Thomas D. Mangelsen rules a nature photography empire that brings in nearly
$11 million a year.
This business model is called total vertical integration. It's one of today's hottest retail strategies. That's because vertical integration is the ideal way to sell luxury goods, says art and luxury goods marketing expert Ketty Maisonrouge, adjunct professor at Columbia Business School in New York. Luxury goods are what Mangelsen really sells, she adds.
Luxury products -- such as costly nature photos -- don't fulfill a need, but rather, "help create a beautiful dream world and make people feel better about themselves," notes Maisonrouge.
Louis Vuitton, Hermès, Ferragamo, and Chanel are other brands doing precisely what Mangelsen does, with their own stores, or stores within stores. Not only does this approach give them complete control of their exalted brand images, but it's a powerful bottom-line profit-builder. "The advantage of the vertically integrated model is this: You set your price and no one can do anything about it," says Maisonrouge.
"There's no middleman," says one Mangelsen competitor, photographer Rodney Lough, whose four-gallery chain is also self-contained. "We're our own middleman. We get 100 percent of the sale price of each picture, less the true cost of goods sold. That's how we can afford the expensive rents," in the Mall of America and San Francisco's popular Pier 39, he adds.
Although Mangelsen's customers come from all social strata and from all over the U.S., the company's key demographic -- 35 to 65 years old, 53 percent female, average household income $100,000-plus -- is a "typical discretionary-goods profile," says Henricksen. They're also largely easterners, hungry for the magic of the west. "Our largest market outside of a gallery location, in terms of numbers of customers, is Atlanta."
Large-format landscape photo-grapher David Brookover also sees a tremendous hunger in the east for photos of the west. "Sixty percent of my business is east of the Mississippi," says Brookover, whose gallery sits below Mangelsen's Jackson office and across from the Images of Nature gallery. Many of Brookover's customers are wealthy financial professionals who say they can't find anything like his work where they're from.
Eastern expansion is important to Mangelsen -- and it's in the works. The most recent store opening, in May 2005, in Chicago suburb Oak Brook, IL, is the easternmost by far. As for adding more, Mangelsen, who insists that he cares more about artistry and promoting conservation than how many outlets he has, isn't so sure. It costs a minimum of $400,000 to open a new store. But, says Henricksen, "You have to grow or you die."
And let others sell his work? Nope. "Tom doesn't want to exploit his work in a mass-market setting," Henricksen says. The company rejected the idea of selling via cable television shopping channels, the way painter/entrepreneur Thomas Kinkade does.
And what about the day when Mangelsenhangs up his Nikons? No worry, says Henricksen. He isn't likely to stop shooting anytime soon. (In fact, Mangelsen set off for China not long after our interview, and then it was on to Alaska.) And besides, he has 300,000 unpublished transparencies waiting to see the light of day.
Asked what keeps him going, the photographer says his goal is to make images that "touch people's hearts, that are exciting, make people say, 'I wish I could've been there.'"
He pauses. "Or to get images that make people say, 'I was there, and I didn't get that shot!'"