Swarovski's Price List (1 Viewer)

RobMorane · Mar 6, 2017

Hi All,

I love Swarovski binos.
But I have to say that their price list is defying logic to me.

The best example is comparing the EL 10x32 Field Pro to the SLC 15x56 WB.
Why those two?
Because they have the same retail price, 2299 USD, and can't be more different.

I studied during years mechanical engineering (I'm in sales now),
and I'd like very much to understand how, from a material cost point of view,
the price of the EL 32 is justified.

SLC have AK Prisms (93% transmission), bigger lenses (57% bigger),
and 2 more optical elements (26 vs 24 for the EL).

EL have SP Prisms (90% transmission), have Swarovision (the 15x56 have flat field without it).

Maybe ELs have a magnesium body and not the SLC?

Looking forward to your insights.

Best Wishes

Pileatus · Mar 6, 2017

RobMorane said:
Hi All,

I love Swarovski binos.
But I have to say that their price list is defying logic to me.

The best example is comparing the EL 10x32 Field Pro to the SLC 15x56 WB.
Why those two?
Because they have the same retail price, 2299 USD, and can't be more different.

I studied during years mechanical engineering (I'm in sales now),
and I'd like very much to understand how, from a material cost point of view,
the price of the EL 32 is justified.

SLC have AK Prisms (93% transmission), bigger lenses (57% bigger),
and 2 more optical elements (26 vs 24 for the EL).

EL have SP Prisms (90% transmission), have Swarovision (the 15x56 have flat field without it).

Maybe ELs have a magnesium body and not the SLC?

Looking forward to your insights.

Best Wishes

Supply and demand.

elkcub · Mar 6, 2017

The rationale for pricing has a great deal to do with the market preferences and sales volume. Like all companies, Swarovski optimizes profit.

Ed

jan van daalen · Mar 6, 2017

For someone with a professional engineering and sales background........Do you need to ask this question?

Jan

RobMorane · Mar 6, 2017

The rationale for pricing has a great deal to do with the market preferences and sales volume.

Ok, so if we follow this logic, knowing the EL 32 is for Birders, and the SLC 56 for Hunters (and Star gazers)
and to me, there are more birders than hunters (thinking about EMEA+NALA+APAC), what does it say?

The price of the EL are way more expensive than they "cost" (higher margin) because they are selling more, in order to maximize profit? Or do I get the logic wrong?

RobMorane · Mar 6, 2017

For someone with a professional engineering and sales background........Do you need to ask this question?

Oh Yes.
You can be in Sales, without having studied it in University, and still over-achieving your targets every Q and FY end, and not have a clue of what's going on in marketing and corporate strategy in another company, just like you can study mechanical engineering technically (material resistance), without working in the same sector.
But I guess a question was too much to ask

jan van daalen · Mar 6, 2017

RobMorane said:
Oh Yes.
You can be in Sales, without having studied it in University, and still over-achieving your targets every Q and FY end, and not have a clue of what's going on in marketing and corporate strategy in another company, just like you can study mechanical engineering technically (material resistance), without working in the same sector.
But I guess a question was too much to ask

Rob,

No question can ever been asked too much (which goes for both sides

)

Jan

etudiant · Mar 6, 2017

RobMorane said:
Hi All,

I love Swarovski binos.
But I have to say that their price list is defying logic to me.

The best example is comparing the EL 10x32 Field Pro to the SLC 15x56 WB.
Why those two?
Because they have the same retail price, 2299 USD, and can't be more different.

I studied during years mechanical engineering (I'm in sales now),
and I'd like very much to understand how, from a material cost point of view,
the price of the EL 32 is justified.

SLC have AK Prisms (93% transmission), bigger lenses (57% bigger),
and 2 more optical elements (26 vs 24 for the EL).

EL have SP Prisms (90% transmission), have Swarovision (the 15x56 have flat field without it).

Maybe ELs have a magnesium body and not the SLC?

Looking forward to your insights.

Best Wishes

Perhaps the price reflects the likelihood of future service work.
It would be expected that a 10x32 would stay in the field, while a hulking 15x56 would rarely leave the user's main observation site. Those are two very different risk profiles.

ceasar · Mar 7, 2017

The labor involved at this level may be more costly for the 10x32 than the 15x56. Making a 12.8mm eyepiece with a wide and flat field for a 10x32 top of the line binocular and giving it 20mm eye relief can't be be done cheaply.

Bob

elkcub · Mar 7, 2017

RobMorane said:
Ok, so if we follow this logic, knowing the EL 32 is for Birders, and the SLC 56 for Hunters (and Star gazers)
and to me, there are more birders than hunters (thinking about EMEA+NALA+APAC), what does it say?

The price of the EL are way more expensive than they "cost" (higher margin) because they are selling more, in order to maximize profit? Or do I get the logic wrong?

Question 1: I don't know what the acronyms mean.

Question 2: I don't understand the question.

Question 3: Very possible. :t:

Ed

ceasar · Mar 7, 2017

RobMorane said:
Ok, so if we follow this logic, knowing the EL 32 is for Birders, and the SLC 56 for Hunters (and Star gazers)
and to me, there are more birders than hunters (thinking about EMEA+NALA+APAC), what does it say?

The price of the EL are way more expensive than they "cost" (higher margin) because they are selling more, in order to maximize profit? Or do I get the logic wrong?

I doubt that the number of sales have anything to do with their prices. Most places that carry these 2 formats probably sell them at the minimum profit margin they can afford to sell them for.

Doug at Camera Land has said that 10x32 binoculars are the worst selling standard size binoculars they carry by far.

15x56 binoculars probably sell even worse.:smoke:

Bob

Troubador · Mar 7, 2017

You don't so much buy the materials and labour and distribution costs when you buy bins so much as what the bins deliver to the purchaser, or to put it another way, you pay for what the manufacturer thinks it does for you. How you define 'what they deliver' is another matter but it undoubtedly includes the cachet of the brand name as well as tech specs and optical performance, handling and accessories.

Do 10x42s cost more than 8x42s to manufacture? Does everybody charge a bit more for the 10x?

So we can deduce that Swaro believes their folding pocket bins deliver as much to the buyer as the bigger SLC. And if you believe that compactness and foldability with its 'carry-everywhere' result has the same utililty value as brightness at dusk and high magnification then they are probably right.

Smaller does not necessarily = cheaper and less capable.

Lee

Gijs van Ginkel · Mar 7, 2017

I am always a little amazed when so much comment is written down on the price of top quality binocuars. If you have visited different binocular production plants, you can notice how many persons are involved in the design, making, quality control and sales of these binoculars. All these persons have to be paid a salary that allows them to live a decent life in the country where they live in. That costs quite a bit of money and these are structural costs regardless how many instruments are sold. Then there is the price of the binocular materials, the infrastructure( buildings, climate control, machinery for making the different parts, measuring equipment to determine the quality of the parts and instruments made, the sales and advertising costs including brochures etc., the costs of after sales service and keeping many parts and qualified crafts persons for repairs. If we get cheaper binoculars for example from China, that has directly to do with the much lower salaries of the people involved. Why do you think that Japanese and other optical companies have large production plants in China? Because they like the color of the eyes of the Chinese women so much? That is of course a very attractive argument, but I am sure that this is not the reason.
Gijs van Ginkel

Robert Wallace · Mar 7, 2017

In basic economics Manufacturing Cost = Material Costs plus Labour Costs plus Overhead Costs. The first two are relatively easy to calculate but how you calculate overhead recovery costs is down to the accountants. I would guess that the smaller binoculars may have a larger relative overhead recovery cost compared to the larger models. To complicate matters the selling cost to the retailers is manufacturing costs plus profit margin.
However the profit margin is subject amongst other things to market forces and what you can get away with.
there is only one way to answer your question and that is to talk to Swarovski's accountants and marketing people but I doubt they would be too revealing. In simple terms if you don't like the price don't buy it -it's called market forces.

Chosun Juan · Mar 7, 2017

Rob, up until the recent superceded model discounting, Swarovski had (and maybe now will have again), the tightest control over retail pricing that I have seen in this industry. This is probably a good thing for dealers (provided the product can back it up, and they don't sit around gathering dust and taking up valuable shelf space - I certainly haven't heard of any rush for the doors with dealers wanting to drop Swarovski) - maybe Jan can elaborate more on this. It would also seem to be good for customers, giving high retained values (unless you get stung by buying just prior to those substantial run out deals as some here did).

You are probably questioning from a Bill of Materials point of view, and even Scale Economies, and Manufacturing Cost of various lines (for example the 32mm vs 56mm models you mentioned), to say nothing of R&D and other Overheads, and Cost Recovery, and certainly this cannot be totally ignored, but has very little to do with it. You have heard from respondents here of Supply and Demand, Optimizing Profit, and even components of ongoing Marginal Costs of Goods Sold - such as lifetime servicing. Even about buying the Dream. These also cannot be totally ignored, nor can Return on Investment, but are not really the main drivers of pricing.

Basically, Swarovski will charge whatever it can for its products. Whatever the market will bear. It is about maximizing Profit.

It has more to do with Game Theory, Industry Barriers to Entry, and Swarovski's large bank of Brand Equity.

Certainly Swarovski are making handsome profits, but there seems little appetite by Investment Bankers to mount a large scale (capitalized) challenge to the Alpha top dawgs (given that a fair degree of their business is leveraged off other larger conglomerate company activities of one form or the other), and it's just rather old fashioned and un-sexy. Everyone seems focused on the inevitable disruptive technologies of the digital age (as we blindly stumble toward homo digimechanica ). :eek!:

Several emerging commercial manufacturing technologies such as 3D printing, will enable the pack of smaller conventional bin designer/manufacturers to close the gap, or even on occasion surpass the top dawgs (especially at given price points). However, the bleeding edge will remain expensive, and you just can't easily conjure up 100+ years of Brand history easily.

Chosun :gh:

jan van daalen · Mar 7, 2017

Chosun Juan said:
Rob, up until the recent superceded model discounting, Swarovski had (and maybe now will have again), the tightest control over retail pricing that I have seen in this industry. This is probably a good thing for dealers (provided the product can back it up, and they don't sit around gathering dust and taking up valuable shelf space - I certainly haven't heard of any rush for the doors with dealers wanting to drop Swarovski) - maybe Jan can elaborate more on this. It would also seem to be good for customers, giving high retained values (unless you get stung by buying just prior to those substantial run out deals as some here did).

You are probably questioning from a Bill of Materials point of view, and even Scale Economies, and Manufacturing Cost of various lines (for example the 32mm vs 56mm models you mentioned), to say nothing of R&D and other Overheads, and Cost Recovery, and certainly this cannot be totally ignored, but has very little to do with it. You have heard from respondents here of Supply and Demand, Optimizing Profit, and even components of ongoing Marginal Costs of Goods Sold - such as lifetime servicing. Even about buying the Dream. These also cannot be totally ignored, nor can Return on Investment, but are not really the main drivers of pricing.

Basically, Swarovski will charge whatever it can for its products. Whatever the market will bear. It is about maximizing Profit.

It has more to do with Game Theory, Industry Barriers to Entry, and Swarovski's large bank of Brand Equity.

Certainly Swarovski are making handsome profits, but there seems little appetite by Investment Bankers to mount a large scale (capitalized) challenge to the Alpha top dawgs (given that a fair degree of their business is leveraged off other larger conglomerate company activities of one form or the other), and it's just rather old fashioned and un-sexy. Everyone seems focused on the inevitable disruptive technologies of the digital age (as we blindly stumble toward homo digimechanica ). :eek!:

Several emerging commercial manufacturing technologies such as 3D printing, will enable the pack of smaller conventional bin designer/manufacturers to close the gap, or even on occasion surpass the top dawgs (especially at given price points). However, the bleeding edge will remain expensive, and you just can't easily conjure up 100+ years of Brand history easily.

Chosun :gh:

First of all we can change the name Swarovski into Nikon, Meopta, Zeiss, Leica etc. Let that be clear

Didn´t I hear a Leica rep tell me that the higher the price is, the harder the customer will run?

Secondly, the post of Gijs tells it all.

To come to :gh::gh: question how Swarovski manages to keep the price integrity so tight, it's simple. They don't.
Didn't I hear a dealer rallying up other dealers to boycot Swarovski products because they allow the dealers to reduce prices?

For example: I had a customer in my shop last saturday who was interested in a Zeiss FL 10x32. A simple Google searche on his Iphone learned him that the same dealer I mentioned above, offers the same bin 700,00 euro's cheaper than mine. We have RSP, he went for negative profit just to make a buck to pay other bills.

The margin pays the bill. Very simple. We invested 800.000,00 euro in stock and not out of charity:eat:

To answer posters question:
Prices are fluctuating because of several influences. You can't " blame"' a brand for it. Thousends of optic sellers closed shop in Holland in the last 20 years because of the "We are the cheapest" mantra forgetting the most important rule that margin pays for service and all other costs.

Jan

maico · Mar 7, 2017

Well, Nikon lost $70 million in 2016 and are restructuring. The company employs almost 26,000 and 1000 have taken the voluntary redundancy offered.
It was mainly in the semiconductor lithography division but also the camera side saw a shrinking market for DSLR and particularly compacts.
I had a look at their company accounts that are published in detail on their website, but couldn't find anything specific about the sports optics division. It appears to be so small as to be an an irrelevance to the business and probably flat lining profits at best ?
I don't think making binoculars is particularly lucrative.

Swarovski's Price List (1 Viewer)

More options

RobMorane

Well-known member

Pileatus

"Experientia Docet”

elkcub

Silicon Valley, California

jan van daalen

Well-known member

RobMorane

Well-known member

RobMorane

Well-known member

jan van daalen

Well-known member

etudiant

Registered User

ceasar

Well-known member

elkcub

Silicon Valley, California

ceasar

Well-known member

Troubador

Moderator

Gijs van Ginkel

Well-known member

Robert Wallace

Well-known member

Chosun Juan

Given to Fly

jan van daalen

Well-known member

maico

Well-known member

Similar threads

Users who are viewing this thread