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When Something Clicks
To understand
how Cameraworld.com operates, view the company through a wide-angle
lens. Founded in 1977 by a Korean-born businessman, Jack Shin,
Camera World began as a 4,000-square-foot mom-and-pop shop
for shutterbugs in a musty downtown area of Oregon's sprawling,
river-straddling city. Shin had come to Portland by way of
New Jersey, where for about two years he'd owned a camera
store that catered to well-heeled amateur photographers with
National Geographic daydreams.
From the moment
he began his business until the day he said good-bye to Camera
World in 1997, Shin refused to sell the cheap "gray market"
goods that many dealers were hawking at the time -- a practice
that stood him in excellent stead with his suppliers. (Gray
market refers to goods that are not meant to be sold in
the United States and generally are not covered by warranties.)
Building on the relationships he'd established in New Jersey,
Shin developed close contacts with executives from Fuji, Canon,
Nikon, and the other rulers of the photo world. Ultimately,
he constructed an intimate universe comprising 15 primary
suppliers.
"The gray market
is a big problem for the industry," says Eliott Peck, director
and general manager of the camera division of Canon USA. "Canon
has had an excellent relationship with Camera World because
the company adds value to our products. It's always provided
the best customer support, sold only fresh merchandise, stocked
all our products, and had very loyal repeat customers." On
a scale of 1 to 10 among camera dealers, Peck adds, "I've
always given them a 10." In return, the manufacturers saw
to it that Shin was first in line to receive new or on-order
stock.
Shortly after
opening the retail store, Shin added a mail-order component
to the business. "Mail order was easy -- we didn't have to
speak much English," explains Young Ui Shin, who acted as
her husband's business partner and interpreter. The Shins
and Young Ui's brother ran the mail-order business in a space
five floors above Camera World's street-level retail store,
which also doubled as a warehouse. Their goal was for customers
to receive their merchandise within five days of placing their
order, compared with the standard mail-order lag of three
to six weeks. Within 10 years the company was earning close
to 70% of its revenues from the distant customers it reached
through back-of-the-book advertisements in magazines like
Popular Photography.
On the back
end, Shin put together a supersimple order-fulfillment and
shipping infrastructure that the company still uses today.
Prior to computerization, sales staffers would write a phone
order on paper, then send along a copy to the warehouse for
picking, packing, and shipping. Working with those paper "pick
tickets," warehouse workers would pull the cameras and lenses
(and occasionally camcorders and televisions, which Camera
World also sold) from the shelves and place them in plastic
tubs. Before the items were packed, other workers checked
to make sure that the products matched the order, recorded
the product serial numbers, and filled out a receipt. Then
shippers packed the items and loaded the boxes onto a waiting
UPS truck, which carted off the packages every afternoon.
If an item was
out of stock, the warehouse workers would pass the information
along to the sales reps, who would find out from Shin when
the shelves would be replenished, so they could tell the customer
when to expect the order.
Returns were
handled similarly: When a customer called, a sales staffer
issued a return number and ordered a UPS pickup at the customer
site. When the product came in, the return number was recorded;
if the package had been opened, the product was sold at discount,
since it could not be returned to the manufacturer or sold
as new.
The paper-based
system stayed in place until 1992, when Shin discovered that
a networked computer system could increase efficiency. He
purchased a set of Compaq 386 computers, one of which was
installed in the warehouse area, and a Platinum database-management
system for which he had a consultant design a unique order-fulfillment,
inventory, and shipping program. Using the new system, salespeople
keyed in orders on PCs at their desks. Hourly, a warehouse
worker would download and print out a batch of orders for
picking and packing. The computerized system allowed Camera
World's sales reps to maintain an easy-to-access record of
customer purchases; it also allowed Shin to keep better track
of inventory and to speed up deliveries. The Shins' five-day
shipping goal had become a consistent reality.
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