Big Ask: Ensuring success in adversity

What practical steps can dealers take to ensure success over the coming 12 months? Austin Clark asks the industry.

David Riley, purchasing director, Ben Johnson: “I believe the post-election fallout and Brexit are really side issues to the ongoing challenges we face in managing the changing workplace. That said, Brexit has had a huge impact on the price we pay for goods due to extreme exchange rate fluctuations. I would encourage all dealers to pass these increases on, and not to try and absorb those additional costs; it’s just impossible to sustain, and damaging to the whole sector, so pass them on!

“Dealers should also ensure they choose the right partner to help them grow their business. The wholesalers are having to change to adapt to the changes in the marketplace. Spicers, VOW and Exertis all have different offerings; dealers need to choose the partner that best suits their business model and work closely with them. It's a mistake to treat a wholesaler as a supplier because, in reality, they are a partner. Remember too that they no longer control the market – they follow it.

“We’re all aware of the decline of traditional workplace supplies, so it’s imperative we all buy into other categories. List five top categories and stick with them. Whether it’s FM, packaging, IT, furniture or print that is the focus, choose a partner that can help create a supply chain to the market. We are all seeing Spicers, VOW and Antalis take on category specialists as they quickly realise this is where the growth will come from. Talk to them to see how growth can be achieved together and factor in salespeople – they might have sold office supplies in the past but do they have the skills to become category specialists?

“Finally, a great online presence, alongside an e-commerce platform, is needed. Without one dealers will simply miss out.”

Steve Harrop, chief executive, Advantia: “The good news is that there are new people looking to set up dealer businesses, which is exciting – and these people are not afraid of being in the office supplies industry. The difference is, office supplies is their start point, because they know about them…but it’s not going to their end point.

“Diversity is crucial, technology is crucial but, above all else, put customers first in everything you do and really engage with them, get to know them and stay close to them – and use great technology to do it. Don’t be sympathetic to the traditional ways of doing things and don’t be beholden to those suppliers that you felt have always had your interests at heart but who now are just looking at the bottom line. Finally, find partners who can deliver you the changes and innovations that will actually make your business stronger for years to come.”

Toby Robins, chief executive, Office Club: “The uncertainty created by the election and Brexit generate both risks and opportunities. No-one can react and adapt more swiftly than the independent dealer community of SMEs but if you bury yourself in the day-to-day – rather than looking over the parapet – you will miss the opportunities and not see the threats.

“Make the time, therefore, to manage your business, focusing on what makes you unique. You add value as a consolidation service so you must keep your sourcing flexible and your relationships strong – and don’t forget your drivers who see your customers more often than anyone else. Private equity money has been pouring into the trade which simply wouldn’t happen if they hadn’t recognised the opportunity for a strong financial return. Make sure you take your share of those profits.”

David Langdown, sales and marketing director, Focus7 International: “For 20 years the independent dealer channel has had to fight off the combined effects of global economic pressures and competitive threats. In a sense, therefore, the next 12 months may be just another year. However, I suspect that the coming 12 months may actually be the year that really separates the wheat from the chaff.

“Another election is more a probability than a possibility, Brexit is going to lead to uncertainty and there will be a general reluctance for businesses to invest in anything seen as non-essential. Customers will demand value and that means margins will be under greater pressure. Inflation and interest rates will rise (they can't fall) and demand for core office products will continue to fall. Add to that the irresistible march of Amazon Business and inevitable consolidation and there will be casualties.

“The winners will be the companies which have found a way to differentiate and to add value. They will be the dealers who invest in their brand and their marketing and find differential advantages that mean something to consumers. They will take a consultative approach with clear and demonstrable company values. They will be offering business growth and productivity opportunities through a much wider portfolio than just office products, focusing on productivity solutions, with efficient ordering processes, environmental deliveries and clear reporting.

“The losers will be those with a webstore but no website, wholesaler catalogues but no unique, personal marketing, no digital or social media presence. Many dealers still think having 20,000 skus for next day delivery is their USP; I'm sorry – but them – their days are numbered.”

Paul Routledge, Country Manager, D-Link UK: “D-Link is working with the channel to ensure it is offering stability through consistent pricing, choice via ever-expanding range of networking solutions and the assurance of its ongoing commitment to support its UK channel partners.

“This will give its resellers the confidence to pursue new opportunities pre-and-post-Brexit with a company that’s been at the heart of the network revolution for over 30 years.”

Nick Wilson, CFO, Office Power: “Focus on strengthening relationships with your customers. As uncertainty continues financial and macro-economic pressures on customers may result in budget cuts and cost control measures – leading to contract tenders and further pressure on pricing. Strong relationships will help you retain those customers if things get tough.

“If inflation continues to spiral upward, interest rates will rise and impact borrowing. If you have premises, make sure you are prepared for the mortgage to go up. Explore your options and make a plan B if that happens. Going stockless could, potentially, be the best option to retain and grow your profitability.

“Don’t put all your eggs in one basket. Brexit may push some large multinational businesses out of the UK, so dealers with an over-reliance on one or few large customers should be conscious of the increased risk of losing these customers.”

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Posted by Austin Clark (95)

Written on 21st July 2017

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