Nikon decide to increase Prices even though they are making decent profits??

[Nikon_Josh]

Another Nikon price increase in the US? | Nikon Rumors

In recent times I think it is becoming clearer and clearer that Nikon are losing the plot, they have made profits supposedly but are now putting prices up? Have they officially lost the plot? This is a time when competition has never been so fierce and now they are forcing companies to keep prices at a certain level.

And to think I was a Nikon fanboy! This rumour may not even be true, but it links in with alot of worrying decisions Nikon seem to be making right now.

 

[Derrel]

Yes, price hikes are a fact of life Josh. I used to work in the retail photo/video business back in the early 1990's, and am familiar with some of the problems the business has, from a real-world point of view.Nobody likes to see prices going up, but the United States dollar has been buying less and less and less over the past few years. I'm not surprised to see Nikon raising prices in the USA. As shown in the B&H ad that accompanies the article Official Nikon Rebates Nikon USA is offering some very hefty rebates right now, such as up to $250 on a lower-level camera + advanced consumer zoom lens, as well as, for example, a $200 rebate on the new 70-300 VR lens. Those rebates represent HUGE savings,considering the relatively low prices for the consumer bodies and the consumer lenses. Now that the earthquake and horrific tsunami has disrupted mainland Japan shipping, manufacturing, and warehousing, Nikon's Sendai, Japan plant, where the pro-level gear was built, has been impacted pretty badly. Nikon is raising prices and enforcing a unilateral price policy to give ALL its dealers, both large and small, an equal opportunity to make profit. In recent years, the "Biggie Stores" have used their considerable cash reserves, web presence, and national reputation to drive thousands of smaller local photography equipment stores out of business. Well, now its payback time. Prices can be raised, which allows Nikon MUCH more leeway to stimulate demand by offering "rebates", on an as-needed basis, while still keeping dealer profits "up", to levels that give dealers a fair, reasonable profit on each item sold.


Competition may be fierce, but as several key world wide web writers have written in the recent months, world-wide SUPPLIES of photo equipment are down, from almost all of the big companies. It has become very difficult for retailers to find stock to buy, and now that the tsunami has further crimped manufacturing, the camera makers are considering raising prices. Prices are going up everywhere....on food, gasoline, clothes, cable TV,etc,etc. Nikon is trying to enforce a unilateral pricing policy--and the penalty for violating it is two-fold: loss of the tremendously valuable Nikon-supplied dollars for advertising buys, and withdrawl of the SKU's violated for up to 18 months. Nikon is, in effect, counting company-wide violations in all stores as counting toward the "three violations" standard, meaning the US retail giant, oh, let's say Best Buy, for example, does not try to say, have a massive Christmas season sale on D5100's with 18-105 lens kits at its biggest Los Angeles, Chicago, and New York stores on the day after US Thanksgiving, and try to call that a "one-day, one-violation incident"...NIkon is trying to protect the VALUE, the INVESTMENT, that even its small-town Seattle dealers like Kenmore Camera, have made in their inventory, and to prevent the "Biggies" from price-undercutting.

A second thought is this: in times of recession, such as we've been suffering through in the USA since at least mid-2008, many consumers are motivated only by what they see as a "super value" or "an incredibly good deal", and raising retail prices, and raising the MAP, or minimum advertised price are smart moves. The MAP is the lowest price a store can advertise a product at, and still continue to receive advertising funds from the corporate parent, like Nikon. That corporate advertising money is like gold to smaller retailers, like one-outlet camera shops, and small chains of "regional" camera stores in the USA. Nikon needs to sell cameras to those shops, and the shops need to make a profit. Higher MAP pricing, unilateral price cooperation, and then customer-motivating NIKON rebate options means Nikon can sell more cameras because recession-weary consumers will BE SENT A CHECK IN THE MAIL for $75, or $100, or $125, or even $250; the dealers will still sell their inventory and make their profits, and customers will feel very satisfied that they got a hefty rebate. Meanwhile, customers with plenty of money to spend will buy whatever they want at full price, in between rebate periods. People with less cash will have to do what they have long done, which is to "wait for it to go on-sale" before buying. Nikon has put increasing demands on its dealers, as a way to keep the "Biggies" from forcing out the the little guys through predatory price-cutting, and frankly, it's about time somebody put an end to the alphabet boys and their business practices, for the greater good of all. Nikon, the parent company, also must look out for the "profits" of its dealers--ALL of its dealers. Higher retail prices, with rebate options is the easiest way to do that. Add in strict MAP enforcement, and severe penalties for price lowballing, and the "Biggies" no longer can run the little dealers out of business.

 

[KmH]

In recent times I think it is becoming clearer and clearer that Nikon are losing the plot, they have made profits supposedly but are now putting prices up? Have they officially lost the plot?

No.

 

[jake337]

I had always thought it was odd that I could walk across the street from National Camera Exchange and get the same, new in box, sb600 for $219 at best buy instead of $249. Poor National Camera Exchange.

 

[480sparky]

God forbid a company wants to make a profit.

 

[traylorc]

Yes, price hikes are a fact of life Josh. I used to work in the retail photo/video business back in the early 1990's, and am familiar with some of the problems the business has, from a real-world point of view.Nobody likes to see prices going up, but the United States dollar has been buying less and less and less over the past few years. I'm not surprised to see Nikon raising prices in the USA. As shown in the B&H ad that accompanies the article Official Nikon Rebates Nikon USA is offering some very hefty rebates right now, such as up to $250 on a lower-level camera + advanced consumer zoom lens, as well as, for example, a $200 rebate on the new 70-300 VR lens. Those rebates represent HUGE savings,considering the relatively low prices for the consumer bodies and the consumer lenses. Now that the earthquake and horrific tsunami has disrupted mainland Japan shipping, manufacturing, and warehousing, Nikon's Sendai, Japan plant, where the pro-level gear was built, has been impacted pretty badly. Nikon is raising prices and enforcing a unilateral price policy to give ALL its dealers, both large and small, an equal opportunity to make profit. In recent years, the "Biggie Stores" have used their considerable cash reserves, web presence, and national reputation to drive thousands of smaller local photography equipment stores out of business. Well, now its payback time. Prices can be raised, which allows Nikon MUCH more leeway to stimulate demand by offering "rebates", on an as-needed basis, while still keeping dealer profits "up", to levels that give dealers a fair, reasonable profit on each item sold.


Competition may be fierce, but as several key world wide web writers have written in the recent months, world-wide SUPPLIES of photo equipment are down, from almost all of the big companies. It has become very difficult for retailers to find stock to buy, and now that the tsunami has further crimped manufacturing, the camera makers are considering raising prices. Prices are going up everywhere....on food, gasoline, clothes, cable TV,etc,etc. Nikon is trying to enforce a unilateral pricing policy--and the penalty for violating it is two-fold: loss of the tremendously valuable Nikon-supplied dollars for advertising buys, and withdrawl of the SKU's violated for up to 18 months. Nikon is, in effect, counting company-wide violations in all stores as counting toward the "three violations" standard, meaning the US retail giant, oh, let's say Best Buy, for example, does not try to say, have a massive Christmas season sale on D5100's with 18-105 lens kits at its biggest Los Angeles, Chicago, and New York stores on the day after US Thanksgiving, and try to call that a "one-day, one-violation incident"...NIkon is trying to protect the VALUE, the INVESTMENT, that even its small-town Seattle dealers like Kenmore Camera, have made in their inventory, and to prevent the "Biggies" from price-undercutting.

A second thought is this: in times of recession, such as we've been suffering through in the USA since at least mid-2008, many consumers are motivated only by what they see as a "super value" or "an incredibly good deal", and raising retail prices, and raising the MAP, or minimum advertised price are smart moves. The MAP is the lowest price a store can advertise a product at, and still continue to receive advertising funds from the corporate parent, like Nikon. That corporate advertising money is like gold to smaller retailers, like one-outlet camera shops, and small chains of "regional" camera stores in the USA. Nikon needs to sell cameras to those shops, and the shops need to make a profit. Higher MAP pricing, unilateral price cooperation, and then customer-motivating NIKON rebate options means Nikon can sell more cameras because recession-weary consumers will BE SENT A CHECK IN THE MAIL for $75, or $100, or $125, or even $250; the dealers will still sell their inventory and make their profits, and customers will feel very satisfied that they got a hefty rebate. Meanwhile, customers with plenty of money to spend will buy whatever they want at full price, in between rebate periods. People with less cash will have to do what they have long done, which is to "wait for it to go on-sale" before buying. Nikon has put increasing demands on its dealers, as a way to keep the "Biggies" from forcing out the the little guys through predatory price-cutting, and frankly, it's about time somebody put an end to the alphabet boys and their business practices, for the greater good of all. Nikon, the parent company, also must look out for the "profits" of its dealers--ALL of its dealers. Higher retail prices, with rebate options is the easiest way to do that. Add in strict MAP enforcement, and severe penalties for price lowballing, and the "Biggies" no longer can run the little dealers out of business.

Enough said....

 

[Nikon_Josh]

Yes, price hikes are a fact of life Josh. I used to work in the retail photo/video business back in the early 1990's, and am familiar with some of the problems the business has, from a real-world point of view.Nobody likes to see prices going up, but the United States dollar has been buying less and less and less over the past few years. I'm not surprised to see Nikon raising prices in the USA. As shown in the B&H ad that accompanies the article Official Nikon Rebates Nikon USA is offering some very hefty rebates right now, such as up to $250 on a lower-level camera + advanced consumer zoom lens, as well as, for example, a $200 rebate on the new 70-300 VR lens. Those rebates represent HUGE savings,considering the relatively low prices for the consumer bodies and the consumer lenses. Now that the earthquake and horrific tsunami has disrupted mainland Japan shipping, manufacturing, and warehousing, Nikon's Sendai, Japan plant, where the pro-level gear was built, has been impacted pretty badly. Nikon is raising prices and enforcing a unilateral price policy to give ALL its dealers, both large and small, an equal opportunity to make profit. In recent years, the "Biggie Stores" have used their considerable cash reserves, web presence, and national reputation to drive thousands of smaller local photography equipment stores out of business. Well, now its payback time. Prices can be raised, which allows Nikon MUCH more leeway to stimulate demand by offering "rebates", on an as-needed basis, while still keeping dealer profits "up", to levels that give dealers a fair, reasonable profit on each item sold.


Competition may be fierce, but as several key world wide web writers have written in the recent months, world-wide SUPPLIES of photo equipment are down, from almost all of the big companies. It has become very difficult for retailers to find stock to buy, and now that the tsunami has further crimped manufacturing, the camera makers are considering raising prices. Prices are going up everywhere....on food, gasoline, clothes, cable TV,etc,etc. Nikon is trying to enforce a unilateral pricing policy--and the penalty for violating it is two-fold: loss of the tremendously valuable Nikon-supplied dollars for advertising buys, and withdrawl of the SKU's violated for up to 18 months. Nikon is, in effect, counting company-wide violations in all stores as counting toward the "three violations" standard, meaning the US retail giant, oh, let's say Best Buy, for example, does not try to say, have a massive Christmas season sale on D5100's with 18-105 lens kits at its biggest Los Angeles, Chicago, and New York stores on the day after US Thanksgiving, and try to call that a "one-day, one-violation incident"...NIkon is trying to protect the VALUE, the INVESTMENT, that even its small-town Seattle dealers like Kenmore Camera, have made in their inventory, and to prevent the "Biggies" from price-undercutting.

A second thought is this: in times of recession, such as we've been suffering through in the USA since at least mid-2008, many consumers are motivated only by what they see as a "super value" or "an incredibly good deal", and raising retail prices, and raising the MAP, or minimum advertised price are smart moves. The MAP is the lowest price a store can advertise a product at, and still continue to receive advertising funds from the corporate parent, like Nikon. That corporate advertising money is like gold to smaller retailers, like one-outlet camera shops, and small chains of "regional" camera stores in the USA. Nikon needs to sell cameras to those shops, and the shops need to make a profit. Higher MAP pricing, unilateral price cooperation, and then customer-motivating NIKON rebate options means Nikon can sell more cameras because recession-weary consumers will BE SENT A CHECK IN THE MAIL for $75, or $100, or $125, or even $250; the dealers will still sell their inventory and make their profits, and customers will feel very satisfied that they got a hefty rebate. Meanwhile, customers with plenty of money to spend will buy whatever they want at full price, in between rebate periods. People with less cash will have to do what they have long done, which is to "wait for it to go on-sale" before buying. Nikon has put increasing demands on its dealers, as a way to keep the "Biggies" from forcing out the the little guys through predatory price-cutting, and frankly, it's about time somebody put an end to the alphabet boys and their business practices, for the greater good of all. Nikon, the parent company, also must look out for the "profits" of its dealers--ALL of its dealers. Higher retail prices, with rebate options is the easiest way to do that. Add in strict MAP enforcement, and severe penalties for price lowballing, and the "Biggies" no longer can run the little dealers out of business.

Thank you again Derrel, for such an insightful reply. I now understand it better!

The way Nikon worded it was like this ...''According to Nikon this policy is designed to allow customers to make purchasing decisions based on service provided and not have to worry about hunting for a better price.'' I mean this is partly why I got the wrong end of the stick to be honest, I mean who finds hunting for the lowest price a dark experience? On the face of it, it seemed like a highly cynical business move. But thank you for intelligently explaining this to me, I now understand the real reasoning behind this. Obviously Nikon are not going to tell people this is what they really are doing, as the big retailers would feel they are being directly targeted for their price cutting strategies.

 

[Nikon_Josh]

God forbid a company wants to make a profit.

Where did I knock a company for wanting to make a profit exactly?? Can I ask??

I understand a company wants and needs to make a profit, the thing I don't like is when a company decides to deliberately fleece their customers. I have now discovered Nikon are not doing this, as Derrel gave a very intelligent explanation as to why Nikon are initiating this move. There is so much unethical business practice going on, that if we as the consumer do not stand up and say anything. The corporate world will be completely allowed to continue to treat their customers as 'useless eaters'.

 

[KmH]

Another Nikon price increase in the US? | Nikon Rumors

In recent times I think it is becoming clearer and clearer that Nikon are losing the plot, they have made profits supposedly but are now putting prices up?

You realise of course, that article does not say Nikon will be increasing their prices, only that they have a new pricing policy that is going into effect the price retailers charge.

On Sept 1, Nikon announced that there will be a new pricing policy going into effect on all Nikon DSLR, Lens and Flash product. This will go live October 16, 2011. What does this mean?
Any retailer that prices Nikon DSLR, Lens or Flash product below their National price will be in a violation of the policy (Unilateral Pricing Policy = Maximum Value Policy (MVP).

You're just being a troll.

 

[480sparky]

Where did I knock a company for wanting to make a profit exactly?? Can I ask??
............

Like...... in the title of the thread that you started.

 

[tevo]

oh my

ing

GOD. NO ):


jk -_0

 

[traylorc]

God forbid a company wants to make a profit.

Where did I knock a company for wanting to make a profit exactly?? Can I ask??

I understand a company wants and needs to make a profit, the thing I don't like is when a company decides to deliberately fleece their customers. I have now discovered Nikon are not doing this, as Derrel gave a very intelligent explanation as to why Nikon are initiating this move. There is so much unethical business practice going on, that if we as the consumer do not stand up and say anything. The corporate world will be completely allowed to continue to treat their customers as 'useless eaters'.

Even if Nikon were planning on raising it's prices, despite the fact they are profitable, how is that "fleecing" their customers?

As long as Nikon not involved in some sort of price collusion or any other illegal activity, I have no problem if they elect to raise their prices despite being profitable profitable. Nikon is not the only game in town, so if they misjudge the marketplace and raise prices then the consequences of that bad pricing decision will negatively impact their profits and market share.

 

[Vtec44]

Supply and demand.

 

[Derrel]

The photography sales business has undergone some changes over the last 20 years. One of the biggest changes is that certain "Mega-Retailers" have developed reputations for always having the lowest prices, and of being able to undercut the prices of basically, 99.9% of all other retailers in the USA. As well as being willing to ship overseas. One large retailer was Camera World, based in Oregon, where there is no sales tax of any kind. Camera World grew from a small, immigrant-owned, single proprietorship company barely making it,into one of the single largest mail-order retailers in the USA, before being bought by the Ritz Camera empire. Ritz bought up hundreds of smaller independent stores, then went in to bankruptcy, and as I understand it, David Ritz poured around 400 million dollars BACK IN TO Ritz, and re-took the company back from his creditors, one of which was Nikon USA. From what I have read, Nikon USA was owed around $40 million dollars by the folks at Ritz at the time of the initial bankruptcy proceedings. Anyway...Ritz had I think it was 62o or some odd stores, and had to close down and liquidate about half of those outlets. Meanwhile, Nikon wants to be able to get the money they are owed BACK from the Ritz/Kits/CameraWorld conglomeration of stores that David Ritz put together under his umbrella.

Well, the "Mega-Stores" that used to have the lowest prices have been putting the hurt on local stores, small chains (3 to 20 store chains), and all the way up to the massive Ritz/Kits empire. When stock is tight, the "Mega-Stores" have not been shy at doing what is commonly called "ticket-scalping"...as much as $1,000 over MSRP pricing on the 200-400 VR-Nikkor at one point when that was the hottest big-glass lens in the world; a forum mate was trying to locate one and I told him a local store in my neck of the woods had the lens for literally, one thousand dollars LESS than the Big New York City store whose name sounds a lot like C&H Sugar...what has happened is that over the years, the Mega-retailers have almost totally ruined the dealer network across the USA, for their own benefit, and frankly, Nikon feels that they need to reign these people in, and create a system in which ALL its dealers have an even footing....no longer is a big, New York City company going to be able to steal sales from a dealer in Phoenix because he's willing to cut the price by $20, or advertise prices that are LOWER THAN the Minimum Advertised Price because the company is SO BIG that it does not really need the Nikon advertising reimbursement money.

There is a grain of truth to the "service" aspect as well...for example for many years, Nikon would NOT ALLOW the Fry's Electronics chains to sell anything made by Nikon. Nothing. Why? Take $1,000 to a Fry's and stand around with it while wearing a T-shirt and shorts. The sales staff works by the hour and will let you walk out of the store before they even say hello. CompUSA had a similar problem.


Also, the retail price/rebate thing is another way for companies to sell products without leaving a lot of money on the table, as the saying goes. If Nikon sets a price that is soooooo low that they sell out entire runs of products in 3 months, then the price was set too low, and they LOST a lot of money. Some cameras, the Canon 5D for example, were always priced wayyyyyyyy too high for the market,and were very slow sellers, with low volume and high price, and the cameras were "moved" by offering rebates. Canon has been offering rebates for years now. Nikon has gotten in to that game now as well. Rebates stimulate sales, and allow for adjustments in pricing and allow better stock management options, without being locked-in to a price that might be too low, or too high, for both Nikon and the dealer network to make adequate profit.

 

[Joshonator]

The goal of a business is to make money. Any company at any time does whatever it can to make more money. Do you think good customer service, promotions, free warranty's, etc are there for the good of the customer? Of course not. The companies wouldn't be doing any of this if they didn't think it would make them more money in the long run. Companies must adapt if they want to maintain "decent profits".