Got my m10-R today. Sending it back tomorrow

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Yes, quite. "Swiss made" is correct, as well.

[rivi1969]

58 minutes ago, analog-digital said:

That means in plain language, Leica's products, M's in particular, are overpaid. Massively overpaid. Because they are not that much "better" than they cost more.

Luxury goods are overpriced. An Hermes Birkin bag costs aprox. 800 Euros to produce, and they are sold from 12,000 and UP (all the way to 300,000) We are talking at least 15 times their real cost. The first line of Tudor Black Bay watches goes for 2500-3000 Euro and use the exact same ETA movement than my 600 Euro Steinhart watch. (other Tudor models have in-house movements and are more expensive) That's the value of the brand.

If the retail price tag of an M10 is $9000... how much do you think it actually cost to produce it... $750, $1000? I strongly doubt would be more than that.

Edited August 10, 2020 by rivi1969

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[250swb]

1 hour ago, rivi1969 said:

Luxury goods are overpriced. An Hermes Birkin bag costs aprox. 800 Euros to produce, and they are sold from 12,000 and UP (all the way to 300,000) We are talking at least 15 times their real cost. The first line of Tudor Black Bay watches goes for 2500-3000 Euro and use the exact same ETA movement than my 600 Euro Steinhart watch. (other Tudor models have in-house movements and are more expensive) That's the value of the brand.

If the retail price tag of an M10 is $9000... how much do you think it actually cost to produce it... $750, $1000? I strongly doubt would be more than that.

You are arguing the leg off a dead donkey. Maybe you think a Rolex has a Rolex movement? No it has a Zenith movement, just get over whatever you think the name of the manufacturer means in terms of 'authenticity'. 

[farnz]

1 hour ago, rivi1969 said:

If the retail price tag of an M10 is $9000... how much do you think it actually cost to produce it... $750, $1000? I strongly doubt would be more than that.

Whatever 'todays' production cost versus price you're forgetting amortisation of the development costs, which are typically the most expensive part and need to take into account net present value and overheads such as paying your staff so you don't need to re-hire every time.  

Additionally there are marketing costs, stocking costs, delivery costs, dealers' margin to keep them afloat etc, so it's not as simple as "it cost x to make the item so the price will be x + profit."

Just so you're clear, I'm not being a flag-bearer for Leica here, I'm simply pointing out that it's not as simple as it might seem, particularly for a small, specialist business that's not in a position to take advantage of the economies of scale available to the Canons, Nikons, and Sonys.

Pete.

[rivi1969]

1 minute ago, 250swb said:

You are arguing the leg off a dead donkey. Maybe you think a Rolex has a Rolex movement? No it has a Zenith movement, just get over whatever you think the name of the manufacturer means in terms of 'authenticity'. 

If you are ok with whatever extra money manufacturers want to charge you based on the apparent country of origin, good for you. 

I know... The fact (some) Leica cameras and lenses are actually made in Portugal is hard to stomach for more than a few hard core fans, personally I couldn't care less as long as they work.

[rivi1969]

1 minute ago, farnz said:

Whatever 'todays' production cost versus price you're forgetting amortisation of the development costs, which are typically the most expensive part and need to take into account net present value and overheads such as paying your staff so you don't need to re-hire every time.  

Additionally there are marketing costs, stocking costs, delivery costs, dealers' margin to keep them afloat etc, so it's not as simple as "it cost x to make the item so the price will be x + profit."

Just so you're clear, I'm not being a flag-bearer for Leica here, I'm simply pointing out that it's not as simple as it might seem, particularly for a small, specialist business that's not in a position to take advantage of the economies of scale available to the Canons, Nikons, and Sonys.

Pete.

You are correct. There are many other factors involved, offices, retail, salaries, distribution, etc and one of them is the pure value of the brand that also goes in the equation.

[andybarton]

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1 hour ago, rivi1969 said:

If the retail price tag of an M10 is $9000... how much do you think it actually cost to produce it... $750, $1000? I strongly doubt would be more than that

How much do you sell your time and expertise for?

How much is your brand worth?

I’ve seen some spurious arguments in my time but to equate the value of an item to the actual cost of making it from its raw materials is right up there with the best of them. 

[jaapv]

4 hours ago, rivi1969 said:

Luxury goods are overpriced. An Hermes Birkin bag costs aprox. 800 Euros to produce, and they are sold from 12,000 and UP (all the way to 300,000) We are talking at least 15 times their real cost. The first line of Tudor Black Bay watches goes for 2500-3000 Euro and use the exact same ETA movement than my 600 Euro Steinhart watch. (other Tudor models have in-house movements and are more expensive) That's the value of the brand.

If the retail price tag of an M10 is $9000... how much do you think it actually cost to produce it... $750, $1000? I strongly doubt would be more than that.

let me fact-check this..

A Leica M10R has high R&D costs per camera, being made in small numbers. The sensor, well, I would put the cost to Leica at about 2500 Euro - the M9 sensor cost 1800 Euro a pop-, the motherboard is a specially developed split one, made in small series, the CPU is a small series dedicated one, and it goes on. We have hand-machined bodyparts by outside manufacturers in Germany and Portugal, all built and assembled to EU-level costs. Not to mention the rangefinder-viewfinder at a net cost of well over 1000 Euro. In the end, Leica turns a decent margin on their products but no more than that.  The company figures bear this out: a decent profit but nothing out of the ordinary. 
The idea that the cost of building an M10R would be in the order of 750 Euro is completely ridiculous. Make it 8 to 10 times that.number. And then you get the overhead of marketing, distribution, sales and guaranty...

So are Leica products expensive? Yes, but not extraordinarily so: a Nikon D6 is over 7000 Euro, a Canon 1Dx-iii 7500 Euro. Are they luxury goods? I would say not, they are simply high-end products, and high-end products cost money, both to build and to buy.

In this context, about a decade ago, Zeiss had the ambition to build a DRF. Not unreasonable with their rangefinder camera expertise and Sony in the background electronically. They had to announce that they were scrapping the project as they could not complete with Leica on price. 

[rivi1969]

1 hour ago, jaapv said:

let me fact-check this..

A Leica M10R has high R&D costs per camera, being made in small numbers. The sensor, well, I would put the cost to Leica at about 2500 Euro - the M9 sensor cost 1800 Euro a pop-, the motherboard is a specially developed split one, made in small series, the CPU is a small series dedicated one, and it goes on. We have hand-machined bodyparts by outside manufacturers in Germany and Portugal, all built and assembled to EU-level costs. Not to mention the rangefinder-viewfinder at a net cost of well over 1000 Euro. In the end, Leica turns a decent margin on their products but no more than that.  The company figures bear this out: a decent profit but nothing out of the ordinary. 
The idea that the cost of building an M10R would be in the order of 750 Euro is completely ridiculous. Make it 8 to 10 times that.number. And then you get the overhead of marketing, distribution, sales and guaranty...

So are Leica products expensive? Yes, but not extraordinarily so: a Nikon D6 is over 7000 Euro, a Canon 1Dx-iii 7500 Euro. Are they luxury goods? I would say not, they are simply high-end products, and high-end products cost money, both to build and to buy.

In this context, about a decade ago, Zeiss had the ambition to build a DRF. Not unreasonable with their rangefinder camera expertise and Sony in the background electronically. They had to announce that they were scrapping the project as they could not complete with Leica on price. 

Jaap,

Interesting. You said an M10R costs 7500 euros to produce, plus marketing and distribution, I doubt it. Where is the profit, how come they manage to have such a nice headquarters if they sell small numbers with small profits?

My experience in advertising with luxury segments tells me that ALL premium brands have a substancial mark-up just for the "value of the brand". Proof of that are the Leica rebadged Panasonics that cost 50% more than their Lumix counterparts, 100% identical other than the logo at the front. I never bought the argument that Leica send experts to Japan to hand-picked Lumix bodies to add them the magic dust. Free Adobe Lightroom and additional warranties are not enough to cover that extra. There is NO other argument for the increase but the simple value of the brand. (50%) Which by the way I am not saying it's wrong. I just am saying it is real.

Now that you mention Zeiss, 15 years ago Seiko Epson manage to produce and sell a digital camera with a real rangefinder for $2000, 1/3rd of what the M8 costs 2 years later. And that was a small numbers camera for sure.

Cheers

 

[IkarusJohn]

I know from clients that I've worked with over the years that costing is variable - many companies go bust getting this wrong, and I think Leica has been close to there more than once.  Similarly, I'm not sure that the assumptions that go with the soubriquet "luxury brand" are fair - it's a photographers' company.  Sure, they make special editions etc because they can, but their core products (S, SL, M & TL/CL) are photographers' cameras, as are their lenses.

This is how my clients have explained their costings to me in the past:

• overhead, or fixed costs not specifically related to the product - rent, staff, insurance etc.  A share of this has to be recovered from every product sold
• R&D cost - this is wider than just traditional research and development; it includes prototypes, testing, specific tooling and production costs recoverable only from that product line
• components and material - loosely, the actual net cost of producing that product.  Jaap's assessment might be overstated, but it is way more than 750 Euro.  There's no way Leica could justify that margin.
• margin - this is overall markup, but isn't really pure "profit".  Most large businesses develop an internal rate of return, which is the final margin, expressed as a percentage of costs.  It is unlikely to be more than 50% of the above costs; my expectation would be more like 25%.

The first overhead (above) is relatively static - if Leica sells more product than anticipated, this might result in over recovery; less, then profits take a direct hit.  R&D is a marginal cost which goes down with every unit sold.  So, if Leica can produce as many cameras using the same platform (M10; M10-P; M10-D; M10-M; M10-R), then the marginal cost for R&D is relatively small, save that the M10-M & M10-R have new sensors and motherboards and firmware, which puts that element up.

Pricing is then assessed on the above build up, compared to what the rest of their products are priced at, what the market will bare and what competitors are charging (such as they are) and anticipated product run.  The price is then set globally, for each currency and sales tax (such are there is).  When you see end of line pricing or you get a good deal from your preferred dealer, that is often the dealer cutting their margin either as a favour to you or to clear their shelves.

This also explains how it is that you might find on a street corner or a market, luxury clothes with the labels cut out sold for 10% of their price. That doesn't get even close to the production cost.  It is closer to the holding cost.  It is rare to see an evergreen luxury product like the handbags referred to above sold at knock-off prices.  They don't need to.  Fashion items are a different story - last year's model is occupying rack space and needs to be shifted.

I had a client once which produced sporting goods.  High R&D and marketing cost, relatively modest production cost, combined with relatively unsophisticated buying public.  My client would produce high quality, tested, excellent products, and would be angry as hell to see people buying poorly made and tested "sexy" products, which often ripped off his excellent designs.  His solution was to produce last year's designs under a different brand at a cheaper price and market the hell out of them.  Clever strategy, as he was cannibalising his own products - if he didn't, someone else would.

Leica might have an interest in the Zenith M(240) knock-offs (I'd be amazed if they didn't), but they not discounting their own products.  They are the only player in a niche market.  The issue for them is not to adopt a "luxury" pricing strategy, but to fund producing excellent cameras and lenses and to price them well enough, without ripping off their small but enthusiastic customers.

As I recall, the price of the latest M cameras have gone down, rather than up ...

Edited August 11, 2020 by IkarusJohn

[Mikep996]

Years ago, when I worked on Long Island, NY, I had a friend who owned a vineyard/produced wine.  He had a line of several whites/reds.  I don't know ANYTHING about wine so that's about all I can tell you about the types of wines he sold - some  were red; some were white!

He decided to come out with a 'premium' wine (don't ask me what that means) and did so.  It did not sell very well and he decided to stop production of that wine.  BUT a marketing company he sometimes worked with advised that he dramatically increase the price of the wine and change the label to something more "elegant".  He thought that was silly but did it.  Sales increased dramatically, justifying the production.  The point is, at the lower price, it was not perceived as a "luxury/high quality" item..  Once he raised the price with NO change in production or cost to produce, the wine made became a big seller for him.  At $15/bottle (early 1990's), there were few buyers.  At $40/bottle he sold all he could make with NO change whatsoever in the wine, just the label.

So price is often perceived as a mark of quality when, in reality, it has little to do with quality and all to do with perception!  I am NOT saying that Leica is overpriced, underpriced, or priced just right.  I am saying that marketing 101 includes the reality that perception has a lot to do with purchasing.  Leica IS considered a luxury brand which will, right off, appeal to some people just because of that.  OTOH folks that are completely linked to "bang for the buck" would consider anyone purchasing a Leica as having more money than sense.  

I go back to the fact that I enjoy using a Leica M mored than any other camera and that justifies the price for me.  It is worth the money I paid for that reason and I would call, say, a Fuji rangefinder a waste of money because I don't want one.  This has nothing to do with comparing picture quality; it is about the personal fun/satisfaction of using the camera.  

[M11 for me]

vor 9 Stunden schrieb 250swb:

You are arguing the leg off a dead donkey. Maybe you think a Rolex has a Rolex movement? No it has a Zenith movement, just get over whatever you think the name of the manufacturer means in terms of 'authenticity'. 

That is not correct. Rolex had always its own movements (made by Rolex in Biel/Bienne). There was (was = not any more) one exception that Rolex always made clear and transparent: The stop watch movements came from Zenith (El Primero movement). But to be clear: This Zenith movement has been replaced by a Rolex movement as well many years ago. The difference can be seen very easily: The second and minute dials on the E Primero are located exactly on the axe between 9 and 3 wheareas on the Rolex movement they are located a bit higher. 

I describe this so much in detail as in this thread there are such a lot of claims that are quite on the surface or simply wrong and without basis. What a pitty.

But of course this has nothing to do with Leica 😇

Edited August 11, 2020 by M10 for me

[jaapv]

10 hours ago, rivi1969 said:

 

I know... The fact (some) Leica cameras and lenses are actually made in Portugal is hard to stomach for more than a few hard core fans, personally I couldn't care less as long as they work.

Complete nonsense. Leica has had the factory in Portugal for decades. The stuff made there, mainly binoculars and sub-assemblies but also some cameras, mostly in the past like the R3, but presently none, is made there for the expertise of the workforce. Portugal? You make it sound like some cheap labour third world country - in fact it is part of the EU which means that cost of labour is comparable, if somewhat differentiated from any other EU country like for instance Italy. Woops - they build "cheap labour" Alfa Romeos there...🙄

[jaapv]

5 hours ago, rivi1969 said:

Jaap,

Interesting. You said an M10R costs 7500 euros to produce, plus marketing and distribution, I doubt it. Where is the profit, how come they manage to have such a nice headquarters if they sell small numbers with small profits?

My experience in advertising with luxury segments tells me that ALL premium brands have a substancial mark-up just for the "value of the brand". Proof of that are the Leica rebadged Panasonics that cost 50% more than their Lumix counterparts, 100% identical other than the logo at the front. I never bought the argument that Leica send experts to Japan to hand-picked Lumix bodies to add them the magic dust. Free Adobe Lightroom and additional warranties are not enough to cover that extra. There is NO other argument for the increase but the simple value of the brand. (50%) Which by the way I am not saying it's wrong. I just am saying it is real.

Now that you mention Zeiss, 15 years ago Seiko Epson manage to produce and sell a digital camera with a real rangefinder for $2000, 1/3rd of what the M8 costs 2 years later. And that was a small numbers camera for sure.

Cheers

 

Wrong comparison. The RD1 was an engineering feat where they shoehorned the innards of an existing Nikon DSLR into an existing Voigtländer body with no further development. As it was an economical failure for Epson, they disappeared from the market after 20.000 cameras without any customer support.

As I said, Leica is not in the luxury segment, it is in the high-end specialist segment.
Their forays into the overpriced luxury market are the highly profitable "special editions"

That is not to say that their target customer base is not the more affluent middle class. That is not surprising, given that they sell products that are by necessity not cheap. That goes for many other industrial producers, giants like Apple as much as niche car manufacturers like Morgan.
Comparing to watch makers is spurious - that is luxury manufacturing universe with dozens of niche companies assembling -only few make- parts to products that have, in the end, little to differentiate them technically to the user but the brand name and the design.

 

 

[andybarton]

If you take a trip to the Leica factory, you can see just how little of the whole camera is actually built there. Most of it, bar the sensor and top plate / rangefinder, comes complete in a padded tray from Portugal.

[Matlock]

We have come so far from the case of a little piece of missing paint and this thread is getting a little tedious. Pick up your Leica (or Canon, Nikon, Sony, etc. etc.) and go out and take pictures.

[earleygallery]

1 hour ago, Matlock said:

We have come so far from the case of a little piece of missing paint and this thread is getting a little tedious. Pick up your Leica (or Canon, Nikon, Sony, etc. etc.) and go out and take pictures.

With appropriate social distancing and PPE where necessary of course, and don't forget to wash your hands. 

These threads about where a Leica is actually made crop up so often maybe we should have a sticky 'Where Leica's are made' thread? Perhaps Leica should also have a helpline for distraught customers who have just found out that their new camera or lens wasn't 100% made actually in Germany. 

My R3 isn't ashamed to wear a 'made in Portugal' engraving. Why do newer Leica's try to hide their true origins? Come on Leica, don't be ashamed of Portugal. 

[jaapv]

7 hours ago, rivi1969 said:

Jaap,

Interesting. You said an M10R costs 7500 euros to produce, plus marketing and distribution, I doubt it. Where is the profit, how come they manage to have such a nice headquarters if they sell small numbers with small profits?

My experience in advertising with luxury segments tells me that ALL premium brands have a substancial mark-up just for the "value of the brand". Proof of that are the Leica rebadged Panasonics that cost 50% more than their Lumix counterparts, 100% identical other than the logo at the front. I never bought the argument that Leica send experts to Japan to hand-picked Lumix bodies to add them the magic dust. Free Adobe Lightroom and additional warranties are not enough to cover that extra. There is NO other argument for the increase but the simple value of the brand. (50%) Which by the way I am not saying it's wrong. I just am saying it is real.

Now that you mention Zeiss, 15 years ago Seiko Epson manage to produce and sell a digital camera with a real rangefinder for $2000, 1/3rd of what the M8 costs 2 years later. And that was a small numbers camera for sure.

Cheers

 

Panasonic Leicas are a different story. Their sole original purpose was to save the company as they were technically bankrupt. Leica was selling their M and R cameras at a loss per unit at the time, despite the price and would lose all sales were they to price them realistically. Nowadays their function is to maintain the presence as a premium brand in the entry end of the market. For that purpose they must be priced higher than the technically identical donor cameras. See above. 
Plus Panasonic charges a hefty licensing fee to protect their own market segment. 

[Matlock]

4 minutes ago, earleygallery said:

With appropriate social distancing and PPE where necessary of course, and don't forget to wash your hands. 

 

I find that using a Leica M with a face mask tends to steam up the viewfinder.🤣

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Hallo,

Look here: Leica M

[jaapv]

In that case you are not using the mask properly. Adapt the metal strip to your nose and breathe “downwards”.