Larry said that at a time when every independent dealer is suffering the loss of business and looking for new avenues as we shift to a digital environment, a gifting program would help to restore some needed revenue and profits. He said that an aggressive independent should be able to generate up to $60,000 in photo gift sales and could expect margins of between 40% to 50%.
How significant is photo gifting? PMA's U.S. Photo Industry 2007: Review and Forecast started collecting marketing information on custom photo products (Gifts and CD/DVDs Ordered at Retail and Online) beginning in 2004. It reports sales of $270 million for that year, and $462 million for 2005; estimates $694 million for 2006; and projects $951 million in 2007 and $1.2 billion in 2008.
I asked Al Steinman why District Photo chose to buy out Photo This at this time. "Just look at the PMA figures where the gift business is going, and you'll see the answer," he said. He indicated that the investment was consistent with the firm's strategy to provide output products.
Back to the men's boxer shorts. Larry told me of a lady customer who purchased seven pair for her boyfriend, each adorned with a different picture of herself, so he could have a new look every day of the week. Just in case you're interested, Walgreens sells the men's boxer shorts for $19.99 a pair.