Fujifilm announces "substantial" (at least double digit) price increase on film

MattKing said:

There is a real possibility that the distributor for film in Australia is also the distributor for other items that the Australian retailers are more dependent upon for their sales.

So if they try to work around the distributors and import "grey market" film, the Australian retailers may mess up their contracts with the source for the majority of their profits.

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That's exactly it.

Ken Nadvornick said:

Silly American question, then...

If you guys can skirt the (forced, for whatever reason...) high prices by purchasing direct from Freestyle, B&H, or MacoDirect, then why can't the Austrailian retail outlets do the same? Seems to me that would be a quick way for them to beat the competition on price—and apparently by a lot—and also create lots of new, happy customers.

Are there laws prohibiting such sideways grey-market importing?

Or would the wholesale distributors come after them with pitchforks? And even if they did, so what? It would seem that those distributors are no good to them in the first place if they are forcing prices so high that end-user customers are doing the self-importing thing anyway. A lost sale is a lost sale.

Ken

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The problem is that the manufacturers have given the wholesalers/distributors exclusive rights to the country (probably for a fee) and the distributors are thieves. They have no interest in there being price competition when they have a monopsony position. If a retailer goes behind the distributor's back on film, they are in contravention of their supply contract and the distributor will (threaten to) punish them, e.g. by withholding goods or cranking that store's prices up. So if a retailer wants to direct-import film, they basically need to direct-import absolutely everything photographic-related that they sell, which is a huge time/labour sink. That's the story I got from my local store; B&H are big enough that they can do all that warehousing themselves and have their own little grey market.

My guess is that the retailers see all those lost sales as less-bad than either not being in business at all, or having an even-less-profitable arrangement whereby they import everything themselves. Of course no serious photographers buy their film here, but they still sell a bit of it to people who are either dabbling or urgently need a couple rolls.

Silly American? I guess I am, I really had no idea the price could vary that much globally. I can't see how that can continue and I hope it doesn't, but I feel for you. No chance of popping into a shop for a roll or two unless you are crazy rich.

While the prices are bad, chromes are the worst examples. B&W is usually only 50-100% marked up, not 500%.

And of course most of us buy enough that we never need to go near a store.

Poisson Du Jour said:

23 million.

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Boy, was my post confusing.

My wondering about the numbers was oriented more toward the other numbers (shipping, duty, taxes, customs brokerage, etc.) then the population numbers - but thanks.

polyglot said:

If a retailer goes behind the distributor's back on film, they are in contravention of their supply contract and the distributor will (threaten to) punish them, e.g. by withholding goods or cranking that store's prices up. So if a retailer wants to direct-import film, they basically need to direct-import absolutely everything photographic-related that they sell, which is a huge time/labour sink.

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Sounds like it's time to create a few non-profit consumer co-ops. Groups of purchasers informally banding together and using their purchasing power to circumvent a controlled market. Simply aggregate the orders to hold down per item shipping costs. At first done as an on-demand sort of thing. Then later a semi-regular event. Then later still a regular one. Start with just film, then expand into non-film photo hardware, as needed.

Then when the day comes that the members realize it's more efficient in terms of availability and avoiding future price rises to over-order and keep a running supply of stock available locally, they will have become their own mini-distribution operation.

The only way to stop it would be for the manufacturers to all band together themselves and try to force all of the retail operations in North America (and the rest of the world) to refuse to ever sell anything whatsoever to anyone in Australia. In essence, try to apply a version of the same tactics to individual consumers—or groups of individual consumers—that they do to wholesalers and distributors.

But if the co-op operations eventually constituted a large enough segment of the Australian market—and you've already said that hardly anyone buys film anymore from the officially sanctioned distribution channels—then the manufacturers would have put themselves in the backwards position of trying to force a significant portion of their revenue-producing customer base to NOT buy their products.

And one of the first rules of business is to never put yourself in the position of working against yourself.

(I can see it now. At a future management meeting. "Those Australian buggers have just found a clever new way to get their hands on our products. But not to worry. We're already on it. We'll do whatever it takes to keep our products from ever being sold to, and used by, those guys. They think they're so smart. We'll show them what smart really is...")

Actually, from what I've read here so far, this already doesn't sound too far off the mark.

Why should something like this this work? Because all that's required to make it happen are a few mouse clicks, and UPS delivers worldwide. And it's exactly the same reasons why successful farming co-ops and non-profit credit unions were formed in this country. And both of those institutions continue to flourish here.

You would have simply become your own non-profit mini-version of B&H, using globalization to work for you instead of against you.

Ken

That's effectively what we do already, but as individuals not retail stores. Anyone who wants to make an order asks their friends in the same city and we bundle it up until there's about $400 to $800 worth. We don't get the benefit of truly bulk surface shipping but the costs come down to about $1/roll for 5-day air courier. I don't reckon we'd ever have the buying power to beat B&H retail prices by $1/roll so we just pay the $1 and count it as the cost of not being an American - plenty to make up for that

For the shops, this is where it sticks:

Ken Nadvornick said:

Start with just film, then expand into non-film photo hardware, as needed.

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because as soon as you start with film, they kick you in the pants on every other product line.

Fuji is still not making money on digital so they increase the price of film to finance digital department.
Kodak rise the price to pay debt and escape bankruptcy.
Ilford is just following the market prices and probably increase profit.
I feel bad paying all that just to enjoy in photographing on film. :-(

polyglot said:

That's effectively what we do already, but as individuals not retail stores. Anyone who wants to make an order asks their friends in the same city and we bundle it up until there's about $400 to $800 worth.

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So get enough people together to instead make it $40,000 to $80,000. Then afterward call the retailer and tell him, "That money should have gone to you. You were our first choice. Fix this broken system and next time it will..."

Then see how long it takes for him to pick up the phone and call his wholesaler/distributor and tell HIM the exact same thing.

Ken

Nice theory, but I don't know nearly enough people to put together a $40k order on film alone and I'm pretty sure none of the retail stores do either. After all most of the heavy (commercial) shooters moved to digital because they were hurting the most from consumables costs, which just leaves us 100-rolls-per-year guys.

At currently listed B&H retail prices, split evenly by cost between 135-36 individual rolls of Velvia 50, Provia 100 and Provia 400, only 5,000 rolls are needed to reach $40,000. If the average order were only 10 rolls per customer, that's only 500 participants.

Or to use your volume estimate, that's only 50 participants for a yearly order.

In a nation of 23 million you don't think you could find between 50 and 500 fed-up film users ready and willing to save a bunch of money? And strike a blow for fairness in the local film marketplace? And continue to demonstrate to the manufactuer an ongoing market for these products by stretching their dollars to buy and use even more of them?

I'll bet you could...



Ken

If you brought in an order of that size there would be at least 10% GST (goods and service tax) added on top, plus some Customs processing fee. I suspect there would be other regulatory hurdles that would make it enough of a headache for the organiser that they would want to make a profit, pushing the prices up. Essentially that is what the ebay sellers are doing.

Understood.

But if the total additional fees were still substantially lower than the reported 500% mark-ups I keep reading about—and I can't believe that the sum total of GST and other fees routinely exceeds 500% of the base cost of anything—then the model iteself still works. And if there are other regulatory hurdles, overcome them.

As far as the organizer wanting to make a profit—don't do that. That would be counter-productive to the real goal of the exercise. There are much bigger fish to fry here. Find an organizer who understands that.

Sometimes in life the best course of action is just to sit back and let things work themselves out on their own. Other times those who are in control of a situation are counting on you to do exactly that...

Ken