I am currently doing some extra work for a camerashop here in Sweden that I've worked for before in the summer. There are four stores in total and is regarded as one of the main companies in Sweden selling photography gear. We do not compete on price but in cusotomer service and expertise (I think there is no one working there without a photography background or at least an interest for photography. Especially in the actual stores, there is not a single employee that have some sort of customer relations that is not a photographer or a cinematographer either porfessional or enthusiast.
Granted, we do serve customers that are only looking for a good deal but our main customer is the one who wants the expertise of the staff, a fellow photog to discuss gear and other stuff with. We do have quite a lot of gear on the shelves that people can play with but cameras and lenses are usually locked up in viewing cabinets that are unlocked when needed so the customer can play with the cameras and lenses
As I wrote before, we do not compete on price but on service. Professionals and enthusiasts choose to go to us, even some gear heads that know quite a bit (or think they do). My point being that there is a market for this kind of stores. Granted, some complain about we sporting higher prices than for example mediamarkt or other "walmart-like" stores. Most people however are willing to pay for the service and the honest opinion of our staff. Not saying it is all green grass and flowery fields, the industry is tough and the pseudo-monoploy of Canon and Nikon is the least appriciated by the stores.
And for a side note: In Sweden the store's actually buying gear from the distributors rather than "paying back" to the manufacturers once sold. I honestly doubt that that's the way it works in other countries. I think that Calumet stop getting shipments because they didn't pay for the gear they bought.