FBoneOne
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Contributing Member
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Posts: 597
Re: Anyone Else Notice the New Meike Lenses for Fuji?
2
I am not familiar with this specific manufacturer but I have done enough China production to retail pricing analysis over the years to not jump to conclusions.
A standard focal length of f:2 aperture, branded and sold through retail goes for about $700 - there is a wide range but let's pick this number to illustrate the point.
Over the year, with various timed incentive the retail rebate structure will hover around 50%. Some brands a little more, others less, but in average over the year that's what a canon (and until recently Nikon) will be paying out to their distribution channels and consumers
Means that the $700 lens nets about $350 for the manufacturer.
Said manufacturer will try to extract about 75% margin from those primes. They are not a highly competitive space - this is not mass market, big volumes, gotta sway the masses for Christmas type of product. So 60 to 75% margin will be the norm for the manufacturer.
That means that the manufacturer paid between $90 and $140 for that lens.
Depending on their size, competencies etc... That camera "manufacturer" (designer and marketer really) will either have their own in-house contracting team in China but my bet is many go through a contracting company - feed them the specs, the price you are willing to pay and they will work through the maze of Chinese manufacturing for you.
Those companies typically make 10 to 20% as "intermediate brokers" - the lens that canon bought for let's say $100 really left the factory costing around $85.
The actual manufacturer made about 15% on that sale - it means the true cost of manufacturing for that $700 lens is roughly $70 or 10% of the final price through US retail (a very common ratio found in hundreds of industries).
If that Chinese manufacturer decides to sell directly on eBay at $90 they actually make $5 more per unit sold that way - or 33% to 40% more profits per unit.
What's missing in this picture? The Chinese manufacturer has no development cost or marketing cost at all. On the former they are just "leveraging" (also known as IP theft but the concept is very vague in China) the work of the company that designed the lens; on the latter, they let the low price and eBay direct sales model do the work for them - after all, it is incremental volume with no base investment so all incremental profits almost
These lenses may very well be crap - but I certainly would not jump to conclusion based on price alone. I also have left out another completely different model which could be that those lenses are produced in massive numbers for the Chinese internal market and a few marketed direct to westerners. Economies of scale play a big role in costing anything for internal Chinese markets. Often though, the same company will play both sides.