no wonder localshops are dying

Discussion in 'Digital Photography' started by hugo drax, Dec 22, 2003.

  1. Sell at cost, lots of electronics shops have demos for customers to
    tinkerwith and sell new stock, when the model is discontinued it is sold as
    a scratch&dent or demo. It is the cost of doing buisness just like
    electricity. To make money you have to spend some money. Demos are good to
    entice customers and get them in the mood to swipe the credit card,
    customers like to open new boxes and see everything brandnew and losses are
    tax deductible, the expense of the demo pays in the number of completed
    sales. This is the difference between a stuffy low selling shop and a shop
    with lots of sales and moving merchandise. Lots of these stuffy shops forget
    that holding on to merchandise is a losing battle.
     
    Mike Harrison, Dec 28, 2003
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  2. The last thing we need is more socialist ideas to ruin the economy.
     
    Mike Harrison, Dec 28, 2003
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  3. hugo drax

    Dan Sullivan Guest

    And the selling price on the internet was???
     
    Dan Sullivan, Dec 28, 2003
  4. hugo drax

    Dan Sullivan Guest

    Excuse me... but I didn't write that.
     
    Dan Sullivan, Dec 28, 2003
  5. hugo drax

    JK Guest

    How long ago was that? Was that cost for a single unit or for dozens or
    hundreds at a time? Was the $1199 the true cost, or were advertising
    and other allowances subtracted from that price, or did the distributor
    or manufacturer throw in some free merchandise with the purchase?
    In some industries, old products that are in low demand, or
    accessories with a high retail price but that are very inexpensive to make
    might be thrown in for free at times to the retailer with a purchase to
    sweeten a deal.
     
    JK, Dec 28, 2003
  6. hugo drax

    JK Guest

    I doubt that is still the case, although even if it is, they don't have to buy
    directly from the manufacturer.
    Who forces a camera store to open in a mall? One can choose to open elsewhere, or even purchase
    the real estate and not pay rent.
    I don't want the local guy to go out of business, but I do want him to be forced
    to become efficient and competitive. Perhaps that might mean that
    he needs some silent partners so that he has enough capital to operate
    efficiently, or that he forms a buying cooperative with other small stores
    to get better pricing. Many small stores are extremely undercapitalized.
    Perhaps if he doesn't need credit, and can buy goods in larger quantities
    and with no right to return merchandise(except defective items) he might
    get much better pricing?
     
    JK, Dec 28, 2003
  7. 1499

    go to www.bhphotovideo.com
     
    Mike Harrison, Dec 28, 2003
  8. That was the price when they initially arrived at the scene, allocations
    were tough so that price reflected small orders of 2 or 3 without any
    allowances.
     
    Mike Harrison, Dec 28, 2003
  9. hugo drax

    JK Guest

    That is a 20% gross margin. Nothing wrong with that on items
    over $500 if expenses are kept low, and the salesmen doesn't
    get commisions. Computer stores often work on 8% to 12%
    gross margins for the computer. Of course computer peripherals
    and accessories carry higher margins (some much higher) as do
    camera peripherals and accessories.
     
    JK, Dec 28, 2003

  10. most small shops will go away as the scales of economies keep killing them
    off. Look at wallmart decimating local shops in small towns, efficient
    distribution models, large purchasing power and cheap labor has wiped out
    the general stores and other small shops in low to mid population cities.
    Pros dont need much handholding and could order over the wire without
    problems so the price premium for basic handholding is not worth the time,
    The newbies are cheap and want it almost free so they order over the
    internet but the dummies keep getting sucked by the sharks advertizing 10D's
    for 999 with free tripod and then the smarter newbies go and choose the
    reputable places saving that 30-40 percent markup localshops ask for.

    Bodies are not that cheap wholesale and you should not see major price
    differences amongst local and internet dealers but you can make a real nice
    profit on glass VS on a body but the problem with localshops is they really
    want to make that huge margin or none (go for broke attitude) at all and
    hope someone else walks in the door so they can get a second chance. The
    reason localshops do this is due to limited stock, they might only stock 1
    135mm 2.0L and would rather gamble a sale now VS losing that stock they have
    and possibly losing a huge margin sale later to someone not as smart who
    walked in the door. The problem with this mentality is the clock is always
    ticking, products gathering dust and depreciating eventually, bills keep
    coming in the mail and credit interest still racking up. If a local store
    priced to move merchandise, invested in a little advert the credit gets
    better and profits start to pile as the scales of economy plays in, holding
    merchandise is not good folks.. This is how some of these NY store grew to
    what they are now. everyone starts small but some grow and thrive and others
    die on the vine. Unfortunately some owners still have that strike for the
    big kill mentality and make the big profits on small sales volumes,
    unfortunately this is not the 1950-60's anymore.

    This is why you see 30-50 percent deltas on glass VS local, but small if any
    on camera bodies (10-15 percent max)


    B&H moves a ton of glass every year even though they make small margins on
    each sales the volumes are so great that it really adds up quickly and due
    to such volumes they are afforded much better credit terms and wholesale
    prices.


    Sell 4 widgets making 300 on each sales and make 1200 bucks
    or sell 200 widgets making 20 on each sales but make 4000 bucks total
     
    Mike Harrison, Dec 28, 2003
  11. hugo drax

    George Kerby Guest

    It IS the case. You need to talk with some mom n' pop operators.
    They Don't?!? AND just how does the customer get the manufacturer's
    warranty? I would imagine that would be better for me than some thrid
    party's b.s. "warranty".
    The advantages of leasing vs purchasing land and building are way too broad
    to go into here. Trust me, the retailer today HAS to rent. And the Mall is
    NOT the only place that the landlord wants a piece of the action.
    I live in a city that used to have maybe a couple dozen camera stores. Today
    there are three. The rest is either chain or discount big boxes. If your
    theories above were practiced, the stores would still be there. You gotta
    realize that Nikon has three (maybe more now?) levels in which they sell to
    retailers. And the store owner has to comply to strict restrictions set out
    by Nikon to be able to sell certain equipment. I would suggest that you get
    to know more about small specialty stores in your neighborhood: What you may
    save in a 5-10% by going online is not really worth the value of what you're
    missing, IMHO.
     
    George Kerby, Dec 28, 2003
  12. hugo drax

     Guest

    I'll tell you one reason local shops are going the way of Walmart and
    Home Depot. Home Depot and Walmart are OPEN! Local shops all close at
    6pm around me. I don't know who is buying items from 8am to 6pm, but
    people with money have to go to work then. I don't get home from work
    until after 6. Anybody that wants my money has to be open to get it.
    Then it's Saturday till 2 and no sunday most shops. Hey, that's when
    I'm home. Of course the locals are closed.
     
    , Dec 28, 2003
  13. hugo drax

    Don Coon Guest

     
    Don Coon, Dec 28, 2003
  14. hugo drax

    Dan Sullivan Guest

    I'll find out tomorrow if the $1199 cost is accurate.

    And if a SHIPMENT was 2-3 bodies out of a larger order Canon does NOT then
    charge a higher price.

    Dan
     
    Dan Sullivan, Dec 28, 2003
  15. hugo drax

    Azzz1588 Guest

    Ahhh... good 'ole pissant

    Cant seem to ever ignore me cant you ???









    "Only a Gentleman can insult me, and a true Gentleman never will..."
     
    Azzz1588, Dec 28, 2003
  16. hugo drax

    Dan Sullivan Guest

    Yes I do.

    It would not be unreasonable to use $900 as cost on the Dig Rebel Kit.

    For ALL the stores.

    B&H and the Mom and Pop.

    Canon for the most part doesn't need to give special deals.
    The fact is the companies would rather ship a thousand to one location than
    ship five to 200 locations.

    Plus they know the big store is gonna pay on time because they're gonna need
    more of the mcd.
    However... other companies will give extra discounts to the dealers who
    place huge orders.

    So as I said before, an item which costs the little store $100 may only cost
    the huge store $95 or even less.

    And the little store may need a minimum markup of 20% to stay in
    business.... so the item sells for $120 at the minimum.

    The huge store may only markup that item 10%... so the item sells for $105.

    Get it now?

    Dan
     
    Dan Sullivan, Dec 29, 2003
  17. hugo drax

    JK Guest

    LOL! I remember one camera store that was open only on weekdays,
    and then only 9am-5pm. I asked the manager how business was, and he
    said poor. I asked him what he was trying to do, sell only to unemployed
    people and those who work very close and could shop there on their
    lunch hour?
     
    JK, Dec 29, 2003
  18. hugo drax

    Dan Sullivan Guest

    If the $1199 cost is correct...

    but B&H doesn't price mcd that high.
     
    Dan Sullivan, Dec 29, 2003
  19. Calumet in Cambridge Massachusetts is a pro-type shop that is only open on
    weekdays. I believe it is because of the counter staff are wedding
    photographers during the weekends.
     
    Michael Meissner, Dec 29, 2003
  20. hugo drax

    Paul Rubin Guest

    Pro-type shops in general are open 9-5 type hours. That is when pro
    photographers are working, but going to the photo store counts as work
    for them.
     
    Paul Rubin, Dec 29, 2003
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