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Olympus Pricing - Variations around the world

Discussion in 'Olympus Cameras' started by LovinTheEP2, May 1, 2012.

  1. LovinTheEP2

    LovinTheEP2 Mu-43 Top Veteran

    Feb 15, 2011
    I've seen a few people complain that it costs more here then there for an OM-D etc and wondering why their country is getting charged more. I thought it good to open a discussion as to influences that result in 1 country having a higher MSRP then another country so people don't feel like Olympus is fleecing them

    Canadians often complian that we pay more for goods then in the USA.

    There are sooooo many factors that play in International pricing.

    1. VAT: Value Added Tax. Some countries charge taxes on incoming goods resulting in an immediate higher MSRP unless Olympus was willing to absorb it, thereby decreasing the Profit Margin for country x. Usually, it would just be tacked on to the MSRP.

    2. Local Marketing costs amortized into the Cost of Goods (COGS). For example, Canada has about the same land mass as the USA but 1/10th the population. So if you figure in how many units will be sold in Canada .. assume a 1/10th through rate (but most likely even less the 1/10th due to different buying demographics for technology) but the cost to advertise it pretty much the same. The Canadian division will need to have less advertising which will result in fewer sales etc. The marketing cost per unit sold is higher in Canada then in the USA so that would reflect in a higher MSRP in Canada.

    3. Distrubtion channels in each country is different and the margins to every hand in the chain are different. So Country X may have 1 distrubtor with no subdistributors .. whereas Country Y may have an importer, a mass market distributor, an online distributor, a mom and pop distributor etc. There are pros and cons to using 1 distibutor or using multiple but every hand in the equation adds to the cost. That added cost sometimes is a good thing if it means more units sold by have a greater reach of stores etc. but comes at a cost which could result in a higher MSRP.

    4. Countries Currency Impact. Using the USA a lead currency. When the Canadian dollar was 1.40 CDN to 1 US. There was an obvious disadvantage in retail pricing as a result.

    5. Country Demographic and higher price acceptance. Canadian have been for decades always willing to pay more for goods then the USA. Sometimes in clothing retail as much to as 40% more! Even in razor blades, Canadians pay 20-30% more for the same exact product south of the border.

    And there are many other factors that play into it as well if you start taking into consideration that Olympus MAY have incorporated subsidiaries ie Olympus North America vs. Olympus HQ Parent vs. Olympus ASIA etc. Each division on its own needs to be profitable and based on their mix of products etc. Some divisions may not be as profitable and have to increase the costs to keep to stay afloat. Etc.
    • Like Like x 1
  2. everythingsablur

    everythingsablur Mu-43 Veteran

    Aug 4, 2010
    Toronto, ON
    #5 is really losing steam with #4 being a non-issue now since we've been at or near par for like 2 years. Canadians are increasingly less willing to stomach a higher price when our dollar and the US dollar are virtually the same value.
  3. Bill Gordon

    Bill Gordon Mu-43 Top Veteran

    Most of the pricing which is above the list price that Olympus advertised is due to parties increasing the price to take advantage of the scarcity of the camera.
    Some are offering the camera with the 14-42mm lens and charging more than the supposed list price.

    It is all about scarcity and demand for the product!!
  4. turbodieselvw

    turbodieselvw Mu-43 Veteran

    Jun 29, 2010
    Moving away from cameras, why is a car assembled in Canada cheaper in the US when compared to the Canadian price? I will be paying my new car from the US. The Subaru Outback is more than $10K cheaper in the US than in Canada. There is a dealer in, I believe, NH that will complete all the importation paperwork for Canadians. All you have to do is to drive the car home and pay the HST and you have a new car at considerable savings.
  5. songs2001

    songs2001 Mu-43 Top Veteran

    Jul 8, 2011
    Because there are no Canadian car companies.

    So they don't have money tied into Canadian money and Canadians don't have the population where a car company can absorb the currency fluctuations like companies that sell in the US can.
  6. Promit

    Promit Mu-43 All-Pro

    Jun 6, 2011
    Baltimore, MD
    Promit Roy
    Apart from that, Subaru pricing in Canada just seems terrible across the board. Dunno what Sbie's problem is compared to the competitors.
  7. LovinTheEP2

    LovinTheEP2 Mu-43 Top Veteran

    Feb 15, 2011
    As for the car reference..

    Why? Just because a car is made here doesn't make it cheaper to sell here. We sell fewer vehicles per year - significantly so.. economies of scale factor in as the US division of Subaru has greater buying power.

    Other factors include again.. fewer people buying cars yet advertising to reach 100,000 people costs about the same in Canada and the US. So if Subaru spends $50,000 on an ad and only sell 1,000 units in Canada vs. 15,000 units in Canada.. the cost per sale is $50,000 / 1,000 per car = $5,000 car or $50,000 / 10,000 = $5.00 per car sold. (numbers are for illustrative purposes only and not based on any real figures). Dealer fixed costs are most likely higher as well in Canada due to higher corporate taxes paid in Canada, higher base salaries etc vs. the states.

    Also, perhaps since they are investing soooo much in manufacturing capacity here in Canada (with the aid of Canadian government kickbacks) creating well paying (in the $35-55 range), nicely subsidized pensions plans (50-70% of average salary over x years) jobs that could easily have been sent to the states, they feel its only fair to charge less to the Americans and charge us a bit more for having kept the jobs here. The assembly workers are benefiting hugely from their investment in Canada and is a very very important part of economy and welfare for retirees which then reinvest by having a comfortable retirement where they can spend money vs. depending solely on government subsidy.

    We can not have our cake and eat it too, think of it as a give n take solution.

    So for a Canadian dealer to have a similar profit margin on a per car basis, they need to raise the MSRP. Why should a Canadian dealer have to sell for example 2x as many cars to make the same amount of money at the end of year with a population 1/10 that of the states if they were to keep the MSRP the same.

    If you buy the car in the states, you'll only be contributing to issue and making it worse for future sales. The only way to truly stand up for the issue, is to really really hammer the dealer, show that you researched, communicated with a US counterpart and are ready to proceed if Subaru CANADA help with some type of incentative. If 1000's of customers did that, it would cause Subaru to act..

    By buying the car in the states, you are taking away sales commissions from Canadian sales people and dealers. Dealers have sales targets so buying those sales states side you make it that much more difficult for them to keep costs down, you're negatively impacting the economy buy moving a lot of money to the states additionally.

    You might want to check warranty coverage with Subaru, many manufacturers are not permitted to do warranty coverage for a vehicle purchased in the US.

    Enough people complained about Magazine-Book costs once the dollar came to parity and it helped, the gap has closed and isn't as large as it once was.
  8. mauve

    mauve Mu-43 All-Pro

    Mar 9, 2010
    Paris, France
    OK. I started that rant, so I feel a bit compelled to leave my answer.

    All that has been said does or doesn't make sense (VAT does, for instance, but there's still a princing gap when you remove that - additional costs may have an influence, but should pretty much be leveled when you take into account change rates between yen, dollar and euro).

    That's not the point I wanted to make anyway. What I meant is I absolutely don't care about local market reasons sound or not. We're living in a global economy, and those pricing schemes are backwards. I refuse to subsidy with my money whatever advantages US consumers gain from that situation. It's as simple as that : if you don't pay enough, I get to pay more. Not acceptable in those days and age.

    End of rant.


    ps. fuel for the thought : http://www.cameradebate.com/2012/mirrorless-market-share-2011-2012/ where you see that in fact ILC market penetration in Europe is actually better than in the US, therefore I think Olympus is pricing more aggressively its products to boost sales where they perceive a lack of interest whereas they milk the markets that are already more sold on the concept to fund for the marketing effort.
  9. turbodieselvw

    turbodieselvw Mu-43 Veteran

    Jun 29, 2010
    I am aware of the warranty issues with cars purchased in the US. Subaru Canada knows about me and they are not happy to hear that I am making my next purchase down south. Subaru Canada as already made more than enough money from me as I am now driving my third Subaru. Yeah, we have to give some to take what we have but I aint giving them any more extra cash outta my pocket no more. I have already been on the paying end all these years and they refused to listen so I am taking my hard earned money and getting my fourth Subaru somewhere else.

    I will buy my next camera locally as the difference inprice is not that drastic but would you pay $10K more for a car? If you would then you must be making a heck of a lot more than most of us.
  10. dhazeghi

    dhazeghi Mu-43 Hall of Famer Subscribing Member

    Aug 6, 2010
    San Jose, CA
    I agree that it's not fair (even though I currently benefit from the setup!).

    But I think at this point the problem boils down to this: unilaterally raising prices hurts sales. For whatever reasons, prices in the US have traditionally been lower. But if Olympus were to raise them to equality with prices abroad, their position vis a vis their competitors would be worsened. I would presume that they've done the numbers and decided that lower margins are worth the additional sales. The US accounts for more than 25% of world camera sales, and that makes it hard to write off.

    Pentax incidentally just did more or less what you suggested - they unilaterally raised prices on their lenses in the US to rough parity with European prices. Lenses that used to cost $800 now cost $1600. My suspicion is that their already slim US marketshare will collapse in the next year as their prices are now grossly uncompetitive with the likes of Nikon, Canon, Sigma and Tamron, but I guess we'll see soon enough.

    • Like Like x 1
  11. silversx80

    silversx80 Mu-43 Veteran

    Apr 27, 2012
    North Carolina
    There is one prime truth in a capitalist economy, charge what the consumer will pay. Macro Economics, 101.

    There is a cost to generate the supply, then the price to charge the consumer. There is a healthy balance between the two, as generating more cameras will cost less per unit, but saturate the market and drive the price you can charge to consumers down. Next, if you keep the market thin, then you can charge more for the product. As a side effect, certain demographics can no longer afford your product.

    There is a healthy balance with all that, getting the supply and price just right, so that consumer demand means profit is maximized.

    Like it or not, that's why Olympus made the EM-5... for profit. Nothing else. They're not in it for charity, or art, or anything touchy & feely. Money is the motivation, not fairness. That's all. Global economy, or not, some locales will pay more for a product than others. Charging more will yield greater profit.

    At the end of the day, if you're not happy about it, then don't spend your money. You don't need that camera, and there's plenty of competition out there vying for your currency. Pricing models will only change if people start taking their business elsewhere when it comes to non-essential goods.
  12. st3v4nt

    st3v4nt Mu-43 Veteran

    May 26, 2011
    Jakarta, Indonesia
    I thought this thread would discuss how the price parity in Olympus camera priced. Here I just want to share my experience as fellow traveler who happen purchase Olympus camera in different part of the world. From my experience there's always many factor taking into consideration why Olympus priced their camera differently. I've been purchase Olympus camera at least in three different country.

    1. The first olympus digital camera that I bought was Olympus Compact (I forget the type) in Singapore. It's special price for tourist, the store need to see my pasport before I eligible to make purchase. As I remember I got about 50% discount, because I check the current price in Internet. But judging from normal price, Singapore can quite competitive if you looking to buy Olympus camera, as long as it in cash, but not so with Credit Card. For tourist you can claim your Government Sales Tax, when you get back home in Airport. Singapore sometimes also offer bonus in form of accessories though the offer tend to be minor such as memory card and small tripod.

    2. The second purchase I was do, is in N.Y, USA, during thanksgiving week known as black friday. In term of offering, Olympus USA probably very generous, I got my EPL-1 PEN at Staple which giving the cheapest price at that time. The price different with my country is almost $100. And they give the essential accessories in form of extra batt and camera bag. But it's quite common for US store to give such a deal during Black Friday and holiday season. Though when I go to B&H I saw the price of E-5 (which is a new camera at that time) a bit higher (after I converting the price) compared to current price at my country. There's also tax different that should be consider by buyer in US depending in the state the transaction occur.

    3. The third purchase I do is in my own country, Indonesia. Where bonuses were minimal and camera considered as luxury goods. So that's why the price is always a bit higher. My EM-5+12-50 kit was priced around US$ 1400+, a bit higher due to the tax by at least US$100, and no bonus as well. The only good thing is probably I got my kit before the official launch day (they launch it today here I got it yesterday) and I can pay it with 6 month installment and 0% interest. And by the way Olympus still hasn't got official rep in here, it's just distributor and authorized service centre, though Olympus advertising is very aggressive.

    Other country that I have surveyed but not make purchase is Hong Kong and Taiwan where mirrorless camera population as high as Japan. They tend to have price much lower compared to Singapore and sometimes US. But it's only if you pay it with cash in brick and mortal dedicated camera store. When I check big dept. store they price the camera almost the same as in my country.

    Hope it can add the knowledge.
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