The dawn of a new year is the perfect opportunity to set and achieve new goals. However, this doesn’t mean the slate is wiped completely clean at the stroke of midnight. Some trends will stay with us, others will fade away and be replaced, and new challenges will arise. While no crystal ball can predict how the road in 2025 will map out, a select cohort of seasoned independent dealers discuss the industry’s hottest topics and what may lie ahead. Lisa Veeck explains…
Overall perspectives
“I don’t think there were any dramatic changes in 2024,” says Myers Jordan of Herald Office, Dillan, South Carolina, reflecting on the year just past. “It was more a continuation of what has been going on for the past five years: sales of office products declining while breakroom and furniture increased. I see this trend continuing in the new year.”
Robbie Clark, president of A-Z Office Resource, Nashville, Tennessee, suggests price increases stabilized in 2024 and hopes this will continue in the new year. He also witnessed the playing field level off: “We saw some softening of the competition—at least in the Tennessee market. Staples and Office Depot were less of a factor in 2024 than in the past, especially in invoicing and accounting, which we can customize for clients. Local dealers should regain some footing as some customers are souring on buying everything from Amazon and favor a return to a service model. Amazon will always be a competitor, but I think people value customer service and having a driver they know. Amazon is more of a threat to Staples and Office Depot and should become less of a threat to independent dealers moving forward.”
Charlie Kennedy, CEO of Kennedy Office, Raleigh, North Carolina, observed more Amazon-fueled price shopping and a surprising uptick in furniture sales in 2024. Still, he is hesitant to make overall predictions for the year ahead: “I have no idea what it will bring. In 2022, people were back in the office and we felt things were returning to a more normal product mix. Then, in 2023, it shifted, and we saw a drop in furniture and general sales. Last year, it bounced back.”
Beth Freeman, executive vice president of FSI Office, Charlotte, North Carolina, highlights the trends she believes will prevail into 2025: “This past year, we saw more customers using technology—more punchouts, more integrated software systems, things that used to be reserved for large customers. There are pros and cons to this: it ties us in better with our customers, but there is an added cost for the technology and maintenance to keep it up. Also, technology is getting smarter, so it’s easier for customers to compare side-by-side pricing.”
Janitorial
All the dealers we interviewed emphasized that diversification is essential for independent dealers seeking growth. “A few mom-and-pop dealers can survive selling just office products, but once you bring on an employee or want to operate on a larger scale, you have to get into other products to survive and grow,” Clark summarizes. “Dealers are increasingly looking at breakroom, maintenance, repair and operations, IT supplies—areas that are non-office products. This trend will continue.”
One of the categories dealers have turned to in recent years, ignited in part by the COVID-19 pandemic, is janitorial supplies. So how might this fare in 2025?
For Kennedy Office, ongoing success in the jan/san sector relies on commitment. “Our focus in jan/san in 2025 is to get dispensers into customers’ facilities,” explains Kennedy. “Dispensers equal committed customers. They can buy can liners from us, but they are less committed if they don’t get dispensers that need refilling. The same is true of coffee brewers. These create consistent customers, which we need since people aren’t buying as many office products.”
Herald’s Jordan points to a less favorable trend in the janitorial supply sector. “Outside of acquiring a jan/san company, it is hard to compete in the sector,” he admits. “ISG can help some, but you can’t buy direct from Georgia Pacific, Tork, Kimberly Clark and the big manufacturers with distribution protection and high minimums. Finding the right partners and lines to compete is an uphill battle. But I still think the sector will remain a focus for dealers.”
Breakroom
Meanwhile, Kennedy suggests that the boom in breakroom sales should continue into 2025 as employers seek ways to encourage employees to return to the office. “One thing that emerged in breakroom in 2024 is snacks,” he says. “We’ve been selling soda, coffee and drinks for a while, but snacks really exploded. As for the kind, people say they want healthy ones and we include them on the list. But what people actually buy are the unhealthy snacks—those are the ones they reorder. Various types of chips and granola bars are among the top sellers.”
The other dealers echo this assessment and Freeman adds a green factor to the mix: “There’s been more emphasis on sustainable food service items—cups, plates, straws. I see this continuing. Part of the reason is there is less of a cost disparity between green and nonsustainable options than in the past. We also see manufacturers doing good things in these areas, like reduced packaging.”
Furniture
Furniture is highlighted as another promising space for independent dealers. “We’ve had better furniture growth than in the past, as there was a lot of government funding this year, especially in education,” reports Herald’s Jordan. “Dealers are also investing more in this sector than before, hiring designers and purchasing software. After all, getting a $200,000 order for furniture is easier than office supplies.”
So, what type of furniture is likely to be a focus in the new year?
“There’s a reason Hon is performing so well,” Jordan muses. “The company has an outstanding product, an outstanding warranty and a good price. It speaks a lot for the popularity of the mid-range furniture market outside architecture and design entities. I see this continuing.” Jordan also suggests the trend toward soft, lounge-like furniture should remain dominant.
Clark agrees the mid-price range is the one to watch in 2025: “At A-Z, we’ve seen a big surge in furniture in the last couple of years, especially in mid-market lines. Customers aren’t buying the expensive lines as they want to refresh sooner—every three years rather than every 10. As for the trends, they follow what the manufacturers are doing, and their furniture is now more minimalist. Furniture for shared spaces and multifunctional areas will remain popular.”
Freeman predicts: “I see furniture continuing to do well, with no slowdown in 2025. FSI already has orders booked for the first half of the year. The projects are bigger in scope and revenue than in the past, and the less transactional-style furniture is selling.”
Kennedy Office is also contracting larger projects. “I can’t say why, but we have bigger projects than ever, with more people redoing their offices,” says Kennedy. “In the last two years, we’d get maybe one really big project a year. This year, it’s been consistent each month and we already have some big ones lined up for 2025, so I have a good feeling about furniture moving forward.”
In addition to shared soft seating, Kennedy has seen an increase in outdoor waterproof seating for hotels, banks and other businesses. There has also been an uptick in outdoor accessories such as trashcans that won’t blow away, umbrellas, patio tables and items for smoking areas. Indoors, light wood colors reign supreme and Kennedy doesn’t see this changing in the near future.
Buy local
Opinions on the “buy local” trend are mixed. “Amazon wouldn’t be the size it is and be growing if more people were buying local,” observes Jordan. “The idea of, ‘Do me a favor and buy from me with higher prices because I am local’ won’t last indefinitely. But ‘buy local’ continues to be relevant if you can deliver the same level of service as Amazon.”
Kennedy echoes this sentiment: “A lot of people talk about buying local, then buy from Amazon. The funny thing is Amazon’s prices aren’t that great—people just get used to ordering from there. We have a lot of loyal customers, but even with some of them, once an item is a dollar over whatever figure they have in their head—whether it’s $50 or $100—they go online to check the pricing of e-tailers in general, and Amazon is the main one.”
Freeman agrees that price is still king: “People like to give you a lot of lip service—they talk about wanting to work with diverse local businesses—but when it comes down to it, you have to check off those boxes for them and still be the lowest price. Also, customer purchasing is more fragmented than in the past. Our sales approach is to be our customers’ single source, but some customers just see us as an office product or breakroom company. They don’t see independent dealers as broad and all-encompassing.”
Clark suggests that ultimately, the success of “buy local” campaigns will hinge on what dealers put into them: “The trend will stay strong as long as those saying it live it. If you say you are part of the community, you have to be part of it. We’ve invested a lot of money in networking and we participate in nonprofit events. We do local advertising and get involved in local organizations. If you continue to do these things, the message will be effective; but if you don’t participate in your local community, it won’t work.”
AI
AI exploded in 2024 and Jordan, for one, “hope[s] it is here to stay”: “AI has become a buzzword for many things, but adapting to new technology at some level is important. We use ChatGPT and Gemini to help with things like contracts, internal memos and building out a marketing plan.”
Kennedy Office has reaped similar benefits. “We are redoing our website and using AI,” reports Kennedy. “It has also helped us create marketing, emails and handbook policies. If we have a spreadsheet that is not divided right or needs to be in Excel, we use AI and it enters it in Excel for us. But we’re careful not to use it for sensitive or customer information. I definitely see AI growing in the coming years and becoming part of our lives. We just have to figure out what that means.”
Freeman also sees value in using AI to handle repetitive tasks and increase overall productivity, but warns that discerning fact from fiction could become increasingly difficult in the future.
Next-day delivery
Kennedy admits he still vacillates on the importance of next-day delivery: “With everything we are doing, it’s hard to promise next-day, especially for janitorial, and be competitive. It’s also hard because Essendant and S.P. Richards haven’t been great on stocking over the last few years, for various reasons, although they are improving. I see the importance of next-day lessening for customers, but we still do it and brag about it, as it’s one of the main things we do better than Amazon.”
Freeman also suggests next-day is diminishing in significance: “It’s less of a requirement than it used to be and customers are demanding it less and less.”
Tariffs and other economic factors
The potential impact of the incoming Trump administration is another known unknown for 2025. “If tariffs are imposed, this will affect us in some way, shape or form,” Jordan acknowledges. “We are a distributor of goods and a service provider—imports are a huge part of our business and the supply chain. When the ports were shut down for two days, it affected us. Gloves are already back on allocations. Tariffs on Mexico will affect the American manufacturers that have operations there. But it won’t all necessarily be negative. We are just the middleman, so if tariffs raise prices for all of us, we will all be on the same playing field. The price increases may make things tighter for customers, but the increases will be across the board, so there won’t be a dramatic difference between suppliers.”
At FSI, concerns about possible tariffs are customer driven. “Something I hear customers saying they are keeping a close eye on is what happens with imports,” says Freeman. “They are looking to source products from countries other than China and to have multiple supply options. We are already trying to figure out some alternatives for our customers. But good luck finding something as simple as a small heater that isn’t made in China. It could get interesting.”
At A-Z, Clark isn’t worried about potential tariffs: “Tariffs don’t concern me if they are done correctly. Last time, they didn’t create more unemployment and the economy was okay. I am more concerned with interest rates and inflation, which won’t come down until the government stops spending.”
Staffing is another issue. “The good are highly sought after and won’t stay unless they get paid a lot of money, which the big guys can pay,” Clarke continues. “But there’s also a decline in the quality of candidates. There’s not much in between the top and bottom of the barrel. The mid-level, who would take a post where they can learn and grow, no longer exists. Pre-COVID-19, I would receive 50 to 60 resumes a day for a driver opening. Now, I’m lucky to get 50 a week. There’s been a slight uptick in applicants in the last four to five months, but it’s something to keep an eye on.”
Consolidation
Our interviewees suggested that M&A activity should remain healthy into 2025. “Consolidation will continue in all industries,” predicts Jordan. “I don’t know whether it will hit the wall once all the baby boomers have retired, but acquisitions are a wonderful way for dealers to stay in business and expand. I honor what has been built by the previous owners and see this as a way to preserve their legacy.”
Clark also believes consolidation will continue, with “more dealers buying up non-traditional dealers, such as breakroom and jan/san companies.”
Kennedy suggests some consolidation can be attributed to confusion: “I am 55 and am considered relatively young in our industry. Some younger people are going into the family business, but not many. Most dealers have expanded into different areas—breakroom, furniture and jan/san—but we still call ourselves ‘office products dealers.’ We lean on our history, but we shouldn’t. It’s confusing for the next generation, who are not sure what we are as an industry.”
Advice
So, what final insights have our interviewees to share as we cross the threshold of a new year? “The thing that stands out to me is the need to change how we go to market,” says Kennedy. “Most of us have veteran sales reps who have not learned how to adapt to all the different categories we now offer. We try to repurpose those reps, but that’s not easy. It is also harder to find the right buyers, as we see fewer customers and sales teams have not adjusted to that. You need to hire some younger people and/or specialists in the different categories. Also, veterans don’t want to go out and find new customers. One thing working for us at Herald is looking at year-on-year spend for customers with multiple locations. Say six were active last year, but four spent a lot less—go to those branches and get them back. It’s easy, low-hanging fruit. We’ve had a few success stories doing this.”
Freeman recommends: “Stay aware of what is happening around you, but don’t take your eyes off your business. Keep moving but see the macro picture of what you need to focus on to do well; then, do it the best you can.”
Wishing you all a very happy, healthy, and profitable 2025!