This entry includes establishments primarily engaged in the wholesale distribution of stationery and office supplies, including computer and photocopy supplies, envelopes, typewriter paper, file cards and folders, pens, pencils, social stationery, greeting cards, carbon paper, business forms, loose leaf binders, and inked ribbons.
453210 (Office Supplies and Stationery Stores)
422120 (Stationery and Office Supplies Wholesalers)
In 2003, D&B Sales & Marketing Solutions reported 10,262 establishments primarily engaged in the wholesale distribution of stationery and office supplies. Their combined sales were approximately $52.2 billion, with the average business generating $6.40 million in sales. The industry employed some 109,745 employees. However, these figures were down from just two years before when the U.S. Census Bureau reported 7,323 establishments, as well as 123,458 employees. The majority of establishments were small employing less than five people. California, Florida, Illinois, New Jersey, New York, Ohio, Pennsylvania, and Texas controlled more than half of the overall market.
Although the stationery and school supplies wholesalers have seen an increase in demand, the demand for business office paper had been in a slump for the past couple of years. With the softened economy followed by the September 11, 2001 attacks on the World Trade Center, businesses were scaling back. The stationery and school supplies wholesalers shared 60.3 percent of the market for 2002, or $13.5 billion in 2002. The industry remained highly fragmented with five of the leading suppliers controlling 31.3 percent of the overall market.
Traditionally, wholesalers buy merchandise from a manufacturer and resell it at a profit to other wholesalers, retailers, or industrial and commercial customers. To compete with wholesalers, superstores such as Office-Max, Staples and Office Depot provide small businesses, and the distributors who supply those dealers, with similar merchandise for lower prices. As competition for smaller businesses intensified, larger distributors began focusing more on commercial accounts. For example, United Stationers targets commercial accounts with $5 million or more in annual revenue, servicing industry office complexes of 50 or more employees. Unisource Worldwide also reports success in attracting and retaining regional and national accounts. In fiscal 1995, these key customers contributed more than $600 million to Unisource revenues.
Wholesale distributors have also tried coordinating their efforts with the superstores rather than trying to compete with them. United Stationers began testing a distribution system with the largest office supplies superstore, Office Depot. United received products from 10 different manufacturers at its Atlanta distribution center, and then within 24 to 36 hours shipped the merchandise to 31 Office Depot stores in the southern United States. United also performed this service for smaller dealers and for some manufacturers by delivering products to the manufacturers' key accounts.
Many retailers and their commercial customers began operating on "just-in-time" delivery, requiring their distributors or manufacturers to ship supplies as quickly as possible. With just-in-time buying, dealers or their customers place smaller orders more often, saving them space and inventory time and avoiding tying up their money in supplies that might sit on the shelves for months. For commercial and industrial accounts, just-in-time also reduced the theft that often occurs in business.
Just-in-time ordering prompted retailers to more fully computerize their sales and inventory information, making it readily available to their distributors, or manufacturers if they dealt directly. With state-of-the-art computer equipment, suppliers could perform some of the inventory management tasks and determine what items needed to be restocked. Because dealers were keeping less inventory on hand, however, they had to ensure that the distributor could get merchandise to them quickly, often for next-day delivery.
The office supply wholesale industry also had to compete with the convenience of catalog and direct mail marketers with whom customers could place orders by calling a toll-free number or using a fax machine. These suppliers also operated on slim profit margins and dealt directly with the manufacturers.
Distributors of stationery and office supplies saw steadily growing sales in the 1990s. Total sales for this industry grew from $27.8 billion in 1990 to $33.5 billion in 1993 and $39.3 billion in 1996. Average annual growth for that six-year period was 6.9 percent, well ahead of inflation. In 1994 and 1995, larger distributors posted strong earnings growth. One particularly strong growth area was contract business forms management.
The 1997 BPIA Leadership Council Meeting identified four major trends affecting the industry: vendor consolidation, globalization, internal competition within the industry, and liquidizations of family-owned businesses. Whereas the office supply and stationery wholesale industry had a large number of establishments operating in the mid-1990s, just over 11,450, and this number diminished in the late 1990s.
As part of the consolidation trend within the industry, larger national distributors established networks of distribution centers to serve targeted regions. National distributors also turned to technology to help make them competitive with the many regional distributors. To enhance service to customers and ensure quick delivery, many distributors converted their ordering, billing, and warehouse operations to sophisticated computer hardware and software systems so inventory could be tracked easily and orders filled within 24 hours.
Meanwhile, large retailers and warehouse clubs such as OfficeMax, Staples and Office Depot were usurping the role of distributors and buying directly from the manufacturer, their large size and vast networks facilitating the volume buying power of wholesalers. These retailers grew quickly by targeting corporate purchasers and expanding their service capabilities.
Smaller distributors were operating on increasingly narrower margins and serving a shrinking market of retail stores, and many went out of business due to a poor economy and fierce competition. Those that did survive did so by reevaluating their pricing and service policies, finding that while they often could not beat the discounters' prices, they could provide value-added services as part of the traditional two-tier distribution system. Wholesale distributors then focused on ways to better serve retail clients and to help those clients provide better customer service.
As for globalization, Paine Webber analyst Aram Rubinson pointed out at the BPIA Leadership Council Meeting that international expansion did not succeed as well for Staples as it had for Viking, a contract stationer, because Viking didn't have to invest in brick-and-mortar infrastructure as Staples did. United efforts within the industry also promoted globalization. For example, in February 1997 the National Purchasing Association (NPA) formed a marketing alliance with Basic Office Products Canada and Integra of the U.K. These three groups represent a total of 600 individual dealer locations with combined sales volume of about $2 billion in office product consumables.
In October 1999 the Business Products Industry Association (BPIA) reported on a new study conducted by the National School Supply and Equipment Association (NSSEA) suggesting that the education segment represented a growing outlet for the industry. The 1999 State of the School Market Report noted the increase in annual expenditure per pupil—to $7,000 from $5,000 a decade earlier—as well as record enrollment increases three years in a row, with projected record-breaking enrollment every year through the early 2000s. National spending on K-12 education increased by 51 percent in inflation-adjusted dollars since the 1970s. This growth in education ensured business for the industry, as most of its products catered to students or school administrators.
By 2003, the stationery wholesalers of business forms seemed to be gaining some ground with 3,365 establishments and more than 32 percent of the market. Stationery and office supplies had 2,618 establishments, or more than 25 percent of the market. Combined, they shared $27.7 million in sales. Greeting cards represented more than five percent of the market, with $2.3 million in sales. Computer and photocopying supplies wholesalers shared $5.6 million annually, while computer paper wholesalers shared $1.4 million.
According to Transworld Information Corp., the school and office stationery sector climbed to $324 billion alone for 2002. The back—to—school sales attributed to the bottom line figure. In fact, the average consumer spends about $123.37 for their back—to—school stationery and office supply needs. Further projections placed the stationery and school supplies in the forefront for 2007, with anticipated market share of 72.4 percent valued at $28.8 billion.
United Stationers Inc., of Des Plaines, Illinois, was the nation's largest wholesale distributor of business products in North America, with a distribution network of 66 Regional Distribution Centers serving more than 20,000 resellers. United Stationers had record net sales of $878 million in the third quarter of 1999, up 10.4 percent from its net sales in the third quarter of 1998 at $795 million. Third quarter 1999 net income similarly rose to $22.3 million, up from $19.9 million in the third quarter of 1998. Net sales over the first nine months of 1999 amounted to $2.5 billion, up 10.7 percent compared to the same nine-month period in 1998, when net sales reached $2.3 billion.
In 1992, United Stationers acquired Stationers Distributing, the fourth largest distributor in the industry at half the size of United. The acquisition strengthened United's position in Texas and the western United States, since United was dominant in the Midwest and Northeast. United Stationers Inc. posted $3.8 billion for 2003, up from $3.7 billion in 2002.
U.S. Office Products claimed to be "one of North America's leading providers of office supplies" and other professional needs. The company performed poorly in the second quarter of 1999, with revenues falling 1.6 percent from the same quarter of 1998 because of diminished North American sales, particularly in the Office Supplies Division. Overall revenues for the company for the third quarter 1999 were $642.5 million as compared to $677.2 million during the same period of 1998. Half-year results showed a more dramatic decline: $1.27 billion for 1999, compared to $1.33 billion, a difference of $60 million.
Other major competitors in the industry include Unisource Worldwide, of Wayne, Pennsylvania; ResourceNet, of International Paper, in Purchase, New York; Genuine Parts Co., of Atlanta, Georgia; Boise Cascade Office Products, of Itasca, Illinois; S.P. Richards Co., of Smyrna, Georgia; and Corporate Express Inc., of Broomfield, Colorado. In May 1999, Georgia-Pacific Corp., of Atlanta, Georgia, merged with Unisource.
Wholesalers have applied advanced computer technology to improve their slim profit margins. This technology improved productivity of all functions, including purchasing, delivery, storage, picking, and shipping. It also improved inventory as well as credit and information management. Using electronic document interface (EDI) technology wholesale distributors, superstores, warehouse clubs, mail order houses and dealers can input an order and trigger the shipping and billing, resulting in faster turnaround, less paperwork, and savings on handling.
D&B Sales & Marketing Solutions, June 2004. Available from http://www.zapdata.com .
"Global Stationery Market Watch." Transworld Information Corp., June 2004. Available from http://www.ttnet.net/ .
Mandel, Sarah."State of the Industry Design Directions." Gifts & Decorative Accessories, 1 April 2003. Available from http://www.keepmedia.com/pubs/GiftsDecorativeAccessories/2003/04/01/116965 .
"Stationery in USA." Euromonitor International, June 2004. Available from http://www.euromonitor.com/Stationery_in_USA_mmp .
Stundza, Tom. "Wait Until Next Year for Demand Rebound in Paper." Purchasing, 1 April 2003. Available from http://www.keepmedia.com/pubs/Purchasing/2003/06/19/270012 .
United Stationers Inc., June 2004. Available from http://www.unitedstationers.com .
U.S. Census Bureau. Statistics of U.S. Businesses 2001. Available from http://www.census.gov/epcd/susb/2001/US421420.HTM .
"US Office Products Reports Results for Second Quarter of FY 2000." Available from http://www.corporate-ir.net .
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