[Leica] Should Leica sell direct to customers?

[dorysrus at mindspring.com (Don Dory)]

There are many reasons why selling direct would be a very poor idea for
Leica.
1) They are selling items that for most people are large sums of money.
Most people do not buy expensive items sight unseen.  The large mail
order firms get away with it for other camera brands because you can
fondle the item at your local store then order it online and save tax.
:)  Leica has very few places you can actually fondle the merchandise so
sales would go to near zero.

2) Leica is selling a superbly crafted mature technology that the masses
would not appreciate.  That would be defined as brand N is 90% as good
and half the price, I would be nuts to spend that kind of money.  I
wouldn't buy that, Agassi doesn't endorse it.  Moose Peterson is
perfectly happy with what he uses, why should I risk all that money on a
Leica.  Rangefinder, you mean I don't see what I will get?

For most people, you have to be relatively experienced in photography to
appreciate what a rangefinder will do for you.  Especially since the
widespread adoption of autofocus, the concept of focusing manually is
somewhat foreign.  Focusing manually is truly foreign when the
viewfinder looks sharp.

3) Without dedicated dealers explaining the virtues of truly exceptional
photographic equipment and training customers in how to use it, even
those brave enough to drop 5K online will be disappointed and return the
item.

A corollary to the above, is that there are very few dedicated dealers
anymore.  Most of the Japanese firms pay some substantial incentive
money to sell their product.  An example would be a salesperson that
sold a lot of Nikon over the Christmas season who now has a brand new
Mini Cooper.  What Leica pays in incentives is very little.  With the
retirement of the old time sales force that knew how to sell a camera
that required knowledge of the photographic process the whole industry
is faced with counter help that knows little more than "turn it to the
green box".

4) What would work is a large installment of equipment at key locations
worldwide so that you could sample the wares ala the LHSA shootouts.  If
you wanted the item, then Leica could next day it to you from
centralized locations.

5) Another suggestion that comes up on the LUG from time to time is
loaning/selling really cheap equipment to students to get them hooked.
I don't think this will work until the digital wave hits Leica as
professionally, digital is almost required.

6) Last, I don't think Leica is able to shift resources quickly;
building one 90 APO followed by an MP followed by a 21 ASPH as orders
come in would require a very large capitalization of new equipment and
workflow.  Some of it would have to do with optical glass being batched
by Leica's suppliers; some of the glass appears to be fairly sensitive
to atmospheric pollutants so that storage is problematic.

Dell was able to change the way computers were purchased largely due to
IBM's making the PC a commodity.  Commodities are sold on price and
delivery terms; which Dell has excelled at.  Then there is the pricing
structure.  If you price your item to convince the customer to buy what
you can make cheap then the customer thinks that you are making a
special one off for them.

0.02

Don
dorysrus@mindspring.com


-----Original Message-----
From: lug-bounces+dorysrus=mindspring.com@leica-users.org
[mailto:lug-bounces+dorysrus=mindspring.com@leica-users.org] On Behalf
Of Peter Dzwig
Sent: Tuesday, March 15, 2005 6:59 AM
To: Leica Users Group
Subject: Re: [Leica] Should Leica sell direct to customers?

Frank Filippone wrote:

> No.  It short cuts the dealer network. Dealer networks take in
inventory and

Frank,

Dealers hold inventory, the cost of which they pass on to you the buyer.
If the 
factory is selling direct to the purchaser then it isn't building for
dealer 
inventory and can reduce its workforce accordingly as it now knows what
the 
actual demand is.