Originally Catering to the Professional Photographic Community, This Unique Retailer Continues to Thrive.
Thirty camera stores existed in Baltimore, Maryland, when Burke Seim told his father he was either going to buy one of his or open one from scratch. Burke’s dad had three camera stores doing processing; however, Burke wasn’t following anyone’s path but his own.
None of the other stores catered to the professional photographic community. Burke loved selling film by the case and Polaroid by the pallet, along with high-end cameras. He wasn’t excited about processing film or making prints. He also saw a total void in the market for camera stores catering to professionals.
“Professional equipment and supplies had very low margin. Photofinishing was the opposite. I didn’t care for photofinishing,” Burke explains. “I saw an unserved market. Everyone thought I was nuts. The region was overrun with more than 30 camera stores. Ritz had 15 within the city. These were stores that sold photo gear but weren’t competition for the market I wanted.
“On April Fool’s Day, 1991, I bought one of my dad’s locations. I focused on what I liked, what I knew and what wasn’t being served in the marketplace.”
Today, none of the other stores are still open. It was Burke Seim and his quirky team who wouldn’t follow the pack, who did things their own unique way, who have survived and prospered to be Digital Imaging Reporter’s 2021 Dealer of the Year.
Service Photo Adapts with Low Margins
“I’ve always been successful being viewed as the underdog. Our customers cheer for us. They’re loyal and appreciative of what we continually do for them,” Burke reflects.
“We don’t like being the last guy standing. For the industry to grow and camera sales to resume, we need passionate camera stores. Other camera stores are not our competition. Our true competition is golf, boating or any hobby that consumes customers’ time and discretionary dollars. Without more camera stores, who is promoting the fun and joy of photography?”
One reason Service Photo survived the digital revolution is they were used to working on low margin. Burke believes photo retailers became bloated with photofinishing margins that evaporated overnight. That—coupled with the lower margin on digital and the shift to retailers having total responsibility for financing inventory—spelled the death of the traditional camera store.
Moreover, after Burke established himself as a proven store operator, his CPA introduced him to a local banker who suggested Service Photo get an operating line of credit. Burke applied. The banker thought the requested loan was too low. The store should apply for a 50% higher credit line. Burke did and has paid every invoice with a maximum cash discount. “You have to take the maximum cash discount or die. It’s where your profit is.”
Of the many words that describe Burke and his team, “pragmatic” is high on the list. Burke recognizes that the current shortage of hardware, due to global supply disruptions, impacts his ability to keep his team employed and functional. He worries his customers won’t have a flawless experience with their gear. He wants them to have immediate, perfect results. “We don’t have a special store. We have a run-of-the-mill store where special things happen.”
Keeping an Open Dialogue
Service Photo has a very large list of customers who want the Nikon Z 9. Burke felt he was answering the same questions every time the phone rang. So, he invited everyone on his Nikon Z 9 waiting list to a Zoom call to discuss delivery; 79 customers immediately responded.
The planned 20-minute orientation on how new product is distributed lasted an hour and 45 minutes. There were questions about how Service Photo worked with manufacturers. The discussion turned into the need for accessories, especially lenses, filters, memory cards and batteries.
When questions about card readers arose, Burke was honest. “I can sell you a reader now if you need one. If not, you need to know next year there’ll be a card reader allowing you to read two cards at once. You may be best served by evaluating that product.” This didn’t sell card readers that night but did establish Burke as a trustworthy retailer.
Moreover, when you’re on the new product waiting list, you receive a “needed accessories” list that tells you what else is needed to complete the purchase. The first-time buyer will need a new memory card format and likely new filters, batteries, case, etc. Burke offers “early bird pricing” on these accessories if the customer orders them in advance. The customer may find the base camera itself more quickly from another source, but Service Photo has secured the accessory sales, which can financially mean more to the store than the hardware sale itself.
Telling It Straight
Service Photo also gets a lift from the “Buy Local” movement. Burke doesn’t guilt-trip people into coming to Service Photo. “They should come because we offer the best deal with the greatest support. Sure, buying local is good for everyone. Earning that business keeps you successful long term.”
Further, the takeover of one of his dad’s older locations came with $400,000 of vendor debt. “I was in contact with the credit manager at every vendor. It was obvious what I had to do—speak the truth, do what you say you’ll do, and stay in communication.” Those credit managers became great friends and resources as Service Photo grew.
With product delays, Burke doesn’t require a deposit to be listed for back-ordered gear. He requires an e-mail address, which goes into his database. He admits product delays have helped manufacturers’ and retailers’ margin. The sales dollars might not be there, but margin has grown during the pandemic.
What’s more, for Service Photo, Covid-19 was personal. Burke and four employees contracted Covid. Burke was out for weeks, losing 25 pounds in the process. However, always seeing the bright side, he says, “Not a good way to lose weight, but I’m keeping it off. I’m now working out every day.
“I hope we’re in the ‘post-pandemic period.’ It’s been very erratic. One day is our worst day in recent history; the next day sets a record. Traffic isn’t consistent.”
Currently, Burke worries short-term profit pressures are choking off the funnel of new customers.
“Some high school and college photography classes can’t get lower priced cameras. Many former students are today’s photo hobbyists. If they’re taught in school that a smartphone is a good enough camera and there’s no need for a ‘real camera’ when none are available, what’s our gateway to future customers?”
Thankfully, classes and events on pandemic hold are slowly resuming. Joe McNally and the Nikon Z 9 was a huge hit reopening on-site classes. The Concierge Education series, consisting of 1:1 instruction, is also very effective and growing.
The Used Gear Scene
There are also used camera buyers on duty every hour Service Photo is open. Twice a year they do events with Used Photo Pro buyers. The semiannual events bring in people, especially customers with unique items for which Service Photo doesn’t have the market.
Furthermore, Burke understands cash flow. He understands used gear customers want to see different products every visit. The first rule is no discounting of used gear in stock less than two weeks. Customers complain it may not be there in two weeks, to which the salesperson responds, “That’s the point.” Many customers buy it right then. However, after two weeks, reasonable offers are considered. Usually around the 45–60-day mark, products get tagged for eBay. Proceeds are reinvested in gear, so the display always turns over.
In addition, if you buy used gear, there’s a 10-day acceptance period. This policy incentivizes customers to use the gear right away. It also gives them reassurance they can return the gear if it doesn’t perform as anticipated.
One customer attempted to abuse the policy by shooting 3,000 pictures over the 10-day period before returning the camera. Burke was called in to discuss it. The customer admitted he bought and returned it so he wouldn’t have to pay the rental fee. Burke gave him the option of paying the rental value or getting a full refund and being banned for life from Service Photo.
The customer took the refund option. The customer then sent his twin brother to buy for him. The staff discovered it and refused to sell him anything. Burke says, “The staff knows our policy is fair. By banning this customer, I showed the former customer and, more important, our staff, that we stand by what’s right.”
Leveraging Social Media
Service Photo just opened a new Instagram account. Normal used gear is on the regular account. However, a new Instagram site was opened for “Vintage, Rare and Esoteric Pre-owned Gear.” They’ve found these are different customers and the products they seek get lost on the main IG pages. Burke smiles, “Used Leica gear, especially esoteric gear, generates traffic who want to talk but don’t want to buy old Leicas.”
Facebook is kept current by Burke himself. “It’s an older crowd I can relate to.” Burke also populates Instagram with product offerings and artwork from manufacturers. These are also shown on Facebook. The team produces stories on Instagram that customers appreciate. In addition, for events or significant new product releases, Service Photo boosts social media posts.
“PRO was the most pleasant business surprise of the last 12 years. The first surprise was how well our customers embraced ProMaster products. Both our customers and salespeople liked their value and broad range,” Burke explains.
The recent additions of Manfrotto, Gitzo, etc., have had a very significant benefit by reducing Burke’s buyer workload. The single source for so many products also reduces administrative costs.
“PRO is more of a partner than a vendor. They have made a significant difference in many areas. We are much closer to Manfrotto as a brand now. PRO has the best delivery and reliability in the industry and that now includes Manfrotto, which had more delivery issues in the past.” Additionally, three years ago, Burke was elected to the PRO board of directors.
Service Photo was also introduced to CRIS, a West Coast repair service, by PRO. Repair margin is slim considering the labor required to service, ship and handle repairs. However, the service does help customers when handled promptly and efficiently. Currently parts are a growing problem. Burke says so far, they are very happy. It seems CRIS has an ability to track down illusive parts needed to quickly complete repairs.
Dealing with Unexpected Financial Pressures
By experience, Burke realizes retailers must know how to weather unexpected financial pressures. In the heyday of film, gray market film was a significant problem. Domestic film offered low, single-digit percentage profits, while gray market film was lower in price with substantially higher percentage margins.
Service Photo never sold gray market films. One of their competitors did without disclosing what they were doing. After Kodak discovered the switch, the competitor was no longer a Kodak Pro Products dealer. Burke ran ads saying Service Photo was the only Kodak Pro Products retailer in Baltimore. The competitor filed a libel suit against him as an individual and Service Photo as a company for $2,000,000.
“You don’t know the pressure when you get a legal complaint served for $2,000,000. It was overwhelming and took away months of my life,” Burke admits.
Fortunately, Service Photo’s insurance covered the defense costs. After six months, the competitor dropped the suit and subsequently closed. Burke still wears the scars of being a defendant in such a legal travesty.
What’s more, burglaries of camera stores are a national epidemic. Burke felt he had a “fortress.” However, during the George Floyd demonstrations, all Baltimore’s police were near the convention center. What were believed to be local opportunists smashed in the front doors and stole almost $100,000 of new and used photo gear.
Burke immediately rebuilt the front area. As a result, a double entryway requires burglars to break through two sets of roll-up security doors to gain access.
The Service Photo Culture
Will Burke ever have branch stores? No, because he respects his “island of misfit toys” team. “We have the most unusual collection of disparate people with one thing in common. They are experienced, knowledgeable, active photographers who want to help others enjoy photography.
“Our team is diverse by design and coincidence. We have built this team over decades. It’s not a cookie cutter model where you can plop one down on every corner or even in every city. You can make a better designed store, a better displayed store, a brighter or flashier store; however, you can’t duplicate the current team’s concern and follow-through for our customers.”
What’s more, Burke’s management style is unique. “It wouldn’t work for many companies, but it works for us. We have such longevity everyone knows their role and the role of those around them. We don’t have a formal general manager position.”
Further, unlike many owners, when Burke’s on a rare vacation, his phone doesn’t ring with team members who don’t know what to do.
In addition, compared to most stores of the same size, Service Photo has significant employee benefits. These include matching 401K pensions; vacation and sick leave; as well as significant health insurance, etc.
Burke emphasizes, “It’s better to hire nice people and get them excited by photography than it is to hire photographic hobbyists and try to teach them to act nicely. You can’t teach nice.”
In addition, Burke wants to recognize his wife and two daughters. “They have to put up with me. They understand what I must do. Small business owners are a different breed, working at least six days a week. I am very fortunate to have the supportive family I need.”
The Service Photo Team
Photo Shows: Pros and Cons
PhotoPlus Expo is an annual (pre-pandemic), large photo show in New York City. Service Photo closes for one day during the show, when they take three busloads of customers and the staff to the event. Other camera store owners question Burke’s sanity over taking customers to events where retailers like B&H and Adorama have an outsized presence.
Burke takes a deep breath. “Our customers know every major retailer on the East Coast. To assume they don’t know them would mislead us.
“What we do is show our customers we’re not afraid of these other retailers. On the bus up to the show, we remind them which product lines we sell. We ask them to figure out their best deal from PhotoPlus, bring it to the store, and we’ll do everything possible to beat it.
“Our customers appreciate it because we’ll also answer questions. And, when asked, we offer suggestions as to what accessories would make their ownership of the product most successful. Customers love being part of the Service Photo family.
“We are hopeful PhotoPlus will resume in 2022, because it generates sales and excitement about photography.”
Additionally, in January 2022, the Imaging USA show will locate at National Harbor, Maryland. Other retailers will exhibit, selling products on the show floor at low margin. However, this model doesn’t appeal to Service Photo. Burke anticipates having product on display that isn’t represented in other booths, because some manufacturers have decided to sit out this year’s Imaging USA.
When it comes to photo shows, Burke’s main message is to remind customers that they exist, so don’t buy from itinerant out-of-town peddlers. Having their booth staffed by long-term Service Photo employees also allows the store to capture long-distance customers seeking a professional relationship with a knowledgeable source.
Moreover, Burke’s not a techno-nut who requires the latest technology toy for his operations. He uses Photoware software from Computyme. “It doesn’t have every bell and whistle; however, it has more than we need. Our people are trained with it; it tells us everything we ask it, and it’s low cost. Why invest money, time and headaches fixing what isn’t broken?” Burke calls it ‘our faithful, old friend’ and is grateful for its reliability.
Burke did try selling on Amazon. It included offering unique products on FBA (Fulfilled by Amazon), which created a nexus in all states. With the changes in sales tax, Burke was contacted by state taxing authorities who said Service Photo must fill out state sales tax returns to prove they didn’t do enough business in each state to collect sales taxes.
Rather than invest in new programs to track these sales and hire people to do it, Burke abandoned Amazon. “The profit margin wasn’t that great, considering the Amazon costs and the fact we’d need to file 45 annual sales tax returns. It just wasn’t worth it for us.”
Is Burke worried about the future? Of course. Rising costs with tentative product deliveries are an uncertainty that could derail the economy.
On the positive side, with the current lack of “instant savings,” retailers and manufacturers are generating more gross margin than normally. Look how few camera stores closed during the pandemic. It’s the boost in margin that allowed them to survive.
Burke also sees growth in the number of new customers who found Service Photo because of product shortages. Many are turning into repeat customers who appreciate Service Photo’s many unique services.
Burke is optimistic about the future of camera retailing. “Our team will help us survive whatever the future brings.”
It is just this steadfastness and dedication to photo retailing, along with the ability to attract customer-oriented, knowledgeable staff, that earned Service Photo the title of Digital Imaging Reporter’s 2021 Dealer of the Year.
All photos, unless noted, © Tedd Henn
The Value of “Re-Gifting”
Burke was waiting on a customer for a camera. The customer said, “I really want to buy this from you, but I have to buy it from Amazon.” Burke, always listening, asked, “Why do you have to buy it from Amazon?”
Burke hates to lose a sale. He considered the situation and said, “We’ll take your Amazon gift card for $100.” Thus, was born Service Photo’s unique customer offering of taking gift cards from Best Buy, Amazon, Adorama, B&H and others. The store confirms the balance on the card, then treats it as a partial deposit on the transaction. The card is used to buy supply items or inventory from those merchants. Thus, the store realizes value from the gift card with just a small additional amount of bookkeeping effort.
What’s more, at a retailer gathering, Burke was discussing how the gift card option is shown in a store poster. One challenged Burke’s intelligence. “Why are you giving publicity to your competitors?”
Burke responded: “I don’t know how smart your customers are, but all my customers know who Best Buy, Amazon, Adorama and B&H are. I don’t treat customers as if they’re stupid. I treat them with respect, knowing they have options about where to spend their money. That’s because I want them to consider Service Photo as a potential source to buy from.
Creating a Great Perception
“The gift card program hasn’t done millions of dollars, but it has done two things. First, it helped those with gift cards get value from us. It’s a stronger bond with the customer than if they just threw down a credit card. We’ve helped them turn that card into cash with the store they want to buy from. Second, it shows Service Photo’s weird thought processes. Every customer who sees that sign thinks, ‘These guys are different. I’ve never seen that before.’ That’s a great perception for Service Photo to build.”