"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.
The Internet is raising the standard for retailers.
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.
Shortly thereafter, Shin added a bar-coding system. By passing a wand over the various products prior to packing them up, workers were able to match orders in the database to actual shipments, and the inventory manager was able to see which models had gone out the door.
From the get-go, Shin went the extra mile for his customers, retail and mail-order alike. He staffed the phones with a sales force of professional photographers (or photographers with day jobs), who could guide callers through the technical complexities of camera selection. If customers weren't happy with their purchases, they could return them for a full refund, no questions asked. In one instance, a company selling five-year extended warranties on Camera World's equipment went belly-up. Though Shin was under no obligation to do so, he set up a fund to cover the cost of repairs for the customers who were left hanging. "We make customers very happy, and they remember we give service, service, service. Repeat customers big part of our business," Shin recalls in emphatic, if stilted, English. "We never cheat. If customers happy with service, they trust us."
"We had to completely change the mentality of the organization," says Mulvey.
In the early 1990s, despite Camera World's computerization, a confluence of external and internal problems began to slow the company's growth. The market for the high-quality 35mm single-lens reflex (SLR) cameras in which the company specialized had flattened by the late 1980s and stayed that way, thanks to a saturated market and a recession. Until digital cameras appeared on the scene, in 1998, the market for SLRs never moved substantially beyond the 700,000-units-per-annum mark. By 1999, according the Boston-based market-research firm Lyra Research Inc., the number of 35mm SLRs sold in the United States had actually declined to 600,000.
Shin's management style also kept Camera World from rising off that plateau. His operations gave new meaning to the phrase lean and mean. He selected office supplies, shipping companies, telephone services, and other necessities on the basis of low price, and replaced equipment only when it fell apart. The company had long outgrown its warehouse, but Shin balked at moving from the low-rent building.
"Mr. Shin ruled with an iron fist," says the company's longtime buyer, Shawn Weishaar. From a glassed-in loft perched above the retail store, Shin would keep a sharp, Big Brotherlike eye on his workers' activities. Employees did stay -- they were well paid by Portland standards -- but because promotions were few and far between, their motivation waned as the years passed. "Mr. Shin had great insight, but he didn't allow mistakes," says Weishaar. "He wanted full control over everything."
