Fall is the time of changing leaves, pumpkin-flavored everything and, for students, the return to school. For most independent office product dealers, who have been preparing for this since early summer, it is a challenging yet profitable season.
Market percentages
Education accounts for 35 to 40 percent of the $6 million-plus annual revenues of VIP Office Furniture and Supply, Hinesville, Georgia. While the company sells to some university systems, the bulk of its education sales are K-12.
So what are its hot-ticket items? “Markers and dry-erase boards are huge,” says president Barbara Pilkinton. “So are composition books and easel pads, which are used in the classroom daily. We sell some electronic add-ons, like mice and keyboards, but not a huge amount of them.”
Arkansas Office Products, Jacksonville, AR, has annual sales of $2 million, an estimated 15 percent of which are in the K-12 education sector, with the bulk coming from K-6. The company sells to public, private and charter schools. Interestingly, its top sellers to schools are not the traditional office products one might expect. “We used to sell a lot of marker boards, but they have pretty much gone by the wayside,” reveals CEO Steven Pawloski. “We sell the most gloves, even though COVID-19 isn’t as much of a focus as it was. We don’t ask what they use them for, but we know they use a lot in the special education departments.”
Office Centre/Teacher’s Pet, Crowley, Louisiana, has average annual sales of $3.5 million. The education segment generates 70 percent of these, with early childhood through K-5 accounting for about 40 percent and the rest coming from K-6 through 12. While the company has two full-time stores and a seasonal satellite retail store, much of its revenue comes from high-dollar items. “We do anything classroom—a lot of educational furniture, lockers, window treatments, stage curtains and full playgrounds,” says CEO Jason Guillory. “We don’t sell computer hardware or software, but pretty much anything and everything else, so we always have some projects going on.”
AAA/Business Supplies and Interiors, San Francisco, California, recently merged with Palace Business Solutions to become northern California’s largest independent office supply dealer. Its biggest customers in education—which accounts for 35 to 40 percent of total sales—are K-12, although it also services several junior colleges and universities. Executive vice president Gary Trowbridge runs through the sales leaderboard: “Crayola products are number one—they are huge sellers. Next would be Dixon Paycon; then Sanford products. Since COVID-19, sales of 9×12 laptop boards have been big. They are more sustainable than paper for practicing writing and sustainability is big in California.”
Yet sustainability is sometimes merely a buzzword in the education market, he suggests: “The state and federal governments are all about sustainability. But the schools want the lowest price and the best quality. If something costs 10 or 20 percent more, they say no. It makes selling in this market interesting.”
At Emerald Business Supply, Philadelphia, Pennsylvania, an estimated 30 percent of annual sales are to the education sector. Of these, furniture accounts for 20 percent and office products 10 percent—two figures that have doubled in the last five years. “Right now, we don’t sell much to higher education because that’s not our focus,” says Nick Faragasso, director of workplace solutions. “We have four good sales reps focused on K-12 and we’ve had lots of success there.”
Odd but true
The dealers we spoke to have all seen their fair share of unusual orders over the years. At VIP Office, Pilkinton cites mattresses as a standout: “It was years ago for a university’s dorm rooms, but it was definitely unexpected. Today, it would be hard to be competitive.”
AAA’s Trowbridge recalls one rather baroque standing order: “For years, we got orders for Make Your Own Slime kits.”
By contrast, Arkansas Office Products’ most memorable requests were more utilitarian. “We got orders from just about every school for Dawn dishwashing soap,” says Pawloski. “Of course, schools have cafeterias, but they have commercial-grade dishwashers that use commercial soap. We still sell one or two cases per school—maybe it works great for removing crayon.”
Emerald president Mike O’Connell says that pre-COVID-19, bathroom furniture partitions and air filters and purifiers were somewhat unusual sellers.
However, Teacher’s Pet might well be the winner of the oddest educational sale contest. “Funny you should ask,” responds Guillory. “Just this week, a teacher called and was looking to create an outdoor classroom. She had a picture of a gazebo with benches but said she could only find it in the UK. I haven’t sold one of those in the 30 years I’ve been in the business. But our motto is to try never to say no. So I called a buddy—a contractor who built my house—who said he could build it and in two days, we had a signed purchase order (PO).”
Trying times
Faragasso acknowledges that fulfilling large orders from schools can be challenging for Emerald: “We sell to a lot of schools in New Jersey. We have some big contracts, but we don’t have cooperative contracts. If you don’t have a cooperative contract for office products, a school can only buy $16,500 from you annually.”
He goes on to observe that timing can also prove an issue: “In the education market, the timing of projects can be more pressing, with all of the teachers ordering at the same time. Teachers’ books open in May and they order in June/July. All the orders coming in at the same time means longer lead times from furniture manufacturers. That’s why we encourage our teachers to order as soon as possible.”
Jaret Lyons, Emerald’s vice president of sales, reveals that decentralization can cause further headaches: “Some of the less-advanced education facilities are not centralized with one buyer or purchasing system. It can be challenging to try to find and get to know the many different buyers, so you may be getting business from the school but not the full business. That’s why having sales reps to ask the right questions to find out about other areas and forge relationships is so important.”
Meanwhile, Pilkinton suggests that a lack of organization in schools can have knock-on effects for the team at VIP Office: “Some school offices and classrooms are chaotic, with so much the teachers have to do. The drivers will make a delivery, but the teachers don’t have time to check the order right away. It can be as long as a week or two before they discover something is missing. Also, because they are busy, teachers often go by the picture and don’t read the product descriptions. They don’t realize the product’s size or the number they are getting, so our drivers have to go back. Our returns are relatively small, but we do business with minimal resources. If our drivers have to go back twice, it’s costing us time and money.”
Trowbridge says supply chain issues are an ongoing hassle for AAA, especially when suppliers implement new technology: “When a company puts in a new computer system, the process always runs at least six weeks behind schedule and one of them does this just about every year. Sometimes, it can back things up as much as six months, so you are not sure you will get the product on time. We also had a month’s wait from one of our big suppliers because it didn’t have enough employees. And imports have to go through the Suez or Panama Canal. With all that’s happening in those areas, they’ve cut the number of ships that can go through at a time by 40 percent, so the ships have to line up and wait, which adds time and cost.”
One of the biggest problems for Teacher’s Pet is competition, although not from other area dealers. “We try not to step on each other’s toes,” explains Guillory. “But the competition for playground building can be more challenging. However, if you have the relationship with the school, that’s half the battle because they want to do business with you.”
The big “A” and buy local
All the dealers we spoke to agree Amazon is a force to be reckoned with in the education sector, particularly in the more traditional office products market.
“Amazon is a huge factor for everybody and COVID-19 really hurt a lot of independent dealers because they weren’t set up to deliver school supplies to homes,” says Trowbridge. “Before COVID-19, most schools weren’t allowed to buy from Amazon. Now, every school has an Amazon account.”
Trowbridge reveals that Amazon’s sheer heft in the market makes it tough to compete with: “Some manufacturers give Amazon better pricing than dealers. I know the big dogs get better pricing based on volume, but the manufacturers are selling some high-use items for 20 percent below cost. If it’s a big contract, sometimes we have to sell for 10 percent below cost, which gives Amazon an even greater advantage.”
Yet most dealers believe there are ways to fight the behemoth.
“It’s price versus cost,” says Trowbridge. “We tell our customers to go to Amazon if they want the lowest price; but if they want the lowest overall cost, come to us. We offer next-day delivery and a PO management system so each teacher can’t exceed their budget. We also load over 5,000 POs per school district into the system for them. Amazon doesn’t do that. We provide proof of delivery within an hour so a teacher can go online and see where it was delivered and who signed for it immediately. Amazon can take a picture but it can’t get the signature. Our school customers know our drivers; we deliver orders with one truck and one label. The schools don’t have five deliveries coming from four different third-party sources.”
AAA also uses what some may initially write off as an old-school approach until the genius behind it shines through. “We still produce a catalog,” Trowbridge explains. “It’s about 100 pages with about 1,800 products. We do it because teachers can’t have computers in the classrooms, and they can’t order on their phones or the unions will make the school pay for all the teachers’ phones. So, with the catalog, they can look it up, write down the product number and get whoever orders to place the order.”
Arkansas Office finds it advantageous to highlight the local money trail. “Schools have to support local businesses to get sponsorships and donations,” says Pawloski. “If they want us to support them, they have to support us. If a high school has a relationship with a local banner company and buys from there, that’s fine. But if they are buying from a huge online company instead of us, we are probably not going to donate to them. And when customers buy local, that money stays here. A company headquartered in Florida is not going to come to Arkansas to go out to eat or buy a car. Some people working for Amazon drive here from 50 miles away. They bring their lunches with them and they take that money back to where they are from and spend it there. Our money stays in the community.”
Guillory agrees: “Teacher’s Pet is generous; we donate and sponsor charitable golf outings (see page X), and other sports, church and Chamber of Commerce events. You don’t see Amazon signs out on the football fields—at least, not in our rural area. We support our community and it supports us.”
But Pilkinton isn’t convinced: “Buying local matters to some people—VIP has a core group of customers who want to pick up the phone any day of the week and talk to me. They know us and like to know who they are talking to. But many in the new generation of buyers want to get what they need with minimal clicks.”
O’Connell recognizes Amazon’s strengths but suggests that ultimately, Emerald is not overly worried: “There’s price, but there’s also service—the ability to deliver large bulk orders and orders tailored to the customer. We can get orders for 200 items and get them wrapped, labeled and to the right classroom, where Amazon doesn’t know who ordered what or where it goes.”
Lyons adds: “Competing with Amazon is all about relationships. Amazon is great at a lot of things, but there’s no human interaction. Ultimately, people want to buy from people.”
Advice from the trenches
Trowbridge goes on to take stock of stocking: “Before the merger with AAA, Palace stocked about 800 products. Now, we have 10,000-square-foot and 18,000-square-foot warehouses and stock about 3,000. Stocking more product was a good move given the instability of the supply chain. I’m not sure how business would be if we were not a stocking dealer.”
He also advises dealers to piggyback on existing PEPPM contracts instead of trying to bid to schools themselves. “If you partner with PEPPM, you don’t have to bid because the contract already exists for the school to buy from you,” he explains, giving OMNIA as an example. “You usually pay a fee of between 2 and 4 percent, but because of the partnership, schools can buy millions of dollars from us at already agreed prices. It’s a win-win.”
Pawloski confirms that Arkansas Office Products also stocks, but recommends only warehousing bulk items and products that sell quickly. His top tip is equally pragmatic: “How many pens can you sell to the higher K-12 grades? If they need pens, they go to Walmart. But as seniors, we noticed an opportunity that’s been big for us and helped us sell more to these grades: banners and awards. Grades 7 to 12 give out lots of awards and all the seniors want banners. Say you have seven seniors wanting banners at $10 apiece. That’s a quick $70. But then figure that you’ve got maybe 52 seniors per school. How many pencils do you have to sell to make that? Plus, it gets us into the high-school districts. Word spreads fast. They go to play another high-school team, see a banner and ask where the school got it. Of course, you have to check the competition. This probably isn’t a good idea if you have 50 banner makers in your area.”
Pilkinton counsels patience: “None of VIP’s education sales were easy. You don’t just get a massive contract. It takes time to build relationships in the school systems. It sounds cliché, but there are no shortcuts. They have to get to know what value you can bring to the school. You have to meet people face to face, interact and find ways to address their needs.”
Guillory suggests getting to know your customers: “Build relationships with the supervisor, the principal, the superintendent. When I go on a cold call, I look around the office. If I see a picture of the customer with his son or hunting, I tell them how I spent 14 years coaching baseball or that I have a cabin in Texas where my son and I go hunting. I strike up personal conversations, not give a sales pitch. Some are receptive; others shy away, but they usually call back.”
As for Emerald, “Look out for us,” half-jokes O’Connell and his team before Lyons gets serious: “Our secret sauce is our people. You can have a game plan, and we can give advice. But if you don’t have the right people, it’s not going to work.”