How To: Buy Equipment

This story appears in the September 1998 issue of Startups. Subscribe »

As a new business owner, shopping for everything from paper clips and pencils to a computer and a desk can be overwhelming. Your goal: to find the best deals, widest selection, most helpful service, best post-sale support, most liberal return policy and greatest convenience.

Superstores

Over the past decade, computer and office superstores have swept across America. They win the one-stop-shopping contest hands down, typically carrying more than 7,000 different products per store. Because of volume buying, superstores can often sell products at 30 percent or more below manufacturers' list prices.

Staples, the pioneer in this industry, has more than 700 stores in North America. Office Depot served 100 million customers in its 613 stores last year; Gary Schweikhart of Office Depot estimates 70 percent of those shoppers were small-business owners or their employees. OfficeMax, though, is now the largest office superstore chain, with 738 stores in 48 states and Puerto Rico, and another 120 superstores are scheduled to open in the United States this year. Many of the stores have CopyMax and FurnitureMax under the same roof.

Theresa Wysocki, co-owner with her husband, John, of Alternative Desktop Publishing in Kansas City, Missouri, purchases most of her office equipment from OfficeMax and CompUSA. Says Wysocki, "I shop around for the lowest prices and best service."

Specialty Retailers

While smaller office supply retailers can't beat the superstores on price, they often win when it comes to providing more choices, greater expertise and more personalized service.

Superstores carry what retailers call "wide but shallow" inventory. "They carry only one or two fax machines, and they don't carry the same ones we do," says Sherry Matini, who works in the supply department of JTF Business Systems, an Alexandria, Virginia, store that sells fax machines, copiers and printers.

If your new business needs a high-volume copier, for example, you're likely to find a larger selection at reasonable prices in specialty stores than in superstores. Also, if you need a lot of post-sale service, specialty retailers are more likely to deliver.

Resellers

If a custom-made computer and software are what you're looking for, consider value-added resellers such as Nate Chadwick, owner of Seagreen Technologies Inc. in Easton, Massachusetts. Chadwick, a software consultant, often finds that clients want him to put together a computer system to meet their needs.

"We can order a variety of brands of computer hardware and software, depending on clients' needs," Chadwick says. "We don't usually mark it up much. [Customers like the fact that] we're a one-stop solution for their computing needs."

Resellers' prices often beat those of retailers because resellers don't have to carry inventory; instead, Chadwick says, they use distributors that can fulfill orders on demand.

"When buying from resellers, always compare the extended warranties and service plans offered," Chadwick says. "All the companies have different offers."

Discount And Used

If price is paramount, check out discount and used equipment or furniture stores, where you can get great bargains. Look in the Yellow Pages under "Office Furniture and Equipment-Used" or search the Web.

Two Jakes Used Office Furniture Warehouse in Brooklyn, New York, has gotten orders on its Web site from as far away as Texas, says Inga Rogers, partner and wife of David Jacobs, who runs the 75-year-old family-owned business with his brother, Michael.

Used furniture dealers buy their inventory from companies that are moving or--more infrequently--have gone bankrupt, Rogers says. The bargains can be excellent: Two Jakes sells Steelcase wheeled desk chairs for $125; they retail for $850 new.

Every state government also has surplus equipment sales. Some won't sell to the general public, but many do. Each year, California's state government disposes of approximately $10 million in surplus property, from desks to drafting tables to computers to calculators to medical equipment, says Hollis Thompson, surplus property manager for California. Rather than toss the items into landfills, the state sells them through two warehouses.

Mail Order

Ordering computers and other equipment by mail is a convenient option offered by a growing number of retailers. Dell Computer was the first to sell personal computers by mail order; now Gateway and Micron also rely heavily on this method.

Mail order buyers can get customized systems with quality components and fast delivery. But you should understand the technology, have some idea what you want to buy and be comfortable buying something without trying it first, although most computer companies allow you to return the products if you're not satisfied.

The Internet

Office equipment sellers of all sizes are moving their sales onto the Internet. The superstores and mail order computer companies mentioned in this story offer online ordering; many smaller businesses, such as Two Jakes and JTF Business Systems, have Web sites where you can check out the products, then order by phone or fax.

Worried about placing orders over the Internet? A growing number of sellers use encryption technology to ensure credit card numbers don't fall into the wrong hands. Netscape Navigator and Microsoft Internet Explorer both use what is called "secure sockets layer" encryption to protect Internet commerce.

Chances are, no one retailer can fill all your needs. Wysocki and other business owners say they use numerous sources to stock their businesses and emphasize that it pays to shop around before plunking down your hard-earned dollars.

The Paper Chase

As you buy supplies for your new business, you're likely to find the most confusing array of choices you face involves not computers--but paper. A box of 20-pound paper and some number-10 envelopes won't cut it; you'll need letterhead, business cards, manila folders, labels and more.

Office superstores carry the basic products. Paper manufacturers such as International Paper in Purchase, New York, producer of Hammermill paper for business, have formed partnerships with the superstores. Staples and OfficeMax carry the broadest lines, says Steve Bares, Hammermill's business manager. You can also find a variety of business papers at college bookstores, electronics retailers such as Best Buy, and stationery stores.

Seeking a wider selection of paper products? Investigate mail order catalog companies such as Quill and Viking, Bares says. Catalog companies are also a good source of specialty papers, including preprinted papers you can use to make your own brochures and mailers. PaperDirect Inc. in Colorado Springs, Colorado, is the largest of these specialty paper suppliers, with more than 2 million business customers.

Jan Norman is a freelance writer who specializes in small-business issues. She can be reached at jnsmallbiz@aol.com.

Contact Sources

Alternative Desktop Publishing, http://www.alternativedesktop.com

International Paper, (901) 763-5997

JTF Business Systems, (800) 444-FAXX, http://www.jtfbus.com

Seagreen Technologies Inc., (888) 372-2221, http://www.seagreentech.com

Two Jakes Used Office Furniture Warehouse, (718) 782-7780, http://www.usedofficefurniture.com