The Nikon Inventory Problem


Why are the pro-level goodies always in such short supply?

Original: started 6/1/2010 on front page; full set archived here.

Can Nikon Really Be This Bad at Inventory?
June 1 (commentary)--
I've written before that Nikon is very conservative with inventory and product pipeline management, but consider this list of what was out of stock at B&H over the just-passed holiday weekend:

  • D300s
  • D3s
  • 16mm f/2.8D fisheye
  • 17-35mm f/2.8D
  • 17-55mm f/2.8G DX
  • 20mm f/2.8D
  • 24mm f/1.4G AF-S
  • 24mm f/2.8D
  • 24mm f/3.5D PC-E
  • 24mm f/2.8 AI-S
  • 24-85mm f/2.8-4D
  • 28mm f/2.8 AI-S
  • 50mm f/1.2 AI-S
  • 70-300mm f/4.5-5.6G AF-S VR
  • 135mm f/2D DC
  • 200mm f/4D Micro-Nikkor
  • 300mm f/2.8G AF-S VR (both I and II versions)
  • 300mm f/4D AF-S
  • 400mm f/2.8G AF-S VR
  • 500mm f/4G AF-S VR
  • 600mm f/4G AF-S VR
  • TC-20E III

That's two of seven current DSLRs (29%), and 19 out of 67 lenses (28%). So here we are coming into the kick off sales weekend prior to graduation, Father's Day, summer vacations, and the World Cup soccer championships and...one of the largest photography stores in the US would have a difficult time delivering much of the serious amateur and professional Nikon products to you. Almost one-third of Nikon's DSLR products are out of stock at B&H.

The situation isn't much better around the rest of the US dealer base. Yes, a handful of D3s bodies managed to trickle out last week and get mostly scooped up. When I offered just over a week ago to list any D3s or exotic lens inventory anyone knew about across the country, I got exactly two D3s bodies and one 500mm lens mentioned to me, and before I could even post that on my site they were sold, apparently because I happened to mention them to people who had emailed me looking for said objects desir.

So, to be fair, I decided to look at the Canon situation at B&H. One body, the recent and hot-selling T2i, was out of stock, though the kit is still available (why the heck is Canon offering rebates on it?). So at least you could pay US$100 more for the kit and sell the lens to recover most of the difference. Lenses? I could only find two USA imports out of stock: 17-85mm f/4-5.6 EF-S and 24-105mm f/4L.

This is getting to be a crisis. Basically any serious shooter is now locked out of any significant Nikon telephoto lens. You can't even buy the 200mm f/2 and put the TC-20E III on it to get to 400mm because, yep, the TC-20E III is out of stock. But given the current situation, there will be some that buy the 200mm and TC-14E instead of waiting for a 300mm f/2.8, so it wouldn't surprise me to see the 200mm f/2 get added to the endangered Nikon list soon.

The question is this: how in the world could Nikon have so badly missed the demand levels in the US? And why is this now a persistent problem? I hope that all of you waiting for a D700 replacement already have the lenses you need, because if Nikon manages to come up with a winning new FX DSLR body, things will go from bad to worse with lenses (let alone trying to get hold of a popular new body ;~). And the D90 replacement is now looking like it could generate a problem, too: the 70-300mm is a very good match to the mid-range body, yet NikonUSA has rebated it into a situation where it is getting in short supply, as witnessed by B&H's temporary outage (at least I hope it's temporary).

Sadly, this is not the first time in Nikon history where we've had these protracted shortages. Unlike companies such as Apple--which seems to defy gravity and grows like weeds during downturns--Nikon seems to do the opposite.

But here's the really scary thought. What if the shortage of D3s bodies is due to Nikon trying to build an inventory of D700s bodies big enough for a global launch? In other words, same D3s 12mp sensor with 720P video in a D700 body. And what if the yield on D3s sensors has been lower than expected? Another possibility: the D3s, the D3x, and the D700 or its followup are made at the same Sendai plant in Japan, so what if it's a plant efficiency issue?

I'm generally not a conspiracy theorist at heart, but something is amiss in Nikon's pro product lineup, and the lack of information about what that might be and when it might end is starting to give us all plenty of time to use our imagination about what could be wrong. From a business standpoint, all I can think of is how many dollars Nikon is letting slip away here. If nothing else, this is dulling the momentum that Nikon had in the pro ranks starting with the D3 launch. One of the great lessons I learned in Silicon Valley is that big successes can lead to big failures if you aren't ready to capitalize. Given how much of the pro gear has been out stock for as long as it has, Nikon wasn't as ready to capitalize on the D3 success as they thought they were. It's not even close. We're talking millions of dollars of lost profit here.

FWIW, the top body of interest to this site's readers is...you guessed it, a D700s (a D700x is basically equal in interest level). Thing is, any new FX body puts more pressure on long glass. Note that all three 300mm lenses are out of stock at B&H this weekend. So what they heck are you going to get to go beyond 200mm if another FX body ships? As I wrote earlier: you've either already got the glass you'll need, or you're going to be waiting. What makes me think I should get on a waiting list now for everything Nikon will offer in the next two years?

So, today I introduce a new item on the Waiting for Nikon list: exotic lens inventory. It's been 19 months by my count since we've had the full line-up of the exotics available simultaneously here in the US. Note to Nikon: if it's another 19 months before that gets fixed, the D4 is going to be a bit of a dud no matter how good it is. It takes more than a body to be able to shoot.

Inventory Again
June 3 (commentary)--
One nice thing about having a well-read Web site with a worldwide visitor base is that sometimes those readers do the heavy lifting for me ;~).

My article on Tuesday (now on the archive page) provoked one heck of a lot of comment, both in my In Box and in the general Internet chatter, as well. So, before getting to some more comments, let's deal with the followup first:

  • I only used one sample point. No, I did not. I used one example to illustrate the problem. If you don't understand the difference between those two things, stop reading now. Yes, I hand-picked B&H as my example, but they're also probably the largest single store camera dealer in the US and they're almost certainly in the top five in terms of volume of Nikon products in the US. And yes, they pay their bills to Nikon. So all of you who think that the problem is "just limited to B&H" need to do a little more research. It isn't. And make sure you do your evidence checking carefully. Some of you cited Web sites listing "in stock" that, in my previous experience, actually list that when they didn't have stock to ship. At least one major seller posts things as being available when they get their "it's about to ship" notice from Nikon, not when they actually have inventory in the warehouse. In the cut-throat Internet sales game, some places believe it is better to take the order and hope you can ship it than it is to tell the truth about their current stock.
  • Nikon keeps inventory low intentionally. Perhaps. If so, it's a wrong decision. As good as the D3s is, the 1DIV is also a very good camera, and in some ways, better. If you're in a buying cycle and you need the current generation of camera and some critical new lenses, your choice is to sit and wait for Nikon or to just buy Canon, which doesn't seem to be having the same level of production problems. Nor does Canon have the same history of not meeting demand with products that Nikon does. At the professional level, where most of the inventory problem currently resides, shorting production would be absolutely insane behavior on Nikon's part. The working professional has to shoot today, tomorrow, and the next day to make his living and be able to repay the costs of that equipment. They're not going to wait for a camera company very long, if at all. They have to stay competitive. We see this problem right now very visibly with the 5DII: Nikon can't match the Canon video capabilities, so those pros that are fielding still+video requests can't wait for Nikon. They have to jump to Canon today. As much as I don't like the still/video hybrid because we get watered down versions of both, the scene in the advertising, wedding, and corporate photography markets now consists mostly of bidding on both simultaneously. If you're a pro in those markets and in a buying cycle, you're buying a DLSR that's good at both. Today.
  • It's just a temporary blip. No, it is not, at least for the higher end products. They've been in short supply for quite some time. Looking for a 24mm f/1.4? Nikon made only about 4000 of them in the first production run. For the world. I didn't ask specifically about a 24mm f/1.4 in my last lens survey of Nikon users, but I did ask about a possible 28mm f/1.4. So let me take the survey results from that lens and project how many serious Nikon DSLR bodies would have to be in use to snap up those 4000 lenses. Are you sitting down? 100,000 DSLR bodies. If we factor in only a quarter of the "would consider buying" instead of the "would definitely buy," those 4000 lenses would only need 50,000 DSLR bodies in the field to be "sold out." We've got more D3x bodies than that in the wild, let alone D300, D300s, D700, D3, and D3s bodies. Given that the new 24mm may be the best 24mm optically to date, the pressure is probably even higher than I guess it to be. Simply put, manufacturing isn't keeping up with demand. Oh, and those of you expecting a 35mm or 85mm f/1.4 soon: you'd really better get to your dealer and put your deposit down: the survey numbers are two to three times worse for that lens. If I'm judging the statistical relationships correctly Nikon would need to produce 80,000 85mm f/1.4G AF-S VR lenses to meet current demand amongst DSLR users. The previous version sold about that many in its lifetime, by the way: but demand is up, not down. (It doesn't help matters to find out that some samples of the 24mm f/1.4G apparently do have an autofocus issue Nikon now needs to figure out and fix.)
  • Maybe Nikon is worried about being paid by dealers. I'm sure they are, they've gotten burned before, and to the tune of millions of dollars. But this is a faux argument for keeping inventory tight. I know plenty of dealers that pay their bills on time to Nikon who are not getting all the things they order when they order them. Try this little experiment: find the person at your local dealer (in the US) who does the ordering from NikonUSA. Ask them if they have had any product orders from Nikon in the last two months that weren't filled. The answer will be yes. Let's see, from the last two dealers I asked that question to, I got that they were short seven lenses and four bodies on their last orders. (One bit of good news: it appears that 70-300mm lenses were shipped this week to many dealers to fill their back order status.)
  • We shouldn't expect a company to be aggressive in an economic downturn. Tell that to Apple. Or any one of a number of other companies. Yes, you have to be more cautious about some things in rough economic times, but if demand is there, you do not ignore it. If anything, during downturns where you sense demand, you should try to fill it to grab market share that'll push competitors out of the market completely. It would be one thing if there were no demand for the products I pointed out. But there's heavy demand. Unfulfilled demand. Counting on that demand to still be around six months or a year or two years from now is incorrect. Demand has this nasty habit of changing. Ask Motorola.
  • Nikon is smaller than Canon, so we can't expect them to produce in volume. This is fan-boy nonsense at its best. Just the camera business for Nikon is projected to sell US$6.4 billion (that's b as in billion) worth of goodies this year. And make US$564 million in profit. Would someone like to explain to me just how big Nikon has to be in order to be able to produce to demand? To get inventory of critical items on shelves? Do they have to do a trillion dollars worth of business before you'd hold them accountable for shortages, or is half a trillion enough?

So, with that out of the way, let's see what the site visitors reported outside the US. I had a number of Canadian responses. One gave me a detailed list of Vistek's inventory on the same items (Vistek is a large online presence in Canada and has six stores scattered around Canada; they are one of largest Canadian Nikon dealers in volume, if not the largest). A quick and dirty sampling:

  • D300s: in stock online, all 6 stores
  • D3s: out of stock everywhere
  • 16mm f/2.8: out of stock everywhere
  • 17-35mm f/2.8D: in stock online, 3 of 6 stores
  • 17-55mm f/2.8G: in stock online, all 6 stores
  • 20mm f/2.8D: out of stock everywhere
  • 24mm f/1.4G: out of stock everywhere
  • 24mm f/2.8D: in stock online, 4 of 6 stores
  • 24mm f/3.5D: in stock online, 1 of 6 stores
  • 24-85mm f/2.8-4: out of stock everywhere
  • 70-300mm: in stock online, 5 of 6 stores
  • 135mm f/2D DC: out of stock everywhere
  • 200mm f/4 Micro-Nikkor: in stock online, 1 of 6 stores
  • 300mm f/2.8: in stock online, 3 of 6 stores
  • 400mm f/2.8: out of stock everywhere
  • 500mm f/4: out of stock everywhere
  • 600mm f/4: in stock online, 1 of 6 stores
  • TC-20E III: out of stock everywhere

Not quite as bad as the US situation, but still not great. The European responses were a bit different: many of you in the various European countries are reporting availability of some of the big items on my list. Still, a few items just seem to have been unavailable for long periods of time (the 200mm f/4 Micro-Nikkor, for example).

Now for the very interesting part: a little polling of the three biggest shops I know of in Japan shows that...you guessed it, virtually everything on my list is apparently in stock and available. So Nikon executives just have to go down to Shinjuku look at the shelves and see that everything is perfectly fine. It must be nice to be able to fool oneself so easily.

The short version: stop shooting the messenger. Nikon isn't building to demand and not getting their inventory into the right places. Here in the US we're seeing significant and long-term shortages of key products. If Nikon can't keep up during an economic downturn, what confidence do you have that they'll manage better during economic good times?

So What Do You Do About "Out of Stock"?
June 4 (commentary)--
Of course, with so many Nikon goodies out of stock all the time, this poses problems for a Nikon shooter, especially here in the US where we seem to be getting the worst of it. So what can you do?

  • Call Nikon. Surprised? Well, get ready to be more surprised. NikonUSA's tech support (now based in the Caribbean) will indeed try to find where there's inventory of something for you. Since they don't have every dealer's database sitting at their disposal, this can take them a bit of time to do, so you'll end up with a callback or email only when they've found something for you. But here's the rub: in the US, once Nikon sells something to the dealer, Nikon has no real say in what happens to it or how it is priced. In recent months I've received multiple reports from site visitors that go basically like this: "I was looking for Nikon Hot Product #1 and couldn't find it anywhere. Called Nikon, and they indicated that there was one in stock at Dealer Y. When I called the dealer, they indeed had one I could purchase, but they were charging 10% [or more] over list price for it!" Even though Nikon isn't technically at fault here--again, under US law they cannot dictate how much or the maximum that a dealer charges for an item--Nikon sure looks bad to the customer. Basically, the customer perceives that Nikon sent them to a price gouger. I don't know how many times I've written in the past fifteen years on the Web that Nikon needs to fix the way they interact and appear to the customer. Here's one instance where they try to do the right thing, but then get tarred by association. They just don't get it. The brand reputation is being hurt by these silly little things, and it starts with something that's their own fault (more on that tomorrow).
  • Develop a strong relationship with a good local dealer. This one's a little tricky. It's hard to know what the dealer's relationship with Nikon is. If a dealer falls behind on payments to Nikon, Nikon stops shipping to them. The dealer could be blaming Nikon for a product you've ordered for not being delivered, but it may be them that's the real problem. But assuming that you're pretty sure that the dealer is in good standing with Nikon and will remain that way, giving them all your business, ordering things in advance, or ordering items not in stock will move you to the top of their list to call when those things do come in. Every dealer appreciates the ability to cash out an item that arrives from Nikon the day it arrives. Time is money. "Guaranteed sold" always brightens a dealer's day. When things sit on shelves, someone isn't making money. Most dealers are aware of what is hot and in demand, and they'll call their best customers when they get one in that doesn't have anyone's name attached to it to see if they can move it fast.
  • Play the lottery. Pick an online vendor that'll take preorders and make one. For example, Amazon takes preorders for many products. However, they sometimes also cancel preorders when things don't seem to be coming in a reasonable amount of time, which means you have to make the order again when they allow it, or you then have to get in someone else's queue, and probably at the end of an already long queue. One problem with pre-ordering is that you don't know how big the queue really is (some vendors will tell you, some won't, and some will tell you but won't tell you where you are in the queue) or whether the next shipment from Nikon to that vendor will satisfy the outstanding orders. The downside is that you'll have no idea when your order will get filled. It could be next week, but it could be next month or far worse. This means you can't buy to need. If you have an upcoming trip to Africa in a month or two, for example, and want a 500mm lens, there's nothing even close to a guarantee that you'll get it by pre-ordering.
  • Consider the options. No Nikkor 500mm f/4 in sight yet? Well, the Sigma 500mm f/4.5 isn't exactly a slouch. It'll save you a few bucks and the only thing you'll probably really miss is VR. Obviously, there are not always direct replacements available. Often they are missing a feature or not 100% the same as what you coveted, but if your goal is photos, waiting around for Nikon isn't helping you make any images today, is it? Maybe not tomorrow, either. This, by the way, illustrates one of the reasons why NikonUSA's perpetual inventory issues are a big deal and cost Nikon real money: once you opt for that Sigma 500mm f/4.5, you aren't likely to buy a Nikkor 500mm f/4 if it ever does show up. Lost sales are lost sales. If missing components cause you to switch mounts, consider that lost sale even more lost (sometimes you can sell the used Sigma for enough to make your interim use of it just a decent rental price).
  • Rent. For anything that retails over US$3000 you really need to check your use patterns before buying. Need it for two weeks vacation a year? Rent. Need it on demand many times a year? Buy. One-time safari to Africa? Rent. Dedicated wildlife photographer who shoots six or more times a year? Buy. You get the idea. A variant on this idea is to form a collective. Time-share a 600mm f/4. Five people who need it one month a year each can probably save money over both buying or renting individually, as long as they can work out the sharing schedule reasonably.
  • Do without. This doesn't work if you actually need a particular product, but it does if you're just satisfying your lust for the latest and greatest. Consider Nikon's perpetual inventory problem a wake-up call to stop maxing out your credit card and to use what 'ya got. Heck, if enough of you would do that, maybe Nikon could actually meet demand for a change. (Nah, the sarcastic side of me says that Nikon would just use that as an excuse to reduce inventory of everything.)
  • Buy used. Seems simple enough, but it doesn't always work. You're not going to find a used D3s or 24mm f/1.4 or 500mm f/4 VR at the moment, for instance. The people that have them aren't selling them, they're using them. But you might be able to find an older 500mm f/4 and some of the other items on the original list I posted. So it's worth a shot if you can verify that the product you're buying used isn't a gray import. Oh dear! Yep, another of Nikon's customer-unfriendly policies and practices can turn out to hurt you: NikonUSA won't repair gray market products under any circumstances.
  • Join NPS. Working professionals should be NPS (Nikon Professional Services) members. Nikon's definition of "working" is a little vague, but if you're not making your entire income off of photography or can prove that, you probably qualify. It's worth a shot. The reason? NPS Priority Purchase. Essentially it's a "cut in line" pass for hard to get items, especially when they first come out. But it's not a perfect solution. Because Nikon simply ships PP items to your dealer of choice with your name on it, and because in the US you can't restrict an item, if your dealer isn't 100% ethical, you still may not get your product. One well-known dealer I used to order NPS PP through sold the D2x with my name on it to someone else that they did more business with. Well, guess what? Now that dealer gets no business from me. I hope that worked out for them (considering the amounts I've spent since then, I don't know how it could have).

The fact that I even have to come up with a list of things you can do to try to get the product you want or need is, well, disturbing. Short-term disruptions of supply are something we're all used to dealing with. One disappointment from a vendor who's struggling to meet demand on a hot product we can understand, especially when we really see them scramble to meet that demand. So how do we explain NikonUSA? We don't. We have long-term and regular disruptions of supply, no communication from the maker as to why or when they'll end, and we see no scrambling from them at all (other than the egg on their face). They appear to think the Nikon faithful will just say "that's the way it is" and accept it. Not really. Some individual Nikon users are starting to say "I'm mad as hell and I'm not going to take it anymore." So much for the Nikon faithful.

Are you listening Nikon?

Hello?

Anyone there?

Inventory Wrap-Up
June 5 (opinion)--Let's consider what happens when you go to buy something other than a piece of Nikon gear:

  • You go to your local Barnes and Noble bookstore. The book you want isn't there. Because there is inventory in some warehouse somewhere and B&N knows that, you're given the chance to order it and have it arrive in a certain pre-specified time. Problem: the inventory isn't where you need it. Solution: the company will move it for you.
  • Maybe you want the latest Apple gadget that's selling like hotcakes and out of stock. Let's see, I'll just go to apple.com and look: "ships in 7-10 business days." Your local Apple store will tell you the same thing. If you still have an Apple-authorized dealer near you, they'll usually be able to tell you something similar ("we're scheduled to get more on X"). Problem: the inventory hasn't been built yet. Solution: build more, quickly, and let the customer know what that means in terms of a wait.

Oh, but D3s bodies and 600mm lenses are more exotic than mass market and consumer products, you say? You can't expect Nikon to keep lots of them in warehouses where you can always get them. Well, okay, let's decide that we want a specific automobile with certain features and a certain color:

  • Our local auto dealer doesn't have the exact car we want. He can search nearby stock for one. Or he can have an order placed at the factory for one. Sure, with that last option it might be 60 days before you get the car you wanted, but the point is you can get it and you can get some level of certainty that you'll get it within a certain time period. Problem: the item is too expensive to keep in local inventory. Solution: provide a clear way to get one, though it encompasses a delay.

So, why is there no way to get a D3s or 600mm Nikkor with level of certainty of any of these other situations? Problem: the item isn't avaiable anywhere and Nikon isn't talking. Solution: there really isn't any other than waiting. See the problem now?

NikonUSA is basically a distributor. And not a very efficient one, apparently. It's certainly not one very good at communicating to its ultimate customers (photographers) what is going on. There's simply no way of knowing when you're likely to be able to get something if it isn't in stock at your dealer today. If Nikon doesn't think this loses them sales, they are sadly mistaken. Even if I choose to disbelieve half of what has been written to me about brand switching, Nikon has lost many, many sales to Canon because of perpetual inventory shortages. They are on the verge of losing more.

One thing that's interesting is how many people have been writing me to give me a reason for why there's a shortage of some products in the US. Sorry, folks, but it doesn't matter what the reason is, the fact that the problem has persisted for so long is inexcusable. And if the reason is a Nikon tactic (say, currency hedging), then remember your Sun-Tzu: "Tactics without strategy is the noise before defeat." Simply put, something is terribly amiss with Nikon's delivery system for pro-level products in the US, and has been for a long time.

The excuse you gave them in 2008 and early 2009 was that the Beijing Olympics gobbled up all the D3 bodies and long lenses. The excuse you're giving them here in 2010 is that the World Cup is gobbling up all the D3s bodies and long lenses. Gee, we've got another Olympics coming up in 2012, would you like to supply the excuse for Nikon in advance? Of course not. If you let someone repeat the same mistake over and over, you're an enabler. The scary thing is that we've seen a progression of Japanese executives come over here to run NikonUSA for a couple of years and then get promoted when they return home. So apparently Nikon corporate thinks things are fine here in the US and everything's running smoothly.

As a Nikon customer waiting for two items to still be delivered to me (no, I didn't order them through NPS Priority Purchase, partly because I can't be sure that NikonUSA doesn't hand pick something that's got my name associated with it), I'm starting to wonder how stupid I am. We Nikon users are simply enabling this situation by tolerating the delays and making apologies for them. Well, as you probably figured out by my writing this week, I'm not going to make apologies for Nikon on this subject any longer.

I'd suggest a three-month "don't buy anything from Nikon" moratorium by us users to get their attention, but given the high demand for some of those perpetually out of stock items, there'd just be a bunch of opportunists who swoop in and use that as a chance to pick up theirs. Just enough of those folk exist to probably pick clean the little bit of inventory that gets here during that time. Thus, a buying embargo wouldn't do anything that Nikon would notice. So I suppose we'll have to get creative at this. Hmmm (smiles diabolically; rubs hands together). What if we all sent large empty boxes to Nikon corporate with a note that said "this is the size box that would hold the product I've been waiting for you to deliver for 18 months"? (No, I'm not really serious about that, don't send Nikon empty boxes. But the sad thing is that it might take something that silly to get Nikon Japan's attention. Let's wait another 18 months before we do that. Yep, there we go enabling their bad behavior again.)

But seriously, Nikon, do you really think your serious and most loyal user base is really happy right now? How the heck is Nikon going to successfully launch new products next month if the prevailing attitude is that they can't meet demand of the current products? Marketing 101: if you bring customer disillusionment all the way to a new product launch, the new product has to exceed all expectations by a larger margin to succeed at the levels it should.

The funny thing is, Nikon keeps making fundamentally huge mistakes. They made several in the Stepper business, which is one reason why the Precision division shriveled up and got clocked by a European startup. Even the Economist noted that mistake. But it's made big mistakes in even small businesses, like eyeglasses (hint: Americans don't buy glasses from camera stores, even sunglasses, they buy them from places like Lenscrafters). Those in Tokyo appear to think everything is fine, because they're not doing anything different to change things, but things aren't really fine at all.

In response to this week's series of articles, I got a lot of email (as you might expect, but none from Nikon ;~). The problem for Nikon is that some of you are starting down the conspiracy theory road to explain why you can't get what you want. Here's a doozy: that Nikon keeps exotic lens inventories low in the US to encourage people to buy gray. That way, they don't have to fix them when they have troubles down the road. Is that really what Nikon wants customers to think? And that's just one of the many conspiracy theories I received this week to explain things.

So, the solution? Well, it's all in Nikon's hands, but:

  1. Bring more supply into the US of the high-end products. If that supply doesn't exist, get hopping on cranking up the manufacturing lines.
  2. Commit to keeping all products in inventory at NikonUSA. Yes, that could mean currency issues arise to nip some profit, but that's the price of being a global company. Better to have more happy users than 3% more profit from a smaller user base.
  3. Communicate to your customers. If there's a shortage of a product, let it be known and let everyone know what you're doing to fix that shortage.
  4. Fix the queue for hot new products. If you really have to parcel out products slowly (e.g. <2000 24mm lenses for a US base that would demand way more than that), figure out a way to set up an orderly queue.

This last point needs a bit more explanation. What's happening right now is that people are multi-ordering because they can't be sure that they'll get their product in a timely way. So they order from Amazon, Adorama, B&H (if they'll take a preorder for the product), their local dealer, and more. The minute one says it's shipping, they cancel the other orders. All this does is give false information up the channel to Nikon. It looks like demand is higher than it is (not that Nikon appears to be doing anything about that ;~).

Yes, I've been hard on Nikon with my criticism this week. Very hard. And yes, it reflects my personal opinion and may not match yours. If you want to give Nikon a pass, fine, do so. But I believe that just sends the signal to them that they can continue to do what they've been doing.

Personally, I think they need to hear what I've written, otherwise I obviously wouldn't have written it. Obviously, from the larger than usual batch of emails I've gotten from you this week, many of you agree with me. I don't write these criticisms trying to hurt Nikon. Just the opposite. I fear that they're out of touch with a large portion of their customer base, and that means there is danger lurking for Nikon if they don't address issues like this.

I was thinking about the BP drilling disaster in the Gulf the other day and a question came to mind: do companies deserve to live on forever, or should we have a "death penalty" for ones that simply get completely out of step with the needs and norms of society? Not that Nikon is anywhere near equivalent to a BP. Not even in the same galaxy let alone the same solar system. So don't interpret me wrong on that. But this notion of "should companies survive eternally" is an important one. Companies think they should. My personal answer is no, they should not. Some, like say, Enron, deserve their sudden death. Others, like Palm, didn't see fundamental things early enough that their customers demanded as the world shifts around them, and thus slowly spiraled downward. Even finally producing a highly competitive product, the Palm Pre, didn't save them from the years of neglect of their customers. I'd personally hate to see Nikon follow that last path, but sometimes it sure feels like they're stuck in some strange "we've always done it this way" march that doesn't line up well with their customer any more.

No, Nikon isn't even remotely close to death as Palm was earlier this year. But it feels like it has started down the same path. It starts by not hearing the problems your customers are having. So I echo yesterday's final comment: are you listening Nikon?


 

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