Magazine Article


Like the Little Guys, Qualex Scrambles to Adjust Its Menu as Roll Count Wanes

Today, according to Mark, Qualex is handling almost 100% of its gifting needs in-house. Only a few items (e.g., blankets, plates, crystals) are outlabbed.

Photobooks are the top-selling gift item, followed by calendars, mugs, t-shirts, and posters. He noted that the average size and revenue from a book sale is steadily increasing, with a typical order calling for 15 sheets (30 pages), 5x7, and hard-cover binding.

The entire matter of photobooks has been keeping the industry hopping as there is such a huge variety of output choices. No doubt, PMA will be a showcase for photobooks as vendors hawk their individual solutions. A recent PMA report entitled Make the Most of the Photo Book Opportunity should be a bestseller. It reports that, "By the end of this year, the photo book business is expected to triple compared to 2005 and is expected to grow more in 2008."

In July, Kodak introduced its EasyShare Custom Creations Software, which can be downloaded at no charge by a consumer wishing to design her a photobook leisurely on her home computer. She just burns the book to CD, drops it at a Kodak drop-box store, where the completed photobook is returned for pickup. Or she can order a classic photobook from Kodak Gallery starting at $29.99 for a 9x10 book with a 10-page min.

Whatever she orders, it will be probably be produced at Qualex's Allentown facility using its own NexPress equipment that can output thousands of color pages an hour.

Strategic Partnerships

Mark looks to new growth for Qualex coming from business channels, both existing online operations as well as firms not currently in the imaging business.

From the first group was the alliance announced in October between Qualex and PhotoWorks (once known as Seattle FilmWorks), a major mail-order processor doing everything in-house. According to Andy Wood, president and CEO, the firm shut down its own processing machines a year ago and is now concentrating its activities solely as an online retailer.

It may be one of the few online firms still promoting film processing, which-until Qualex stepped in-was being handled by District Photo. Andy said, "We still have tens of thousands of customers who only use film." One current promotion is "Forgotten Film Day," where customers send in up to five rolls for free processing and order prints online-not free.

Andy said that with the Qualex alliance he'll be able to provide a comprehensive service by bundling a long list of gift and digital products available through Qualex as a single-source supplier. Why the change from District to Qualex, Andy? "I have the highest regard for District Photo. It was purely a commercial decision."

Mark said he was being aggressive in the search for new partners. He noted that early last year there was only one person in Qualex charged with the responsibility of finding potential alliances. Now, there is a team of 12 specialists lead by David Glover, VP, New Business Development. "The department continues to grow," Mark said.

In addition to the recently announced PhotoWorks alliance, Qualex has made deals with such online firms as: Digibug, dotPhoto, Memorable Images Photography, Sequoia Media Group, Forever Books, The Family Post, Printroom, LifePics, and PNI Digital Media. Mark said that there are about 15 to 20 partnerships. Expect some additional alliances to be announced at PMA.

In the nontraditional photo category, one of the more intriguing partnerships that Mark's group has signed is with the American Kennel Club, which rules the doggie world. On its website is a link to Kodak with the cutesy message: "Go fetch-great prints and photo gifts from Kodak." The link opens to a page offering gift items that can be ordered via a software system provided by LifePics. Hey, Mark, don't forget to call on the Cat Fanciers' Association. They could use: "Get out of the litter box-meow for great prints."

Mark refers to his various alliances not as accounts, but as "strategic partners."

Among the concerns with each new affiliation is the need for differentiation as to market offerings and the ability to digitally tie in to each other's electronic systems. Mark said there's an engineering team that works with each account to address the matter of "how my machines talk to your machines" and that the marketing department works with each partner to develop exclusive ideas such as unique album covers, greeting card styles, frameing options, or calendar designs.

Kodak Service and Support (KSS) is still an important part of the Qualex operation, but Mark doesn't look for growth there. He said there are fewer wet labs to service, as many of its retail chain customers are either adding or replacing with dry lab equipment. Every minilab brand is serviced and parts are still manufactured or remanufactured, especially for the defunct Gretag-brand machines-of which there are still about 5,000 in the field. (Many of these were sold by Mark, incidentally, as he was once president of Gretag Imaging's U.S. operation. He joined Kodak in 2003 as GM of Worldwide Service and Support.)