Originally posted by NS_Sailor You may be correct in your assessment of the retail market here in Canada, but this business practice of other Camera suppliers, though not so much in the Canadian Retail market, is part of the "Cost of doing business" in many parts of of the world and is as old as time itself.
I also remember when, probably before Pentax was bought out and abandoned by Ricoh, that there was a network of "Authorized" Pentax Retailers & Service Centers. made up of Local retailers an some national chains. Here in Halifax we were lucky to have both with staff very dedicated to the brand. Sadly the repair center, though still in business, is no longer considered and "Authorized" Pentax facility and the local Retailer again still in business no longer handles any camera equipment. Fortunately many the staff familiar and support the Pentax brand are now working with another local retailer.
The business of being a camera retailer is a long list of dead bodies. I bought my Program Plus at Toronto Camera which at the time I was in school was one store on Young street in Toronto. They expanded to try and put stores every where, and eventually went under. Over time Henry's took their place with the same business model, main store in Toronto, satellite stores all over the place.
But Pentax faces the same problem Apple did. A built in sales force that steered customers away from Apple product. They responded by starting their own stores. Stores where their product was featured, not in a dusty unused out of the way corner of the store.. They then took control of the retail channel. The Apple price is the Apple price, you offer some other price and Apple reps will come in and pull your product off the shelves. So basically, faced with not being able to undercut the Apple price on line people take advantage of stores. Be it Best Buy, Staples, whatever. If they find what they want at one of those store they buy from the Salesman who helped them. Not the guy who offers the same thing for $50 less, because they know that price is not available.
One of my favourite "teaching moments" was the day a major chain here in Canada offered an un-autherized sale of Apple computers and ended up with no stock. Apple reps visited every one of their sites and removed all existing stock as per their service agreement. Apple wants you to sell with quality of service, not price competition.
The issue here is what can a small underdog company do to increase sales? The majority of Canon , Nikon salesmen do not know why or who to recommend Pentax to. Pentax has responded by selling on-line. Fredericks of St. Catherines typically has more Pentax stock on hand than much bigger Henry's stores. That is a corporate decision on Henry's part, I was there shortly after and saw the consequences. I walked into a Henry's in St. Catherines and went to the Pentax section. All the Pentax stuff was gone, I asked the salesman what happened. He said "I don't know, some guy from head office just came in and took it all." Just as the Apple Store is the result of corporate decisions in a lot of other companies. But the bottom line is, if people can save money buying on line, most are not going to go to a store. Personally, I'd rather have the camera delivered to my post office box here in town than drive to pick it up in a store. The only thing a store does for you is drive buy impulse buying, and I'm not sure how often that even happens in the camera business.
Apple is the only company I know that's been able to control this situation, and most people think of them as Nazi's for doing so. With Apple I go to a store if I'm in the neighbourhood, if not I order on line. It's a comparable experience either way and there is no price advantage one way or the other. I prefer to work with a real person, but if that's not possible, no problem I get the same deal at the same price. But, no one else is Apple. Apple took control of the situation. Camera companies seem to be wandering in the wilderness.
My K-1 from the closest store would have been $100 more than the on-line price. That's just not right. Apple insists the retail channel offer service. The other day I phoned up the Apple on-line store and discuss specs with a sales person, and we had a fairly comprehensive discussion. Ricoh doesn't insist on similar service from on-line sellers. The issue is on-line sellers and Ricoh itself providing very little service. They essentially don't care how cut throat the supply chain is as long as they are selling cameras. As result, there isn't a camera retailer on earth, I'd want to do business with... at least not that I know of. Everyone that put the time and effort into decent customer service has been undercut by companies that sell on-line and don't do the same.
The equation is simple. If you sell to the cut throats, legitimate retailers can't afford to sell your stuff.
And bottom line, to get to my nearest Pentax store, I have to drive to their store at cost of 3 hours of my time, pay a higher price than I can get on-line, wait for it to come to the store, drive 3 hours again to pick it up. I should support the local store, but, I've paid the higher price at retail stores before enough times to know, my business will not support a store. The money they make from me from one sale probably keeps them in business for a few hours. If everyone else goes for the cheaper price on line, it doesn't matter what I do. This has to be controlled at a corporate level. Individual consumers have absolutely no clout.
The difference between Apple and most companies is they saw what was happening and did something about it. My suspicion is the execs at Ricoh would watch the company go down the tube rather than get this under controll. They did try a few years ago, but they coupled the grab for a controll with a huge price increase, then didn't remove product from those undercutting their prices, In effect punishing their own dealers. That's the problem with copy cats. If you are going to copy Apple, you have to realize it's a whole package. You don't get to pick and choose what parts of the model you want to use. Pentax refused or couldn't take stock away from cut throat marketers, so their plan was doomed from the start. All they did was punish their remaining dealers.