PROFOTO FINANCE CASE STORY: ROOT STUDIOS
In 1994, Oleh Sharanevych decided to move on in his profession and started a full service rental house with Isaac Litchfield. The company they founded was named TREC and rented lighting equipment to photographers – fashion photographers in particular. Oleh and Isaac grew their business, and the company flourished. Today, TREC has evolved into the Root Group, which spans two locations offering several services, including everything from fully equipped photo studios to fashionable event premises and video retouching facilities, to name a few.
When Oleh and Isaac founded TREC, they immediately recognized the need to differentiate their company from the competition. Inthis case, the brand of choice came to be the unique selling point.
“Before we started TREC, I was a salesman,” says Oleh. “At that time, Profoto was an up-and-coming brand, and I always told my customers about this nice, creamy light that was absolutely perfect for skin tones and fashion. One of the first major customers that I convinced was actually Annie Leibovitz. I also got Albert Watson to change from Norman Strobes to Profoto. This was quite difficult to do, since Albert had named his son Norman after his lights. So when I started TREC, I thought that If I have to choose a brand that makes me different from everyone else, Profoto will be that brand.”
The next step in ensuring the company’s future was to sign a leasing contract.
“Leasing is not important,” says Oleh. “It’s very important. The logic is simple. Root pays a certain rental fee to Profoto, and we then charge a higher rental rate to our end customers. I‘m not sure what the lease rates are now, but we would traditionally pay USD 30 for USD 1,000. Let’s say you lease a Profoto generator and a head that’s worth USD 10,000 in total. This would then cost us USD 300. Of course, you can rent the generator many more times than that. The whole thing is just set up to work.”
The leasing contract that Root now has also includes other benefits, such as preventative maintenance and extended warranty, and Oleh emphasizes how valuable these services are for his studio. They now know exactly how much the equipment will cost and there will not be any unpleasant repair bills.
“As a rental studio, keeping your maintenance costs as low as possible is absolutely crucial. The repairs can really drag you down if you’re not careful. The preventative maintenance and extended warranty obviously make this a lot easier.
“All in all, I would definitely recommend leasing to anyone that’s in the rental business. I think that’s true throughout the entire rental industry, not just the photography industry. Tool rental, car rental – it’s all based on renting at a lower rate and then re-renting at a higher rent to the retail market. It’s basically what makes the business go around.”