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Buying Cameras From Overseas ...What is "Grey Market"?

  • What makes a camera a grey market camera?
  • What is parallel importing?
  • What are the problems with purchasing a grey market camera?
  • Is it illegal to buy my camera overseas and what about GST?
  • Why buy a grey market camera?
  • What about International Warranties?

These are all very good questions and ones that you need to fully understand before buying your next camera or lens. Lets look at them as listed shall we......

What makes a camera a grey market camera?

When manufacturers create their distribution channels, they do so to "authorised" dealers and specify their stock to be distributed. This allows them to manage the logistics of supply & demand and pricing variations due to international money rates, freight & local government duties. It also allows them to track product models and batch numbers, so that in the event of a problem it can be rectified in the easiest possible way.

"Grey Market" is when an UN-authorised company circumvents these distribution channels and sells (wholesale / retail) a camera into a market place for which it was not intended by the manufacturer.

So an example of an authorised Camera purchase would be: Canon Inc. has an authorised distributor in Australia (Canon Australia) who in turn supplies to authorised retailers like Ted's/Paxtons/PhotoContinental etc. who then supply the consumer.

An example of a Grey Market camera purchase would be: Canon Inc. supplies an authorised distributor in China. This distributor then supplies a Chinese based retailer, who in turn retails the camera to the consumer. No problems there, as a camera intended for China is still in China... but wait, what if that very same retailer also has an online presence and markets their camera stock to the world.

Now all of a sudden, a camera that was intended for the Chinese market, can be purchased in the Australian market.... or a "grey market".

What is parallel importing?

Parallel Importing in the act of bringing grey market products into a country. So to the consumer, the result is the same. The camera purchased was not intended for the particular country it is purchased in and is therefore considered "grey".

What are the problems with purchasing a grey market camera?

Naturally it disrupts the manufacturer's distribution processes and effects how accurate their logistical calculations can be. It also bypasses local stores, effects their profitability and ultimately may even see the loss of local jobs. Now this tends to be a polarising issue and what side of the fence you sit on is your deal.... so on these points I will let "your" moral compass be your guide.

The problems for the purchaser are warranty and retailer reliability. Manufacturers know 'what camera was intended for where' and they will issue warranties only in the "intended country of sale". So as soon as your serial# reports your camera as being "grey", the manufacturer is NOT obligated to supply any warranty service if it's required.

This is why the retailers will generally supply their own warranty. This means that your camera may need to be returned to the seller for repair, or be sent to a local repairer who's cost is covered by a 3rd party warranty company or insurer.

This is of course a risk, but it's a risk that only lasts for as long as the warranty period. After that, any repairs would be at the owner's expense anyway, regardless of where a camera was purchased. This risk is one that only YOU can access and decide if the money saved makes it worthwhile.

The other risk to the purchaser is in avoiding the shonky dealers. There are new grey market dealers popping up all the time and there have been many reports of money spent, but no camera received. So investigate your dealer carefully, look at sellers feedback reports, ask around in photography forums and blogs, as this will give you a good understanding of who can be trusted.

If I was to recommend one to help you avoid the shonks, it would have to be DigitalRev.com as they are one of the biggest and have a very good reputation for quality service.... they even offer a local AU warranty repair!

Remember this basic rule when looking at grey market products though: If the deal seams too good to be true.... IT IS TOO GOOD TO BE TRUE! So don't be tempted.... it's safer to use a recommended supplier.

Is it illegal to buy my camera overseas and what about GST?

No absolutely not. While travelling you will have options of buying both grey market and authorised. If you buy authorised, then you have bought a camera intended for a specific country, IN that specific country. The fact that you will bring it home to Australia is beside the point, as it's your camera and you can take it where you want.

You will however have to consider GST when re-entering Australia. If your item is over $1000 then it will attract GST at the standard rate of 10% plus a small customs fee (it was $52 I think, but may have changed). Under $1000 attracts no GST. This holds true for both grey & authorised camera equipment coming back into Australia, whether you have brought them back from holidays, or purchased them online and had them delivered by mail.

So always check the customs website before considering an overseas purchase and factor in any charges that are likely to be incurred.

Why buy a grey market camera?

The simple answer for most people is price. When you factor in cheaper markets, GST and exchange rates it is possible to save many hundreds of dollars..... even on a basic kit and often that is the difference between making a purchase and not. That said, buy from the wrong grey market dealer and postage and customs charges can soon bring the price on par to local purchaces... so do your maths and read the fine print.  If the dollar benefit is minimal, then there is a lot to be gained by puchasing locally.

What about International Warranties?

International warranties are GREAT! ie: Canon provides international warranties for their lenses (not camera bodies unfortunately). This means that no matter where I purchase a lens, Canon will honour a warranty repair in any country in the world. However this does NOT mean that grey market lenses are covered, as "how" the lens was purchased is also taken into consideration by Canon. Other manufacturers may have a different policy, but the trend is certainly for manufacturers NOT to honour their warranties on grey market items.

Please check with the manufacturer before making your purchase regarding warranty.

Cheers Russell.

 

See also: What camera should I buy?

 
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