Magazine Article


2006 State of the Distributor Industry

Adapting to Change

Mark Roth, President, Argraph Corporation

The photo industry continues to experience monumental changes, and those who are able to adapt are prospering. The overwhelming dominance of digital has created both challenges and opportunities. Many of your traditional profit centers may be gone, but digital also offers new ones. Two key aspects of digital cameras are driving sales and creating huge opportunities that photo specialty dealers are uniquely positioned to exploit.

First is the tremendous growth of digital SLRs. Reminiscent of the glory days of film SLRs for the masses, digital SLRs offer you much greater profit opportunity than P&S cameras.

Second is the built-in obsolescence/replacement factor. Computer products are used for an average of approximately three years and then replaced for newer technology. We are seeing the same pattern with digital cameras. Where photographers once used the same film camera for decades, they are now trading in their digital cameras for new ones with more pixels, anti-blur, face recognition, etc.

The keys to exploiting these opportunities are: Differentiate, Accessorize, Print, and Create Store Traffic.

The demand is there. Your job is to get your customers to buy their new digital cameras from your store. Accentuate what differentiates your store from the mass marketers—your expertise, knowledge, and personal service. In most cases you can match their prices, add the valuable extras that you can offer and they can’t, and make a good profit.

Every digital camera sale should include accessories (marketers call this the “attachment rate”—make yours 100%). Start with the usual suspects: filters, tripods, bags, and cases. Then add the digital-specific needs: every camera you sell should come with extra memory cards, a card reader, and rechargeable batteries and charger. And finally, sell new accessories designed specifically for new avenues created by digital photography.

For example, the new line of Zigview Digital Angle Viewfinders are a high-demand, high-profit accessory for digital (and film!) SLR’s.

Digital printing at retail continued to grow in the past year. This explosive growth is fueled by consumers getting the message about the benefits of in-store digital printing—lower cost, higher quality, and greater convenience. This growth in printing is just beginning—the majority of digital images are still printed at home. And even more digital images are never printed at all. Everyone knows this represents lost revenues for the photo industry, but it also represents potential lost memories for consumers. Memory cards are lost, files are deleted, hard drives crash, and nobody knows for sure if today’s CDs will be compatible with future formats. Convince your customers of the importance of printing all their images and you won’t miss film at all.

And when you present your customers with the beautiful prints made from their digital images, be sure to sell the presentation products that preserve, protect and show off their prints. Frames, albums, Pana-Vue Print protectors, portfolios, and Century Archival boxes all enhance their images…and your bottom line.

Sell Imaging Solutions, Not Just Cameras Rob Eby, Director of Purchasing, D&H

Business is up. People are buying that “better camera.” Therefore, make sure as a dealer you have a full complement of accessories, batteries, and lenses to add to the profit of the sale. Since people are more likely to store and print photos at home, be sure to offer external storage, as well as small dye-sub printers and the accessories that go with them.

As the business climate gets tougher, the distributor has to become the dealer’s store. The distributor needs to be able to deliver when called upon. With five nationwide warehouses, D&H can usually get product to the dealer within a day or can accommodate drop-shipping directly to the end-customer. We basically become the dealer’s business partner, reducing their costs by decreasing their inventory requirements.

Despite current politics, the economy is still strong and consumers are spending again. For instance, the number-one gift for Father’s Day this year was a digital camera. Gas prices do increase the shipping costs, which eventually impacts pricing across-the-board for everyone from e-tailers to retailers.

The imaging industry needs to focus on the entire imaging solution. The dealer should be able to assemble a turnkey offering, including home-based printers, scrapbooking software, NAS storage, and other hard-to-find accessories. This is where the retailer can stand to gain by creating an integrated solution that encompasses a variety of products.

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