BEST JUDGEMENT FOR BUSINESS: REVISITED

In the second in a new series where we catch up with some of the interviewees who we spoke to during the peak of the COVID-19 pandemic, we sit down again with SARAH MEWETT who gets us up-to-date on what’s been happening at Paperstone since we last spoke in October 2020

2020 – THE BUSINESS JOURNEY

Paperstone is an online-only dealer with an interesting history and a unique ethos. Launched nearly 18 years ago, as a reseller of EOS products alone, forward-thinking CEO and co-owner Jim Brown didn’t expect his customers to start asking for traditional office products – but they did! Despite plans to be a major cartridge supplier, people soon began requesting paper, then stationery and, soon, Paperstone had to find itself a wholesaler.

But it’s not as if Jim and his business partner hadn’t researched what people wanted in the first place. “We started Paperstone in my friend’s flat; we did a lot of market research about what people wanted – and what they wanted was cheap toner cartridges,” says Jim. “So we found some suppliers, launched a business – without a catalogue or a website – and used the flat’s landline as a ‘phone number - customers would ring up and have my friend’s hungover flatmates answering sometimes! But we kept growing, got a catalogue and a website up-and-running, and it was onwards and upwards from there. The customers were asking for stationery, so that’s what we gravitated towards, and we became an OP business.”

John Philips, sales manager, joined Jim and his co-founder, Max, two years in. By that point, Paperstone already had a decent-sized office in the west end of London. John had been in office products

since 1997. “Except for one year when I exited the industry, thinking there was more to life than stationery – I was wrong!” he says. “So I joined Jim in 2006, left again to do some project work for a traditional dealer in Essex, and then re-joined Paperstone.”

“We dragged him back, kicking and screaming,” says Jim. “We struggled without him because John’s got such a good knowledge of product and industry; it wasn’t quite the same without him driving that area, so we poached him back.”

John says that the pace of decision-making, and growth, within many other OP dealers is slow; he returned to Paperstone to regain the kind of professional energy he thrives on.

Another key cog in the Paperstone team is Sarah Mewett, head of marketing, who’s helped shape the image of the business and spread the word about its innovative way of operating. While she had no prior experience in office products she’s brimming with experience in marketing, and this allowed her to shape and refine what the business already had, and develop it into what it could be.

“I found there were so many great things going on, from the brand’s point-of-view, which hadn’t been clearly defined, and people weren’t totally aligned with the values of the company,” Sarah explains. “I wanted to solidify what made Paperstone different from everybody else, so we started e-mail marketing, supporting the sales team in how they communicate – anything which, for a brand where people are predominantly finding us online, would humanise the brand.”

2020 - THE BENEFITS OF ONLINE

There are major benefits to having been an online dealer from the start, most notably that it gave Paperstone a foot in the door earlier than most resellers; it also allows for additional flexibility and agility. Paperstone has an in-house tech team that can support customers immediately with any problems they might be having with the website – helped further by the fact that the business is independent, so nobody has to jump through hoops to make changes. Paperstone is also stockless, so it never has to try to get rid of stock that nobody wants.

The company is able to react to customer wants and needs very quickly, enabling it to get involved in some of the more unusual product segments, which have proven lucrative. “Originally, when we launched, we were a bit niche,” says Jim. “Because we grew out of the internet the big stationery companies were already covering the mass market and we were there to pick up lots of sales in the weird and wonderful segments.

“Over time we grew stronger at the general offering, but we can still fill the gaps in-between as well. Surprisingly, our more recent growth areas have been in core office supplies products – like desktop filing and paper – which goes against the market, and is ironic for a business that started off the way we did.”

It helps that Paperstone caters to a huge range of verticals and sectors, and recognises the patterns and demographics within them. The business keeps getting smarter, and more and more customers respond to that – Paperstone has between 50 and 100 new businesses buy from it every day, whilst also still catering to customers who have been with it since 2004.

So, with a seemingly perfect formula already in place, what does the future hold for Paperstone? “We don’t plan too far in advance,” says Jim. “We don’t plan a whole year – more like two quarters. We do what we want, when we want, and we’re looking at what challenges we face right now. We storyboard it all, map it out, and leave gaps in our schedule for inevitable changes but, really, our future holds more of the same – we know how to grow, we have what we need, and we have a great system.

“We’ll keep doing what works well, and pushing forward.”

Over time we grew stronger at the general offering, but we can still fill the gaps in-between as well

2020 – COVID QUICK FIRE QUESTIONS Has the flexibility of being an online-only dealer helped since COVID hit?

Being online has been very fortunate for us during the current crisis. More and more people started shopping online - and we were in a fantastic position to service their requirements. We saw a staggering 100% uplift in new customer sales during the first six weeks of lockdown. We were glad to be able to help as they were very scary times for everyone, but we were also fortunate to be very profitable as well - we even had customers doing a weekly food shop with us for a while!

How has business changed?

A few things have changed as a direct result of COVID. We already had a ‘phone and computer system that allowed the team to work normally from anywhere - we just hadn’t tested it with the entire company working remotely! Fortunately, it held up perfectly, and

The pricing challenges have forced a lot of companies to search online for a better deal – increasing our opportunities

productivity was great, so now you are no longer required to come into the office – ever!

Most people have returned, as they prefer the team environment, but around 25% haven’t come back to the office at all. This hasn’t caused any issues so far and, hopefully, we can continue as we are indefinitely.

Sales have been adversely affected; our current daily run rate is 25% down from January. This is due to the drop in demand and the fact that remote workers, generally, consume less OP - although we have plans in place to help better serve home users, so watch this space!

Have you made any operational changes to the business?

Sadly, despite our best efforts, we still had to make four roles redundant. The changing OP landscape, and uncertain economic outlook, meant we needed to adjust to be ready for whatever COVID and winter 2020 throws at us. We’re still operating the full optional remote working policy, as mentioned above. Perhaps the biggest change has been that, in April, we also changed wholesaler due to the demise of Spicers. Previously 90% of our spend went to Spicers, so switching to VOW was never going to be without challenges. That said VOW, and Kath Briggs in particular, have been brilliant and, despite the challenges, they have been right by our side from day one.

Without them, this would have been a very different interview, for which I am very, very grateful!

2022 – THE CATCH-UP When we spoke last time you said that you saw a staggering 100% uplift in new customer sales during the first six weeks of lockdown - but then your current daily run rate was 25% down from the previous January. How did this trend pan out over the two years since then?

New customer acquisition is back to pre-pandemic levels. We didn’t expect that, but after looking at the data we can see more businesses looking for a new office product supplier than we expected. We feel this is down to two main industry challenges – pricing and service. The pricing challenges have forced a lot of companies to search online for a better deal – increasing our opportunities. The drop in service levels is driven by the UK’s driver shortages (pun

unintentional). Some dealers’ next day delivery completion rates are as low as 60%! This is way below customer expectations and, again, pushes more customers into the market.

We asked you in back in 2020 what the future held for you. No-one then could have predicted just how different the future would be - but now we have the benefit of hindsight – what have the last two-and-a-halfyears been like for your company?

Like most companies, we had to adapt. Sadly, we lost a few members of the team at the start of the chaos as we just didn’t know what the future held. The remaining team dug deep and worked the craziest of hours and, as the storm calmed, life slowly returned to the new hybrid working normal. By then we had significantly expanded product categories, explored new sales channels, invested in additional website traffic, and onboarded new suppliers. It’s not been an easy process but, as Winston Churchill said, “Never let a good crisis go to waste”. The result is that we are far more efficient than we were pre-pandemic; last month’s sales were 10% higher than in 2019!

In 2020 you mentioned that you don’t like to plan too far in advance. How did that attitude benefit you during COVID when things were constantly changing?

It benefitted us immensely. Like many people, we had no idea what was going to happen from one week to the next. Back to work? Another lockdown? We had no idea, and took each day as it came! As things started to settle down we started to look further into the future and now, for the first time since early 2020, we are back to quarterly planning. We even have a rough plan for 2023 but, you never know, it could all change!

In our previous interview you said that 25% of your team were working from home. How does the office/remote working split look now?

Very similar, but staff are slowly returning more and more. It’s not been easy for anyone. People get comfortable working from home, and their lives have adjusted to fit this new found flexibility. The challenge is that those changes don’t always benefit the rest of the

The result is that we are far more efficient than we were pre-pandemic; last month’s sales were 10% higher than in 2019!

business. Over the next couple of years, I expect the figure to drop to 10%, but it will happen gradually.

You’d recently made the switch to VOW when we last spoke; how is that working relationship now?

We have a fantastic relationship, but it hasn’t been without its challenges. Being stockless means your suppliers are a crucial part of your business – the most critical part, in fact (if you exclude your team).

VOW have had a challenging couple of years and those challenges have impacted our service and, ultimately, affected our growth - but with adversity comes innovation, and these innovations have enabled us to build better, more robust, processes. Pain + reflection = progress!

Last time we asked you to share some key lessons you had learnt during the peak of the pandemic. Now that we are somewhat moving forward, post-pandemic, what additional lessons have you learnt?

When life is feeling really tough, you need to take a step back to reflect on what you really value. I’ve also been listening to more podcasts to hear other people’s perspectives. One I’ve particularly enjoyed is Steven Bartlett - The Diary of a CEO.

With your new found perspective make one small change in the right direction - then don’t stop making small changes!