The short answer is no. The longer answer is below.
There’s a controversy that’s been brewing for awhile, but has really gained steam over the last couple of weeks, that suggests Fujifilm is purposefully crafting market shortages of products so as to create hype (or, really, FOMO), in an attempt to ensure that their products are constantly in high demand. The roots of this controversy are in the constant shortages of Fujifilm’s products. At one time, you could walk into most camera stores on any given day and buy the camera or lens that you wanted; however, over the last few years, that hasn’t always been the case. Then, just recently, Fujifilm seemed to confirm it.
“The most important point is how much brand strength to create and how to maintain it,” said Teiichi Goto, Fujifilm President and CEO, in response to a question about their inventory situation and plan. “Therefore, it would be quite unfortunate to manufacture too much and lower the price. What Fujifilm has been trying to do for a long time is finally coming true now. We intend to drive the entire imaging business, including Instax, while concentrating on building brand strength and not reducing the value of the properties purchased by our customers.” When asked if the current inventory situation is normal, Mr. Goto replied, “Yes.”
A lot of people responded to this with something to the effect of: “This proves it! Fujifilm is purposefully creating camera shortages to manipulate the market.” But I think they misunderstand it. I wasn’t planning to write this article, but, since I’ve had several people ask me to comment on the controversy, I thought I’d type out my opinion.
I’m completely convinced that if Fujifilm could produce the precise number of gear (cameras, lenses, etc.) for the current demand, so that everyone who wanted to purchase something could do so without waiting, they would. But that’s nearly impossible to correctly estimate. When PetaPixel asked for clarification if they consider insufficient supply to be part of a marketing strategy, Fujifilm responded, “No. Our marketing strategy is to showcase the innovation behind our lineup of digital cameras and lenses to provide creators with a variety of options so they can choose the right tools for their craft.”
It takes many months for a camera to be manufactured and end up at a camera store. Fujifilm has to secure the parts, get them assembled, and shipped across the world. They are guessing in December what the demand might be in July. And there are limited resources for manufacturing. How many parts can a supplier produce at any given time? How many cameras can an assembly line put together each day? The whole process is much more complex than I think many people assume. Fujifilm not only has to anticipate future demand, but they have to figure out how to meet that within the constrains of many and various limitations.
Demand isn’t steady, but constantly fluctuating. It can spike unexpectedly, and fall off a cliff unexpectedly. If the demand for a certain camera suddenly ceases, Fujifilm needs to anticipate that months and months in advance, or they’ll continue to manufacture tens of thousands of copies of a product that few are buying.
Let’s look at the Fujifilm X100V. It was released in early 2020, and, for about two-and-a-half years, Fujifilm was more-or-less manufacturing the number of copies it needed in order to meet the demand for that camera. Then, suddenly, demand spiked, due to several viral TikTok videos. Fujifilm did not ramp up production (or, if they did, it wasn’t nearly enough) of the X100V, likely because they assumed the hype would quickly dissipate, especially since the camera was approaching three-years-old at the time; however, they guessed wrong.
For the X100VI, Fujifilm assumed that doubling the production of the X100V would be enough to meet the anticipated demand for it. Fortunately or unfortunately, depending on your perspective, the demand for the X100VI was historic and unprecedented. There were more preorders for the X100VI in China alone than there were X100V’s manufactured in total. Fujifilm has said that they will be increasing production of the X100VI, but I’m not certain to what extent exactly (I’ve heard that it could be 30,000 units per month by sometime in the summer, but I have no idea what the precise numbers are right now).
This is uncharted territory for not just Fujifilm, but for any camera maker. Fujifilm has to try to meet steep current demand while being hyper alert for any changes in future demand. If, for example, they are actually making 30K cameras per month, and suddenly the floor drops and nobody wants one, and they’ve already set in motion the manufacturing of 150K cameras, that could be enough to bankrupt the company (at least the camera division).
Another example is the Fujifilm X-E3 and X-E4 cameras. Fujifilm anticipated that demand for the X-E3 would be greater than it actually was, and made too many copies. Fujifilm had to discount the X-E3, and sometimes significantly, to clear the warehouse. You could still find brand-new (and discounted) X-E3 bodies 18 months after it had been officially discontinued. Fujifilm used the sales figures of the X-E3 to estimate the demand for the X-E4; however, the X-E4 was much more in-demand than the X-E3 was (largely because it was viewed as a top alternative to the impossible-to-find X100V in the aftermath of the viral videos). Fujifilm did not secure enough parts to manufacture nearly enough copies to meet the demand of the X-E4, and likely assumed (incorrectly) that the spike in demand would be short-lived. If you look at eBay, X-E4’s are listed for double the price of X-E3’s, and much higher than the MSRP when they were brand-new.
I bring that up for a specific reason. While consumers prefer over-manufacturing (especially since it usually means one can find bargains, and you can readily buy what you want), producers prefer under-manufacturing. Most ideal is precise-manufacturing, but that is really difficult to achieve; between over and under, every company—including Fujifilm—would much prefer to err on the side of making too few of something than too much. And, if you want the gear that you spent a lot of money on to retain its value, you, too, will prefer them to err on the side of caution.
Toyota created the Toyota Production System in the aftermath of WWII. This system invented what is now referred to as Lean Manufacturing (or Lean Business Philosophy or Lean Strategy Process). Many books have been written on this topic—I have a few on my library shelf, although I’ve only actually read one. To understand Fujifilm’s approach to manufacturing and inventory means understanding the Lean approach, which is used worldwide, especially in Japan. This Harvard Business Review article gives a very brief synopsis of what the Lean strategy is, just to give you an idea; even better, I’m sure your local bookstore has a few books on this topic.
The conclusion is that Fujifilm (along with all manufacturers) is in the tough position of trying to accurately gauge demand for each product they offer, and attempt to produce just the right amount; if they are going to err on one side or the other, they much prefer to err by producing too few copies than too many. Making too many of something reduces its value, while making just the right amount or too few does not. They have to guess what the demand will be many months from now, not just what the current demand is. The current demand might be an indication of future demand, but it also might not. Fujifilm would love to make and sell 50,000 copies of something, but just because they make 50,000 copies of something doesn’t mean that they will actually sell them all. A much better position for Fujifilm is to make 30,00 copies of something, and sell them all. That’s not manipulating the market, but simply good business strategy that provides some stability in a turbulent market.
Well wrote Rithie. And thanks for the article on lean start-up strategy.
Much appreciated!
I don’t think Fuji or anyone else would do that, too harmful to the company but what Mr Goto said was not good. If they were doing that there is no way he would have said that.
I think what he said was just misunderstood, perhaps due to translation (for example, Fujifilm translated Daylight WB as “Fine” WB for a number of years) and/or trying to summarize something extremely complex into a short answer.
I think how it should be understood is:
– “Brand strength” = not overproducing, which devalues the products.
– “Maintaining brand strength” = better forecasting future market trends before the bottom falls out. Think The Price is Right: getting as close as practical without going over; except, doing it six months to a year in advance.
– Going over is unfortunate for both Fujifilm and Fujifilm’s customers.
– Fujifilm has always strived to not overproduce products, but not necessarily with success; however, they’re getting better at it.
– Getting better at it is a driving force for Fujifilm.
None of that should be surprising to anyone who understands the Lean strategy.
Imagine. They produce aspc small sensors as well as medium format. The japanese do nothing without purpose. Of course those was the idea. The field is competitive. And artists talk more about scarcity than abundance. It was well played. Yet they need to move upward now. Many have figured out how to get the looks and it’s long term going to hurt this brand. Like myself. I have a R5. I had a Fuji and loved and missed it. With this backorder I went all the way to x pro 2 and realized after research, software can handle a lot of the Fuji look. So that’s the issue. Software can change the look to soft. And the profiles. A sharper camera we all have. The size of this is the form of fun. Yet no lense options are a bad move to keep the mindset we have in line. Marry the lense date the body. It’s real. It’s tested. Cheers for the listen!
Software like Lightroom has its version of Fujifilm profiles, but it’s not 1:1 100% accurate or the same. You cannot fully replicate SOOC Fujifilm looks with software. I’m sure that with a little work you can get pretty darn close, and probably close enough that nobody would care… but… it still took you work (vs no work of SOOC). Definitely not the same exact thing.
You can find an X-T5 without too much trouble. B&H has the X-T50 in stock right now at this very moment. Aside from the X100VI, you can find all the other Fujifilm bodies with just a little effort. I visited several camera stores across America last month that had most models in stock while I was there. I think the scarcity of Fujifilm cameras has been a bit overblown (the X100VI being a different story). If you want a Fujifilm camera, you can get a Fujifilm camera, and you don’t have to buy an eight-year-old model either (although the X-Pro2 is still wonderful… you should have picked it up).
Good post. Conspiracy theories aside, somehow I wonder if the CEO’s comments perhaps didn’t translate well. After spending decades in a fortune 500 business marketing environment, I can offer that it is highly unlikely that manufacturing and marketing could ever successfully collaborate to pull off such a plan. “Let’s not make as many so we are more profitable” isn’t a lexicon for success.
I think it is probably partially the translation, and partially trying to state a very complex business concept into a short answer. I believe it was mostly misunderstood.
Excellent, even-handed analysis.
Thanks! 😀
I think the real winners here are the camera stores. B&H has had my x100vi money since February. That’s a lot of money to earn interest on.
Well, it’s crummy that they did that. It used to be that they charge once it’s shipped. They shouldn’t be holding people’s money hostage.
Yes, you’re absolutely right. Whenever I’ve seen a pre-order option they’ve always made it clear that you won’t be charged until they have the product to deliver. If it was me I’d demand a refund.
After Fuji shifting to “made in China”, I never believe a bit in “production shortage”.
To make a few models a “limited edition” to make a hype in marketing is understandable.
But keep saying it is because of “production shortage” is an insult to consumers’ intelligent.
So, I canceled my X-T5 booking, and bought a Q3.
I refuse to be manipulated.
Production shortages are common for popular products. Fujifilm is becoming more and more popular, so it is to be expected, especially as Fujifilm adjusts to it. BTW, I had no issues buying an X-T5, so perhaps it was just bad timing? It seems like anything other than the X100VI can be found without much trouble as long as the buyer is patient. I don’t think you are being manipulated.
Well it’s not so much a production shortage as an ordering quantity shortage. My experience with high end audio equipment is that a production line is setup to build a certain quantity of units to cover a period of time (ex 6 to 12 months). So parts are ordered for that amount, kits of parts are put together (PCBs, power supply, mechanical parts etc ) and the production line is setup, tested and the units are built and then the line is torn down and the space is reused for other products or clients if contracted. Lead time for parts can be weeks to months depending on the parts. So if demand is much greater than planned then it can be a big problem. In theory a company may buy long lead items ahead of time. But the guesses on quantities are important and you can’t just add 20 or 30 people it’s logistically complicated and if some part is missing it may stop everything. Now guessing demand is very difficult, when you come out with a v2 product you don’t know how many will upgrade or how many new customers you will get and neither do the stores. Demand dries up whenever stuff sits on the shelf and no one wants to be stuck with 10 million dollars of cameras or parts. You don’t get fired for not making enough but you do get fired for loosing 10-20- 30 million of income.
Funny you using this story to justify buying a Leica, enjoy…
That’s an excellent point. Fujifilm doesn’t want to have warehouses full of extra parts to eventually be made into cameras, but instead have all the parts at the precise moment that they’re needed for manufacturing. It’s a huge and difficult balancing act to orchestrate, but definitely a big part of the Lean philosophy.
I don’t think this is a specific Fujifilm problem. For several years I’ve noticed many products from the other major camera companies frequently listed as “out of stock”, “awaiting stock” etc.
Are people in the Canon, Nikon etc. communities having exactly the same conversations?
I think some of it is an increase in demand, and some of it is difficulties obtaining parts. Fujifilm is certainly not the only brand affected, but for some reason it’s the only brand being accused of nefarious practices (quite unfairly, IMHO).
The people who complain about manipulating the market are the same people who will lament the closure of the business because of excess inventory.
I think it’s mostly those who have ordered an X100VI and are on a long waitlist. No matter how much they’re told that the demand for it was unprecedented or that with patience they’ll get it in time, they insist on believing that it is a conspiracy against them instead.
Who comes up with these conspiracy theories?
cap·i·tal·ism
/ˈkapədlˌizəm/
noun
an economic and political system in which a country’s trade and industry are controlled by private owners for profit.
I have no idea, this is a strange one for sure. 🤣
Great article Ritchie! I think you summed it up quite well. I do not believe in conspiracy theories and I do believe that Fujifilm honestly never anticipated that the X100VI would be met with such a buying frenzy on launch day. I for one have had a camera on back order from B&H since launch day. I placed my order 20 minutes after it went live on B&H’s website. Never even dreamed that 20 minutes would mean a 10 month or more wait! I do have an X100V which I purchased right when it was released. So I’m waiting it out. I was notified that I might get one in October. I had no trouble buying my X-T5 when it was released and I didn’t buy it when it dropped.
What I would like an answer to; is how some buyers (namely the ebay scalpers) were able to buy multiple units at the same time. And yes I know there’s a special place in hell for those people. One buyer had 45 units of each of the silver and black. So they were able to buy 90 units at once. That seller was asking $2599 for each. And that’s just one of the many scalpers on ebay who bought multiple units on launch. How? How was this possible? Is that the fault of the stores i.e. B&H, Adorama, Samy’s et al? Just a side note, those ebay sellers were all US sellers. I saw a couple from Canada and UK but the majority of those with multiple cameras to sell were from the US.
I do wish that Fujifilm had done more (I have no idea how; haven’t considered the logistics) to stop the scalpers. I’m sure it’s bots, where one person was able to place a hundred orders (or more!) at once using some home-built application. Seems like there should be a way to stop it, and that needs to happen. Unfortunately, people buy from the scalpers, which only encourages them to keep at it.
Ritchie, thanks so much for your response. Oh man, I never considered the high volume buying done by bots! You’re probably correct that is exactly how re-sellers were able to buy so many units at one time. After reading your response I did some research on shopping bots. Seems as though they are perfectly “legal” however not so ethical. I learned that there are sites like Amazon that have software that detect and deny shopping bots preventing them from taking advantage of high demand products like sneakers for instance. Maybe B&H, Adorama etc should look into a more robust form of software that identifies a real human customer from the bot.
And just to be clear, I’m not vilifying all ebay sellers I’m sure there are some good ones.
I think the Fujifilm Samurai is not high enough in rankings to decide for itself. Personally, I see the sudden cease of 16Mp sensor fabrication as a punishment. To understand what is happening with Fujifilm, we need a broader image of Japanese Society. Of which we do not have access.
I thought maybe it was punishment, too; but I’m certainly not sure. It might have been simple economics.
It’s the eBay resale market where the problem begins. Is there enough supply to meet current demand as far as Fuji is concerned? Probably. Do predatory eBay folk have multiple spots on waiting lists, buy and then resell cameras at embarrassingly high markups, and don’t give a damn about the average Fuji consumer and user? True without question.
The solution is that people need to stop buying from those resalers. But maybe that will never happen.
Now Amazon is charging $2379 for a x100vi and then displaying that you are getting an 8% discount from $2595. Not sure how they get away with this
I looked into that. It’s a third-party seller called Wholesale Photo, apparently a camera store out of New Jersey. I wouldn’t buy from them, personally… that’s a bit of a crappy thing to do, and they’re probably not an authorized dealer (if they are, they’re likely violating the agreements that they have with Fujifilm). Doesn’t seem like a trustworthy place.
They are the seller on the main page when you open it, but if you click other sellers below, one of the sellers is Amazon and not third party
No, none of them are directly from Amazon.
Wholesale Photo and Green’s Camera World are selling new, and Commerce Carts, Ships Free Today, Shaun’s Watch, and Core Collections are selling used. All of those are third-party. At least on my page, none are directly from Amazon—I only find 3rd-party.
It’s under the all black version not the silver. Sorry, I should have specified
I show the black one as out of stock, and not available. It shows in stock for you?
I ordered from B&H the day they started taking pre-orders and was just notified today that it would be delivered this week. Hopefully, this price gouging will stop now the orders are being shipped regularly.
Wow, congratulations on it coming soon!!
I have XT4 – and want to upgrade (Not to XT5) – and/or add a second camera – even if older rev like X100V – but NONE are available. Their Website feels like a Joke- Every camera other than XH2 – XH2S – is Out of stock !! If this is how they want to manage I better go to Sony or Cannon – and buy and upgrade when I want to…and experience the joy. Right now its painful shopping for Fuji camera.
Also, I want to gift a camera to my daughter – but again nothing is available – either I have to buy at a ridiculous price or buy used….
So, I got her a Sony …available, at a decent price, and no “black market” – where everyone is trying the jack the prices up!
Anyway…enough of complaint. If anyone on this website has contact with Fuji – let them know 🙂 I am not alone – others in my photography circle are considering quitting on it as well.
If you go to a theme park and only choose the rides with the shortest lines, you will likely miss out on the best rides.
Fujifilm used to have short lines, but now they’re trendy—everyone wants one—so the lines got longer and longer. Right now it can be difficult to find their gear in stock (although, aside from the X100VI, they can all be found with just a little effort—seriously, try a little harder and you’ll find whatever it is you’re looking for… I visited several store recently who have stock right now). From what I understand, Fujifilm has increased production, but the demand is quite high. It’s a tricky business, I’m sure, to secure the parts and manufacture them into a camera, while trying to guess what the demand will be many months in the future, when it is all so volatile. Fujifilm is much more popular than it was just two years ago (or even just one), and they’re trying to adjust to that while knowing that demand is a fickle thing. It’s kind of like walking blindfolded down a narrow path with a ditch on both sides, and trying not to fall off either way. Tough to do, especially when the path isn’t straight or level. But people tend to be impatient and unsympathetic and want everything at the moment they desire it and at the price they want to pay for it, and then rant on the internet when that isn’t the case. Very, very first-world type of problem.
As far as everyone who supposedly is eager to quite Fujifilm if they don’t get their way right this second (seriously, how childish is that?), I find it funny. It’s hilarious! Going back to the theme park analogy, it’s like going to Disneyland, and when the Matterhorn is a 90 minute wait, swearing to disavow Disney and go to Knott’s Berry Farm instead. Nothing wrong with Knotts, but either wait your turn for the Matterhorn, try Genie+, or go find a different ride—or leave the park and go to Knotts. Whatever makes you happy. Nobody at Disney will notice that you’re not there, and the line for the Matterhorn will still be 90 minutes after you leave because that’s a ride that many people want to enjoy. It is what it is, and no amount of complaining will change anything one iota.