As sales of office products slow, independents look for different categories to grow sales. Coffee, snacks and cleaning supplies are just a few of the non-office products items that dealers sell today to enable them to grow sales and market share.
By Michael Chazin
Dealers have almost always sold other product categories in addition to office supplies to help grow sales and provide a one-stop shopping experience for customers. Recently, however, the move to broaden the product mix has gathered momentum as office supplies sales continue to decline. Here’s a look at some of the new categories independents are adding.
Digital marketing drives jan/san growth
When Phil Barnette joined EVOS Inc., Chandler, Arizona, some 16 months ago janitorial sales were nothing to write home about. “We were an office supply company that dabbled in furniture and jan/san,” says Barnette, vice president sales and marketing. “One of my focuses is to become more of a jan/san and furniture house that dabbles in office supplies.” Since he came on board, Barnette reports, jan/san and breakroom sales have increased between seven and nine percent.
To generate jan/san sales, Barnette has targeted every customer in the dealership’s database with email campaigns and did-you-know campaigns to establish the janitorial category. He relates a conversation he had with one customer recently that really summarizes the challenge of growing sales in the category.
“That customer looked at us as an office supply house and had no idea that we sell all the different categories that we do,” says Barnette. That could be the biggest challenge that the dealership faces; getting office supply customers to understand that janitorial supplies are also available. With that as a backdrop, the marketing approach comes down to the need to target everybody.
For instance Barnette might pull a list of customers who spent a certain amount the previous month but didn’t buy any janitorial items. Everybody on that list is sent a coupon to buy janitorial product. “When your own customers don’t even know you do this, what about the new prospects you are trying to reach in the Arizona market?” says Barnette. Many have not heard of EVOS; those who have identify it as an office supply company.
Much of the janitorial offering is sourced through wholesale. “Since Essendant is our supplier of almost all things, I rely on them heavily to bring on new products and expand their product line,” says Barnette. Much of the janitorial inventory is items that are not available through wholesale. For example EVOS sells a towel and tissue line that it purchases from a source in California. “It is a proprietary product that allows us to be somewhat different in the market,” says Barnette.
When new janitorial sources are being evaluated one criterion that is always looked at is the availability of digital marketing materials. “Every time we meet with somebody offering to sell us product not stocked by Essendant, we ask them for digital marketing materials,” says Barnette. Those digital materials are turned over to an internal team, which builds marketing pieces to take to market.
The marketing effort at EVOS concentrates on developing digital marketing pieces and campaigns for janitorial supplies, and for the most part is not challenged by product knowledge details.
“Small to medium-sized customers don’t have heavy demands for product knowledge,” he says. “In many cases customers are just looking for a competitive price on roll towels or a better price on tissues.” It is only when larger customers are approached that issues might arise that call for specialized knowledge of cleaning chemicals or similar product. “We’re not there yet in terms of knowledge,” he adds.
An additional challenge might be acquiring that product knowledge. “I spend way too much time chasing suppliers, where suppliers should be chasing me,” says Barnette. It appears to be a symptom of the times. At the top of the supply chain contacts are trying to save their jobs with consolidations, mergers and acquisitions taking place as the backdrop. “So much energy is being devoted to that aspect that there’s not a lot of energy being spent getting in front of customers,” he adds.
As far as sales training is concerned, Barnette has used Essendant’s Jan/San Boot Camp but the focus there, his salespeople say, is more on product knowledge than on sales techniques. Barnette relies on his own past experience as a sales trainer to provide his sales team with as much training as possible.
The challenge remains to let the customer base know all of the janitorial products that EVOS can supply. “We have to get that message out bigger, faster and quicker,” says Barnette. “Get the right message to the right person at the right time.”
School sales drive growth
Six years ago, Findlay, Ohio-based FriendsOffice seized the opportunity to increase sales to the K-12 market. Under the leadership of Nancy Sarson, director of educational sales, the dealership developed an organized strategy to sell to schools. A recognition that the school market is very different from the everyday commercial market led FriendsOffice to create a strategic plan to sell into school districts, which involves every department in the organization.
“Learning to navigate through a school district can be quite a challenge,” says Sarson. “There are multiple decision makers, multiple product categories and multiple budgets.” Another difference is the cyclical nature of school sales. The sales cycle can be extremely long. The school year typically begins on July 1 and as much as 75 percent of sales takes place from May through August.
Often times, products are stocked in June, delivered in July and payment is received in September. Managing purchasing and cash flow is critical for success in the school market. “Requests for quotes begin in January for fulfillment between April and August,” explains Sarson. “If you miss this cycle, you may need to wait another year for the next opportunity.”
Sarson conducts training for the sales team, which focusses on the school market. Topics include how and why to sell to schools, who are the school decision makers, how schools are funded and product training unique to the school market. “The effort insures our account managers are well equipped to bring value to their school districts,” say Sarson. “Building relationship and trust is critical. We want our account managers to be the first person a district thinks of when they need something.”
The dealership’s marketing arm equips its education specialists with marketing materials unique to the education market. The WRITE (We Reward Innovative Teaching Endeavors) grant program has provided a way for FriendsOffice to give back to local teachers. The dealership also is active on social media, where it provides educational insights and product knowledge.
FriendsOffice hires summer help for order fulfillment and seasonal delivery drivers. Each department makes the necessary changes to handle the influx of school orders. Warehouse operations install higher racking systems to make more space available and temporary warehouse space has been found when needed. Purchasing and data analytics insure stocking levels are increased and work closely with first-call wholesaler S.P. Richards on anticipated stocking needs.
Keeping up with legislative activity that impacts schools is also part of the strategic plan. Attending meetings, tracking legislative issues, grants and system budgets are important to understanding issues impacting the school districts.
Over the past six years, those efforts have paid off handsomely. “In that time our school business has increased 700 percent and is on track to be about 15 percent of total company sales,” says Sarson. K-12 sales started out selling mostly consumables. However, the last few years have seen an increase in classroom products, furniture and custodial items. “It hasn’t been easy and has taken several years to develop but we are all committed,” says Sarson. “We anticipate continued growth over the next few years.”
Coffee – everybody drinks it; why not sell it?
For the last 15 years, expanding the categories of products available to his traditional office product customer base has been a primary focus of Sid Lerman, owner and president of The Weeks Lerman Group in New York.
Coffee products and services proved to be a critical vertical for Weeks Lerman as it eventually helped expand into a full breakroom offering and catalog. Now coffee is paving the way for a more significant janitorial supply endeavor as well.
Fifteen years ago, K-cups were only available through authorized distributors, who enjoyed ready sales to a captive audience according to Lerman. Once the K-cup market opened up, he made significant investments in resources including hardware and software, technicians and facilities to compete for K-cup sales.
Additionally, Weeks Lerman brought on salespeople with coffee sales experience and eventually purchased an existing coffee reseller. The acquisition took in all assets, including existing accounts, additional service people and salespeople. These moves positioned Weeks Lerman as a force in the coffee business early on, and the company has seen significant sustained growth in the category since.
Initially, Lerman recruited a well-established industry director for the Coffee Service Division who accompanied existing office products salespeople when they went to cross sell the coffee line. Reps with existing coffee sales experience also worked with the director and were given the opportunity to introduce the full line of office supplies to prospects. Only a handful of those coffee sales reps survived the transition, though.
The existing OP sales force benefitted the most with an additional product category to sell. “We already had business from our customers, why not just sell them another product?” asks Lerman.
Fast forward to today and K-cups have become a commodity and dealers no longer enjoy the margins that they once did. “Larger customers focus on developing and keeping talented personnel by providing more sophisticated amenities,” says Edna Fox, current director of coffee services at Weeks Lerman. “This provides the opportunity to get them talking and thinking about moving up to more sophisticated coffee systems.”
There are now many options other than Kuerig, and The Weeks Lerman Group has product and price points for every office, according to Fox. Options include single-cup systems from Mars’ Flavia and Nestle Professional’s Majesto, their answer to a single-cup system, which also makes espressos and cappuccinos. Lavazza and Nespresso coffee machines also are offered as are Starbucks and other high-end brewers. All the machines and almost all the coffee is purchased direct.
Coffee is an item that appeals to virtually every existing Weeks Lerman customer. “When we do a whole office with furniture, including the pantry, we introduce our coffee service,” says Fox. “It’s not unusual today for an RFP for office supplies to include a section covering office coffee service,” he goes on to say.
The Weeks Lerman message is clear that office coffee goes along with a one-stop shopping approach. “We have a six-man service department and they’re fully trained in all the brewers and equipment that we have in the field,” says Fox. “Our delivery service, our order fill rate and our coffee service make the experience seamless for our customers.”
Selling retail supplies
Office Basics Inc., Boothwyn, Pennsylvania, recently redesigned its corporate logo, which had featured a paper clip, as it felt the image was too limiting. “People thought we just did office products and that perception needed to change,” says Norma Anthony, director of marketing. The change was to let customers and potential prospects know that Office Basics dealt in workplace solutions and could provide anything that might be needed.
“If we can source it, bring it into our warehouse, pick it, pack it and deliver it, then there’s really nothing we couldn’t do—except if it needed to go into cold storage,” says Anthony.
The Internet has changed how items are currently sourced. “It’s not as scary for an independent dealer to do that anymore,” says Anthony. “These items might not be in our wheelhouse but can we source them? If we can, let’s go ahead and bid on that RFP.”
That was the approach that got Office Basics into the retail supplies business. The RFP started like any other request for office products, with paper, pens and file folders. But it also included shopping bags and fastener accessories. Anthony called on her promotional products division to see if it could source the bags in truckload quantities. Then a source for the fasteners was identified on the Internet.
The RFP required the source to stock all these retail items, but that was not an issue for Office Basics. There was room in the distribution center. “If we needed to add extra rows for some retail items we could do that,” says Anthony. The retail-oriented products could be assigned SKU numbers and brought into inventory. It didn’t take more than that to get the business started.
Not every retail product was a complete unknown; some were available from the breakroom, janitorial and office products vendors that Office Basics already did business with. Still others had to be custom made; but that was not a big challenge. “It might take a little extra work and a little extra time, but if you are going to thrive and grow in the independent market you have to challenge yourself every day,” says Anthony.
Dealers need to venture outside their comfort zone to truly find growth. “We shouldn’t be afraid of going outside our wheelhouse,” Anthony contends. “Let’s be challenged by it.”
Every customer needs breakroom products
When Shad and Laura Estes took over their dealership almost six years ago, one of their first efforts was to change the name. “We went from Coastal Office Products to Coastal Office Solutions,” said Shad Estes, president of sales at the Victoria, Texas-based dealership.
“We changed the name because we do everything from office furniture, janitorial and breakroom supplies to window coverings and artwork,” said Estes. “Whatever our customers need, we do our best to get it. We like to take care of our customers that way.” Coastal wants to grab the title as an office solutions company because, as Estes suggests, no one knows what the office supply business will look like in five years.
The breakroom business at Coastal has expanded to meet growing customer needs. Some customers were going to Sam’s Club to purchase snacks and drinks for their business. Coastal stepped in and offered to source those products for them. “When these customers go to Sam’s Club, we know they pick up other things as well,” says Estes. “We want to be their one-stop solutions provider.”
Coastal started to source breakroom products more than 18 months ago, and the breakroom business has grown from there. The current breakroom offering includes snacks, sodas and coffee, as well as disposable paper and plastic ware and utensils. Much of the product offered is brought in through the wholesale channel.
Estes says that breakroom sales provide a ready opportunity to grow sales volume and at the same time meet a growing customer need. Even though some of these products are available from Internet sources, many customers like the convenience of one-stop shopping and prefer the free delivery that is offered as part of the service.
Many buyers today share the common experience of not being able to find anyone who can answer a question. That’s not the case with Coastal’s customers, Estes reports proudly.
The Coastal staff has the experience to provide customers with any help they might need. Whether it involves breakroom sales or any other area of Coastal’s business, taking care of the customer is a continuing theme. “If that means running out to Sam’s Club to pick up something for a customer, then that’s what we do,” says Estes.
Going forward breakroom will continue to be a growth area for Coastal Office Solutions as customers continue to inquire about the dealership’s breakroom capabilities. “I want to become a one-source supply company for my customers because I can’t just stay in office supplies and office furniture,” he says. “I have to think about what my company is going to look like in three or five years.”
To prepare for that uncertain future, Estes plans to roll out a new website before the end of the year, which will feature enhanced online ordering. That commitment is necessary to stay relevant. ”We’ve got to stay on the cutting edge of what is going to happen within our industry so that we can continue to survive,” says Estes. “It is a different world, and it’s going to continue to get different as we move forward.”
Playing it safe-ty
The safety category isn’t at the front of every buyer’s mind and that is why Twist Office Products, Wood Dale, Illinois, works hard, especially during June – National Safety Month, to bring attention to the sales of safety products. “During the first week of the month, drivers passed out safety flyers along with children’s yellow hard hats with the Twist logo,” said Wendy Pike, Twist president. For the full month, drivers wore orange safety vests to reinforce the dealership’s involvement in the category.
Twist entered the safety category about two years ago when S.P. Richards introduced its safety catalog. The dealership was already doing business with property management and construction companies and these customers formed a ready market for safety product sales.
It is not uncommon to receive a request for product direct from a job site. “They ask if we can provide safety harnesses, glasses and ear plugs,” says Chip Pike, vice president. Manufacturing companies are another ready market and these customers purchase ear plugs, safety glasses and gloves. “It’s a category that continues to add to monthly profit dollars,” says Chip.
The Twist sales force has taken to sales of safety products like ducks to water. Many products are self-explanatory but when there is an issue that calls for specialist product knowledge experts are readily available, either from the wholesaler or from safety product vendors.
The biggest challenge in the safety category might be finding vendors. Wholesalers aren’t always competitive on safety products pricing, and the buying groups have yet to bring many safety vendors onboard, says Wendy. Twist is often left to its own devices to find vendors and relies on Google or asks prospects what products they’re using and where they got them.
Safety products buyers tend to be totally different from the buyer for other categories. Finding that contact can be a bigger challenge than learning where to source safety products. Very often the safety customer is already doing business with Twist, and that buyer can refer the salesperson to the safety contact. “They already have the relationship with Twist, so they have the confidence that we can bring them what they need when they need it,” says Wendy.
Non-traditional customers provide a growth market
Rocky Mountain Business Products, Denver, opened the market to supply marijuana dispensaries a decade ago when the dealership printed up some business cards for one of the first dispensaries to open in Denver.
“Back in those days most people didn’t know how to respond to somebody in the marijuana industry,” says Jay Tittman, owner and president. A lot of dealers wouldn’t engage with them based on the stigma associated with the business. “There was also the issue of it still being illegal federally and having strict banking regulations,” he says. “All these things were confusing to business people.”
Tittman took the position that these were licensed businesses paying taxes in Colorado and there was no reason not to sell to them. “We sold office products, janitorial supplies and custom printing to the first dispensary that opened and it just snowballed from there,” said Tittman.
Since it first started in business in 1977, Rocky Mountain Business Products has sold point-of-sale hardware to the retail and restaurant industries. Dispensaries run like all other businesses on software and hardware. “That was part of our engagement that we sold point-of-sale hardware and equipment,” said Tittman.
The appeal to the cannabis dispensaries takes in a variety of their business needs. Rocky Mountain Business Product provides hardware, software and supplies; scales; custom labels; competitively priced office products; graphic design and custom printing, and janitorial supplies Promotional items typically include hats, T-shirts, uniforms and stickers. “You’ll also see imprinted lighters highlighted on our website,” says Tittman.
Dispensary sales as a vertical has grown to include sales to 34 states and five countries. “We were involved with the first medical marijuana businesses up in Canada and provided their point-of-sale equipment,” says Tittman. Rocky Mountain also worked with the first Canadian growers and provided hardware products and printer supplies.
A separate web domain has been established as a marketing concept to separate Seed to Sale Supplies (https://seedtosalesupply.com/) from Rocky Mountain Business Products. A separate web site is almost a necessity; not so much to distance the main business but more to provide some uniqueness to the support offered to the cannabis industry.
Coffee can’t be digitized
About five years ago, Reuben Levy, founder and president of Global Office Solutions, Novi, Michigan, recognized that declining sales of office supplies threatened the life of his business. “Margins were tightening and people were simply going to be buying less,’ he says. The questions became what product line could be easily brought in without a lot of additional costs. “It needed to be something that was sticky, that couldn’t be digitized and was profitable,” says Levy.
Coffee seemed to be the perfect choice. It was the second most drunk liquid in the U.S. after water and it was the top visible benefit that HR departments could provide. “Seven out of ten businesses provide free coffee to their employees as an HR benefit,” says Levy. Although the coffee business has started to consolidate somewhat it remains fragmented with few major national competitors.
To get an understanding of the marketplace, Global Office Solutions brought in four coffee service vendors. “We had four different coffee suppliers come in and they gave us collateral, gave us pricing and we got some ideas from them,” says Levy. At the start the dealership aligned with BUNN and offered batch brewing systems.
It was the BUNN representative who planted the seed for how the coffee business would develop at Global. According to Levy the Bunn rep emphasized the need to offer something truly distinctive. In response, Levy went with a local roaster offering a special coffee blend that appeals to all coffee drinkers but especially those aficionados who fully appreciate specialty coffees.
The roaster Levy selected works with beans hand-selected in Honduras to develop a high-quality specialty grade coffee. “We ended up with a specialty-grade boutique coffee with some very favorable pricing,” says Levy. “Our roaster started out by taking his coffee to some smaller bed and breakfasts and boutique restaurants and hotels and started growing as a business. We are the beneficiaries of his great roasted coffee!”
As the batch brewing systems took hold and coffee became a more important category, Levy learned about a high-end bean-to-cup system that was offered by the U.S. branch of a Dutch company and manufactured in nearby Taylor, Michigan.
A coffee prospect related how another company location had a machine that made espressos and cappuccinos. Machines started at $5,000. Levy hesitated at first but research showed him how profitable these machines could be.
Global Office Solutions provides the machines for free but has customers sign agreements that all ancillary products – coffee, cups, sweeteners, creamers, etc. – will be purchased from the dealership. To start machines were put into companies with 100 to 150 people and that provided a large enough user base to guarantee a positive ROI. More recently, machines have started to be placed in offices with about 50 employees.
The cost, whether a customer pays a rental fee or just pays for consumables, amounts to one of the lowest-cost employee benefits that any business can offer. “Sometimes we don’t even sell through purchasing but through human resources instead,” says Levy.
One client that wanted a machine but didn’t have enough volume to pay down the cost is being charged a monthly rental fee of $250. “They told me they didn’t care,” says Levy. “They wanted amazing coffee and all the options for espressos, lattes, mochas and cappuccinos.” There are only 20 people in that office so the cost worked out to roughly $150 a year per employee.
Another positive result of placing these coffee machines is it tends to open that customer to breakroom sales. “You’re looking at on-demand water, snacks and other breakroom products,” says Levy. Next up, his roaster plans to offer cold-brew coffee in 12 ounce cans using the same specialty beans. That offering will provide yet another coffee product to sell.