If you're thinking of selling office supplies you'll need to decide on the product ranges you'll stock and make sure your premises are big enough. Our guide covers the key issues for starting and running your own office goods business.
- Research your target market
- Selling on eBay and Amazon
- Decide what to sell
- Establish your customer profiles
- Decide which services to offer
- Price your products
- Buy an existing business
Research your target market
When you set up your new office supplies business you'll need to make an estimate of the amount of demand there is for your products, and find out how well that demand is already served. Doing some market research will help you with this.
Estimating demand
It's important to try to find out whether there is enough demand for an office goods supplier in your area, if you plan to operate from premises. Be aware that the sector is quite competitive and is dominated by large chains and online retailers. Depending on the type of items that you stock, you will be competing with:
- large office products chain stores such as Office Outlet. These stores generally stock a huge range of products, including office stationery, computing and telecoms equipment, office furniture and so on
- online retailers. There are a number of exclusively online office goods suppliers, such as Staples, Euroffice and Viking Direct, and these also offer a huge range of items and often very generous discounts. They also offer a delivery service, which is convenient for busy workplaces
- general retailers, such as WH Smith
- other independent office goods suppliers
- general furniture retailers that offer office furniture
- computer retailers. If you decide to offer computer equipment then you will face competition from dedicated chains, such as PC World as well as electrical goods stores, such as Currys
Check out the competition in your area to identify how many other outlets are already selling office goods locally. It may be that you will only be competing directly against some of these outlets because you will be targeting a particular segment of the market. For example, you may choose to only supply office furniture, or only recycled papers and 'green' office supplies.
Have a good look at existing retailers' websites and outlets to establish:
- what they sell and the prices they charge
- which services they offer
- how knowledgeable and helpful their staff are
- whether the premises and fittings are modern and smart
Why will customers choose your business
You need to make sure that customers choose to use you rather than one of your competitors. In a sector where customers often make purchases based on price alone, it's important to make sure that you stand out from the competition. You may try to achieve this by:
- setting your prices lower than your competitors
- building personal relationships with your regular customers
- offering generous account facilities
- running frequent discounts and promotional offers
- choosing a prime trading location for your outlet
- offering a comprehensive range of different products and services
- specialising in a certain type of product
- offering a delivery service
- offering catalogue or online sales
- offering van sales to smaller customers like retailers, or business people who work from home
- opening in the evenings so that business people can shop after work
Check out future developments
The location of your outlet is very important and ideally, there will be ample and easy parking nearby. Many customers will be purchasing a large amount of goods and will not want to walk long distances to return to their vehicle. Check that there are no plans to build new road systems, which would mean that traffic would bypass your shop, nor proposals to impose parking restrictions.
Find out what people want
You may find that an effective way of competing with large chains and online retailers is to get to know your customers and talk to them about the level of service they expect from you and then do your best to accommodate their wishes. Building a relationship with your customers and keeping them informed of special offers and so on is a good way to retain them.
Research current trends, plus legal and tax issues
- Sector trends for office goods suppliers
- Legal issues for office goods suppliers
- VAT rules concerning office goods suppliers
Selling on eBay and Amazon
Selling online can be an excellent way of reaching new customers and boosting your sales. But setting up your own ecommerce website can be expensive and you may not be sure at the beginning whether the value of the sales you'll make online will justify the set-up costs.
As an alternative, trading on eBay or Amazon lets you get a feel for selling online but with much lower start-up costs. And you may decide to keep on selling through eBay and Amazon even when you have your own online shop.
Getting started
You might already have your own personal eBay account that you use to buy items for yourself and to sell things that you don't need any more. But if you're trading as a business on eBay you're legally obliged to make it clear in your listings that you're a business seller. This means that you'll either need to register a new business account or upgrade your personal account to a business one. There's guidance in the eBay Seller Centre on the definition of 'trading' if you're not sure whether you need to register as a business seller.
Similarly, with Amazon, you can use an existing account or create a new one when you register as a business seller.
If you're not already running a business and you intend to start selling things on eBay or Amazon - perhaps just in a small way to begin with - then you'll need to notify HM Revenue & Customs (HMRC) that you're trading. There's guidance on the Gov.uk website that gives an overview of what counts as trading and what counts as self-employment. It also gives details of your tax and record-keeping obligations.
Decide whether to have your own virtual 'shop'
Having your own virtual storefront will give your business a valuable online presence and will allow you to display all your products together in one place.
When you sign up to sell on eBay, you have the option of setting up an eBay Shop. This allows you to create your shop using an existing template or to customise it to your own design. You don't have to choose the eBay Shop option straight away - you may decide it's best to wait until your monthly sales build up to a certain level and then upgrade.
With Amazon, you'll automatically create your own storefront regardless of the package you choose. You won't be able to customise it very much but you will be able to add your name and logo and provide some information about your business.
How much does selling on Amazon and eBay cost?
Before you start selling on Amazon and eBay it's a good idea to find out how much you'll have to pay in fees. Depending on the items you sell and the method you choose for selling them, your total fees can be quite substantial. And while some of the fees you pay will be linked to the number of items you sell each month, others are likely to be fixed costs which you incur even if you don't sell anything.
Both eBay and Amazon give you the option of selling as a business seller without paying any fixed monthly fees, although it's usually more cost-effective to choose a subscription-based package unless you're only selling a small number of items each month.
The eBay website has a fee illustrator tool and a fee calculator that will help you compare the fees for different selling methods and get a good idea of how much your actual per-item selling fees are likely to be.
The Amazon website gives detailed fee guidance, including some examples of pricing for their subscription and non-subscription packages.
Managing your listings
Uploading your inventory to eBay or Amazon and managing your listings can be a time-consuming task, particularly if you're planning to sell a large number of items.
Both eBay and Amazon offer useful listing tools, some of which are free and others that you'll have to pay for.
Promoting your items
Because there's such a huge number of items for sale on eBay and Amazon at any one time, it's very important that you do everything you can to stand out from the crowd.
Always make sure that your listings include accurate, spell-checked descriptions and that your photos and other images show the items that you're selling in the best possible light.
You might want to take it a step further and use the various marketing tools provided by eBay and Amazon such as search optimisation, cross-promotions and paid-for advertisements.
Your reputation
As an eBay or Amazon seller, your online reputation is extremely important. All sellers have a feedback score based on actual customer feedback and this is the main measure that future customers will use to check that you are trustworthy and reliable.
So you'll want to keep your rating as high as possible by providing an excellent level of customer service and fast delivery at reasonable prices. Make sure you always respond promptly to customer queries, deal with returns efficiently and keep an eye on your stock levels to avoid your listings showing an item as being in stock when it has sold out.
Be aware that packing up orders and sending them out can be time-consuming, but it's important to stay on top of the job to make sure that the right items get delivered in good time to the right people. Very many parcel delivery services now offer bulk shipping tools that integrate with your eBay or Amazon account and these can greatly simplify the process of arranging and tracking your deliveries.
If you're selling on Amazon you might also consider using the Fulfilment by Amazon service, where you send Amazon your inventory and they do all of the picking, packing and shipping as well as providing customer service.
More information
The eBay and Amazon websites have a great deal of useful guidance to help you get started as a business seller and expand your business as demand for your products grows. Both also have lively seller community forums where experienced sellers are often happy to answer questions.
Decide what to sell
If you take a look around a large chain store, such as Office Outlet, or browse an online office supplies catalogue, you will see virtually every item that may conceivably be used in an office as well as products aimed at students and other non-business users. The products they stock include:
- calendars and diaries
- cartridges and toner
- desk accessories
- filing supplies
- labels
- mailing and packaging supplies, including envelopes and postage stamps
- paper
- pens, pencils, markers and other writing instruments
- laminating and binding materials
- calculators and other office machines
- office cleaning and janitorial supplies
- catering supplies
- telephones and accessories
- canteen furniture and supplies
- chairs
- desks and tables
- computer furniture
- lighting
- trolleys
- office furnishing
- work wear
- computers, tablets, peripherals and accessories
- software
- blank CDs and DVDs
- memory sticks
- digital imaging equipment and sundries
- printers
If your premises are not big enough to be able to offer a similar range of items, the first step is to decide what product lines you are going to carry. You may decide that you will be unable to compete on price for electrical items, such as computers and printers. Instead, you may decide to focus on the core products that are used in offices, such as paper, pens, filing and archiving supplies and so on. Alternatively, you may decide to target a particular niche area, such as office furniture, and only stock a small amount of other office sundries.
You may decide to offer catalogue sales, which will allow you to offer customers a broad range of products without having too much money tied up in stock. The disadvantage of such a system is that your customers may not be prepared to wait for delivery.
Some of the lines you stock, such as printer cartridges, may have a limited shelf life so you should make sure that you monitor stock turnover carefully and discount anything that is approaching its sell-by date.
Establish your customer profiles
Your market
It is likely that most of your customers will come from your local business community. Small and medium-sized businesses are the most likely to use your services. Larger companies generally, but not always, have a central purchasing policy for office supplies and do not source them on a local basis. Any business that uses paper, computer accessories and general office sundries is a potential customer. If you sell online you are likely to find that your customers are located all around the UK so you'll need to give some thought to your delivery methods.
You may also decide to target non-business customers, such as students. For example, you might offer 'back to college' or 'new term' packs. If you offer other services, such as photocopying and scanning then you are likely to attract a certain amount of off the street, non-business custom.
Decide which services to offer
As well as stocking a wide range of office products, you may also decide to offer different services. These may include:
- photocopying
- scanning
- refilling printer cartridges
- delivery. You may make a charge for this or offer it free, for example to long-standing customers or for orders over a certain amount. You may decide to offer a same-day delivery service, although it's important to carefully consider the financial implications before offering such a service
- catalogue sales. Offering catalogue sales is an effective way of providing a wide product range without having too much money tied up in stock or having to have a large outlet
- online sales
- van sales of popular stationery items to small businesses like retail outlets and hairdressing salons
- account facilities
- bespoke office design and fitting service
- personalised business gifts such as pens and key rings
The right image
It is important that your outlet projects the right image. Make sure that your window displays are changed regularly, that your shop is as tidy as possible and that all the services you offer and any special promotions are clearly advertised. It is also important that any staff you employ are well turned out, helpful and polite. Make sure staff are available to answer customers' queries about your products.
If you offer online sales it is important that your website is well designed and operates efficiently.
Advertising your outlet
Whatever the nature of your outlet, it's essential to make sure that your potential customers know about you and the products and services you offer.
There are a number of things you can do to promote your business:
- contact potential customers. You may find that 'cold calling' potential customers with details of the products that you sell and services that you offer will be an effective method of securing sales. Once you have established a relationship with a customer, keeping in regular contact with them will help to retain them
- advertise in your local newspaper and any local directories
- organise or sponsor a local business event
- launch your own website, showing all the goods and services that your business offers and possibly also offering online sales. Don't overlook the cost of investing in search engine services and, possibly, online advertising
- have leaflets printed and distribute them to local businesses or as inserts in a local paper
- offer discounts and loyalty rewards
- use social media to let people know about special offers and promotions
Price your products
Getting the price right is very important. You must make sure that the difference between the cost price and the selling price is enough to cover all of your operating costs, including your own drawings. Remember that the office products sector is very competitive and customers very often buy purely on price. So you will have to price in line with or below your immediate competitors unless you are targeting a niche market that your competitors do not cater for.
While your regular customers may well appreciate the excellent level of service that you offer them, they are also likely to keep an eye on the prices that your competitors charge and take their business elsewhere if they feel they can get a better deal. You might consider offering customers a loyalty card so they can collect points towards a discount on their next order. Perhaps you will offer special deals and promotions from time to time.
Suppliers to the office products sector may include suggested retail prices in their catalogues and price lists. Buying groups such as Nemo produce catalogues that include price lists for different items.
Special offers and discounts
You will probably offer a discount as a matter of course to your business customers. How much discount will depend on your pricing policy and how much local competition there is. You could offer further discounts for buying goods in large quantities or at certain times, for example when university terms start. You might consider a loyalty scheme which rewards customers with free gifts or extra discounts if their order value is over a certain amount. Keep a close eye on any special offers and discounts you do make to be sure that they are working for you. After all, these kinds of promotions might encourage extra sales, but they will also affect the amount of profit you make on each sale.
Buy an existing business
You might decide to buy an existing office goods supply business rather than start your own venture from scratch. Buying a going concern can mean that:
- the premises, business equipment and shop fittings are already in place
- there are established customers
- the business can generate income immediately
- suppliers have been identified and relationships established with them
- the business has a track record, which can help if you are looking for finance
- a business website may have been created
- staff may already be in place
However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.
Your market research into the sector as a whole and the locality, in particular, will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.
Other matters to consider include:
- the state of the premises, fittings, equipment, delivery vehicles and so on. Will you have to spend money refurbishing or replacing assets
- the condition and value of any stock you are buying. Check this over carefully before agreeing a price
- is the existing owner prepared to give you some training after you take over
- existing staff rights
- how to retain key personnel once you've taken over
- does the business owe money that you will be responsible for
- if you are paying for goodwill, to what extent does this depend on the skills and personality of the seller
Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.
