Superior Suppliers?

Entrepreneur, May, 2001 by Mie-Yun Lee

Online versions of our favorite office-supply stores: Do they make stocking any easier?

Purchasing office supplies used to be a no-brainer: Once someone started in on the last pack of pens or legal pads, you knew it was time to hop in your car and head to the nearest office-supply store to replenish your dwindling stock. However, now that the industry has grown to include not only traditional office-supply stores, but also their online counterparts, choosing the best place to buy office supplies is no longer a black-and-white decision.

This month, we take a closer look at office-supply giants Staples, OfficeMax and Office Depot to get a handle on your purchasing options in this increasingly Internet-oriented business world. One thing is clear: The great divide between the Internet and real-world versions of these stores is narrowing.

"We're going for a seamless integration of our retail stores and our online site, meaning that someone could walk in our stores, go to an electronic online station and order products or business services from OfficeMax.com," says Steve Baisden of OfficeMax. "If they can't find that favorite red pen in the store, for example, they can order it online in the store and have it delivered to their business the next day."

OfficeMax is not the only retailer heading in this direction. "The Internet is going to be a tool for our customers to run their business online, not just to buy products. So the integration of the services in addition to the products we sell is a great focus," says Monica Luechtefeld, executive vice president of e-commerce at Office Depot.

At press time, however, Office Depot announced it would be closing 67 stores nationwide, along with three in Canada. "They're stores that are by and large not in great locations," explains Luechtefeld. "They [sell to] customers whom we're going to [service] through our catalog, mail order and sales force. We're not leaving [those] customers--we just won't be servicing them in a retail store."

ONLINE REALITIES

Focusing on the Internet is the right move, judging by the popularity of online ordering among entrepreneurs. In fact, of all the people I talked with, not a single one purchases their supplies primarily by dropping by the store--not even one business owner whose office is located across the street from a Staples.

What's the selling point? In a word, convenience. You don't have to leave the office, you can consult a running log of past purchases when it's time to reorder, and you're spared the burden of carrying a load of supplies back to the office. Many feel buying online gives them more control over their expenses because they can make a set list of approved purchases employees can make.

And delivery is a real cinch. Staples.com, OfficeMax.com and Office Depot Online (www. officedepor.com) all offer free shipping for orders totaling more than $50. And actual prices for products are pretty much the same regardless of where or how you shop (see "Shop Around" on page 85).

Online ordering does have its downsides, however. Budget-conscious penny pinchers will miss out on sales and promotions offered in the physical stores and, consequently, sometimes end up paying more online. (A Web site like www.dealcatcher.com, which lists available coupons for a variety of retail sites, can help, though.) Also, if you're particular to certain brands, the selection you find online may be different from what you're used to in the physical store.

Ready to buy online? Then there's only one remaining question to answer: Who do you go with? A few words of caution--don't take this decision lightly. It's not just another expense; it's a long-term relationship.

"A tip I would give to other entrepreneurs is to allow much more time to get set up than you think you're going to need, and definitely do due diligence upfront before selecting your supplier--you're probably going to end up staying with them for a while because it's just too much of a hassle to change," warns Rosemary O'Neill, 36, co-founder of Infopop Corp. in Seattle. O'Neill's company, which has annual sales of about $2 million and spends $300 to $400 per month on office supplies, has come to rely on OfficeMax.com for the majority of its office-supply needs.

While the ease of ordering and simply waiting for your delivery is a definite draw for online shopping, some aspects of the in-store buying experience simply can't be replaced. For instance, the personal customer service found in a physical store doesn't really translate well to the online world, where you're dealing with computers instead of people. "In stores we're constantly striving to beat customers' expectations in terms of customer service," says Baisden of OfficeMax. "I think we're really trying to add value in the training we give our associates and how they interact with customers."

For instance, if you're still fishing around for products that will address your company's needs, then going to the physical store, where you can consult with salespeople, is still your best bet. If you're looking for office furniture, for example, you might feel more comfortable going to the stores to look at and touch the actual products. And some entrepreneurs are accustomed to using special services the stores offer, such as copy centers that let you whip up everything from business cards to marketing materials.