All this really tells me is their margins are too high.
They'd be better off if their reps became sales people and just sold product.
Phase would be a lot better off if they stopped charging $4,000 for a warranty, value added or not.
JR
More reps would have to be hired to cover the territory our dealers cover and that would eat into a significant portion of those recovered margins. And before this idea of huge margins gets out of hand, let me tell you that Hasselblad dropped the price of their H3DII-39 to
below my dealer cost at PPR. So don't get the idea that dealers were making $14,000 every time they sold an H3DII-39. It's going to be a challenge to see if this works for them because they're going to have to sell
a lot more units than they have been to make the same profit.
A significant portion of medium format digital sales happen in rural areas, sold to photographers who had no idea the product was available. These sales would almost certainly be lost without specialized dealers, who go out and call on these guys. Essentially, specialized dealers are our reps, we pay them from the margin they make.
I'm not saying we would never look at other methods of distribution. But it's way too simple to see lower price and think it will work for distribution of that high end product with fewer people selling it that know what they're talking about, not to mention getting to the photographers who rarely get into a camera store in a large metroplitan area and ask for something like a Phase One product. People don't ask for these products, these products are presented to them and if that doesn't happen - and it likely won't in a Camera Store - the distribution model won't work.
We charge $3,000 for a 3 year Value Add warranty, not $4,000. You must be thinking of Hasselblad. Oh, I'm sorry, they're $5,000 for their 3 year warranty. Phase One's warranty guarantees next day replacement as well as some nice chotsky items, case, dual battery charger, etc. There is a definite cost to this in the substantial amount of digital backs which we have sitting on our shelves in Melville, New York waiting for a call. And if someone buys the Value Add Warranty for a P+/Phase One camera bundle, the additional cost is only $500 more and includes the Hasselblad lens adapter, which basically pays for the warranty.
Steve Hendrix
Phase One
