Lars Johnsson wrote:
High end gear is more than between 5% and 20%.
I'm talking about the dealer's (retail) markup - the amount he sells for, over and above what it cost him to buy the goods from the national Canon/Nikon/whatever distributor and not what it would cost him to buy it off the back of a truck in Bangkok).
I've worked in the retail photo equipment business, and briefly managed a camera store, and I don't think things have gotten any better since I came to my senses and got out of that racket.
What about employee discounts? My $3000 mountain bikes would cost me $12-1400 on "employee purchase" through the manufacturer. $130 helmet, $35. $650 suspension fork, $302.
It's not changed in the least. Dealers get many incentives, and the big ones get 'special pricing'. But dealer net is just that dealer net, and that's what all the small guys pay less you're as big as B&H, BestBuy, etc.
Pay your bills on time you get a discount, pay by check with order you get a discount, sell so much of this and that you get some spiff, etc, etc.
There also co-op money for advertising.
Still the same.
molson wrote:
I'm talking about the dealer's (retail) markup - the amount he sells for, over and above what it cost him to buy the goods from the national Canon/Nikon/whatever distributor and not what it would cost him to buy it off the back of a truck in Bangkok).
I've worked in the retail photo equipment business, and briefly managed a camera store, and I don't think things have gotten any better since I came to my senses and got out of that racket.
Edited by BuLLets on Jun 15, 2008 at 11:13 AM GMT
Edited on Jun 15, 2008 at 11:13 AM
Jun 15, 2008 at 11:11 AM
Lars Johnsson Offline • • • • • • • Upload & Sell: Off
molson wrote:
I'm talking about the dealer's (retail) markup - the amount he sells for, over and above what it cost him to buy the goods from the national Canon/Nikon/whatever distributor and not what it would cost him to buy it off the back of a truck in Bangkok).
I've worked in the retail photo equipment business, and briefly managed a camera store, and I don't think things have gotten any better since I came to my senses and got out of that racket.
Do you really belive Thailands largest photo shop buy from the back of a truck It's an authorized dealer from Canon Thailand and probably bigger than 99 % of the shops in your country.
And I'm also talking about the dealer's retail mark-up. Do you really belive B&H pay maybe $ 1000 more (for the 1Ds3) than other dealers that are smaller
Lars Johnsson wrote:
Mehrwertsteuer is the same as VAT or sales tax in other countries. The dealers (shops) don't pay that when they import the cameras from Japan ot other countries
In Europe though isn't it generally included in the purchase price? As a result, the higher price doesn't reflect what the dealer actually gets for the product.
In the US, sales tax is added post purchase (and is not uniform across the states nor even within states - some areas have local option sales taxes (LOST))
At any rate, cross-country margins are hard to compare because of exchange rates, warranty differences, etc.
IN the US at least, I'd guess margins on bodies are slim. If you compare prices:
Ritz $1099 or 1049 for D Rebel Owners plus $80 sales tax where I live
B&H $939 +$15 to $71 for shipping so $954 to $1010 before tax
If a store had a 30 or 40% margin on the body I'd at least match B&H's $1010 (since you'd get it now not in 2 days); since at a 30% margin my cost is $845 and I'd still make $165 for a 20% margin. Even matching the $945 the margin is still around 12%.
My guess is their margin is much smaller and so you see a lot less willingness to match B&H.
Jun 15, 2008 at 11:17 AM
Lars Johnsson Offline • • • • • • • Upload & Sell: Off
BuLLets wrote:
Using B&H as an example, nearly every single Canon lens they are selling at the moment, USA warranty versions are at 'dealer net' (without including the instant rebate, include that and they are below dealer net) as I'm looking through Canon's Price sheets at this very moment. About the only thing that isn't at dealer net with regard to Canon are the New High end Bodies, 1ds mark 3, and 1d mark 3. Hence my original comment about 'most stuff'.
Eventually those bodies will drop closer to dealer net as well. They always start at Canon Map and drop after the initial demand lets up.
The 1d mark 3 is much closer to dealer net at the moment then when it first came out selling for $4499 (MAP). Right now it's selling for $4099 on B&H's site. Dealer net is $3960 on that body. Making the current markup $139, not even 4%.
No way $ 3960 is the dealer net for a company like B&H. I can buy that camera for a couple of hundred dollars lower price than that in S.E Asia. And I did that in January. From an authorized Canon Thailand dealer. I don't belive the worlds biggest photo shop B&H are paying a lot more than other much smaller shops when they get those cameras from Canon.
jlc61 wrote:
In Europe though isn't it generally included in the purchase price? As a result, the higher price doesn't reflect what the dealer actually gets for the product.
In the US, sales tax is added post purchase (and is not uniform across the states nor even within states - some areas have local option sales taxes (LOST))
At any rate, cross-country margins are hard to compare because of exchange rates, warranty differences, etc.
IN the US at least, I'd guess margins on bodies are slim. If you compare prices:
Ritz $1099 or 1049 for D Rebel Owners plus $80 sales tax where I live
B&H $939 +$15 to $71 for shipping so $954 to $1010 before tax
If a store had a 30 or 40% margin on the body I'd at least match B&H's $1010 (since you'd get it now not in 2 days); since at a 30% margin my cost is $845 and I'd still make $165 for a 20% margin. Even matching the $945 the margin is still around 12%.
My guess is their margin is much smaller and so you see a lot less willingness to match B&H.
You are right about the VAT " the higher price doesn't reflect what the dealer actually gets for the product"
I don't know how it is in all European countries. But in my country the shops always have two prices, with and without VAT. A privat person has to pay VAT. But a proffessional or company don't have to pay it. Or they get it back after paying it.
I belive it's in a similar way in most EU countries.
I don't think you're reading this stuff correctly. Canon's USA Dealer Net price on a 1D Mark III is $3960. What B&H pays for it, I have no idea and you'll have to ask them. Most dealers in the USA pay that price, including the two that are owned by personal friends of mine. The retail dealer's profit margins are small on bodies and lenses, they make their money on accessories.
The dealers get some incentives worth a few percentage points, that's how and why they can sell bodies/lenses close to or at Canon's published dealer net price.
And lastly, USA dealers buy their gear from Canon USA, not Canon Japan. Another reason why B&H has two prices, one for USA product another cheaper price for GREY market items, purchases from who knows where. Clearly, prices are different when comparing Canon USA to elsewhere in the world.
Lars Johnsson wrote:
No way $ 3960 is the dealer net for a company like B&H. I can buy that camera for a couple of hundred dollars lower price than that in S.E Asia. And I did that in January. From an authorized Canon Thailand dealer. I don't belive the worlds biggest photo shop B&H are paying a lot more than other much smaller shops when they get those cameras from Canon.
Mehrwertsteuer is the same as VAT or sales tax in other countries. The dealers (shops) don't pay that when they import the cameras from Japan ot other countries
right you are. i suppose the mehrwertsteuer was just an example that there are different taxing systems in different countries (a poor example for our purposes, though).
point is, that there are different costs associated with being a dealer in different countries (some employers must pay more social health care tax per employee head, meaning more overhead), so i would imagine that what one company marks up in holland wouldn't be the exact same markup used in austria.
Lars Johnsson wrote:
High end gear is more than between 5% and 20%.
I will give you an example from B&H. They charge you $ 8000 for a 1Ds3. I bought mine for just over $ 6400 in a Bangkok store without any special discount or anything. And they are still selling it for about that price (take a couple of hundred dollars up & down depending on the daily exchange rate) And the Bangkok store makes a descent profit (not very much) on that sale.
And I'm sure that B&H even buying it for less than that store because they are so big. ...Show more →
Mark up from $6400 to $8000 is just over 20%.
I would say that shop you mentioned marks up probably 5%.
Dealers always make their margin on the accessories. Not sure about lenses, but I doubt bodies, when initially released, are marked up even 5%. The price of a body is elastic, meaning a small increase is price results in a larger relative decrease in quantity sold. As time passes, the technology gets cheaper, thus allowing for a larger margin in the 10-20% range, but probably nothing more. Making a battery, generic filter, or carrying case, however, is not rocket science and does not require much R&D. But those items are nearly a necessity, or inelastic, so their price can be raised and the average consumer will likely still pay it. You can't run a camera without a functioning battery! So when yours decides to die, you are forced to purchase the marked up battery.
Also, don't forget about services. That is where car dealers make money hand over fist, and I would bet the same is true for camera dealers. Basic cleaning, tuneups, and out of warranty service translate to big margins.
The dealers have to make a profit in order to stay in business, but that profit comes from accessories and not bodies.
I bought some gear from a nice gentleman in the B&S who was forced to close his camera store after 30 years. He can not get anything digital for less than what B&H sells for. Canon was the worst for not giving perks either.
Red Grainger wrote:
Actually the markup is betweem 28% and 35% in the United States and about 5% less in Australia and the EU. Most of the cost difference between these regions is attributed to the tax scheme (VAT vs sales tax). Larger volume dealers usually do about 5% better. Markup on lenses and accesories is closer to 45%.
Cheers-Red
I assume you're not talking about cameras and lenses? Because that is no where near correct. Dealer margins are so slim that they nearly give the cameras away for free --- They hope to make about 20% of accessories, but that's it.
chez wrote:
Seems like no one really knows how much profit there is to be made on the cameras and lenses. Is there anyone who actually works in a store that might shed some light. I really don't think it is anywhere near the 40% range some folks think. Like any electronic item, there is not much profit in them. The accessories is where the money is made.
I work at a camera shop and see the cost and retail prices on a daily basis. Cameras have hardly any markup. A $1300 camera might have $100 profit. by the time you take into consideration credit card fees, and other expenses, it's basically nothing. Accessories will usually have around 20% to 30% profit, but they also are not as expensive.
Places such as B&H will usually retail their items for quite a bit less than the small shops will pay for the equipment from Canon. I'm not blaming B&H, they certainly have more buying power, but it would be nice if Canon charged the same amount for everyone.
Some companies seem to charge the same amount no matter who the retailer is. Companies like Gitzo, and Leica are usually the same price no matter where you go.
Ben Horne wrote:
I work at a camera shop and see the cost and retail prices on a daily basis. Cameras have hardly any markup. A $1300 camera might have $100 profit. by the time you take into consideration credit card fees, and other expenses, it's basically nothing. Accessories will usually have around 20% to 30% profit, but they also are not as expensive.
Places such as B&H will usually retail their items for quite a bit less than the small shops will pay for the equipment from Canon. I'm not blaming B&H, they certainly have more buying power, but it would be nice if Canon charged the same amount for everyone.
Some companies seem to charge the same amount no matter who the retailer is. Companies like Gitzo, and Leica are usually the same price no matter where you go....Show more →
While there may not be as much profit in a 40d, there is a LOT of markup and profit in a 1ds3, (I'm sure that's mostly for Canon) but again, as has already been pointed out you can buy a 1ds3 for $6400 both abroad AND here in the US. These cameras are not being sold at a loss....
I was bitching about prices to my local dealer and he showed me the price sheet and what they net after expenses. Local camera stores make VERY LITTLE money on lenses and bodies and their markup is very low. I believe lars is basing his comments on his experience with the discrepancies in exchange rate, but its simply not a correct observation as US dealers (what I believe this topic is about).
I was bitching about prices to my local dealer and he showed me the price sheet and what they net after expenses. Local camera stores make VERY LITTLE money on lenses and bodies and their markup is very low. I believe lars is basing his comments on his experience with the discrepancies in exchange rate, but its simply not a correct observation as US dealers (what I believe this topic is about).
jamesf99 wrote:
While there may not be as much profit in a 40d, there is a LOT of markup and profit in a 1ds3, (I'm sure that's mostly for Canon) but again, as has already been pointed out you can buy a 1ds3 for $6400 both abroad AND here in the US. These cameras are not being sold at a loss....
Cost on the 1DsmkIII is most definitely NOT under 6400 for small shops. I should know, I bought one. The Employee purchase amount (5% over cost) only gave me a several hundred dollar discount from the 8k price. Cost for small shops is over 7k.
Jun 15, 2008 at 02:04 PM
Lars Johnsson Offline • • • • • • • Upload & Sell: Off
Taylor Barrett wrote:
I was bitching about prices to my local dealer and he showed me the price sheet and what they net after expenses. Local camera stores make VERY LITTLE money on lenses and bodies and their markup is very low. I believe lars is basing his comments on his experience with the discrepancies in exchange rate, but its simply not a correct observation as US dealers (what I believe this topic is about).
No I'm not doing that. Discrepancies in exchange rate can do $100 and mostly $200. (I also wrote in the post "give or take $200 up or down from that price because of the exchange rate) But it will not do $ 1600.
jamesf99 wrote:
While there may not be as much profit in a 40d, there is a LOT of markup and profit in a 1ds3, (I'm sure that's mostly for Canon) but again, as has already been pointed out you can buy a 1ds3 for $6400 both abroad AND here in the US. These cameras are not being sold at a loss....
