Dealer Support July 12 by Intelligent Media Solutions

July 2012 Issue 205

INSPIRING BUSINESS SOLUTIONS FOR DEALERS

DEALER SUPPORT JULY 2012 | ISSUE 205 CATEGORY MANAGEMENT | M&A | A HEALTHY WHOLESALER

CATEGORY MANAGEMENT A look at building a stronger supply chain M&A The pleasures and pitfalls A HEALTHY WHOLESALER An interview with VOW’s Helen Beckett

Please contact one of our Authorised Distribution Partners Hardware: Micro-p Midwich Consumables: Advent Data UFP Westcoast VOW or contact Konica Minolta on

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FROM THE EDITOR

Stepping up the game MANAGEMENT

GROW YOUR BUSINESS

Being an independent contender in any industry is always a challenge – not least in the office supplies market, where threats are coming at all angles, from the big corporates down to the one-man-bands with a good e-commerce strategy. Dealer Support is here as usual to step in and fight the good fight for the indie, to help you have that edge that will make or break the big contract.This issue is a bumper one, filled with great advice and in-depth industry analysis from our editorial team, including much from newcomer Billy Taylor, who many of you will have met as he makes his way up and and down the country to various dealer conferences and events. In this issue, we investigate the supply chain through a special feature on a business strategy sweeping the industry. The process of category management has been used in other sectors, but only recently has it been adopted in the OP sector in an effort to change the procurement process from an adversarial to collaborative approach. On page 16 we find out how it’s working out both from a manufacturer and wholesaler perspective. On page 24 we build on the supply chain theme with an interview with VOW’s Helen Beckett, who was recently tapped to play a new role in the company as the business development director. And don’t forget to check out Nick Hood’s article (p40) that asks dealers if they know their supply chain financial risk. So enjoy this issue, and please do not hesitate to get in touch 35 with any questions or issues you may have, since alongside our role delivering valuable content to the dealer community, the editorial team at Dealer Support is also here to act as a champion for the channel, and give you, as our name suggests, that little bit of extra support. So, if you have any stories you want to share, or issues you’d like us to tackle, please drop us a line. GROW YOUR BUSINESS

or a long time the office supplies industry has regarded inkjet and laser printers as performing very distinct roles. As Dexter Harriss, UK & Ireland marketing manager, imaging and printing at HP, puts it: “Inkjet printers were traditionally favoured by consumers due to the lower cost while businesses tended to use laser printers due to their quality, reliability and speed connotations. However, over the past few years technology has developed significantly in both the laser and inkjet markets, resulting in a shift of these habits - although inkjet is still preferred in the home, there are far more businesses today using inkjet printing than ever before.” So, are we seeing a softening of the lines between the two technologies, or are the stereotypes in place for a reason? LASER

Laser printers have been seen as the long-time printer of choice for businesses but with a high power output, haven’t always offered the best choice for those looking to keep their carbon footprint the right side of the abominable snowman. Alan McLeish, senior product marketing manager for OKI, thinks this is no longer the case: “We recognise that laser printers do use more energy, so we’ve incorporated something called deep sleep mode, which uses almost no power but stays awake enough, so that if a printing job comes over the network, it will print it quickly.” He continues: “We’re actually using more powerful fusing technology, which warms the machine up faster. It’s what people want and because it also cools down quickly, it also cuts down on energy consumption. Many of our products are only using one watt of power in their deep sleep mode.” Someone else who’s keen to point out the improved eco-friendly credentials of laser printers is Anne-Marie McGarry, Samsung’s product marketing manager. She explains: “All of our devices come with our eco driver, aimed at reducing the environmental impact of printing and people’s costs. It’s easy to put pages into duplex or print multiple pages on one piece of paper. We also have toner save mode, so you can save up to 30% on your toner costs.” While the toner save mode sounds like a compromise on quality, McGarry doesn’t think this is the case: “All of our printers use polymerized toner, which has more uniform particles, and therefore a glossier output. Because the toner particles are so fine, the saver mode is fine for everyday use.” She does subscribe to the opinion that these machines are better suited to a business environment, pointing out that if you’re only using a printer for a few pages per week, you won’t see much benefit from these new features. For SOHO market, there’s also the higher start-up costs associated with laser printers. Another advantage to laser printing is the speed accomplished when printing large quantities, while still achieving good results. As Harris points out: : “For those industries and businesses printing high volumes of black and white prints - such as the legal profession - are more suited to laser, due to its high speed and print quality.” McGarry is in agreement: “Because it’s a powder that fuses to the fibres of the page, it’s like a stamp as opposed to inkjet, where the ink is dropped from a height. With laser you can get more precise lines, so it’s better if you’re doing anything that’s really detailed and there are no problems with smudging that can occur with ink.”

page 16

page 34

Inkjet and laser printers have traditionally been viewed as performing different roles and appealing to different markets. George Carey takes a look at both technologies and asks if they are still so different or if it’s just a Jedi mind trick

JULY 2012 www.dealersupport.co.uk

www.dealersupport.co.uk JULY 2012

“Category management works as long as it’s adopted as a culture rather than a process”

Julia Dennison, managing editor

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

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

EDITOR Billy Taylor billy.taylor@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

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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 July 2012

INDUSTRY 06 NEWS AND VIEWS All the month’s news and views in the office products industry

08 CONFERENCE REPORT Dispatches from the Nemo and Superstat conferences 10 BUY, SELL OR MERGE When it’s time, what will you do? 16 CATEGORY MANAGEMENT A look at how the business process works for the OP sector

PEOPLE 22 A HEALTHY WHOLESALER VOW discusses latest innovations and investments 28 OFFICE ESSENTIALS An interview with Paul Green of Harrison Green

MANAGEMENT

34 GROW YOUR BUSINESS This month: inkjet vs laser 38 SUPPLY CHAIN RISK How vulnerable are you? 42 DOMAIN NAMES A look at why they’re important 46 FINAL WORD Uniross’s Mark Wiltshire on the impact of batteries

Flip over for the July edition of USP magazine

INDUSTRY

NEWS

NEWS New photocopier supplier group formed Association dedicated to raising standards of photocopier suppliers to schools A new industry body has launched to regulate the photocopier supplies market, with the aim to protect schools, colleges and other educational establishments. The Nationwide Association of Photocopier and Print Suppliers (NAPPS) was created in response to the lack of regulation and standardisation of services which has recently been criticised by the educational sector due to mis-selling and substandard service, costing schools and colleges millions of pounds. NAPPS will monitor and accredit the operating standards of photocopier and document management companies through its Code of Practice, with the objective to provide a collective voice and trusted community of suppliers who will uphold the highest quality of customer delivery. Photocopier and printer companies that sign up to the NAPPS Code of Practice will make up the growing body of document management companies that are creating increased consumer confidence and assurance of a high quality service. The National Association of School Business Management (NASBM) welcomed the new initiative and fully supports the aims of NAPPS. Chief executive Bill Simmonds said: “Following revelations of the nationwide issue of mis-selling of IT equipment leasing agreements to schools, it became evident there was an urgent need to introduce some form of regulation into the sector to protect schools from such mal-practices. When seeking new agreements, we urge our members to take advice from as many sources as possible to safeguard themselves from dealing with unreputable suppliers. “Any organisation that is working to regulate the services of these suppliers should be welcomed and we support NAPPS in its objectives to introduce an accredited Code of Conduct that will raise standards and help protect schools going forward.”

“To survive we need each other, the reseller and wholesaler, and we can only achieve success if we’re working together with the same objectives.” Helen Beckett, VOW

JULY 2012 www.dealersupport.co.uk

Lyreco sets sustainability targets Telford site to become a zero landfill operation Lyreco has announced ambitions for its Telford site to become a zero landfill operation by the end of 2012. The company’s 2012 ECO Future policy has been expanded to include the objective, with plans already underway through a partnership with the Harper Adams University College in Newport, Shropshire. Lyreco’s sustainability initiative, ECO Future, is a strategy implemented with every partner and subsidiary around the globe that encompasses reducing carbon emissions, slimming down packaging processes and promoting green energy through the use of electric vehicles. It also sets a target to recycle 90% of all waste generated through its activities.

TOSHIBA ACCUSED OF GREENWASHING Campaign said to be flawed and harmful to paper and print The Two Sides Campaign, a world-wide initiative to promote responsible production and use of print and paper, has accused Toshiba of blatantly greenwashing its brand for marketing purposes at the cost of the paper and printing industry. A division of Toshiba, Toshiba America Business Solutions, has announced that 23 October is to be ‘National No-Print Day.’ Toshiba has proposed that companies not print or copy anything on the day in order to raise awareness of “the impact printing has on our planet” as well as ‘the role of paper in the workplace.’ However, according to Two Sides, the campaign is flawed and unsubstantiated. Two Sides said: “Toshiba seems to have ignored the environmental impact of electronic communications. Just saying you are eliminating print and paper really does not mean you are necessarily helping the planet. It’s a lot more complex than that. If the alternative is, for example, electronic communication, then what is the environmental impact of this? Greenpeace have identified electronic waste as the fastest growing component of the municipal waste stream.” Toshiba has been asked to withdraw the campaign.

NEWS

VOW launches Chrysallis Programme Bespoke graduate recruitment, training and development VOW has added a new service to VOW+ with the introduction of the VOW Chrysallis Programme. The objective of the new programme is to attract new talent into the industry and into VOW+ resellers businesses. The VOW Chrysallis programme has been developed in partnership with graduate recruitment specialist, Bright Futures Resourcing, and training and development experts OnTrack International. The programme sources high quality talent, full of drive, motivation and ambition, and through a world class training programme transforms them into valuable salespeople capable of “hitting the ground running” to drive sales and profitability. The training and development programme has been designed specifically for VOW resellers, offering not only sales training but also bespoke training modules dedicated to the industry, including an industry introduction, product category training, pricing, VOW operations, logistics, and services as well as support on how to compete in the corporate market. The programme will ensure that new recruits understand the industry they are working in and the wholesale structure that will support them. The VOW Chrysallis Programme promises to transform graduates into professional salespeople with the skills to sell at the most senior level. The programme offers an alternative to traditional recruitment by encouraging resellers to develop talent through the exclusive access to Bright Futures societies located at more than 45 leading universities nationwide.

news in brief... NEMO ANNOUNCES NEW MD After initial success as Nemo’s commercial director, Tim Beaumont takes the reins as the group’s MD. Chairman Michael Morgan said: “This is part of our growth and innovation strategy. There are many challenges ahead, Tim brings a wealth of senior level business management experience and we are confident that he can help us continue to develop and innovate.”

PAPERLINX MAKES CUTS, CLOSES HQ The global paper merchant, Paperlinx will be closing its global headquarters in Milton Keynes as well as disbanding its global marketing and global human resources departments. In addition, James Orr, EGM

BOSS Federation and BPIF extend contract

corporate affairs, has left the company. The

A three-year association management contract has been agreed

VOW MANAGEMENT CHANGE

firm has promised a 35% reduction in corporate costs on the prior year for 2012-13.

VOW has confirmed that business development director Simon Wallis will be leaving the company in December. The company’s marketing director, Helen Beckett, has been tapped to replace Wallis. Adrian Butler, MD of VOW, said: “Simon leaves after two years in his latest role and I would like to thank him for his contribution to the management of the VOW+ programme in this time.” Following on the success of the past five years the British Office Supplies and Services Federation (BOSS) and the British Printing Industries Federation (BPIF) have agreed to extend their association management contract by a further three years from July 2012 to June 2015. Maintaining original agreements, both organisations will retain their separate legal status and separate boards of directors, with BOSS outsourcing their administration, support, products and services to the BPIF. During the last five years of the management contract, BOSS membership has successfully increased by 30%, strengthening the membership to 1,300 members. BOSS members now have access to a wide range of additional BPIF products and services, including HR, health and safety, legal, environmental, consultants, ViP lean process engineers and training.

DIARY 8-9 September Office Club conference Newport, South Wales 12-13 September Office 2012 Earls Court

www.dealersupport.co.uk JULY 2012

INDUSTRY

CONFERENCE REPORT

Dispatches from this summer best dealer group conferences NEMO CONFERENCE: Growth and Innovation

Celebrating 25 years in the business, Nemo hosted a special conference this year on 22-24 June, centred on ‘Growth and Innovation’. The event was held at the De Vere Carden Park Hotel set in the picturesque Cheshire countryside. The weekend kicked off with a series of team building activities. including a golf tournament, archery, laser clay pigeon shooting and even duck herding. And although a sporadic drizzle of rain threatened to dampen the mood, the general consensus from dealers playing in the gold tournament was that the sport must go on. Friday evening’s Caribbean-themed beach party provided the ideal opportunity for everyone to dust off their summer clothes and indulge in some fun beach-related games and entertainment. But more importantly, it was a chance to raise a lot of money for the Boss Federation Benevolent Fund. Saturday began early with a presentation from Google’s industry manager Alex Nurnberg, who provided a fascinating insight into current and future online trends. The business session continued with a vendor exhibition where a record 52 vendors were given the opportunity to showcase new and upcoming products while networking with Nemo members. After an afternoon rest, guests re-emerged for the gala dinner and awards ceremony. The Hollywood theme and black-tie dress code ensured that the glamour stakes were high as guests enjoyed a three-course meal, while being entertained by a charismatic MC and a truly hilarious ventriloquist.

SUPERSTAT CONFERENCE: Cross the Line

Set in rural Northamptonshire, Whittlebury Hall Hotel and Spa was the setting for the 2012 Superstat Conference held between 28-30 June. Taking place only weeks before the 2012 London Olympics, the conference was appropriately themed: ‘Cross the Line!’ The weekend commenced with a speech from Superstat MD Chris Collinson, followed by an afternoon of business sessions and networking events. However, it was the evening’s final event that will have people talking for years to come. The Robert Horne Greek Night featured an impressive display of traditional Greek cuisine, live Greek music, a belly dancer, and, of course, plenty of plate smashing. And on at least two occasions a majority of the crowd could be seen participating in a Greek-style conga line that snaked around the room, kept on beat with regular acclamations of “Opa!” Suffering Ouzo-induced hangovers, conference participants gallantly rallied bright and early on Saturday for a well-attended supplier exhibition. The event featured 34 exhibitors, which gave dealers a chance to discover and explore the latest products and innovations in the industry. A relaxing lunch served in the hotel’s restaurant, and a Pimms social hosted by Spicers, gave conference participants plenty of time to network and get ready for the evening’s big event. The conference came to a dazzling climax at the Olympic-themed Gala Dinner and Awards sponsored by Spicers. Welcomed with a champagne reception, guests were escorted into a ballroom transformed into a black-tie Olympic Awards Ceremony stage, equipped with both a three-tiered rostrum and a giant version of the Olympic rings formed from dozens of coloured balloons.

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TAKE IT TO THE MAX Office Friendly Dealer Association is putting the ease into eMarketing with its relaunched system, Maxemail More than 60 members of the Sheffield-based dealer group are using the tool to promote products and events, strengthen customer relations or deliver all-encompassing marketing campaigns - from one convenient online hub. Businesses can produce and print bespoke e-shots, flyers and publications using hundreds of templates, as well as allow their customers to buy through an integrated ‘order pad’, without being sent to a separate e-commerce website. Maxemail, which also includes a VOW product search feature, full reporting metrics, video tutorials and spam checkers to stop e-shots being read as junk, will be integrated into OFDA’s forthcoming multimedia centre. OFDA MD, Steve Harrop, estimates that members are delivering more than 65,000 targeted emails to their collective consumers each month using Maxemail. “We’re really excited about this product as a sales generation tool for our members,” Harrop said. “It has a key role to play as part of an effective marketing strategy and can be very rewarding used alongside telemarketing sales as part of a punchy promotional campaign, increasing customer awareness and consumer stickiness.” For more information on Maxemail call Office Friendly on 0114 2566300 or email katie.metcalfe@officefriendly.co.uk

INDUSTRY

MERGERS AND ACQUISITIONS

COME TOGETHERâ&#x20AC;Ś RIGHT NOW Mergers and acquisitions are nothing new and can be a great way for businesses to evolve and fulfil their full potential. George Carey finds out the pleasures and pitfalls involved

JULY 2012 www.dealersupport.co.uk

INDUSTRY

MERGERS AND ACQUISITIONS

n these tough economic times, mergers and acquisitions seem to be increasingly prevalent, with those struggling looking for support and those who are making the dip work for them looking to add to their already successful business. Most notably, Unipapel’s acquisition of Spicers and subsequent selling of the UK and Ireland operations to Better Capital caused quite a stir at the turn of the year. The company has continued to shake things up since with the renegotiation of prices with manufacturers; the proposed sale of its head office; and the appointment of Lord Digby Jones to the board, but it has been business as usual. While the scale of Unipapel’s initial purchase price of £200m could make it seem like an undertaking that has no bearing on the average dealer, the principles are the same. It’s a tactic that, if done correctly, can work for all dealers great and small. It’s a course of action that could suit dealers in a range of situations and could become a necessity for some as the economic situation shows no sign of abating. Phil Jones, Brother’s deputy MD, says: “Businesses should be looking to each other for opportunities and areas of collaboration – both inside and outside the industry. Anything that will enhance a company’s offering to the market should be considered. Don’t be afraid to join forces, even with those companies you once considered the enemy.” If dealers have a stable structure and owners or managers have the time and commitment to oversee such a move, it can prove to be a very positive thing. Paul Green, director of Grantham-based dealer Harrison Green thinks that a strong vision and empirical reasoning for the move is essential if a merger or acquisition is to be successful: “They need to be clear on why they want a merger, its more than just gaining turnover.” Some may choose to acquire a dealer for geographical reasons. If the acquired company is on the outskirts of the buying dealer’s delivery area, for example, it can be a great way to improve your reach, without making journeys overly long or causing organisational issues.

Culture club Business culture is something that may not instantly be considered as important, but it can make a huge difference to both parties, if there are clashes in that respect. It can be difficult enough to integrate two businesses that have previously had little or no contact, but if they have a completely different approach to sales or customer service, it could prove to be disastrous. Jane Walker, MD of Compleat Office Initiatives, believes this is an important factor: “There is potential for power struggles going forward, perhaps a different vision of business – cut-throat or benevolent? For it to work I think the two parties would have to be very similar in ideology.” If one sales team is used to conducting the majority of their business face to face, it may be a nasty shock if they are suddenly expected to sit at a desk all day and make cold calls. Similarly, a salesperson used to a large degree of autonomy may find it irksome to be called into regular sales meetings and given rigid KPIs (key performance indicators) for the number of calls made or meetings arranged.

JULY 2012 www.dealersupport.co.uk

There is however, a clear distinction to be made between different and possibly incompatible cultures and different skill sets. It can provide a huge boost to a business to merge with or acquire another business that has more experience than them in certain areas. For example, one company may have a huge amount of experience in furniture and office refurbishment but be scared to tackle MPS (managed print services) or AV (audio visual) because they don’t feel comfortable having those kind of technical conversations with their customers. In that instance acquiring new knowledge and experience can prove to be invaluable. Distributors often use this business model to increase their product offering and this has certainly been the case with AV distributor Midwich. Stephen Denby, MD, comments: “A lot of our growth is organic but if a market is quite specialised, then it’s often easier to buy a business that’s got a good reputation and good people, while trying to integrate them into our model.”

“Anything that will enhance a company’s offering to the market should be considered”

INDUSTRY

MERGERS AND ACQUISITIONS

Opportunity knocks

Plan ahead

A company that is struggling can present a cheap opportunity for a dealer looking to add to their business, but such a proposition must be approached with caution. It’s important to consider why that business is failing and how realistic it is to turn those fortunes around. It could be down to a number of factors, such as location, personnel, cash flow or product offering. If the staff are unmotivated and not pulling their weight, it can be a gamble to attempt to turn that situation around. While a shake-up may provide new impetus initially, it may be harder to solve the underlying issues in the long-term. It’s also worth bearing in mind that we are all better at seeing each other’s faults, whereas the director of a company that has spent 10 years building it from scratch may not appreciate being told that his sales team doesn’t have the right approach. Buying power is a significant advantage that can be gained from joining forces and can make all the difference to dealers struggling to compete on price in a world where cheap internet deals are ten-a-penny. A little extra muscle in negotiations with wholesalers or dealer groups could see both businesses become a lot more profitable and, when combined with the potential for reduced overheads from moving into one office or sharing delivery vehicles, it could make the difference between sink and swim.

While meticulous planning can help to ease some of the inevitable stress involved for those choosing to merge or acquire, it’s important to remember that flexibility and reactive measures may be necessary. It’s important to realise that there will be teething problems and to expect the unexpected, as Green has discovered in his time: “I had the job of closing down a location and was en-route to meet with the staff to make everyone redundant when the IRA decided to issue a bomb warning. I couldn’t get to the branch because of road closures and neither could the HR manager. One of the staff checked their bank balance to find they had a large credit. When they phoned wages, they were told that it was their redundancy. By the time I finally got there, four hours later, they were all sat drinking copious amounts of wine.” The advantages for those looking to take the plunge are there for all to see, whether it’s spreading to a neighbouring county as part of your plans for world domination; gaining new staff with useful and previously unavailable skills; or simply gaining strength from being a little bigger. As with any business venture, if it’s properly researched and given hard work from both sides, there’s no reason it can’t be an exciting opportunity for both parties. DS

“Acquisit ion should n’t be see way to gr n as a ow for tu r novers sa survive b k e or to ym it’s not an aking yourself big ger, answer o n its own ”

JULY 2012 www.dealersupport.co.uk

INDUSTRY

SUPPLY CHAIN

Managing your category There’s a business strategy sweeping the OP industry that hopes to bring a more collaborative approach to the supply chain. Billy Taylor sets out to discover why everyone’s talking about category management

or the OP industry, the road from manufacturer to end user-can be long and winding. The distribution process is complicated and full of intermediaries, and an ambiguous marketing message seems to be the rule, not the exception. It’s no wonder traditional manufacturers are frequently criticized for their lack of end-user research, which raises the question: Is there a better way for suppliers to develop the products resellers offer? There’s a growing consensus amongst industry stakeholders that there might just be. In recent years there’s been a growing interest in the industry to analyse data at the category level. To develop successful strategic systems that not only save money, but add a broader value to the business. The concept is aptly named category management (CM) and it’s a valuable process for both the buyer and supplier alike.

JULY 2012 www.dealersupport.co.uk

“We’re still in roll-out, but we’re getting quite spectacular results”

The Category Management Association – (yes, there is a dedicated association) – defines CM as: “Trading partners collaborating to determine the point of optimization in pricing, promotion, shelving, and assortment to maximize profitability and shopper satisfaction.” While there are many traditional approaches to managing purchasing and supply, a CM strategy is winning over progressive business leaders due to its natural compatibility with technology. That’s because it’s a strategy driven, if not dependent, on market data. “From a technical viewpoint it’s about using all available data to better profile consumer buying patterns,” says Steve Plaistowe, a wholesale channel manager for Fellowes. “It enables resellers to gain either revenue and/or profit from adapting tactics to better meet consumer demands.” As a business strategy, CM started in North America in the 1980s. The process became known for the way

INDUSTRY

SUPPLY CHAIN

it changed the relationship between the supplier and retailer. Until then, the supply and procurement process was marked by a traditionally adversarial approach, but CM set out to convert it into a progressive, collaborative relationship. First limited to the grocery industry, its success soon had it duplicated across other retail sectors. But now, further fuelled by an explosion of information technology, allowing sales data to be more easily analysed, CM is slowly gaining traction within the OP industry. While Plaistowe acknowledges his company has used CM in its most basic form for some time, he admits that things have changed in the last couple years. He claims buyers are more willing now than in the past to provide greater detail and drive activities that add incremental sales and profits: “A good example would be the various trade-up promotions recently run within the wholesale/ dealer channel to encourage consumers back into branded archival storage products, and therefore experience a better product.”

CM and the manufacturer It’s one thing to talk about CM in an objective sense, but what does it is mean practically for a manufacturer? Gregg Corbett, marketing director for Avery, says CM is now a key priority for his company: “For us the essence of category management is efficiently meeting consumer needs by assessing the current performance of a category or trend against the market or competitors. Most importantly it’s about understanding the different types of consumers, their different needs and ensuring that the product offering meets these needs.” Simple, right? Just don’t make the mistake of dismissing it as corporate fluff. Corbett argues it goes much deeper than that, even for resellers: “We feel category management is such an essential exercise because it helps provide focus and a vital understanding of the categories, brands and products that generate the dealer a profit. It helps to give salespeople, whether they are on the phone or on the street, a clear insight into which products they should be promoting when and with which complimentary offering in order to lead to a stronger basket of products and ultimately better business results. While this may sound like essential basics – keeping it simple is important.” Corbett explains that CM projects at the supplier level can directly benefit resellers because the strategy promotes mutual understanding of each other’s needs: “For instance, we frequently organise blitz days for dealers where promotional and product literature is distributed to sales teams, as well as exciting promotions for staff and customers to help drive sales.” For Jon Green, sales director for paper-based stationery manufacturer Sinclairs, a company’s commitment to CM is paramount to its success: “From a manufacturer’s viewpoint, CM works excellently through any size organization as long as it’s adopted as a culture rather than a process because I think the skill sets and understanding required to successfully manage CM need the full participation of the whole organisation to ensure maximum benefits are gained.” Green is adamant in his belief that manufacturers should always remain focused on end-users, noting that CM is an ideal way to stay on track: “‘Consumer users first’ is the major principal, always has been, always will be. But it’s amazing how many organizations forget this.

JULY 2012 www.dealersupport.co.uk

However, the engine room of CM is in the analysis of the data.” To date the principles behind CM haven’t been practiced near as much in the OP sector as other sectors, but Green, who comes from a strong retail background, urges forward-thinking manufacturers to quickly embrace the concept if they haven’t already: “Sinclairs embraces the approach and with like-minded trade customers we are able to see tangible results.” Following his own advice, Sinclairs partnered with VOW earlier this year to develop a collaborative CM programme for its category. If you’re wondering if the company has witnessed results in such a short time, Green puts it best: “I think 2012 was the very first time Sinclairs adopted [CM] in the OP sector. And certainly in our category, we had the highest rate of success than any of our peer groups in terms of new product developments and listings.”

CM and the wholesaler The beautiful thing about CM is how well it resonates throughout the industry. By definition, the process includes the end-to-end management of the supply chain, so this makes it an important consideration for all stakeholders, including the wholesaler. Understanding this, VOW went live with a CM strategy in 2010. The OP wholesaler first started by testing a single category: repositionable notes. “It wasn’t easy because that’s when we were having our challenges as a business,” says Andrew Stacey, the vendor and product management director for VOW, “but we were working with 3M and they lent us some resources to start building our CM process.”

INDUSTRY

SUPPLY CHAIN

Stacey and other executives at VOW quickly formed a cross-functional team and started the task of developing a process-driven manual on CM. The team needed a global solution, but struggled to find precedence anywhere in the OP industry. So they borrowed principals found in retail CM guides, and built on it to come up with their own version developed specifically for distribution. In just over two years the company has gone from testing a single category to now managing over ten, with 15 more on the conveyor belt. Stacey explains the process: “What we do is allocate product categories or product sub-categories to identify suppliers to help us manage that category and manage the profitability throughout the whole of the supply chain.” Stacey explains that once a category is identified, the CM process is always the same: “We look at the categories with the biggest opportunities to begin with, and then approach those suppliers and say: ‘Here’s an opportunity and we think we can work with you.’ Some of the criteria we look at include: Are they going to be around? Will they have the data resource to help us work this through? Do they have a track record? Are they historically dominate in the area? The answers to all of these questions go into our scoring matrix and based on that we say: Are you interested? If so, pitch to us and tell us how you would category manage.” Once a supplier’s pitch for CM is assessed and found viable they are invited to become the ‘Category Champion’ for VOW. This, Stacey explains, begins an

JULY 2012 www.dealersupport.co.uk

“While this may sound like essential basics – keeping it simple is important”

intense, collaborative relationship between the supplier and wholesaler: “We start by sending data back and forth in order to be analysed. From there we build a joint strategic business plan with a score card that measures results. Only once everyone is comfortable with the process do we go live.” While Stacey admits the time between identifying a category and going live can vary depending on supplier, he is less ambiguous about the outcome: “We’re still in roll-out, but we’re getting quite spectacular results. Every one of the Category Champions that are live are growing above the market rate.” Although this doesn’t surprise Stacey who credits the success to the amount of data shared between the supplier and the wholesaler: “Every month we share two data files, transactions that happen and an inventory snap-shot. This allows [the Category Champion] to shape both the category and the stock holding in the supply chain. Often they make short-term, data-driven decisions to ensure that in the long-term the category prospers.” Through VOW’s CM process, Stacey says the supplier is finally able to make objective product decisions: “It gives the Category Champion a view of what the category looks like because they’re seeing the data. It’s actually bringing the end user much closer to the manufacturer.” And ultimately, that’s the point. Category management offers a process to bring a bloated sector together to collaboratively produce the best possible experience for the customer. DS

PEOPLE

DEALER INTERVIEW VOW

A Healthy Wholesaler VOW’s marketing director, Helen Beckett was recently tapped to serve as the company’s new business development director. Billy Taylor met up with her at VOW’s Arrow Distribution Centre to discuss investments and innovations

JULY 2012 www.dealersupport.co.uk

DEALER INTERVIEW VOW

Last time Dealer Support sat down with VOW, the company was emerging from a challenging period as well as some restructuring. What have you been up to since? In the last three years we’ve seen a number of developments both operationally and in terms of our sales and marketing structure. Primarily, our focus has been continuing to invest in our logistics and infrastructure whilst focusing on supporting our customers to grow. We very much see these two elements as key to our success. It’s important that we get the basics right, offering industry leading levels of service to our customers. For example, the building you’re in now is our flagship warehouse, and we’re continually investing and developing to offer greater efficiencies and flexibility. In the last 12 months alone we’ve introduced a number of new initiatives. One would be shrink-wrapping paper, which has reduced our damage levels significantly – particularly when it goes through our Wrapide service via UPS. Ultimately, improved deliveries and lower levels of damage result in our customers offering an improved level of service to their consumer, so these types of investments are beneficial throughout the supply chain. In the last three years we have also commissioned a new semi-automatic warehouse, which increases our ability for growth going forward, and allows us to work our stock harder which results in our ability to achieve consistently high service and fill rates. In addition to operational developments and investments, we have centralised our sales and service functions since you last spoke to us. Now we have a centralised, internal sales and customer service function in Wakefield. It’s actually in the same building as the warehousing. How much stock is kept in Wakefield compared to this facility? There is around 20 million pounds of stock here, and about 15 million in Wakefield. We also have a third, semi-automated warehouse in Ireland. We are running from three major hubs across the UK and Ireland now, but if you look back 15 years ago we were running from 13 different individual warehouses. There has been a significant investment to the way we manage our logistics, and that goes back to getting the basics right. I can imagine all of those things help to make ordering more efficient. Absolutely. Our customers’ success is our success ultimately. We need to ensure that we enable our customers to deliver the right product at the right time when it’s expected. All of the investment that we put into the facility here, in Wakefield or Ireland, ultimately makes the whole operation more efficient for us and our customers, and that’s fundamental to the resellers’ success. Let’s step back and talk about the industry as a whole. In what can be described as a prolonged recession, have you noticed a shift in the way you work with dealers? I certainly think the industry has found the economic environment challenging and if our customers are finding conditions challenging, this has an impact on us.

www.dealersupport.co.uk JULY 2012

PEOPLE

DEALER INTERVIEW VOW

But I’m pleased to say we have had a strong start to 2012. If we are to continue to see growth we must continue to look to the future. We’re investing in the tools and services to enable our customers to grow long-term. I don’t think the economic environment has fundamentally changed the way in which we work with the customer but I think it means we are looking beyond just the products and services of today and trying to focus on what the next opportunities for our customers are; for example, facilities management. We’re looking at supporting our customers to diversify into new product categories and services. It’s about moving beyond today and preparing for tomorrow. How important is diversification? I think it’s really important that we support the reseller to diversify. If you look back at the industry 15 or 20 years ago, a stationary supplier would never have dreamt of selling ink and toner – and we all know what a large proportion of the market EOS is now. VOW would’ve never dreamt 20 years ago, as an office supplies wholesaler, that we would be one of HP’s top five distributors, or that we would have direct distribution agreements with all the key manufacturers. These are all examples of not only VOW but also our resellers diversifying. We hope to replicate that with the facilities management category. That is certainly our aim: to grow the FM category in the same way that we grew the EOS category all those years ago. At Dealer Support we try to constantly push dealers to diversify their offerings. Are you getting a positive response to the added products and services? Absolutely. We’ve had a limited range of FM products for probably ten years. If you look at coffee, for example, and some of the basic janitorial products, they’ve been featured in the main catalogue for some time now. However, it’s been during the last 18 months to two years that we’ve really started to grow the product category. We launched a specific FM catalogue for 2012, which was extremely wellreceived by our customers and those customers who took the catalogue in 2012, I’m pleased to say, are growing faster in the FM category with VOW than those that didn’t. I think that is a really good message when we’re talking about growing the FM category into 2013. We also hosted two FM roadshows earlier in the year, and it was evident by how many customers came to those, and also sent along their sales teams, that it’s not just about having a catalogue and putting product on the page, but it’s about supporting the reseller in terms of knowledge and expertise to enable them to address the market in the most appropriate way. FM now accounts for ten per cent of our turnover as a business and that continues to grow. It’s a really positive story for both VOW and our resellers. Tell me about VOW’s new MPS solutions. We launched managed print services earlier in the year, and we’ve been on a journey in that area ever since. It’s our belief that going forward managed print services will not be limited to the large corporate end-user, but will start to be embraced by

JULY 2012 www.dealersupport.co.uk

medium to small-sized organisations. As such, it will become increasingly important for resellers to have an MPS offering. We worked with a small number of VOW resellers to shape our service provision. We have two MPS partners. We have partnered with PrintFleet on our software and analytics solution and we’re also partnering with a company called, M2 to support the full MPS solution. What we’ve introduced in terms of the solution itself is almost a staged solution consisting of three facets. The first facet allows the reseller to introduce PrintFleet software into their end-user businesses, which mean they can see the data of the usage of consumables within their customers business. It allows the reseller to then offer different levels of MPS, and that can be as simple as the software allowing them to see when a cartridge is about to run out. They can deliver the cartridge to the end-user before it even runs out which is absolutely fantastic in terms of the service proposition they can offer to their customers. At the top end of our MPS solution, we have partnered with M2 to offer a full, almost re-engineering of the print environment. So for example, the reseller, in partnership with M2, would audit their end-user to understand their usage. Then M2 and the reseller will submit a proposal in terms of how they can streamline that print environment offering hardware, consumables and maintenance. Additionally, we offer a unique mid-level MPS solution called MPS Lite in which they get all of the service, support and benefits from a full MPS solution but they keep their existing devices.

It’s important that we get the basics right, offering industry-leading levels of service to our customers

It’s great to have different options for resellers. I think it’s very important to have options. With around 3,500 resellers in the UK we have to be able to

PEOPLE

DEALER INTERVIEW VOW

offer solutions where customers can select and choose what is right for them. It’s not about us dictating what is right, it’s about providing options and flexibility. I believe we’ve achieved this with the MPS solutions. I mentioned earlier how important it is for us to have the tools and services available for tomorrow, and I really believe that MPS is one of those. Have these investments helped VOW take any market share from Spicers? We’ve certainly seen some wins from Spicers over recent years; and we haven’t lost any the other way. Having said that, I mentioned right at the beginning, our focus is very much on supporting our supporters. It’s very much about working with our VOW+ partners, and VOW+ supporters, to support them to grow. We employ a lot of time, effort and resources to developing relationships with existing customers and supporting those customers to grow. That said, as we enter new product categories there will be other competitors and we will never be complacent about our position in the market. Competition is healthy; it means we’re laser-focused on where our priorities should be.

some direct feedback from those customers first. We talk to them about what the opportunity could be, and they tell us if they believe the opportunity is a reality. We work with them to shape those solutions. Have you ever taken an idea to the PDF that you absolutely loved but they hated? I wouldn’t say we’ve had examples of that, but we have thought we ticked all the boxes necessary and they’ve helped to shape and define the initial concept into an action plan that works for the reseller. A really good example of that would be when we were talking at the last meeting about some of the marketing literature we have available for the secure shredding solution. And some of the guys gave us some really, really good feedback about how we could develop that to be more appropriate for the sales process related to secure shredding.

That’s where we want to be: partnering with our customers and helping them to grow

Speaking of focusing on your current customers, tell me about the Partner Development Forum. We have a group of customers that we call our PDF, Partner Development Forum. There are 12 resellers in the group from across the UK and Ireland. The senior management team at VOW meet with them quarterly, and its role is to be a discussion forum. The PDF members come to us with items they’d like on the agenda, and we go to them to say: “These are some ideas, concepts, theories, thought processes that we’re going through.” It’s a fantastic forum for some feedback. It means that when we are considering developing a tool or service, for example, we get

JULY 2012 www.dealersupport.co.uk

Looking toward the future, where do you see VOW in the next two to three years? I very much believe that for the reseller it has to be about developing a business model to encompass a larger range of services for the end-user. It has to be about developing end-user loyalty and getting as much share of that end-user’s business supplies spend as possible. I think we as a business have to continue to invest; we have to continue to be as lean and efficient as possible. We will continue to look at new product categories, but not stop there. We will continue to look at services and tools that enable our customer to achieve high levels of customer loyalty. In the future, partnership will become increasingly important. To survive we need each other, the reseller and wholesaler, and we can only achieve success if we’re working together with the same objectives. That’s where we want to be: partnering with our customers and helping them to grow. DS

PEOPLE

DEALER INTERVIEW Harrison Green

RUB OF THE GREEN George Carey talks to Paul Green of Harrison Green about the early years, sending the Liberal Democrats packing and worryingly fast scooters

JULY 2012 www.dealersupport.co.uk

DEALER INTERVIEW Harrison Green

What made you decide to start the company? I’d always wanted to run my own business. I was made redundant in ‘99, which really focused my mind and I decided that I wanted to use my redundancy pay to start a company. Where does the Harrison come from? Harrison was a local printer and previous companies that I‘d worked for had subcontracted a lot of their work out to them. So when I was starting up, I went to them to see if they’d be happy to do the same with us. As it happened, they were looking to diversify, so they offered us an investment and office space. After two years we bought them out, but didn’t want to change the company name, so we kept it. How many of you were there in the beginning? It was just the three partners to begin with: myself, Lee Alexander and Jane Green. Our growth has been a gradual process. Staff members Jo Phillips and Bob Taylor were both people we’d worked with at previous companies. It was good because as we decided that we needed more staff, we were able to cherry-pick the best people that we’d worked with in the past. I don’t think there are many companies that can boast such a wealth of experience from such a small group of people. Last time we totted up, we had 110 years between five people. It makes you feel quite old when you say it. How did you find those early years? They were particularly hard. When we started we did the exact opposite of what people normally do and didn’t try to take any customers

with us. We started with a clean sheet. It made the first couple of years very hard. There was a lot of cold calling but we never had a blank day, even in the first couple of weeks. The third year was the worst. We won a £100,000 furniture order, but if they hadn’t placed that order and paid their deposit, I think we might have had to call it a day. It gave us a good example of where we could improve and we started to concentrate more on furniture as a result. From year three until the recession started, we did more and more furniture until it was around 30 to 35% of our turnover. I never wanted furniture to account for more than 50% of our business, because as soon as a recession hits, that side of things slows down. It’s picking up again, but if we had been relying heavily on furniture for our sales, the last three years would have been really tough. What have been your highlights during your time in business? In 2005 we won business of the year in the local area. In our first six years we were runner up every year and then at the seventh attempt, we finally cracked it. We’re not very good losers, so it was great to win after coming so close on that many occasions.

CV LOCATION: Grantham, Lincolnshire TURNOVER: £900k

What’s the biggest difference that you’ve noticed in terms of products or services that customers want now, compared to when you started? I don’t know if it’s down to our own focus or customer demand, but furniture has grown to be a much bigger part of our business. One thing I’ve learnt is that you’ve got to sell into different sectors. At the moment we’re

DEALER GROUP: Office Friendly MARGIN: 34% NUMBER OF VANS: 2 NUMBER OF STAFF: 9 BUSINESS SOFTWARE USED: Prima

www.dealersupport.co.uk JULY 2012

PEOPLE

DEALER INTERVIEW Harrison Green

focusing on corporate gifts, EOS cartridges and catering supplies. We’re trying to find all of the purchasing contacts within companies that can buy those products from us. Our growth in the last three years has been well above what people would expect and it’s come from those sectors. Underlying office supplies has been quite static, so it’s only by diversifying that we’ve managed to grow.

Co-directors Lee Alexander and Paul Green

What got you into promotional gifts? We have a customer who is a business gifts supplier and suggested that if they give us some of their catalogues, we could start a joint venture. As our demand grew we started to involve some other suppliers and this month we’ve launched a specialist gifts website that links to our main site. Does the new website have e-commerce? You can’t actually pay using a credit card, but it generates an email order that goes to us, so we can add it to an existing customer’s account or get in contact with any new customers. It’s not an e-commerce site in the truest sense, but they can complete the whole order on there. They can also create a virtual sample, by uploading the logo they want to use, which will then be automatically applied to any product they look at from that point onwards. Do you have e-commerce on your main site? No. It’s going to sound a little bit odd but we want to trade with companies that we know, so we don’t want to take orders from just anyone. We prefer to work closely with a customer so that we have that business for a long time, not just a few orders here and there. It’s been our policy since we started. Do you tend to make business plans in advance or just react to the market? We plan quite far in advance. Every three years I take a few days to step back and re-do the entire business plan, which I did last autumn. In the autumn we sat down and looked at everything to see what was declining and where the new opportunities were. We do a definite three-year business plan inside a looser five-year plan, because you don’t know what’s going to change. It’s a great way to focus your mind and it reminds you of some important things, such as 80% of your business coming from 20% of your clients. I know everybody says it but I honestly think that our customer service is second-to-none, but we need to focus that in the right way. We had a customer recently that specialises in customer service training and after we processed their order in the usual way I got a call from the owner of the business, who said that in 20 years of working in customer service, she’d never had a better experience. The downside of that is that you can sometimes service the wrong customers. It’s just not cost-effective to spend as much time on a £30 order as we would on one of our

JULY 2012 www.dealersupport.co.uk

I know it’s an over-simplification but there is no easier industry

big clients. When we did the business plan, we decided that we would no longer pursue customers below a certain value of business. Are you a member of a dealer group, and what do they offer you? We’re a member of Office Friendly, and one of the big advantages of that is the catalogue. It’s particularly good and suits our business model because it channels people down to a core choice of products, where we can control what they’re buying more easily. Rather than one of the big wholesaler catalogues with 20,000 products, it has 4,000 and through Office Friendly, we’re more in control of the margin on those products. Does that mean that you’re quite strict on the range of things that you’re willing to supply? Absolutely not. In the past six months for example we’ve supplied lawn mowers and helped people to move offices, there’s nothing we don’t do. The Liberal Democrats headquarters in Westminster is one of our biggest clients and when they moved last year, we did everything for them.

Was that an area of business that you decided to focus on, or did you come across it by chance? A bit of both really. We’ve been asked to supply furniture when people have moved into new buildings and then when we did that it just seemed like an obvious thing to try. The benefits are two-fold, because you can make a profit from the move and it’s also a great way to develop further business with that customer. If you’re talking to people about their move, you’re talking to them about all the different things you could supply, and it’s often a different person that you don’t normally deal with. There’s another company that we moved last August and since then we’ve started providing all their catering supplies. Before that, they didn’t realise that we sold that type of thing. How does your recruitment work? We don’t tend to actively recruit. In the last year or so we’ve been talking to more people about that, because I think we could do with someone else, but it’s not really pressing. If we come across the right person we’ll talk to them, but we wouldn’t necessarily advertise. Because we’re so established as a team, we need to be certain that someone will fit into our culture and we’re more likely to find that out talking to people, rather than just advertising blindly. Do you focus on eco-friendly issues much as a business? To be honest, up until now, we haven’t. We’re very careful not to be wasteful as a business, but there just hasn’t been the demand from customers. We’ve always said that once

Heatons Trading Company is powered by...

DEALER INTERVIEW Harrison Green

DEALER BOOKMARK

Paul on his scooter, Lee on his BMX

Name: Tim Clixby Job title: ICT Manager Dealership: Heatons Location: Merseyside SPECIALITY

Heatons offers transparency with customers, state of the art IT systems and well-established specialist departments providing a high quality, very personal service. We are extremely proud of our customer retention record.

we start getting regular questions about it, we’ll look at getting some form of accreditation. That has happened twice in the last month, so I’ve just set up a meeting to look into Office Friendly’s So-Go-Eco programme.

includes everything that a business needs, how can it be that tough? When businesses are failing, solicitors and accountants are always busy, so target them. There’s always someone that’s doing well.

Do you divide your salespeople up by sector? It’s funny you should ask, because that’s something we’ve been thinking about recently. Lee and I are normally the creative ones, so we’ll research new areas of business and then pass that information down to the team, so that everyone can work on everything. However, we’ve recently taken on Claire Hayes, who’s going to focus on promotional marketing and corporate clothing, so we may choose to have specialists in the future.

What do you think sets Harrison Green apart? It’s our service and our honesty. We’re always very honest with people about how we make our money and how the industry works. We’d rather explain to a customer how catalogues work, rather than manipulating margins. We’ve recently changed our strapline and it came from a customer after a meeting. He’d been fending us off for about three years but we finally got a meeting with him and he really appreciated our honesty. At the end he said: “That was refreshingly different”, so we kept it.

What do you think is the biggest challenge facing dealers today? I think maintaining focus is a big problem. There are so many potential areas of business now, but where do you attack first? When you’re talking to people, it’s sometimes tough to know what area of business to start off talking about. One of my pet hates is when you get any group of office supplies companies together, they’ll talk about how tough the market is and it’s simply not true. I know it’s an over-simplification but there is no easier industry. We’re selling to businesses and it

Finally, I’ve got to hear about the British Scooter Championship Lee and I are incredibly competitive and we both race at the weekends. I spend my weekends on a 100 mph Lambretta and when people come to watch they’re shocked at how fast scooters can go. Lee races BMXs, so there’s a running joke about him still using a kid’s bike. He’s a former British champion and still competes at a high level. Of course, my scooter is covered in Harrison Green stickers. DS

I joined Heatons on a short-term contract after completing my A-Levels in 1999. I was tasked with improving the efficiency of the IT systems and establishing an e-commerce platform. Now we process £1.7m of business each year online.

WINNING MOMENT

Flicking the ‘go live’ switch when we moved to Horizon with BlueSky back in 2006. We were only the third or fourth dealer to take it, and certainly the biggest.

CATCHPHRASE

“It’s not a big job; it won’t take 10 minutes.”

WORD FOR THE WISE

We heavily rely on Horizon’s Automate and Robot modules. They remove the mundane ‘button-pushing’ processes of the business, whilst keeping customers informed and releasing staff to focus on important roles.

THE LEADER IN INDUSTRYSPECIFIC BUSINESS SOFTWARE

www.eci.eu

MANAGEMENT

GROW YOUR BUSINESS

JULY 2012 www.dealersupport.co.uk

GROW YOUR BUSINESS

or a long time the office supplies industry has regarded inkjet and laser printers as performing very distinct roles. As Dexter Harris, UK and Ireland marketing manager, imaging and printing at HP, puts it: “Inkjet printers were traditionally favoured by consumers due to the lower cost while businesses tended to use laser printers due to their quality, reliability and speed connotations. However, over the past few years technology has developed significantly in both the laser and inkjet markets, resulting in a shift of these habits – although inkjet is still preferred in the home, there are far more businesses today using inkjet printing than ever before.” So, are we seeing a softening of the lines between the two technologies, or are the stereotypes in place for a reason? LASER

Laser printers, which have been seen as the long-time printer of choice for businesses but with a high power output, haven’t always offered the best choice for those looking to keep their carbon footprint the right side of the abominable snowman. Alan McLeish, senior product marketing manager for OKI, thinks this is no longer the case: “We recognise that laser printers do use more energy, so we’ve incorporated something called deep sleep mode, which uses almost no power but stays awake enough, so that if a printing job comes over the network, it will print it quickly.” He continues: “We’re actually using more powerful fusing technology, which warms the machine up faster. It’s what people want and because it also cools down quickly, it also cuts down on energy consumption. Many of our products are only using one watt of power in their deep sleep mode.” Someone else who’s keen to point out the improved eco-friendly credentials of laser printers is Anne-Marie McGarry, Samsung’s product marketing manager. She explains: “All of our devices come with our eco driver, aimed at reducing the environmental impact of printing and people’s costs. It’s easy to put pages into duplex or print multiple pages on one piece of paper. We also have toner-save mode, so you can save up to 30% on your toner costs.” While the toner-save mode sounds like a compromise on quality, McGarry doesn’t think this is the case: “All of our printers use polymerised toner, which has more uniform particles, and therefore a glossier output. Because the toner particles are so fine, the saver mode is fine for everyday use.” She does subscribe to the opinion that these machines are better suited to a business environment, pointing out that if you’re only using a printer for a few pages per week, you won’t see much benefit from these new features. For the SOHO market, there’s also the higher start-up costs associated with laser printers. Another advantage to laser printing is the speed accomplished when printing large quantities, while still achieving good results. As Harris points out: “For those industries and businesses printing high volumes of black and white prints – such as the legal profession – are more suited to laser, due to its high speed and print quality.” McGarry is in agreement: “Because it’s a powder that fuses to the fibres of the page, it’s like a stamp, as opposed to inkjet, where the ink is dropped from a height. With laser you can get more precise lines, so it’s better if you’re doing anything that’s really detailed and there are no problems with smudging that can occur with ink.”

www.dealersupport.co.uk JULY 2012

MANAGEMENT

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INKJET

It appears that laser is in the process of casting aside some of its negative associations, so has inkjet managed the same? It has always been associated with photography and, due to its cheaper running costs, home use, while not being seen as an option for businesses that get through high volumes of print. Vasanta Group technology category head Gilly Blackburn thinks that manufacturers have made leaps and bounds in recent years to redress the balance: “With inkjet you get a better quality of print and better images and some companies have made great headway with turning inkjet into more of a business machine. The cost of the ink is now closer to the cost of laser and the printing speed, which has historically been an issue with inkjet in the business environment, has been improved so that’s gaining them some traction.” She continues: “People have stuck by laser because it’s a cheaper cost per page but you do have the extra hidden running costs.” McLeish also subscribes to the opinion that these problems are no longer as true as they were: “In the business environment, inkjet is perceived to be more expensive, slower and less robust, but it’s not always the case.” Despite the improvements made by laser printer manufacturers, reduced energy consumption is still something for inkjet machines to hang their hat on. Peter Butler, pre-sales manager for Epson, says: “With our business inkjets, a major selling point is the electrical consumption. Comparing it to laser printers it’s about 80% less. Colour lasers can use up to 1, 000 watts when the fuser is flashing, whereas our new inkjet will get up to 26 watts, maximum. Colour lasers also tend to use a lot more power on standby as well. Because inkjets are a cold technology no heating required – they’re a lot cheaper to run.” Traditionally the cost of consumables at high-volume has been seen as greater for inkjets, but as Butler explains: “The cost of the inks and therefore the cost per page is vastly improved if you look at yields. We quote up to 50% savings but there are other inkjet printers that quote even bigger savings than that. If you go up against the big, very expensive lasers then their consumables tend to be cheaper but you’re paying a lot more for the hardware.” Another black mark against inkjets in a business context has tended to be the speed of printing. This is another factor that Butler thinks they have gone a long way to eradicating: “People tend to think that inkjets are slow compared to lasers but because there’s no fuser to heat up, they can start printing pretty quickly, it’s almost as fast as the PC takes to process the information. We can have the first page out in seven seconds, which is an improvement on most lasers that can take up to 12 seconds. When we speed tested against 20 page-perminute lasers, we actually found that the business inkjets were quicker to print out four pages. ROLES REDEFINED?

With the improvements in both technologies, it certainly seems that the dividing line between those using inkjet and laser is not as stark as it was. It seems unlikely that a corporate behemoth printing 10,000 pages per week will turn to inkjet and equally, a consumer with very low usage will continue to baulk at the relatively high initial cost of a laser machine. However, for the large number of potential customers in the middle, it’s time to start having the conversation to check that they’ve got the right printer for their business. It would appear that the force is strong in both. DS

JULY 2012 www.dealersupport.co.uk

Laser printers tend to use more energy to heat the fuser but the power consumption has come down dramatically compared to what it was

MANAGEMENT

FEATURE

Is ignoring supply chain financial risk dangerous? Do you rely on a chain of suppliers to meet customer demand? The journey from source to destination is paved with risk and uncertainty. Nick Hood , head of external affairs at Company Watch, explains how you can better judge vulnerabilities

y common consent the UK’s battered post-recessionary economy has slowed to a crawl or even worse. The implications are profound, with the low/no growth scenario threatening the health and survival of many suppliers, especially those companies that have already eaten their fat during the recession and were looking to the recovery phase to restore their financial strength. Never has it been so important for those responsible for procurement to make sure that they monitor the ongoing financial health of the suppliers and service providers on which their businesses rely. They need to be ahead of the game in spotting potential problems, and minimising risk has become paramount. Simply relying on the due diligence when the relationship started will lead to trouble in these times when a firm’s finances can change so rapidly. So far so good, because credit information about suppliers is widely available, although the variety of data available can be bewildering. There are various early warning systems, which pick up significant adverse events like the late filing of accounts, court judgments and formal insolvency filings, providing useful real time data to prompt credit urgent action to mitigate a potential business interruption. At the other end of the spectrum, there are information providers who use complex analytics applied to several key aspects of a company’s financial profile, such as asset management, funding source dependence and profitability, not just as individual factors but in combination and set in the context of the country and the sector in which the business operates, as well as its relative size. A system like this also looks at trend data over several years, avoiding the snapshot mentality, which can be so misleading in a rapidly changing commercial situation. One of the great problems with most credit information is that it relies on out-of-date financial data. UK public domain information from Companies House can be as much as 21 months out of date, which might be particularly unfortunate when looking at the health of a company going through a sudden and survival-threatening downward spiral. Fortunately, one of the more sophisticated systems offers modelling capability to stress-test risk profiles and look at all manner of “what if” scenarios. By way of example, this enables its users to input management accounts from suppliers, if they have them.

JULY 2012 www.dealersupport.co.uk

MANAGEMENT

FEATURE

Take the hypothetical example of a well-established medium-sized manufacturing company, with annual turnover of some £70m, decent gross margins of 13% and post-tax profits of £800k. Its net worth is £16m. The diagnostics on its latest accounts to May 2011 show the company has a health rating (H-Score) of 33 out a possible maximum of 100, not great but well above the warning area below 25 where statistically one in four companies fail or need major restructuring. (See the health profile in box 1.) Moving forward, the November 2011 management accounts show the business has achieved a commendable 12percent rise in sales but suffered price pressure which has reduced gross margins by an apparently modest 1% to 12percent. Add a dollop of overhead cost increases and some non-tax deductible reorganisation costs and, hey presto, the profits have disappeared. The sales for the half year are £38m, the gross margin is still £4.6m, but post-tax profits are a paltry (£14k. See how the health profile has changed in box 2.) Despite the growth spurt, the H-Score has dropped from 33 to 21 inside the warning zone, making the company a potential candidate for failure and very definitely a supplier which needs to be closely monitored. This is food for thought for those responsible for procurement, who may well only have been told by this supplier that it was doing well in the recovery phase. After all, who wouldn’t boast about a 12% increase in sales in such uncertain times? (See box 3.) This example looks at an apparently successful business, highlighting frailties only revealed by current data. But there are other equally worrying scenarios. Take the health charts for an AIM-listed company called Legion Group, which provided total security solutions and which went into administration in August 2010. This is a classic illustration not just of the need to recognise when a supplier may be mortally wounded and take action to avoid an unexpected supply chain interruption, but also of how long the warning signs can be there before a company’s final demise. Legion was in the warning area with an H-Score of only seven out of 100 in its final published accounts. But it had been at rock bottom figures of two in March 2009 and eight in March 2008, a whole 30 months before it collapsed. Astonishingly, not only did it trade through that whole period, and presumably with customers who were prepared to take the service interruption risk, but with an active public share listing. So, everyone who takes responsibility for their company’s supply chain management, or more precisely its smooth and efficient operation, should be thinking about the potential vulnerability of its components, those suppliers and service providers upon whom they depend. Once upon a time judging these risks was a dark art, now it is very much a science and one which should no longer leave room for nasty surprises. DS

JULY 2012 www.dealersupport.co.uk

BOX 1

Source: Company Watch, June 2012

Health Profile

Factor Profile

100 100 75 75 50

0 4/07

0 4/08 H-Score

4/09

5/10

SIC Average

5/11

Warning Area

4/07

4/08

Profit Management

BOX 2

4/09

5/10

Asset Management

5/11 Funding Management

Source: Company Watch, June 2012

Health Profile

Factor Profile

100 100

75 50 50 25

0 4/07

4/08

H-Score

4/09

5/10

SIC Average

5/11

11/11

Warning Area

4/07

4/08

Profit Management

BOX 3

4/09

5/10

Asset Management

5/11

11/11

Funding Management

Source: Company Watch, June 2012

Health Profile

Factor Profile

100 100 75 75 50 50 25

0 9/04

0/05 H-Score

9/06 SIC Average

3/08

3/09 Warning Area

9/09i

9/04

0/05

Profit Management

9/06

3/08

Asset Management

3/09

9/09i

Funding Management

MANAGEMENT

FEATURE

Domain names â&#x20AC;&#x201C; key to online success Gerard Doyle , CEO at DiscountVouchers, explains why it is important to get the perfect domain name for your business

very business in the UK wanting to do business online needs to register a domain name at some point and almost all of them will frustratingly discover that the domain they would have liked has already been claimed. It is hugely irritating for the aspiring entrepreneur, but made even worse when the person who owns that domain is not even using it. Domain names are a valuable business commodity. A domain can be likened to real estate; it is limited in supply and as the population of online business increases, so does the value of the domain.

JULY 2012 www.dealersupport.co.uk

MANAGEMENT

FEATURE

THE REASONS FOR GETTING THE RIGHT DOMAIN NAME

There are various steps to take when selecting and registering a domain name. Although it is important, the process doesn’t just stop at picking a name that you like that ‘fits’ your brand. It is essential for businesses to protect themselves while creating every chance possible to attract traffic to their site. A proven way to do this is to register multiple extensions such as ‘.org’ and ‘.net’ in addition to the extension you have already chosen for your online business. By doing this you will be able to capture more visitors for your site as even if they have typed the wrong web address; traffic can be diverted to the correct site. Registering multiple extensions also minimises the chances for a competitor to register a similar domain name to your business. This will stop visitors searching for your site from being distracted by a similar looking web address. Additionally, it can be beneficial to look to the future. You may only be starting out, but will there be potential for your company to grow outside of the UK? If so, it’s a good idea to register a ‘.com’ or ‘.net’ domain name alongside ‘.co.uk’, so the name is there and ready for any future expansion. WHAT MAKES A PREMIUM DOMAIN NAME?

While the variation of domain names is almost infinite, it is only the ‘premium’ domains that go up in value. For example, Books.co.uk will continue to increase in value while ez-books-1234.co.uk will rise much more slowly (if at all). The disappointing reality normally strikes when our new business owner excitedly offers to buy a domain only to be presented with a five or six figure price tag. This leaves our entrepreneur with two options: buy the premium domain or register a new domain that has no meaning but one they hope to build a brand around. Thousands of hugely successful businesses have been created around non-topic specific domains names. Just think of Google, Yahoo, Amazon, Groupon – to name a few. However, these businesses have had to invest massively in branding in order to build the name from a random term to the association it has today. The clever entrepreneur will now be considering who is investing in premium domain names and questioning how they identify future trends. GETTING A KEYWORD-RICH DOMAIN

Premium domain names have been given the ‘premium’ rating as they are already registered domains that are now available for resale. These names are often short and made up of memorable words including key search terms. Domains including search terms are considered premium as the name exactly describes the product found on the website. Having a premium domain name gives you a competitive advantage in search engines, such as Google, due to the ‘exact match’ between the domain name keywords and the popular Google search phrases. There really are only two ways to go if you want to build a large online business. You can get the perfect match domain name or you can invest millions building up a brand like Groupon.

JULY 2012 www.dealersupport.co.uk

INVESTING IN ADDITIONAL DOMAIN NAMES

The domain names market is big business and it’s good to be aware of how many people out there could be looking at the same domains as you. As a consequence, this could mean that you’ll be spending a lot for the name you want. Similarly, the domains market is a money-earner for some investors, as they buy up names at a cheap rate that they anticipate could be desirable to a business in the future. Andreas Voniatis, owner of the SEO agency Alchemy V, has been fortunate enough to sell domains during the domain name ‘land rush’ for a massive return on investment. “I’d purchased a bingo-related domain name that I really liked the sound of. I built a small website and was then approached by a large gaming company looking for a new UK brand. I decided to ask for my dream price and I was shocked when they settled for a five figure sum. A fantastic return on the £7 domain purchased only two years earlier,” says Voniatis. Greg Platz is the CEO of Fabulous.com, a public company in Australia and one of the largest professional domain name companies in the world. “Domain names are big business and major brands know the value of the right domain name,” he says. Fabulous.com now hosts and monitors more than five million domains, as well as a huge resale website FabulousDomains.com. BUT IS IT ALL IN THE NAME?

Having the right domain name is not the only key to a highly profitable business. We have found success through turning a premium domain into a leading brand. Customer engagement is crucial for any online business to ensure customers know you offer the services they want. This is essential to reduce the chance of visitors being led astray, which can easily happen in the hugely competitive world of the web. But of course, the first thing people remember is a name – whether that’s because they’ve been faced with fantastic branding, a quirky name that stands out or a ‘perfect match’ domain and that’s certainly something worth considering when starting on online business. DS

WWW.GHNDIRECT.CO.UK

THE SIMPLE RECYCLING SOLUTION DO YOU AND YOUR CUSTOMERS FIND THE CHOICE AND SELECTION PROCESS FOR RECYCLING BINS AND ACCESSORIES TOO COMPLICATED?

If so, we have a very simple solution for you â&#x20AC;&#x201D; single, double or treble units available as complete entities.* All variations supplied as a single package. We can even deliver packs direct to your customer. Check out www.ghndirect.co.uk for more information.

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PLEASE VISIT WWW.GHNDIRECT.CO.UK TO VIEW THE FULL RANGE OF KEBASORT BINS AND ACCESSORIES . SINGLE UNIT 1 grey 60 litre container 1 trolley 1 blue lid 1 lid hinge 1 pair of trolley connectors

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G.H.NEVILLE LIMITED, UNIT 1 ALBONE WAY, BIGGLESWADE, BEDFORDSHIRE, SG18 8BN | TEL: 01767 316437 | GHNDIRECT.CO.UK

FINAL WORD

The impact of disposable batteries on the environment

Sustainable energy Mark Wiltshire, general manager UK and Ireland, Uniross

Rechargeable batteries have up to 32 times less impact on the environment than disposable batteries

he UK battery category has continued to grow over the last few years. Innovations in alkaline, new applications in lithium batteries, and new rechargeable batteries/charges have all contributed to the trend. However, with this growth, the issue of their impact on the environment has become more and more important to our industry, and the question of how to reduce this impact needs to be resolved. Batteries are made of chemicals and valuable raw materials. They should be collected at the end of their life to be processed for recycling in order to avoid the loses of chemicals to the environment enhancing the sustainable management of our resources. Using rechargeable batteries is a viable economic and environmental alternative to disposable batteries as they can be recharged up to 1,000 times, cutting potential battery waste volume to a 1,000th of its current level. As such, Uniross is co-founder of two associations, and is actively committed to working towards increasing the percentage of batteries recycled as well as encouraging the use of rechargeable power sources. BIO-INTELLIGENCE SURVEY

Uniross carried out a bio-intelligence survey in 2007 that served as the first worldwide study comparing disposable batteries with Ni-MH rechargeable batteries. Performed by Bio Intelligence Service for Uniross, the study was based on a comparative life cycle analysis between disposable batteries and rechargeable batteries. Ultimately, the study found that rechargeable batteries have up to 32 times less impact on the environment than disposable batteries. Adopting five main environmental impact indicators, Bio Intelligence Service concluded that based on 1 kWh of energy produced, rechargeable batteries have: 23 times less potential impact on non-renewable natural resources; 28 times less potential impact on global warming; 30 times less potential impact on air pollution (ozone); nine times less potential impact on air acidification; and 12 times less potential impact on water pollution. CHANGING HEARTS AND MINDS

Currently, only about 25% of batteries are recycled, the other 75% are being thrown away in household waste. Recycling systems are being organised by battery manufactures, however, managing batteries at the end of their life is a major educational challenge. The purchase of rechargeable batteries and a charger pays for itself after only the fifth charge. This equates to buying five or so packs of disposable batteries, whereas rechargeable batteries can be reused more than 100 times. I believe we still have a long way to go in educating the consumer with regard to throwing away batteries. However, once they understand rechargeable batteries can be recharged for as little as 1p of electricity per AA battery â&#x20AC;&#x201C; the whole category will change. Until that happens, we will continue to spread the word and continue to work towards a better way of reducing the impact on the environment. DS

JULY 2011 www.dealersupport.co.uk

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hallenge Pioneer C mber 2012 te 17-28 Sep

ARE YOU UP FOR THE CHALLENGE? With the London 2012 Olympic and Paralympic Games coming up this summer, this year is undeniably a year of sporting achievement. If you’re feeling left out of the fun, here’s your chance to do something good for yourself and others. Dealer Support magazine is partnering with Antalis McNaughton and Pioneer Paper to take on the Pioneer Challenge 2012, to get the office supplies industry on their bikes in aid of Breakthrough Breast Cancer. Taking place from 17 to 28 September, 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 (each stage is around 85 miles)

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

The dates 17-28 September

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 date/s.