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Q: Office Supply Industry ( Answered 5 out of 5 stars,   0 Comments )
Subject: Office Supply Industry
Category: Business and Money > Economics
Asked by: shiaobai-ga
List Price: $5.00
Posted: 11 Oct 2002 20:17 PDT
Expires: 10 Nov 2002 19:17 PST
Question ID: 75587
Please give me a brief description on office supply industry.  Thank you
Subject: Re: Office Supply Industry
Answered By: seedy-ga on 12 Oct 2002 05:40 PDT
Rated:5 out of 5 stars
The evolution of the office supply industry has undergone dramatic in
recent years. While we might think that the office supply superstores
(Staple, Office Mx, and Office Depot) dominate the market, that is
hardly true. They are a fast growing segment as is BIB on the Internet
but the majority of market sales are still made my "mom and pop" local
or regional suppliers. It is estimated that office supply represents a
175-200 billion dollar industry with the Superstores representing
around 10% of the market and the Internet representing 2% of the
market expected to grow to 30% of the market in five years.  As you
recall, the merger of Staples and Office Depot was rejected as
anti-competitive in 1997, but the following link discusses a market
share argument and price competitive argument that would have allowed
the merger.

The FTC in its ruling examined anti-competitveness in the market
segment dominated by the superstores.

A further discussion of this case can be found in the following links:

(about half way down the first page)

The way that "mom and pop" stores survive against the superstores or
the large retailers (Wal Mart, K-Mart, etc.) is to form buying groups
such as described in the following link:

In summary, when I was a young man, I had to hunt for office supplies
in a several small storefront stores which were more like auto supply
stores are today.  There was a counter where you went to describe what
you wanted, a small display space (little self service), and little
choice (you want a #2 pencil, that's what you got rather than a choice
of pens and pencils that could all do the same job and had many
additional features/benefits to the old #2 while actually the old #2
still works pretty well), and little innovation in terms of
convenience ideas. The local office supply evolved into a catalog
store with a bit more display space and a catalog that detailed the
variety and convenience of alternate choices, which now evolves into a
superstore where you can wander the aisles, test the merchandise,
examine the choice and but "stuff" that you may or may not like or
need in the end.

Home offices have become more common from my youthful days and the new
merchandising of the superstores is keyed to that growth offering home
delivery, variety, price competitiveness, and convenience.

Businesses are evolving in the way they purchase supplies from
spreading the business around to the local "mom & pops" having an
office manager who handed out the #2's with great reluctance to "wow"
look what's available to keep everybody happy, to B2B working to keep
the larder stocked with a limited number of choices automatically
replenished, to letting key employees send their admins to Staples for
a special color of pen which is all they could work with and charging
it on their expense report.

One of the interesting results of the tendency to superstores is
creating a more concentrated target for environmentalists as you can
see in the following link:

Other links which may be of interest are:

Office supply is a business you don't think about often. Thanks for
bringing it to our minds again.

If I can clarify any of the information provided please don't hesitate
to ask before rating this answer.

shiaobai-ga rated this answer:5 out of 5 stars

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