Leica and dealer network….

[Linford]

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I’m confused or maybe concerned is the better word that Leica is following the corporate/ manufacturing trend of trying to go straight to the consumer and bypassing their dealer network. I have been on the list for some time for a Leica M-A. Today I was notified by Leica that the M-A was available through their online portal. I have no interest in bypassing my AD as I believe in relationships. I have seen a number of premium watch companies attempt the same thing. It does not leave a good taste in my mouth. I was taught that you dance with the girl that took you to the party. Am I missing something? Cheers—lt

[egrossman]

Unfortunately this is part of a growing trend to cut out the middle man. You see it with Tesla and Rivian in the automotive space and Apple with their stores and more recently with bikes with Specialized (specializedbayarea.com).

What you are doing is honorable but manufacturers will continue to focus on giving themselves priority in terms of inventory to maximize profits. This will not change.

Erik

[kivis]

I agree. Last time I was in that situation, I called my preferred dealer Leica Miami and asked them how to work this out. They told me that for items hard to get, I should buy it where ever it was available, which was online.

[Guest]

Why pay the dealer the markup when you can have it all. 

My Leica dealer sold me my camera and lens but they were shipped direct from Wetzlar, so what did they do to earn their cut?

[Guest]

Independent dealers can still advise on products that should be compared across companies in order to find the right part for the customer.
But with a unique camera system like the Leica M and its lenses, I don't want to be constantly being referred by dealers to other camera systems for which they might get a higher trading margin or where they might get pressure from their management to sell them off before they are superseded by the next model variant.
That's why I appreciate the Leica stores, where I can try out the new M11 without having to keep repeating that I'm not interested in any Sony, Olympus, Canon, Nikon, Hasselblad or whatever else still is in store.

[egrossman]

I fear the dealer networks are not long for this world as long as customers continue to practice showrooming. 

Erik

[Guest]

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9 minutes ago, egrossman said:

I fear the dealer networks are not long for this world as long as customers continue to practice showrooming. 

Erik

@egrossman that maybe true, but it depends on the dealer markup. I don’t mind a small markup to support them, but not a substantial amount. Or if they provide extra services along with the purchase. 

As I’ve said in a previous post I went through an official Leica dealer to buy my M10-R, they just passed my order to Wetzlar and pocketed the dealer share, no other value added service was provided. 

[Linford]

16 minutes ago, kivis said:

I agree. Last time I was in that situation, I called my preferred dealer Leica Miami and asked them how to work this out. They told me that for items hard to get, I should buy it where ever it was available, which was online.

My AD did the same. Urged me to get it from “the site” because he knows I want the camera for a trip that is coming very soon. I told him I would wait to get it from him. He has been helping me with Leica products for 10-years and provides services a corporation cannot and will not provide. He has always taken care of me and the many friends I have sent his way. I’ll fight the trend as long as I can. I’m glad I’m not young.—lt

 

[Linford]

9 minutes ago, OThomas said:

@egrossman that maybe true, but it depends on the dealer markup. I don’t mind a small markup to support them, but not a substantial amount. Or if they provide extra services along with the purchase. 

As I’ve said in a previous post I went through an official Leica dealer to buy my M10-R, they just passed my order to Wetzlar and pocketed the dealer share, no other value added service was provided. 

And there is no discount for removing the middle man. JUST MORE CORPORATE PROFIT.

 

[graphlex]

A good independent dealer will help with equipment failures and similar problems. More than a factory owned store, I suspect. 

[Guest]

34 minutes ago, graphlex said:

A good independent dealer will help with equipment failures and similar problems. More than a factory owned store, I suspect. 

I agree, I got more assistance from Ffordes Photographic Inverness than I did with the official dealer. 

Edited August 31, 2022 by OThomas

[LeicaR10]

Linford,  I agree with your OP thread.  If one needs or wants customer help with a Leica product, nothing beats the bricks and mortar store.  Leica "dealers" make about 15% margin on sales of most products. (Canon and Nikon is about 5% for a dealer, sales based on volume and a key to making money)  When buying a Leica, there is no negotiation with price.  It is what it is.  Fair enough to me.  When I have an issue or need help with getting something repaired or ordered, the dealer is my go to place.  I have been with Camera West and Leica Store San Francisco (same owner) for a decade plus.  Always most excellent customer service.  If I need something, Sean will get it for me.  I don't believe many people don't understand how the Leica Stores in the USA work.  There are only 2 maybe 3 Leica Stores that are jointly owned with a store owner, the rest are company stores.  How that works for Leica as company only owned stores has been somewhat of a challenge for Leica.  There has only been one Leica Store closed since opening, the Las Vegas store.  The rest somehow make money albeit based on location and staffing, they may actually lose money.  Perhaps the online store is Leicas way to move to internet store fronts.  But nothing at this time, replaces a real store that you can go try a demo, perhaps trade or get personal service.  Like you, I only buy in store and if need be, I can pick up the phone and talk with a person who knows my gear and can help me get resolution to any issue.  Just my 2 cents, the rest of my money goes to Leica....  r/ Mark

Edited August 31, 2022 by LeicaR10

[RayD28]

One advantage a dealer has is trade-ins and consignments.  ADs make 25% to 30% on consignments and sometimes more with trades. Not sure what the mark up is on new equipment. 
 

New car dealers often make more money on used cars. 
 

Regarding after-sale service on new equipment, I was told I’m at the mercy of the repair shop. Maybe I bought from the wrong dealer. 

[Linford]

1 hour ago, LeicaR10 said:

Linford,  I agree with your OP thread.  If one needs or wants customer help with a Leica product, nothing beats the bricks and mortar store.  Leica "dealers" make about 15% margin on sales of most products. (Canon and Nikon is about 5% for a dealer, sales based on volume and a key to making money)  When buying a Leica, there is no negotiation with price.  It is what it is.  Fair enough to me.  When I have an issue or need help with getting something repaired or ordered, the dealer is my go to place.  I have been with Camera West and Leica Store San Francisco (same owner) for a decade plus.  Always most excellent customer service.  If I need something, Sean will get it for me.  I don't believe many people don't understand how the Leica Stores in the USA work.  There are only 2 maybe 3 Leica Stores that are jointly owned with a store owner, the rest are company stores.  How that works for Leica as company only owned stores has been somewhat of a challenge for Leica.  There has only been one Leica Store closed since opening, the Las Vegas store.  The rest somehow make money albeit based on location and staffing, they may actually lose money.  Perhaps the online store is Leicas way to move to internet store fronts.  But nothing at this time, replaces a real store that you can go try a demo, perhaps trade or get personal service.  Like you, I only buy in store and if need be, I can pick up the phone and talk with a person who knows my gear and can help me get resolution to any issue.  Just my 2 cents, the rest of my money goes to Leica....  r/ Mark

We are on the same page. Personally, I want the dealer to make money. That's what allows them to be there. The business model implies that Leica makes profit from the dealer who in turn makes a profit from us, provides a service and manages a network of customers. It is simple, we should appreciate and honor our business relationships. Its not as if the consumer is benefiting by bypassing the dealer in any way. Cheers--lt

 

[TomB_tx]

Another factor: in much of this country there are no camera stores of any type for long distances, and few of the remaining ones carry Leica. To buy one conveniently many of us have to either buy on-line or make a special trip to find a dealer. Direct sales by Leica solves that problem.

I bought my first Leicas from a small local cameras shop (and licensed Leica dealer) - but that was in 1968. I haven't lived near a dealer since them.

[tedd]

3 hours ago, LeicaR10 said:

Canon and Nikon is about 5% for a dealer

I find this extraordinarily difficult to believe. 

I work in mid/high-end domestic audio at a wholesale level here in Australia. We offer some direct sales through select brand websites but only at RRP, our dealer network have additional margin to discount a recommended 10% to gain an advantage. We view dealers as hugely important, though the odd direct sale we do is nice as it banks us significant margin which goes toward keeping a small company afloat (we have warehousing costs, warranty and support to offer). 

The way I see it (biased, I know, but I've worked plenty of retail in the past): stores have the least to worry about. They carry heaps of brands and have full control over what they stock, most people don't shop online for luxury goods (and when they do it's from a store anyway) and they have the lowest overheads.

Wholesalers are in the middle. We have a few brands but could be fired from them at any time. We make less margin than the stores, have more overheads but higher turnover. A bad range from an important brand could be very damaging. 

The brands themselves get it the worst. They have all the R&D costs, the least margin, huge overheads and a bad product can ruin the entire company. Considering they literally are the products we are so passionate about I wouldn't mind giving them some extra margin and shopping direct, if the Leica store in Melbourne wasn't staffed by the rudest, most pretentious retail workers I have ever met. Instead I'll just buy online from DigiDirect. 

[kivis]

19 minutes ago, TomB_tx said:

Another factor: in much of this country there are no camera stores of any type for long distances, and few of the remaining ones carry Leica. To buy one conveniently many of us have to either buy on-line or make a special trip to find a dealer. Direct sales by Leica solves that problem.

I bought my first Leicas from a small local cameras shop (and licensed Leica dealer) - but that was in 1968. I haven't lived near a dealer since them.

Good point, there are two sides to every coin.

Edited September 1, 2022 by kivis

[Linford]

2 hours ago, kivis said:

Good point, there are two sides to every coin.

Very valid point. However, I now live 1800 miles from my dealer. The bond has survived many years and we communicate by phone, text and email. All products are shipped to me. But, your point is valid. Though I doubt that is the manufacturers primary motivation in this case. I hope I am not too cynical.

[LeicaR10]

Tedd,  I found it hard to believe too when the Leica dealer told me what his other two stores do with other brands.  The camera business is cutthroat in the USA.  Perhaps in Australia too.  I was told the stores also keep going with the trade ins and secondary market in the USA.  The Leica Stores themselves were initially modelled to be Apple/Hermes  store like. Direct sales with knowledgeable staff and store fronts. I personally think, store fronts suffered a lot during the pandemic.  Probably an understatement on my part.  The remaining camera stores in the USA are frustrated with photographers who go into the store to touch and feel the camera model(s) and then go to a discounter store or online to buy the product.  The big stores get the manufacturer discounts based on incentives and discounts for volume buying.  Hard to compete with that model when you own a specialized camera store, having to pay all the overhead, mortgage, lights, personnel, inventory, insurance and list goes on.  One can imagine the risk involved and what happens during a recession etc.. Hard times had by all.  Anyways, I am glad Leica has real stores or boutiques that I can go too and have no issue buying from them.  r/ Mark

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[Huss]

21 hours ago, Linford said:

And there is no discount for removing the middle man. JUST MORE CORPORATE PROFIT.

 

Actually in the case of Tesla, there is.  Tesla fixes the prices - list price is what you see and what you pay.  No add ons.  No mysterious charges.  No "market adjustments".

Other car dealerships in the last couple of years have indulged in massive price gouging.  In Los Angeles the avg mark up was something like $8-$10K per car over summer.