Margins on DSLR's and Lenses

The23rdman

The23rdman

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Does anyone have any insight or trade knowledge on what kind of mark-up and margins there are on DSLR's and lenses? I'm working with someone on the possibility of getting into the trade, but if the margins don't work there's little point.
 
That's what my subsequent research has shown me. Never mind!
 
you could set up a grey import business (there's probably more margin on grey lenses even after paying tax).

Or a second hand business like MPB / Camera Jungle
 
I haven't a clue either, but presume quite low.
Without overheads,premises/shop etc obviously a better margin than local shops, but there might also be problems sourcing official gear, so presumably then you're then into the realms of `importing`? (be it EU or non EU)
 
big soft moose said:
you could set up a grey import business (there's probably more margin on grey lenses even after paying tax).
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Unlikely, I'd have thought. Retail prices in the USA and HK are higher than in the UK, once you strip out taxes. So there's no obvious reasons to suppose that wholesale prices will be any lower there either.
 
so how do Hdew make money ? (given that they provide a Vat receipt etc so its clearly not from smuggling)

I know a guy who imports grey wood work machinery from the states - (with all taxes paid ) - even selling below the standard uk price his margin is significantly higher than it would be buying through official channels
 
We've no interest in the grey market but instead would have been focusing on superseded products.
 
The23rdman said:
would have been focusing on superseded products.
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Interesting approach

Are you talking about second hand ? or new stuff that isn't easily saleable in the mainstream once superceded , like the remaining stock of 60Ds now the 70D is with us ?

I'd imagine the margin could be slightly higher as suppliers would be looking to offload , but i'm not sure how much market there'd be except for the occasional specific model where the preceding product was superior (like with the nifty mk 1 )
 
big soft moose said:
Interesting approach

Are you talking about second hand ? or new stuff that isn't easily saleable in the mainstream once superceded , like the remaining stock of 60Ds now the 70D is with us ?

I'd imagine the margin could be slightly higher as suppliers would be looking to offload , but i'm not sure how much market there'd be except for the occasional specific model where the preceding product was superior (like with the nifty mk 1 )
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I think the market is there. You can see from the second hand market that there are plenty of people who don't care about the very latest gear - they just want good gear. I would use my knowledge to sell the virtues of older but brand new gear.
 
Interesting, although that might prove difficult as you'd be up against the second hand market? price seems to be most peoples consideration.
 
I realise that, but if the price is keen enough people will still appreciate a warranty, won't they?
 
it could work - id be interested in a brand new 50D with uk warranty , but only if it wasnt much more than a mint s/h one from MPB - ie the warranty aspect would only be worth a few quid (say maybe 50) to me

the other weaknes i see is where you'd source a reliable supply of new but superceded stock - surely most main dealers sell their superceded stock off retail at a discount when successor models launch (as is happening currently with 60Ds)
 
Yes, that is a potential problem that I have yet to find a satisfactory answer to.
 
That makes sense, Daryl, although it's not a place I will go.
 
big soft moose said:
so how do Hdew make money ? (given that they provide a Vat receipt etc so its clearly not from smuggling)
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I don't want to get bogged down in a discussion of grey/black market practices, because that's not relevant to the OP. But since you ask: I'm not sure. Questions have been asked about HDEW's practice of only providing VAT receipts on request, because that raises the unfortunate suspicion that if you didn't ask you wouldn't get one. And I have seen evidence that the owners of HDEW also own other companies which are not VAT-registered (ie trading illegally). So goodness knows what's going on in the accounts. My best guess is that they only put a proportion of their activity through the VAT-registered entity, to satisfy people like me who ask for VAT receipts, and the rest is "black". I hope I'm wrong, because it's all quite depressing to learn that these days "grey market" usually means "black market". But unfortunately it does look suspicious.
 
have you passed that evidence to HMRC ? - if its accurate i can't imagine they wouldnt kick their arse into the middle of next week.

the import thing could be relevant to the OP in the wider context as one potential source of superceded stock is where it is still being sold in other trading zones
 
The23rdman said:
We've no interest in the grey market but instead would have been focusing on superseded products.
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The other place where you can earn huge margins is with newly released equipment. Look at the prices of stuff when it's first released, compared to a few months or a year later and you'll see that in the UK the must-have-it-now crowd pay a big premium.

For example, from memory the Canon 70-200/2.8 Mk II was £2799 at launch, but now it's £1900 or so. And the Canon 24-70/2.8 Mk II was £2299 or £2399 at launch, but now it's around £1800. Somebody's making money there!

I think the dealers make big margins there, partly because they can, and partly because they need to cover the cost of holding stock of a large range of lower margin products. But if you set up a niche business without such a large range...
 
StewartR said:
The other place where you can earn huge margins is with newly released equipment. Look at the prices of stuff when it's first released, compared to a few months or a year later and you'll see that in the UK the must-have-it-now crowd pay a big premium.

For example, from memory the Canon 70-200/2.8 Mk II was £2799 at launch, but now it's £1900 or so. And the Canon 24-70/2.8 Mk II was £2299 or £2399 at launch, but now it's around £1800. Somebody's making money there!

I think the dealers make big margins there, partly because they can, and partly because they need to cover the cost of holding stock of a large range of lower margin products. But if you set up a niche business without such a large range...
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That is a great point.

Edit: Although don't the big players release their products pretty close together? There might be big fallow periods. I'm looking to try and find something a little different.
 
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StewartR said:
I have seen evidence that the owners of HDEW also own other companies which are not VAT-registered (ie trading illegally)
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Just to point out it would relate to turnover if they are trading illegally or not. If the other company is not making the VAT threshold they are entitled to trade perfectly legally without being VAT registered. A company only needs to be VAT registered to trade if it turns over the required amount and hits the threshold.
 
E.M.P. said:
Just to point out it would relate to turnover if they are trading illegally or not. If the other company is not making the VAT threshold they are entitled to trade perfectly legally without being VAT registered. A company only needs to be VAT registered to trade if it turns over the required amount and hits the threshold.
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Isn't it about £80k? If so you could probably tot that up in the HDEW thread on here alone within the past few months.
 
yeah (79k) but Hdew themselves are Vat registered so it would be pointless , stewart was talking about other companies alledgedly operated by the same directors- the point is there's nothing illegal about running one company that is over the threshold and vat registered and another that is under and not... so long as they are genuinely separate not parts of the same operation pretending to be.
 
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Oops. Duplicate post. Sorry.
 
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The23rdman said:
Although don't the big players release their products pretty close together? There might be big fallow periods. I'm looking to try and find something a little different.
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I don't think that's really a problem. There is a tendency for the major manufacturers to announce new products at the major trade shows, but that doesn't mean they'll actually be available to sell then. Plus, the 'high margin' period for new lenses is typically about 6 months, so with each manufacturer releasing a handful of new items each year there ought to be a fairly steady stream of them and not too much by the way of fallow periods.
 
E.M.P. said:
A company only needs to be VAT registered to trade if it turns over the required amount and hits the threshold.
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I know that.
big soft moose said:
there's nothing illegal about running one company that is over the threshold and vat registered and another that is under and not... so long as they are genuinely separate not parts of the same operation pretending to be.
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I know that too.
 
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