M8's true cost?

[jaapv]

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Of course, I know full well.... momentary aberration I fear .... old age creeping up - or rather sprinting in my direction... Does that mean that the price in the USA must have tripled:eek:

[dfarkas]

The Noct is a whole other issue. This is the last lens to be manufactured in Canda by Elcan and the only M lens not made in Germany. The design dates back to 1972 and the exotic glass is getting more difficult to source. Leica AG has less control over the manufacture than they'd like, certainly. So, without any addtional supply, increased demand of the lens due to M8 poplularity, and an increase in manufacturing cost, the price goes up. My guess is that Leica is trying to stem the demand at the same time as cover the rising costs. Yet, the lens is still in greater demand than ever. I believe that the wait time is now about 5 months. We got some for customers in the fall before the price increase and the wait was a little more than 2 months at that time. And of course, there is the ever-present fears that the Noct will go the way of the 75 Lux and 28-35-50 Tri.

 

David

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[Guest guy_mancuso]

Plus the vendor for one element in that lens raised the price through the roof. So most of that price increase on it is really out of Leica's hands. I'm a little bummed out since my postmark failed to be in time to get one at 30 percent off , so in reality i lost 2 30 percent off vouchers and no lens. Now that was wasting a great deal on some leica glass.

[stunsworth]

Ok, let's try the 50mm Summicron <grin>

 

I bought mine new in 2000 in France and paid the ridiculous price of £650 - at the time I think they sold in the UK for £500-550. Current price in the UK is £920.

[Guest tummydoc]

I just ordered my M8, in case Leica raise price next month. However I don't really believe they will raise $500 for the same digital M8, looks like a brainless marketing strategy to me.

 

Really? It induced you to buy one straight away

[Eoin]

.....I'm a little bummed out since my postmark failed to be in time....

 

I don't believe you missed the window, I thought you had that well covered. Oh well ! look on the bright side, you possibly saved your self a small fortune on glass you of all people could do without. LOL

[Guest guy_mancuso]

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yes i could have made a phone call and it would have been fine but your right i have plenty now. What i need is a fast 21 or 24

[wattsy]

The Noct is a whole other issue.

 

I'm not so sure. Other less exotic lenses have also seen considerable price increases during the last few years. I remember buying a 35/F2 ASPH in late 2002 from a UK official Leica dealer for £795. I bought another (don't ask why) around a year later for something like £895. Current UK RRP is £1520 (with some dealers selling the 35/F2 for £1365).

[ArtZ]

Something I find very difficult to understand is why in the US market price increase is 500 USD and in European market 600 Euros (830 USD)

 

Maybe the American market is more sensible to price increase, but making the European consumer paying for the bad situation of the US Dollar it's not the solution IMHO.

 

I was talking a couple of days ago with the owner of "La maison du Leica" in Paris and he was very upset for the price rise.

 

Well we'll see what happens!

.

[trs]

I hear that cost of doing business in Europe is more than in US. Maybe that is what causes the price differences? (not a business person, so I do not know - just hear/say).

 

In the mean time, I sure hope, Leica is making enough Money because we would want them to live. I don't want to see Leica do do what Minolta did to their d/SLR camera business. When Minolta/Konica sold the SLR business to Sony, it was very a sad day to me.

 

-tanka

[ho_co]

... In the 60's the dealer cost was 78 cents on the dollar. Not much of a mark up. However, a dealer or employee could purchase a body and 'normal' lens for half price, provided he agreed not to sell it for two years. Lenses and accessories under the same plan, were 60 cents on the dollar.

 

You don't deal in Leicas for the large margin.

 

Jerry--

Just FYI, Leica seems to have made a number of changes from those days. I was in retail for part of the 60's, and then joined Leica as a sales rep for a while. I've still got a couple contacts at Leica, and from what I understand, the margins are even tighter today. That is, your assessment is correct, only more so.

 

I'm glad you and David offer your insight here. It's so easy for a gear-coveter to glance around a camera store, see all the expensive goodies, and think the dealer must be making good money. Unfortunately, that's not the case. Twenty years ago there were four big, solid camera stores in Houston; today there's only one left.

 

--HC

[atanabe]

Luigi,

As far as margin... while I'm sure Leica wouldn't really like me to share this info I can tell you that it is certainly not what you'd expect. The camera retail business has very slim margins all around. As I say, we aren't selling ipods and Xboxes here. There are no quantity breaks or incentives like in the consumer electronics business. I can say this, on Nikon and Canon lenses that we sell, our maximum markup on any lens is 10%. You'll pay more than that in gratuity going to a restaurant and getting mediocre service. Our sales staff might spend an hour or more helping someone decide what is best for their needs, rather than merely pulling a box off of a shelf and pointing them to the register (or online checkout). That's the paradox. Many people say they want great service. Few (but a growing number indeed) are willing to pay anything more for that service.

 

 

David

 

David raises an important point about the changed dynamics in a small camera store. I do not think that the margins on gear have increased or decreased much over the years (just speculation) but the way that shops make their money has.

 

If you take the example of a $1000 film camera which the dealer made 10% margin or $100 profit. He would then sell you some film and accessories $10 - $40 at 30 - 50% profit. You would come back to the store drop off your film and processing, ask for advice get to try the "new" gear maybe make a gear purchase, but mostly the income was made on just the small, profitable film and processing.

 

With digital and the internet, the profit centers are now disappearing, the margins on the camera are still the same and the level of product knowledge has increased ten fold. I have read about many people browsing at their local shops and then making the purchase online to escape sales taxes. How is his fair to your local dealer? He paid the manufacturer to stock the gear and you asked the questions of his staff and then bought the gear online to escape paying sales tax? I hope that you received good return service and got quality questions answered by the internet dealers. I know I would have a hard time going back to my local shop and asking them questions about my new camera purchased on the internet. I don't like paying sales tax, but I also don't want to see my local dealers go out of business because they cannot afford to stay open as a manufacturer's showroom for long.

 

BUY LOCAL! Support your addiction!

 

Sorry for the rant

 

Al

[Printmaker]

David raises an important point about the changed dynamics in a small camera store. I do not think that the margins on gear have increased or decreased much over the years (just speculation) but the way that shops make their money has.

BUY LOCAL! Support your addiction! Al

 

One of my most memorable working-my-way-through-college jobs was in a small store that specialized in Leicas. That was back in 1968-1969. The markup was about 38% and the standard good customer discount was 20% yielding a net of 18%. Minus rent, utilities, and employees wages. With 3 sales people working, we moved about $5,000 in Leica cameras and lenses per week. Taking out expenses, the owner probably neted $250-$250 per week - with his life savings tied up in inventory. In today's dollars, that's maybe $100,000 per year or $1,000 per week after taxes.

 

Good thing he got his 50% off on his personal camera or he couldn't afford a new Leica!

 

Tom

[pelikan1931]

I have heard the dealer price is somewhat around $US 3850. Of course the more expensive the item, the higher the mark up prices. So whether you are going to see if the recent M8 price increase is fully reflected in the retail price will pretty much depends on retailer pricing strategy, plus demand and supply.

[ho_co]

I have heard the dealer price is somewhat around $US 3850. Of course the more expensive the item, the higher the mark up prices. ...

 

Sorry, pelik, but I don't agree that "the more expensive the item, the higher the mark up prices." Dealer margins on Leica are shorter than on other brands, or at least they were when I had to do with the product. If a dealer gave a customer 20% off on Nikon, he was making far more money than he did giving a customer 20% off on Leica, even though the Nikon was less expensive to begin with.

 

In the US, Leica also has a "MAP," or 'minimum advertised price,' to prevent a dealer's trying to price others out of business. I think some other brands also require that the dealer stick to a MAP.

 

Dealers have very little room to maneuver with Leica because their margin is very slim.

 

--HC

[omshanti5@hotmail.com]

slim retail margins on Leica... ha! Not true! It is true for other brands - as a previous poster stated - Canon and Nikon 10% max profit margin for a dealer, often less, around 7%. Leica on the other hand - mandates 20-27% profit margins for dealer, and by contract the dealer is not allowed to price below the mfgs retail price. That is why all the dealers prices are within $5 or so of each other. I saw the contracts, and have first hand knowledge. Leica products carry the highest markup of any cameras.....

[marknorton]

Another angle for US buyers is that sales tax is payable if you buy retail, not if you buy mail order out of state (as I understand it and I think there are moves being suggested to change this). I'm surprised anyone buys retail in the US.

 

There's no equivalent in Europe (other than buying as a business expense or in a country with a lower VAT rate), but if UK buyers could avoid VAT by buying mail order not retail, what few retail shops are left would close.

[ho_co]

slim retail margins on Leica... ha! Not true! It is true for other brands - as a previous poster stated - Canon and Nikon 10% max profit margin for a dealer, often less, around 7%. Leica on the other hand - mandates 20-27% profit margins for dealer, and by contract the dealer is not allowed to price below the mfgs retail price. That is why all the dealers prices are within $5 or so of each other. I saw the contracts, and have first hand knowledge. Leica products carry the highest markup of any cameras.....

 

Josef--

Better double-check your info. You're confusing a number of things. As I mentioned, Leica enforces a MAP. No one advertises "the mfgs retail price," as you put it.

 

Your statement that "by contract the dealer is not allowed to price below" any amount is also in error and such a contract would be illegal. Leica nor anyone else can dictate to a dealer what price she is to sell the product for in the US. You should inform yourself better. You might start by re-reading my previous post and attempting to understand the distinction between "the mfgs retail price" and MAP.

 

"Leica products carry the highest markup of any cameras..." Better not speak in absolutes unless you have absolute knowledge. How about Hasselblad, Rollei, Seitz, Holga, Sinar, Apogee Ascent (e.g. the A105C, which uses the same sensor as the M8) etc?

 

Your statements also confuse margin and markup. Even if it were true that "Leica products carry the highest markup of any" camera, that would say nothing about dealer margins.

 

Put simply, if a dealer can make more on Leica than on other lines, why are there so few stocking Leica dealers?

 

Respectfully,

--HC

[ho_co]

Mark--

Your point about buying via Internet or mail from out of state is true. Doing so helps volume retailers like Adorama, Amazon and B&H make money, but robs local shops of business as you and others have mentioned.

 

The other day I received a request for which I needed an SB-800 flash. The job was for the next afternoon, so I bought locally. Could have saved a few dollars buying from out of state, but that would have meant either getting next-day shipping (more expensive than sales tax) or getting 3-day shipping but losing the job.

 

Certainly, that's a special case. But I need to keep this camera store around because of other such situations which may arise in the future, so I'm glad to buy locally when it's reasonable.

 

Another point is that the dealer makes a lower profit on cameras than he does on the add-ons like batteries, bags and filters. And since those are less expensive than bodies and lenses, they are more often impulse purchases. That's another way the local dealer combats the encroachment of mail-order business.

 

You're right, our representatives keep telling us that they'll change the law so that anything shipped into a particular area must be taxed at the local rate. But if that's coming, it's doing so woefully slowly.

 

--HC

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[jaapv]

Howard- the contactual situation is different in Europe. It is very hard for a dealer to sell below list=price - he risks losing his dealership.