goldenyears Loc: Lake Osewgo

This is just a curiosity question. From watching Shark Tank I've seen that there is usually a very big difference between a manufacturer's cost and a retailer's selling price. At least that has to be the case in order to get offers from the sharks. Does anyone know what the total markup is for DSLR and Mirrorless cameras?

BebuLamar

Manufacturing cost would vary a lot and I don't think any manufacturer would reveal it. You might be able to find the cost the dealers have to pay but then I believe this also vary on how many units the dealers can sell.

ricardo00

Also the manufacturer assesses the cost of development and advertising and will attribute this to the total cost of an item, not just the actual production.

BebuLamar

Yes development and tooling cost are very signficant. It's a reason why they can't make cameras without video. Doing so would save a few bucks on the manufacturing but the development and tooling for a products that don't sell many would be too much.

larryepage Loc: North Texas area

I worked in the manufacturing industry for nearly 50 years. One thing I learned is that markups are very different from one segment to another, but they tend to be remarkably consistent. In the durable consumer goods category (where cameras and stereos and such live), it is very common for the retailer to make a gross profit of around 40% on the items that they sell. In other words, an item that they sell for $100 probably cost them somewhere around $60 from their wholesaler or distributor. The distributor/wholesaler probably paid around half that amount, $30, to the manufacturer for the item. Of course, there is variation around those numbers. Really "hot" items might produce more profit, as might "clearance" items.

Other products followed different models. I worked in a toy store while going to school. Almost everything in the store followed the 40% model. But when we sold a doll, the store kept close to 90% of the selling price. Guess what they wanted us to sell...

Groceries and vehicles follow very complex models. It is almost impossible to know how much a dealer makes on the sale of an automobile, and different dealers will keep different amounts. Grocery stores operate on very thin prifit margins. Jewelers, on the other hand, may sell items for two or even three times what they paid.

Bottom line...you can probably be pretty confident that your dealer paid between $600 and $700 for that camera you bought for $1000. You can also be pretty sure that it probably cost somewhere between $250 and$400 from the manufacturer. Manufacturing cost was probably somewhere between $150 and $250 to make.

By the way...most of the time the final sales price is targeted and set, then the task is to see if a manufacturing cost can support that selling price. It rarely works the other way around. Products that cannot meet a manufacturing cost target more often than not either get redesigned or else just die on the vine.

tramsey Loc: Texas

When I was growing up my dad had a hardware store and the mark up was usually 33% but most things were on consignment. 'Course that's everything except cameras

CHG_CANON Loc: the Windy City

Remember too, the camera manufacturers set the price for all their authorized resellers. They can sell for more, but they can't sell for less. Only grey market (non 'authorized') will have variable prices, as well as lacking a warranty.

User ID

Nope. Its unknowable.

User ID

RIP Nikon Df.

paulrnzpn Loc: New Zealand

Hi there,

This is my first-ever post on uglyhedgehog.com. :)

I have a Canon 5D Mark 4. This camera has been on the market for a number of years now but I only got mine in Sept 2021. Originally, the body-only price in New Zealand was NZ$5,500. However, the price dropped over the years and mine cost NZ$4,000. The retailer must still be making a profit after the $1,500 price reduction, so I imagine that Canon probably reduced their wholesale price, possibly due to the 5D Mk4 being an end-of-line model, and with mirrorless taking over.

I still like DSLR so I won't be switching to mirrorless anytime soon. In fact, I bet my 5D Mark 4 is still going fine by the time a lot of mirrorless owners have to replace their first mirrorless camera.

I also have a Canon EOS 600D DSLR that I still use, from time to time. It still works fine after 10 years. I got this camera on a sale, and with the two kits lenses it cost NZ$1,600 at the time. Now you could buy the newer model in that Canon level for less than that. So there is on plenty of room for prices to move and retailers still having a profitable margin.

User ID

Rotsa ruck widdat !

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pendennis

There are a couple of factors at play. First, pricing is based on forecasted sales, for the most part. Camera X will sell so many units, based on what marketing research shows. As long as that forecast holds, the costs will be amortized over the forecasted sales period, whether that will be one, two, or however many years. If sales exceed forecasts, the manufacturer may indeed reduce the price based on increased sales volumes. Also in the manufacturing chain, are the elements of cost. If raw materials get cheaper, the price may be reduced. However, costs such as labor are generally fixed.

And don't forget that the competition has a large bearing on what the manufacturer can get for his product, and everyone watches for opportunities to reduce cost.

The stockholders also have a say. They likely have been advised that a product will provide x.xx% profit margin. If that margin varies, they'll be asking why; and it cuts both ways. Too much unforecasted profit is just as bad as too little forecasted profit.

And one other thing. Regardless the costing elements, the retail sales price of the competition, especially if they control more of the market than you, will define the upper margins of your sales price.

Architect1776 Loc: In my mind

I worked at Tempe Camera for a couple of years while at ASU.
At least then the purchase and sale price of cameras seemed to be in the 10% range.
That is why consumers are encouraged to buy accessories that have a very large profit margin.
So your designer straps, bags etc. Are where the money is.

billnikon Loc: Pennsylvania/Ohio/Florida/Maui/Oregon/Vermont

I worked for Nikon back before dirt was invented. The dealer can show you the actual cost of a lens for example, but the price shown is only for ordering ONE lens. So, for example, say the dealer bought 20 lenses, Nikon would give a greater discount based on the total number of lenses ordered, put the cost sheet would only reflect his cost of ordering just one lens, get it.
So, a retailer can show you an invoice that shows the actual cost of a lens, but again it is only for ONE lens. They did not pay that because they may have ordered 20 lenses and got a greater discount. And with Nikon the retailer could order different lenses as long as the total way higher.
At least that is how Nikon worked way back when.
And photography is one of those businesses where you pay either the list price or a discounted price only when the camera manufacture discountes the price. Sorta like most sports equipment.
Canon, Nikon, Sony and the rest sell for ONE price regardless of where you buy it. Now local camera stores can discount discontinued items at will and sometimes if your a regular customer they can discount beyond what they normally sell an item for.
Usually most retailers will never show you what they actually paid for a particular piece of equipment, it is just not done.
Good luck and keep on shooting until the end.

Jimmy T Loc: Virginia

Thanks for sharing your insight and experience.