Daran wrote:
That is an entirely different price strategy. They want you to come to their store for essentially all you need regularly and keep higher prices for those items, that you buy there simply because you are already in their store. Trying the same trick internationally makes zero sense.
Why, does price elasticity not exist outside of the USA? It makes perfect sense to me when you consider how price elasticity varies from region to region. The notion that companies would have already been charging more if they could have is akin to saying companies would have been cutting cost more already if they could have, yet companies are always embarking on new cost-cutting measures that find savings they could've found earlier.
Jun 25, 2025 at 07:21 AM
Steve Spencer Offline • • • • • • • Upload & Sell: On
snapsy wrote:
Why, does price elasticity not exist outside of the USA? It makes perfect sense to me when you consider how price elasticity varies from region to region. The notion that companies would have already been charging more if they could have is akin to saying companies would have been cutting cost more already if they could have, yet companies are always embarking on new cost-cutting measures that find savings they could've found earlier.
I think what Walmart is doing is basing their pricing strategy on the assumption that when someone enters a Walmart they buy multiple things. I am sure they know exactly how many things the average customer buys. Let's say 40. They will raise the price on some of these goods and not on other of these goods trying to determine what will get them the most profit per visit rather than per item. They realize people are quite price sensitive to some items and might shop elsewhere if those items go up, but are not price sensitive to other items. They will try to hold down prices to items for which people are price sensitive, but let prices go up for items for which people are not price sensitive.
As an example when I worked at a grocery store in high school (a similar situation to Walmart) the store had virtually no markup on sugar, mayonnaise, and eggs. All items to which people were price sensitive, but had huge markups on things like spatulas and candy. The goal was always to get about 20 percent markup for the shopping cart, but consciously to hold profits on some items and maximize them on other items. Staples as the owner saw it were priced with near zero on sometimes even a slight loss. Impulse buys were priced with big margins. You can obviously extend that strategy to price increases with tariffs. Staples you try to hold the line on price even if there are tariffs, but impulse buys you increase the margins even if there are not tariffs. Walmart has that flexibility because people are buying a cart of goods.
That strategy makes sense for Walmart, but I can't see how it can be implemented very much at all for cameras. They are a different category. They certainly aren't staples like sugar and eggs. They aren't really impulse items either in most cases. And when people buy cameras, they aren't buying a cart of goods. Maybe a camera and a lens or two and a flash, but which of those would they try to hold the line on price and which would they let the prices rise higher? I don't see the Walmart strategy working for cameras, lenses and related gear. I don't even see that Walmart is implementing that strategy as being particularly relevant to the price of camera gear. Simply put Walmart's strategy is a different paradigm than camera pricing strategy.
snapsy wrote:
Why, does price elasticity not exist outside of the USA? It makes perfect sense to me when you consider how price elasticity varies from region to region. The notion that companies would have already been charging more if they could have is akin to saying companies would have been cutting cost more already if they could have, yet companies are always embarking on new cost-cutting measures that find savings they could've found earlier.
I guess I wasn't clear enough. I'm saying that Walmart US designing prices to pull more customers will have no effect on how many customers visit a Wallmart in the EU. Wallmart EU will obviously employ similar strategies, depending on their specifics.
PS: Seems there no longer is a Wallmart EU. Which is of course irrelevant for the argument.
US companies better be really careful, as they’re stuck between pressure from the White House and their duty to shareholders. If Walmart, for example, eats a part of the tariffs, its shareholders could sue the company for willingly not optimizing profits and thus harming their returns.
Steve Spencer wrote:
I think what Walmart is doing is basing their pricing strategy on the assumption that when someone enters a Walmart they buy multiple things. I am sure they know exactly how many things the average customer buys. Let's say 40. They will raise the price on some of these goods and not on other of these goods trying to determine what will get them the most profit per visit rather than per item. They realize people are quite price sensitive to some items and might shop elsewhere if those items go up, but are not price sensitive to other items. They will try to hold down prices to items for which people are price sensitive, but let prices go up for items for which people are not price sensitive.
As an example when I worked at a grocery store in high school (a similar situation to Walmart) the store had virtually no markup on sugar, mayonnaise, and eggs. All items to which people were price sensitive, but had huge markups on things like spatulas and candy. The goal was always to get about 20 percent markup for the shopping cart, but consciously to hold profits on some items and maximize them on other items. Staples as the owner saw it were priced with near zero on sometimes even a slight loss. Impulse buys were priced with big margins. You can obviously extend that strategy to price increases with tariffs. Staples you try to hold the line on price even if there are tariffs, but impulse buys you increase the margins even if there are not tariffs. Walmart has that flexibility because people are buying a cart of goods.
That strategy makes sense for Walmart, but I can't see how it can be implemented very much at all for cameras. They are a different category. They certainly aren't staples like sugar and eggs. They aren't really impulse items either in most cases. And when people buy cameras, they aren't buying a cart of goods. Maybe a camera and a lens or two and a flash, but which of those would they try to hold the line on price and which would they let the prices rise higher? I don't see the Walmart strategy working for cameras, lenses and related gear. I don't even see that Walmart is implementing that strategy as being particularly relevant to the price of camera gear. Simply put Walmart's strategy is a different paradigm than camera pricing strategy....Show more →
The point of my Walmart example was to demonstrate how companies aren't always charging the highest price they could've received for an item, ie the assumption of perfect price discovery isn't necessarily always true. That is to say, Walmart could've raised the prices on the non-tariffed items prior to the current scenario without even having to consider the total shopping revenue factors you mentioned.
1bwana1 wrote:
The possibility to geographicaly arbitrage the situation exists as always. The goal being to get the lowest price when regional sale events take place, take advantage of forex fluctuations, and of course not pay tariffs, VAT, or local sales taxes using multiple citizenship identities. This of course requires frequent travel unrelated to the purchase so travel costs are not assingned to the purchases.
What governments and politicians due is best mitigated through effecient structuring of your personal and business situations.
Don’t you still have to declare the value of all purchases when you return back to the US if your total amount is greater than $800?
Outstanding wrote:
Not true, I am in Canada and Sigma increased prices here too.
Just like supply chain excuse during Covid, camera manufacturers are jumping in to raise prices. Supply chains went back to normal, but prices stayed up.
As a consumer, I am definitely not happy with the current situation. I also personally feel the changes have been way to aggressive and happening way to quickly for businesses and consumers to adapt to.
But I would be remiss in not acknowledging that this is a complicated issue with many factors, both short term and long term.
On the photography front, maybe we will come to our senses and realize we don't have a US photography market to even try and protect 🤣
chez wrote:
Don’t you still have to declare the value of all purchases when you return back to the US if your total amount is greater than $800?
No, although I am a US citizen my current legal residence is not in the US, so I am allowed to travel to the US visiting with no duties owed. The VAT refund is based on non EU passport, and issued by Global Blue when exiting the EU. All very straight forward even if intentionally manipulative of the rules.
Even if returning to the US as a resident the duty free rules are manageable by which country you made the purchase in with variable duty free allowances. Additionally, the duty free allowances can be combined between family members up to four so the duty free allowance can be quite high if properly managed.
Finally, I think there are many out there who will simply carry the items in without declaration.
snapsy wrote:
The point of my Walmart example was to demonstrate how companies aren't always charging the highest price they could've received for an item, ie the assumption of perfect price discovery isn't necessarily always true. That is to say, Walmart could've raised the prices on the non-tariffed items prior to the current scenario without even having to consider the total shopping revenue factors you mentioned.
And I am challenging that point because Walmart does not price individual items but purposely prices for a cart of items and that makes their strategy different from camera makers strategy. I am suggesting your point does not apply because the pricing strategy is different. I find your argument totally unconvincing because you do not recognize this fundamental difference in pricing strategy.
And I am not saying perfect price discovery is true. That isn't my point at all, but I am saying that Walmart's strategy of holding prices down on some goods with tariffs while raising prices on other goods without tariffs does not address anything about perfect price discovery for cameras. It tells us nothing about that because the pricing situation is fundamentally different. You are trying to make the Walmart example say something that it simply cannot.
Steve Spencer wrote:
And I am challenging that point because Walmart does not price individual items but purposely prices for a cart of items and that makes their strategy different from camera makers strategy. I am suggesting your point does not apply because the pricing strategy is different. I find your argument totally unconvincing because you do not recognize this fundamental difference in pricing strategy.
And I am not saying perfect price discovery is true. That isn't my point at all, but I am saying that Walmart's strategy of holding prices down on some goods with tariffs while raising prices on other goods without tariffs does not address anything about perfect price discovery for cameras. It tells us nothing about that because the pricing situation is fundamentally different. You are trying to make the Walmart example say something that it simply cannot....Show more →
Walmart is absorbing the cost of price-elastic tariffed items and offsetting the loss of profit by charging more for price-inelastic non-tariffed items, which means they are charging more for the latter without affecting sales of the latter, which means they could have previously been charging more for the latter all along, thus my point.
snapsy wrote:
Walmart is absorbing the cost of price-elastic tariffed items and offsetting the loss of profit by charging more for price-inelastic non-tariffed items, which means they are charging more for the latter without affecting sales of the latter, which means they could have previously been charging more for the latter all along, thus my point.
But your point is misguided because although they could have been charging more for the price-inelastic non-tariffed items all along that doesn't mean the same is true for cameras. My point is that you are assuming that what applies to those price inelastic non-tariffed items applies to cameras and I think that is a faulty assumption and they are fundamentally different sort of goods. Specifically at Walmart those price-inelastic non-tariffed items are going to be predominantly impulse purchases that are relatively inexpensive. Cameras are not that sort of product, so your example is not relevant to your point.
Steve Spencer wrote:
But your point is misguided because although they could have been charging more for the price-inelastic non-tariffed items all along that doesn't mean the same is true for cameras. My point is that you are assuming that what applies to those price inelastic non-tariffed items applies to cameras and I think that is a faulty assumption and they are fundamentally different sort of goods. Specifically at Walmart those price-inelastic non-tariffed items are going to be predominantly impulse purchases that are relatively inexpensive. Cameras are not that sort of product, so your example is not relevant to your point.
The point is we don't know whether it's not also true for cameras, the same as how Walmart doesn't necessarily know it's true or not true for the items they plan to charge more, ie imperfect price discovery. Daran's point was that a company would never charge more for an item they could have been charging more for all along (ie, camera makers charging more for cameras in non-tariffed markets like Europe) - that is simply not true, and the fact Walmart is trying a price increase with imperfect information is prima facie proof of that, the same as how camera makers can try charging more with imperfect information.
I looked ahead about 6 months back and determined everything I'd want in the next 4 years and purchased it all. I am now done buying camera gear. The only exception might be a used item. But as new items increase in price, used prices will also rise in prices.
its official
