Dealer Support December 2012 by Intelligent Media Solutions

December 2012 Issue 210

INSPIRING BUSINESS SOLUTIONS FOR DEALERS

DEALER SUPPORT DECEMBER 2012 | ISSUE 210 WHOLESALE | PAPERSTONE | BUSINESS RATES

WHOLESALE CHANGE Just what will you buy from whom in 2013? ROLLIN’ ‘STONE Paperstone continues down its road to success ARE YOU OVERRATED? Finding the leeway in ‘fixed’ business rates

FROM THE EDITOR

The changing face of the industry PEOPLE

DEALER INTERVIEW

Loyalty has long been rewarded in this industry. Most dealers will choose a wholesaler and stick with them. This is rightly so, since the major wholesalers will usually give preferential rates to their better customers, much like many dealers will do for their own best clients. However, with the onslaught of competition in the OP market – with distributors planning to sell traditional stationery and office products in the New Year – things may just begin to change. On the one side, the likes of Westcoast and Beta would actively encourage dealers to shop around. Westcoast’s Alex Tatham is very clear about this in the article I wrote on page 10. He says the IT industry works like this, and he expects the business supplies channel to follow suit. Driving cost out of the supply chain, he believes, is the only way forward. However, when dealers find it difficult to compete on price themselves, it’s no surprise they would be attracted to the service proposition from the wholesalers. Indeed, in the same article, Spicers’s Alan Ball is very clear about the fact that dealers who pick and I choose where they buy their volume lines will not sit well with the wholesaler. Those who remain loyal, however, will be treated with the best rates and, of course, service. So the industry has a choice – do they buy fast (and sell fast) and cheap? Or do they invest in a logistical relationship like what you get from the two major wholesalers, with all the added levels of margin it may bring with it? It seems we’re at a crossroads, and no 23 one way is the right way. Dealers will have to find their own direction, with, perhaps, the help of their trusty dealer group, colleagues and, hopefully, this magazine. I’m keen to hear from you about how you feel the channel is headed. Please do get in touch on editor@dealersupport.co.uk with your thoughts, gripes and praise. As a title that prides itself in supporting the independent dealer, one thing I can say, is whatever direction you turn to, we’re with you all the way. DEALER INTERVIEW

Paperstone

A site for sore eyes

Paperstone has established itself as something of a trailblazer with its approach to ecommerce. George Carey meets up with the

company’s MD, Max Trotter-Landry, and IT director, George Harris, a week after the launch of its new look website to find out about the

page 10

page 22

company’s philosophy and translating that onto customers screens.

t’s office supplies, but not as we know it. From its central London location to a staff made up of more technical experts than sales people, Paperstone is a dealer doing things a little differently. It’s been an eventful few weeks for the metropolitan merchants, with a BOSS award for e-tailer of the year, accompanying the launch of their new site. So what is it that sets this dealer’s digital discourse apart from the rest? “We feel in many ways that what’s enabled us to deliver a successful website is the fact that we’ve got a completely dedicated team of experts building it,” says Max TrotterLandry, Paperstone’s MD. “Lots of other companies outsource our buy something off the shelf but what we’ve got is a series of specialists who operate in different areas of the design process. We pull them all together in-house and with that we’ve delivered a very bespoke site geared to what our customers want.” George Harris, IT director at Paperstone and the man behind the new site, emphasises the importance of the personality projected through it: “I think we’ve really managed to get across the personal touch on our website.

DECEMBER 2012 www.dealersupport.co.uk

www.dealersupport.co.uk DECEMBER 2012

“If this channel is to carry on flourishing and succeeding, I cannot see that happening without change being imposed on it”

Correction The Office Club address printed in last month’s dealer group review (p10) was incorrect. The correct address is Bucknalls Lane, Watford, WD25 9PR.

MANAGING EDITOR Julia Dennison julia.dennison@intelligentmedia.co.uk

DESIGNER Sarah Chivers sarah.chivers@intelligentmedia.co.uk

EDITOR Austin Clark austin.clark@intelligentmedia.co.uk

DESIGNER/PRODUCTION Peter Hope-Parry peter.hope-parry@intelligentmedia.co.uk

REPORTER George Carey george.carey@intelligentmedia.co.uk

SUBSCRIPTIONS MANAGER Natalia Johnston natalia.johnston@intelligentmedia.co.uk

SENIOR ACCOUNT MANAGER – MEDIA SOLUTIONS Matthew Moore matthew.moore@intelligentmedia.co.uk

PUBLISHER Vicki Baloch vicki.baloch@intelligentmedia.co.uk

ACCOUNT MANAGER – MEDIA SOLUTIONS Krystle Davis krystle.davis@intelligentmedia.co.uk

Managing editor

intelligent media solutions suite 223, business design centre 52 upper street, london N1 0QH tel: 020 7288 6833 fax: 020 7979 0089 email: info@intelligentmedia.co.uk web: www.dealersupport.co.uk web: www.uspmagazine.com

Annual subscriptions are ABC available at a cost of £68.00 for UK and overseas by surface mail, £90.00 for airmail. Subscription enquiries should be sent to the above address Dealer Support is the leading monthly publication for dealers in the business supplies industry. It provides information on the industry (both in the UK and overseas), information for and about the UK’s independent dealers, as well as information and advice on running a small business. The views expressed in this magazine are not necessarily the views of the publishers. Copyright of all the material published remains with Intelligent Media Solutions Limited. No part of this magazine may be reproduced, copied, stored in an electronic retrieval or transmitted, save with written permission or in accordance with provision of the copyright designs and patent act of 1988. Printed in the UK by Buxton Press www.buxtonpress.co.uk

INSPIRING BUSINESS SOLUTIONS FOR DEALERS

CONTENTS December 2012

INDUSTRY 6 NEWS AND VIEWS All the month’s news and views in the office products industry 10 THE CHANGING FACE OF WHOLESALE Just what will you buy from whom in 2013? 16 AN ELECTRONIC LIFE VOW’s Gilly Blackburn talks EOS

PEOPLE 22 ROLLIN’ ‘STONE Paperstone continues down its road to success 28 THE GREAT OFFICESCAPE Former Supplies Team dealers double their revenues

MANAGEMENT

34 GROW YOUR BUSINESS This month: MPS 38 IS YOUR BUSINESS OVERRATED? Finding the leeway in ‘fixed’ business rates 42 HR ADVICE How to get the most out of your workforce 44 FINAL WORD Toshiba’s Jeremy Spencer on the future of the market

Flip over for the December edition of USP magazine

INDUSTRY

NEWS

NEWS Dealer celebrates milestone by announcing record turnover An office supplies business that started life operating out of a bedroom is celebrating its tenth anniversary and reaching a record turnover of £8m. Universal Office Products (UOP) was established by Mark Broadbent and Steve Manley in Manley’s mum and dad’s spare room in Sheffield, in November 2002, with just one computer and patio-style office furniture. The company is now the fastest growing office supplies company in the UK for the second year running, according to wholesaler VOW. Broadbent, UOP’s joint MD, said: “We are so pleased to be reaching our tenth birthday and seeing the company continuing to thrive. Despite tough economic times we have continued to develop year on year and our turnover has grown from £2.6m in 2010 to £4.4m in 2011 and £8m this year.” Broadbent said he and co-MD Manley initially started developing the company from cold calling, networking and hard work and, after its second year of trading, UOP had reached the £1m turnover mark. Broadbent added: “Every one of our clients is assigned a dedicated account manager, has its own dedicated internal helpdesk contact and we even deliver a chocolate bar every Friday to all our customers. This unique approach has ensured we have a 99% account retention rate. We even offer free ‘health checks’ to companies looking to save on their office supply bills.” The pair, who have 36 years of office supplies experience between them, have also expanded the business to serve the B2C, small office and home office market with a purely online subsidiary – www.stationeryfix.com. Manley added: “When we started the business we could only dream of reaching such a milestone, so we are very happy to have arrived at this point. We are now looking ahead to our collaboration with Amazon and Play.com, where our products can now be purchased, and we have just launched a new updated site for our existing customers so they can buy products with even more ease.”

Charity-focused dealer joins Nectere Jeremy Hughes is heading a new Nectere dealer model where his company, Kanusa, will donate a large percentage of profits to charities. Hughes said: “The Nectere structure is the perfect base for Kanusa to work with. With fantastic trustworthy teams behind me I can leave the day to day administration and can concentrate on gaining new accounts.” He continued: “Having such a low overhead with Nectere, which includes a fully maintained website and back office, I am able to donate a large percentage of profits to local charities. By working with Nectere we can really make a difference to peoples’ lives.”

TRENDSETTING PROGRAMME AT PAPERWORLD As well as providing an overview of the entire international paper, office supplies and stationery sector, the Paperworld exhibition promises to entertain and inform through a whole host of supporting events. Visitors to the trade fair, which takes place in Frankfurt from 26 to 29 January 2013, can take time out to source new ideas from a packed supplementary programme, as well as from the ten halls filled with exhibitors. Highlights of the supplementary programme include the Paperworld Trend Show, the first point of contact for those in pursuit of the latest product trends, and Asia Design Excellence, a special showcase of paper products submitted by Asian manufacturers that are distinguished by their striking, innovative design and a brand orchestration that is very much their own. For more information about the trade fair log on to www.paperworld.messefrankfurt.com.

DECEMBER 2012 www.dealersupport.co.uk

NEWS

Creative partnership drives new business Longstanding Integra member, Penkeths, has teamed up with Integra Office Solution’s Creative Services division to design a corporate brochure and direct mail campaign for it’s business. The creative team at Integra worked closely with Penkeths to develop a contemporary corporate brochure and folder that reinforced the core values of the business as a professional and local supplier of office, FM and AV supplies. In addition, Integra Creative designed a distinctive direct mail piece to generate new accounts through a high level direct mail campaign. The results have been pretty impressive, with Penkeths securing £250,000 of new business so far. Karen Abel, marketing manager for Penkeths, commented: “We’re thrilled with all of the work Integra’s creative team have put into making Penkeths corporate marketing campaign a success. From conception to delivery they’ve handled the process exceptionally well and we are already working with the team on another project.”

Dealer’s recycling campaign helps charity Leatherhead-based dealer, MBM Omega has raised over £2,200 for Rainbow Trust Children’s Charity by encouraging customers to recycle their used ink cartridges. The money raised is enough to pay all of the ever-increasing transport costs of one of Rainbow Trust’s Family Support Workers for four months. Driving is a big part of a Family Support Worker’s job. The families Rainbow Trust support have to cope with numerous hospital visits for appointments, consultations and admissions for treatment. “By encouraging our customers to recycle their empty inkjet and toner cartridges we are not only helping the environment, we are also raising vital money for charity,” said Diane Green, marketing manager at MBM Omega. MBM Omega has raised the amount by donating all money received from recycling the cartridges straight to Rainbow Trust.

news in brief... ADVANTIA LAUNCHES 2013 MARKETING PROGRAMME Advantia has launched its 2013 Marketing Guide, showcasing the added value services available to its members. A host of services, such as managed print, on- and off-site shredding services, postage consolidation, recycling and print sourcing, are featured.

INTEGRA ANNOUNCES NEW RETAIL INITIATIVES FOR MEMBERS Integra has announced a new retail agreement with VOW Retail that will give its members access to special discounts, exclusive offers and free delivery. Neil Basham, Integra’s purchasing director, commented: “This new agreement provides retail members with some great benefits including ongoing promotional support and a dedicated account manager.”

CHARLIE PERRY JOINS THE EGAN REID GROUP Egan Reid, the Stockport-based independent dealer, has confirmed the appointment of Charlie Perry as general manager at Education Express, its Leeds education supplies subsidiary. Perry worked previously for Shachihata for 11 years and Setten & Durward for 18 years.

Advertorial

www.dealersupport.co.uk DECEMBER 2012

INDUSTRY

NEWS

OFDA Conference Growth is ‘not an option’ More than 220 delegates headed to Heythrop Park in Oxfordshire recently for two days of networking, business seminars, supplier exhibitions and a gala awards dinner at the Office Friendly Dealer Association’s Annual Conference. Former javelin world record holder, Steve Backley OBE, the only British track and field competitor to win medals at three Olympic Games, explained how the tools for sporting success can be transferred to the boardroom, while author and businessman, Phillip Hesketh, outlined growth strategies in times of recession. Office Friendly’s MD, Steve Harrop, then told dealers now was the time to “go on the offensive”. “Change is tough but growth is not an option because now is the time for the independents in our industry to go on the offensive,” he said. “We should not be sitting back and allowing the bigger international players any respite. “This is the time for members to increase customer contact, generate more leads and apply segmentation techniques – with Office Friendly by their side.” Harrop hailed the success of Office Friendly’s telemarketing scheme, Call2Action, and e-marketing programme, Maxepromo, after revealing the group had made its biggest investment yet in support services. On the social side, delegates enjoyed oompah music, sausages and German beer at a special ‘Oktoberfest’ on Friday, while former X Factor star Ruth Lorenzo took to the stage on Saturday after four dealers were honoured with gold awards for their work on Office Friendly’s environmental scheme, So-Go-Eco.

DIARY 26-29 January Paperworld Messe Frankfurt paperworld.messefrankfurt.com 14-15 February Vow+ Annual Event Heythrop Park, Oxfordshire voweurope.com

We will certainly be selling stationery next year and office products generally. Alex Tatham, Westcoast

Integra Conference Celebrating the past, present and future The Cotswold Water Park Hotel was packed to the rafters last month when dealers from across the country attended the 2012 edition of Integra’s National Conference. Starting with a presentation by MD Aidan McDonough, the day went on to celebrate the dealer group’s 15 years in business, while also investigating the current state of the industry and looking at the future opportunities that lie ahead. Keynote presentations expertly addressed the big issues facing the industry, including how to establish an effective MPS programme, the importance of social media and the need to celebrate change, cut costs and improve service. Meanwhile, business sessions covered off topics such as succeeding in the education market, social media and how to increase sales with Integra’s 2013 Marketing Programme. A supplier exhibition – featuring over 70 suppliers – proved popular, as did the inspirational presentation by Parker Liautaud, the polar adventurer who reached the Geogrpahic North Pole aged just 16, who is now planning to trek unsupported to the South Pole at the still tender age of 18. The day wasn’t just about business either. The Celebrate Gala Dinner crowned the day, with a number of awards handed out, including the Initiative member, supplier and distributor of the year prizes (see dealersupport.co.uk for the winners), before the night was danced away with Joey The Lips, the 10-piece soul and funk band.

DECEMBER 2012 www.dealersupport.co.uk

OFFICE FRIENDLY BOOSTS SALES TEAM Office Friendly Dealer Association has bolstered its sales team with the appointment of two new business development managers. Experienced duo Jason Walker and Katy Granter have joined the Sheffield-based group and will report to sales development manager Keeley Shepherd in a restructured sales department of five. Walker, who will cover the South East region, spent eight years as a key account manager at Office Depot and recently worked for Croydon-based dealer Bates. Granter, responsible for members in the South West, arrives from office cleaning products specialist AF International and previously spent five years with Lyreco. “We’re delighted to welcome two very enthusiastic and knowledgeable people to the team – I know our members will really relate to them,” Office Friendly MD Steve Harrop said. “This increased sales presence means we can spend more time with dealers developing one-to-one marketing and business programmes. “Our recent conference theme was ‘growth is not an option’ and these appointments reflect the need for Office Friendly to back-up major recent investment projects such as Call2Action and Maxepromo, as well as highlight our confidence in the independent dealer channel.”

New Office Friendly recruits Katy Granter and Jason Walker.

INDUSTRY

WHOLESALERS

A wholesale change With the major office products wholesalers working harder than ever to differentiate themselves from a growing number of competitors, Julia Dennison speaks to representatives from both, alongside rising contenders, to get a better idea of what the wholesale market will look like in the year to come

he independent office supplies channel as we know it has been reliant on two major wholesalers for the supply of the majority of its products. While many resellers remain everloyal to their wholesaler of choice, there has been an ongoing narrative at dealer group conferences and industry gatherings surrounding the hope for a third wholesaler, to balance out the duopoly VOW and Spicers currently enjoy. The demise of ‘third wholesaler’ Hanmar a few years ago set that hope back, as well as a less than successful attempt on behalf of a certain paper merchant to do the same. However, times are changing, and the need for other contenders, some may argue, is more important than ever.

Wholesalers on top Over the last year there have been growing examples of competition: IT distributors threatening to sell traditional office products and specialist distributors in product areas like facilities management selling more to dealers. Meanwhile, and undoubtedly partly in response to this, the traditional wholesalers are working harder than ever to expand their existing product offering and improve their benefits to dealers. “Over the last few years we have introduced a number of initiatives and investments to improve our efficiencies and position in the marketplace and ultimately to ensure we can offer our dealers the best possible service,” confirms Adrian Butler, MD of VOW. As part of this, VOW and Spicers have invested heavily in its logistics and upping their marketing support for dealers. While this is happening, certain categories of brands are being reduced – particularly those that fall into the category of traditional office products. For example, the major pen brand Pilot will not feature in Spicers’, 2013 catalogue. CEO Alan Ball says this was a mutual decision. “We had a request in terms of the commercials,” he explains. “Pilot had a

DECEMBER 2012 www.dealersupport.co.uk

INDUSTRY

WHOLESALERS

strategy to grow their margin and therefore they weren’t able to offer the commercial deal that we requested.” For dealers who are concerned their customers won’t get the pens they want, Ball says Spicers will be retaining the SKU numbers and will endeavour to match the demand with “equal and equivalent” products from other brands. This brand constriction is by no means exclusive to Spicers. “It’s no secret that the traditional sector is declining, albeit slowly,” admits Andrew Stacey, vendor and product management director at VOW, “so we use category management to select an experienced champion to work alongside the teams to objectively manage our product portfolio.” In some cases, he is clear, this does lead to “brand rationalisation”. “In 2000 we had 20 suppliers of lever arch products across many diverse brands,” he explains. “This has now reduced to 10 brands and our plan for this category is to reduce it down further. The important element is that the decisions are made objectively, using market data, alongside our supplier partners.” Conversely, both wholesalers are expanding their breadth of product for 2013 in other areas, like FM. “We encourage our resellers to consider themselves as business supplies and service providers. Having a broader product range is a differentiator against their competition,” says Butler. There is also a move towards investing in own-brand and specialty exclusives, like the Pantum partnership with Spicers, who also plans to expand its 5-star offering by a couple of hundred more lines in the next catalogue.

“If this channel is to carry on flourishing and succeeding, I cannot see that happening without change being imposed on it”

Alternative to the traditional As the OP wholesalers dip their collective toe into other markets, so, too, do the IT distributors, only the other way around. “We will certainly be selling stationery next year, and office products generally,” confirms Alex Tatham, sales and marketing director of Westcoast. While the distie’s plans are still relatively in their infancy, a project manager has been recruited and the conversations are happening with suppliers, who, Tatham says “are all very keen”. Beta is the other distributor stepping into the OP game. “We have received a lot of feedback from dealers, who we supply EOS to, that they would be very interested in purchasing more traditional office products from us – in effect providing some competition to the existing wholesalers,” explains marketing director Nigel Morris. “Whilst we are still working on finalising the range we will have a significant branded stationery range ready to launch in January next year.” While the disties make no attempt to compete with the wholesalers on extent of range, they are marketing as what Morris calls “a more refined range”. “Beta’s strategy has always been to work with fewer vendors and add value to their business rather than to follow the more traditional broadline approach,” he adds. The brands Tatham plans to sell will be what he calls “the brands that everyone wants”, or the “volume brands”. Despite taking the step into office products, both Westcoast and Beta are actively encouraging their vendors to branch out into other product areas outside the traditional remit. “It is our belief as a trade-only distributor that the dealers need to venture into new markets and get every piece of business available from their customers – we see it as our role to help them access these wider opportunities,” says Morris. Tatham is mixing up how he thinks the OP channel should do business. For example, the catalogues for Westcoast’s office products will be entirely online. Furthermore, he would encourage the dealer channel to shop around more, and not

DECEMBER 2012 www.dealersupport.co.uk

INDUSTRY

WHOLESALERS

just commit to one wholesaler or the other. “Customers tend to either use VOW or Spicers, they don’t tend to use VOW and/or Spicers,” he says. “What’s interesting is that’s not how the IT channel works at all – everyone shops around all day long and isn’t loyal to one wholesaler or the other, which to be honest with you is much more what I would much prefer the stationery market to become.” However, Ball is quick to send out a warning to resellers considering this tack: that loyalty will be rewarded. “We’ve always been conscious that the likelihood was that there would be new entrants coming into the market, however, what I would say is these distributors are likely to be selling top 500 and we will not be supporting dealers who just want to buy the tail off us. If they want to cherry-pick the top 500 and then come and buy the 18,000 balance through Spicers, then they’re not going to get the same terms from us,” he says. “We offer a full service and that service has to be paid for, and therefore we have a blended mix of margins.” Tatham agrees that while what Westcoast is offering is “going to be cheaper than VOW and Spicers”, “the service levels will not be as rich”. “That’s definitely the approach that we’re taking,” he comments, adding that general admin costs make up only 1.7% of its sales. In short, it seems, you get what you pay for. If you want the product, the disties are prepared to offer you a good price, if you want the logistics and service, the traditional wholesalers are still the market leaders. Of course, this is not always the rule – and the disties are stepping up their service game, while the wholesalers are working on competitive prices.

Other options Another example of an alternative supply chain exists in the realm of dealer groups. Advantia, for instance, formed a partnership agreement with Office2office at the beginning of this year, which allows members to outsource their logistics to the contract stationer under the Banner brand. And there are, of course, other alternative wholesalers to consider, from paper merchants to cleaning, catering and workwear suppliers. The benefit of dealing with an alternative wholesaler within a specific category like this is they often offer a very extensive range in their category and have expertise in their specific field. Tony Torrible, MD of North West Tea argues prices can be better too. “We buy in huge quantities and work on a much lower margin,” he argues. “We spend millions of pounds with certain suppliers and pass on to the dealer what we feel [is] excellent pricing.”

DECEMBER 2012 www.dealersupport.co.uk

Niche wholesalers like these are also encouraging dealers to branch out, for obvious reasons and otherwise. “In recent years buying trends have shifted to save time and money. Previously buyers would use one supplier for each specialist product required,” comments Jeremy Thorn, sales director of speciality cleaning product and workwear supplier, Jangro. “Today buying has become more centralised and focused on ‘one-stop shops’ so stationery suppliers are asked to advise on cleaning and janitorial supplies, vending, contract cleaning and a whole range of non-core products and business services.”

The times are a changin’ Of course, the two wholesalers are well aware that things are changing. “We acknowledge the market in which we are operating is evolving and we are developing our product offering and services to enable our dealers to compete effectively,” says Butler. “We invest time and effort in developing partnerships with our customers and helping them to grow. Ultimately the wholesaler should be offering choice, depth and breadth of product range, an excellent logistics infrastructure and the ability to support the dealers’ own business development. I believe VOW’s strategy enables us to do just that, developing long term mutually beneficial partnerships with our customers.” However, to this Tatham adds: “This hasn’t been a good year for office products dealers and don’t tell me next year is going to be any better, because it just isn’t. Therefore, cost needs to shrink.” It is with this in mind that he steps boldly into the market. “You don’t move into a market because it’s growing, you move into a market because you can add value to it, and I can add a lot of value by ripping cost out of that whole channel,” Tatham concludes. “If this channel is to carry on flourishing and succeeding, I cannot see that happening without change being imposed on it, and if I’m a disruptive influence on that channel, then I’m very happy to be so.” As it stands right now, many independent dealers, especially the smaller ones, are still reliant on the service offering from the major wholesalers, and until another comes around with the same or a similar proposition, there won’t be a ‘third wholesaler’ as the channel would recognise it. However, it seems worth considering that in the next catalogue year, the industry may change irrevocably to become a different beast altogether and alternative wholesalers may just be there for the dealers who wish to work differently. DS

INDUSTRY

EOS VOW

Inky issues While you’re bound to know how well your own EOS sales are going, the birds-eye-view may be a little different. George Carey asks Vasanta Group’s category head for technology, Gilly Blackburn, what the scene looks like from above

Are there any big changes in your EOS offering for the 2013 catalogue?

Has there been much change in the market share between inkjet and laser?

There haven’t been any huge changes in the inkjet and laser area and there’s nothing brand new coming out, so nothing huge in that respect. We’ve laid out the catalogue a little differently to help people with customer choice. The only other changes are in the data media area, which falls under EOS but everyone forgets about it. We’ve included SanDisk, which is the world’s largest provider of Flash media. It’s a really well established brand and at the moment, you can only find them in retailers. We’ve worked with them for a number of years and we asked for their consent to put them in the catalogue, and they agreed, which is fabulous.

A little, yes. Inkjet has declined and laser has gone up. I think it’s because of people’s cost awareness; inkjet is still perceived by many as an expensive and slow machine. As people have looked to cut down on costs, they’ve moved towards laser printers.

DECEMBER 2012 www.dealersupport.co.uk

Do you think the increasing sales of MFPs spell the end of small single-function printers to businesses? I don’t think so. One of the OEM brands that I spoke to last week said the brand share of their single-function mono lasers had risen by six per cent.

INDUSTRY

EOS VOW

Again, it’s because people are looking at running costs. I think five or six years ago, they were buying the machines they’d wanted to have in their office, whereas now it’s the things they need.

What about faxes, are people really still using them? We had this conversation when we were putting the catalogue together recently but I think people do still use them. You see them in sales order offices and in transportation and distribution. There is still a good market out there for them, and I don’t see that changing in the near future.

How do compatibles and OEM cartridges shape up, in terms of your turnover? In the past year everything’s been steady. A couple of years ago, there was an increased focus on compatibles when everyone was looking to save money, but over the last year, the balance has steadied and if anything it’s leaning back to OEM again.

Is that because of quality issues? I don’t think so. Customers are always chopping and changing, trying to save money, but people in the UK, in particular, can be very brand-loyal and they tend to stick to what they know best. We haven’t seen a seismic shift one way or the other.

As people try to save paper and cut down on the cost of consumables, how has this affected sales? It hasn’t really, I think paper’s been hit more than anything. We haven’t seen a decline in consumables. I think people are duplexing, so they’re using less paper but printing the same amount. The only thing that we have seen is people putting more pressure on manufacturers to reduce prices. They’re printing the same amount; they just want to pay less for it.

Do you think that OEMs still have an advantage over compatibles? I do. I think people are brand-loyal; they look at the brand’s heritage and that gives them confidence. It’s got the same name as the machine that they’re

using and it’s designed specifically for that machine so they know it will provide optimum performance. A number of the OEMs have actually increased their prices this year. Compatibles haven’t increased in price, so the gap continues to widen but people seem to follow the OEMs.

With Pantum becoming the first Chinese OEM manufacturer, do you see other Chinese companies following suit? Personally I’m not expecting to see any others around, there aren’t any that are knocking on the door. It’s a hugely established market with really strong brands, so it’s a bit of a strange one really for a Chinese manufacturer to come across and try to crack the UK market.

Has it been in the pipeline for a long time? They’ve approached us for a number of years, to see if we’d be interested in taking it on but it doesn’t sit well with our strategy of supporting the OEM brands. We’ve got very strong direct relationships with the manufacturers which we value. Those relationships give us great benefits that we can pass on to the customers, so working with Pantum is just not something we’d do.

What other changes do you see as significant in the market? The biggest change this year in terms of print is Kodak pulling out of printing. So after December, they’ll no longer be able to ship any hardware or printers, but they’ll still have the legacy of their inks and consumables around.

How do you see the market progressing in the short term? With the increased price pressure and the reduced margins for everybody, I think OEMs are looking to establish themselves as leaders in a particular niche. So, rather than wanting to be the UK’s number one laser printer brand, they want to be the number one laser printer in A3 all-in-ones. They’re picking select categories and I’d guess they’re doing that by profitability. We’re seeing this with things like Lexmark pulling out of inkjet. Companies are not focusing as heavily in some areas and putting all their efforts into others. DS

“I think OEMs are looking to establish themselves as leaders in a particular niche”

DECEMBER 2012 www.dealersupport.co.uk

INDUSTRY

VENDOR PROFILE Olé

Do you read me

For independent dealers struggling to make an impact, help is on its way. Intelligent Media Solutions, publishers of Dealer Support magazine, bring you Olé, a monthly magazine aimed at office managers that you can bespoke with your brand

DECEMBER 2012 www.dealersupport.co.uk

VENDOR PROFILE Olé

here’s no getting away from the fact that competition in the world of office and business supplies is fierce. Internet dealers, mail order specialists and contract stationers are all fighting for business in a sector that, putting it mildly, is tough, given the economic climate. That means, for independent dealers, it’s more important than ever to concentrate on the service proposition – going that extra mile to offer customers more than they would receive from a competitor, whoever that may be. One valuable yet cost-effective tool that adds value to any independent dealer’s offering is Olé – the magazine for customers of dealers written and published by Intelligent Media Solutions, the same people behind Dealer Support and USP. Produced specifically for customers of office and business supplies dealers, this digital magazine (e-zine if you like) is packed full of must-read ‘office-lifestyle’ content, delivered in a light-hearted, easy-to-read format. Feature articles, competitions, fun news snippets and lifestyle ideas ensure that every issue is read from cover-to-cover. on the job

on the job

W E L L T R AV E L L E D PA blogger, Practically Perfect PA (aka NICKY CHRISTMAS) gives us her expert tips on booking business travel

don’t know about you, but I can spend hours arranging and then rearranging travel for my director. It takes up a huge amount of time and can be incredibly complex, with a number of destinations involving connecting flights and a host of visa requirements. I’ve had absolute nightmares in the past, such as the time I organised a trip to Japan, only to be told to cancel everything the day before because my colleague now had to go to Brazil. All this stress and I don’t even get to leave my desk! Here are my pros and cons for booking travel yourself and booking it via a travel agent. THE DIRECT APPROACH PROS  For point-to-point travel it can be quicker booking directly with the flight operator and hotel. You don’t have to explain what you want to someone else and you don’t have to wait to hear back on the options etc.  Websites such as Skyscanner.net and Kayak.co.uk have the same functionality as the systems used by travel agents. So, if you know when and where your manager would like to travel to, you can get all of the flight information using these websites.  In most cases, travel agents will not charge you for booking a hotel but will relay that cost to the hotel as a finder’s fee. If your colleagues use the same hotel every time then it is worth organising a corporate rate directly with that hotel because they won’t be paying any additional fees. In some cases I’ve noticed agencies have received a finder’s fee from the hotel and also charged my company a booker’s fee. Not good! CONS  Some airlines and hotels will hold back from advertising their best prices online because they like to maintain a good relationship with the travel agency.  Booking directly will require you to use either your manager’s corporate credit card or their personal card and then ask them to claim the money back. I always find this slightly worrying if they travel extensively and don’t get their expenses reimbursed straight away.

 What happens when everything goes wrong? Having that additional support can be an absolute godsend. USING AN AGENT PROS  A good travel agent will have contacts at the airlines so can advise on seat allocation, delays and upgrades.  The travel agency will have a profile on each of your managers and colleagues so they automatically know their preferences.  An agency should have a 24-hour emergency helpline, which means if anything goes wrong, your colleague can contact them to find out information and get an idea of when they can get home.  From a price point of view, the agent should be able to negotiate a good deal for you because they will have access to a variety of flight prices over a longer period of time and they will know when that particular price expires. CONS  Quite often with larger travel agencies the service you get differs according to the person you get on the phone or via email.  Although travel agents will be able to find you the best price at that particular point in time they will charge you a booking fee – factor this in when looking at the overall cost. Are they actually saving you any money compared to booking something directly?  It can be time-consuming dealing with a third-party who don’t have the knowledge that you have, especially if you have a complex trip with lots of internal and external flights and have to double-check everything they are doing. There have been times I’ve booked flights through an agent that have left colleagues stranded for hours at connecting airports because the agent didn’t bother to see how long the layover time was or even if there were direct flights!  In most cases a travel agent will not quote prices for budget airlines. Check out Nicky’s regular blog at practicallyperfectpa.com

A valuable tool for dealers So, how can Olé help you? The simple answer is that a publication of this kind raises the bar when it comes to service, adding value to the proposition of an independent dealer and making customers feel valued. When a dealer or supplier purchases an Olé marketing package, Intelligent Media provides a personalised version, complete with company logo, which can be delivered to the inbox of their customers, immediately giving off an air of professionalism and building the dealer’s brand name and corporate identity. Whether a timely reminder that a dealer is there – perhaps prompting the next order – or a great way to open dialogue with new customers, Olé makes dealers memorable, which is no bad thing in today’s crowded marketplace. Olé is also a superb way for dealers to show customers that they care – that relationships are just as important as orders. The content and tone of voice adds an element of fun to those relationships too, often sparking conversation that clients simply wouldn’t get with an internet supplier or mail order giant. A well implemented end-user publication like Olé can work extremely hard for dealers and suppliers by raising the value they deliver to their customers and by assisting the sales and marketing effort. At the heart of the solution is a regular magazine, packed full of must read ‘office-lifestyle’ content, delivered in a light-hearted, easy to read format.

The easy solution Olé offers dealers a straightforward, convenient way to add value to their service. The editorial and design team look after the magazine production from start to finish, meaning all dealers need to do is send it to their customers once a month. It’s as simple as that. Convenience doesn’t have to come with a hefty price tag either. In fact, Olé is a cost-effective tool that can easily prove to be a solid investment for any dealer.

Check out the content To discover more about the content that can be found in Olé, visit the e-zine’s dedicated website – www.olemagazine.co.uk – where you can browse through the latest content and flick through the last couple of issues. DS

Speaking from experience Olé’s editor, CARRIE SERVICE, is a former reader of the magazine. She has this to say about the e-zine: “It’s quite fitting that I should now find myself as editor of Olé magazine. Working as an office administrator many moons ago, I was the person responsible for ordering the company’s stationery and office supplies and being a relatively small office placing modest, regular orders, I knew our local stationery dealer pretty well. As a sign of their appreciation of my custom (however insignificant or last-minute my orders may have been) I received a complimentary copy of Olé in my inbox once a month, branded with my stationery supplier’s logo. I used to look forward to this treat – 10 minutes with a cup of coffee, flipping through a magazine which was easy to read – short enough so that I could read most of it in my coffee break and on-screen so that it wasn’t obvious I wasn’t working (not that I didn’t deserve a break!) “The ethos behind Olé has remained unchanged over the years: fun yet informative. It provides relevant, useful features and news to office professionals, such as PAs, office managers, administrators and the like

– in other words your target market – in a stylish, glossy and convenient format. The beauty of Olé – speaking from a reader’s point of view – was that it made me feel as though my role, and custom, were valued. I knew that from chatting to me, my stationery supplier had known that Olé would be right up my street, which sort of cemented their position as my supplier of choice. I think that this personal touch and the fun colourful, easy-toread layout of the magazine is what really appealed to me and kept me reading every month.”

Packages

There are a number of ways in which you can use this fantastic marketing tool, including: n an Olé partner package allowing you to send the e-zine out to your top members free of charge n a ‘dual-branded’ version of the magazine, featuring your logo as well your contact details n and an ‘own label’ package, where all Olé branding is removed and replaced with your own branding.

For more information on how we can make Olé work for you, contact account manager Krystle Davis on 020 7288 6833 or Krystle.davis@intelligentmedia.co.uk

www.dealersupport.co.uk DECEMBER 2012

PEOPLE

DEALER INTERVIEW Paperstone

DECEMBER 2012 www.dealersupport.co.uk

DEALER INTERVIEW Paperstone

A site for sore eyes Paperstone has established itself as something of a trailblazer with its approach to ecommerce. George Carey meets up with the company’s MD, Max Trotter-Landry, and IT director, George Harris, a week after the launch of its new look website to find out about the company’s philosophy and translating that onto customer screens

t’s office supplies, but not as we know it. From its central London location to a staff made up of more technical experts than salespeople, Paperstone is a dealer doing things a little differently. It’s been an eventful few weeks for the metropolitan merchants, with a BOSS award for e-tailer of the year accompanying the launch of their new website. So what is it that sets this dealer’s digital discourse apart from the rest? “We feel in many ways that what’s enabled us to deliver a successful website is the fact that we’ve got a completely dedicated team of experts building it,” says Max TrotterLandry, Paperstone’s MD. “Lots of other companies outsource or buy something off the shelf, but what we’ve got is a series of specialists who operate in different areas of the design process. We pull them all together in-house and with that we’ve delivered a very bespoke site geared to what our customers want.” George Harris, IT director at Paperstone and the man behind the new site, emphasises the importance of the personality projected through it: “I think we’ve really managed to get across the personal touch on our website.

www.dealersupport.co.uk DECEMBER 2012

PEOPLE

DEALER INTERVIEW Paperstone

We’ve got a dedicated account management team that speaks to customers and deals with their issues and at the same time we’re able to represent that service through our brand, on the website.” Crucially, it’s transmitting into increased business as well, as Trotter-Landry explains: “This year sales are up 25%, so we’re very pleased and I think, apart from the launch of the website, that’s our biggest success. New customer conversion is up by 30% as well, which is fantastic.” So what does the new site actually deliver? “We wanted customers to be able to find products quicker, so we bought in a new search engine that’s faster and has spell correction and autocomplete. We also made the new site a little wider so we can provide more information and it works better on tablet and mobile devices as well, which is an area that we see growing massively in UK e-tail,” says Harris. Trotter-Landry continues: “I think the key with that is to enable customers to get to a product very quickly across a number of different platforms. We’re seeing increasing traffic from mobile devices and tablets, so we’re making it easy to find products wherever you’re coming from.” The changes made to the site would have been counterproductive, if they we weren’t attuned to what Paperstone’s existing customers wanted, so market research was crucial to the process. “We did extensive interviews with a lot of customers and then built up different customer profiles and tried to ensure that the new site could deliver what all of those customers were looking for,” recalls Trotter-Landry. “You make a judgement call on which of those customers is more important and then try to cater to them more than anyone else. The key was a lot of upfront research and involving our customers in every stage of the development. It’s an explorative and engaged process with the customers and a long, drawn-out project.” Harris agrees that customer involvement was an integral part of the process: “We’ve got some great customers who are very loyal to our brand, so they’re the people we’ve really focused on involving. We wouldn’t put a website live that our customers and sales team weren’t happy with; we were adamant that it had to be perfect.” Feedback is an essential part of the on-going improvement of the site as well. “We have an automated third-party review platform that enables every customer to give feedback and we display it all on the website, whether it’s good or bad. At the moment there’s about 750 reviews on there,” explains Trotter-Landry. Harris sees this function as vital: “I think it’s really important for our brand, which is about trust and transparency, to have immediate feedback on the website. That honesty aspect is crucial.” At Paperstone they’re keen to keep things in the family and have opted against seeking outside help, in favour of investing in their own

DECEMBER 2012 www.dealersupport.co.uk

team. “Including myself, we’ve got a team of six technical staff covering design, marketing, usability, business analysis and software development,” says Harris. “We didn’t want someone who doesn’t really have an interest in the company making decisions about the look and feel of the site and making assumptions about what our customers want.” TrotterLandry also looks at it with the long-term in mind: “We have a combination of industry experience and the ability to deliver and execute complex technical projects, like this one. We’ve kept that core knowledge in-house because we wanted to build up a resource, which we’re now drawing on constantly. We’ve currently got more technical staff than sales, design although I imagine as we grow, that balance Business analyst Ed Beerbohm and may shift. For the time being, there’s an and marketing specialist Alex Brignall enormous investment in R&D and IT” Many dealers see online ordering as an obstacle to the kind of personal service that marks them out from their competitors, so how does Paperstone strike the balance between convenience and rapport? “I think the key is to give people what they want,” opines TrotterLandry. Some people enjoy ordering online, so you need to give them a website where it’s very easy to do that. Others prefer to order over the phone, so you’ve got to be prepared to do that as well. We want to make it as easy as possible for people to use our website but they can deal with us in any way they like.” Harris doesn’t see online ordering and strong relationships as mutually exclusive: “I think it’s possible to deliver that personal touch online Senior software develop and that’s been one of our major focuses for er Henry Barker and sales director Jim Bro the new site. Giving people the right signals wn and the right information on the site, so that

We have a combination of industry experience and the ability to deliver and execute complex technical projects they feel comfortable using it to place their order.” It seems to be working, according to Trotter-Landry: “I think around 80% of our business is through customers placing their own orders online but people still tend to place larger orders over the phone.” So what advice do these two have for those looking to dip a toe into the online world? “I think you need to understand your own brand and what you mean to your customers. Setting up a web shop blindly would be a mistake,” asserts Harris. “If you have a full understanding of why your customers deal with you and not someone else, you can use technology to reach out to more people with that message. That’s what we’ve tried to do consistently over the years.” Both are agreed that commitment is

MD Max Trotter-Landry and IT direct George Harris

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PEOPLE

DEALER INTERVIEW Paperstone

key. “It’s an obsessive process that you have to go through, to get this right. You don’t just accidently build a good website,” says Trotter-Landry, with the air of man who’s suffered for his art. “You need to either have the core skills in-house or be very lucky and find those people elsewhere and combine them with your industry knowledge. It’s not for everyone.” He concludes: “I don’t think every dealer would be better off as an ecommerce website, they’re different businesses.” The complex world of SEO is constantly evolving and is very important to those looking to get ahead in online sales. Harris is mindful of the changes and encourages the shift towards a focus on customer experience, rather than technicalities and key words: “Google has made a couple of substantial changes to its algorithms this year that have affected retailers across the UK, not just in our industry. It’s key that online businesses are able to react to those changes and do something positive. In recent years, it’s become a lot more difficult.” He continues: “Now Google focuses on sites that offer the best experiences to customers, which is the way it should be. It shouldn’t be about how many links you’ve got to other sites or other incidental factors like that. Our focus is on great on-site content and making sure that we obey the basic rules of SEO.” Trotter-Landry is equally supportive of this shift and thinks that the days of fast-win tactics and technical trickery are behind us: “Google is becoming increasingly sophisticated and if you try to

DECEMBER 2012 www.dealersupport.co.uk

cheat, you’re probably going to get caught. If you get blacklisted, it’s game over from an SEO point of view. You’ve got to give customers what they want, be informative, usable and accessible. If you follow those mantras, then your site will do well.” It’s with that attitude in mind that the pair is quick to dispel the notion that the impressive amount of non-commercial content on the site is uploaded to climb a few extra rungs on the Google ladder. “I’m not sure of the immediate SEO value of those pages. There is a benefit to having them there, but they’ve actually become quite a core part of our brand,”

We wouldn’t put a website live that our customers and sales team weren’t happy with; we were adamant that it had to be perfect explains Harris. “The news section in particular has been a great way for us to move into social media, sharing quirky stories about the office supplies industry, rather than just talking about our product range, which people

don’t want to share with their friends because it’s not that interesting.” This goes back to the company’s mission statement to deliver the most personal experience possible, through an online service. “Customers engage with the stories and things like our ‘contact us’ page involving Ruby [the dog]. The news stories allow us to put a bit of character out there and tell our customers what we’re all about,” says Harris. Trotter-Landry concludes: “It’s a very useful way for us to get across what we’re like as a business and being able to put our values through this channel, enables our existing customers to see that reinforced in a different way.” So what’s next for our intrepid online explorers? “The key message with the new website, is that this isn’t the end result, it’s the beginning of the next stage of our web platform. This site will be changing very rapidly,” says Trotter-Landry. “What George and his team have done is give us a technical infrastructure which allows us to move very swiftly.” Harris is in agreement that finishing this huge project is just the start of the real work: “It means that we can focus on the customer experience much more, now that we feel we’ve brought the site into the 21st century. We can experiment with features, try lots of things out and really lead the way in the industry.” The passion and expertise is clear to see and judging by the industry recognition and increasing profits, it is getting results. The future looks very bright for Paperstone. DS

PEOPLE

s d

DEALER INTERVIEW OfficeScape

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DECEMBER 2012 www.dealersupport.co.uk

DEALER INTERVIEW OfficeScape

he OfficeScape offices are not unlike those of many other independent OP resellers. Familiarly, they sit in a business park on the outskirts of urban sprawl, in this case Harlow, Essex. When you walk in the door, a receptionist greets you and you’re led up to an open-plan office that, on first glance, has the familiar feel of a commercial dealership. However, the reasons this yearling of a business has exceeded expectations in its first 12 months – reaching a £1.6m turnover – become clear as you step onto the sales floor. A hubbub of prospecting calls, shouts of another sale made and an excitable buzz permeate the small office. Central to this are founders Andy Greening and Trevor Corrigan, who launched the business in October 2011 after long-standing careers as MD and sales director of Vasanta Group’s Supplies Team respectively. It is immediately obvious they both take a hands-on approach to their start-up; this is evident as Corrigan, known throughout the industry for his sales prowess, acts as a constant source of encouragement, pacing around the open-plan floor, applauding success and goading for more. As Corrigan juggles phones and new sales, Greening takes us to a small meeting room off the sales floor to tell us what the two industry stalwarts had in mind when they moved from the corporate wholesale world to the independent channel. A promising start With 7,000-plus customers, a £1.6m turnover and over 30 members of staff, it’s fair to call OfficeScape a success story, however, Greening is quick to add that it has been “not without its challenges”. “It’s always a little bit hairy and scary in your first year,” he comments. “You’ve got proof of concept, and once you’re up and running it becomes real and there is a deluge of challenges that you’ve probably not anticipated.” However, Greening and Corrigan came in somewhat prepared, having spent a fair few years in the industry already. Greening started working for The ISA Group in the early 1990s and ended up as MD of Supplies Team for eight years. He went through the merger with Kingfield Heath and left the Vasanta Group and its subsidies in 2008. Because of contractual restrictions, he was essentially blocked from taking a job in the industry and so worked as a consultant in other retail industries. A few years later, an opportunity arose to work with Corrigan, his long-standing colleague who came from a background in consumable sales at Pitney Bowes. “I’ve known Trevor for many years, since he used to run the southern office of Supplies Team,” Greening explains. Together they decided to start an independent office supplies company – a direction Greening had not expected to go in. “I never really planned to [go back to office supplies],” he tells me. However, he says, “when the opportunity with Trevor manifested itself, all the numbers seemed to hang together”. While they still feel much like the new entrants into the channel that they are, Greening and Corrigan’s background in wholesale has allowed them to plan their move carefully. “We both sat on the corporate side of things; we’d seen how things worked, the infrastructure you’d need from an operational and marketing perspective to build a good solid business going forward; and we had a plan in terms of new business acquisition that has worked pretty well,” says Greening. Being independent, however, has meant the founders can react to changes in the market quickly. “We’ve got a direction, we’ve got a plan and we can measure against that,” says Greening. “We’re not completely hung up on it like in the plc world. It gives you that great flexibility away from that corporate environment to be able to adjust when you see things are going well or not so well and make changes.” This plan, along with a team of 15, a premises (and a hope and a dream) was much of what they needed to launch on 3 October last year.

CV DEALER: OfficeScape FOUNDERS: Andy Greening and Trevor Corrigan TURNOVER: £1.6m GROSS MARGIN: Around 40% STAFF: 32 MAJOR WHOLESALER: VOW BACK OFFICE SYSTEM: Vision by Eci

www.dealersupport.co.uk DECEMBER 2012

PEOPLE

DEALER INTERVIEW OfficeScape

But they also needed a wholesaler and while VOW was the obvious choice, it wasn’t an automatic choice. “We’ve got some long-term relationships within VOW and the Vasanta Group,” says Greening. Equally, they had a good relationship with Spicers, so asked the two to compete for their business when OfficeScape was launched. VOW was selected off the back of that. “I have complete respect for what both organisations do,” says Greening. “It’s easy to forget the challenge that they’ll face as an organisation, not just focus on yourself as a reseller and think: ‘My staples are out of stock.’ They provide a defence or bulwark between resellers and some pretty brutal global vendors who can make changes at the drop of a hat and what they do from a service perspective is nothing short of phenomenal.” A hope and a plan The OfficeScape business plan has been a considered one. “We recognised straight away that to secure agreements with large [and] mid-sized companies, there were certain things that you needed that we don’t have on day one,” explains Greening, “so our first year and probably, to be fair, first two to three years, are going to be based on transactional sales – where we’re selling products into people as opposed to striking long-term supply arrangements.” These will come later, once the company has built up a reputation for delivering good value office products and services. “What we have been able to do,” Greening continues, “is sell to a lot of customers, which in itself brings its own challenges.” For the majority of OfficeScape’s 7,000 or so accounts, the first order came through the new business telesales team, with others coming via its retail website. “We’re calling them back and saying: ‘Thanks for your first order, our catalogue goes out with your first delivery, what else do you buy? Are you in a contract?’ And if someone is in a long-term contract, well, we’ll stay in touch

and make sure that we try and build a relationship ready for the tender.” Once these relationships are established, they have to be serviced, watched and pursued to ensure they stay accounts. “What we’re trying to do now is deep-dive with the ones that show real opportunity and appetite for change,” he adds. “We’re not targeting a particular sector, a particularly geography or a particular market. We’re selling product to people and those that we can lock onto from a relationship perspective, we’re trying to develop as quickly as we can – notwithstanding the fact that we haven’t necessarily got the tools in place that we’d ideally want.” They are making these sales through telesales primarily with some field sales on the side. In short, OfficeScape has seen a rapid acceleration of new customer acquisitions, which Greening would like to see slow in future as they pick out the ones who prove loyal. With this shift from fostering new business to cultivating existing customers, the sales team’s structure has had to change. Those who started by acquiring the new business have moved over into business development. It goes without saying that having talented sales staff is central to OfficeScape’s budding success, and Greening believes it is important to invest in people. However, this always brings the challenge of balancing on-going profitability with growth. “We’re trying to invest sensibly and make sure we’re making the right moves at the right time,” he says. It’s not easy finding a good sales team, so to find 32 staff (22 in sales and 10 in operations, finance or marketing) in a year is no small feat. “We’ve been recruiting all year – constantly, constantly, constantly,” says Greening. “That’s the biggest challenge that we face. Recruiting great salespeople is a real challenge because the great ones aren’t typically looking for a job.” But equally, he’s keen to get quality candidates and is less inclined to take people who are “hopping

OfficeScape HQ; Founders Trevor Corrigan and Andy Greening

DECEMBER 2012 www.dealersupport.co.uk

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DEALER INTERVIEW OfficeScape

DEALER It’s easy to forget the challenge that the wholesalers face. They provide a bulwark between resellers and some pretty brutal global vendors who can make changes at the drop of a hat from job to job”. Greening puts the success of his team down to the fact “a lot of them are home-grown”: “We’re happily developing our own, which brings its own challenges and actually slows growth a little bit because you’ve got to give people learning room.” If growth has slowed, it has clearly not been by very much, proving the team has been worth its investment. Part of the proof of its worth is the high gross margin OfficeScape is achieving – 40% on the £1.6m turnover. Greening admits this may not last long. “As the traditional catalogue business overtakes what we’re doing in new business – and new business is higher in margin than our business development team – it will be in line with what you’d expect from most other dealers, which is in the mid-30s,” he says. He is not entirely worried about price, though: “You have to remember there are companies in this market who enjoy fantastic margins, for example Viking, which are turning over several hundred million [pounds] at 40-50% margin, so the price objection is not really an issue. If you can get past the initial five top products, then you’re OK on price.” Greening puts the ability of companies like Viking or Lyreco to charge higher margins down to their strong brands, and hopes to build the OfficeScape identity accordingly: “When we launched we actually had to be almost quite vanilla in what we did, and if you look at the website, you’ll get a feeling for that – it’s sort of me-too. We have to find our own voice.” He hopes this will come through as he replaces the current website with one that has a bit more personality and substance. “As you launch, you’ve got to get the website up quickly, and we put the business plan and delivery together quickly, so you’re not entirely sure what you’re going to look like.”

A future in business In terms of breadth of product, the company is trying its luck at everything office-related. EOS makes up nearly half of OfficeScape’s turnover, while the remaining business comes from a range of different areas, which are expected to change and shift over time. “When I started it was fax paper and typewriter daisy wheels. The market will always change,” says Greening. “With the asdvent of tablets, I envisage people printing less.” In terms of the direction of the industry and channel, he’s not entirely sure where it will go. “I can’t predict what’s going to happen,” he comments, “but what I do know is offices will consume things, whether it’s furniture, traditional stationery or whatever. Our challenge is to lock onto customers and service them with their requirements, whatever those requirements will be.” With this, he sees the direction moving towards that of being more of a service provider. This conjures images of concepts like managed print services, of which Greening remains wary. “I don’t think it’s something you can play with; I think it’s a very costly hobby,” he says of MPS. “If we get to a point when we want to do it, we need to be in a position where we can invest heavily in it.” Looking forward, Officescape expects to more than double revenues to £3.5m in its second year. It expects this growth to come from product proliferation into its newly acquired customers and a continued focus on new business acquisition. The directors are determined to gain ISO 9001 and 14001, as well as make a commitment to Investors in People, as Greening calls these the “badges” they need to have serious conversations with procurement departments. “They’re accreditations that we recognise that we really need from a legitimacy perspective,” he says. OfficeScape also has plans to move to a bigger premises next year, which will give them the capacity to hold some stock. “We need some growing room,” says Greening. The rate at which this company is growing, this might need to be ample room indeed. DS

BOOKMARK

David Williams Director Cascade Print Systems and Priory Print and Stationery Ashford and Sevenoaks

SPECIALITY

Within the Cascade group we encourage a happy working environment, in a rural setting, supported by old-fashioned values.

I started out as a gardener but the excitement of selling paperclips and pens was too much to resist. thirty years later I still can’t get enough.

BEST MOMENT

The first time we hit over 100 orders in a day.

CATCHPHRASE

You only need two words… communication and motivation.

WORD FOR THE WISE

Due to the growth of our companies, we felt that the Horizon system, developed by ECi, encompassed the best elements for commercial and retail and had the ability to continue to grow with us.

THE LEADER IN INDUSTRYSPECIFIC BUSINESS SOFTWARE

www.eci.eu

MANAGEMENT

MPS

T O M A N A G E O R N O T T O M A N A G E

DECEMBER 2012 www.dealersupport.co.uk

MPS

Despite its seemingly inexorable rise, there are still many dealers who don’t feel ready to engage with MPS. George Carey asks if it is the answer or just another option and finds out what dealers think

hile it’s not that new it’s only in recent years that managed print services has become a buzz word, regularly debated at dealer group conferences and other industry events throughout the land. For many dealers it seems to be a case of ‘when’ rather than ‘if’ they will get involved with a system that appears to offer considerable benefits to resellers and customers alike. So what’s the truth behind the hype, is it really a panacea for dealers struggling in the face of a predicted triple-dip, or a complicated affair that could leave those lacking expertise, severely out of pocket? It’s important in such a debate to get the opinions of those with the expertise and also the dealers charged with taking it to market. Do they feel it is something worth pursuing and what do those who have taken the plunge think of the results? THE NUMBERS ADD UP

While it used to be regarded as the preserve of larger companies, there is now a movement among tech-savvy, forward-thinking medium-sized businesses to adopt MPS. Research firm IDC forecasted earlier this year that demand for MPS would result in the European market growing to €4bn by 2014. In addition, the Gartner 2011 report asserts that MPS can save a company between 10% and 30% of its total print costs, and those improving paper-based processes could save even more. This appears, on the face of it, to be a pretty easy sell to your customers, but some urge caution before dealers get too excited. Paul Green, director of Harrison Green, hasn’t decided to take the plunge yet, and thinks that it’s important to look a little further into the impressive sounding statistics: “I think there’s a definite danger of overhyping this in small to medium-sized accounts, which is where many independent dealers have the majority of their business… But there is a definite ‘threat’ in larger corporate accounts.” While some of the jargon and the technology involved may have changed, Simon Bishop of Bishops Office Products thinks he’s seen it all before: “It’s not new; if you think back to the copier industry in the ‘80s and ‘90s everything was done pay-per-click, it’s all gone full-circle. Those established machines dealers out there just take it as second nature. Integra have got an offering for us and when I go to our regional meetings and talk

www.dealersupport.co.uk DECEMBER 2012

MANAGEMENT

MPS

to other dealers, a lot of them seem scared of MPS, because it’s the unknown.” He believes that it’s in this type of new service scenario that dealers benefit from being part of a group: “That’s a benefit of the dealer group because they’ve done the leg work. It’s still big and new and it’s getting your head around how it works. It’s a bit like furniture, a lot of dealers are nervous about tackling it, until they give it a go.” A NEW LANGUAGE

A major cause for concern among those considering selling MPS for the first-time is the technical expertise required. The contracts aren’t always overly complex, but they do require a degree of specialised knowledge and experience. After all, there is a lot to consider for the uninitiated. An MPS proposition includes: provision of hardware supplied on a purchased or leased basis; the supply of all required consumables and a service package to cover the support of the solution, which can be exclusively hardware or cover software as well. Green is one of those who is yet to be convinced: “I think dealers are apprehensive. Personally I think it is because it’s actually quite an involved sell, bordering on technical and it’s potentially quite demanding on your time. We haven’t found a solution through VOW or M2 that we are currently happy with so are now asking Office Friendly to get a solution in place. In truth we are not finding enough of a demand to get anything more quickly, independently, so there’s no real time pressure for us.” Despite the potential difficulties, Darren Bush, MD of Tandem Solutions, decided that it was something worth pursuing and hasn’t looked back. He launched his MPS offering in September 2011 and decided to fully commit to the project, appointing an MPS sales director. This was one of 13 newly appointed of staff focused on MPS, which adds around £165,000 a month to the business, as he explains: “We estimate to add £3m onto our turnover over the next 12 months, and expect to install in excess of 1,200

DECEMBER 2012 www.dealersupport.co.uk

machines.”. Tandem Solutions started offering MPS through Network Group’s reseller programme and the group expects to turnover around £4m through the service this year. GREEN CREDENTIALS

I think there’s a definite danger of over hyping this in small to medium sized accounts, which is where many independent dealers have the majority of their business

The service can also form an integral part of an eco-conscious dealer’s ethos, as exemplified by Commercial Group. The company’s environmental strategist, Simon Graham, explains: “It’s a really key part in which we can say that we can help people to become a responsible business. I suppose that is where Commercial has an advantage in that we have that expertise in managed print services, which we have now had for decades – but toners are key to that. After all, the toner itself is the thing that puts the stuff on the paper and I would suggest that taking responsibility for it is part of being a managed printer.” Graham believes that the two are interwoven. He elaborates: “If you are offering a managed print service, or manage part of it, and tell customers that it’s up to them to dispose of the waste then it’s not fully managed. We take responsibility for it and we’ll help them to deal with all the issues that come from printing. I think offering toner cartridges is critical to that because we can take responsibility up the supply chain up to the supplier and we can get a really good, clear understanding of where it comes from and how it gets disposed of. It just makes it more seamless.” It’s clear that MPS doesn’t come in a one-size-fits-all package, and some dealers have taken to it like second nature, while others will decide that it’s not right for them. The message from many is that they are still doing their research and looking for counsel from their dealer groups before they decide to commit to a process that could require a significant investment of time of money. For those who are willing to commit that and have adequate technical knowledge and support, it could be a very lucrative addition to their revenue. DS

MANAGEMENT

BUSINESS

Business rates, along with rent and employees, form a large part of the fixed costs that businesses have to pay. While many believe that a rates demand, once received, must be paid without question, there are others who know that the system does have leeway built into it. Solicitor Louise Hebborn looks at the topic in more detail

Is your business over-rated?

usiness rates are a tax on property and all business premises are given a rateable value by the Valuation Office Agency (VOA) in England and Wales. The basic level of rateable value usually remains fixed for a five-year period. The rateable values that became effective on 1 April 2010 were based on open market rental values on 1 April 2008, with the next revaluation coming into force on 1 April 2015. The amount of business rates payable is calculated using the rateable value and a multiplier, which is set by the government. This multiplier usually changes each year in line with inflation. Currently, the standard multiplier in England is 42.6p. Therefore, a building with

DECEMBER 2012 www.dealersupport.co.uk

a rateable value of £50,000 would be liable for annual business rates of £21,300. There are reductions for businesses eligible for Small Business Rate Relief (SBRR), while businesses in the City of London should expect to pay a small surcharge on top of the standard multiplier. Despite calls for rates to be frozen during such tough economic times, the government implemented an increase in April 2012 of 5.6% at a time when many businesses are facing uncertain futures and struggling to make a profit. CHALLENGE A VALUATION

Business rates can often be challenged through an official appeal process. There are three grounds to appeal – the

MANAGEMENT

BUSINESS

new valuation was wrong; the property has been changed and should be reflected in the rateable value; or an alteration made to the valuation is wrong. There are various ways to challenge a rating and businesses should seek advice from a professional advisor including a solicitor, the Royal Institute of Chartered Surveyors, the Ratings Surveyors Association, or the VOA. Businesses who want to challenge their rating themselves, can contact the local VOA to state why they consider the valuation to be incorrect. It can also be done online at www.voa.gov.uk. The VOA will acknowledge the appeal within 10 working days and check if it’s valid. If it is, they may visit the property. If it is a material change, say, alterations have been made to the property or the use of the property has changed, then a visit may not be required. PLAN B

There are various other ways to seek to lower liability. There have been instances of businesses shutting off floors of their premises to reduce their bill significantly; if part of the building is empty and not being used, it can qualify for rate relief. Likewise, an empty property is exempt from paying rates for three months after it becomes vacant. If the premises are an industrial/warehouse building, it would gain a further three months relief. If the building only has a rateable value of up to £12,000, 100% relief is available in this financial year (2012/13) and up to 50% in the subsequent years. Those with a rateable value from £12,000 to £17,999 can also make use of SBRR mentioned previously. Businesses that relocate to one of the new Enterprise Zones can take advantage of a 100% relief to their ratings bill for five years. There are 21 Enterprise Zones planned, with projects announced in Cheshire, Essex, Cornwall, Gosport, Hereford, Humber Estuary, Leeds, Sheffield, Birmingham, Bristol, Liverpool, London, Manchester, Derby, Nottingham, the Black Country, the Tees Valley, the West of England and the North East. Rural businesses will also be eligible for relief, aimed at encouraging small businesses to remain open in more remote areas. TIME TO PAY

Business owners and property owners will receive the rate demand from the local authority each year in April. There is a choice of ways to pay including spreading the cost over 10 months to help with cash flow. Businesses that are experiencing particular hardship should contact their local authority. They have the power to provide rate relief for struggling companies. The government has created the Business Rates Deferral Scheme to help businesses spread the increase in the current financial year’s bill across three years; it enables companies to reserve paying 3.2% of the current year’s bill (60% of the retail price index rise) until 2013/14 and 2014/15. Road improvements, road closures and upgrades to transport infrastructure can sometimes be disruptive and restrict access to for deliveries and customers. This can have a negative impact on the income of a business and so an appeal against the business rating may be appropriate. Businesses concerned about how local disruption impacts on their livelihood could take a variety of routes.

DECEMBER 2012 www.dealersupport.co.uk

Traders in Rochdale contacted their local MP when improvement work to the Metrolink tram station impacted on their livelihood. Their MP collectively called for a reduction in business rates for affected traders. Under current law, there is no compensation available for loss of trade. But, for disruption over a sustained period, it may be possible to apply for a temporary reduction in the business rate, because the highway works may have affected the rental value of the premises over that period. If a business is affected by local disruption, they can also contact their VOA directly to lodge an appeal to attempt to have the rateable value of the property temporarily reduced for the period of the works. While it may not always be possible to reduce business rates liability, there are a multitude of options available to businesses and an experienced advisor will be able to assist in identifying possible reductions. DS

Business rates can often be challenged through an official appeal process

MANAGEMENT

FEATURE Employment

Funding the young apprentice Employing an apprentice can be a hugely effective way of sourcing a capable member of staff. Rachael Fidler , MD of HTP Training, explains how businesses can grasp the full benefits of taking on an apprentice and secure the allocated government funding now available.

DECEMBER 2012 www.dealersupport.co.uk

FEATURE Employment

ore and more businesses are now recognising that apprenticeships offer an effective way of securing competent members of staff and are now reaping the benefits of the Apprenticeship Grant, recently introduced by the UK government. Securing this funding is certainly advantageous but some employers are being left somewhat confused and frustrated with the complex application process – to the point where they are often put off from pursuing it beyond an initial enquiry. The statistics speak for themselves. Eighty per cent of employers say that their apprentices make their workplace more productive and 92% of employers with apprentices say they believe apprenticeships lead to a more motivated and satisfied workforce. It’s no wonder then that an increasing number of organisations are now looking to secure apprentices for their business. The recent introduction of a Government Apprenticeship Grant is providing further incentive for businesses employing less than 250 members of staff to take on an apprentice. So, as an independent dealer, how do you secure the funding available through the Apprenticeship Grant?

requires an investment of not just finance, but also time. Once you have established that an apprentice is right for your business, contact the National Apprenticeship Service (www.apprenticeships.org. uk) or a specialist apprenticeship training provider to talk about your requirements. By being forthcoming and truthful, your training provider can ensure that the apprenticeship meets your exact requirements. It’s important to note that the government department responsible for the apprenticeship grant has a robust system in place to check companies for eligibility.

DO YOU QUALIFY?

A THREE-WAY RELATIONSHIP

If you employ less than 250 members of staff, have not taken on an apprentice for the last three years and are looking for an apprentice who is 16 to 24 years of age, then you are eligible for the £1,500 government grant. The £1,500 is in addition to the training costs of the Apprenticeship Framework, which are met in full for young people aged 16 to 18 and 50% for those aged 19 to 24. A total of 40,000 grants are available through the scheme. Up to ten grants can be made to any one employer.

At first glance, it may seem like the application process is complicated. Most training providers will, however, walk you through the paperwork and provide support when you come to complete it. Following the completion of the paperwork, the training company will then advertise the position, at no cost to you, to find suitable candidates. Applicants will then be screened to ensure that they fit your requirements. For example, it makes sense that they have a passion for sales or the B2B sector, even if they want necessarily have a passion for office supplies. The most suitable candidate will then be sent to you for interview selection. Once you have selected your applicant, the next stage is for the training company to work with you and the chosen apprentice to develop a training framework. This framework incorporates your requirements and what the apprentice wants to get out of the programme. What makes apprenticeships so effective for employers is that it provides them with a member of staff who is trained specifically to meet the organisation’s needs. For an apprentice, it provides them with a qualification and on the job training, allowing them to develop specific business skills which will help to strengthen their capabilities and experience, positioning them favourably for future employment. DS

IS AN APPRENTICE RIGHT FOR YOU?

An apprentice is not a short-term solution. First, evaluate why you want an apprentice and what you want them to achieve. What do you want the apprentice to contribute to your business and what can the apprentice gain themselves? You need to see the apprentice as an integral member of your business, whatever department they work in, and not as a ‘temp’ who will help you to secure a government grant. You need to do this with an understanding that taking on an apprentice is a long-term commitment with honesty at its heart. Bear in mind that an apprentice is a learner and

You need to see the apprentice as an integral member of your business

WHAT DOES IT COST?

The minimum wage for an apprentice is currently £2.65 per hour (the rate increased from £2.60 per hour on 1 October 2012). What’s important to bear in mind is that the grant is paid over two instalments: £750 is paid when the apprentice has completed week eight of their apprenticeship and the final instalment is paid on completion of the programme – which is usually a year. It goes without saying that it’s paramount you set aside the necessary funds to be able to pay your apprentice on time and not rely solely on the grant.

£400bn

www.dealersupport.co.uk DECEMBER 2012

FINAL WORD

Light years ahead Jeremy Spencer, marketing manager, Toshiba TEC UK Imaging Systems

A building’s carbon footprint from lighting can be reduced by up to 80% by exchanging all incandescent bulbs for LEDs

DECEMBER 2012 www.dealersupport.co.uk

e live in fast moving times and, in my opinion, one of the most exciting developments for my industry and beyond is the application of light emitting diode (LED) technology. As semiconductor devices that emit infrared or visible light when charged with an electric current, LEDs are all around us – from light bulbs and car headlamps to televisions and signage. The fact that they are proving so popular should not come as a surprise as they contain no hazardous materials, have an extremely long lifespan, give excellent light output and have a robust construction. Although LED technology has been around for over a century – since 1907 to be exact – it meets the requirements of the modern age. Energy efficiency is driving all aspects of product manufacture, partly due to the UK’s tough targets for carbon reduction. The long-term framework, outlined by the Department of Energy and Climate Change, sets out plans for achieving the objectives defined in the Climate Change Act 2008, which states that when compared to 1990 levels, a reduction of at least 34% by 2020 and at least 80% by 2050 must be achieved. The way we light our homes and workspaces is one of the most significant ways to reduce energy usage. It is estimated that a building’s carbon footprint from lighting can be reduced by up to 80% by exchanging all incandescent bulbs for LEDs. This is because they have a long service life of between 50,000 and 100,000 hours, which compares to 2,000 to 5,000 hours for a halogen bulb and 8,000 to 15,000 hours for a compact fluorescent lamp. In hospitality and retail environments, where lighting is often on 24/7, there is a real business case for making the switch and the brave early adopters taking the plunge into LED technology are reaping the rewards. The sheer number of products that utilise this technology is remarkable and printing, scanning and copying devices are also benefitting from it. LEDs are used instead of lasers and the fact that very little heat is generated means that fewer fans and other components are needed, making these multifunction products quieter, lighter and more energy efficient. The next generation of this technology is already beginning to create interest. Organic LED (OLED) lighting works by passing electricity through one or more extremely thin layers of organic semiconductor material. Designers, architects and consumers are increasingly using OLEDs in a variety of aesthetic contexts – ceilings glowing with colour, glass walls that light up at the wave of a hand, or windows that provide subtle illumination after dark. There are clear opportunities for those companies taking advantage of the rapid adoption of LEDs and by doing so they can use this versatile technology as a way to enhance their own sustainability based credentials. LEDs are now on the radar of everybody from multinational corporations to homeowners as a way to save energy and money over the long-term – so make sure you don’t miss out. DS

S W E N

PY C

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E SAVE TH DATE!

P LI

hallenge Pioneer C 18 May 6 May –

HERE’S YOUR NEW YEAR’S RESOLUTION

JOIN THE CYCLING REVOLUTION What a year 2012 was for British cycling, with Bradley Wiggins scooping the Tour de France title as well as an Olympic Gold, and Sir Chris Hoy becoming the most successful British Olympian of all time. Now you have the chance to join the cycling revolution by getting on your bike and doing your bit for charity. Dealer Support magazine is partnering with Antalis McNaughton and Pioneer Paper to take on the Pioneer Challenge 2013, to get the office supplies industry on their bikes in aid of Breakthrough Breast Cancer. Taking place from 6 May - 18 May, the goal of Pioneer Challenge is to have 20 riders on each of the 10 stages of the relay. If every rider can raise around £100, with all the expected participants we will blow the £20,000 figure of last year.

The challenge Cycle one or more of the stages from Aberdeen to Brighton (between 60-90 miles, mainly on road but with some mountain bike sections)

The charity Breakthrough Breast Cancer, dedicated to saving lives by finding the causes of breast cancer, improving detection, diagnosis, treatment and services

The dates 6 May - 18 May

How to enter Please go to www.dealersupport.co.uk to find out more about the challenge, dates, cycle routes, setting up a donation page, logistics and cycle support, then email matthew.moore@intelligentmedia.co.uk with your choice of day/days.