FEATURE STORYSEPT/OCT 2008EVOLVING BUSINESS MODELSKEEP DEALERSCOMPETITIVEFor growth to stay on track you needto check your business model regularly
Sound methods of getting office products to market are be<strong>com</strong>ing as diverse as the productlines themselves. What began as strictly a stocking brick and mortar business model has evolved intostockless, right stocking, Internet only and telesales, along with hybrids of each. By regularly assessingthe plus and minus factors unique to their chosen business models, independents are able to keeptheir strategies fine-tuned and on track toward future growth and success.National <strong>com</strong>petition drives the change we see in the waybusiness is done today, says Curt Heick, USSCO businessdevelopment manager out of Indianapolis. “They forceindependent dealers to revisit their business models based on theiroperating expenses and the challenge of growing sales. But this<strong>com</strong>petition also forces them to be<strong>com</strong>e better operators, better<strong>com</strong>panies and better business people which ultimately are goodthings,” he says.Change is a constant regardless of which model you’re using. Theimportant thing is that you react to changes in market conditionsby adjusting your model to make it more efficient. Independentsare finding they have to be<strong>com</strong>e more effective in all departments.If they’re struggling to make a profit with the model they’re using,they need to consider changing models if redesigning them isn’tworking, advises Heick.CHOOSING THE RIGHT MODELStart with the end in mind. “When you know where you want togo, choosing the right model be<strong>com</strong>es easier,” says Bob Broadwell,USSCO’s Midwest business development manager. For example,an established dealer might want to grow sales by 10 percent. Thesales force can achieve a four to five percentincrease. So, how does the dealer achieve therest? “Expanding the sales force is one way,”says Broadwell. But, how does the dealer raisethe capital to fund more salespeople? “Onemethod is to reduce inventory by e-stockingor right stocking,” he continues. So the modelyou choose depends on where you are goingand how you plan to get there.Look to the consumer’s needs and the service model the <strong>com</strong>petitionis using to meet those needs, suggests Heick. Replicate successfulformats, yet make them your own by having yours reflect yourpersonal beliefs and solid value proposition. “A stockless dealerwill typically have some inventory,” he says. “How much variesby dealer. There’s no consistency as you’d have with a franchiseoperation.”SUCCESS IN STOCKINGWith five locations in two states, Lyle Dabbert, president andowner, Brown & Saenger, Sioux Falls, S.D., is a stocking dealer whose<strong>com</strong>pany provides a diverse slate of products and services. “We tryto be more appealing to our clients by offering them more,” he says.As a result, he provides business products, furniture, printing, andpromotional products including a full embroidery division. “Weprobably stock more than a lot of people,” says Dabbert, “withUnited as our valued partner to furnish the items we don’t stock.”The advantages of Brown & Saenger’s stocking business model<strong>com</strong>e from its diversification. In a soft market his furniture businessmay slow down as promotional products pick up. Their Midwestlocation is a plus, as well. “Someone in a major metropolitan citywould never be able to cost-effectively operate the size warehousethat we do. In turn, we’re able to take advantage of the economiesof stocking up on items that may see price increases. This platformis not for everyone,” says Dabbert, “because we have a lot tied up“Customers served by the power channels don’t knowthey’re getting bad service, so unless they’re havingmajor problems customers usually don’t change.”– Steve Klaverin inventory and in our own fleet of trucks. But we’ve been able tosuccessfully carve out our niches.”One niche not seen as often today is the stocking dealer with aretail store. This model is still proving successful for Sidney Genius,7www.ussco.<strong>com</strong> | OFFICELINE
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