yanidel
Well-known
Out of curiosity, does anybody have an idea on what margins Leica dealers work with on M8 and lenses sales ? How does that compare to margins granted by Nikon and Canon on high-end DSLR's ?
Avotius
Some guy
I think this is an interesting question actually and I hope the doom and gloom squad don't show up here quoting international currency exchange and this and that as part of the answer. I often wonder how much a seller is making on something I am buying and how much it costs for them to have said product and how much the importer is making and how much the factory sends them out for then how much it actually costs to make something. I don't believe those who say that m8's cost close to their current asking price to make because it doesn't make sense bussiness wise to me.
Tuolumne
Veteran
These are usually closely guarded secrets. You need an insider willing to spill their guts. Or a good financial analyst with connections and a history in the industry.
/T
/T
yanidel
Well-known
That is funny, there are so many experts on this forum about the high production costs of M8's but nobody with any clue on dealer margins ...
well, this is also a big part of the equation IMO.
photogdave
Shops local
Margins on Leica are about the same as Canon, Pentax etc. The cost of buying inventory is so much higher and the turnover so much slower, that dealers can't afford to stock as much inventory.
Rogier
Rogier Willems
I used to be able to get 20% discount on Leica when I was still working for Apple...
monochromejrnl
Well-known
based on my discussions with a friend who manages a well regarded camera store (he has over 25 years industry experience in NA, Europe and Asia) - the margins on consumer digicams ranges from 5-10 points, prosumer to pro level dSLR and digital MF gear earns them as much as 15-25 points at the beginning of the product's life cycle then down to 5-10 points at the end when new 'replacement models' begin ship... this has certainly been my first hand experience with purchasing a D200 at cost from him just before the D300 was announced...
No idea if these margins apply to Leica because this guys company doesn't deal in Leicas due to lack of demand..
he also mentioned that Canon and Nikon make up 85-90% of all digicam sales with the rest of the manufacturers fighting over 10-15% market share... doesn't bode well for these other players...
No idea if these margins apply to Leica because this guys company doesn't deal in Leicas due to lack of demand..
he also mentioned that Canon and Nikon make up 85-90% of all digicam sales with the rest of the manufacturers fighting over 10-15% market share... doesn't bode well for these other players...
photogdave
Shops local
5 points on a consumer digicam wouldn't even cover the cost of doing business. Especially if the customer used a credit card. I think you got it backwards: 15-20 points on consumer, 5-10 points on pro gear seems more likely!
benlees
Well-known
Sure economy of scale has to be a big influence here. The margins on Canon and Nikon are surely more than other brands simply because their factories can pump out so many. Pentax has to compete on features and price or will simply disappear. The money they make per camera is probably a lot less since they are followers in the market. The dealers may have a lot less leeway with the Pentax products.
Leica is now a luxury brand and the prices reflect that. The margin is probably quite large even though their R&D and tooling is likely higher than industry standards.
But, who knows?
Leica is now a luxury brand and the prices reflect that. The margin is probably quite large even though their R&D and tooling is likely higher than industry standards.
But, who knows?
yanidel
Well-known
Interesting. I would nevertheless thing than when a product reaches the end of its life, most of the discounting comes from the manufacturer and it does not go against the dealers margins. Maybe it is participatory, but I would not expect a dealer to go down to 5%. As mentionned on this thread, it would not cover cost of doing business.
Bill Blackwell
Leica M Shooter
In the USA Leica dealers used to work off of minimum advertised price ("MAP") guidelines where an item was required to be advertised an a certain minimum price - but this did not preclude the dealer from selling the item for less. A few years ago Leica imposed a new policy whereas dealers operate under minimum sales price ("MSP") guidelines. This was intended to ensure dealers could not under-cut each other. When the policy changed it was not a closely guarded secret. However, Leica does not appear to rigidly enforce this policy.
The MSP guidelines were supposed to ensure dealers would get a certain margin without unfair competition from large dealers. Also, Leica used to provide the dealer with a discount when their invoice was paid within certain terms - this was an additional margin for the dealer on the "back-end." Although it makes sense to continue this policy, I say "used to" because I don't know for certain they still do this. IIRC, the discount was 3%.
Again, IIRC, the margin between dealer price and MSP was 10%, or perhaps a 'bit less. Therefore, dealer net profit could be as high as 13%.
Dealers only stay in business from buying and selling used gear where profits usually exceed 30%.
The MSP guidelines were supposed to ensure dealers would get a certain margin without unfair competition from large dealers. Also, Leica used to provide the dealer with a discount when their invoice was paid within certain terms - this was an additional margin for the dealer on the "back-end." Although it makes sense to continue this policy, I say "used to" because I don't know for certain they still do this. IIRC, the discount was 3%.
Again, IIRC, the margin between dealer price and MSP was 10%, or perhaps a 'bit less. Therefore, dealer net profit could be as high as 13%.
Dealers only stay in business from buying and selling used gear where profits usually exceed 30%.
bluefin
Newbie
When I lived in New York City I knew a buyer for a major retail clothing store. She told me that it was standard industry practice to mark up items 3X (300%) from the initial purchase price to the retailer to the price that was paid by the ultimate customer.
monochromejrnl
Well-known
300% markup on clothing - yes, for cameras? no... even 30% is high...
photogdave
Shops local
Respectfully, no one in this thread is actually in a position to know the real margins, and if they did, to state it would be a violation of their dealer agreement. So this whole thread can be nothing but speculation.
Henryah
Member
Ingvar Kamprad (the IKEA boss) used to figure out suppliesrs margins by watching the cars
the salesmen parked in frpnt of his office.
Henry
the salesmen parked in frpnt of his office.
Henry
jbh
Member
If I may give a little input as a camera shop operator for 10 years (closed in 2000).
Dealer margins are in fact vanishingly small whether Leica, Hasselblad, Rollei, Mamiya, Nikon etc. The margin is defined as the difference between what the dealer paid and what the item is actually sold for and has nothing to do with the list price. Margins can or course be increased with quantity purchases, paying the invoice net 30 etc, but at any point during my years in the business I could've turned a higher profit simply by buying an index fund in the stock market, and even in today's turbulent times that may still hold true.
So forget the notion that a dealer is making a huge markup on the sale of an M8; it just ain't happening.
Where do dealers profit? Sales of accessories at 100% markup plus of course sales of used gear again at roughly 100% markup (dealer-purchased) or consignment sales at roughly 20% or so.
Back in my day <g> I could make more cash money on the sale of a couple of Ricoh p&s cameras than a complete RZ-67. Consignment was really the cash cow; no investment other than overhead and at least a 20% profit. FWIW.
-jbh-
Dealer margins are in fact vanishingly small whether Leica, Hasselblad, Rollei, Mamiya, Nikon etc. The margin is defined as the difference between what the dealer paid and what the item is actually sold for and has nothing to do with the list price. Margins can or course be increased with quantity purchases, paying the invoice net 30 etc, but at any point during my years in the business I could've turned a higher profit simply by buying an index fund in the stock market, and even in today's turbulent times that may still hold true.
So forget the notion that a dealer is making a huge markup on the sale of an M8; it just ain't happening.
Where do dealers profit? Sales of accessories at 100% markup plus of course sales of used gear again at roughly 100% markup (dealer-purchased) or consignment sales at roughly 20% or so.
Back in my day <g> I could make more cash money on the sale of a couple of Ricoh p&s cameras than a complete RZ-67. Consignment was really the cash cow; no investment other than overhead and at least a 20% profit. FWIW.
-jbh-