Magazine Article


Imaging Distributor Update 2005: Adjusting to a Rapidly Changing Industry
From The Cover

There's no doubt about it. The role of the photo distributor has changed considerably. And its role has even changed in the past few years, when PTN last presented an industry-wide update. In the last two years, the general public has become even more reliant on digital cameras. Resolution on digital cameras has improved dramatically, and digital cameras have become even more affordable. As of this printing, for example, consumers can purchase a 5.0-megapixel digital for less than $200. But that can change tomorrow.

This means the job of photo distributors is perhaps more difficult than ever before. New digital camera releases are commonplace. Even media card technology is quickly improving. To thrive, photo distributors must be ahead of the curve in the product-to-market chain. They must know the latest technologies and be available at all times to rush the latest cameras and accessories from the manufacturers' warehouse floor to retailers' stores.

No longer is a distributors' role simply to move product. They need to be the "fly on the wall," knowing what products will be released and anticipate what will sell robustly. They must train and educate, and know pricing trends to keep their dealers competitive. And with profit margins tight, distributors need to help retailers innovate ideas to make more money.

With that said, what's the "State of the Distributor" today? PTN interviewed some of the leading imaging distributors to find out.

More Predictable Volatility
When it comes to photo distributors, Mark Roth, president of Argraph Corporation, has seen it all. Argraph, the 52-year-old Carlstadt, New Jersey company, has over 3,000 customers. Roth said his company's role has changed in just the past couple of years as "low-margin digital products have supplanted high-margin traditional products and processing." "We're constantly endeavoring to create, develop, or discover new products that ride the digital wave but offer dealers the higher profit margins of traditional photo products," he said. "We've introduced a number of these products in recent years with great success, and will continue to do so in the future."

The short lifespan of digital products has had a huge affect on the industry, he added. "Retailers today can't afford to heavily stock digital products because prices can go down and products become obsolete so quickly. We encourage our dealers to stock only what they need and rely on us as their back warehouse. Because they order a variety of products from us—both digital and traditional—many can order daily, and they do."

However, Roth commented that the volatility of digital products has become more predictable in the past year or two. "Prices certainly continue to change, but less frequently and sporadically than in the earlier years of digital," he said. "Manufacturers continue to upgrade their products—increasing memory cards and speeds, cameras with higher megapixel counts and more features. Consumer digital cameras have an average six-month life; digital SLRs about a year. Ten years ago, at the dawn of digital imaging, a 4 Megabyte card had a retail price of $189. Now a 2 Gigabyte card retails for a few dollars less. That's 500 times as much capacity for less money!"

As for the future, Roth said Argraph's long-term commitment to photo retailers will grow and prosper. Argraph was involved with digital imaging early on and partnered with SanDisk and Lexar, now industry leaders, of course. "We introduced these products to our dealers, and helped them successfully transition into digital while continuing to profit from still-viable traditional products. We will continue to look for innovative companies, new products, and new services that will help our dealers prosper in the future."

Ahead of the Curve
Rob Eby, director of purchasing at Harrisburg, Pennsylvania-based D&H Distributing, said the distributor's role continues to become more crucial for retailers as digital continues to have an impact. "There is no question that a ‘stocking' distributor is of benefit to the retailer," he said. "A distributor can boast having the latest and greatest technology, when they actually have little or no inventory exposure. Our goal is to remove most, if not all, of the inventory risk through our "Just-in-Time" model, and to reduce carrying costs for the photographic retailer."

To further help retailers, Eby said D&H has five trade shows a year. "It gives the photo specialist a chance to meet the vendors as well as touch and feel the product," he said.

An additional way to assist photo retailers is by helping them expand his or her product offerings with audio/video/and home theater products. "Last year, it was all about printing," said Eby. "This year, I truly believe it is all about content and storage. That and, also how to move that content around the home. We offer a full array of external storage, DVD and CD burners as well as wireless devices to move information from place to place within the home."

In the future, "We are consistently trying to stay ahead of the curve," he said. "For us, this year will include a big storage and Adobe push into the channel. We feel that as the products become more mainstream, people truly need good solutions to be able to store and manage their content. Also, more and more people are editing images on their PCs, and the Adobe suite of software products is the perfect solution for the home user. If the dealer is smart, he will realize that the sale of the camera is just the beginning of the digital sale process."

A ‘Unique Solution'
Despite a quickly changing industry, DBL Distributing, Inc. has not changed its focus during the past 16 years. "We have four main beliefs," said Bruce Kuperman, vice president of Sales & Marketing for the Scottsdale, Arizona company. "We offer good products, good prices, good service, and we take care of the customer. With the increased delivery of new technology within the photo channel, our sales team is provided with training so our customers can utilize their expertise in providing solutions."

"DBL has a unique solution to the issue of volatility in the lifespan of digital products," he continued. "Because photo retailers can use DBL as their warehouse, they benefit from not having to carry large quantities of inventory. Not only does this minimize overhead, but also the volatility in price affects photo retailers on a lesser scale."

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