Supreme Court Clears Way for Internet Sales Taxes

[Barry_Green]

Another example, you can buy a brand new Panasonic GH5 on eBay for under $1,300 while it is $2,000 on the Panasonic website.

And you can buy one out of the back of some guy's trunk for $50. Damn that greedy Panasonic and their markups!!!

Buying from liars, scammers, gray marketers, imported product that's taking advantage of currency fluctuations, and thieves who dismantle the product and remove the battery, the lens cap, the charger and other such things and then try to charge you grossly inflated rates to get all the stuff that should have been there in the first place, or refurbished product sold as new, and all with no warranty, or who cancel your order if you don't get a ridiculously expensive extended warranty to go with it -- seriously, what the hell? Why troll around in the sewers?

There are two legitimate prices out there in the world -- there's MSRP (such as will be found on Panasonic's website) and there's MAP (the Minimum Advertised Price) such as will usually be found on B&H, Adorama, and others. Those are legit, from authorized resellers. Any lower price means that some or other aspect of the prior paragraph applies. The very, very best-case scenario for the price shopper is to find a gray market product, which is factory original product that was made for a different territory but is being imported and sold into the US. If you're lucky, that gray market product will still be new, factory-fresh, and include all accessories. And that savings (if any) that you'll get on that gray market product is going to be offset by the fact that you will have zero warranty coverage.

There is no free lunch. Shopping for a lower price is going to involve tradeoffs. You just have to determine if those tradeoffs are worth it to you. That ebay seller flat-out admits that it's a gray market product. So you can get a gray-market import GH5 body-only for $1300, or a factory-fresh brand-new unit from B&H including the factory warranty and your choice of either a free microphone or a kit that includes a bag, SD card and battery, for $1500. Pick whichever deal you prefer, but recognize that they're not the same.

 

[markfpv]

^ Spot on Barry. :thumbup:

 

[alaskacameradude]

Buy the camera from a gray market seller and it may show up missing pieces or even nonfunctional. And then don’t come crying to us about it, if you buy gray market there’s no warranty to honor and we may even refuse to service it at all. Our policies are the same as many other companies.

I know what you are saying but.....if you buy a camera off eBay and it shows up
'missing pieces or nonfunctional' you will get your money back. Now as far as never having a warranty,
that one is true and a totally valid reason to avoid a grey market camera. But you are not going
to lose your money and get a nonfunctioning camera with missing pieces. eBay is very good
about this. I've even heard it said that they go too far to favor the buyer in disputes.
I personally have had 3 different issues when buying off eBay. Once a package that was
supposed to carry a camera lens arrived with a slit in it and nothing in the box. Another
time a laptop I bought, literally came apart when I took it out of the box. And another time
the seller did not include what he said would come in the package....excluding one important
item. Every time I got every cent back. You'll get a 'functioning' camera with all pieces that
the seller claims it will have, or you'll get your money back.

What you WON'T get is service or support afterwards. Some people are OK with this.
I personally would usually be inclined to pay the little extra for the warranty but to each his own.

 

[alaskacameradude]

And you can buy one out of the back of some guy's trunk for $50. Damn that greedy Panasonic and their markups!!!

Dude, show me where that guy and his truck are at! I'll take 5!

 

[Cary Knoop]

I personally would usually be inclined to pay the little extra for the warranty but to each his own.

Good point, but when an importer charges excessive markups, 65-70%, much more than in Asian and European countries and blocks package deals that are offered in Europe and Asia (for instance the introduction of the GH5) they should not be surprised people look for other ways.
On top of that importers harras vendors when they want to sell the goods for prices they want to sell for.

And what gives 'there are two legitimate prices', I thought we live in the USA, not North Korea.

 

[Barry_Green]

And what gives 'there are two legitimate prices', I thought we live in the USA, not North Korea.

Wow, you nailed it. Our capitalist free market system is exactly like North Korea. What a brilliant insight.

Look, any seller can sell whatever they want for any price they want. B&H could choose to sell GH5s for 30 cents apiece if they wanted to. It's perfectly legal and valid, nobody anywhere is stopping them from doing so -- but if they do so, they'll go out of business. So they don't. They CAN, but they don't. Nobody does. B&H advertises their price at the MAP, which is a CONTRACTUAL arrangement (i.e., MUTUALLY AGREED UPON) between the reseller and the manufacturer. But B&H adds additional value by including a microphone, or a bag, battery, and card. They're still selling at the MAP, but they're also giving you more value than you may get from another reseller.

Sellers can sell at less than the MAP if they want, they just can't CONTRACTUALLY (i.e., MUTUALLY AGREED UPON, and not enforced by any totalitarian government) ADVERTISE at that price. You see this happen occasionally, where someone will say "add to cart to get a lower price". Sometimes it makes a difference. Sometimes it doesn't. They can't ADVERTISE it for less, but they can sell it for less. The only thing this really means is -- if you see a seller advertising a price for less than the MAP, then you know for a fact that that seller is not a legitimate, factory-authorized reseller, and that some or all of what I described above is in play.

 

[jb.]

Those are legit, from authorized resellers. Any lower price means that some or other aspect of the prior paragraph applies.

That's not always true. I've bought several items from a few different manufacturers all below MAP from GreenToe.com. All have come from legitimate dealers and all were USA-market products and 100% intact.

 

[Barry_Green]

That's not always true. I've bought several items from a few different manufacturers all below MAP from GreenToe.com. All have come from legitimate dealers and all were USA-market products and 100% intact.

I can see what you mean; I hadn't heard of GreenToe before. But what I was meaning was "any lower ADVERTISED price"; an authorized reseller agrees to not advertise for less than a certain price. Those resellers are always free to sell at any price they choose, and that's what your sellers have done for you.

 

[Run&Gun]

To me, Gray Market isn't worth it. I want support if I need it. But the internet is full of people who are more than willing to roll the dice to save $100 on a camera.

I've bought "Gray Market" once, if you can even call it that. About 15+ years ago Fuji did not have a "gray market" policy, so you could buy lenses out of market and they were legit purchases. I bought a lens directly from Japan and had it shipped in. Saved me about $7K or so over the US price and it was fully warranted and eligible for service. Of course, now it's different and the next one I bought was through my dealer.

 

[ntouched]

I bought my Fujifilm XH-1 from Greentoe.com earlier in the year (January 2019) for $1099! NEW IN THE BOX, FROM AUTHORIZED FUJIFILM DEALER with BATTERY GRIP and TWO EXTRA BATTERIES! And that was when other retailers were selling for $1299/ $1399. GreenToe.com is legit!

 

[yoclay]

I bought my Fujifilm XH-1 from Greentoe.com earlier in the year (January 2019) for $1099! NEW IN THE BOX, FROM AUTHORIZED FUJIFILM DEALER with BATTERY GRIP and TWO EXTRA BATTERIES! And that was when other retailers were selling for $1299/ $1399. GreenToe.com is legit!

eglobal does the same thing in Europe. The trade off is that it usually takes about 15 days for the product to arrive. I bought a Fuji X-T3 for 1049€ ($1179). The B&H price for that camera is $1399 (with a $100 rebate). The other thing to note is that in Europe there is an obligation by resellers to provide a minimum of 2 year warranty. So they will often have to provide the second year at their own cost. As a result, even when they have a grey market product, they will provide the warranty service completely from their side, as opposed to the manufacturer.

 

[Samuel H]

Earlier this year I bought an a6500 from ebay. At 900eur vs 1200eur at amazon, it made sense to take the risk that the camera could be faulty, refurbished, used, or not appear (which would have cost me time and stress, if not money). The camera is new, came with all the pieces, and works flawlessly. And personally I've never had a camera issue within the life of the warranty that was not my fault, so I can live without a warranty.

I also bought a sigma 56mm f/1.4, and was afraid it might be one of those tilted copies that get sent back time and again by buyers. But again, given the price, I was OK with taking the risk. Luckily, this one also worked well.

What I'm saying is: there's a price difference, and also a risk, and it may or may not make sense for YOU to take that risk. In particular: you don't want to be the guy that makes a 30-people shoot stop for two days because he saved 300eur buying a camera on the grey market. But that's not what I'm using this camera for, so I'm good.

 

[DLD]

... What I'm saying is: there's a price difference, and also a risk, and it may or may not make sense for YOU to take that risk...

if you're a cross shipping/gray market goods retailer and you shaft your customers, you're more likely than not going to get stuck with a huge inventory of unsold goods. And a lot of these cross-shippers have been in business for a long time. I have no idea how working around the Euro VAT works - I know how it's been done in the US and that was an organized crime endeavor and was busted eventually - but running a heavy discounter online makes sense since there's no store, almost no advertising, virtually no overhead and only a few employees. So a ~ $1,300 camera at 25% profit margin still has use at 10%-12% if everything else is also budget.

PS. Best Buy's latest financials (the one with their new CEO announcement) show ~ 23.5% in-store profit margin. Considering that the Best Buy product mix includes a lot of entry level merchandise and white goods, this is pretty impressive. From math alone, they must have quite a few 30%-35% items, which they do in substantial volume.

PPS. When Canon lowers its C300MKII MAP from $16,000 to $12,000, aka a 25% reduction, overnight, do they lose money on the new MAP?

 

[alaskacameradude]

PPS. When Canon lowers its C300MKII MAP from $16,000 to $12,000, aka a 25% reduction, overnight, do they lose money on the new MAP?

Ummm....nope. Which is a good point.

 

[Barry_Green]

Considering that the Best Buy product mix includes a lot of entry level merchandise and white goods, this is pretty impressive. From math alone, they must have quite a few 30%-35% items, which they do in substantial volume.

They also have a few 10,000% items. Try buying an HDMI cable or a USB cable or an Ethernet cable from them.

PPS. When Canon lowers its C300MKII MAP from $16,000 to $12,000, aka a 25% reduction, overnight, do they lose money on the new MAP?

Maybe. Any time a manufacturer has to drop the price by 25% on a product, that's a pretty good sign that they weren't selling any anyway. So they may be clearing out the remaining overstock. If they were selling zero products at $16,000 then their net margin was ZERO.

The bigger question is -- why do folks care so much what the margin is? Manufacturers are entitled to charge what the market will bear. If you can make a product for 50 cents and sell it for $100, and the market is happy to have that product because it fulfills a need they have, then -- whose business is it what the margin is?

Let's put it another way -- when you go to work for $40/hour at a day job, or $800/day as a freelance crew member, what's your margin? Literally 1,000,000,000%. It costs you practically nothing, yet you walk away with $800. Should I complain about your margins? Should I expect you to work for only 10% above what it cost you? What did it cost you -- a t-shirt and jeans, which have long, long ago been amortized, and maybe a dollar in gas. I even have to pay your food on this job. So it costs you $1, yet you walk away with $800. Isn't that obscene? Shouldn't you be happy to work all day and I should only have to give you $1.10, a 10% profit margin?

What about your screenplay that you want to sell for a million dollars... it only cost you about $1.50 for the ream of paper you printed it on. So shouldn't you be happy with $1.65, a 10% margin over your costs?

So why do you care what the margins are? Healthy margins mean a growing company and innovation. As long as the product is worth its price TO YOU, then who cares what the margins are? And if the product's not worth it's price to you, then DON'T BUY IT.

 

[Run&Gun]

I was going to make pretty much the same post as you, Barry. Monster Cables are ridiculous profit monsters for Best Buy and probably the worst value for customers.

I was going to draw parallels with us, too, but we all know that it’s not all profit. Even with 100% of my gear paid for, which it is, I still have to pay for my business insurance(gear and liability), federal and state taxes, county taxes, insurance on my vehicle, fuel and upkeep on my vehicle, power, water, gas, phone, internet, satellite, maintenance on equipment, adding new equipment, house insurance, health insurance, try to put some money in the bank for when I’m old, and lots of other things. So our day rates aren’t all profit. Then throw in the fact that most of us don’t work everyday. It ebbs and flows. But I understand what you were saying and the point you were trying to get across.

People look at profit margins and they always think they’re being screwed. “What? There’s only $10 in parts there, you should be selling it for $11.” I have a friend that owns a deli and people are just as bad when it comes to food. He told me about this old lady that came in bitching about his prices, because she could go to the store and buy the stuff to make the sandwich at home for less. Bottom line everyone wants everything given to them for free or almost free, but wants to get paid for everything they do.

 

[nutmegger]

I was once told by a marketing professor "when people believe they are getting value for their money, they will gladly give you their money." A good current example is the Canon XF705 camcorder https://www.bhphotovideo.com/c/product/1434328-REG/canon_3041c002_xf705_hd_camcorder.html and the Panasonic CX350 camcorder https://www.bhphotovideo.com/c/product/1451846-REG/panasonic_ag_cx350_4k_camcorder.html. Both camcorders have similar specs yet the Canon sells for $6,999 and the Panasonic sells for $3,695. I wonder how many Canon XF705s have been sold? Whereas Panasonic appears to be having difficulty meeting the demand for the CX350.

 

[Barry_Green]

I was once told by a marketing professor "when people believe they are getting value for their money, they will gladly give you their money." A good current example is the Canon XF705 camcorder https://www.bhphotovideo.com/c/product/1434328-REG/canon_3041c002_xf705_hd_camcorder.html and the Panasonic CX350 camcorder https://www.bhphotovideo.com/c/product/1451846-REG/panasonic_ag_cx350_4k_camcorder.html. Both camcorders have similar specs yet the Canon sells for $6,999 and the Panasonic sells for $3,695. I wonder how many Canon XF705s have been sold? Whereas Panasonic appears to be having difficulty meeting the demand for the CX350.

To take it a step further -- would it change your opinion in any way whatsoever if you knew that the Canon only had maybe a 10% margin and the Panasonic had a maybe 20% margin? Would you care in the least?

 

[Barry_Green]

I was going to draw parallels with us, too, but we all know that it’s not all profit. Even with 100% of my gear paid for, which it is, I still have to pay for my business insurance(gear and liability), federal and state taxes, county taxes, insurance on my vehicle, fuel and upkeep on my vehicle, power, water, gas, phone, internet, satellite, maintenance on equipment, adding new equipment, house insurance, health insurance, try to put some money in the bank for when I’m old, and lots of other things. So our day rates aren’t all profit. Then throw in the fact that most of us don’t work everyday. It ebbs and flows. But I understand what you were saying and the point you were trying to get across.

Thanks, and I agree, but for the sake of the thought experiment let me take it a bit further. Yes you have expenses, and yes I have expenses, but as an employer I don't know or care what your expenses are. Those are your business. If you choose to live in a tent on the side of the road and eat grass and roadkill, that's your business. If you choose to live in a mansion and run your credit cards to the max, that's your business. Neither scenario will make a bit of difference to me when it comes to whether I hire you or not. If you are worth $800/day to me, that's what you'll get, so long as you show up on time, do the work, and don't cause problems.

Now, if someone tried to tell me "well, I'll do the job, but I need $1500/day because I have a pretty strong coke habit and that costs a lot, you know..." then I'd say "that's your problem. I need someone, I'm willing to pay $800/day for a good worker." I'm not going to pay you more than what you're worth just because your expenses are higher, and I'm not going to pay you less than what you're worth just because your expenses are lower. That's your business. My business is: will you do what I need, and is your fee worth it to me?"

People look at profit margins and they always think they’re being screwed. “What? There’s only $10 in parts there, you should be selling it for $11.”

Those people almost certainly have never run a business, and would learn immeasurable life lessons by running a lemonade stand for a day.

I have a friend that owns a deli and people are just as bad when it comes to food. He told me about this old lady that came in bitching about his prices, because she could go to the store and buy the stuff to make the sandwich at home for less.

Yes, I've seen that many times. The cost of food is probably the lowest expense most restaurants face! (when compared to labor and rent and taxes, obviously). To them, I use the screenplay example -- "the paper you printed it on is worth maybe a buck fifty, so that's what I'll pay you. Sound fair?"

 

[alaskacameradude]

The bigger question is -- why do folks care so much what the margin is? Manufacturers are entitled to charge what the market will bear. If you can make a product for 50 cents and sell it for $100, and the market is happy to have that product because it fulfills a need they have, then -- whose business is it what the margin is?

So why do you care what the margins are? Healthy margins mean a growing company and innovation. As long as the product is worth its price TO YOU, then who cares what the margins are? And if the product's not worth it's price to you, then DON'T BUY IT.

Not sure if you’ve paid attention to it lately but a
LOT (and I mean a LOT) of people these days are
concerned with profit margins, CEO pay, how much
corporations make in profit, and what they see as
‘growing income inequality.’ I’m not going to get
political here or express my opinion as I know it’s
a ‘no-no’ but watch news reports, or read stories
about Walmart, ‘Big Oil’, ‘Big Pharma’ or any big
corporation and you will see similar sentiments
expressed by many who are interviewed on the subject.