Dealer Support May 2012 by Intelligent Media Solutions

May 2012 Issue 203

INSPIRING BUSINESS SOLUTIONS FOR DEALERS

DEALER SUPPORT MAY 2012 | ISSUE 203 DISTIE REVIEW | FM GUIDE | IDS LEAGUE

DISTIE REVIEW 2012 The major players in IT wholesale FM GUIDE Tune in to facilities management IDS LEAGUE Last chance to enter!

FROM THE EDITOR

Keeping up the good work MANAGEMENT

GROW YOUR BUSINESS

Projecting into the future

page 22

page 54

Bryony Taylor looks at the growing market of audio visuals and projectors to see if they’ve bucked the trend during the recession

“Teachers want to engage pupils in a dynamic way often on an individual basis; businesses want to be able to project ideas around the world; and a Joe Bloggs wants his family to see the amazing time he had in Thailand.”

Dealers are well known for their consultative approach to sales, and do a brilliant job of it, but now is not the time to rest on your laurels. With competition coming in from every angle – online and elsewhere – dealers have to keep on their toes and understand that the market is changing significantly. We at Dealer Support endeavour to stay one step ahead of the industry curve so that you can too. Large manufacturers have the clout and manpower to ensure their multi-billion pound businesses have a future, so it’s never a bad idea to ride on their coattails. It was with this in mind that I attended the Brother press event last month, which gave me a great deal of insight into the mind of this £5bn firm. While the company has been known of late for its printer business, its beginnings were in sewing machines. What does their (our) future hold? Who knows? But they know it could change – and dealers should too (for more on the findings of the conference, see the news section). This month’s issue will hopefully continue to inspire you to think outside the confines of your traditional product categories. On page 24 we hold our annual review for ‘disties’, where we look at the latest trends and innovations in the IT wholesaler channel. On page 20 we 55 look at whether or not catalogues are still necessary in an industry that’s progressively moving towards the digital sphere. In other news, we are running our bi-annual FM guide (p39), to help steer you in the direction of cleaning, catering, and work wear products. This category is going from strength to strength, so if you’re not thinking of these kind of solutions now, it’s time to get cracking. So, in short, keep up the good work, dealers, now is not the time to lag behind. GROW YOUR BUSINESS

he UK economy will grow more quickly this year than previously forecast, according to Chancellor George Osbourne’s budget, released at the end of March. Met with as much controversy as any budget release has been since 2008, most newspaper headlines focused on how Granny’s savings would be snatched away, leaving her unable to purchase the now more expensive Cornish pasty – a pastry that apparently the Prime Minister has a love for (important news obviously). But if Osbourne and the Office of Budget Responsibility (OBR) are correct in their forecasts, the average person might be able to stretch for a Lamb Oggie as well during lunch by 2016. It doesn’t sound like a lot, but it’s at least economic growth. The OBR forecast growth of 0.8% in 2012. That’s 0.1% more than previously forecast. Not much improvement, but not a reduction, and certainly not a recession. More importantly, thanks in part to a £1bn reduction in government borrowing this year the OBR believes that the UK economy will hit 2% growth by 2014, and 3% by 2015. Ok, so these figures aren’t comparable to China, but they’re not negative, and that’s probably the healthiest outlook one can hope for. Based on the belief then, that we are not in a recession, we ask the perennial and perhaps daily question: how can dealers maximise their businesses and grow? Without fail it always comes down to how well dealers know their customers’ needs, and in the area of projects and audio visual equipment, this is no different. Teachers want to engage pupils in a dynamic way often on an individual basis; businesses want to be able to project ideas around the world; and a Joe Bloggs wants his family to see the amazing time he had in Thailand. That bit is neither rocket science nor surprising. But the figures for growth in the AV and projector market are. Statistics from Futuresource Consulting show that the UK projector market is expected to reach $307m in 2012, up from $292m and $309m in 2014. Also on the up is the UK professional flat panel market with sales of $245m and $275m in 2012 and 2013 respectively, up from $179m in 2011. Interactive whiteboards are expected to dip to 40,000 units sold this year, as opposed to 41,000 in 2011 and 44,000 expected in 2013. So how does this fit in with the rise of tablet devices in the classroom? “It’s a tricky time for tablets, as until now there hasn’t been a suitable tablet designed for dedicated business use,” explains Trusha Sharma of Casio Projectors’ Product Marketing team. “It’s tough to give a presentation to a room of people using tablets alone, so

MAY 2012 www.dealersupport.co.uk

projectors will always have a place in most classrooms and meeting rooms. In some sectors, notably in education, teachers are being very creative and using multiple AV devices in a single class to keep their students’ attention.” “Education is definitely still the largest market for business projectors,” explains Neil Hartigan at NEC Display Solutions. “Ultra short throw models are very popular with new builds; however, because of budget cuts, many schools are opting for new standard throw projectors which will fit their existing mounts. More higher education establishments are buying larger and brighter installation projectors which are used mainly for lecture theatre applications,” he says, adding that NEC has not seen any reduction in sales despite budget cuts. Graeme Davidson, category manager at Epson agrees, adding: “Despite the much talked about issues facing the economy, there is still a need for technology upgrades throughout the business and education sectors. A lot of investment is going into education, particularly with the wave of new Academy schools, while the increasing tuition fees for universities will ensure they have to provide the best facilities to students.” According to Davidson all businesses should be looking to stay ahead of the game, and with the surge of interest in areas such as social media and tablets, and a desire to view high definition content in the boardroom, there should be plenty of opportunities for cutting edge AV technology. Greg Allen from GfK notes that the projector market is moving toward new technology like Pico but that specialists remain traditional. “The majority of the market may well still be with Lamp Projectors (comprising 91.5% of the market in December 2011), but the growing tendency towards Pico projectors is clear to be seen. The segment of the market has grown by over 180% between 2010 – 2011.” Mark Ivens, a UK marketing manager of Philips PicoPix, says: “In terms of new and innovative products, dealers should have a look at the Pico product ranges. There are multiple applications as these products fit into both the consumer electronic and business categories.” He notes that typically a purchase can be justified for business reasons, but then enjoyed at the weekend or on holiday. “New technology is a real driver for this product sector,” Ivens says, adding that the palm sized projectors’ main selling point is that they slip into a pocket or a laptop bag. “Everybody has compact portable gadgets these days. Last year in the UK 4 million people bought a laptop, 5 million bought a camera, and 13 million bought a smartphone. Add to these the growth in gaming, tablets etc., and all these people could enjoy the benefits of a Pico projector.” Nathan Dawes, a Vasanta Group hardware product manager, adds: “Ultra short throw projectors that don’t require a whiteboard to present on and don’t give any glare or shadow are particularly popular in the education market at the moment.” While the market has suffered due to the economic downturn, sales of projectors are up in terms of units sold, says Darren Tobin, head of Apple, displays and peripherals division at Ingram Micro. “The corporate sector is looking stronger buoyed by continued growth in digital signage and content creation space, secondly we have a number of sporting events this year such

www.dealersupport.co.uk MAY 2012

“If we lose the printable publications would we all just be a group of online dealers?” 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

Julia Dennison, managing editor

intelligent media solutions suite 223, business design centre 52 upper street, london N1 0QH tel: 020 7288 6833 fax: 020 7288 6834 email: info@intelligentmedia.co.uk web: www.dealersupport.co.uk web: www.uspmagazine.com

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

INSPIRING BUSINESS SOLUTIONS FOR DEALERS

CONTENTS May 2012

INDUSTRY 8 NEWS AND VIEWS All the month’s news and views in the office products industry 14 THINGS ARE LOOKING UP Is that a light at the end of the tunnel we see? 16 REAPING THE REWARDS Trends and innovations in EPOS equipment sales 20 PAGE TURNERS Are catalogues still necessary? 24 DISTIE REVIEW 2012 An overview of who’s on the IT wholesale market

PEOPLE

28 GET SET, GO! An interview with the kings of the South West 34 INTEGRA OF TIME Integra’s Aidan McDonough celebrates 15 years for the group

FM GUIDE 39 FM NEWS AND VIEWS The latest goings on in the world of facilities management 42 GETTING PERSONAL Personal and office hygiene takes the stage

46 THE GREAT OUTDOORS From car parks to cycle racks – start to think outside the office 48 GET THINK-ING Think Office Supplies makes an FM commitment 52 TAKE A TEA BREAK OP dealers are winning with coffee (and tea too)

MANAGEMENT 54 GROW YOUR BUSINESS This month: How to get ahead with AV 59 IDS LEAGUE 2012 Want to impress? This is your last chance to apply! 62 HMRC, YOU AND REAL TIME Why you need to know about the government’s RTI project 68 FINAL WORD Solicitor Martin Clifford talks Ts & Cs

Flip over for the May edition of USP magazine

INDUSTRY

NEWS

NEWS Commercial Group launches own brand Cheltenham-based dealer to offer environmentally friendly remanufactured toners The independently owned business services company, Commercial Group, has launched its own brand of environmentally friendly remanufactured toners, for use across a range of printers and multi-functional devices. Manufactured in a factory inside the UK, powered by renewable energy, the low carbon toners are now available for Commercial customers nationwide to purchase on its bespoke online ordering system, Sprint, or by contacting Commercial’s office supplies team via phone, email or fax. Simon Graham, environmental strategist, Commercial Group, said: “Although printer consumables make a large percentage of the office supplies market, businesses can still have difficulty sourcing a reliable, consistent product that also has strong environmental credentials.” “Given our supplier network and understanding of the environmental requirements our customers have, we took the problem into our own hands and have sourced a product which ticks all of these boxes, allowing them to meet their environmental responsibilities without compromising on quality.” The new toners extend the range of green products supplied by Commercial and follows hot on the heels of the success of Commercial’s toner recycling scheme, which has received consistently positive feedback from customers since it was introduced, praising the fact it is free, flexible and easy to use.

ECi adds to acquisitions Bluesky Systems Solutions becomes latest addition ECi Software Solutions has acquired BlueSky Systems Solutions, a back office systems supplier for the European office products industry based in Derbyshire. BlueSky is to become part of ECi’s Office Products Division, which includes the Horizon, Horizon Web, Office2Net, Vision, NGV, EasyOrder, Progress and Prolink Web products. Speaking to a group of dealers at the Charing Cross Hotel in London, Trevor Gruenewald, COO of ECi, reassured the audience by stressing that it will be “business as usual” for existing BlueSky customers. Gruenewald noted that the entire BlueSky team have been brought on board ECi’s European division, and that all existing contracts with BlueSky customers will be honoured. He emphasized that customer platforms such as Horizon, Vision, Next Generation Vision (NGV), and Progress will not only continue to exist, but will be enhanced and supported. “We are very excited to join the ECi family,” said Adrian Billingham, founder and MD of BlueSky, who will remain as director of development. “By joining forces with ECi, we will be able to expand our product offerings to our customers and improve product implementations and conversions. We will also be able to increase investments in the resources we have developing for this market.”

MAY 2012 www.dealersupport.co.uk

OFFICE CLUB JOINS THE DAILY TELEGRAPH Dealer group creates online video Watford based dealer group Office Club has launched a new online video with the Daily Telegraph’s Business Club – a site that provides articles, expert views and case studies to help businesses grow, with associated content regularly appearing in the national newspaper’s pages. The seven-minute long video features Office Club dealers discussing how, as independent special suppliers of stationery and office products, they have come together as part of Office Club to give themselves greater strength and presence in the marketplace and maintain/increase market share. Mark Austen, MD, Office Club, commented: “We live in a rapidly moving age where social media and business have come together to create a very powerful new way to communicate.” However, the danger in social networking accounts, Austin believes, is to not include content that provides people with interaction and information opportunities.

Channel Telecom takes partners on incentive trip Distributor hosts an expenses-paid trip as part of incentives for dealers and resellers Channel Telecom hosted a group of channel partners to an expenses-paid trip to watch the US Masters play at the Augusta National golf club in Georgia, USA. The trip was part of their on-going programme of incentives for dealers and resellers. Participants were treated to business class flights, hospitality events for the preview par three tournament and opening day, and luxury hotel accommodations. Guests on the incentive trip included the winner of Channel Telecom’s Overall Partner of the Year award, John Bradbury, MD of Company Telecom.

INDUSTRY

NEWS

Banner joins the Woodland Trust Over six million trees across the UK to be planted Banner Business Services is throwing its weight behind the Woodland Trust’s Jubilee Project, which aims to plant over six million trees across the UK to celebrate the Queen’s Diamond Jubilee. “When we heard about this fantastic project we just had to support it,” said Richard Costin, MD, Banner. “With our award-winning Closed Loop solution we provide a complete paper recycling service. By supporting the Woodland Trust we’re not just saving trees, we’re helping to plant them too.” The Woodland Trust campaign was launched in February 2012 and will last for 12 months, during which time six million trees will be planted, including sixty special jubilee woods. Companies, communities, schools and individuals are all being encouraged to support the campaign by planting a tree. As well as helping turn Britain green, everyone who plants a tree will take their place in the history books and be included for posterity in a new Royal Record marking the campaign. “We’re proud to be doing our bit by both planting trees and making a financial contribution to the campaign. I urge everyone to do their bit, too, so we can leave a lasting and wonderful legacy,” said Costin.

New VOW MPS software partnership Wholesaler chooses PrintFleet to provide software for Printreviewlive VOW has partnered with PrintFleet, a managed print software specialist, for its managed print service (MPS) software platform, Printreviewlive. VOW claims its MPS service is a comprehensive three tiered approach designed to enable VOW+ resellers to offer a tailored solution to suit their customers’ needs, helping them reduce costs, optimising their current fleet and enabling environmental benefits. The first tier of the solution is powered by the PrintFleet software while the remaining two tiers operate in partnership with MPS specialist, M2. According to the wholesaler, Printreviewlive is a great option for VOW+ resellers who are just getting started with MPS and are looking to explore the benefits before jumping into a full service offering. This data collection and audit software allows resellers to lock in their customers’ consumable purchases. Currently more than 20 VOW+ partners have been trained on Printreviewlive and are beginning to use the solution with their customers. Simon Wallis, business development director at VOW, commented: “VOW’s MPS program gives our VOW+ resellers a choice of solutions to embrace at their own pace, when they wish and how they wish.”

“SMBs are still printing and still printing significantly, but they are printing differently – they’re printing smarter” Chris Marshall, senior manager, printing and solutions division of Brother International Europe.

MAY 2012 www.dealersupport.co.uk

news in brief... AMAZON ENTERS B2B MARKET The world’s largest e-retailer Amazon has launched a new website, AmazonSupply, to offer product solutions for business and industrial customers. Customers can shop for items by product, material and brand across 14 categories, including ‘office’. Offering a broad selection of products, over 500,000 in total, the company is promoting free shipping on eligible orders $50 or more, 365-day returns, corporate lines of credit, and a dedicated customerservice centre.

DATES ANNOUNCED FOR THIRD SPICERS ACADEMY The third NTA (New Talent Academy), the joint venture between Spicers and P1 Training and Development to recruit and train graduates and sales trainees for Spicers dealer partners, will run from 11 June at Spicers Heywood location in Lancashire.

INTEGRA ANNOUNCE LATEST INITIATIVE CATALOGUE Following on from the success of its 2011 initiative catalogue the 2012/2013 version is now available for members to order. The new edition features the latest initiative products together with a product focus on each page giving the consumer an even more compelling reason to buy.

DIARY 22-23 June Nemo 2012 Annual Conference The De Vere Carden Park, Chester, UK 28-30 June Superstat Conference Whittlebury Hall, Northamptonshire, UK

INDUSTRY

NEWS

DEALERS NEED TO WORK HARDER FOR PRINT Yes, there is a decline in print, but it’s not as bad as you think. But dealers beware: SMB buyers will buy online unless you can offer them more. Julia Dennison attends Brother’s annual European press event to hear about the future of the sector from the horse’s mouth

Brother, internationally known for its printers, is no stranger to trying new product categories – evident in its beginnings in sewing machines. So when the Japanese firm moves into other circles, the dealer channel should sit up and listen. Attending its annual European press event this week, I was struck by the sheer range of new products on display. Alongside the world’s fastest mono inkjet printer (set to arrive in 2013-14 at 100 pages per minute, you don’t want to accidentally hit print on that 50-page report with this one), Brother surged ahead into cloud-based solutions, web conferencing and single-function scanning market, as well as dipping its toe into interactive table projections and glasses that project your smartphone screen in front of your eyes. So if this £5bn global corporation is looking outside the printer box, your average £1m dealer certainly should be too.

Print in decline? Print is in decline, but not as much as you think. Two-thirds of European companies have not postponed their plans to purchase printing solutions; over 60% of small and medium-sized businesses in Europe still need hard copy records of documents; nearly three out of four need to print documents for clients, while at the same time making a significant effort to reduce printing-related costs, according to a recent Europe-wide survey carried out by independent research company IDC. “Printing is still very important for these businesses,” Chris Marshall, senior manager, printing and solutions division, told the press. “SMBs invest in IT to put themselves at a competitive advantage and equal playing field with other organisations.” He continued: “SMBs are still printing and still printing significantly, but they are printing differently – they’re printing smarter.”

The energy and efficiency sale According to the IDC, SMBs are more likely to make one-off purchases of hardware online because it’s cheaper, and turn to a dealer for a more consultative sale, or one that requires more trust. In fact, according to the research firm, SMBs use dealers for less than 30% of their hardware purchases. This means dealers have their work cut out for them. But the light at the end of the tunnel lies in energy saving. Helping these smaller businesses choose the right fleet of printers will save them significant dosh on their electricity bill, and they will thank you for it. It’s up to you to prove it to them.

MAY 2012 www.dealersupport.co.uk

Where five years ago, the environment played less on the average SMB’s mind, saving energy is now at the forefront – 61% of European companies say sustainability is important. Dealers that offer energysaving consultations to their business customers may just win the business.

Bigger is beautiful Another area where dealers can help customers is ensuring they have the right products for the job. Research commissioned by Brother from one of Europe’s top human behaviour psychologists, Professor Richard Wiseman of the University of Hertfordshire, has revealed that businesses are 66% more memorable if they print in A3 rather than A4. Furthermore, people find products and services 43% more likeable and 30% better value for money when viewing them in A3. And dealers take note: adverts become 66% more memorable and 47% more impactful if they are printed in A3 rather than A4.

Like Brother like son Brother is upping its game in the corporate market by launching a new range of more sophisticated laser printers and all-in-one machines. Like many independent dealers, Brother is better known for providing solutions to the SMB market, and hopes this move will be an opportunity to take its loyal resellers with them knocking on the blue chips’ doors. “We will not be changing our sales and marketing strategy drastically because we will stay and we will work with current users and resellers to increase more business with our current customers,” Toshikazu Koike (pictured), global president and chairman of Brother Industries told me. Koike pointed out that generally speaking, customers are buying more from websites and it will be up to the dealers to convince them to do otherwise. “We are the ones just providing the product,” he said. However, Phil Jones, the recently promoted UK country head/deputy MD at Brother UK, sees a “big opportunity” for dealers and was quick to add this analogy: “If you think of a heating engineer – you can buy all the bits you need to put a heating system in, but you need a heating engineer to actually plumb the whole thing together,” he said. “Fundamentally there’s a huge opportunity for the channel that exists today to work with customers to be that plumber, that person that actually brings all of these things together and uses their expertise to make our hardware come alive.” In short, print is in decline but there are other ways to supply solutions to customers. “We’re going in a new direction now,” Jones told me later that day. “We are a printer company, but we also need to understand that there may be a sell-by date on print.”

MILESTONE BIRTHDAY FOR PAPERCHAIN A High Wycombe-based dealer founded in a suburban garage is celebrating 20 years in the business. The Paperchain Partnership – a member of the Office Friendly Dealer Association - took humble roots during the recession of the early 1990s and from a £7,500 initial investment now boasts a £2m turnover. Peter Helling, disillusioned by the effects of the economic downturn, set up the company with industry colleagues Richard Kirk and Graham Hodson, initially supplying paper products. But after turning over £250,000 in their first year, the trio quickly moved out of their makeshift office and upgraded to a small warehouse. Peter persuaded his wife, Liz, to join the team and in 1996 the company began operating from its current Buckinghamshire premises. The Hellings bought out their fellow investors five years ago and now employ a 12-strong staff. “It feels wonderful to reach our 20th birthday,” Peter said. “Looking back, I suppose it was quite an entrepreneurial move but as the recession started to bite, it was a case of financial necessity. We spent most of our start-up money on a computer system and off we went.” Paperchain has since made two acquisitions and counts mulitnational pharmaceutical company Johnson & Johnson among its diverse client base across the south-east. Through Office Friendly’s So-Go-Eco programme, the business now works to a tailor-made environmental policy, achieving cuts in carbon and costs. Peter believes adapting to change, as well as to the latest economy slump, has been key to growth. “As technology has advanced, core stationery sales have declined. We’ve had to get smarter and greener. “We never used to sell tea and coffee; now we’ll offer anything a business needs, whether it be first aid kits and cleaning products or a whole new office. It’s about cutting the number of suppliers. “We’ve made our delivery vans more fuel-efficient, embraced email marketing and expanded our sales team,” he added. “There have been tough times but it’s about being proactive. Our philosophy has always been to go out and sell, rather than wait for the phones to ring, and we’ve seen results - 20% growth in the first quarter of 2012.”

Top Pic L-R: Fari Chaudhry, Liz Helling, Beckie Harris and Joan Weston Bottom Pic L-R: Peter Helling, Neil Webb, Peter Crozier

To find out more about The Paperchain Partnership visit www.paperpart.co.uk or call 01494 539 000.

INDUSTRY

INDUSTRY ANALYSIS

Optimistic about office products The office supplies industry has endured some tough years recently. George Carey asks if things are finally improving and finds out what our readers are doing to improve their outlook

usiness services provider Regus, published the results of its bi-annual Business Confidence Index last month, which surveys more than 2,500 businesses, and the results point to cautiously optimistic UK businesses; prompting regional director Celia Donne, to say: “Finally, after a significant setback between April and October 2011, business confidence is beginning to grow again. It is clear from our research that the business performance and confidence of small firms has particularly improved over the last period.” However, in the same month, the Ernst and Young Item Club forecasted British GDP growth, at a ‘dismal’ 0.4% this year, half that of the 0.8% estimated by the tax and spending watchdog, the Office for Budget Responsibility. Peter Spencer, the organisation’s chief economic adviser, said: “Business investment has picked up nicely in the US but UK companies remain extremely risk averse, which is sapping strength from the economy.” So, who is correct, and what does the economy look like at ground level?

Grass Roots While the industry is tough at the moment, there are still growth opportunities for those willing to look hard enough, as Chris Armstrong, commercial director of The

MAY 2012 www.dealersupport.co.uk

“It is good at the moment, but get ready for a very big fight. Either merge with others or join a very good buying group”

Supermarket Online attests: “We’re certainly experiencing significant sales growth over the same period last year. Although, the market is still hard and genuine growth is not easy to come by, so I wouldn’t describe the economy as ‘on the up’ but for those of us who continue to strive to find growth then there are rewards to be had.” Arsmtrong elaborates: “There are pockets of customers out there that can be attracted and retained to provide genuine medium term growth but finding and determining the right marketing message is very difficult. I believe the outlook is potentially bright for dealers who continue to develop new initiatives and promote themselves to prospects in as many ways as possible. He concludes by asserting that constant innovation is necessary to stay afloat: “A great maxim is: ‘if you continue to do what you’ve always done you’ll get what you got’. Bearing in mind the reduced product consumption over the last two years and the increased levels of competition, doing what you’ve always done will result in a continual decline and dark times, whereas getting busy and innovating drives you to brighter skies and a better outlook.” Another dealer who is seeing the green shoots of a revival is Peter Wallis, MD of Wallis Business Services. His business has enjoyed a successful start to the new year: “We have had record sales in March and we have

INDUSTRY ANALYSIS

seen our best net profits for the first three months, than I have seen for some time.” On the wider economy, he seems typically reticent to hail a revival ahead of time: “I do feel that there is a better feeling in the economy, and have not quite worked that one out yet. On the macro economy America is improving, although Europe has a long way to go.” While it’s not something that he’s personally considering, Wallis can certainly see the merits in mergers and thinks that some of these could have seriously adverse effects on smaller dealers: “The big boys and some of the medium sized dealers that have done the right thing by merging together are coming in a great wave. It’s like what we saw many years ago with the emergence of Viking, Staples and contract stationers. He carries his point further and leaves those in doubt with a stark warning: “This type of dealer will come after the medium size customer, which is traditionally the average size dealer’s bread and butter. It is good at the moment, but get ready for a very big fight. Either merge with others or join a very good buying group. Also enjoying an improved start to the year is Office Supplies Now. John Fitton, the company’s MD is feeling optimistic about the new financial year: “Things are positive for our business, we increased sales by 30% last year and that growth has continued into the first quarter

of 2012. We have seen good growth in the education sector in terms of both educational furniture & equipment and traditional office supplies.”

A view from above

“Doing what you’ve always done will result in a continual decline and dark times”

A little further up the food chain, Louise Haslam, VOW’s regional director for the Midlands and East Anglia, is also cautiously optimistic: “I think the market is looking up for dealers and I think they are enjoying success but they have to work at it and position themselves to take advantage of the opportunities as they arise. Our successful dealers are not successful by chance, they are the ones chasing success and determined to win.” Haslam goes on to highlight three dealer members enjoying particular success in the midlands. She singles out Stoke-based dealer, Fenns’s ability to “embrace change, new product areas, and new services with gusto.” She is also keen to point out “Irongate’s ambitious ‘can do’ attitude” and Whittakers Office Solutions’ “forward thinking and progressive attitude”. The pervading experience throughout the industry seems to be positive, although everyone asked is acutely aware of the possible problems that lie ahead. As always, any business won will be hard-fought and constant evolution and innovation is necessary if a larger market share is to be gained. DS

www.dealersupport.co.uk MAY 2012

INDUSTRY

EPOS UPDATE

Enhancing the

POSitives With constantly advancing technology and an economy feeling the pinch, effective point of sale technology is as important as ever. George Carey looks at the latest trends and the sales opportunities they offer dealers

he importance and general reliance on effective electronic point of sale (POS) and retail solutions can provide a great platform for office supplies dealers to open discussions about a host of business opportunities. The market for POS equipment is hugely varied, in line with the different needs of the various industries that require solutions. But from the smallest corner shops to the largest supermarkets and venues, the principle of ensuring reliable and efficient POS solutions is the same. The way this is delivered, however, will be hugely different. It is useful to consider the market in two areas: hospitality, which includes pubs, bars, restaurants and hotels; and retail outlets.

MAY 2012 www.dealersupport.co.uk

INDUSTRY

EPOS UPDATE

Consumer experience In the retail sector, companies are constantly looking for products that will help them improve both the customer experience and shop floor efficiency. Ray Cranston, sales manager, business systems at Epson, suggests the technology in this area is helping to shape the customer experience: “A recent phenomenon in retail is the so-called ‘Apple store experience’. Simply stated, the level of customer engagement and the high-tech atmosphere that Apple has infused into their stores causes customers to want to stay and spend money.” He continues: “When it is time to pay for merchandise, the ‘checkout anywhere’ aspect of mobile POS is unmatched, and leaves a customer with a fond memory of their experience, so much so that they are willing to bring their friends to the store. And every retail CEO wants that same kind of excitement and experience for their stores.” This is a view shared by Dr Guy Boxall, senior product marketing manager at Casio Electronics: “The high street as we know it has to change and adapt, but now is a good time for retailers to restore the high street to its former glory by making a positive difference to the overall shopping experience.” He is keen to point out the opportunities offered by combining tablet technology with more tradition EPOS equipment: “The possibilities of using an Android platform tablet in an EPOS scenario are almost entirely unexplored. Together with the release of the Casio Business Portal, this is especially exciting for the high street retailer today. As the consumer market has seen with mobile phones, there is huge potential for a greater range of EPOS apps and services to help the retail sector.” The hospitality market certainly has plenty to gain from the use of mobile technology as well, as Cranston is keen to point out: “There is a growing interest and in many cases increased use of mobile devices and tablets in the hospitality sector. We can see a real benefit to restaurants where the customer has the ability to place their order at the table via mobile device, such as an iPad.” There is an increased interest in colour voucher printing in the retail environment, with the general attitude among retailers being that colour vouchers are far more likely to be retained by customers. On the subject of printing, Cranston points out the rapid adoption of the cloud among retailers: “With recent figures suggesting that 54% of EMEA’s retailers plan to invest in cloud based IT capabilities during 2012 , Epson has developed a retail printing solution capable of working with a cloud based system and enhancing the benefits it brings – reducing costs and streamlining end customer interaction and experience.”

Opportunities for dealers Any office supplies dealer entering into the market will be aware of the potential for high returns on

MAY 2012 www.dealersupport.co.uk

“The possibilities of using an Android platform tablet in an EPOS scenario are almost entirely unexplored”

investment. However, Cranston reminds that a certain level of specialism and commitment of time and resources is required on the part of dealers. “In order to succeed and provide the high level of service that retailers expect, dealers need to ensure they are dedicated to improving their expertise, training and knowledge of the products and services relevant for the retail environment,” he says. “Sales to retail can be rewarding but dealers will need to invest time in the sales process – these are not quick, over-the-counter sales, retailers are looking for a solution rather than just a product.” Despite the huge uptake of new technology and innovation in both the retail and hospitality sectors, there is still opportunity to take advantage of less technical solutions, which could be a great starting point for dealers taking their first steps in this market. For example, there are lots of corner shops that are still using labels and typing the price in at the till. For a relatively modest investment they can improve the efficiency and the general business performance of their POS system. There are so many options within the EPOS market that there should be plenty of possibilities for dealers to explore and find the systems that they are most comfortable selling. While initial purchases of EPOS hardware and equipment can bring great returns, the potential for adding value to sales is huge, and there is great scope for building lasting relationships with customers who will value dealers’ expertise. DS

INDUSTRY

PRODUCT ANALYSIS

A catalogue of errors? With increasing pressure on dealers to cut down on costs and operate in an ecofriendly manner, is there still room for the traditional office supplies catalogue? George Carey finds out if the catalogue is in for a glossy future or falling victim to a digital dynasty

ome things are just taken for granted: the England football team will fold in major tournaments; gym memberships will be cancelled in February; and the office supplies industry will always need catalogues. However, an increase in online ordering and the recent prevalence of mobile devices and tablets means that catalogues might not be the industry keystone they once were. So, can customers and dealers alike work without catalogues and, more importantly, do they want to?

View from the top At the moment it seems that the majority of people are still using catalogues and this has been backed up by research. At the end of last year, Spicers commissioned a survey of 750 end-users to investigate buying habits and catalogues were a major part of the study. The research showed that the majority of respondents (60%) kept between two and five catalogues at any time, with only seven per cent not keeping any. On the subject of types of catalogues retained, an overwhelming majority of those surveyed favoured comprehensive catalogues (60%), while only three per cent kept purely specialist catalogues.

MAY 2012 www.dealersupport.co.uk

“To take a comparison: When did you last look at Yellow Pages? We all use Google now”

While the number of catalogues in circulation has fallen slightly, there is still strong demand for them. Alan Ball, CEO of Spicers, comments: “We have seen a reduction, there’s no doubt about it. On average it’s between seven and 10% year-on-year over the past three years on the number of catalogues taken. However, we had research done on our behalf and end-users overwhelmingly said that they still use a paper catalogue in the office environment by choice and on average every catalogue touches seven people. It would appear that paper catalogues are still the medium of choice.” Rival wholesaler VOW is in agreement that, in the short term at least, catalogues are not going anywhere. Despite research carried out by the wholesaler seeing a similar gradual reduction in the use of catalogues, marketing director, Helen Beckett sees digital alternatives as complementary to catalogues, rather than a permanent replacement. “It is true to say that we are seeing resellers combine their printed publications with web-stores, online catalogues or Digicats and are definitely being more targeted in the way they utilise and distribute their printed publications; with far more resellers developing their

INDUSTRY

PRODUCT ANALYSIS

customer databases, enabling them to send multiple publications to multiple contacts within an organisation.” She continues: “However, despite the more strategic approach to the use of catalogues and mailers combined with online media, we see no reason to conclude that the need for printed publications will cease.” This view of integration rather than replacement is backed up by David Kowal, marketing manager of dealer service provider, Nectere: “The cost savings on publications created in a digital format are obvious and can be positioned as an environment benefit. We recommend that all our partners’ sales representatives use iPads as a way of presenting our existing publications and promotional offers.” He goes on to remind us that digital solutions are unlikely to stand alone: “However, I believe customers will continue to expect a printed publication which can be marked up and become their own. This tangible possession forms part of the customer relationship and their buying commitment which is a very strong reason to like them in the future.” Kowal concludes by posing an interesting question on the subject of digitalisation: “If we lose the printable publications would we all just be a group of online dealers?”

Number of catalogues personally held by respondents (overall)*

One

21%

60%

Two - Five

Six - Ten

More than ten

Grass roots While wholesalers and dealer groups have the advantage of gathering information from a host of sources, and possess the financial muscle to carry out expensive market research, they are not the ones who deal first-hand with the customers that the catalogues are aimed at. So what reaction are dealers seeing at ground-level? Many dealers’ experiences back up the opinions garnered from market research that print catalogues are experiencing an evolution, but not a revolution. John Fitton, MD of Rochdale-based dealer Office Supplies Now, says: “Whilst over 50% of orders are received online we do find that existing customers like to have a paper catalogue and find that they use this to search for products or distribute to users and the buyer then inputs the codes online to order.” Chris Armstrong, commercial director of The Supermarket Online says there is clear evidence that print catalogues lead to more online activity and they serve as a good way to remind customers of his company’s presence. Although he has experienced some customers that have fallen out of love with catalogues. “Quite a lot of our customers say that they don’t want a physical catalogue, preferring an online version so they can see products presented in catalogue format but without the need for innocent trees to be battered to death,” he says. One dealer offers an interesting parallel with another big book that people may not have pictured living without a few years ago. Jane Walker, co-owner of Compleat Office Initiatives, explains: “I think that as buyers aged 50+ retire, the new generation will embrace online catalogues or websites and this, aided by the promised improvement in broadband quality, will take them forward. To take a comparison: When did you last look at Yellow Pages? We all use Google now and I think that is a pretty strong indicator of the death of the paper catalogue.” Although figures show a gradual decline in the uptake of paper catalogues, for the moment at least, it appears that no one is ready to say goodbye completely. As tablets become cheaper and more widespread, it may be that they will spell the end for this industry stalwart. For now the situation remains unsure; at least we can rely on England to perform as usual this summer. DS

MAY 2012 www.dealersupport.co.uk

None

SME businesses are significantly more likely to hold 2-5 catalogues

Respondents in SOHO businesses are significantly more likely to have no catalogues (13%)

* Data from Spicers: ‘Evaluating Spicers and Competitor Catalogues’

Types of catalogues kept* No catalogues 4% Mix of both comprehensive and specialist catalogues 33%

Specialist catalogues (individual ranges) 3%

Comprehensive catalogues (full range) 60% * Data from Spicers: ‘Evaluating Spicers and Competitor Catalogues’

INDUSTRY

DISTRIBUTOR REVIEW

DISTRIBUTION OF W E A LT H How have distributors faired over the past year and what have they done to improve their offering to our readers? George Carey talks to them to find out.

MAY 2012 www.dealersupport.co.uk

DISTRIBUTOR REVIEW

t’s been another eventful year for distributors as they attempt to gain market share and continue to expand the products and services that they offer UK dealers. They have not been immune to the severe economic conditions but in the midst of a tough 12 months, some have seen exciting developments and found encouragement for the future.

New services Distributors have been proactive in looking at new ways to work with dealers that can help both parties to thrive. John George, MD of JGBM, said: “We’ve introduced several initiatives; enhanced account management via a new CRM system; produced weekly newsletter-style promotions; and expanded our dealer helpline, now dealers can send their customers to the helpline for product advice.” Keen to prove that JGBM is not a one-off case, Alex Tatham, sales and marketing director of Westcoast, points out the advances that the company has made: “These have merely increased in complexity and value, as Westcoast continues its push upwards into the solutions business, helping customers quote complex enterprise solutions. Our focused team now has over 20 staff with a wide variety of skills covering all aspects of HP servers, storage, services and networking.” Another distributor that’s been trying to add value to the service it provides is Midwich, as MD, Stephen Denby explains: “We’ve invested a lot more in people this year than last. Although the market has been a bit flat, we’ve been looking to the future and improving the company moving forward. We’ve developed various new sales teams and we’re looking at new markets. We’ve boosted the marketing team, so we’ll be doing more research and analysis of the markets and doing more customer focussed marketing and doing more marketing activities that our customers can use to promote their own business and that’s been a good development for us.” Nigel Morris, marketing director of Beta Distribution points out its expanded offering for dealers, centred on a free web store project: “We invest money in SEO and Google adwords to drive end-users to a brand or product-specific landing website, and the dealer can benefit from the sale. For example, we have launched a webstore specifically for our Perfect Green range of remanufactured toners – we drive end-users to the landing site, where they type in a postcode, which takes them to the dealer who we’ve allocated to that region.”

Big issues During an austere year, it should be no surprise that pricing has been cause for concern and this is something that Denby has noticed, particularly with consumables: “We need to stay competitive and will react if it makes sense for us to do so, but we’ve seen some competitors selling at a loss and there’s no point in doing that. I think it’s a bit insulting to the manufacturers if you’re just dumping products onto the market. It does no one any good because it just brings down selling prices for everyone in the chain and devalues the products that are being sold, it’s a very short term strategy.” Denby

www.dealersupport.co.uk MAY 2012

INDUSTRY

DISTRIBUTOR REVIEW

also noticed some supply issues, stemming from the Japanese tsunami. George believes that the biggest concern has been dealers’ continued aversion to online activity: “There does seem to be a general reticence to appreciate the online threat and embrace change. On the one hand this is understandable as all things online are not the domain of a traditional dealer, however, there’s no reason why this can’t be learnt and developed. In mitigation, we don’t believe that there has been a serious web solution for dealers that will actually resolve the problem. That’s something we’ll be looking to resolve later this year.” Tatham is fairly emphatic in his opinion that certain distributors are failing to keep up with an ever-changing market place: “The continuing underperformance of traditional stationery distributors and their very expensive model versus an IT distribution approach of low cost and low margin has been an important issue. I can only see this continuing more aggressively in 2012 and beyond. Buying groups’ power is also waning by the day.”

All change In an effort to keep evolving and improving, distributors have also made changes in personnel and premises. In March, Computer 2000 announced its relocation from its Intec site in Wade Road, where it has been for the past 18 years, to a new 48,000 square-foot office building, just over a mile from its former location. Peter Hubbard, managing director UK and Ireland for the company, said: “Our future strategy is built around sustainable growth and we needed better-quality offices to support those plans. We wanted to stay within Basingstoke to make any move easier for our staff. We also wanted somewhere that would be a great place for us to take our customers and partners and Chineham Park fits the bill in every respect.” The IT specialist also appointed Cathi Low as director of public sector, in an effort to start a major drive into the education, healthcare and government sectors. Low rejoined the company after spending more than five years at Ingram Micro. Hubbard said of the appointment: “Cathi is ideally-placed to lead our plan to build a significant and strategic public sector practice within Computer 2000. We are already working with a number of resellers on specific opportunities and there are more in the pipeline, so it’s great to have Cathi coming on board at this time.” Midwich sought to streamline its logistics by moving its existing two warehouses into one larger facility. Denby commented: ‘Whilst running two warehouses was never a cause for concern in terms of customer service, centralisation will result in a reduction in the potential for logistical error as well as a cost saving which we can pass on to our customers.” The company also made many appointments intended to improve customer services and expertise, with Denby highlighting Neil Drain: “We employed Neil, who’s dealing with our consumer accessories focus for us and looking at the independent retail market. It’s something that we’ve only focused on in the past few months and it’s doing very nicely.” Also in March, Steljes made Sam Baker its head of product management, a newly created position to cope with expansion in the product management team. She reports directly to Ian Goodhind, commercial director at Steljes, who said: “Her appointment is a key step in our investment and future growth plans as we adapt our business to address the ever changing needs of our marketplace. Watch out for the launch of new products from existing and new

MAY 2012 www.dealersupport.co.uk

vendors that will enable our reseller partners to enter new markets and help them grow their businesses profitably.”

Predictions

“We’ve invested a lot more in people this year than last. Although the market has been a bit flat, we’ve been looking to the future”

On the subject of the future, Denby envisages another year of consolidation, unlikely to trouble sales records: “The economy’s still tough and I don’t expect it to improve much this year, so we are still interested in investing and growing; making sure we’re in a good position for the future. We’ve seen quite a number of distributors struggling, particularly at the retail end of the market. A few of those have gone down, so that could open some opportunities for us. George sees an industry in need of changes if it is to survive and continue supplying a new generation of office workers: “The industry has to embrace a change from catalogue to online. Can you imagine kids coming out of school into a procurement role and you hand them a catalogue to buy from? Catalogues will continue for some time of course, but they’re not the solution. He continues: “A catalogue based industry has so many disadvantages for manufacturers, for dealers and for customers. For dealers with no serious web solution it’s like handing their customers on a plate to online competition. We’re looking to remedy the situation with a new dealer website solution later this year, tailored specifically to the industry, so watch this space. DS

PEOPLE

DEALER INTERVIEW

GET SET, GO! SET Office Supplies in Cardiff claims the title of largest independent office supplies company in the UK. And with a £25m turnover, there’s little standing in its way. Matthew Moore speaks to SET purchasing manager Rob Street to find out how he’s buying

MAY 2012 www.dealersupport.co.uk

DEALER INTERVIEW

t’s not often Wales can get the leg-up on the rest of the country when it comes to big business, but it seems in the independent office supplies channel, Wales rules the roost. Cardiff-based SET Office Supplies has been in business for 36 years and touts itself as not only the largest independent office supplies company in Wales, but the UK too. This is thanks in part to organic growth, but also to a series of acquisitions that sees branches in Swansea, Haverfordwest, Bristol, Devon and Cornwall. A secure online retail system also allows for order-taking 24 hours a day, with its full product range online. Dealer Support’s Matthew Moore caught up with SET’s purchasing manager, Rob Street to find out what he thinks about the future of the independent channel. You have two warehouses, do you think having stock is important? [Having stock], we can change things – not a huge amount – but we can change things to a certain level. When you become stockless you can’t change anything. I know a couple of dealers who have gone stockless and they would love to carry on doing what we’re doing, but they made that switch and now they’ve got a sales office, no warehouse and they’ve got no rents, so to bring that back is very difficult. And at the end of the day, it’s only a year saving, when Spicers or VOW take that away from you. It’s very dangerous. How much is delivered by the wholesalers and how much is delivered by your vans? Only about three per cent of our turnover is delivered by Spicers direct nationally, all the rest is delivered by us on our own vehicles. Your turnover is high, but how healthy are your margins? It changes quite a bit [between locations]. The trouble is when we bought Martin Luck that dragged the lot down because we started from scratch there. There was no money being made – it was a negative and now it’s in a plus – so [when] your average has dropped, it brings everything else down with it. What is your average sale amount? An average sale in Cardiff is about £40/45, [but] you go into our Bristol or Cornwall branches and it’s around £25 – it’s different per branch and that’s something we’re trying to address. How do you see your future with the wholesalers? Our partnership won’t change with the wholesalers because they need to be there. I don’t know which way the wholesalers or the industry will go, because it’s a minefield at the moment. Will there be one [wholesaler]? That’s the rumour. Don’t know – it all depends, now with Spicers having their buyouts and their changes that are going to happen over the next 18 months. I think the next two years is critical for them both. I think both of them need to drive margins back up – it’s critical for them to put margin back into their own account, which means they’ll put margin back into our account. I [also] think they need to start to use more home-grown manufacturers again.

CV DEALER: SET Office Supplies ANNUAL TURNOVER: £25m NUMBER OF WAREHOUSES: Two

– one 25,000sqft warehouse in Cardiff and one 26,000sqft in Plymouth STOCK LINES: 1,800 NUMBER OF VANS: 20 NUMBER OF STAFF: Around 200 BACK OFFICE: Legerdemain

Would you include European manufacturers in that? Yes, there’s got to be a certain amount of European manufacturing in there. I think if you’ve got good manufacturing in the UK [and] good European manufacturing, then you’ve got a good overlap, but when you’re relying so much on Far Eastern [goods] coming in, you’ve got a huge amount of delivery times, you’ve got a huge amount of stock issues – there are so many problems that can go wrong. The biggest thing is the quality. You can’t guarantee the quality coming out of the Far East like you can with product made in this country. And our quality has definitely dropped on product, you can see, but that’s governed by the price. When you’ve got so much going abroad, you lose control of what you’re

www.dealersupport.co.uk MAY 2012

PEOPLE

DEALER INTERVIEW

doing. And that’s the biggest thing in our industry – I think everybody’s lost control of what they’re doing. At the moment, it seems to go cheapest price, cheapest price, cheapest price. That matters, don’t get me wrong it does, you need to be competitive in the marketplace against the guys we’re up against every day of the week, but also you need to protect your own infrastructure in the country and that hasn’t happened. It’ll never come back because most of these places are either housing estates – or they’ve been flattened. So manufacturing in the UK is in dire straits and that’s the biggest problem [we’ve] got. Does brand matter? Everybody spoke to us in the marketplace about how the brand matters – and it did matter – and it still does matter. And then the wholesalers start ripping on the brands that have been growing for donkey’s years. I just don’t understand the method beyond the madness. You try to get your customer on to one area of what you’re doing and all of a sudden they tell us it’s changed again and the customer’s changing again – and it’s just so much upset for us, for the salespeople, for me as a purchasing manager. [Look at] the Neville boys: they spent 20-30 years growing a massive brand and their focus was just through the wholesaler and then they’re dropped like that. They would never come to us direct because they had that loyalty and it matters. It matters from a purchasing manager’s point of view and it also matters from their point of view. Without those, we’re nothing.

What is important to us is not necessarily getting new accounts, but getting everything on the accounts you’ve already got Is price erosion a problem? The cheaper a product becomes, the cheaper we have to sell it. That’s the basis of it – and we’ve done that to ourselves. The wholesalers have allowed it to happen. They’ve smashed each other to pieces as they’re the ones that guide us and they just dropped and dropped the marketplace and everybody else, the likes of Lyreco and Office Depot, followed and it just means that pound for pound there’s less being made. You can’t go back. Years ago if you got them onto a brand, you’d keep them on that brand, but today, you can’t go anywhere. You stay on the white box product and that’s the product you sell. But then the customer is kicking back and saying they want the brand again. They’d rather pay more for something that’s going to last over time. It’s up to the wholesalers to keep those brands fighting – but it’s all led by money at the end of the day. Do you use any other distributors besides Spicers? We use VOW; UFP for our EOS, but there again we buy from various different sources for our EOS. We use Eagle for our envelopes, Antalis for our paper.

MAY 2012 www.dealersupport.co.uk

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DEALER BOOKMARK

So you’re buying from the specialists? Yes, you’ve got to at the end of the day because they’re the backbone of your business, they’re the ones that can help you promote the brand and get behind the sales staff. The biggest part of any dealer, in my opinion, is the relationship between the manufacturer and the sales staff. You’ve got to get that manufacturer in front of the sales staff. You’ve got to get that manufacturer to be part of your business, and that’s where wholesalers have lost the plot, because they don’t bring in the manufacturers to meet the salespeople [as much]. They’re not actively doing blitz days – with us anyway, I can only speak for us – but the likes of Antalis or Eagle are regularly doing training. Most of the suppliers we get in are on first-name terms with every member of staff that sits upstairs in this building. If one of those members of sales staff need to contact that rep from that company to sort out a problem or to get a quote for a big job, they don’t need to worry about coming through me, they’ve got that relationship already built up with that manufacturer – and that’s so important. You’ve got logos on your walls – Olivetti, Sanyo, Xerox. What do they mean to you? The brands shown on the building are the brands that we’ve decided to partner with, and we feel, as the building says, that brand matters. We’ve got a marketing manager upstairs who works very closely, week in, week out, with manufacturers to push that brand – and constantly push that brand. We try to be a one-stop-shop at the end of the day, so if one of our customers goes into Argos, B&Q, ASDA or Staples, they don’t buy it from there because they recognise that SET does that. It’s not the product, it’s the product pushing the brand. If they know we’re a Fellowes dealer, they should come to us and buy all their Fellowes from us. If they know we’re an Olivetti dealer, they should come to us and buy all their Olivetti from us. HP, Brother, Antalis etc., we’ve got to be recognised that we’re a dealer that can offer these to a customer. And just because it’s not in a catalogue, doesn’t mean we can’t do it. That’s a big thing for a

dealer. Yes, there’s going to be a certain amount in the Spicers catalogue that has been discontinued for 2012, but it doesn’t mean that we still can’t get it. Print is a big category for dealers – and you’re a big dealer. Can you tell me how initiatives like MPS are affecting your business? There’s a crossover between your classic photocopier salesperson and your printer salesperson – most of the stuff falls into the same category. So we’ve got one division downstairs that’s selling the lot, to be perfectly honest. We were talking to VOW a couple of weeks ago and they’re finding the general consensus in the industry is that EOS is flat and as the case may be, it could start going backwards, so they need somebody to start propping that back up. So, what’s your secret to success? We’re local, we can deliver when you need it to be delivered; if you’ve got a problem, we can get out there within hours to solve the problem because we’ve got enough reps in the marketplace to get you a delivery quick. We’re keeping business in the local economy and when you’re talking to us, we know what we’re talking about. Do you see any more acquisitions in the future? I can’t see any more acquisitions because Martin Luck has taken enough time to turn itself around, and I think we’ll just stay where we are at the moment and just concentrate at what we’re good at. It’s the MD’s and the chairman’s choice, so if something came up, I’m sure they wouldn’t turn it down without a good look at it, but at the end of the day, we’re doing well and you take your finger off the ball too quickly and you start looking at things you shouldn’t be looking at. So you batten down the hatches and make sure you’re good at what you’re good at and keep what you’ve got. What is important to us is not necessarily getting new accounts, but getting everything on the accounts you’ve already got. Make sure you don’t have any leakage – that’s just as importance as anything else. DS

Name: Nik Stubbs Job title: Owner Dealership: The Office Trading Company Location: Birmingham

SPECIALITY

I think we are still finding our feet and our place in the market. Nothing here is set too much in stone at present. As a business I can see we are changing for the better every month. I think this ability to adapt to the customers’ needs is a great strength.

Started out with a family business where I worked for 15 years. Moved on in late 2009 and set up Office Trading right at the beginning of the downturn. It was great timing....

WINNING MOMENT

Winning a large furniture order within the first couple of weeks of trading. Right place, right time kind of thing. Made enough cash to keep the show on the road for the next couple of months and realised despite my doubts that this could actually work.

CATCHPHRASE Outstanding.

WORD FOR THE WISE

ECi NGV has allowed us to automate our buisiness processes, which has resulted in us achieving significant cost savings.

THE LEADER IN INDUSTRYSPECIFIC BUSINESS SOFTWARE

www.eci.eu

PEOPLE

DEALER INTERVIEW

Flying high Matthew Moore (almost) takes to the skies with pilot and MD of Integra dealer group, Aidan McDonough, to find out his thoughts on the industry and celebrate Integraâ&#x20AC;&#x2122;s 15 years in business

MAY 2012 www.dealersupport.co.uk

DEALER INTERVIEW

idan McDonough is a man of many talents. Not only does he stand at the helm of Integra as its MD, but he’s also an accomplished pilot. When Matthew Moore visited him at the dealer group’s HQ in Newport recently, he had been promised a trip around the skies over south Wales to learn about McDonough’s hobby and what makes the director tick, as part of a bid to resurrect Dealer Support’s ‘A Round With’ style interview format. Sadly, weather and head-colds stood in the way, and the duo were forced to undertake their discussion with feet planted firmly on the ground. Looking on the bright side, this left for no distraction when it came to finding out more about the dealer group’s decade-and-a-half history. Here’s what was said. Take me through Integra’s 15-year history. The group was formed in 1997 as a merger of Instat and NDA, which were two buying groups. I actually worked for NDA prior to 1997. The principal catalyst was that Corporate Express was entering the UK and their strategy was to acquire independent dealers, so it obviously put pressure on the two buying groups so there was a view at the time – and it’s probably still relevant today – that we needed greater economies of scale in order to leverage the buying. So that was what drove the two businesses together. We then took on BCSA, which was a specialist group in computer consumables, and COG was a specialist hardware division. The strategy behind it was at the time our view was that EOS would become a bigger component of the independent dealer’s business. Where we stand today is the average dealer would have 30-40% of his revenues generated by computer consumables. In terms of the hardware, our feeling was there would be convergence in the channel – you would see the office products dealer wanting to sell hardware and the hardware dealers wanting to sell office products – and while that has happened to a certain degree, the complete convergence hasn’t taken place. The hardware guys have done really well in selling computer consumables, and it’s a big component of their business, but you’ve not seen a massive penetration of office products dealers selling hardware. That actually led to the four divisions within the group – across hardware and office products. Do you think more OP dealers will sell hardware? There is certainly the opportunity there for office product dealers to sell it. We’ve seen quite a significant growth, certainly on the printer side, as that’s becoming more and more plug and play. It gets a lot easier. You don’t have to be a specialist to put in a printer.

How has the company evolved over the last 15 years? Back in 2007, we restructured the business, so in essence we are more of a cooperative on the Integra Office Solutions side, so any surpluses we make are repatriated back to the dealers, which is a significant change in strategy from where we were previously. Since 2007, we’ve paid back close to £1.4m in additional rebates. Over the last 15 years, the infrastructure has grown to support more service and solutions. We introduced a CRM system in order to better understand the dealers. We log all the contact we have with the dealers, so we can see how they are performing and if we’ve had any issues with a dealer, it’s flagged up to everybody and it allows me to monitor exactly who is talking to whom within the business. What is the value of being a member of a dealer group in today’s market? Buying power is still an issue. It is about economies of scale. We have the strength of being a large organisation in terms of the infrastructure we have to support the dealers. We have a strong balance sheet as well, so if we need to invest in projects, we have the capability of doing that. We’re here to try and improve the dealers’ gross margins, ultimately, whether through additional rebates or negotiating input prices. You’ve got the own-brand, you’ve got catalogues, you’ve got differentiated marketing – because each of the divisions have a different marketing solution that we provide them. One of the big, big benefits of the group, in my view, is you take out all the operational and the tactical side – like buying and IT for example. – it’s the camaraderie of the network. You’ve been to some of the events over the years. There’s, in my view, an atmosphere of ‘we’re in it together’. You’ve got the national salesperson’s conference, you’ve got 16 regional reviews – a lot of these guys know each other from years ago, so it’s like hooking up with old friends who they can bounce [ideas] off and they can see what works, what doesn’t. I think that’s sometimes underestimated. If you think about it, if you are running a business on your own, there are aspects of it where it’s a pretty lonely world to be in 365 days of the year, and the attraction we’ve got is we’ve got dealers from every segment from the very large £10m-plus, the £5m to the sub-£1m. There are common issues throughout the sector. We work with BPGI; you talk to people globally and there are the same issues, just transposed to North America, central Europe or down in Australasia. It’s a people business, in my view. I’ve always maintained that you can have all the technology, but people want to work with people.

It’s not rocket science. You’ve got to go out and ask for the business

www.dealersupport.co.uk MAY 2012

PEOPLE

DEALER INTERVIEW

What suggestions do you make for the dealers? I think it’s about maintaining close personal relationships that they have with their customers and it’s about being flexible, approachable and listening to what the consumer is saying to them. It’s the flexibility and the relationship these guys have got with their clients that made them successful. They’ve got to pursue, in my view, multiple contact strategies – in terms of, it’s not just about the stationery buyer, it is about who’s involved in FM, who’s involved in stationery, who’s involved in print. You’ve got to get behind the technology side, and you would have thought that was a given these days, but there are still people who are reluctant to get on board.

terms of cash? One is cash flow the other is bad debt. Those are constant issues we come across at the regional reviews and board meetings. We do a best-practice guide on credit control, to help dealers recover money. We’ve just launched an improved online credit-checking service where they can go on and vet their clients before they open an account. We’ve got some top-flight finance guys here and they’re taking calls all the time. We’ve been through the process, when we were growing the business through the EOS, of using things like confidential invoice discounting. The problem over the last couple of years for the dealers is actually accessing overdraft facilities or using a confidential invoice discounting.

That’s been a theme we’ve covered a lot lately. Do they even have a choice? You haven’t got an option with generation Y. It’s simple things – you’ve got the e-marketing, you’ve got the e-commerce site, you’ve got the back-office system – you need these processes in place and you need to be going through the learning curve now because without them I’d be surprised if you could survive long-term. It’s not just about selling office products, it is identifying the gaps and the guys have access to a huge quantity of products that they can sell these days, whether it’s FM, PPE furniture, or print. There are fantastic margin opportunities on the reman side of EOS, for example, since EOS is traditionally defined as quite a struggle. There are new MPS solutions coming out, secure shredding, there’s a plethora of services you can offer customers. It isn’t just about being a traditional dealer anymore.

What is a confidential invoice discounting? It’s where you obtian the provision of finance against your unpaidinvoices – typically 75-78% of invoices up to a 90-day period. The ‘confidential’ bit relates to the fact that your customers are unaware that you are discounting your invoices. It means you can pay your creditors and as the money comes in from the clients, you repatriate it back. It’s a way of managing cash flow. You normally do it in circumstances where you’re trying to grow the business, but it comes at a cost. In our experience, it comes at a slightly bigger cost than expected. We operate central billing from here, you have to be really careful in terms of recommending any financial services, for obvious reasons, but we would talk to the guys in terms of our experience and point them in the right direction. The issue is the fact that the bank facilities were always available for the guys over the years and it was all very informal, but then all of a sudden, when it started getting very difficult, there’s a very formal process involved and normally the outcome is rates that are more expensive than they were previously, or you can’t get the facility.

Talking about MPS, I have had discussions with manufacturers about it and some of them haven’t got their systems in place, some have. How do dealers start getting to grips with it? We launched a solution a few months ago and we’ve already got a really good uptake on it. At its very basic level, the dealer does an audit and the software evaluates machines and the usage, allowing the dealer to make recommendations. The other end of the spectrum is a complete break/fix solution, with a contractual arrangement behind it that says you will pay XYZ. What the dealer doesn’t want is to be in a situation where they’ve done nothing and the client comes to them and asks if they have a solution and they’re scrambling around trying to find one. So the solution’s out there to look at now and get familiar with. Should a dealer partner with a manufacturer and use their system or not? I think you should pick the solution that meets the clients’ needs. The bigger clients may want the break/fix contract, and some of our dealers work directly with the manufacturers like Canon. I think it’s just finding the right solution that fits your business model and the client’s business model too. Would Integra help a dealer that was financially struggling? If you talk to the dealers, what are the big issues in

MAY 2012 www.dealersupport.co.uk

For the Integra dealers that are doing well, are there common practices? It’s the guys who are keeping close to their customers [who do well]. Companies like the COS group do a huge amount of corporate events – they do the cricket, the rugby and the football – so they’re out all the time with their clients. WG Office is the same. You saw SOS did a ‘green’ event recently. You’ve got user days with these guys. I think it’s just about trying to develop a closer working relationship with a commercial theme to it – whether it’s talking about the environment or how you’re going to help the client. It’s also about knocking on doors. You’ve got to get out there. It’s not rocket science. You’ve got to go out and ask for the business. Are things looking up for the independent channel? I think we’re seeing the possible shoots of recovery, but I’ll reserve judgement until I get Q2’s figures out of the way. DS

R LE

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BUY EMGEE PRODUCTS DIRECT AND SAVE MONEY!

Following the February launch of it’s dealer-direct website www.ghndirect.co.uk G.H.Neville Ltd have been extremely pleased with the increase in dealer orders. Director Dave Neville says “We are very happy with the uptake of sales from dealers purchasing on-line and calling us with regular weekly orders. The feedback is very positive on pricing, product quality and product range.”

Giving us a go…can you afford not to have a look? We are seeing an increasing number of pro-active dealers purchasing outside of their normal wholesaler channel and they keep coming back due to the huge savings and very reasonable minimum order level. In a market where it’s difficult to make good percentage profit on office products switching to a direct purchasing model with us has got to be worth a look. Special offers Visit www.ghndirect.co.uk on a regular basis for special offers, new products and check out the very top-end, unique Keba filing products from Sweden. A big thank you to all dealers for your positive feedback and business, we appreciate your support. Please be aware that former Emgee catalogue codes will be fulfilled with alternative brand products. Please be careful and inform your customers.

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

FM GUIDE

NEWS

NEWS VOW FM Roadshow proves success Positive feedback from suppliers and resellers VOW has reported a favourable reaction from resellers and sponsoring suppliers alike, to its recent FM Roadshows, held in Leeds and Elstree. VOW says the Roadshows were aimed at providing its resellers with more detailed tools, hints, tips, and product training, directly from industry leading FM suppliers and the FM experts within VOW. The goal was to help resellers identify the opportunities at hand in the category and learn how to take advantage of them. Featured at the event was the VOW Zone, where the team showcased over 40 promotional flyers, cheat sheets and other sales tools for the resellers and their sales teams. The new Q Connect FM products were also on display, as well as offers on coffee, fans and cleaning products exclusive for the attending resellers. Debbie Nice, Vasanta Group FM category head, noted: “It was great to meet with so many customers at the event. I saw lots of new faces which was really encouraging as this category is a gold mine of opportunities and so many Resellers were excited to see everything that VOW and our suppliers have available to help them. “Everyone, VOW, suppliers and especially resellers, had such positive feedback on the information exchanged at the events. We are optimistic about the benefits these Roadshows will hold for the attending customers.” The first event in Leeds hosted more than 120 Resellers and 16 suppliers, while the Elstree event included over 110 Resellers and 17 suppliers.

Integra announce shredding service Secure document shredding provides dealers with new service offering Integra Office Solutions in conjunction with PHS Datashred, the UK’s leading national specialists in secure shredding and office recycling, will provide a complete solution for members enabling them to be fully compliant with the latest Data Protection Act legislation. Members will benefit from a UK nationwide service for confidential document disposal, on and offsite paper shredding, recycling, branded goods destruction, disposal of redundant IT equipment together with general and special waste disposal. Integra’s purchasing director, Neil Basham, said: “We are confident that PHS Datashred will provide our dealers with a distinct service offering, giving them access to an easy to implement and cost effective solution for their customers.” Patrick Stephens, account manager for PHS Datashred, added: “With identity fraud on the rise, businesses need to take steps to eliminate the risk to their organisation, their staff and their customers.”

WHAT THEY SAID With identity fraud on the rise, businesses need to take steps to eliminate the risk to their organisation, their staff and their customers.” Patrick Stephens, PHS Datashred

FM GUIDE

OFFICE HYGIENE

CLEANING UP Cleanliness in the office is a bigger issue than ever and many dealers are taking full advantage. In the first of a two-part series on health and safety at work, George Carey looks at office hygiene and tells you how to maximise sales

ith ever-changing legislation on health and safety at work and an expanding product base, the office cleaning market is one with huge potential for growth. Manufacturers and resellers alike are seeing dramatic changes in their market share and the types of products being ordered. “Cleaning and hygiene is one of our fastest growing categories as we gain market share from competitors outside the office supplies industry and businesses become more aware of the importance of cleanliness to reduce the spread of germs,” explains Debbie Nice, head of FM, Vasanta Group. “In particular, we have seen an increased interest in anti-bacterial products.” When promoting these products, it is important to remember the value of link selling. “If you supply inks and toners, screen filters or keyboards, then you can sell a whole range of cleaning products to complement them,” says Karen Harrison, group marketing manager, HK Wentworth Group. “Companies like AF sell small, consumer-type products which, although they do not cost a great deal, do generate excellent margins.”

MAY 2012 www.dealersupport.co.uk

FM GUIDE

OFFICE HYGIENE

Preaching the gospel With spend in this area on the increase, there is still plenty of room for expansion in the market and it is important that dealers are educating their customer base about the benefits they will realise with a cleaner office. It seems churlish to mention fear-of-loss to a readership of salespeople but there is a reason that it is an integral part of the sales process. It is important to effectively relay the cost that your customers can incur through illness. Gregg Corbett, marketing director, Avery, says: “By adhering to health, safety and hygiene guidelines, businesses can protect their workers from accidents and illness, lessen sick leave, retain staff, maintain their reputation, boost productivity and reduce insurance premiums. All key messages for dealers to bear in mind when selling such products.” It is also important to emphasise to customers that changing work practices and an increasing reliance on gadgets in the workplace has had an impact on the amount of cleaning necessary to maintain hygienic standards. “Growing technology usage in the office and at home, as a result of increased nomadic working practices, has resulted in an increased number of devices to be cleaned,” says Louise Shipley, European marketing manager for office productivity at Fellowes. “From laptops, to Smartphones, they all require cleaning as our working day is formed around train journeys, plane journeys and hot desking.” The right tools Once you have educated customers about the need for a clean and healthy office, it is important to be aware of the full range of products available and the current trends. It should come as no surprise that speed and convenience are key things that are required from products. Zena Goddard, key accounts manager, CPD, says: “The cleaning market is enjoying a surge from offices using wipes rather than sprays and cloths. Products like Flash wipes are becoming very popular as a consequence; people appreciate the ease in which they can be used, and then hygienically disposed of, meaning that there really is no excuse for having a dirty work space!” Nice has noticed a similar trend: “A busy workforce and the ‘Facebook culture’ means that an increasing number of people are eating food at their desks ─ meaning that the desk should be cleaned before and after lunch. Wipes and microfibre cloths have proven to be ideal products for everyone to have on their desks to ensure constant cleaning.” While dirty surfaces are easy to spot, air-borne impurities are not and can be equally if not more hazardous to the well-being of office staff. There is a range of air purifiers on the market that can greatly improve air quality and ensure that illness is kept to a minimum. “Studies indicate that indoor air can be up to five times more polluted than outdoor air, and allergies and respiratory illnesses are a growing concern within Europe. The need to not only clean your workspace, but also the air you breathe, is becoming more apparent,” says Shipley. “There are many factors that contribute to poor indoor air quality including, fungi,

MAY 2012 www.dealersupport.co.uk

mould spores, dust mites, germs and viruses, which can also be found living on the average workspace. Using an air purifier in your office, with a four stage filtration process, filtering at the molecular level will remove these impurities.” While everyone has the best of intentions regarding cleaning, during a very busy day it can easily slip to the bottom of the priority list and signs around the office can provide a useful reminder. “Central to better hygiene at work is clear signage, whether it is hand wash reminders or information posters on outbreaks such as Swine Flu and the latest advice to limit the spread of infection,” says Corbett. “According to the NHS, preventing the spread of germs in the workplace is the single most effective way to slow the spread of diseases amongst offices. As a result, it is essential that signage and labelling solutions are of a high standard.” As with anything else, proper education for customers and an awareness of new products are the keys to boosting sales of hygiene products. DS

Don’t miss the concluding part of our health and safety series next month…

“If you supply inks and toners, then you can sell cleaning products to complement them.”

WWW.GHNDIRECT.CO.UK

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

FM GUIDE

OUTDOOR PRODUCTS

THE GREAT OUTDOORS There are many products that your customers require that may not fit in with the traditional range of office supplies. George Carey looks at the sales opportunities outside the office that you may not have considered

hen trying to keep up to date with the latest AV products and wrestling with the decision about whether to offer MPS to customers, it can be easy to forget that there is a huge range of products outside the office that can be just as profitable for dealers. Beyond the four walls of the office there is a host of needs that you can fulfil, from bicycle safety to a dry place to smoke, that can provide sales opportunities. With the increasing popularity of cycle to work schemes, it is important for businesses to provide storage systems that are adequate in terms of space and security. Depending on a customer’s budget, there is a wide range of options available to ensure that their employees can store bikes safely. Those on a shoe string may opt for a traditional bike rack but for a larger budget, secure bicycle compounds are available, which offer not only increased security but also a dry bike at the end of the day. In order to keep all those cyclists safe, it’s important for your customers to have the right road safety equipment around their premises. Speed bumps can be an important element in maintaining the safe use of car parks and different bumps are available to reduce cars to differing speeds, with options for five, 10 or 15mph. Adequate road markings are an important factor for maintaining a safe car park and ensuring that those all-important parking space hierarchies are maintained. Specialist weather

resistant sprays, combined with an easy-to-use wheeled applicator means that anyone can do the job. This also provides the opportunity to sell high-vis clothing and safety equipment for those carrying out the job. The smoking ban has left smokers literally and metaphorically out in the cold in recent years, which has created a considerable marketplace in outdoor smoking-related products. From wall mounted ashtrays to larger free-standing smoking bins, it seems that profits can arise phoenix-like from the ashes. Smoking shelters are another product that can offer an excellent margin, although it’s important to ensure that you know the relevant legislation before offering to supply these products. Shelters must be at least 50% open and adjacent walls, hedges or other structures may cause the shelter to be in violation of the law. With the great British fortnight of summer on its way, businesses may also be looking at upgrading their outdoor seating facilities. From benches to picnic tables, these products are easy to install and can provide cross selling opportunities for items such as outdoor heaters and refuse bins. If these products aren’t something that you are already supplying they could provide a profitable new revenue stream and show your customers that you are capable of thinking outside the box. DS

It’s important to ensure that you know the relevant legislation before offering to supply these products

MAY 2012 www.dealersupport.co.uk

FM GUIDE

DEALER INTERVIEW Think Office

Thinking about FM After striking out on their own in 2005, husband and wife team Gary and Nikki Williams have taken their company, Think Office, from strength to strength. George Carey talks to Gary Williams about the three reasons for starting the company and the challenges of supplying FM products

CV ANNUAL TURNOVER: £1.5m VANS: 1 STAFF: 12 MARGIN: 35% BACK OFFICE: Blue Sky

How long has Think Office been in business and what were you doing before that? My wife and I set up the business in 2005. We both had senior positions at ISA Supplies; I worked there in two stints for 15 years and my wife was there for 12. I’ve been in the industry since I was about 20, when I started working for a company called NAC Computer Supplies. That was way back in ’85.

We’re still working on that at the moment, it’s a bit of an on-going issue.

What prompted you to start your own business? I was made redundant in 2004, only a year after my wife had given birth to triplet girls. We couldn’t, or rather didn’t want to, give blood sweat and tears for our employer, who was demanding that at the time. We decided that we wanted to put all of our knowledge and sales ability into running our own business.

What percentage of your business would you say that FM accounts for? It’s quite a small amount at the moment, I’d say 10%, but we’re looking to expand that of course. I’ve just had Office Friendly in here and the meeting we had was predominantly about FM. We’re looking to do a lot of e-marketing and proactive sales calls for FM products. Something we’re considering at the moment is nominating one of our salespeople to be our FM champion.

How long have you been supplying FM products and were there any teething problems? We have been working very closely with Office Friendly and VOW supplying FM the last two years or so. The delivery has always been pretty spot-on but pricing caused huge problems when we first started. It was quite unexpected because we thought our wholesaler would have realised that the prices needed to be at a certain level when you’re dealing with the likes of Booker and all the other businesses out there.

MAY 2012 www.dealersupport.co.uk

What area of the country do you cover? We use the Rapide service through VOW to deliver nationally and we personally deliver to any customers within a 35-mile radius of our office in Silsden, West Yorkshire.

Generally is your selling all done over the phone? I would say that 95% is proactive telesales, but my wife’s and my background is in field sales, so with the larger spending accounts, one of us will hop in the car to go and close that business if we feel that it will help. However, we’re from the old school of telesales, so we know that we can cover more customers by selling over the phone.

FM GUIDE

DEALER INTERVIEW Think Office

Has there been any resistance from existing customers to getting their FM products from you? Not really other than price, although that has sometimes been a bit of a sticking point, particularly with the larger accounts. Having said that, obviously we don’t just sell on price; we offer all the benefits of working with Think Office and dealing with us as salespeople. Do you find that you have to market FM products differently? Yes, because we’re often selling them to different people within a business. If we’re selling consumables we’ll often be dealing with the IT buyers or if it’s stationery it’ll be the office manager. The FM products are ordered by a greater range of people in organisations, it could be anyone from the warehouse manager to facilities manager, so we have to gear our marketing in a slightly different way beacause it’s going to people who probably all speak a slightly different type of language. Has FM become a more competitive area of business for dealers? Yes absolutely. For us it’s a massively untouched area. At the moment it’s 10% of our business and if we can get it to 20% by the end of the year, I’ll be very happy. It’s very competitive but we believe that because we can offer next-day delivery on these products, if the price point is there, customers should buy from us. The potential is huge. I see that you also supply quite a lot of furniture, what made you get into that? We touched on furniture when we first started because we had the big Kingfield Heath book at the time, which had quite a lot of furniture in there. The difference now is that we’re buying furniture direct by going to people like Elite Office because of the price. We’re looking to employ a furniture salesperson in the near future as well. In an ideal world, we’d have a specialist person championing FM products and another for furniture. We want someone who is going out there proactively looking for those deals. We’re aggressive in the way we go to market. Is it the less urgent nature of furniture ordering that allows you to source products direct? We initially ordered all of our furniture through VOW and they would deliver everything the next day. The majority of customers don’t need that; furniture is a much more planned purchase. We now offer it for delivery in seven to 10 days; we go in there and plan it all, working closely with the distributors and the clients to deliver a great service. Are there any other new product ranges that you’re considering at the moment? We’ll sell anything as long as we can make money from it. If you go into an empty office building, we’ll be happy to fill it for you. Do you have any advice for dealers looking to increase the amount of FM business that they do? Don’t bother because Think Office are already doing it.

MAY 2012 www.dealersupport.co.uk

FM products are ordered by a greater range of people in organisations, so we have to gear our marketing in a slightly different way

FM GUIDE

INSIGHT

Beverage leverage Where would we be without our morning pick-me-up or our afternoon refreshment? Tea and coffee are office essentials for the majority of businesses. But, are you making the most of the market? Carrie Service takes a look

ea is the quintessential drink of the English. But a lot of us also turn to coffee when we’re in the workplace, perhaps to give us that extra boost when we’re under pressure. So how well do you know your customer’s drinking habits and are you catering to their needs? Many offices get into the habit of reordering hot drink supplies each month simply because it is easier than asking members of the office what drinks they would prefer. The hot drinks industry is immense and, despite the recession, many people still can’t do without their morning latte. This is a phenomenon that dealers should be tapping into, as making your own cup of tea or coffee is a mere fraction of the cost of heading to your local Starbucks. If you tend to sell more coffee to businesses than tea, you should remember that where there are coffee drinkers, there will also be tea drinkers, says Heather Griffith, business manager for out of home at Tata Global Beverages: “Away from home, the workplace is the number one location people consume beverages, therefore the quickest and easiest way for dealers to increase sales is to ensure they are selling tea to every office they sell coffee to.” One way of expanding the variety of hot drinks you sell is by giving offices the chance to try something new. Many are stuck in the rut of reordering bulk supplies of standard tea and coffee, and it never really occurs to them to try anything new. “Where dealers should get a little smarter is offering speciality teas” says Tom Farricker, sales director at Northwest Teas.

MAY 2012 www.dealersupport.co.uk

Why not try offering samples of a variety of fruit or herbal teas and see if orders change? It could be that no one has actually reviewed the tea and coffee order for a while, or since the last buyer left, so you could be missing out on an opportunity to expand. Many offices don’t even realise their stationery supplier sells hot drinks, so offering samples or first-order special offers can help to ensure it is on their radar. If you get a new flavour of tea in, make sure that customers know about it – people like to try new things. Finally, be certain that you know your market: “Dealers need to be certain they are selling the right pack to the right office. If an account says they nip to Tesco to purchase their tea as they don’t need 440 tea bags, offer them [packs of 100]” advises Griffith. DS

One way of expanding the variety of hot drinks you sell is by giving offices the chance to try something new

MANAGEMENT

GROW YOUR BUSINESS

Projecting into the future Bryony Taylor looks at the growing market of audio visuals and projectors to see if they’ve bucked the trend during the recession

MAY 2012 www.dealersupport.co.uk

GROW YOUR BUSINESS

www.dealersupport.co.uk MAY 2012

MANAGEMENT

GROW YOUR BUSINESS

as the 2012 Olympics and the Euro 2012 football tournament which we are fully expecting will boost product sales in Q2 and Q3 of this year,” he adds. “The corporate world is said to be over 40 times larger than the education market for interactive technologies,” explains Martine Dodwell-Bennett, sales and marketing director at Steljes. “Interest from the corporate world is certainly being accelerated by the need to reduce costs and increase productivity by using the latest collaborative technologies and conferencing systems. This is also helping corporates boost their environmental credentials, as these technologies reduce the need to travel and thereby reduce their carbon footprint.” Within corporates the demand and use of media-rich content for both internal and external meetings is probably the highest it has ever been, Dodwell-Bennett adds. This is largely driven by consumers’ experiences in the home, including flat screen displays, high performance speakers and projectors. “Customers’ expectations are much higher when it comes to presentations, and staff are demanding user-friendly systems that increase meeting room participation and enhance streamlined communication and decisionmaking meetings. The AV industry is playing a key role in helping companies achieve this,” she says. Dealers need to keep abreast of technology news and future developments, matching these to their customer needs, making sure they have the right product and at the right time. “Dealers have to focus on providing products that are as future proof as possible to make their customer’s investment go further and also on the convergence of AV and IT to help their

MAY 2012 www.dealersupport.co.uk

customers develop a coherent enterprise-wide strategy for their AV investment,” says Tobin. “The AV market is a really exciting industry and the pace of change is immense with new innovative products being released all the time.” “Video walls are becoming big business both in terms of revenue achieved but also volume,” adds Dodwell-Bennett. “Companies want the ‘wow’ factor for their HQ office and installing a video wall gives them exactly what they are looking for.” “Dealers need to have a product champion who knows the basics on the brands and different types of technologies, because of limited resources, manufacturers are pulling away from doing product demonstration and sampling unless there is the potential to win a really large order, so dealers need to fill this gap internally,” explains Dawes, adding that dealers can maximise sales by including add-on products such as projection screens, audio equipment and wireless presenters. As always the best sellers will focus on understanding the product and all its features before pitching them to meet a customer’s needs. “Dealers should focus on features such as the ability to re-use the existing ceiling mount for the upgraded projector,” says Hartigan. “Or, sell the eco mode facility which extends the life of lamps and also reduces power usage.” Davidson agrees adding: “With total cost of ownership ever more critical, dealers should be aware of issues like lamp life, power consumption, warranty conditions, filter maintenance and replacement lamp costs.” The aim is to keep running costs to a minimum, and that is a motive for sales in all markets for this equipment. DS

✁ IDS LEAGUE

Application form Application for the 2012 Independent Dealer Success (IDS) League

Financials 2010

2011

Turnover

Average gross margin

Less

Sales & admin %

Distribution costs %

Establishment costs %

DETAILS

Hence

Name:

Operating profit %

Net profit %

APPLY NOW

Company name:

Operations

Address: Telephone: E-mail address:

2010

2011

Total number of people in sales * Field sales Telesales Other sales Total warehouse & delivery staff

AFFILIATION

Delivery

Are you a member of a dealer group?

Warehouse

(No/Yes)

Total other staff *

If yes – name of group?

IT Management Other (specify below) Overall total

Please e-mail your completed form to martin.wilde@ntlworld.com or fax to 01223 704347 by 23 May 2012. Alternatively, visit tinyurl.com/d22yr67 to apply online. All figures and information are supplied in absolute confidence. Any queries, please contact Julia Dennison on 020 7288 6833 or e-mail editor@dealersupport.co.uk.

*Broad category – just use these if you cannot break down by subcategory

Do you operate your own warehouse? If yes

2010

2011

Number of warehouses Total sq ft Average stock value

Sq ft £

www.dealersupport.co.uk MAY 2012

â&#x153;

INDUSTRY

IDS LEAGUE

GREEN DEALER OF THE YEAR

Sources of product

What environmental schemes are you a part of (i.e. ISO 14001, Carbon Smart etc)? Please listâ&#x20AC;Ś

What proportion (%) of your total spend is with each of the following?

What percentage of your cut paper sales is recycled, FSC or PEFC accredited? ____% What percentage of your printer cartridge sales get reclaimed for recycling? ____% What percentage of your packaging waste is reclaimed for recycling? ____% Please list any further environmental initiatives you may be undertaking: (Please specify)

2010

2011

Direct from manufacturers

Office products wholesalers

Dealer group warehouse

Computer consumables distributors

Paper merchants

Furniture wholesalers

Importers

Others (specify below)

Total

100%

WEB DEALER OF THE YEAR What percentage of your annual sales value is captured via an e-commerce enabled web site? 2010: ____%, 2011 ____% What percentage of your internet business is made up of repeat orders? 2010: ____%, 2011 ____% How many visitors, on average, visit your site per month? 2010: ____%, 2011 ____% What is your conversion rate (percentage of visitors who make a purchase)? 2010: ____%, 2011____% What percentage of this is traffic from search engines? 2010: ____%, 2011 ____%

Please e-mail your completed form to martin. wilde@ntlworld.com or fax to 01223 704347 by 23 May 2012. All figures and information are supplied in absolute confidence. Any queries, please contact Julia Dennison on 020 7288 6833 or e-mail editor@dealersupport.co.uk.

MAY 2012 www.dealersupport.co.uk

Which office products wholesalers do you use, and what share of your total spend with wholesalers do you spend with each of them? 2010

2011

VOW

Spicers

Others (specify below)

Total

100%

MANAGEMENT

LEGAL

he PAYE system has been with us since 1944 having been originally set up to aid collection of taxes during the Second World War. What’s perhaps most surprising about the system nearly seventy years later is how well most of it still works, but changes in work patterns, payment patterns and the sheer volume of information handled by the system have left it straining to cope.

SO WHY CHANGE?

HMRC – you and real time Soon to be compulsory, dealers need to know about Real Time Information (RTI), a project launched by the government some 18 months ago to overhaul the way PAYE works in the UK. Tax expert Jason Piper investigates

PAYE was, unsurprisingly, designed to run on paper. Reconciling all the information by hand used to take months, and until very recently still took many weeks, even on computers, as there were over a dozen different systems running around the country without the ability to automatically cross check against each other. That didn’t matter so much while people’s pay patters stayed similar year on year. However, as jobs became more mobile and pay levels began to change more frequently, only being able to figure out what tax should be paid, anywhere up to 18 months after the event and requiring the PAYE code to be revised accordingly, was becoming a problem for tax payers. What’s worse, as computers took over the processing of the information, tiny errors and inconsistencies that a human would have simply ignored or amended became a major stumbling block. If the person known to HMRC from their old job as ‘Anthony Smith of Rose Drive’ was put down on the PAYE form for the new position as ‘Tony Smith of Rose Dv.’, then the system could not tie the two of them up and he’d end up with two separate records. If they were on separate computers in different parts of the country it could take years to sort out. However, HMRC now have a single computer able to handle all the PAYE records for the whole country and they can process the year end information in just two or three days. Introducing it lead to what HMRC might call ‘a few teething problems’ - or to the tens of millions of people who received notices of under or overpayment of tax, a mess. Still, that was down to the way they introduced it, not the system itself, and now that things are bedding down it’s starting to reap benefits. But to really get the best out of it, the system needs the information faster and in a more consistent format, and without necessarily needing all the stages built into the paper-based process. The PAYE system has lasted remarkably well and it can sensibly and usefully be rebuilt to work in a computer-based world rather than a paper-based one. Tax codes can now be adjusted monthly to reflect every change in circumstances as they happen.

WHY NOW?

The case for change is strong, but the proposed timetable has raised a few eyebrows. PAYE is a hugely important part of the UK tax system and the business environment. The process of implementing RTI has to be complete by October 2013, which leaves relatively little time to test and revise systems or roll out new payroll software. The next PAYE year that businesses open

MAY 2012 www.dealersupport.co.uk

MANAGEMENT

LEGAL

will need to be RTI ready, so if that means rebuilding a payroll setup, now is by no means too soon to be thinking about it. The reason for the rush is the overhaul of the benefits system, and the introduction by Department of Work and Pensions (DWP) of the Universal Credit. Running that properly will need accurate detailed information about the tax and National Insurance position of every person in the country receiving any type of benefit, and that means getting the PAYE records right. Universal Credit is due to go live in October 2013, so DWP need the systems feeding information to them by then. There have been plenty of strong words said and written about whether DWP can really get the Universal Credit software working by then; but that’s the timetable HMRC have been given. They’re doing something that they’d probably want to do anyway, but the Revenue might well have liked a little more time to iron out the wrinkles that any change of this magnitude is bound to create. OK, so what do I need to do about it? Well, that depends on who runs your payroll. If you use an outside specialist or bookkeeper to submit your returns you need to make sure they’re up to speed. Talk to them now about who is going to do what and when. It will do no harm to agree in writing, between you and the information provider, the best way to do it whether that means using an Excel spreadsheet or handwriting it into the payroll operators own form. If you do your own payroll, then you’ll need to take care of things yourself. Software providers have been working closely alongside HMRC to try and work out what needs to change and what can be kept. The P45 is an example. Original HMRC thinking was that they wouldn’t need it at all under the new system so it could be done away with. However, investigating how businesses would operate under the new system highlighted the fact that both the departing employee and the new employer still needed all the information held on the current form, even if HMRC didn’t need it on paper anymore. HMRC are upgrading their free software (available if you’ve nine or fewer employees) and it can be submitted over dial-up if you don’t have reliable broadband. Software firms are running pilot programs across the country with 300 employers from April 2012, another 1,300 from July 2012 and up to 250,000 from November 2012. If you want to be ahead of the game, ask your provider if you can join in one of the pilots. Perhaps the most important thing you can do is tidy your payroll data. Because the new system is totally computer driven, it won’t be tolerant of variations and will spit out any inconsistent information as being wrong. You shouldn’t be submitting records in the name of ‘AN Other’, or ‘A Student’ anyway, although thousands still do according to HMRC records. At the very least, you’ll need the NI number, date of birth and ‘official’ name (i.e., Anthony J Smith, rather than just Tony Smith) for each employee to give the HMRC system a chance to match up different records. It’s worth bearing in mind that if you regularly get your RTI submissions returned you’re likely to move up HMRC’s ‘at risk’ register for a PAYE visit, and with monthly returns they’ll get a much quicker idea of whether you’re having problems than under the old annual system.

MAY 2012 www.dealersupport.co.uk

MANAGEMENT

LEGAL

There have been horror stories about how much information employers will need to submit, and there are potentially over 100 items of information needed for a single PAYE record. However, many of those won’t be relevant to the vast majority of employees (e.g., anticipated duration of stay for international assignees on your payroll) and others (e.g., passport number) you may well already have anyway, just for different reasons. Once you’ve put them into the payroll software they’re not going to change. The system will want to know how many hours have been worked by each employee in the pay period, so this may be one area you need to look at. Of course this is not an issue if everyone is on fixed hours, and paid well above NMW, but if you’ve got many part-time workers on the payroll you’ll need to look at how you capture that information and get it into the system. On the plus side, the year-end forms (P35, P14a and P38As) will no longer be needed, and you won’t need to send P45s to HMRC, or complete a P46. However, employees will still need a P60, and expenses and benefits will still need to be reported on a P11D/P11(b). HMRC’s own figures show that the net impact of RTI will be to save employers a net total of £300m per year in administration costs. Reporting will be more frequent, but the new system has been designed so that software will do most of the work. It’s worth bearing in mind that it won’t just be your employees who lose out if their tax and NICs records are wrong. In 2011, HMRC introduced a controversial new set of ‘in year’ penalties for PAYE record keeping failures, and while there’s likely to be some sort of soft landing for issues relating to the RTI system, as there have been for VAT online filing and the new iXBRL reporting regime for companies, relying on that is a dangerous game to play. The new penalties can quickly run into thousands (or tens of thousands for larger businesses) and you’ll still have to spend the time sorting out your records after spending the cash on the penalty. DS Jason Piper is technical manager for tax and business law at the Association of Chartered Certified Accountants

“Perhaps the most important thing you can do is tidy your payroll data”

MAY 2012 www.dealersupport.co.uk

FINAL WORD

The benefit of written terms and conditions “The importance of having a well drafted set of written terms and conditions in place should not be underestimated.”

Martin Clifford, solicitor, Pickerings Solicitors LLP

ritten terms and conditions of business form a key component of an organisation’s supply chain management process. Many businesses recognise the importance of this, having a well drafted set of terms in place with their suppliers and customers. It’s also fair to say however that many others adopt a more indifferent attitude, working with outdated or unsuitable terms or perhaps even contracting with no written terms at all. The importance of having a well drafted set of written terms and conditions in place should not be underestimated. Their purpose is to protect your business by setting out how it enters into contracts with third parties. They can also add value to a business by helping to standardise its contracting process as well as demonstrating to others that you take your business dealings seriously. If businesses choose to simply rely on oral arrangements when entering into contracts, they are doing so in uncertain circumstances with the risk that neither party has much understanding of the exact terms of the contract. What then happens if a dispute arises? Clearly drafted terms and conditions can help to extinguish this uncertainty, enabling the contracting parties to know exactly where they stand on important issues such as arrangements for payment, delivery and also on the key issue of liability. A set of terms and conditions should be regarded as a living document that evolves with the business as it develops. The terms should reflect how a business operates in practice. All too often, I’m asked to review a client’s existing terms only to find that they bear no resemblance to the reality of how that client operates on a day-to-day basis with the result that they are of little or no value to the client; worst case scenario being that the terms may even be unenforceable. Where does this leave you if, for example, if you’ve got an insolvent customer who owes you money for goods and you want to recover them? Time spent on drafting effective terms will be wasted unless procedures are put in place to ensure that they are properly incorporated into contracts which means making sure that they have been brought to the other party’s attention before the contract is entered into. This might mean undertaking staff training so that they know when the terms should be introduced into the contracting process. It is also important to remember that terms and conditions form only part of a business’ supply chain management process and that they are not in themselves to be regarded as the ‘silver bullet’. There is no substitute for adopting other practical measures such as robust credit control and quality control checks. Running a business these days is difficult enough and problems can arise, frequently out of circumstances that are beyond your control. So why not take some time to review those things that you can control such as your terms and conditions, to make sure that your business is best placed to deal with those issues when they inevitably occur. DS

MAY 2012 www.dealersupport.co.uk

S W E N

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E SAVE TH DATE! e

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Challeng Channel mber 2012 te p e S 17-28

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 Channel 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 Channel 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/ channelchallenge2012 to find out more about the challenge, dates, cycle routes, setting up a donation page, logistics and cycle support, then email matthew.moore@dealersupport.co.uk with your choice of date/s.