{"id":6586,"date":"2014-02-07T08:24:07","date_gmt":"2014-02-07T13:24:07","guid":{"rendered":"http:\/\/www.theweekinimaging.com\/?p=6586"},"modified":"2014-02-07T08:24:07","modified_gmt":"2014-02-07T13:24:07","slug":"buying-power-ibpis-randy-horshok-on-what-it-means-to-be-a-member-of-the-office-technology-industrys-largest-buying-group","status":"publish","type":"post","link":"http:\/\/www.enxmag.com\/twii\/feature-articles\/2014\/02\/buying-power-ibpis-randy-horshok-on-what-it-means-to-be-a-member-of-the-office-technology-industrys-largest-buying-group\/","title":{"rendered":"Buying Power: IBPI\u2019s Randy Horshok on What It Means to Be a Member of the Office Technology Industry\u2019s Largest Buying Group"},"content":{"rendered":"
\"Randy<\/a>

Randy Horshok<\/p><\/div>\n

Whether by accident or design, IBPI has become the largest buying group in the office technology industry, representing more than 350 independent commercial copy, print, and IT dealers across North America. Its members have a combined annual sales volume of more than $4.1 billion.<\/p>\n

IBPI was founded in 1987 by a small group of AB Dick dealers who put together their buying power with the goal of buying smarter and better. The buying group still maintains that premise today, however, over the past 27 years it has changed its vendor offerings. Initially, the organization focused on copier supplies and products. Today, its offerings impact most of a dealer\u2019s daily operations and include supplies, software, shipping, and even social media.<\/p>\n

Membership in IBPI has its privileges.<\/p>\n

\u201cWe have the buying power of a $4.1 billion dealer and have the leverage to negotiate industry best pricing and programs from our vendors, says Randy Horshok, IBPI president. \u201cThere isn\u2019t a dealer in the industry that can make that claim.\u201d<\/p>\n

Members currently have access to 27 different vendor programs with another two or three more expected to be added in the near future. Savings generated from these programs can be significant, from $25,000 for a small dealer to more than $160,000 for a larger dealer.<\/p>\n

\u201cThese aren\u2019t my guesses or calculations, but data provided by our members,\u201d says Horshok.<\/p>\n

In order to join IBPI, dealers submit a one-page membership application and pay a one-time fee of $500.<\/p>\n

\u201cThat\u2019s it. No annual fees, no dues, ever,\u201d states Horshok.<\/p>\n

In addition, that $500 membership fee buys one share of IBPI stock, which makes that dealer an owner of IBPI. If the dealer sells their business, or for whatever reason, decides to terminate their membership, they get that $500 back.<\/p>\n

It almost sounds too good to be true.<\/p>\n

\u201cWhen we say $500 membership fee and the savings, the instinct is to wait for the other shoe to drop,\u201d notes Horshok. \u201cSorry folks, you\u2019re not going to hear the other shoe drop because there aren\u2019t any hidden secrets or fees. If anything, there are more features or benefits to belong to IBPI than the savings on their purchases.\u201d<\/p>\n

It helps that the discounts they receive are often better than what they may be getting by dealing directly with a Parts Now or a Katun.<\/p>\n

IBPI\u2019s target market is small and medium independent dealers, but membership is open to larger independents as well. \u201cWhen one of the larger dealers join it allows me to go back to the smaller dealers and say, if these $50 million dealers find value in belonging to IBPI, imagine how much savings is on the table for you?\u201d<\/p>\n

Members have annual revenues of $1 million dollars to more than $50-million and during the past four years the typical new member had revenues of $8-$10 million annually.<\/p>\n

Even though IBPI has enjoyed terrific growth over the last few years, Horshok isn\u2019t satisfied with current membership numbers. \u201cWe\u2019ve been averaging two new members a month, but know there\u2019s greater potential out there.\u201d<\/p>\n

The biggest challenge facing IBPI members today, according to Horshok, isn\u2019t all that surprising and that\u2019s competition with OEM direct operations. \u201cThat\u2019s become a source of angst for all independent dealers as well as conflicting relationships with their own OEM when competing for clients,\u201d states Horshok. \u201cThis love-hate relationship has been the basis for many discussions at our membership events.\u201d<\/p>\n

Other challenges faced by members and all dealers for that matter is the need to broaden their product and service offerings while maintaining or strengthening their core programs.<\/p>\n

Here\u2019s where MPS comes into the discussion.<\/p>\n

\u201cEverybody was told five or six years ago they had to be offering an MPS program if they plan to survive,\u201d recalls Horshok. \u201cWell here we are six years later and we know that\u2019s not true because there are very successful dealers not offering MPS. On the flip side, there are successful dealers offering MPS. It\u2019s a matter of looking down the road and trying to figure out what\u2019s best for them and what other products or services they can offer such as Managed Network Services, 3-D printing, VoIP, that don\u2019t take them out of their comfort zone or core strength too badly.\u201d<\/p>\n

It\u2019s often a challenge negotiating discounts with the manufacturers and service providers, but Horshok says as IBPI increases its number of members and buying power associated with membership, vendors recognize the potential to work with the buying group and assemble a great package for member dealers.<\/p>\n

\u201cIt\u2019s never easy to negotiate discounts and nobody wants to give up anything more than they really have to,\u201d states Horshok. \u201cIt\u2019s just a matter of convincing them they have to in order to become a member of IBPI. What makes it easy is we have a basic tenet that\u2019s been with us since day one when we discuss programs with the vendors; the vendor must provide IBPI dealers with their best pricing in our industry. Not the best price on the street, but their best price. We know someone is always going to offer a less expensive product or service somewhere out there, but we must maintain the integrity of our program by having our vendors provide their best pricing and program to recognize the strength of our organization.\u201d<\/p>\n

IBPI typically adds two to three new vendors per year while two to three fall by the wayside.<\/p>\n

\u201cWhen they fall by the wayside, it\u2019s typically a program that\u2019s no longer of use for our members or a program we added thinking it would become popular and it just wasn\u2019t,\u201d says Horshok.<\/p>\n

From the very beginning when IBPI negotiates programs with its vendors not only does it require the best price in the industry, it requires they provide IBPI with a small percentage rebate on every single transaction. The rebates are another perk of membership.<\/p>\n

\u201cThat\u2019s how we get away with not charging fees or dues,\u201d explains Horshok.<\/p>\n

IBPI receives the rebates, pays its expenses and with the money left over, distributes those profits via a \u2018rebate pool\u2019 back to its members. \u201cFor 27 years we\u2019ve collected more in rebates than our operating expenses,\u201d adds Horshok.<\/p>\n

The biggest difference from when IBPI first started doing that to today is that the checks have gotten much bigger. \u201cThe checks we write pale in comparison to the actual savings the dealer enjoys throughout the year, but that check is very tangible proof of their IBPI membership,\u201d states Horshok.\u00a0 \u201cWe track all purchases and rebates. If you\u2019re a dealer in Pennsylvania and we calculate you\u2019re responsible for 1 percent of the rebates we collect in a calendar year, you get 1 percent of whatever is in that rebate pool.\u201d<\/p>\n

IBPI is always watching for new program opportunities for its membership and the IBPI Board of Directors that evaluates and approves every vendor program. Horshok finds them and brings them to the Board, but it\u2019s usually the Board that points him in a particular direction. For example, if he\u2019s asked to look for shipping and freight programs, he goes out and opens discussions with five or six different companies and brings back two or three to the Board for review.<\/p>\n

IBPI is also on the forefront of trends sweeping the industry. \u201cJust like MPS six years ago, we started seeing some interest by our dealers in Managed Network Services about two to three years ago,\u201d notes Horshok.<\/p>\n

Seeing that trend, the organization found a vendor, N-Able Technologies, and now has an MNS program in place.<\/p>\n

\u201cHaving said that, we\u2019re keeping an eye on 3D printing,\u201d says Horshok. \u201cIt sounds like a natural extension although it requires a different mindset from a service standpoint. But from a consumer point of view it\u2019s a natural extension for the office technology dealer to offer these things.\u201d<\/p>\n

Meanwhile, he\u2019s talking with four different product and service sectors in areas where IBPI does not have any vendor programs. \u201cI\u2019m looking for those little voids we don\u2019t currently touch but it\u2019s something the vast majority of our dealers need or will need in the not too distant future.\u201d<\/p>\n

Members also find the regional meetings that IBPI offers quite helpful. Those began about nine years ago in Cedar Rapids, IA. That event surprised Horshok by drawing dealers from all across the country. Today, IBPI moves the meetings from region to region and last year had 40 percent growth in participation over the previous year.<\/p>\n

A highlight of these events is a roundtable session with 15 vendors\u2014the first 15 that sign up. Dealers spend 20 minutes with each vendor and learn about that vendors programs and services. \u00a0\u201cIt\u2019s also a networking opportunity,\u201d says Horshok. \u201cThat\u2019s the beauty of this program; the old NOMDA shows are no longer around and there isn\u2019t the opportunity for the independent dealer to get out there and see competitors to their own OEM and products and services not at their own OEM event.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Whether by accident or design, IBPI has become the largest buying group in the office technology industry, representing more than 350 independent commercial copy, print, and IT dealers across North America. Its members have a combined annual sales volume of more than $4.1 billion. IBPI was founded in 1987 by a small group of AB Dick dealers who put together their buying power with the goal of buying smarter and better. The buying group still maintains that premise today, however, over the past 27 years it has changed its vendor offerings. Initially, the organization focused on copier supplies and products. Today, its offerings impact most of a dealer\u2019s daily operations and include supplies, software, shipping, and even social media. Membership in IBPI has its privileges. \u201cWe have the buying power of a $4.1 billion dealer and have the leverage to negotiate industry best pricing and programs from our vendors, says Randy Horshok, IBPI president. \u201cThere isn\u2019t a dealer in the industry that can make that claim.\u201d Members currently have access to 27 different vendor programs with another two or three more expected to be added in the near future. Savings generated from these programs can be significant, from $25,000 for a small dealer to more than $160,000 for a larger dealer. \u201cThese aren\u2019t my guesses or calculations, but data provided by our members,\u201d says Horshok. In order to join IBPI, dealers submit a one-page membership application and pay a one-time fee of $500. \u201cThat\u2019s it. No annual fees, no dues, ever,\u201d states Horshok. In addition, that $500 membership fee buys one share of IBPI stock, which makes that dealer an owner of IBPI. If the dealer sells their business, or for whatever reason, decides to terminate their membership, they get that $500 back. It almost sounds too good to be true. \u201cWhen we say $500 membership fee and the savings, the instinct is to wait for the other shoe to drop,\u201d notes Horshok. \u201cSorry folks, you\u2019re not going to hear the other shoe drop because there aren\u2019t any hidden secrets or fees. If anything, there are more features or benefits to belong to IBPI than the savings on their purchases.\u201d It helps that the discounts they receive are often better than what they may be getting by dealing directly with a Parts Now or a Katun. IBPI\u2019s target market is small and medium independent dealers, but membership is open to larger independents as well. \u201cWhen one of the larger dealers join it allows me to go back to the smaller dealers and say, if these $50 million dealers find value in belonging to IBPI, imagine how much savings is on the table for you?\u201d Members have annual revenues of $1 million dollars to more than $50-million and during the past four years the typical new member had revenues of $8-$10 million annually. Even though IBPI has enjoyed terrific growth over the last few years, Horshok isn\u2019t satisfied with current membership numbers. \u201cWe\u2019ve been averaging two new members a month, but know there\u2019s greater potential out there.\u201d The biggest challenge facing IBPI members today, according to Horshok, isn\u2019t all that surprising and that\u2019s competition with OEM direct operations. \u201cThat\u2019s become a source of angst for all independent dealers as well as conflicting relationships with their own OEM when competing for clients,\u201d states Horshok. \u201cThis love-hate relationship has been the basis for many discussions at our membership events.\u201d Other challenges faced by members and all dealers for that matter is the need to broaden their product and service offerings while maintaining or strengthening their core programs. Here\u2019s where MPS comes into the discussion. \u201cEverybody was told five or six years ago they had to be offering an MPS program if they plan to survive,\u201d recalls Horshok. \u201cWell here we are six years later and we know that\u2019s not true because there are very successful dealers not offering MPS. On the flip side, there are successful dealers offering MPS. It\u2019s a matter of looking down the road and trying to figure out what\u2019s best for them and what other products or services they can offer such as Managed Network Services, 3-D printing, VoIP, that don\u2019t take them out of their comfort zone or core strength too badly.\u201d It\u2019s often a challenge negotiating discounts with the manufacturers and service providers, but Horshok says as IBPI increases its number of members and buying power associated with membership, vendors recognize the potential to work with the buying group and assemble a great package for member dealers. \u201cIt\u2019s never easy to negotiate discounts and nobody wants to give up anything more than they really have to,\u201d states Horshok. \u201cIt\u2019s just a matter of convincing them they have to in order to become a member of IBPI. What makes it easy is we have a basic tenet that\u2019s been with us since day one when we discuss programs with the vendors; the vendor must provide IBPI dealers with their best pricing in our industry. Not the best price on the street, but their best price. We know someone is always going to offer a less expensive product or service somewhere out there, but we must maintain the integrity of our program by having our vendors provide their best pricing and program to recognize the strength of our organization.\u201d IBPI typically adds two to three new vendors per year while two to three fall by the wayside. \u201cWhen they fall by the wayside, it\u2019s typically a program that\u2019s no longer of use for our members or a program we added thinking it would become popular and it just wasn\u2019t,\u201d says Horshok. From the very beginning when IBPI negotiates programs with its vendors not only does it require the best price in the industry, it requires they provide IBPI with a small percentage rebate on every single transaction. The rebates are another perk of membership. \u201cThat\u2019s how we get away with not charging fees or dues,\u201d explains Horshok. IBPI receives the rebates, pays its expenses and with the money left […]<\/p>\n","protected":false},"author":3,"featured_media":6588,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[82],"tags":[479,1181,1180],"_links":{"self":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/6586"}],"collection":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=6586"}],"version-history":[{"count":2,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/6586\/revisions"}],"predecessor-version":[{"id":6589,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/6586\/revisions\/6589"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/6588"}],"wp:attachment":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=6586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=6586"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=6586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}