The store sits on the second floor above Kaplan's delicatessen, overlooking New York's bustling diamond district. But crowds climb narrow stairs to 47th Street Photo's main store in search of bargains in cameras, watches, TV sets and other electronic products.

The interior is as plain as the entrance -- simple plywood counters circle the bare salesroom. Most of the salespeople are Hasidic Jews, with long hair, beards, plain black suits and skullcaps. They talk Yiddish to each other.

Although many shops offer comparable prices, this dingy store and 47th Street Photo's newer branches have come to symbolize New Yorkers' distaste for paying retail prices for anything they can buy near the wholesale price.

The company does an estimated $100 million in business every year, and has added a catalogue and a telephone and mail order operation to its stores. At the same time, 47th Street Photo is trying to spice up its image.

Its ads feature computers and microwave ovens, and despite the store's name, photographic equipment now accounts for only about one-third of its sales. The company buys about 20 percent of its products on the gray market, including IBM computers, which supposedly are restricted to a network of 1,900 authorized dealers.

Because of a sluggish computer market, however, many dealers have been willing to sell off excess inventory to 47th Street Photo and other gray market stores. Some IBM offices even bought IBM computers from 47th Street Photo. Last week, however, IBM announced a crackdown on dealers supplying the gray market, threatening to cancel sales contracts with them.

Irving Goldstein, a Hungarian refugee, founded 47th Street Photo 15 years ago with his wife Leah. He still runs the company and sets its tone, but it is no longer a mom-and-pop operation. Computers are everywhere, and the store boasts a staff of knowledgeable buyers. Goldstein does not like to speak to reporters, but Abe Brown, the effervescent general manager, said the company thrives because it picks up national buying trends quicker than its competitors.

It has researchers who go through magazines and out-of-town newspapers seeking hints on what Americans want. As a result of that research, Brown said, 47th Street Photo decided to push microwave ovens in its ads. Microwave ovens, though, posed a special problem for the company, which Brown said must follow Jewish religious laws as well as city, state and federal statutes. Suppose a buyer had heated a cheeseburger in a microwave oven, rendering the oven non-kosher by mixing meat and milk, and then returned the oven to the store for a refund. Would the store be permitted under Jewish law to resell the oven?

Brown said the company took the question to a group of rabbis. They ruled that any oven that is returned could turned on while empty for a period of time. This would ensure that it was still kosher.