Just curious how much markup, over cost, there is to the end user, in total. Also, the Japs cost of doing business is way less than the euros, right?
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Death Of The Alpha? (1 Viewer)
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Just curious how much markup, over cost, there is to the end user, in total. Also, the Japs cost of doing business is way less than the euros, right?
A couple of retailers have dicussed with me what they actually pay for certain models they stock. The mark-up for the recommended price does vary, but it sounds like it's often quite a bit less than 40%, and then that gets squeezed by competition. In one case a guy complained his cut was less than $10 on a popular $300 model once he'd paid for shipping.
David
We would all love to know this JG. There are different ways of looking at markup as well. As you say there are all the costs to cover from R+D, manufacturing, marketing and distribution, but then there are interests, taxes, set-aside for amortisation, not to mention dividends to shareholders. After all that you can talk about whats left being profit which I think is what you are driving at, but from this profit companies invest in new machinery, increase staffing, research and development of new product etc.
The Tract model has the potential for delivering savings to the final customer but we don't know whether it does or not. Pricing is influenced by the overall market as well so for example it appears different in the US from Europe although it is hard to pin it down due to shifting exchange rates. If you have seen my price comparisons in my reviews you might have noticed that a model's price competitors in Europe can be different from those in the States even if all same models are sold in both markets.
Your question about the cost of doing business being cheaper in Japan than in Europe is another good one. It appears still to be cheaper than Europe but the difference can't be as big as it once was. Cheap guitars and photographic kit used to be made in Japan but now many products have moved to Thailand, Taiwan and Indonesia as labour costs have increased in Japan and of course China has more recently taken over as the cost leader.
All interesting stuff JG.
Lee
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Hermann
Well-known member
If you look at the prices of high-quality camera lenses still made in Japan, the prices have gone up a lot over the past five years or so. The same applies, albeit to a lesser extent, to the prices of lenses made in Taiwan and even China.
Hermann
Their crystals is really where Swarovski makes their money They pretty much dominate the market with their crystals.
"The Tract model has the potential for delivering savings to the final customer but we don't know whether it does or not."
It did for me. I paid $650.00 for the Tract Toric 8x42. Less than 1/2 the price of my Swarovski's.
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james holdsworth
Consulting Biologist
You actually lost $250.00, as you missed out on the Bushnell Elites for $400.00....the new [old] alpha killers.
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I tried the Bushnell Elite's ED 8x42 once. The 330 foot FOV was a deal killer for me. Just too narrow. The Tract Toric's are 377 feet and have a bigger sweet spot which is almost 90 to 95% ,whereas, I remember the Bushnell at about 80%. Amazon.com has the Bushnell's for $371.95.
https://www.amazon.com/Bushnell-Elite-Roof-Prism-Binoculars/dp/B003MWJ5D6?th=1&psc=1
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james holdsworth
Consulting Biologist
Yep, the 8x42 FOV is too narrow, the 10 is better...
The 10x Bushnell Elite ED is only 314 FOV. The Tract Toric 10x42 is 344 FOV. Pretty big difference.
JG
Looking back over some notes I have from conversations or mails from dealers I would guess a dealer margin might be a nominal 20%.
I say nominal because if they want to offer a price lower than other dealers selling the same kit then, as mentioned by Typo, they have to eat into this margin to offer a discount.
A big photographic dealer fairly recently said that they make more money on accessories like filters, batteries and memory cards than they do on cameras and lenses. Perhaps optics dealers make more on straps, harnesses, cases and digi-scoping accessories than they do on bins.
Lee
Dennis thats a nice saving from that angle but what we are discussing is whether your Tracts have actually passed the dealer's margin on to you or not and we don't know that.
Take a look at Typo's calculation based on a similar model from Opticron in post 699.
Lee
Naive question (I know I am interrupting here, but my question is actually on topic, I believe, at least judging from the initial title):
Is the Alpha still dead?
I am counting 712 posts in this thread within 23 days - this is quite something (even if 3/4 of all posts are from Denver CO - man, I envy some people for the time they can spend debating).
ShalI say it then ? Shall I ??? Ok:
THE ALPHA IS DEAD. LONG LIVE THE ALPHA !!
Is the Alpha still dead?
I am counting 712 posts in this thread within 23 days - this is quite something (even if 3/4 of all posts are from Denver CO - man, I envy some people for the time they can spend debating).
ShalI say it then ? Shall I ??? Ok:
THE ALPHA IS DEAD. LONG LIVE THE ALPHA !!
I am amazed that you found the time to count all of the posts on this thread. You deserve a medal and a nice sit down in a quiet room with a cup of tea :-O
Lee
pete_gamby
Birds? What Birds?!
I'm posting this not as a representative of Opticron, but based on my long term knowledge of the UK IT and consumer electronics market, hence no signature.
An independent or small chain UK retailer supporting a bricks and mortar store (and perhaps with some internet sales) will need between 20% and 35% gross profit to survive, depending on staff to turnover ratio (staff being typically the biggest fixed cost).
A web retailer can probably live on between 5% and 15% depending on turnover and how much cost is backed off to suppliers e.g. delivery, warehousing etc.
Some retailers will claw back margin in the way of marketing funds, sales target incentives or other costs of sales charges (Amazon is very good at this with things like no returns discounts and charges for failure to comply with a myriad of labelling, packaging and delivery requirements).
Suppliers may also offer a range of incentives to hold stock - buy x, get 1 free, x% off all orders over £x - or to sell more of their product - salesman sells Binobrand 8x42, gets £20 in Argos vouchers, increase sales by x% this month, get x% additional discount etc. etc.
So a headline profit margin of, say, 25% on the hardware can increase for those prepared to invest. Similarly, the margin skimmed by internet only suppliers gets bolstered by winning more and more business.
In theory, the factory -> brand owner -> end user model should deliver the chance to provide a more competitive end user price than factory -> brand owner -> dealer -> end user model. But if your purchasing power is relatively lower, then your cost price is probably higher so this may erode some or all of that advantage.
HTH
Pete
P.S. With my Opticron hat back on, the Tract price is higher than I'd expect given the business model they have.
An independent or small chain UK retailer supporting a bricks and mortar store (and perhaps with some internet sales) will need between 20% and 35% gross profit to survive, depending on staff to turnover ratio (staff being typically the biggest fixed cost).
A web retailer can probably live on between 5% and 15% depending on turnover and how much cost is backed off to suppliers e.g. delivery, warehousing etc.
Some retailers will claw back margin in the way of marketing funds, sales target incentives or other costs of sales charges (Amazon is very good at this with things like no returns discounts and charges for failure to comply with a myriad of labelling, packaging and delivery requirements).
Suppliers may also offer a range of incentives to hold stock - buy x, get 1 free, x% off all orders over £x - or to sell more of their product - salesman sells Binobrand 8x42, gets £20 in Argos vouchers, increase sales by x% this month, get x% additional discount etc. etc.
So a headline profit margin of, say, 25% on the hardware can increase for those prepared to invest. Similarly, the margin skimmed by internet only suppliers gets bolstered by winning more and more business.
In theory, the factory -> brand owner -> end user model should deliver the chance to provide a more competitive end user price than factory -> brand owner -> dealer -> end user model. But if your purchasing power is relatively lower, then your cost price is probably higher so this may erode some or all of that advantage.
HTH
Pete
P.S. With my Opticron hat back on, the Tract price is higher than I'd expect given the business model they have.
Lee, all you have to do to find the post numbers is look to the right hand side on the top of each post
Lee, all you have to do to find the post numbers is look to the right hand side on the top of each post
Hi KC nice of you to drop by.
Yes of course I know you only have to look at the post numbers but he did use the word 'counting' in his post so I made a joke out of it. Blame it on British humour.
Lee
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