Office Supplies In Demand
Offering office supplies adds up to quality customer service and a bigger bottom line.
As distributors continue to evolve from forms-based enterprises to suppliers of printed products and related services, the office supplies and consumables market has emerged as a solid profit center with room to grow.
Totaling more than $30 million in sales in 2001, office supplies accounted for more than 7 percent of BFL&S's Top 100 Distributors' sales, continuing the overall trend toward diversification and demonstrating the market's sustained capacity for growth.
With such remarkable figures to boast about, BFL&S set out to find the story behind this profitable market's burgeoning potential.
Jeff Green, president and CEO of Print Data, Hopelawn, N.J., said his company's initial entry into the business products arena was purely market driven. "A few of our customers asked if we knew where they could buy office supply items because of our forms business," he said. "Then we discovered that as forms distributors, we could purchase myriad other products wholesale in addition to forms."
As the company began to research the market, it realized its other customers could benefit from this service as well. Further research indicated that business products could be as lucrative as forms, and possibly even more so if sold and marketed properly. This is due to the diversity of the product line and its relatively higher profit margins.
With that in mind, the company began vigorously promoting its new services and looking for new clients. It wasn't long before they found success.
"In the past year we've sold 25 percent more business products than in the prior year," noted Green. "And sales have increased 500 percent over the past five years."
Green said he also anticipates substantial increases in this product line's sales for many years to come. However, as rosy as the market's future may appear right now, some companies have been in it for awhile.
Take Allied Office Products for instance. Instead of offering business products as a way to recover revenue lost in the printing market like many distributors, "Allied actually started out selling business products," explained Stuart Friedman, vice president of the Clifton, New Jersey-based Allied Printing Division.
But even with a 25-year lead on forms suppliers new to the office supplies market, Friedman said the one service that has contributed to the company's success more than any other has been online procurement.
Just six months after launching its new e-business infrastructure in 1999, the company's average Web-based order surpassed those made by traditional means by nearly $14 per order. Now, Friedman said, with so much of the legwork associated with traditional accounts distilled into a few keystrokes, reps can handle three to four times their previous sales.
"Our sales have increased nearly $300 million since July 1998," said Friedman. "And with our Web-based orders growing every day, we expect to reach our goal of $400 million to $500 million in sales very quickly."
Online office supply ordering has also played a role in Liberty Data's success. Sam Young, president of the Houston-based company, said the Internet is going to change business in the future, and it's also a great way to lure customers into doing business and keep them coming back for more.
"With online or-dering, if distributors can get clients to their Web sites and become familiar with their features, it's just one more hurdle the competition has to cross," said Young. "Plus, because customers are exposed to so many other products, the opportunity for larger orders is limitless."
Good Service is Key
Of course, online ordering can only help to bolster existing business. Rarely, if ever, does a client come on board simply because a company is offering Internet-based sales. This means, then, that good service is the key to success.
At least that is what President of Joliet, Illinois-based Independent Forms Service (IFS) Dave Puntney has found.
Though IFS does not have its online ordering system in place yet, Puntney said so far it hasn't hurt the company, mainly because IFS's philosophy is rooted in offering good service above all else. Nevertheless, Puntney is counting on the new system to add substantial dollars to last year's $5.4 million in revenue. Until then, he said IFS will accommodate its customers the old-fashioned way—with great customer service.
"In most industries, the more completely one can satisfy his or her customers' needs, the less likely they will be lost to a competitor," said Puntney. "We started offering office supplies as a service and that's how we view online ordering—as a service."
Yet for most companies, distributors aren't the only game in town. Ever since the first big box office supply store opened, everyone from Fortune 500 companies to companies with a staff of one have had the opportunity to shop and compare office supply prices at a number of retail outlets. In the face of all this competition, many distributors are wondering whether they have a chance at survival. The answer is a resounding, Yes!
"Nobody else has the ability to turn on a dime the way a distributor does," said Green. "This holds true for service, advice and pricing. As long as those conditions exist, the distributor will grow and flourish."
Young agreed. Though initially many distributors' retail competitors were able to offer a lower price, that eventually changed. What they never had in the first place, Young added, was quality service on par with a distributorship, which makes all the difference.
"When Office Depot first came into business, it was selling computer paper below our cost," said Young. "Today, it doesn't have the killer prices it used to and we're finding that people are highly interested in receiving better service.
"In order to survive in the future, you must provide the services your customers want, whatever they may be," urged Puntney. "Office products can be offered without stepping out of the realm of what's already being provided, and most companies lump their forms and supplies into the same category anyway."
By Allan Martin Kemler
- Companies:
- Allied Office Products
- Print Data
- Places:
- Hopelawn