When Ryan Puccinelli and Bryan Freund graduated from the University of Illinois, they knew they wanted to start an office supply franchise someplace warm. They had a friend in Tempe, Arizona. So off they went to open their business there. The only thing lacking was any knowledge of the industry.
“We knew absolutely nothing about the office products industry,” says Puccinelli. “To give you an idea of how little we knew, we charged our first customer $135 for a carton of paper—10 percent below list. We ended up crediting the customer. I like to tell this story because it shows how we truly had no idea about the office products industry.”
Yet through “shoe leather and elbow grease,” the duo learned the business. So much so that in 2010—just three years after setting up shop, and despite the 2008 recession—they opened their second corporate office in Houston, Texas.
“When we opened, it was just the start of the recession,” Puccinelli recalls. “We didn’t have any customers to lose. We were looking for business and a lot of customers were looking for alternative vendors to save money. So the timing turned out to be good for us.”
Today, IQ Total Source recently added a third corporate office in another warm spot—San Diego, California—following its acquistion of Office Advantage (see page 6). Its four franchises are in Columbus, Ohio; Orange County, California; Kansas City, Kansas; and Tampa, Florida.
Not an e-tailer
While 99 percent of IQ Total Source’s business is online, Puccinelli wants to make it clear the company is “not an e-tailer.” “We are a B2B business, but most of our customers have always wanted to buy online,” he says. “That is our core model—a model that includes WISE: ‘wildly insane service experience.’ Customers can order online, then contact us through our live chat, the phone, email or in person—whatever works for them.”
COVID-19: challenges and wins
“We had a strong 2020 despite COVID-19, and I attribute this to our being nimble and flexible,” Puccinelli says. “We were able to pivot our model to sell cleaning, disinfecting and PPE products.”
Puccinelli does not think the impact of the pandemic is over. “It is an interesting point in time as companies try to decide what business model to return with,” he says. “People are reluctant to come back to the office. They are waiting it out, the effects of which will probably be felt through the third or fourth quarter.”
This wait-and-see attitude is presenting some difficulties. “Getting new business is more challenging,” Puccinelli acknowledges. “People aren’t jumping to make vendor decisions. Sales cycles take a little longer.”
Yet in the areas most important to the company, Puccinelli believes IQ Total Source emerged from the shutdown a winner. “We didn’t have to lay off one employee during the pandemic,” he says. “In fact, we hired during it. This was very important to us. I think my job title of chief culture officer sets the tone about our culture, our people and our values. We want always to be a company where people want to work.”
Puccinelli is confident this business model will continue to serve the company well in the post-pandemic world.
“COVID-19 certainly changed the industry, but we are incredibly optimistic about the future,” he says. “In the next five to 10 years, I envision IQ True Source growing, especially through acquisitions. We will be focused on finding the right opportunities for acquisitions and moving on them. I also see us growing organically, as well as through additional franchising opportunities.”
While it started out selling strictly office products, IQ Total Source’s inventory is now more diversified and Puccinelli encourages other independent dealers looking to thrive to follow suit.
“Diversification is important, especially in what I like to call ‘spike categories,’ such as furniture, print services and promotional products,” he says. “And today, about 50 percent of our revenue is janitorial and facility supplies; breakroom supplies are big. Being able to supply product for customers in multiple areas leads to stronger relationships and better profitability.”
He also believes flexibility will remain critical to IQ True Source’s success, and that of other independent dealers. “We have to continue to pivot and evolve,” he says. “Business is not going to be the way it is today forever. We have to remain ready and willing to invest and to pivot as needed.”
Year opened: 2009
Number of employees: 25
Key management team:
Chief culture officer: Ryan Puccinelli
Operations manager: Levi Scott
% of business online sales: 99%