[Leica] Low US equipment prices.

[lrzeitlin at gmail.com (Lawrence Zeitlin)]

A major reason for lower equipment prices in the US is the simplification of
the product distribution process. Typically there are several tiers of
distribution between the manufacturer and the retail outlet, the wholesaler,
the jobber, and possibly a regional stocking warehouse. Each tier adds to
the product price to cover its costs and make a little profit. In Japan the
distribution system is even more complex with multiple levels protected by
law. Large retail outlets in the US have sidestepped the distribution system
by negotiating directly with manufacturers. Walmart probably sells more mass
market photographic equipment than the next four or five outlets combined.
Sears, Costco, and even B&H move enough product to get favorable terms
directly from the manufacturer. US law permits sidestepping the traditional
distribution system and prohibits manufacturers form setting the retail
sales price. Leica probably flys under the radar because its share of the
camera market is so small that the larger retailers don't bother with it. By
eliminating the middlemen, equipment prices can be 30% lower, even before
sales events. If you are intent on getting the rock bottom price, some
states have no sales taxes (New Hampshire) and some retailers don't charge
for shipping big ticket items (Amazon). It's called the "free enterprise"
system. Of course with the margins so slim, there is little incentive for
dealers to provide much hand holding or after market service.


A short distance away from my home is the Woodbury Common, one of the
largest outlet malls in the US. Busloads of Japanese and other foreign
tourists arrive daily to snatch up bargains from the Sony outlet store,
Armani, Tomy Hilfiger, Movado, Williams Sonoma and a variety of other
stores. Sony products are nearly 50% cheaper than they are in their home
country. Since Japanese electrical and television standards are the same as
those in the US, the products will work just as well when the tourists get
home. The US has become a bargain shopping destination for the world. Given
the current recession, I suppose that is a good thing. Bring money here and
leave it.


Larry Z