Nikon 200-500

ethanz

1DX II
CR Pro
Apr 12, 2016
1,172
459
ethanzentz.com
Hello,

My dear Nikon friend (Jesus calls me to love my enemies, so I try) just bought a Nikon 200-500. He was showing it to me and it looks really sharp on his D810. I've read that there is extreme copy variation, so he must have just gotten a good copy. How much do you think Nikon is losing on selling that lens or are they actually breaking even? I think this may have been discussed before, but I couldn't find it.

Thanks for any insight
 

Mt Spokane Photography

I post too Much on Here!!
CR Pro
Mar 25, 2011
16,609
1,571
Nikon is not losing money. Its a consumer grade lens and designed to sell for a low price. It is definitely a good deal for Nikon owners on a budget, but Nikon is not losing money on it. Don't think of it as comparing to a pro grade Nikon lens.
 

Ryananthony

EOS RP
Nov 7, 2015
498
2
Mt Spokane Photography said:
Nikon is not losing money. Its a consumer grade lens and designed to sell for a low price. It is definitely a good deal for Nikon owners on a budget, but Nikon is not losing money on it. Don't think of it as comparing to a pro grade Nikon lens.

Basically this. I just purchased the d500 and 200-500 and have been really impressed so far with both focus speed and sharpness at 5.6 at 500. With that said, there is no confusing this for a high end big white equivalent from Nikon.

Ethan, what makes you think Nikon would be losing money on it?
 

ethanz

1DX II
CR Pro
Apr 12, 2016
1,172
459
ethanzentz.com
They may have thought that making a lens like that and pricing it so affordably would help to lure or keep customers, even if they did not make money on it. It just seems like it should be priced higher and cost more to produce.
 

RGF

How you relate to the issue, is the issue.
Jul 13, 2012
2,818
36
Assuming Nikon is selling the lens above manufacturing cost then are making a something on the lens. Perhaps not as much as if they make on other (more expensive and likely higher margin lenses).

A couple of things to consider

- Does volume offset lower margins to help them cover the initial development costs?
- Does this lens help them fend off Sigma & Tamron 150-600 (or former versions) keep costumers in the Nikon fold? Hypothesis is that once they try a 3rd party manufacturer they may be more likely to buy another.

I could go on, ...

Rich
 

Talys

Canon 6DII
CR Pro
Feb 16, 2017
2,076
356
Vancouver, BC
ethanz said:
They may have thought that making a lens like that and pricing it so affordably would help to lure or keep customers, even if they did not make money on it. It just seems like it should be priced higher and cost more to produce.

I don't think so. It's not any better than a Sigma/Tamron 150-600 (they're all great consumer-grade telephotos), and for sure Sigma and Tamron aren't losing money on their lenses :D
 

Mt Spokane Photography

I post too Much on Here!!
CR Pro
Mar 25, 2011
16,609
1,571
RGF said:
Assuming Nikon is selling the lens above manufacturing cost then are making a something on the lens. Perhaps not as much as if they make on other (more expensive and likely higher margin lenses).

A couple of things to consider

- Does volume offset lower margins to help them cover the initial development costs?
- Does this lens help them fend off Sigma & Tamron 150-600 (or former versions) keep costumers in the Nikon fold? Hypothesis is that once they try a 3rd party manufacturer they may be more likely to buy another.

I could go on, ...

Rich

I think you are right, the profit margin is less, but they steal the market away from the 3rd party manufacturers. Tamron and Sigma have cut into Nikon lens sales. Nikon lenses have typically been over priced, and for Nikon owners, Sigma and Tamron lenses are a good choice. Its not as clear cut for Canon, but I expect they feel the pinch as well.
 

Talys

Canon 6DII
CR Pro
Feb 16, 2017
2,076
356
Vancouver, BC
Mt Spokane Photography said:
I think you are right, the profit margin is less, but they steal the market away from the 3rd party manufacturers. Tamron and Sigma have cut into Nikon lens sales. Nikon lenses have typically been over priced, and for Nikon owners, Sigma and Tamron lenses are a good choice. Its not as clear cut for Canon, but I expect they feel the pinch as well.

I dunno, the only lens that competes with the 150-600 from Sigma/Tamron is the 100-400LII, and that really serves a different market. I kind of wish Canon would have a lens that competed with the 150-600, because then I would stop eyeing and dreaming of the 200-400, lol. Maybe.
 

Don Haines

Beware of cats with laser eyes!
Jun 4, 2012
8,265
1,935
Canada
You can get about 90 percent of the quality for about 50 percent of the cost. If Tamron and Sigma can make money with their 150-600 lenses, then it is a safe bet that Nikon can make money with the 200-500....
 

Talys

Canon 6DII
CR Pro
Feb 16, 2017
2,076
356
Vancouver, BC
Don Haines said:
You can get about 90 percent of the quality for about 50 percent of the cost. If Tamron and Sigma can make money with their 150-600 lenses, then it is a safe bet that Nikon can make money with the 200-500....

I believe the 150-600 is better in sharpness and worse in autofocus than the 200-500, though I haven't ever played with the Tamron or Sigma on the Nikon, since everyone I've met with a newish Nikon that's a birder has the 200-500.

If I had to pick I'd take the sharpness (and 100mm on the telephoto end isn't anything to sneeze at either).
 

Talys

Canon 6DII
CR Pro
Feb 16, 2017
2,076
356
Vancouver, BC
ethanz said:
Talys said:
I would stop eyeing and dreaming of the 200-400, lol. Maybe.

Just do it Talys, its so nice.

Trust me, it's high on my wish-list. I want this lens more than any other camera gear.

1. HVAC for home
2. New roof
3. Canon 200-400

On the bright side, the Canon 200-400 is the cheapest of the 3!!
 

aceflibble

EOS RP
May 8, 2015
298
71
I can't provide a direct source because it comes from an in-person, real life conversation, but I asked a distribution contact I have about this when the 200-500 first launched and I saw the price, and was told that without shadow of doubt, Nikon is making a huge profit off this lens. It is selling way above cost.

Bear in mind that this is completely normal for any lens. Camera manufacturers do not make money from bodies. The average profit off any body sold is 5%, except for the 1D/Dx cameras (and, I believe, the Sony α9) which are a little further up. The figure I've been quoted is that for every £1000 a body costs on the shelf, the shop and manufacturer are making about £50 profit each. (Exact rate obviously varies depending on the specific model in question and whatever distribution deals are in place.) When manufacturers offer those cash rebates for £100 or £150 or so, that's usually them giving up their entire profit from that body sale.
... Conversely, lenses have a profit margin of closer to 400%.

This is why manufacturers are willing to sell bodies at barely-above cost. The idea is that for every body they sell, you'll buy at least one lens. One lens sale more than makes up for one body sale. Most people buy at least two lenses per body, so now we're talking big profits. For the serious enthusiasts and the working professionals who buy a huge range of lenses, the lack of money made on the body sale doesn't matter at all.

Bodies are made and sold to drive lens sales. Bodies rarely make much money; lenses always represent huge profits. As such, bodies are seen as making a profit by encouraging those lens sales.

So, no, Nikon is not selling the 200-500 at a loss, and they're not just breaking even, either. If they're selling anything at a loss, it's probably the D500, and it wouldn't surprise me if the D850 was only breaking even, too. The 200-500 is a giant cashcow.
 

AlanF

Stay at home
CR Pro
Aug 16, 2012
7,776
8,555
Well, if that's the case, Tamron and Sigma must have a nice marketing strategy. And if Canon was really smart, they would sell their lenses with Nikon, Sony and M4/3 mounts. And Nikon could fit the 200-500 with a Canon mount.
 

IglooEater

EOS R
Nov 15, 2014
904
0
Talys said:
ethanz said:
Talys said:
I would stop eyeing and dreaming of the 200-400, lol. Maybe.

Just do it Talys, its so nice.

Trust me, it's high on my wish-list. I want this lens more than any other camera gear.

1. HVAC for home
2. New roof
3. Canon 200-400

On the bright side, the Canon 200-400 is the cheapest of the 3!!

I can help you with 1 and 2. It will go towards a good cause, such as number 3 for me ;D
 

Talys

Canon 6DII
CR Pro
Feb 16, 2017
2,076
356
Vancouver, BC
IglooEater said:
Talys said:
ethanz said:
Talys said:
I would stop eyeing and dreaming of the 200-400, lol. Maybe.

Just do it Talys, its so nice.

Trust me, it's high on my wish-list. I want this lens more than any other camera gear.

1. HVAC for home
2. New roof
3. Canon 200-400

On the bright side, the Canon 200-400 is the cheapest of the 3!!

I can help you with 1 and 2. It will go towards a good cause, such as number 3 for me ;D

LOL Good one! ;D
 

3kramd5

EOS R6
Mar 2, 2012
3,084
405
aceflibble said:
The figure I've been quoted is that for every £1000 a body costs on the shelf, the shop and manufacturer are making about £50 profit each.

There is typically a distributor in the mix too, if not a whole seller, not just OEM and retailer.

Maybe, MAYBE companies like nikon have a direct relationship between major retailers like amazon, but generally not with Bob and Tom’s Electronics Emporium at the corner of 1st and Grand. Nikon sells to businesses who sell to businesses who sell to consumers. There has to be enough margin to go around, particularly for the retailer who uses up shelf space, deals with petty consumers (not rebuys like most B2B), processes credit at 1.5%-3% card fees, etc.
 

privatebydesign

EOS-1D X Mark III
CR Pro
Jan 29, 2011
9,709
4,279
3kramd5 said:
aceflibble said:
The figure I've been quoted is that for every £1000 a body costs on the shelf, the shop and manufacturer are making about £50 profit each.

There is typically a distributor in the mix too, if not a whole seller, not just OEM and retailer.

Maybe, MAYBE companies like nikon have a direct relationship between major retailers like amazon, but generally not with Bob and Tom’s Electronics Emporium at the corner of 1st and Grand. Nikon sells to businesses who sell to businesses who sell to consumers. There has to be enough margin to go around, particularly for the retailer who uses up shelf space, deals with petty consumers (not rebuys like most B2B), processes credit at 1.5%-3% card fees, etc.

The distributer/importer, in the case of Canon and Nikon, are wholly owned subsidiaries of the main Japanese corporation. They get to double dip.
 

3kramd5

EOS R6
Mar 2, 2012
3,084
405
privatebydesign said:
3kramd5 said:
aceflibble said:
The figure I've been quoted is that for every £1000 a body costs on the shelf, the shop and manufacturer are making about £50 profit each.

There is typically a distributor in the mix too, if not a whole seller, not just OEM and retailer.

Maybe, MAYBE companies like nikon have a direct relationship between major retailers like amazon, but generally not with Bob and Tom’s Electronics Emporium at the corner of 1st and Grand. Nikon sells to businesses who sell to businesses who sell to consumers. There has to be enough margin to go around, particularly for the retailer who uses up shelf space, deals with petty consumers (not rebuys like most B2B), processes credit at 1.5%-3% card fees, etc.

The distributer/importer, in the case of Canon and Nikon, are wholly owned subsidiaries of the main Japanese corporation. They get to double dip.

Everywhere? That’s quite an operation! I suppose canon at least can leverage its office supply infrastructure.
 

aceflibble

EOS RP
May 8, 2015
298
71
Not quite "everywhere", but in most countries, yes.

This is why I generally don't factor in distribution costs when talking about The Big Three, because Nikon and Canon essentially own and operate their own, while Sony is such a vast corporation with fingers in so many pies, distributors fight each other to work for them. Distributor costs aren't really a factor for them.

Fuji, Panasonic, Olympus, Pentax, Leica, Phase, now those are a different story.
 
<-- start Taboola -->