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New Policy Redirects Dealers Ordering Small Quantities from Kodak to Wholesalers EXCLUSIVE

Kodak's professional and photo retailer customers who have been buying in small quantities direct from Kodak have been advised by letter that after January 1, 2008, they should contact an authorized wholesaler for their product needs.

The new policy will affect Kodak customers whose predominant ordering pattern requires parcel post delivery, according to Chris VanZandt, Kodak vice president and general manager, professional output. These are usually orders that meet Kodak's current requirement of a $1,600 order or 400 lbs. of paper for free freight, he said.

Kodak customers purchasing in pallet quantities from either its Atlanta or Whittier, Calif. distribution centers will continue to be served, he added.

“We have reviewed our current distribution capabilities and related policies and feel we can better support their needs and achieve an enhanced customer experience by implementing a third-party partner model…,” Kodak officials wrote in a statement.

“Third parties” refers to a wholesaler structure that has been in place for some time and has been supplying Kodak products to those dealers who, for whatever reason, did not buy direct from Kodak. VanZandt would not reveal how many dealers will be affected by the policy shift.

A group of eight Kodak Authorized Medalist Wholesalers (listed below) will have the responsibility to supply the photo retailers. A single firm, Liberty Photo Products of San Clemente, Calif., however, will serve professional labs on an exclusive basis throughout the country.

VanZandt said the bulk of such purchases, as many as 95%, includes paper, chemicals, film, single-use cameras and batteries.

Requiring customers to buy from a third-party wholesaler, rather than from the factory, could be a concern for dealers from a pricing perspective. But in a statement Kodak reassured dealers. “We expect customer pricing to be comparable to current direct pricing from Kodak…,” it said.

Liberty Photo will be a major player in the new program. Not only does the firm have the exclusive for pro-lab distribution, it recently acquired the Minilab Supply Store in Plymouth, Minn., a Kodak Medalist Wholesaler and long-time national leader in supplying products to minilabs. Liberty calls itself “The world's largest supplier of Photographic Imaging Supplies,” according to its Web site.

Garry Green, Liberty president, said: “We’ve been working with Kodak for over 20 years and we are extremely excited over the new program.” He said the firm currently serves 14,000 customers, including many of the major chain operations, with more than 5,000 SKUs. With the new Kodak responsibility, Green plans to increase his staff to around 85 employees, up from 63, by January 2008.

Currently, the Liberty staff consists of 11 salespeople on the road and at the headquarters, and 13 more customer service personnel. He said that every customer has an assigned sales and customer service individual. “We are expecting to provide a customer experience that exceeds what they get today,” Green said.

A longtime supplier for the pro-lab trade, Kodak has turned over approximately 800 pro-lab accounts, some of which were already being served by Liberty, he noted.

Liberty’s goal is to have pricing comparable to Kodak and to turn orders around in one day, according to Green.

W. Schiller & Co., Inc. is one of the Kodak Medalist Wholesalers that will serve dealers within a 200-mile radius of its St. Louis headquarters, according to General Manager Andrew Miller. Unlike many of the other medalists, Schiller only wholesales Kodak products. The firm also operates a fourth-generation retail photo location called Schiller Camera and Video.

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