The Gray Market
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See also How and Where to Buy Photo Equipment.
The following article applies only in the USA.
The black market is the trade of illegal and/or stolen goods.
The white market is the trade of legitimate goods.
The gray market falls somewhere in between.
In photography, gray market goods are those imported by anyone other than the authorized distributor or agent.
Gray market goods have no factory warranty, and receive no customer support from the legitimate importer. In the case of digital cameras, you probably won't be able to get software and firmware updates, and may not be able to get service for it no matter how much you are willing to pay, because the very specialized parts and service jigs, firmware and software are only available directly from the legitimate importer, or the manufacturer back in Japan.
This sounds scary, but Gray-Market is how I've always preferred to buy my manual-focus Nikon lenses!
Let me explain.
Foreign made equipment, like Nikon, Canon, Leica, Fuji film and just about everything, obviously has to be imported into the USA for you and me to use. The only things we still make in the USA that anyone cares about overseas are Hollywood movies, aircraft, computer software, weapons of mass destruction, Zippo lighters, Mag-Lite flashlights and bullets, explosives and propellants for advanced weaponry.
Even Made-in-USA Kodak film is exported and then re-imported, so this applies to just about everything purchased in the USA.
Every major photo manufacturer has either an authorized representative or its own division in the USA. Nikon Corporation (Japan) has Nikon Inc. (Long Island, New York), and Canon (Japan) has Canon USA, also on Long Island, New York; Fuji Film (Japan) has Fuji Photo Film USA based in New York, Schneider Kreuznach (Germany) has Schneider Optics on Long Island, NY, and smaller companies like Linhof (Germany) use manufacturers' reps like HP Marketing in New Jersey.
The authorized organization not only imports and distributes the goods to stores, but also provides you and me all the free telephone technical support, brochures and technical literature, free seminars, free warranty repairs, magazine advertising, after-warranty service, and, well everything you and I associate with what a manufacturer should do. Here's the key point: it's not the manufacturer doing this, its the USA office, division or manufacturer's representative.
Back in the 1980s when I first started buying new Nikon gear, I bought all my lenses gray market. When one buys gray market, one may save money, and for a product which will never require service, like Nikon's fully mechanical, all-metal manual-focus AI-s lenses, gray market was the way to go. I bought my lenses brand-new gray market for less than they sold for used, and less than my local dealer paid as his dealer cost from Nikon!
Even in the 1980s, I bought my cameras only as legitimate USA versions, because I know that some years down the road that I'd need them serviced.
Today with digital cameras, I know within just months I'll either need to call (800) NIKON-UX or (800) OK-CANON with a question, or will want the latest firmware updates, so I would never buy anything gray market today, except for manual-focus non-electronic lenses.
Lenses should never be bought gray market either, because they all are loaded with autofocus motors and IS and VR systems today. I've sent my Canon and Nikon lenses in to have their autofocus motors (Nikon 17-35mm AF-S) or IS systems replaced (Canon 28-135 IS) for free, under warranty when they broke. If I had tried to save $50 buying gray-market, I'd have been screwed.
A US Dollar bought more than 300 Japanese Yen back in the 1980s, so it made sound business sense for large NYC dealers to buy Nikon equipment directly overseas, and ship it here by the container load. When they sell it as gray market, it's marked that way, and they offer you the option of gray (import) or USA.
Today in 2010, with the US Dollar only worth about 80 Yen, we don't see Gray Market much, but as of the end of 2010 I'm starting to hear about it again, so it's worth mentioning so people don't get ripped-off.
Buying gray market is fine if you understand the risks involved, and was why you were paying less back in the 1980s.
30 years later today, the bad news is that the few gray market goods that are seeping back into the distribution chain are being fraudulently passed off by shoddy retail dealers onto unsuspecting customers as if they were USA products, with the savings going straight into the retail dealer's pocket instead of yours. The shoddy dealer is gambling that he'll be long gone when your product breaks and the maker's US office declines to repair your item as it explains to you that you got ripped-off.
The Gray Market top
"Gray," also called "import" and "direct import," is when a big camera store just emails the foreign manufacturer or some other source in some foreign country and orders a huge container load of gear shipped straight to them. The big camera store sells this themselves, and depending on the foreign exchange rate, can get us a screaming deal since the camera store obviously does not have to bear any of the costs of repairs, employees, advertising and having to support reasonably stable prices as exchange rates fluctuate that the legitimate US office does. (More about exchange rates under "rebates," below.)
Gray market is OK when the dealer identifies it as such, but criminal when shoddy retailers pass-off gray-market as USA to save themselves a few dollars, and cheat you out of product support and warranty service in the process. Misrepresentation with felonious intent (profit motive) is called fraud.
Gray market product is exactly the same, although it may have a different model number or manuals included with it. For instance, Nikon calls cameras one thing in the USA and something else in the rest of the world, so you know any F80 or F65 you buy in the USA is gray market since the legitimate camera is called N80 or N65 in the USA. Many Nikon USA lenses have the letters "US" as part of the serial number. The D1 cameras have little USA stickers inside the battery compartment. On other products like many manual focus lenses there is no way to tell unless Nikon looks up the serial number the hard way.
Gray market products are obviously not supported by the legitimate importer, so you are on your own if it breaks. If Adorama or B&H offer you the choice of gray, they usually back it up with their own warranty, so if it dies you can send it to some non-factory service center at their expense. After the store's warranty expires, the US importer may not even touch it even if you pay them. Nikon usually says that even if you pay them they will not work on gray products, although if you ask them they sometimes have no way of knowing.
USA vs. Gray Market top
Since its the same product either way, it's easy to figure out which you should buy.
If it's something complex, like a digital camera, that you know is likely to need firmware updates or God knows what at some point, get the USA and nothing else. For instance, one of the best lenses I ever bought new is my 17-35mm Nikon AF-S. Knowing it was complex I bought it USA (actually after rebates the price was almost the same anyway) since I knew if it needed service I don't want anyone other than Nikon touching it. Lo and behold, it has broken and required service twice, even 2 years after I bought it. (I'm not happy about that.) It was covered both times under Nikon USA's 5 year warranty. If I had bought gray it first would have been fixed by some camera store's service dept (if I was lucky) and the second repair would have been out of my pocket at some other service facility. I'm glad I spent the few extra dollars for USA!
If it's a product you'd feel comfortable buying used and are confident can be serviced at a local repair facility, then consider gray. For digital cameras today, don't even think about buying gray.
The good news is that I've never seen any of the good dealers (Adorama, Amazon, B&H, Calumet, Ritz or J&R) offer gray-market cameras, even if they sometimes will offer us the choice of gray or USA for lenses. These guys don't screw around or misrepresent things. When you order a D7000, it's a USA D7000.
If you intend to use the manufacturer's telephone technical support or based your purchase on the help you received locally or from advertising or brochures, buy USA. No, there's no law saying you have to, but when you understand that buying gray is cheating the people who work at the USA based organizations out of their salaries and the costs of the literature and services they provide. This is the honor system, and it's stealing if you ask the manufacturer for help and then go buy gray.
If you know what you want and don't plan to need any support, say for something like a manual focus lens that lasts for decades, then consider gray.
When you buy the legitimate product from a legitimate dealer 99% of the time you are buying the product supplied through the authorized channel. This is what's usually called "USA."
Be careful; two potential gotchas are:
a.) Not all dealers are authorized to sell all brands. Each dealer has to earn the right to sell each brand. I have seen retail camera stores that push Nikon or Canon over Canon or Nikon, and you have to realize that the store simply may not be an authorized dealer for the other brand! Yes, they may sell the other brand if you insist, but if they are not authorized they have to get it from some other source (like another dealer) and thus their costs are greater and they really don't want to sell it to you. Usually you're getting the legitimate product, just not through an efficient channel.
b.) Illegitimate dealers (typically found in Brooklyn, NY, or other tough neighborhoods, and use warm, cozy names like "Honest," "Family" or name themselves after other places or states that suggest they are not in Brooklyn) will sometimes sell gray products and offer their own store warranty, not the manufacturer's. They will label this as "USA," and in this case USA does not mean that it is a legitimate product, because the store (not the manufacturer) is providing a USA warranty. You almost have to be a lawyer to figure this all out and ask the right questions when dealing with questionable dealers. Here's a great guide to which dealers are bogus.
How to Tell What You Got top
USA products usually include have blank warranty cards with the camera company's USA addresses on them. Gray Nikon lenses used to come with international warranty papers, and lately the stores selling gray are just pulling all the warranty documents out of the boxes.
Many AF Nikon lenses have the letters "US" before the serial number to denote USA, and the D1 cameras have little "Nikon USA" stickers inside the battery boxes. You'd have to use the serial numbers to figure this out for used manual focus lenses. Nikon is inconsistent: all because you have no sticker or "US" on the serial number does not mean it's gray. Any model that does not come to the USA, like F55, F65, F75, F80 is gray market in the USA, since the USA models are called N55, N65, N75 and N80. The F100 and F5 are called that all over.
USA AF Nikon lenses come with a 5 year Nikon warranty.
The most accurate way to tell, after you have the gear in your hands, is to call the USA office, along with your serial number and the name of the dealer, and just ask them. The USA office also can tell you beforehand if the dealer you are considering is legitimate. It's amazing what I've heard when I've called USA offices to check out a dealer and just asked.
How do I get my legitimate USA products, shown below? I bought them from a good dealer: Adorama.
Nikon Camera Warranty Identification top
As of 2010, Nikon sometimes marks the boxes of USA products with a (U) after the product name, seen above the UPC on the lower right. (E), (EP) or (UK) means you got screwed; those are for other markets. If you're in the USA, return anything marked this way immediately; you have NO WARRANTY from Nikon USA if you need help or service, and with digital cameras, you will need service, or at least firmware updates, in the future. (UK) is for the UK.
When you open your D7000, the plastic bag holding your two fat, printed users manuals (one in English and one in Spanish) should have a "U-S" (or "U-K" for the kit with lens) sticker on it. This tells the packers in Thailand that this is the manual set for the US version.
"U-S" sticker on D7000's user's manual package. "U-K" is OK, too.
Just for laughs, in the UK, the manual set has a sticker saying "B-S!"
When you open the manuals, hidden in between the Spanish and English manuals is the small, folded, offset-printed USA warranty sheet:
Nikon D7000 USA Warranty Sheet.
The key points are that:
1.) It lists Nikon Inc. as the warrantor. Nikon Inc. is Nikon in the USA, unrelated to Nikon Corporation, who are in Japan.
2.) It says it is valid in the USA.
3.) It provides addresses in New York and California for warranty service. Gray-market products list a zillion worldwide locations on their international warranties, but not these USA addresses.
4.) Of course the warranty only applies to legitimate products. All because you have a copy of this easy-to-reproduce one-sided black-and-white sheet, you won't get any help from Nikon with this warranty form unless you really have a USA-version D7000, identified to you and I by the (U) on the box and the box' serial number matching the serial number of your D7000.
If your camera lacks this, you got screwed. Different cameras may use different forms, but USA cameras will list Nikon Inc. and at least Nikon Inc.'s New York address.
NIkon Lens Warranty Identification top
When buying a lens, USA products will have a three-part NCR (no-carbon required) form, in which the second sheet lists Nikon Inc., and expresses your warranty is valid in the USA, and gives the California and New York addresses:
Second sheet, Nikon Lens Warranty in USA.
If your lens lacks this, you got screwed.
Imported equipment has a price that will vary with exchange rates.
No camera maker likes to raise prices for no obvious reason when exchange rates become less favorable.
Most brands support these exchange fluctuations by keeping their prices high, and offering rebates instead of dropping prices when rates are favorable. That's why Canon and Nikon always have rebates running.
Not that they wouldn't love just to provide the lower price; it's just that it looks and feels really bad to have to raise prices as exchange rates vary. It's much more pleasant just not to renew a rebate offer.
Overseas Purchases top
What if you go on vacation to Japan and buy something over there to carry back with you? Usually no problem; bring it back with you to the USA and almost always, so long as you can show you bought it in Japan personally, the USA office will do your repairs.
Be very careful if you are cagey enough to try to buy from an overseas dealer from the US, as some people try with Mamiya since it is overpriced in the USA.
Mamiya is overpriced because Mamiya is uniquely effective in preventing any gray market imports, and is effective in getting US customs authorities to keep their eyes out for Mamiya products crossing the border. Research this carefully if you try. I think it's probably just easier to fly to Japan yourself, where new Mamiya gear sells for less than it sells for used in the USA. You can pay for your trip with the money you save.
If you go overseas to make the purchase you are probably OK, and if you just have it shipped to you you are probably not. Just phone up the USA office and ask if you have any questions, although realize that in most cases they are doing you a courtesy at their expense to offer you service for gear purchased in other countries.
If You Got Screwed top
If you buy locally elsewhere, or find a deal online too good to be true, you are asking for trouble.
If you think you got screwed, call the manufacturer ((800) NIKON-UX or (800) OK-CANON) with your serial numbers and the name of the dealer and confirm if you got USA or gray.
If you got gray, there is nothing Nikon (USA) or Canon (USA) can do to help. The issue is entirely between you and your shifty dealer. You didn't buy it from the US offices of Nikon or Canon, nor did your dealer. These USA offices have nothing they can do to help, and they have no obligation to you for anything, if you bought gray product. As far as USA offices are concerned, gray products are the same as stolen products: they got cheated out of their cut, too.
Worse, today gray products probably don't come directly from the maker in Japan, as they used to when the US Dollar was strong. They more likely come from Hong Kong or who knows where, in which case, you legally didn't even buy new product! Your dealer probably bought from some other dealer, not the maker. If the dealer isn't authorized, then he's selling used gear, even if it's never been opened.
In the 1980s, you could send your gray Nikon product to Japan for service, since it came with International Warranty cards good overseas. Today, with gray items coming from indeterminate locations and often without any warranty cards, don't plan on it.
If the dealer didn't disclose it to be a gray product, I'll define that as fraud, in which case, maybe you can call the police. I don't know, but as I understand things, it is fraud when the dealer misrepresents something to you as worth more (a USA product) than what you got (a gray product). Try your usual avenues when you have a problem, something at which my wife is skilled at resolving, but few people are.
If you used a credit card, call the card issuer and cancel the transaction. The dealer never delivered what was promised, and you have no obligation to pay for it.
The best advice is to avoid questionable dealers, and at least look on the box to see what you're getting if you take your chances at retail.
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