Nothing illegal, just negotians between business partners.
Ilford priced to leave Japan
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Nothing illegal, just negotians between business partners.
If Ilford has an exclusive distributor in Japan, certainly Ilford mingles with the business strategy of the distributor, Ilford would not accept any kind of price policy passively after having given exclusivity privilege.
If Ilford doesn't have an exclusive distributor or an official distributor, and anybody can easily buy large quantity of Ilford product and sell them in Japan through their own network, then one might infer demand in Japan for Ilford product is so low that the distributor can price as a "monopolist" while not fearing any competition.
It is likely that Ilford has some kind of an "exclusive" distributor in Japan.
From Ilford web site:
The distributors of ILFORD PHOTO products in Japan are shown below.
Cyber Graphics Corporation
4A, Suzuno-Bldg. 11 kandakonya-cho , Chiyoda-ku, Tokyo, 101-0035, Japan
Tel 00 81 3 3526 2586
Fax 00 81 3 3526 2587
Website http://www.ilfordphoto.jp
One might expect the shift in pricing strategy was agreed by Ilford and the distributor, and the distributor doesn't fear competition by a "parallel" importer, either because Ilford would not collaborate, or because of the volume of the Japanese market which doesn't make competition economically feasible.
I suspect some small, family-business parallel importers selling online through eBay have an opportunity there.
My company makes 90+% of its sales through distribution. You can be VERY certain that we (and other companies) do get to make the call on distributors. Were a distributor to start pricing our products in a ridiculous fashion, they would lose our business INSTANTLY. Pricing is part of the contract that they sign and so while they do get leeway on how they price our products so that they get a profit, they cannot do so without limits because our company's name and brand gets trashed.
We can clearly see here that Ilford's name is going down fast with 300+% price increases with no explanation of any kind.
It is completely incorrect to say that distributors have total control of the products that they handle. No company would surrender that.
Absolutely true. Well said. Ilford most certainly knows about this price increase.
MattKing
Moderator
Any attempt by a manufacturer to control the price charged by either a distributor or a retailer would be considered anti-competitive behavior/a restraint of trade and would be illegal in Canada and as I understand it would be illegal in the US.
The manufacturer can, of course, control the price it charges to those distributors.
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Here in the US is it now perfectly legal for a manufacturer to set prices by contract if they want to. Anti-trust is far more likely to happen in exactly
the opposite manner, by big Walmartish or Amozonish schemes which bankrupt all the little local competitors by price-dumping until they secure a
monopoly on that category, and then they can do anything they please, including blackmailing the manufacturer. The Supreme Court picked up on this sea change, realized that internet retailing become the new avenue for undermining competition, and given manufacturers a formal alternative. Quite a few US manufacturers have gone down the drain recently due to internet price dumping; and in the EU, Amazon is currently being investigated for anti-trust relative to the book trade. They have, of course, already destroyed most of the mom n' pop bookstores in this country, and have undercut author incentive. In the long run nobody wins at price dumping except a few greedy CEO's and outsourcing counterfeiters, and its almost certainly the
best way to permanently go out of business that I can think of, though someone might buy the brand label afterwards and put it on something else.
I've been directly involved in a major fixed-price distribution arrangement from the EU for about seven years now, and its been win-win for everyone.
Of course, this has to be done in some fashion of sustainable common sense.
the opposite manner, by big Walmartish or Amozonish schemes which bankrupt all the little local competitors by price-dumping until they secure a
monopoly on that category, and then they can do anything they please, including blackmailing the manufacturer. The Supreme Court picked up on this sea change, realized that internet retailing become the new avenue for undermining competition, and given manufacturers a formal alternative. Quite a few US manufacturers have gone down the drain recently due to internet price dumping; and in the EU, Amazon is currently being investigated for anti-trust relative to the book trade. They have, of course, already destroyed most of the mom n' pop bookstores in this country, and have undercut author incentive. In the long run nobody wins at price dumping except a few greedy CEO's and outsourcing counterfeiters, and its almost certainly the
best way to permanently go out of business that I can think of, though someone might buy the brand label afterwards and put it on something else.
I've been directly involved in a major fixed-price distribution arrangement from the EU for about seven years now, and its been win-win for everyone.
Of course, this has to be done in some fashion of sustainable common sense.
This is factually incorrect in the US.
You can stop selling to a distributor if they charge outrageous prices.
A manufacturer and wholesaler both want to make profit.
If a wholesaler lifts prices to the extent that retail revenue sinks, but in his niche/luxury-concept he still makes profit, even more profit, the manufacturer has to react as he then is losing revenue AND profit.
One way would be to increase his price to the wholesaler or finally change the distributor.
I doubt that would be illegal in Canada.
Anyway, in the long past manafucturer prescribed retail-prices were allowed in parts of Europe and standard in West-Germany's photo-industry with Agfa being their greatest advocat.
Andrew O'Neill
Moderator
When I'm in Japan next Spring, I certainly won't be loading up on HP5. It'll be Acros 4x5 this time!
Manufacturer price and distributor price cannot be independent variables.
We could have a situation where the manufacturer charges a low price whereas the distributor goes for the "niche/exclusive" route and raises the prices considerably. The result would be that the manufacturer, which has a fixed unitary gain, would see its profit shrink while the distributor would see - if the manoeuvre is properly executed - its profit soar.
So price positioning is always the result of a certain negotiation between manufacturer and distributor (if the distributor is "exclusive" or "official").
Price fixing is not unknown in business practices in Italy as well, notably in luxury markets or in the apparel market. I have always wondered how this can be tolerated by laws protecting free commerce, the point probably being that no luxury or apparel manufacturer is a monopolist in his market, so if he fixes a minimum (or fixed) catalogue price the consumer can go somewhere else. On the other hand, keeping a minimum price on certain goods helps the manufacturer strategy of placing its product in the market as "premium" and makes the inventory investment somehow less risky for small retailers.
I have two LPG distributors in the vicinity. They practice exactly the same price, since years, to the 1/1000 of Euro. I cannot say they are expensive, but they certainly are not competing for my business (I often save something by filling my tank in the countryside when I go hiking).
We could have a situation where the manufacturer charges a low price whereas the distributor goes for the "niche/exclusive" route and raises the prices considerably. The result would be that the manufacturer, which has a fixed unitary gain, would see its profit shrink while the distributor would see - if the manoeuvre is properly executed - its profit soar.
So price positioning is always the result of a certain negotiation between manufacturer and distributor (if the distributor is "exclusive" or "official").
Price fixing is not unknown in business practices in Italy as well, notably in luxury markets or in the apparel market. I have always wondered how this can be tolerated by laws protecting free commerce, the point probably being that no luxury or apparel manufacturer is a monopolist in his market, so if he fixes a minimum (or fixed) catalogue price the consumer can go somewhere else. On the other hand, keeping a minimum price on certain goods helps the manufacturer strategy of placing its product in the market as "premium" and makes the inventory investment somehow less risky for small retailers.
I have two LPG distributors in the vicinity. They practice exactly the same price, since years, to the 1/1000 of Euro. I cannot say they are expensive, but they certainly are not competing for my business (I often save something by filling my tank in the countryside when I go hiking).
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There are all kinds of contracts as well as distribution business models. The manufacturer can even fix the retail selling price of its items in an entire given country. This generally only happens with tightly-controlled high-end brands. But it is how I make much of my living, at least for a little while longer, until I retire. Setting up enforceable contracts is a LOT of work. But this is often the only was to ensure long-term interest in carrying a brand which requires substantial investment to begin with. If a manufacturer pulls the rug out from a distributor, or visa versa, eventually nobody will trust that party, and their own business will collapse. Each necessary step has to include a realistic profit margin, or these is no incentive. And all the leaks have to be plugged - in other words, no gray market, period, and no exceptions, period. But how to buffer this over currency swings, market ups n' downs, etc, is what separates the men from the boys.
The argument Agfa raised in favour of their fixed retail prices was to ensure customers even deep in the province to have an offer of photo products.
Actually this is the reason for the one exception on banning manufacturer-fixed prices in Germany: books
Actually this is the reason for the one exception on banning manufacturer-fixed prices in Germany: books
Yet, I hear all the time people talking about try film photography, but one of the ideas that held them back is the believe that it is expensive, specially after looking at a €6 film negative roll.
Anyone like to hazard a guess as to how much longer Ilford will be in Japan based on these price increases which I assume no other film manufacturer will replicate? I wonder what the irreducible minimum of Ilford buyers will be i.e. those buyers who are so wedded to Ilford that they will pay any premium to get Ilford film?
If it is a deliberate action by Ilford then presumably Ilford has worked out what this irreducible number is and has calculated its resulting profit position which is better than it currently is, otherwise why bother with such a large price increase which will reduce sales? Presumably the increase isn't based on increased Ilford costs which other manufacturers may incur and which would leave things as they were pre- the price increase?
Either way the picture is gloomy for Ilford users in Japan and in the second case of increased costs it is gloomy for all Ilford users unless the increased costs are Japan specific
pentaxuser
If it is a deliberate action by Ilford then presumably Ilford has worked out what this irreducible number is and has calculated its resulting profit position which is better than it currently is, otherwise why bother with such a large price increase which will reduce sales? Presumably the increase isn't based on increased Ilford costs which other manufacturers may incur and which would leave things as they were pre- the price increase?
Either way the picture is gloomy for Ilford users in Japan and in the second case of increased costs it is gloomy for all Ilford users unless the increased costs are Japan specific
pentaxuser
From http://emulsive.org/articles/community-interviews/emulsive-x-ilford-community-interview-results-time
"Pricing is a tricky one, because we can’t specify selling prices so once the product leaves us it’s up to the dealers and distributors in specific territories."
"Pricing is a tricky one, because we can’t specify selling prices so once the product leaves us it’s up to the dealers and distributors in specific territories."
In this case the real possibility exists that people will soon find Ilford film on Japanese auction sites and similar, bought from Europe (even at retail prices) and sold in Japan for a margin. It's the beauty of free market.
I had no idea Ilford was in such a weak position. Unable to price their own products!! Wow. My company is MUCH smaller than Ilford and sets prices at our distributors all over the world.
I think you're casually misreading that statement - Ilford have a wholesale price, but do not control what the retail price is - ie after the product has been sold to the distributor, it's up to the distributor to work out a retail price.
I understood that. My comment was that they are too weak to prevent egregious pricing of their products. If one of our distributors tried to triple the price of our products, they'd be tossed in a heartbeat.
Ilford film, like most products, is simply not good enough to survive such ridiculous price increases. This will be the end of them in Japan and elsewhere this is tried.
We could also consider the possibility that Ilford plain lie regarding price policy.
The Japanese distributor is not somebody happening to knock at Ilford door and buying some quantity of film at a certain price, the reselling it in Japan.
The Japanese distributor, as appears from Ilford website that I quoted in #52, is Cyber Graphics Corporation and its internet domain is ilfordphoto.jp.
As Ilford gives its name to the internet domain of their distribute it is obvious to me that they have a partnership and a coordinated strategy in the distribution of the product.
Basically Ilford is not sincere regarding the entire stuff. They can't openly say: "it's a lost battle in Japan if we compete on price and volume, so we decided, together with our local distributor, to play the "niche, boutique" card and see how it works. If it doesn't work, we might slowly re-align the price of our film to the competition".
(Don't buy something which is priced as Champagne. Actually, don't buy Champagne! Buy good wine (film) correctly priced! Pay for quality not for brand)
The Japanese distributor is not somebody happening to knock at Ilford door and buying some quantity of film at a certain price, the reselling it in Japan.
The Japanese distributor, as appears from Ilford website that I quoted in #52, is Cyber Graphics Corporation and its internet domain is ilfordphoto.jp.
As Ilford gives its name to the internet domain of their distribute it is obvious to me that they have a partnership and a coordinated strategy in the distribution of the product.
Basically Ilford is not sincere regarding the entire stuff. They can't openly say: "it's a lost battle in Japan if we compete on price and volume, so we decided, together with our local distributor, to play the "niche, boutique" card and see how it works. If it doesn't work, we might slowly re-align the price of our film to the competition".
(Don't buy something which is priced as Champagne. Actually, don't buy Champagne! Buy good wine (film) correctly priced! Pay for quality not for brand)
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I can't remember any film that was ever consistently priced. It's a lot of work to enforce anything like that. Supply, demand, competition, custom, convenience, and now and then some haggling.
Actually their films aren't that far off Kodak and Fuji (in Japan at least). What really doesn't make any sense is their paper and their chemicals.
Interestingly Cyber Graphics Corporation is also the company behind the new B&W film "Seagull 100 and 400" in Japan. That is selling for 25% less than Ilford branded films.
Interestingly Cyber Graphics Corporation is also the company behind the new B&W film "Seagull 100 and 400" in Japan. That is selling for 25% less than Ilford branded films.
MattKing
Moderator
And now you know why the Ilford prices are so high.
Thinking about Ilford and what their market positioning, expansion and/or promotional strategies might be remains a mystery. It is not clear what their intentions really are... Are they really trying to grow their photographic business/s or are they just content to service a diminishing user base until...? Clearly, they alone, are not well placed to expand the film based photographic market growth. It will need the camera manufacturers to drive sales of consumables... The film camera needs a manufacturing comeback albeit, at first, in limited camera body offerings designed to use currently ranged lenses/accessories. Until this happens we will forever struggle to find support for our photographic interest. Presently it is a sellers market. We, film based photographers, are but a small niche consumer group motivated to buy whereas our supply base is not really motivated to sell! When last did you see any above or below the line advertising/promotional activity undertaken by Ilford or any of the others? Here, in Australia, we can buy Ilford product but cannot have confidence as to retailer "in stock" position. Consequently we, too, opt to support overseas retailers who can supply at a retail price inclusive of freight and exchange rate variation the landed cost of which is lower than the local retail price plus delivery costs. The delivery costs arise because of limited local outlets carrying film based consumables - maybe also a function of Ilford not driving sales? Thus, the more we buy from overseas the fewer options locally! And, so on "ad infinitum".
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