Many distributors assume office products yield single-digit profit margins and tiny orders (think a dozen pens). But printing pros who take a consultative approach to office product sales can ink new, substantive business.
Law Firm Gets Better Filing System
Although office products account for 75 percent of distributorship S&T Office Products Inc.'s sales, Vice President Patrick Crowley talks more about selling productive solutions than selling ink cartridges and pens. In June, a sales representative from the distributorship suggested to a law firm that it could increase productivity by improving its filing system. The law firm agreed, and S&T Office Products won a $35,000 order.
Many companies use static filing systems
where the floor-to-ceiling shelves are fixed. St. Paul, Minn.-based S&T
Office Products introduced the law firm to a track filing system in which
shelves move back and forth. The system allows the customer to store more
folders in less space. Also, the folders are color-coded to ensure files are
stored correctly.
S&T Office Products also offers
technology-based solutions. "We have spent and invested heavily in our internet
capabilities," Crowley says. Approximately 200 of the distributorship's 6,000
customers use its bar code scanning technology, provided by Eagan, Minn.-based
Jump Technologies Inc. (www.jumptech.com).
When a customer needs to replenish an office product, he uses a hand-held
scanner the size of a matchbox to scan a bar code located on a product, on a
label, on a contract or in a catalog. The scanner holds all necessary ordering
information. The customer then connects the scanner to his computer with a USB
port. Using software provided by S&T Office Products (originating from Jump
Technologies), customers then upload the data from the scanner directly into a
shopping cart located on S&T Office Products' web site. This limits the need
to search for a specific office product on the distributorship's web site, which
offers thousands of office products. Crowley says the technology, which S&T
Office Products launched a year ago, has been successful and triples the speed
of customers' online ordering time.
S&T Office Products is one of the largest independent contract office supplies dealers in the United States. The distributorship has 140 employees and four offices in Minnesota. Its 40 sales representatives have two primary responsibilities: account management and new-account development. Contract office furniture accounts for 25 percent of the firm's sales. Law firms, which make up a large segment of its business, require custom products such as legal pads and promotional items. The distributorship supplies office products efficiently because it's part of the TriMega Purchasing Association (www.trimega.org), which enables the distributorship to combine purchasing resources with other firms.
Crowley says major national retail stores such as Staples and Office Depot offer tough competition. To beat them, Crowley says the company offers a "total value proposition" to its customers. Instead of focusing on price, those clients consider S&T Office Products' services such as next-day delivery, free freight, 100-percent-order-filled success and account representation, he says. "As competitive as it is, there is still a tremendous amount of opportunity as long as [companies] are creative in how they approach their market," Crowley says.
Partnerships Help Both Sides
Sonny Arora is big on change. "For the small distributor, no matter what business you're in, there's always a different angle that you can take when approaching a customer," says Arora, president of Lakewood, N.J.-based distributorship Action Office Supplies. For Arora, that meant expanding the company's office supplies business into one that offers additional products and services such as printing capabilities and machine servicing. "It sets us apart," he says. "We're a one-stop shop." Although office products account for the majority of Action Office Supplies' sales, Arora says dabbling in printing and machine servicing has enabled the distributorship to grow significantly.
This doesn't mean Arora has bought a few presses, hired some press operators and begun cut sheet work in house. That wouldn't be cost-effective, he says. Instead, Action Office Supplies teams up with printing firms that don't want to deal with office products. Arora says several printing firms have signed agreements to give his company referrals in exchange for a commission. Distributors who want to sell office products to complement their printing sales can partner with an office products distributor that can be trusted, he says. "Our software system costs $38,000," Arora says. "Then there are the recurring maintenance charges, lots of staffers and the customer on the phone for a half-hour to order two print cartridges." These issues likely would frustrate distributors, so partnering makes sense, he says.
Another way to sell office products is to offer them on a limited basis, Arora says. "Limited" means that a distributorship would sell them only to clients ordering a certain amount (say, $20,000 a year) or only to its largest customers. An ideal situation is to have three or four customers who order $400,000 worth of office products annually, he says, But companies offering office products to everyone should expect to deal with customers who place small orders.
Office products wholesalers often shy away from smaller print shops, and it's important to help end users lose the perception that independent dealers can't compete with superstores on service and price, Arora says. "Most of these small- and medium-sized companies don't realize they're overpaying for dealing with a name brand [such as Staples]," he says, adding that distributors who join buying groups can get the same (if not better) products cheaper. Plus, distributors can work with local vendors willing to work on thin margins, nevermind the often added-bonus of free freight and overnight shipping. "The environment is very ripe for some independents to get in the business," Arora says. "There are very few dealers...it's perfect timing."
Kara Gebhart, a freelance writer in Cincinnati, is a former
assistant editor at Print Solutions. Email us your comments at bholt@printsolutionsmag.com .
5 Ways to Conquer Competitors
1. Offer computer-related supplies. Don't limit yourself to highlighters and pens--also offer toner, ribbons, machine servicing and other complementary products and services. For the past five years, providing desktop printing supplies has been a large portion of St. Paul, Minn.-based distributorship S&T Office Products Inc.'s business, says Vice President Patrick Crowley. Offering digital tapes for data archiving is smart, too, he says.
2. Join a buying group. "Buying groups allow you to buy direct like Staples, as long as the collective group meets minimum requirements," says Sonny Arora, president of Lakewood, N.J.-based distributorship Action Office Supplies. "There's quite a few that we belong to. It basically allows us to play in [superstores'] playing field." Buying groups work like this: Distributors place orders through a buying group, which groups orders together. The wholesaler receives larger orders, resulting in rebates and discounts.
3. Target medium-sized businesses. Businesses with more than 250 employees likely qualify to purchase their office supplies directly from wholesalers. Businesses with fewer than 15 employees likely send an employee to stores like Staples once every few weeks. Businesses with 15 to 250 employees are perfect targets for independent distributors: They're too small to buy direct and they're too big to take care of the necessary purchasing on their own.
4. Offer office products online. Many office products dealers offer 30,000-plus items. Offer your clients an easily searchable web site. Action Office Supplies offers an online software package that enables dealers and distributors to sell office related products online. For more information, visit www.opcommander.com.
5. Focus on added value. To compete with major players such as Staples and Office Depot, don't focus on price when trying to make a sale. Instead, focus on services such as free freight, next-day delivery and CSR representation.
