[Recovered Thread: 116805]

[JohnG]

This is a discussion from another forum that went the typical route of talking about volume and such as the reason why on-line stores like B&H can offer a camera at a lower price than the local camera store (unlike otheer on-line vendors B&H has an actual storefront to maintain). I found this reply significantly interesting enough to post a link to another site. Hope the mods agree it's of enough interest to warrant a cross-forum post:

http://forums.dpreview.com/forums/re...ssage=21997437

[eric s]

Very interesting. I, for one, am happy you posted it here.

So some of it is volume (they are able to max all the deals related to volumn) and some of it is just that its an amazingly well run shop so they can leverage all the other discounts that they offer - as the poster you linked say:

It's much more about brutal efficiency than about levaraging a substantially lower price out of Canon

B&H is (from the out side any ways) a really well run shop.

Eric

[madecov]

Back in the late 70's and early 80's I worked in NYC
B&H was a little hole in the wall with a sales desk about the size of a kitchen table

They had huge mail order ads in Pop photo and modern photo.

Customer service was nill but prices were amazing, you went in ordered on the phone but you NEVER asked a question. They were volume oriented.

Now I'm in Texas and would love to go visit the actual store.

I also used to shop at Adorama/Cambridge/47th street/ and a few others

[flippedgazelle]

This is a very interesting topic, John. I read thru about 1/3 of the posts on DPReview ('m a long-time lurker there) and will eventually read all of it.

A few years ago, I was a priest of the Cult of the Blue Vest (think mega-chain store symbolized by a smiley face). As such, I was privy to many pricing and acquisition details. I don't know how much the following applies to the camera shops:

1. Discount pricing for long-term guaranteed quantities. At the Cult, we would tie up manufacturers/distributors with long-term deals. In a nutshell, we would purchase from an entity for 3 years or more, at a guaranteed minimum quantity. The quantity would be huge it was almost guaranteed profitability for that sector of the business selling to us. Think of it as a low-interest but guaranteed investment.

2. Accessory madness. When someone makes the "bug purchase" - camera, TV, car, etc. - the natural inclination is to accessorize. So, you buy that $200 digicam on "Rollback" and think, yup, good deal. And maybe the Cult makes a 2% profit. Then you buy a nice little case for it for $18.88. The Cult bought it for $4.50.

3. Perception/reputation. The genesis of this is always price and/or service. You build up a good enough reputation, people will buy without shopping around. Suddenly, you do not need to be quite so concerned about having the rock-bottom price. People on tight budgets will purchase form the Cult without thinking because the assumption is the price will be either the lowest, or close to it. That's reputation at work. That HDTV you just bought from ol' Smiley Face for $1400 is currently on sale at 6th Ave Electronics for $1199, but you didn't even think to look.

3a. Those flyers you get in the mail, advertising "Always Low Prices"...? You wouldn't believe how many people assume those are *sale* prices. They are not. They are special purchases (products bought for a one-time distribution, and often for research purposes), Rollbacks (think of it as a one-year price reduction) and Every Day Low Prices. No sales, really. But it brings people into the store.

Of course, the Cult of the Blue Vest is not the only entity that does this. America's Computer Company ("Dude, you're getting a...") capitalizes on the same principals, as does my favorite (and largest, I think) computer component web site (do you like your Eggs, scrambled, poached, or New?).

How much of this applies to places like B&H? I don't really know. But I would be willing to bet there is a Byzantine labyrinth of deals, guarantees, cross-promotions and kickbacks involved.

Someday, I really do want to get to B&H; they are only about 60 miles from where I live. I just hate driving in NYC...

[Hayward]

flippedgazelle wrote:

Someday, I really do want to get to B&H; they are only about 60 miles from where I live. I just hate driving in NYC...

This is why there are trains, subways, and buses .

PS when I lived outside NYC, I visited many of these (B&H, , 42, 47th, etc.... and they were ALL relatively hole in the walls... obviously not their main operation.

And like was said, forget asking questions, etc.... Just what do you want

[digital demon47]

I first shopped at BH when they were on 18 or 17th st on 6th ave. It was very

small. like you said a large counter that was it. The checkout area now was

the size of their store then.

The memories

:|