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New Chuck Westfall Comments | |
Retail margins of third party, official Canon dealers (not super volume people like B&H or Dell) on bodies and lenses runs around 10%-20% (or did, at least, a few years ago).
That's 3rd party retailers, not Canon. Volume guys probably get slightly better prices... 5% better, maybe? I can't really be sure on this... never worked for those guys.
Places like Dell are special, actually. They might in fact sell an item in a short burst at what LOOKS like a loss. It all depends on warehouse space, projected volume on that item.... and importantly... on OTHER items it may need room for.
Here's a simplified scenario (it gets WAY WAY more complicated). Dell (or it's supplier) has lots of stock of product A-- more than it should-- and product A doesn't generate much revenue-- is low volume and low margin. Dell has tons of sales volume of product B, and makes high margins. Dell is limited by how much of its assets and space are tied up in product A, so it firesales it for a limited window, in order to move product B... or carry more product B.
In this way, it might sell product A at a loss (cost to sale price), but actually, it is MAKING money by reducing its opportunity cost when related to Product B. It makes more and more sense when you have thousands of products and a computer making projections. Advanced economics goes way beyond simply the marginal cost of a product and the sale price. Opportunity cost is idiotic for a company to ignore-- and believe me, any company worth its weight is constantly seeing what will make it MORE money... and sometimes that means selling at a loss. And Dell is famous for this. Literally, people have written about it.
The side effect is that folks will now pay attention to Dell, looking for that rare super deal. Marketing side LOVES this.
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