Monday, February 21, 2011

Rebate or Rip-Off? Canon price rises explained!

When Canon raises the prices to retailers, rebates are generally offered for the first few months to delay the price-change for customers. We don't raise prices on our existing stock to match the new prices, which often means that customer prices drop initially; however within a week or two, when we've sold out of almost every Canon unit that has a rebate on it, as well as a few that don't - we have to pay the increased prices when we re-stock.

At the same time if Canon decides to enforce their MAP program more aggressively, it leaves us no choice but to offer the renewed inventory at Canon “estimated retail prices”.

Manufacturers usually require retailers to meet MAP restrictions in order to participate in a rebate offer program, and many of Adorama’s regular list prices are frequently too low to be able to offer the rebates. If we don’t comply, we’ll lose our Authorized Dealership Status

When a manufacturer or US importer changes MAP parameters and enforces them vigorously, retailers are left with no option. Therefore when our inventory is exhausted, prices have to go up to reflect the new MAP. Nevertheless, prices at Adorama will at no time be raised above MSRP.

MAP restrictions mean that when the rebated lenses are marked up to the Canon "estimated price," the cost of the unit with the rebate applied will in some cases either be equal to, or in some case greater than the regular discounted price that we were selling them for before the instant rebate program went into effect!

The reason that you may find units pre-price rise at a smaller or independent retailer while prices at the bigger retailers have already increased, is simply a matter of scale; stores that carry & sell on from a larger inventory, will deplete stocks bought in at the pre-price rise prices far more quickly than smaller stores with a slower turnover.

Also, the price at smaller retailers is rarely as variable as at larger outlets, because they are generally unable to offer the same level of deep discounting due to their smaller purchasing power, so price increases are not as great.


As retailers who care passionately about the products we sell, I can promise you that we don't like it any more than our customers do.



Helen Oster ☺
Adorama Camera Customer Service Ambassador
HelenO@adorama.com

http://twitter.com/HelenOster

7 comments:

  1. What is MAP? googled and not very clear.

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  2. Minimum Advertised Price; try this link: http://saxforte.com/M_A_P__Price/m_a_p__price.html

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  3. Well said. Valuable information nicely presented. Thank you.

    --
    Henry Posner
    B&H Photo-Video

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  4. Thanks Henry; as one of my biggest sources of inspiration I value your feedback, highly.

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  5. Very nice explanation....thanks!

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  6. Just a quick note on the Saxforte MAP explanation that you linked to. It's a good overview of the MAP system, but it should probably be reworded a bit here and there to take into account the Leegin Creative Leather Products, Inc. v. PSKS, Inc. 2007 U.S. Supreme Court decision. That decision changed U.S. law related to minimum resale price maintenance. Here's a NY Times article about it:

    http://www.nytimes.com/2007/06/29/washington/29bizcourt.html

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  7. http://en.wikipedia.org/wiki/Leegin_Creative_Leather_Products,_Inc._v._PSKS,_Inc.


    --
    Henry Posner
    B&H Photo-Video

    ReplyDelete