LX7 for $299, is there an issue???

Started Dec 11, 2012 | Discussions thread
ANAYV
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Re: LX7 for $299, is there an issue???
In reply to lenshoarder, Dec 12, 2012

lenshoarder wrote:

ANAYV wrote:

Perhaps they are undercutting the LX7 to deffer many folk from buying the Sony RX100 (or others in this category). They make only a little profit, but sell more, and that means less going to their competition.

Just a guess.

ANAYV

At $299 I doubt they are making an profit on it at all. If anything, they are probably losing money on it. That's a firesale price. Companies do that to limit losses. Panasonic has a gross margin of about 26% across the company. But let's even assume a huge gross margin like what Apple gets on the iphone of 50%. Based on the MSRP of $500, they would have to sell for at least $250 to break even on the cost to make it. What the retailers and distributors make come out of that $299. Add in overhead at Pansonic, marketing, etc, etc and even at $299 Pansonic is losing money on it with generous 50% gross margin assumption. More likely the gross margin is closer to 26% and thus Panasonic is losing money at $299.

The reason is simple. At full MSRP of $500, it can't compete with the RX100. I don't think they are trying to deny sales to the RX100 as they are trying to cut losses. Better to lose less money than to lose more.

not sure its competing against the sony.........as it has a 28mm lens......that alone makes it not an option for many.Sure the sony rx100 is better regards to IQ, but think it cators to a slightly different crowd.I'm just glad to see the lx7 is better than the lx3 and 5.....and a great price right now,too !

ANAYV

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