Why these dealers aren’t about to let fewer mask sales deter them
For the last few years, jan/san has been a staple for most independent office supply dealers. For some, it has kept their doors open. But now it’s 2023. While—unfortunately—COVID-19 and its variants remain more than a distant memory, the truckloads of sanitizers, masks and thermometers that were being purchased from any available source at the height of the pandemic have slowed to a normal pace and, in some cases, come to a complete halt. So now what? Does this mean independent office supply dealers should sell their excess jan/san inventory and return to what they know best? Or will they forge ahead, delving deeper into that world until they have made it their own?
Benjamin Keel, vice president of Office Express Office Products, Cedar Rapids, Iowa, says the company started focusing on jan/san in 2017-18 in response to “customers yearning for us to sell facility maintenance products. Then the pandemic hit and forced our hand to increase our focus.”
Today, Keel is adamant: it’s still full steam ahead. “We are absolutely going to continue to expand in jan/san,” he insists. “We’ve been talking with a janitorial company that does a great job in our area regarding a possible acquisition. We hired a facility management director and a senior facility management sales rep. We’ve made it a business priority to train our reps to communicate to their customers the opportunity to buy their jan/san products from us, to drive home that we are a one-stop shop.”
“The biggest growth area based on my research is maintenance, repair and operations—or safety, industrial and janitorial,” says Keel. “Office products are flatlining. We still have growth in the single digits, around 7 percent year over year. In jan/san the last few years, we’ve experienced 28 percent, 37 percent and, in 2022, about 35 percent year over year. I see this continuing.”
Memphis, Tennessee-based Highbar Trading Co.’s largest accounts are in private and charter schools, manufacturing, distribution and laboratories. Cofounder Justin Miller estimates jan/san now accounts for 60 percent of the company’s business, compared with 25 percent for office products and 15 percent for industrial and safety.
Despite spending about 20 years in the office products business and only a few years in jan/san, like Keel, Miller wouldn’t think of dropping this new line: “It’s more fun to sell than paperclips. And while we’ve always sold jan/san, now it dwarfs our office product sales. We always knew it would take over.”
According to Miller, several things make jan/san more fun: “Office products are binary, all ones and zeros. If you have a next-day delivery mechanism and a reasonable price, you are in the game. Jan/san is different. It’s more solution based versus trying to change where someone buys paperclips. There are typically one or two decision makers, and if you are doing your job right, jan/san is more relationship based than just transactional.”
Not all one-sided
And while independent office supply dealers steadily enter the market, some jan/san dealers consider this a two-way street.
“Office products and janitorial supplies go hand in hand, and we are getting more requests from customers asking can we get this or that office product,” says Kim Smith, owner of Smith Paper and Janitor Supply, Eldon, Missouri. “It’s not a full-court press; it’s a new market for us. We are still learning, so we are doing just a bit more than dipping our toes in. We want to add on products as it makes sense. But we now have flyers promoting that we sell office products.” He says the company uses Essendant to ship the office products to its headquarters or drop ship them directly to customers.
Smith says his sales reps are also making progress selling the new items, although he admits it has been challenging. “It’s always an uphill climb when you take people out of their comfort zone,” he says. “People get into a routine of what they know and are comfortable selling. But we are starting to see our salespeople say, ‘Hey, we are already here and you need office products. Did you know we can get those for you?’”
That said, Smith doubts whether office products will ever be a main profit center for the company: “There are a lot of places to buy office products in our territory. Also, a classmate of mine sells a little jan/san but more office products. We have a good relationship and respect each other’s business in our trade area. Then again, you never know. We are close to retirement, so I joke with my classmate, ‘Do you want to buy us out and I will work for you, or the other way around?’”
Smith also believes jan/san offers better protection against heavyweight competitors such as Amazon. “There’s less of a negative impact on sales with jan/san because products come in bigger, heavier boxes, liquid gallons and some are hazardous chemicals, so it’s harder for Amazon to negotiate good freight rates,” he explains. “There’s not a lot of freight with pens and pencils. But if Amazon figures out how to ship the bigger boxes and weight, it will impact our jan/san sales more.”
Prevailing trends
With jan/san products thus now a stalwart of the office products industry, what trends do dealers see already here or on the horizon?
”We tend to be five years behind the East and West Coasts, but greener, safer products made with soybean and orange citrus, for example,” says Smith. “Manufacturers are making progress in developing safer chemicals that do an effective job.” Smith also says it seems every chemical company is coming out with a version of a nonbleach cleaner, such as hypochlorous acid. He warns against falling for “smoke and mirrors” from less ethical manufacturers. However, “any time they can come up with one product that covers more areas of cleaning, it is easier to learn,” he says. “So, if you have one product that is a good disinfectant at this dilution rate and a good window cleaner at a different dilution rate, there is less to learn to sell it than having a ton of products.” It also cuts down on inventory space, he says.
Keel suggests online ordering will continue to soar: “There’s so much retirement going on in the industry and new, younger buyers who want to buy online. We go into clients and create a list of what they buy and put it online for them. All they have to do is click on the janitorial list to order what they need. It is much more efficient for the buyer and makes it much easier for them to buy from us. We still have clients that are ‘old school’ and there is nothing wrong with that. But it’s a changing environment and buyers are changing, so you need an online platform that makes it easier for them.”
Smith has also noticed an increase in online ordering—a trend he expects will grow in 2023. “We’ve done a better job with our online ordering and expect to continue to do well and improve it. That said, I may be old fashioned, but I still think personal one-on-one sales are best and create the most loyal customers.”
Many dealers have said the “buy local” movement has helped their office products business, which seems true of jan/san too. “I used to think it didn’t matter,” admits Miller. “But with all the consolidations, now people seem more surprised to find a company that is local and competent than they were one or two years ago.”
Advice
When asked for pearls of wisdom to share with office dealers keen to break into or expand in jan/san, Miller attributes his advice to a colleague: “A gentleman I worked with said if you are just starting and go after bigger pieces of business—say $50,000 to $100,000—when you are just starting, they are more complex. If you lose the account, you will feel shut down, like you can’t do this and it’s not the business you want to be in. It whittles away at your confidence. Going after the $1,000 to $2,000 a month business is much more palatable, whether you build from scratch or buy a company.”
And Miller has some further practical guidance: “You won’t be able to buy direct until you build up the business, so have a couple of wholesalers—at least two—that, if you show them growth, will support you. Then pay your bills on time. This is very important. It means you need a line of credit and other financial backing. Without it, if you are starting in jan/san, you will just be chasing your tail. Many companies are stretched for cash, so they want longer 60-day terms to pay. You want to give them that flexibility but also pay your supplier. If you can’t do both, it can be a barrier to entry and you’ll be out of the game. You need cash flow, which is the biggest challenge facing dealers no matter what business you are in.”
Miller also recommends doing your homework and choosing suppliers wisely. “Be careful who you partner with,” he counsels. “If I find brands selling a product for less online than to wholesalers and cheaper than I can buy it, why do I want to buy from them? Some brands decide it’s more important to win against other brands at the expense of street business. Go to Amazon and see what cost they are selling products for; if your price is higher, I wouldn’t be interested. You also need to look at your market. When we first started, Georgia Pacific was all over town. Manufacturers want growth, to know it’s a good market for them. They want something in return for partnering with you—market share. It needs to be a win-win for you both to get their support. If Georgia Pacific is already everywhere in the area, it’s not a good partnership for either of us.”
Smith cautions that jan/san and office products are not the same. “Jan/san is a different animal,” he says. “An essential aspect of the business—of any business—is knowing what you are doing. Just as we have to learn office products, you need to be educated in jan/san. Toilet paper, paper towels and trash bag liners are stepping stones. More education needs to take place when you are talking about the chemical side. Align yourself with a chemical company that knows its stuff, offers support and can help you learn about issues like disinfectant kill times. Or take food service disinfectants: if customers use the wrong one, it can damage surfaces and hurt individuals. You need to be educated to talk to your customers.”
And Smith warns that even the “stepping stones” aren’t as straightforward as they once were: “Say 15 or 20 years ago, a standard jumbo roll of paper was nine inches with 1,000 sheets. Now, it’s nine inches but rolled looser and only 500 sheets per roll. It’s important to know these things to be price competitive. Again, it comes down to education.”
Finally, Keel advises: “It’s important to adapt to change and be sure your online platform is working well. And have those conversations. Go to the clients you are selling office products to and tell them, ‘I notice you are spending a certain dollar amount on office products with us but not on jan/san. Is there someone in particular who handles your jan/san? I can show them our program and help you bring it all under one roof. You’ll have next-day delivery, which is easier for your personnel. We can deliver your Clorox wipes with your Post-It Notes and copy paper, which will mean cost savings.’ I once read that the average purchase order costs $80 to $100 once you add up all the time and resources of everyone touching it, approving it, sending it, etc. Wages are the biggest expense in any business, so streamlining vendors can save money not just on consumables, but on time and labor, so your customers can dedicate their resources elsewhere. We always say, ‘If you’re not growing, you are dying.’ It’s a black-and-white comment, but it’s true. If you aren’t doing better than the inflation rate, you are not growing. So, don’t be afraid to go after jan/san. They are using those products, so they should be buying them from you.”
From a jan/san association president’s perspective
Despite inflation, the continued threat of a recession and lingering supply chain issues, Ty Huffer—vice chair and president of The United Group (TUG), a leading buying group for the jan/san industry—sees a lot of opportunity for independent dealers in the sector. “My wife and I used to laugh when she was an executive with the Estée Lauder cosmetics company,” he says. “We’d say our industries may not be recession proof, but they are recession resistant, since women always need lipstick and other cosmetics; and everyone needs toilet paper.”
He believes this still holds despite the significant consolidation going on in jan/san: “There are a lot of acquisitions in our space—many companies are trying to become these massive companies while others are trying to become big enough to be bought out, and I see this continuing in 2023. But people still want that personal touch: they want to pick up the phone and talk to someone. It’s a huge opportunity for independent office product dealers.”
However, he believes the opportunities hinge on several factors. “I say this with love in my heart and not to be rude, but it’s like being pregnant: you can’t be half pregnant,” he warns. “If independent office product dealers want to sell jan/san products, they need to invest in people and inventory. They can’t learn it on the fly. They have to be able to hire a jan/san specialist, someone with years of experience in the industry. They also need to invest in inventory or use a redistributor like RJ Shinner, Essendant or R3 Distribution.”
He also believes success depends on expanding beyond traditional jan/san products.
“2020 was a record year for our members and us because of all the personal protective equipment,” he explains. “But in 2021, we topped it, thanks to food service disposables, containers and bags that restaurants needed for takeout orders. I don’t have the numbers yet for 2022. But our members are on track to match 2021—this time because of packaging supplies and the increase in e-commerce.”
And what does he predict will be the big seller for 2023? “A combination of all three,” he suggests. “In jan/san, the prices of gloves and masks are going down, but people are returning to work. It may be a hybrid model, but they are still in the office two or three days and need clean spaces. They need chemicals, towels and tissues. And e-commerce is not going anywhere. The UPS truck is at our house so much that my wife has a personal relationship with the driver! Packaging will remain strong.”
What other trends does Huffer see escalating this year? “There’s going to be more focus on sustainability, on green cleaning,” he forecasts. “Some places like California and New York are banning Styrofoam and plastic takeout containers, so they will need alternatives.”
Huffer encourages independent office product dealers to join and use TUG as a resource but says many already are members, although they may not know it.
“We give our members access to 200-plus manufacturers and service providers, such as AT&T, consultants and HR companies,” he explains. “We have an affiliate program with Independent Suppliers Group and AFFLINK. So, if you are a dealer and a member of one of these two groups, you are a member of TUG.”
Lisa Veeck is associate editor of INDEPENDENT DEALER and owner of Clean Communications, a full-service content-generating firm specializing in the office products, cleaning and maintenance, and healthcare industries. She can be reached at lisa@cleancommunications.biz or 773-484-7412.