In case you haven't heard, Staples has announced that it is buying the newly minted Office Depot/OfficeMax company for an estimated 6 billion dollars. The combined company is expected to generate sales of 39 billion annually.
And then there was one.....well, one major chain.
When monopolies are formed (think AT&T), a couple of things are sure to happen:
- Store Closings
- Higher Prices
- Decrease in Personal Service
I've already been asked what I think and how it is going to affect the smaller office supply dealers like us. When I went to school , they taught us what happened when a single company dominated the market. Basically, after killing off the competition, the company can charge whatever it wants and also dictate the price it wants to pay as well. (Where else are the manufacturers going to sell the bulk of their products?) One thing is for sure - they aren't going to "pass the savings along to you" as they would lead you to believe.
Make no mistake - Staples did kill off the competition. All of the Big 3 gained their success by offering many commonly used products below cost to make the competition look bad. This story shows a good example of how this works. It's hilarious - see how "easy" it was! http://www.wsj.com/articles/when-staples-offered-items-for-a-penny-state-workers-ordered-kleenex-by-the-pound-1406169004.
They put thousands of independent dealers out of business and, after that was done, they had to go after each other. Office Depot and OfficeMax have struggled with profitability for years. Depot got caught and sued and settled case after case for overcharging customers. (http://www.bizjournals.com/southflorida/news/2015/01/14/office-depot-to-pay-68-5-million-settlement-to.html)
The Benefits of an Independent Dealer
This merger will really give the independent dealer its time to shine. We exceed in employment growth, we keep pricing competitive, and strive to increase personal service beyond expectations. Independent dealers have the same buying power as the chains. Many customers don't realize that. We buy direct from the manufacturers just like the chains do. How, you ask? We are part of a group of other independents across the country that have banded together to collectively buy from the major manufacturers in the industry. By doing so, this affords us a combined $12 billion purchasing power. We can special order products for you that we don't normally carry. We have a staff of account managers to oversee your account and provide you with personal service - including usage reports and analysis, recommendations, consolidated billing, scheduled visits and custom contract pricing. Many times we can respond more quickly than the chains do because there is less red tape to navigate. We have customer service representatives who know you by name and know what you order regularly.
So how will this affect us? Positively, I hope. People like to have choices. If people are not treated well, they will go somewhere else. That's why all of our core values, which are the reasons for our success, are all about serving the customer. We call this recipe Customer Love. Customer Love is how we have stayed in business for 29 years and we will continue to do this.
People ask "How can we compete?" For starters, we match competitor's prices. When doing price comparisons for customers, we always find items that the Big 3 are charging more for than we are. We consistently save companies 5-10%. When we agree to special pricing on a group of products, we keep the prices the same. We have found that this is not true over time with our competitors. When you come to Office Express, you are buying from a company that has experts on staff in supply purchasing, printed materials and office furniture. We can guide you to the right choices in a personal way. Good choices pay off more than just the cost of the product itself. (See my Fact or Fiction: The Truth About Buying Office Supplies blog.) If you are currently splitting your office products purchases between one of the Big 3 and us, now would be a good time to contact your Office Express account manager and schedule an appointment. Let us show you what we can do for you.
Will It or Won't It?
Will the merger actually take place? I don't know. They tried it before and the FTC shot them down. It might be different this time, but it might not - we'll just have to wait and see.