The Distributors Channel Moves Forward

The Distributors Channel Moves Forward

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Distributors live in that crucial space midway between manufacturers and retailers. Only the best ones endure and prosper by providing essential services to both their suppliers and their retail customers that increase efficiency and profitability at both ends of the retail spectrum.

In an age of shrinking profit margins, rapidly changing technology and a still challenging economy, distributors enable photo specialty retailers and other small-to-medium-size retail channels to compete successfully with big-box stores, large consumer electronics chains and Internet aggregators like Amazon. In the current retail environment, they continue to play a pivotal role, offering significant benefits to retailers and vendors alike by configuring, executing and supporting more effective, efficient and profitable business strategies and working relationships.

Distributors are deeply involved in helping retailers like you maintain lean inventories, enabling you to tailor your ordering requirements to your immediate needs rather than the demands of manufacturers and suppliers, optimize your product mix to suit rapidly changing conditions, and reap the benefits of just-in-time shipping programs. They’re also deeply involved in promotion, sales and service at both ends of the business, providing the knowledge base and financial infrastructure that deliver maximum flexibility plus the obvious benefits of bulk pricing and fast delivery for smaller orders.

Typically, distributors also provide such business services as marketing analysis keyed to your store’s demographics, timely updates on the latest products and trends, plus a host of management skills. Many also handle operational details ranging from returns and credit approvals to invoicing—even collections.

They’re definitely in business to make a profit, but for many independent imaging resellers, the services and benefits they provide make perfect business sense. In short, a good distributor maximizes your flexibility and agility so you can run your business smoothly, efficiently and predictably, despite the inevitable economic ups and downs.

To give you a clearer picture of how distribution is evolving, how distributors are responding to changing trends in the imaging marketplace, and an overview of the hottest emerging product categories, marketing strategies, services and convergent products, we interviewed five leading distributors and asked them to give us their candid views.

Jeffrey Seidel, Director, Sales & Service, OmegaBrandess Distribution
OmegaBrandess, founded as Simmon Brothers of enlarger fame over 70 years ago, is a privately held company that offers about 10,000 discrete products from dozens of branded lines in the imaging space. We serve upward of 400 retailers, and our goal is to be a one-stop shop for everyone who needs the latest photographic accessories at attractive prices—accessories are what we’re all about.

Not a lot has changed in the last year, but we continue to add product lines that appeal to the mobile lifestyle and are now focusing on products that change smartphones into high-performance cameras. These include ways to mount the phone on tripods, use them as monitors for digital cameras and adding lenses and filters that refine the photographic capabilities of these devices.

Another growth area for us is in accessories that take advantage of the tremendous popularity of the GoPro camera and similar models. We now offer cages for these action cameras that allow the shooter to mount all types of accessories, like lights, microphones, grips, filters and more. Some even accommodate an external lithium-ion battery to extend the video-recording time of the camera up to four hours. Other products such as the MogoPod allow the mounting of a camera and then extending it up to 10 feet overhead for creative shooting angles. We are also looking into robotic tripod heads that allow the camera mounted on it to track its subject in real time—perfect for the GoPro crowd and action photographers/videographers in general who want to be in the picture rather than behind the camera.

Coming back down to earth, we have seen strong growth in the lighting category as well, particularly as it relates to off-camera flash. The Phottix line of Mitros flashes and Odin radio triggers keeps growing and garnering fantastic reviews. The success of these items brings along with it increased business in all related items, such as soft boxes, brackets, mounts and stands.

Distribution is becoming more challenging, but we feel it’s more important than ever for small and midsize stores to support distributors like us. We have no minimum purchase requirements, but we’re still able to offer retailers popular product lines at competitive prices. We take the risks of stocking new brands and new product categories, and we provide retailers with the opportunity to try new things without investing lots of money in a risky proposition—one of the most important ways to grow one’s business in this period of rapid technological change.

We’re also committed to serving niche markets others tend to ignore. Whenever there’s a hole in the market, we do what we can to find different products to fill that void. And, as every retailer knows, the profit margin is in accessories, and these days that definitely includes wireless stuff, external hard drives, battery packs for the iPad, smartphones, etc.

Essentially, what we offer retailers is in-depth product knowledge and the ability for smaller specialty dealers to take advantage of our large-scale quantity pricing. We pass along the lion’s share of the savings to our dealers. That’s why we’re becoming an increasingly important connection for smaller dealers in helping them to compete with the big boys, and to survive in a fiercely competitive environment by combining attractive prices with their strongest suit—one-on-one relationship marketing. omegabrandess.com

Matt Sweetwood, President, Unique Photo
Unique Photo is a major retailer that began and still functions as a major distributor, and we’ve been committed to distributing photo supplies and related products since 1947. The major distribution trend that’s been accelerating over the past few years is that our reseller customers have been ordering smaller amounts more frequently, and this cuts two ways. On the one hand, the positive service aspect is that we provide same-day shipping on 25,000 different products, which allows retailers to keep their cash “loose” and inventories lean by ordering only what they need on a just-in-time basis. This is a crucial advantage for small stores with limited resources.

On the other hand, there is no doubt that, due to economic uncertainty in the camera and photofinishing/minilab businesses that consume processing chemicals, paper, etc., we find stores are being very cautious with their purchasing. Those are the two factors causing our retailers to order less but more frequently, and it’s not unusual for our reseller accounts to order on a daily basis. As a result, this turns out to be an effective distribution strategy for us and for retailers as well. In contrast, other vendors typically have a high minimum order amount and a relatively slow turnaround time, making it more difficult for retailers to reap the benefits of having a just-in-time inventory.

In terms of product trends, we’re gratified to see a growth in Fujifilm Instax sales, which makes us smile because it reminds us of the good, old days of Polaroid. And as everyone knows, there’s been a steady decrease in point-and-shoot camera sales. In today’s market, the sale of compact DSLRs is mostly driven by the release of new products, and that’s what motivates consumers, so sales tend to spike when new cameras are released. Overall sales of accessories such as camera bags, tripods and lenses have remained steady, which you can read optimistically or pessimistically, but in any case this is a lot better than a steep drop.

In terms of distribution, what really differentiates Unique Photo is that we have such a high service level, ship 99% of our orders the same day, and we aim for a 100% accurate fulfillment model. We understand that our retailers are ordering inventories just in time for good reasons, and we make it our business to deliver on that promise. uniquephoto.com

Doug Weaver, Business Manager, Photo Specialty Division, WYNIT

WYNIT was established in the late 1980s and has been evolving ever since. Our entry into the photo business was unconventional, taking a quantum leap with the advent of the digital revolution and later backing into traditional products like black-and-white film. Our list of suppliers includes a few hundred manufacturers, and we serve several hundred photo retailers overall. Our mission is to offer products and services that are relevant and profitable for our customers and also for our suppliers.

What differentiates WYNIT? We’ve evolved into a company that serves a range of differentiated, vertically integrated market segments with focused business units. Our company is rooted in the photo business—that’s where we came from. We were instrumental in the launch, seeding and initial success of some of the first digital cameras from Nikon, Canon and Kodak into retail channels. We were the source for digital cameras when they were new. Today, our photo business unit is made up of people that eat, sleep and breathe photo and understand the special needs of your individual business. Indeed, our motto is “We make it our business to know your business.” We’re one of the largest photo distributors in the U.S., big enough to service multiple warehouses but specialized enough to meet your specific needs.

One of the questions keeping me up at night is, “Where will the camera evolve outside of mobile and who will be the key manufacturers of these devices?” With all the momentous changes we’ve recently seen in our industry, we can only assume the next “game changer” is just around the corner. Will the professional camera still be a DSLR? Will it have glass lenses? Will it have f/stops and shutter speed controls? Will it come from a known camera manufacturer, from a technology giant or from a start-up? What type of accessories will it use? These are the products we need to be vigilant in seeking out. These are the products we need to bring to our dealers.

Another big question that keeps me up at night is, “What will the photo retail dealer channel look like in five years?” As the business has evolved, we’ve seen many customers in the photo retail channel struggle to find their niche. Many have embraced new strategies, including online marketplace sales, training, repairs, business-to-business sales, etc., in an attempt to thrive. Some have found success adding different product categories to their mix.

WYNIT strives to be a valued partner in this journey. We are not merely a source of products for our customers to sell. We deliver unique dealer programs, we support dealer events, and we are a trusted source of industry knowledge. In addition, we are tirelessly searching for the next new product that will drive customers through the doors of these retail stores. This is more than just a good business strategy. Over the years we have made many good friends in this business. We would like to be doing business with these folks in the decades to come, whatever the future hardware looks like. 

Some hot product trends I see this year are action cams and accessories. Anything that enhances the capabilities of a GoPro camera has the potential to be huge. Also, this year we’ve seen more camera stores begin carrying cell phones. Accessories that complement the photo/video experience of cell phones are still a growth category. 3D printing, a new category for WYNIT, also has many unique applications in photo.

In summary, we expect sales to be strong this year. Despite the deep freeze that has embraced most of the country this winter, our sales have been strong. As the weather continues to warm and temperatures rise, I expect sales to do the same! wynit.com

Paul Zakrzewski, Director, Marketing, Manfrotto Distribution, Inc.
Manfrotto Distribution, Inc., was originally established as Bogen Photo in 1950. It is our mission to import and distribute the brands designed and manufactured by the Vitec Group, including Gitzo and Manfrotto photo supports, Manfrotto video supports, Manfrotto LED lighting, Manfrotto bags, Avenger lighting accessories and National Geographic bags.

In the U.S. market, we also represent Elinchrom lighting, Metz flash systems, Gossen light meters and Rotatrim cutting devices. Manfrotto Distribution, Inc., markets and sells all of these categories to its extensive authorized dealer network. Manfrotto continues to expand our portfolio of product offerings. As an example, we have recently brought to market a complete line of pro-level LED products for on- and off-camera use, as well as three brand-new lines of camera and video bags that meet the highest standards of amateur and professional photographers and videographers. 

Service, innovation and quality are what we stand for and what we provide. For the past 20 years, distribution strategies have leveraged technology to drive efficiency and accuracy, improvements that ultimately lead to savings to the bottom line. Robust WMS (warehouse management systems), pick-to-light and voice-pick technologies are a few examples of these approaches. In the last few years these productivity-based initiatives have become essential in meeting the demands of our customers.

Purchasing entities have grown to realize the value in engaging their vendor and aligning systems for receiving inbound goods for quick receipt. EDI capability as a requirement exists with virtually every larger volume retailer, and it factors in as an important part of the overall workflow. And advanced-ship notifications enable retailers to reconcile purchase orders with relative ease and to receive goods in a fraction of the time.

Customers also look to vendors to develop strategies for optimizing their specific inventory levels to ensure their on-hand inventories are adequate to satisfy consumer demand yet controlled enough to minimize the square footage needed to store goods. Demand-planning systems and volume analysis expertise are becoming essential.

The fastest growing trend among larger retailers is to demand that vendors’ distribution systems provide e-commerce solutions that integrate with retailers’ systems. This allows for the smooth exchange of data and, in some cases, enables direct fulfillment, facilitating a much faster turnaround to the consumer. As retail partners become more sophisticated, it is critical that we as a manufacturer continue to evolve with all of the new technologies and workflow demands.

Manfrotto Distribution, Inc., will continue to deliver great innovation in products, service and the overall customer experience. manfrotto.us

Mark Roth, President and CEO, Argraph Corporation
Argraph has been in business for over 60 years, and we’ve been able to succeed by hewing to the traditional values that retailers espouse—fast, complete delivery, sourcing new and profitable products, providing information that keeps dealers current, and, of course, great customer service.

We represent about 50 accessory brands, many of them exclusive to us, including Pana-Vue, Sirui tripods, Marumi filters and Samigon accessories. Basically we’re doing what we’ve always done, but we’re also very responsive to changing technology. Pana-Vue has been making quality slide viewers for eons, but their Pana-Scan line is perfectly positioned for the ongoing analog-to-digital conversion market. We also represent QP Cards, an innovative color calibration and management system that includes a free downloadable software package. We see this as another upmarket category going forward.

The Sirui line of ultra-high-quality tripods, heads and tripod accessories has been extremely successful. We’re really pumped about the ingenious new line of Sirui PS monopods with a ball head toward the bottom that gives photographers the unique ability to swivel, pan and move the camera while the fold-down stabilizing feet are firmly planted on the ground to maintain impressive steadiness when shooting stills or video. There are four new models in the PS series, one in aluminum and three in carbon fiber.

As more casual shooters transition to becoming serious enthusiasts, accessory sales will inevitably increase. We also feel the trend toward increasing smartphone camera use is creating opportunities that we, along with everybody else, are seeking ways to monetize effectively. We are constantly looking for new high-margin products with unique capabilities that we can bring to our dealers to increase their sales and profitability, and we know that more than ever we have to run a super-efficient operation to deliver on this promise. Whatever challenges we may face, we truly believe that 2014 will be a great year for the photo industry. argraph.com

Rob Eby, Vice President, Purchasing, D&H Distributing
At D&H, we are emphasizing sports and outdoors as a niche market for digital imaging sales. It’s a challenge to compete with in-phone cameras in the same market. Therefore, we’re looking to recreational models as a “sweet spot” for retailers. For example, several manufacturers offer “trail cams” with high-definition and infrared LED features for hunting and other outdoor activities; or action camcorders, including watertight models. Such devices are gaining momentum as electronic sporting gear as opposed to pure photography tools, and enthusiasts are willing to make purchases that satisfy their hobbies.

The distribution business continues to change as mobile devices such as smartphones and tablets achieve a higher market penetration, and as camera models improve to compete. Most manufacturers are trying to move the actual selling price upstream, especially in the DSLR and compact system camera categories. More sophisticated enthusiast-aimed models and interchangeable-lens, mirrorless cameras are now competing head-to-head with DSLRs in this upscale market segment.

As a distributor, it’s our role to make photo retailers aware of the growing array of offerings from different manufacturers in these high-growth areas, and to teach them how to maximize revenues from these transactions with strategies such as accessory add-on sales. dandh.com

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