Buying Groups: The Essential Edge

Buying Groups: The Essential Edge

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It’s practically a cliché that imaging industry buying groups enable small and medium-size photo specialty retailers to compete on a more level playing field with big-box stores and Internet giants like Amazon. They provide retailers with group discounts on equipment, accessories and services, as well as offer marketing strategies, programs and networking to enhance profitability. But as most buying group members will be happy to tell you, they do a lot more than that.

The two largest imaging-industry groups are PRO (Photographic Research Organization), which specializes in hardware, product design and manufacture, and IPI (Independent Photo Imagers), which provides a wide variety of turnkey marketing solutions, consumables and print-related products and services.
Both PRO and IPI are close-knit communities of dealers whose members are loyal to one another and to their organization, as well as deeply committed to the success and enhancement of all of its members.

Having talked with at least 100 PRO members and dozens of IPI members over the years, it’s significant that every single one of them has had an overwhelmingly positive impression of these organizations, and many considered their membership an essential element in their continued success. That is a remarkable achievement, and a clear indication that imaging industry buying groups are performing a critical function in these times of rapid technological change and this challenging economic environment.

We’ve provided a concise backgrounder on each buying group and interviewed two well-established members of each to get their perspectives on the benefits they derive from their association.

About PRO (Photographic Research Organization)
Founded in 1958 by a pioneering group of six photo retailers, PRO is currently the largest cooperative buying, marketing and distribution company in the photo specialty channel. It has 145 member firms and affiliates, including two in Canada, that operate more than 400 stores throughout North America, and it’s owned and managed by some of the most innovative independent photo specialty retailers in this vast region.

Known as the imaging experts in the local markets they serve, PRO member stores offer a full line of digital and traditional photographic products, including cameras, lenses, related equipment and accessories. Additionally, most PRO member stores offer on-site printing and digital imaging services, film processing and a complete range of supplies designed to enhance their customers’ picture-taking experience.
A market-driven enterprise, PRO also designs and distributes an extensive line of high-quality, high-profit-margin photo equipment and accessories under the company’s signature ProMaster brand. These products are manufactured to their premium specifications and sold through member retail stores and affiliates.
Official Contact: Jeff Neal, vice president, Sales & Marketing, 203-336-0183, ext. 1106, jeffn@promaster.com.

About IPI (Independent Photo Imagers)
Founded in 1982 in Southern California, IPI is North America’s largest buying group/trade association composed of independent businesses operating in both the image archiving (which covers the complete array of printing and imaging preservation solutions) and image capture industries. As a community of more than 500 members owning and operating close to 800 locations in the United States, Canada, Australia, New Zealand and South Africa, IPI is the principal network for independent imaging retailers, providing its members with privileged pricing, expense management, business services, cyber and face-to-face networking, as well as educational and marketing opportunities.

IPI is well recognized in the imaging and allied industries as a leader in innovation and execution of a wide range of programs and marketing initiatives that benefit both its members and consumers.

IPI members offer a unique mix of goods and services to consumers, businesses and government. For example, IPI members provide: consumer, commercial and professional photofinishing; large-format and fine art printing; portrait, on-location and event photography services, including photo booths and coverage at sports, school, dance, church, wedding and other events; photo gifting, framing, creative archiving and memory display services, including photo books and albums; photo restoration, image scanning, image storage and archiving solutions and services; and photo-related goods and services that include photographic equipment.
Official Contact: Brent Bowyer, executive director, president and CEO, 702-617-1141, ipimemberinfo@ipiphoto.com.

                  Perspectives on Buying Groups by Active Members

VIEWS ON PRO

Respondent: Roger Christian, President and Owner, University Camera, Iowa City, Iowa. University Camera is a moderate-size single-location photo specialty retailer that serves the active University of Iowa imaging community and provides a full range of on-site photofinishing services, including the most comprehensive film developing and printing services in the region.

“We’ve been members of PRO since 2005, joining when IPI had an arrangement with PRO that let us affiliate for only $100 a month. As a brick-and-mortar location offering a wide range of cameras, equipment and services, we fit the PRO retail model. Becoming a member allowed us to learn about the organization at little expense and gave us access to a basic version of the PRO catalog, which benefited our business. They offer a unique range of ProMaster products like studio equipment, lighting solutions, tripods and digitally related electronics.

“Even more important, they provide access to an incredible bunch of photo retailers. By networking with them and kicking ideas around, we were able to develop a number of effective retail strategies that improved our efficiency and profitability. We transitioned to being a full PRO member in 2008, which provided access to a slightly wider range of products and allowed us to participate in profit-sharing as well as become a stockholder in PRO, increasing our holdings by increasing our purchases.

“Through this evolving relationship, we are able to offer many innovative high-quality, high-margin ProMaster products, such as the ProMaster Xtra Power Express charger that charges up to four cells in about 20 minutes, and the Mymuvi HD Video Machine that lets users view the movies in their memory cards directly on a TV in Full HD 1080p.

“ProMaster products, including an excellent line of memory cards, allow us to compete in price by cutting out the middleman, and PRO is actually a vertically integrated enterprise that designs, manufactures and distributes products specifically aimed at photo retailers.

“Distributors may see PRO as a competitor, but they also have relationships with many distributors in the field, so they’re a partner as well. For example, they work with D&H, Daymen (Lowepro/Joby), Dennis Daniels Frames, Fujifilm, Lucidiom, OmegaBrandess and many major camera companies. They’re a buying group, designer, manufacturer and distributor rolled into one.

“What I like most about PRO is they run at a high level of efficiency with an incredibly small staff, and their entire operation is streamlined and simple. PRO runs a wholesale warehousing operation like a retail store, and purchasing and ordering on their website is a simple process with an astounding degree of automation. Members buy such a large percentage of their stock from PRO that they know a great deal about our businesses and can tell us, for example, the 20 hottest items we’re not stocking. Their warehouse incentive program encourages members to buy a wide variety of ProMaster products and not just cherry-pick, and their quarterly rebate program rewards members for purchasing a specified variety of merchandise—and it tells you, for example, if you need to order two more filters to qualify.

“PRO is like a fellowship. Members are fiercely loyal and really try to help each other by sharing ideas and information freely, while maintaining a high degree of confidentiality about PRO to the outside world. The bottom line: As a direct result of our membership in PRO, our profitability has improved markedly, and I have upgraded many of our business practices based on the information I’ve received by meeting and talking to other PRO members.”

Respondent: David Sarber, Co-Owner, Sarber’s Camera, Oakland, California. Sarber’s Camera is a single-location store in the posh East Bay, Oakland Hills area that is defined by the upscale 94611 ZIP code. Located in the Montclair Shopping District, the store’s demographic is “a little bit of everything,” including movie stars, band members, family picture takers, serious enthusiasts and part-time pros.

“We do very well with ProMaster-branded products because the label has established a reputation for high-quality and innovative features, and we reap the benefits of their substantial lower cost to dealers and higher potential markup. We offer ProMaster tripods, memory cards, cameras and batteries (that often outperform the OEM originals).

“The staff at PRO is also a tremendous advantage for dealers because it gets advantageous pricing from major manufacturers like Nikon and Lowepro. PRO negotiates with many different manufacturers to get us products at reasonable costs, and we basically sit back and enjoy the benefits of their hard work. Many dealers would not be in business today were it not for PRO.

“PRO is also a community of like-minded people with the common goal of being successful in photo retailing. ‘How can we help each other?’ is our mantra, and most dealers are very forthcoming about what they’ve found to be successful and, equally important, unsuccessful. As many have said before, PRO gives independent photo retailers the tools to complete on a more or less equal footing with the big boys. Even with a small staff, we can increase our overall profit margin, and that’s what allows our store to survive and flourish.”

VIEWS ON IPI

Respondent: Chris Lydle, Owner, Chris’ Camera Center, Aiken, South Carolina. Chris’ Camera Center is a single-location store situated in a “sophisticated little city or big town” that’s in a huge county about the size of Rhode Island and has a population of nearly 175,000. The store’s customers include everybody from casual picture takers to serious enthusiasts and pros. Its demographic is equally distributed between men and women, ranging from lower middle class folks “who really have to sacrifice to take pictures” to upscale consumers. About 50% of the store’s income comes from hardware, the other half from services.

“We joined IPI about eight years ago when Brent Bowyer, the executive director, touted me on its social benefits. I’m a very social person so the community aspect was very important to me, but it soon became evident that IPI also provides significant creative buying opportunities as well. Their MSP marketing program is a turnkey operation that provides a huge range of design templates for products and marketing ideas that include e-mails you can send to your target audience as well as in-store signage.

“IPI also offers solutions for every possible photo output stream, including processing machinery, and online solutions like 4EverPics, an app that enables people to order prints from their smartphones and lets us compete directly with big-box stores. 4EverBooks is a parallel system that allows our customers to order custom photo books online.

“Indeed, IPI lets us save money on virtually all the printout products we buy, including silver halide photo paper, chemistry and inkjet paper, and they have an excellent program that covers a full range of wet or dry printing equipment and kiosks. IPI helped us a lot when HP got out of the retail printing business and left many retailers, including us, looking for alternatives. They really saved the day by providing us with support.

“But perhaps the most important thing IPI provides is interactive member support, with the most active online forum available. IPI training takes advantage of every possible service and has more info in one place than anything else in the industry. And at IPI, you know the people you’re talking to come from our side of the photofinishing counter, and most of them have been dealing with the same exact problems we’re facing.

“To cut to the chase, these days any store that has a photofinishing line must be a member of IPI or simply declare bankruptcy. And any photo specialty dealer that specializes in hardware should definitely belong to PRO. Those with one foot in each camp (I call them Mugwumps) should belong to both; in fact, according to Brent Bowyer, out of the 145 members of PRO about 80 are also IPI members.”

Respondent: John Albright, Owner, Fromex Photo & Digital, Long Beach, California. Fromex is a single-location store that’s been in business for longer than 30 years and serves a varied clientele that ranges from family photographers to serious enthusiasts and pros.

“I am a cofounder of IPI, so naturally we’ve been a member since 1982. We do all our photofinishing in-house, including film processing and printing, and 75 IPI dealers send photofinishing to us. In fact, we have the only full-scale film lab in the area. We do everything from scanning video and custom framing to printing on aluminum and on canvas, and virtually any other printing service our customers demand. About 25% of the store’s business is conducted online.

“Frankly, without IPI we wouldn’t be in business. IPI members are survivors because we share information, we learn and we care about each other. There used to be 30 labs in Long Beach and now there’s only one—us. IPI provides great marketing materials, info and preferential pricing on photo paper, chemicals, inkjet paper, scanners, etc., and it also has partners that get us discounts on everything we purchase.

“It’s a buying group that has evolved into a marketing solutions provider, but the reason we succeed is that we’re a family. When you join this group, you get more than enough information, support and real-world benefits to make your business grow. It’s definitely the place to be if you’re in photo services, and you can rest assured is has helped every single one of its members to survive and prosper.”

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