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Pen pricing madness

Discussion in 'Olympus Cameras' started by dhazeghi, Apr 1, 2012.

  1. dhazeghi

    dhazeghi Mu-43 Hall of Famer

    Aug 6, 2010
    San Jose, CA
    Dara
    When I got my Olympus XZ-1 about a year ago, I remember I paid about $500 for it. At the time, E-PL1 kits were selling for roughly the same price.

    Today the XZ-1 is still $500 ($400 refurbished) and E-PL1 kits are going for $200 (also refurbished).

    Makes me wonder what's going to happen to the high-end compact market, not to mention the used DSLR market, where secondhand entry-level kits from 2008 are still selling for more than that. Sure, the E-PL1 isn't the best posterchild for m4/3, but a $200 E-PM1 or GF3X kit by early next year would be a very compelling option to anybody contemplating an entry level DSLR kit.

    A pity most of these deals are on eBay, where the vast majority of potential buyers won't have a chance to see them. If Amazon or Best Buy were selling them, it'd go a long way to expanding interest in m4/3.

    DH
     
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  2. foto2021

    foto2021 Mu-43 Veteran

    301
    Nov 5, 2011
    SE England
    The problem was that Olympus carried on making cameras and lenses that were not selling. The result is that Olympus has enormous stocks of E-PL1 and other, later bodies and lenses and is now releasing them on to the market in order to reduce stocks.

    They are great value for money. The E-PL1 is a fine little camera whose image quality is as good as that of any 12 MP m4/3 body, At $199 with a standard kit lens, it is a steal. But it does mean that selling prices of used Olympus gear have dropped considerably.

    Things are even worse with 4/3 (rather than m4/3) bodies and lenses. There are still many brand new unsold E-1 bodies and Zuiko Digital lenses. I'm convinced that the main reason Olympus continues to make bodies for the E System is in the hope of selling these unsold ZD lenses to buyers of new bodies.

    Having owned an E-1 when they were first introduced I would love to own another. It was one of the best handling cameras I ever used, and I loved the colour rendition of the Kodak CCD. I'm just not sure what use I would find now for a 5.0 MP DSLR with very high noise levels at anything over base ISO.
     
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  3. dhazeghi

    dhazeghi Mu-43 Hall of Famer

    Aug 6, 2010
    San Jose, CA
    Dara
    It's a bit more complicated than that. Most of the gear is selling, but perhaps more slowly than they expect. So they stuff the retail channels early in the release cycle, and get left with lots of extra unsold inventory at the end. They also tend to price things high initially, which somewhat limits demand.

    It's not a great business strategy in terms of making money, but in terms of gaining buzz it would actually be fairly effective if more of the low-priced gear were at places where they'd be seen.

    It would probably work better if they were more conservative on their production runs, and a bit more modest on their pricing. But as long as they're going with the current approach, it seems to me they might as well gain the most exposure and marketshare that they can.

    I seriously doubt there are new (or even refurbished) E-1 bodies anywhere. There are of course a good many ZD lenses and I'm sure they'd love to get those sold, but production is somewhere between light and nonexistent (one advantage of doing things in batches), so the costs at this point are quite low. Of course the retailers don't appreciate slow-selling gear cluttering their shelves, which is a big part of the reason why so few carry regular 4/3 gear.

    DH
     
  4. foto2021

    foto2021 Mu-43 Veteran

    301
    Nov 5, 2011
    SE England
    Fundamentally, there is no difference between that and what I said. Olympus made them at a faster rate than they were selling - and continued to do so. If this practice was repeated across all divisions of the company, it would go a long way towards explaining how they got into such bad financial shape, with unsaleable product valued as assets in the company accounts.



    I have a personal and business relationship with a wholesaler who handles Olympus equipment. We have known each other for over thirty years. We were talking about our Four Thirds experiences and how much money we had each wasted on the E-System.

    He told me his price for a new E-1 body and asked if I would be interested. As a joke, I offered to buy ten. He jokingly suggested a discount if I bought a hundred. So I asked the price for a thousand. It was then he said that if I was serious, he could get me a thousand within a week. The supply is basically unlimited.

    He later sent me a list of ZD lenses and accessories with prices and an indication of quantities available, running not into thousands, but totalling tens of thousands.

    I know of one UK camera store owner who has bought some E-1 bodies and ZD lenses from my friend and is trying very hard to sell them, but his sales are extremely slow. There are plenty of UK camera stores offering ZD lenses but no-one can find a way of selling them.

    I would quite happily buy some and sell them on eBay if I thought there was sufficient demand. The problem is, it would only be an attractive proposition if I could sell dozens of the things, and I know that isn't practical. But be in no doubt that E-1 bodies and ZD lenses are still available in surprisingly large numbers.
     
  5. kevinparis

    kevinparis Cantankerous Scotsman

    Feb 12, 2010
    Gent, Belgium

    E-1's ???? thousands still available???... find that kind of hard to believe... they stopped selling those 5 years ago, and probably stopped making them a year before that..

    Surely even Olympuses mad accounting department would have written those off the books years ago and would have turned them into landfill

    E-3's i might just believe, and I am sure there are stocks of lenses

    Then again your wholesaler friend may have made a bad business choice when he bought the job lot of stock from a grateful Olympus

    k
     
  6. pxpaulx

    pxpaulx Mu-43 All-Pro

    Jan 19, 2010
    Midwest
    Paul
    I've seen the XZ-1 refurb for $299 as well, quite a discount (just this week, either direct from Oly USA or cameta camera, can't recall). If the way they are conducting the sales, 'refurb' sales and quick to market new releases weren't working as a business model, it probably would've stopped a couple of models ago around the e-pl1. The fact that it continues in my eyes tell me just how much profit is built into the initial MSRPs of the Pen cameras (likely Panasonic's as well), and also how well they are selling. They wouldn't keep releasing new bodies with such fervor if they were losing money - they want the market saturated, getting people into the system is just the start remember! Then come the lenses...lenses...lenses.
     
  7. foto2021

    foto2021 Mu-43 Veteran

    301
    Nov 5, 2011
    SE England

    A thousand E-1s, not thousands. He deals all over Europe.

    As for Olympus's "mad accountants" it is now a matter of public record that Olympus's corrupt directors systematically hid losses of many hundreds of millions of pounds/euros/dollars over a decade or more - does no-one here read newspapers any more? Has no-one heard of Michael Woodford?

    I'm sure that thousands of E-1 bodies could easily have been "lost" in those figures - they would have been just a tiny percentage of the overall Olympus fraud, which apparently covered the whole company, not just the imaging sector of the business.

    The stocks of E-3s and E-5s are much smaller. There are quite a few lenses that might be of interest to m4/3 users but no discounts are available on the adapters.

    My friend owns no stock at all so takes no risk. He does deals, takes the money and delivers (within days) what was ordered. For this, he makes a percentage but has no outlay on stock. But it is pretty hard work as he is dealing with items that are difficult to sell, so they aren't exactly in demand.

    He also has access to large stocks of Pentax equipment, especially the Q System, which is only just beginning to sell after retail prices almost halved. Once again, I'm tempted to buy some but the importers are looking for volume purchases of items that they cannot currently sell, and I have no idea whether they would sell well on eBay. I'm not a risk taker, which is probably why I'm far from rich ...
     
  8. WJW59

    WJW59 Mu-43 Veteran

    235
    Feb 20, 2011
    XZ-1 Refurb is $299 in the Olympus America store.
     
  9. dhazeghi

    dhazeghi Mu-43 Hall of Famer

    Aug 6, 2010
    San Jose, CA
    Dara
    Right. What I'm saying is that with batched production you're always making more than you're selling at a given point in time, because the batch has to last until the next one gets made. The problem comes when you're making a new batch and the previous one is still on store shelves.

    It's a hard problem because there are usually enough enthusiasts to plow through the initial few batches, so it's hard to gauge how much the demand curve will trail off later in the cycle.

    But in the long-term, it's certainly not great for the company. Imaging is still losing money, albeit very slowly. My hope is that with the E-M5, they'll finally hit the right balance between achieving availability (good) and glutting the market (bad). We shall see.

    Wow! Well, I had no idea. I'm surprised a bit about the E-1s, because while the demand is low, there's still enough to support a few sales (E-1 afficionados are a pretty loyal bunch) and I don't see any of them in the usual places.

    You're right - somehow missed that. Still - my initial point is that we have Pens underselling quality compacts - which seems remarkable considering the production costs involved.

    Lenses sound good in theory, but in actuality the average DSLR owner purchases 1.5 lenses per camera, which for low-end sales means usually just getting the kit lens with the body. I don't think the strategy per se is market saturation - it's more the byproduct. But as long as it's there, it would be good for them to take full advantage.

    DH
     
  10. kevinparis

    kevinparis Cantankerous Scotsman

    Feb 12, 2010
    Gent, Belgium
    foto2010 said

    As for Olympus's "mad accountants" it is now a matter of public record that Olympus's corrupt directors systematically hid losses of many hundreds of millions of pounds/euros/dollars over a decade or more - does no-one here read newspapers any more? Has no-one heard of Michael Woodford?

    errr... yes... I read a lot of newspapers, journals, blogs...every day... I am very aware of the Olympus troubles and Michael Woodford. Hence the jokey reference to mad Olympus accountants

    I also know that the big losses they hid over the years were from dodgy financial investments that went south as opposed to the core businesses of Medical Imaging and the camera division, both of which have been profitable on the whole, though the camera division has suffered in recent years.

    give us at least a little credit for some intelligence amongst this forums members

    K