[Leica] In Shock

[don.dory at gmail.com (Don Dory)]

Neal,
The camera business is one of eight hundred pound gorillas and everyone
else.  So, B&H, Ritz, Best Buy and a few others who order in the hundreds of
thousand boxes get fabulous prices that the small shop can only dream of
receiving.  So the small shop goes away as any rational consumer will not
pay $50 more for a three hundred dollar camera just because of loyalty.  One
example of the power of being big, Ritz sold over 50,000 HP small printers
in 10 days as part of a free after rebate promotion.  So the small guy has
no pricing power, can not keep the depth of stock required and has lost the
profit from 4X6 prints.

At PMA I had the chance to talk to many large and small retailers and the
small guys are specialising in camera phones, gift items like custom coffee
cups, studio business, large format printing, knowledge about specific items
like Epson printers, or some other niche.  But don't think the big guys are
on easy street; prices depreciate by the minute and unless you can move the
product through the pipeline in three to ten weeks you are stuck with money
losing merchandise.  Manufacturers will only protect your inventory to a
certain point after which you are out really large $.

As to profit, it has always been on the accessories.  Going back to the AE-1
Canon you made more money on the UV filter than you did on the Camera.

Don
don.dory@gmail.com


On 12/14/06, Neal Friedenthal <neal@nairobisafari.com> wrote:
>
> The photo retail business is the most rediculous business to gwet into, as
> it seems to be a sin to make a decent profit. On Canon amd Nikon, which are
> by far the most popular makes, it is impossible to sell for more than $100
> over cost and are usually sold for less than $50 over cost. You can't stay
> in business for long on that type of profit margin.  We have to sell some
> cameras at cost and try to make some profit on accessories such as memory
> cards, cases, filters, and batteries. I work part time for Le Camera in New
> Jersey and we are trying to hang in there but it is not easy.  The only
> cameras that we do make a decent profit on, a bit over 10%, is Leica and
> that is only because to get a dealership with them you have to sign a
> contract that requires that you sell no lower than their "minimum selling
> price" which is why everyone's price is the same on Leica equipment.  The
> small independent camera shop is a dieing breed and it is the consumer who
> is killing it.
> BTW we have more used equipment than we know what to do with, how about a
> nice Nikkormat FTN with a 50mm f1.4 Nikkor for $125.....
>
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