From the May 2001 issue of Entrepreneur

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 Office-Max.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 re-order, 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 On-line 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"). 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.

Analyst Buzz

Of the three superstores, Staples.com seems to be beating the competition from an analyst's perspective. "Office Depot and OfficeMax have online sites, but it seems to me that they haven't really created a services platform for their small-business customer," says analyst Kneko Burney, director of eBusiness Infrastructure & Services at Cahners In-Stat Group. "Staples has just always been really innovative, and they have a phenomenal distribution network."

It turns out that the majority of business owners consider reliability and service rather than price to be their main priorities in purchasing office supplies, and Staples.com seems to have beaten the competition on those levels. "Their customer support is outstanding. The e-mail responses have been accurate and blazingly fast," says Ramon Ray, an analyst at Smallbiztechnology.com, a New York City-based company that provides strategic technology solutions to small businesses.

With this shift from in-store to online purchasing, companies have been striving to add value for entrepreneurs via additional online services, such as payroll and recruiting. "You'll see that [Office Depot's] goal is not just to aggregate hundreds of services," says Luechtefeld. "[Instead,] what businesses want us to be is that trusted partner in helping them find the best quality."

And it's quality of products and services that office-supply stores hope to provide to entrepreneurs. The weeding-out of lower-quality items also seems to be one of Staples' strengths. "They go through a significant due diligence process that's really beneficial for customers," according to Burney.

The bottom line: You don't want to get stuck taking mental notes during an important meeting because your office-supply store of choice is late on yet another delivery. Just because a store carries your favorite pen or notepad doesn't mean it's your best choice. Look at the big picture, and remember that this is a long-term decision.

Shop Around

Here's a snapshot of a price comparison that was conducted in January among Office Depot, OfficeMax and Staples, along with their online counterparts. Note that some online prices reflect those found for a specific ZIP code, and prices may vary according to your geographic location. The in-store pricing seen below is based on the Boston area.

Product descriptionUnitOfficeDepot Online
OfficeDepot
OfficeMax.com
OfficeMax
Staples.com
Staples
Bic Round Stic
Ball Pens,
medium point
box of 12$0.89
$0.89
$0.87
$0.89
$0.88
$0.96
Liquid Paper,
multifluid
box of 12$10.49
$10.49
$13.99
$13.99
$12.49
$10.48
Imation formatted
3.5-inch floppy
disks, 1.44MB
box of 10$4.99
$4.99
$4.99
$6.99
$5.25
$4.97
Hewlett-Packard
MultiPurpose Paper,
500 sheets/ream,
letter size, 20 pounds
case of 10 reams$35.99
$35.99
$39.94
$39.98
$39.98
$35.98
Avery Hi-Liter
fluorescent pens
colors
pack of 12$5.49
$5.49
$5.47
$5.69
$5.49
$5.49
Carter's Foam
Stamp Pad, black
1$1.79
$1.79
$1.79
$3.29
$1.99
$1.79
Avery Durable
Slant Ring View
Binder, 1.5-inch
1$5.99
$5.99
$4.99
Not Available
$5.99
$5.15

Mie-Yun Lee is the founder and editorial director of BuyerZone.com, an Internet purchasing hub for small businesses. Doreen V. Bentley contributed to this article.


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