Monday, February 21 2011

The Camera Gray Market Explained

Written by  Ibarionex Perello
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Everyone has heard the saying, "If it sounds too be good to be true, it probably is". However, it's an expression of common sense that sometimes gets lost in the fever of hunting for a bargain for a new camera or lens. I don't know of anyone who doesn't hope to save some money when investing hundreds if not thousands of dollars on photographic gear. This isn't a cheap hobby or profession. So, it's practical to want to find the best deal possible. The problem comes when the satisfaction of saving a couple of dollars is replaced with aggravation and remorse. That's why it's so important to understand the concept of gray market.

Much of the photographic gear sold in the United States is imported merchandise from other countries. These products have authorized distributors in the United States who have been authorized by the manufacturer to import and sell their products to dealers.

These products come with a manufacturer's warranty, which is valid in the United States as well as an international warranty which can be used by the purchaser should the product require warranty service while traveling abroad. With this document and a valid sales receipt, the user can receive free servicing of their equipment during the warranty period. It's good all the way around.

Gray market items (also referred to as parallel import) are products that are not brought into the country by the authorized distributor. These products, which are often purchased in countries where the exchange rate is particularly favorable, are purchased and resold in the United States by other parties. It's not an illegal practice.

These products are often the same products that are sold by the authorized distributor, but in some cases may have a different name. For example, the Canon Rebel in this country is referred to the Canon Kiss in Japan. Besides the name difference, the product is exactly the same. It's not an inferior build or knock off.

The problem with such products is that these items were intended for another market and come with an international warranty, which is valid only in the original country of destination, and does not have to be honored by the American distributor. It may be a brand new camera in all respects, but the distributor can decline to service it under the terms of the warranty.

This is why stores that deal in gray market goods will offer a store warranty, which involves the camera being sent to a repair facility, that they have an association with rather than sending it to the authorized distributor for repair.

Now, most equipment is incredibly reliable and doesn't pose any problems within the first 12 months, which is often the standard warranty for much gear. However, it may prove problematic should your item prove defective in that time as you may not have the option to have the equipment serviced at an authorized repair facility.

Besides the warranty, the purchase of the gray market product makes you ineligible for any rebates offered by the authorized distributor. Because you must often cut a portion of the original box as well as make a copy of the warranty card, it makes your purchase ineligible for any further savings.

In my experience, the tip off that you may be dealing with a gray market product is when the price of the camera or lens is considerably less than most other dealers are advertising the product for. When I see a savings of several hundred dollars, that's an immediate red flag that the product may be a gray market good.

This has traditionally been an issue with mail order dealers though many of them have become more upfront with their gray market sales, by identifying those products as "import" or "parallel import". They offer their own warranty and guarantee for the product, but it's something that has to be taken advantage of through the store directly.

Less than honest dealers have been known to advertise gray market and when they are ready to place your order, inform you that you have to be extra for "accessories" such as batteries, straps, etc. They may explain to avoid such charges, you can purchase the model that has all the items, which is supposedly has a better build quality or is more reliable. This bait and switch approach in the "heat of the moment" can lead you to make a purchase decision that leaves you more disturbed than exhilarated.

If you are in the market for camera equipment, it's a good idea to shop around and when you find two or more dealers that you are interested in purchasing from contact the authorized distributor to confirm that they are an authorized dealer. Nikon for example has a toll free number you can call to confirm that a dealer is authorized at 1-800-645-6687.

When you are ready to place your order, ask whether the price being quoted to you is for the authorized product or a gray market. Most dealers will be up-front about this and you can insist that they provide you the product with the authorized US warranty.

It's also a good idea to go with a dealer, which has earned a good reputation. The experience of friends who have purchased from these dealers and even comments from many of the popular photographic forums can be a good source of information before making your financial investment.

Though the allure of saving money leads many to make purchases online and via mail order, the purchase through a local dealer does provide some piece of mind as you can check the status of your equipment before you walk out the door. As well, you have often the benefit of staff members who are passionate photographers themselves and are eager to help you to make the most of your purchase.

There are few things more frustrating that opening up a box and discovering it's not what you thought you paid for. The process of wrangling with a dealer over the phone can ruin any cost savings you thought you might have won, especially if the product has issues that require service.

So, remember that if it sounds to good to be true, pass on it and don't take the risk.

© Ibarionex Perello

Ibarionex Perello is a photographer, writer and educator. He is the host and producer of the popular interview show, The Candid Frame (www.thecandidframe.com).
His new book, Capturing the Light: Improving Your Photography Using Available Light will be available this spring from Peachpit Press.

Last modified on Sunday, February 20 2011

3 comments

  • Comment Link Monday, February 21 2011 posted by Corrie

    One other consideration, should you need repairs....I bought a grey market lens, and after I'd had it for a few years, I dropped it. I took it to a local service center, where they told me that when they call Nikon for a part, Nikon wants the serial # of the item being repaired. If it's grey market, they won't sell the part. (I did get mine fixed; they happened to have another lens that was being used for parts.)

  • Comment Link Monday, February 21 2011 posted by Roger Spikey

    I am in South Africa, and I have to agree with Stephen that the extra 30-50% that one must pay to get an authorized item, just can't be justified. Not sure who is making all the extra profit on the items.

    Thanks for a very informative post.

  • Comment Link Sunday, February 20 2011 posted by Stephen Eaton

    I live in Australia and with the excellent exchange rate between USD & AUD being close to parity it's too good an opportunuity to pass up. I'm sorry to say that the authorised Australian resellers are taking too long to pass on savings associated with the exchange rate, however they were very quick to put up prices when the AUD was falling against the greeback. I stil have a bitter memory of ordering my 1st L-Series cash ready, having placed my order and waiting until stock came in only to be told it will be another $400 due to Canon Australia putting up prices due to exchange rates. Needless to say I held off on that particular purchase on principle alone. (I ended up finding a great second hand lens on Ebay)

    I recently purchased another Canon L Series Lens via a grey market website based in hong kong, after contacting a local authorised reseller to get pricing (unfortunately they could not compete by nearly $1000), 3 Days later the lens was sitting in my hot little hands, perfect condition, Tack sharp, everything I expect from my lenses and....No regrets with the purchase.

    If it fails after a year, well it would have had 12 months warranty anyway so I'd be out of pocket if indeed it fails at all. My risk is it failing within 12 months and thats the risk I take, even then I could pay to get it fixed, I would think it would still be under the cost of what I'm saving.

    Unfortunately we now live in a global economy, for better or worse, there is no changing it. Manufacturers should be supportive of their customers where ever they purchase the product from, otherwise their customer base will decline.

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