(Typical example of what can happen if you use a gray market camera.)

I guess it’s the time of year. Several big photo sites have decided (again) to explain the gray market in camera equipment.

Having worked for a camera company that nearly went out business due to gray market, I have some familiarity with this subject.

Around the time of the the Korean War, word got around that the Japanese were making some very fine camera lenses. Some of these optics were on a par with Leitz and Zeiss. If the Japanese could enter markets in the West, it would be a bonanza.

Given their limited knowledge of foreign consumers, companies like Nippon Kogaku, Canon, Asahi (that would be Nikon, Canon, Pentax) and others made distribution agreements with companies overseas. As businesses, these regional distributors were wholly independent from the manufacturer. The distributors provided marketing, parts, service and what we now call “support”.

The distributors wanted and needed to hit certain sales targets, both to cover the cost of operation and to make sure the folks in Japan agreed the arrangement was mutually beneficial. And it was here that interests began to diverge. You see, the sale of an Asahi Pentax camera made for the Asian market was still a sale, even if the camera ended up in Pennsylvania. But to Honeywell, the Pentax distributor in the USA, it wasn’t a sale at all. And it wasn’t just a lost sale, because the customer might reasonably expect Honeywell to provide customer service and even warranty repairs–all for a product Honeywell hadn’t sold in the first place!

So the distributors found themselves in a spot. With 360 Yen for a dollar, tourists and military stationed in Japan were bringing home everything from from Asahi to Yashica. (I was going to say Asahi to Zenza Bronica but they weren’t around yet.)

When a tourist or member of the military brought back a camera for their own use, the regional distributors did the sensible thing and looked the other way. But before long, enterprising individuals realized they could buy cameras in bulk, wherever the price happened to be low, and resell them where the price was high.

I’m not an attorney but it appears this type of arbitrage is legal and has survived numerous challenges. The icing on the cake is that consumers, understandably seeking the lowest price, probably think the authorized distributors are the bad guys for charging too much.

It’s hard to know how upset the Japanese manufacturers really are about this. After all, it has gone on for a very long time, and a sale is sale. Various deterrants have been tried, like different model designations in different markets and extended warranties on non-gray market products. Minolta even tried adding extra features but they put them on cameras for the home market, making the “gray” versions more desirable, not less. The current approach seems to be a safety arguement; that a camera purchased in Australia might pose a risk if used in Canada. I suspect you’re unconvinced.

What to do? I keep thinking about this week’s news on Cuba. Eventually, strategies that just don’t work have to be abandoned. If you shop for a Mercedes in California and tell the salesperson you want to pick it up in Stuttgart, the dealer will arrange it. The point is, the company, even at the dealer level, realizes any sale is better than none.

Since we’re not likely to see similar accommodation in the camera business any time soon, should you buy a gray market camera or lens? Well, no guarantees (pun intended) but many camera distributors will service gray market products for a fee. This policy lets them “reward” consumers who purchased an officially imported product by providing warranty service, while at the same time not completely alienating customers who knowingly or unknowingly bought a gray market product.

Nikon, with rare exceptions, is the exception. If you buy a Nikon photo product in the US that wasn’t officially imported by Nikon USA, they will refuse to service it, even if you are willing to pay. Believe it or not, even if you buy a used Nikon product, with no knowledge of where it was purchased, they will refuse to service that too, if it turns out the item wasn’t originally a “USA” import. From what I gather, the situation in the E.U. is similar.

For me, the bottom line is, digital cameras and lenses are so complex, I want the best warranty I can get. So, for the big stuff, gray market is almost always no-go. Also, I’m suspicious of independent warranties unless they include the option of sending the item back to the factory in Japan. Not ideal, but at least the work should get done properly.

On the other hand, things like straps, caps, adapters, extension tubes, electric cable releases and filters don’t have a lot to go wrong. Even batteries, if you’re sure they’re genuine. At the end of the day, it probably makes sense to at least check the price is on a gray item. There may not be big savings in the first place.

So, do I ever stoop to buying gray? Yep, sure do. The 11-22mm lens for my Canon EOS-M came from Henry’s in Toronto and my 55-200 EF-M came from some guy on eBay in Japan. Neither of these lenses is sold by Canon USA so technically, they’re gray market.

One last thing. Whatever your thoughts on gray market, make no mistake; nobody buys a $3000 camera and sells it for $2200. When a gray market item is selling at a big discount, it’s because the manufacturer sold it to somebody at a big discount. There are plenty of reasons they might do this, but the reality is that ultimately, the source of gray market goods is the manufacturers themselves.

There’s a lot of nonsense and speculation about gray market, but if you want to read more that’s accurate see Thom Hogan’s site.