If the last year and a half has taught us anything, it’s that it’s quite easy to get distracted and obsess over the changing conditions in the world. But David Concors has been fortunate enough to retain a laser-beam focus.
The vice president of sales for Supplies Network, a preeminent wholesale distributor to the industry, doesn’t fret over the things out of his control, be it the pandemic or the availability of hardware from manufacturers. Concors has his eyes on the long game: the exiting of our shared nightmare, and positioning Supplies Network to help serve the needs of resellers in the best and most economical way possible.
We caught up with Concors to find out more about how the distributor has weathered the changing business landscape, including work-from-home and the movement toward transactional business. He has full confidence in mpsSELECT and managed print services rebounding once employees return to the office, thus paving the way to more contractual opportunities. He notes that, courtesy of the growing barcodeSELECT, Supplies Network is opening the door for resellers to approach their client base from a different angle. And while many of the larger distributors are repositioning themselves through M&A, Concors points out that Supplies Network remains unwavering in its dedication to the print space.
How did the pandemic impact Supplies Network’s 2020 financial performance?
Concors: During 2019, we completed the best year in company history, which covers a 30-year span. COVID changed things in a hurry. We struggled to meet our financial goals, particularly from April through July, and we felt the challenge through the balance of the year. We did finish a little bit stronger than expected, and we’ve carried that momentum into 2021.
Provide some insight into Supplies Network’s strategic approach during the pandemic and how it pivoted to meet the needs of its reseller partners.
Concors: First and foremost, we were very committed to the employees by quickly shifting to a full-time work-from-home strategy. Fortunately, we’d invested in remote technologies a few years prior, and we pivoted with little to no hiccups. Further, we operated all of our distribution centers at full capacity from day one and experienced no major business interruptions. Although our order volumes declined, we continued to operate at a high efficiency in meeting the demands of our reseller partners. I think we’re pretty pleased with how we managed the pivot and the challenges, and how we managed to remain a valuable partner to all of our business customers.
We’ve heard many news reports in the mainstream media about accessibility of (or lack of) supplies/materials in the manufacturing space, order backlogs and delays. Tell us what you saw as a pivot player in the supply chain.
Concors: We absolutely have been affected and we’ve seen some challenges pretty much across the board. More specifically, almost every OEM is struggling to fulfill demand for new equipment. Many are forced to allocate based on specific deals and partners. They’re literally asking us to provide them the specific dealer and end-user, and they allocate product to specific orders. This is quite unique and nothing we’ve ever faced in the past. Recent experiences with the supplies are much better than with equipment; we did have some major challenges early in the year, but they seem to be a little bit more caught up on supplies. Some manufacturers have been and continue to be challenged. They’ve indicated there will be an ongoing issue with the availability of product. So although we’ve seen some improvement, it seems we’re definitely settling in for some more challenges and having to manage it at a customer level to fight for the allocation necessary to meet the demands of the reseller and the end consumer.
Can you gauge when the situation might return to pre-pandemic levels?
Concors: It’s a tough question to answer as it’s out of our control, and my assumption is those who can answer it may not want to be as forthcoming with the information unless it’s positive. They might not want people to find alternative paths to meet the needs of what they’re trying to source. However, we’re starting to see a little catch-up in terms of supplies; it’s definitely improving. Where we’re not seeing as big of a catch-up is on the equipment. We’re hoping everything is caught up by the end of the year so we can all get past the 2021 pandemic recovery and go into 2022 with a new outlook. But ultimately, we have to rely on the manufacturers to dictate what’s going to happen.
How would you characterize the first half of 2021? Are we seeing a return to previous demand levels?
Concors: We’re seeing a steady rebound in our daily numbers, and I’d say we’re slowly becoming more optimistic in our return to prior demands. We’re making great progress. The first quarter fell just a little bit shy of expectations, but a strong April and May put us back on track. Our mix of business has shifted a bit with the remote work. We’re selling more items aimed at remote, such as ink and smaller personal printers, as opposed to the traditional office printers and copiers. That’s changed the complexity of our business a bit from strong growth areas such as managed print. In our business, we’re incapable of managing MPS through people’s home offices because you don’t have access to the data, devices or supplies. Therefore, we’re growing, but we’re selling more items transactionally than we are contractually because of the remote limitations. We’re hoping more people go back to the office, where our MPS program is more aligned, so we can start to see progress in that business segment as well.
Earlier this year, Supplies Network announced partnerships with Oberon Americas and Predictive InSight. Tell us about the value of these relationships as they apply to your mpsSELECT print management platform.
Concors: We’re trying to bring to market the most flexible MPS program possible because not everyone wants to rely on us for their entire program. They might want to use pieces—á la carte—because they may be strong in some areas but need our help in others. We’re allowing them to opt in or out on the various services that better align with their business needs. In our world, the various data collection agents we use are really just sources of information for us to plug into our business, and then we operate our managed print program on those various sources of data. We’re really not dependent on those data agents for anything other than the information as we incorporate that into our system and manage things such as automated shipping of supplies, service alerts and the like. We expanded to include Oberon and Predictive InSight because our customers are starting to adopt that data collection technology. We want to be connected to any and all data sources our customers rely on because we depend upon that data to be able to manage our program. If customers are shifting to a new platform, we certainly don’t want that to limit our ability to meet customer needs. So we’re expanding where we’re seeing demand in new data collection sources, and many of our core partners are migrating to these two.
It’s been about a year since the barcodeSELECT supplies replenishment program was launched. How has this venture, coupled with your partnership with Zebra Technologies, played out thus far?
Concors: We’re super pleased with the progress that we’re making, not only with our relationship with Zebra, but also with our expansion of the Zebra products and the entire category, thermal barcode, in our business. Specifically, we’re making progress helping Zebra approve new resellers within their MPS Spotlight program, and that’s primarily coming from our BTA copier channel. We view that an as opportunity to help position Zebra and thermal as a path for resellers to create incremental revenue streams during and beyond the pandemic. We’ve found, through discussions and reviewing data collection, that there’s a great opportunity for the BTA channel to leverage relationships with businesses they currently support and expand into thermal and barcode via traditional labels or applications such as medical wrist bands. The BTA channel has such strong relationships with the IT side of a business as opposed to just the traditional buying side, so it’s a great path for them to introduce incremental revenue. The exciting part is it’s starting to become meaningful as a percent to our overall revenue. It’s no longer a project or a hobby, it’s a full-fledged business in which we’ve directed resources to help capitalize on the category’s growth.
Additionally, Zebra has a new technology called Link-OS that allows device data collection to be captured, so you can actually manage things such as auto replacement and overall performance. They want to upgrade legacy devices to those new devices, and our ability to connect some type of managed print program to those devices in barcodeSELECT is allowing those dealers to go into older environments and present a different solution that may bring more value and efficiency to end-consumers. That’s where we’re starting to see a lot of growth from the BTA channel because they’re leveraging existing account relationships and introducing a newer solution that helps drive more value for the end-consumer.
Earlier last year, Supplies Network talked about the expansion of its southwest and midwest distribution centers. Are there any plans for the southeast?
Concors: Although we reviewed that market many times, the need is not quite there as our shipping into the region is highly competitive and we still feel we meet the demands of our customers in our ground shipping model from the four primary DCs that we have in Carlisle, Pennsylvania; Fresno, California; St. Louis and Dallas. At this point, we don’t have a plan to add one in the southeast, but instead want to focus on overall efficiency. During and just prior to the pandemic, we introduced three brand-new warehouses where we more than doubled our space in St. Louis, Dallas and Carlisle, and introduced robotic technology from 6 River Systems, which is different from anything we’ve ever done in the past. Over time, that hopefully will allow us to become more competitive in the pricing that we pass on to our resellers.
There’s been a lot of M&A going on in the distribution channel in general, including Tech Data, Synnex and Ingram Micro. What’s your perspective on those deals and the changes taking place in the distribution channel?
Concors: That’s something we’ve talked about a lot internally. We’ve always been the smallest company in the print space relative to companies we compete against, including Synnex, Tech Data, Ingram, Essendant and SP. But in terms of market share in the print space, we’re not the smallest. In fact, in some categories/brands, we’re the largest. We view the deals as healthy mergers and those businesses were already invested in far more than just print. A number of the mergers allowed them to expand in other categories and leverage other business services in the market.
For us, we’ve remained committed to the print strategy and do not have a plan to expand our business beyond print. We want to maintain that focus and be viewed as the best in print. We have the right relationships with the manufacturers and understand all of their various programs, which can be ultra-complex. There are rules, processes and procedures you have to follow to enable the resellers to get access to the right products at the right price. We view these deals as potentially a window for us to continue to grow the print space as these competitors may shift their attention and energy to other areas that are more in line with why they combined in the first place.
We’ve heard a lot of negatives regarding 2020 and the pandemic. What are the positive takeaways from your perspective?
Concors: It was hard to lose business and shrink, as it’s difficult for us and our resellers. The pandemic really forced us to look at the business. We started to shift resources from areas that were growing, while becoming more comfortable in accepting that we may have fewer resources in declining areas. We didn’t downsize our team, we simply moved people around to support the shift.
The pandemic forced us to communicate in more different ways than ever. The conference calls and video calls can be awkward, and we all have jokes about the challenges people face in video calls. I like that it forced to get us to know one another better as people. Videos allowed us to see into people’s homes and notice things such as photographs or mementos. Frequently, you’d see their children and pets. Although we were further apart than we’ve ever been, in many instances it gave us an opportunity to be closer. As the pandemic comes to a close, I really hope that our calls maintain the video element. I’ve heard from many of our sales reps and managers that those video calls were the first time they’ve ever seen someone they’ve been doing business with for years. I think video is a great opportunity for us to improve upon the legacy relationships.
Lastly, I really think the pandemic forced our management team to hunker down and collaborate more than we ever have on our immediate and longer-term strategies to manage all the chaos and uncertainty. My personal relationships with many in my company grew as a result of having to go through this process and that constant collaboration. Although it’s a very difficult process for us and our resellers, and it cost a lot of business and energy managing through it, the friendships and the relationships will improve as a result of how we had to manage around it.
With the pandemic now in our rearview mirror, how is Supplies Network engaging with its reseller partners to maximize market potential moving forward?
Concors: We never stopped interacting with our customers. In fact, some might say we over-communicated during the pandemic. We wanted to stay in touch with people because we knew things were difficult. We checked in regularly to see how the reseller community was dealing with the pandemic, and we tried to find ways to help—including extending credit terms, offering our warehouse space or looking at alternative shipping methods—to drive down costs. Fortunately, now with the easing of restrictions, our sales teams are back out on the road doing in-person visits, which is a step to resuming some form of normalcy. It has us very excited about the second half of 2021.
Is there anything new on the horizon from a product or partnership standpoint?
Concors: Our strategy remains pretty firm. We like to position ourselves as the preferred print distribution partner in the industry. We specialize in print—we’re not distracted by other products or categories. We’re pretty dialed in on supplies, hardware, managed print and print-related services. This includes printer installations, configurations and larger printer rollouts. In terms of new, I’d say Zebra currently represents the recent expansion within the print category. Right now, we’re really focusing on continuing to grow that category.
What is Supplies Network looking to accomplish in the second half of 2021 and into the new year?
Concors: We want to meet and exceed the expectations of our customers. We’re looking forward to welcoming our employees back from remote work around the early part of September. We want to work with manufacturers to reduce the number of product backorders, and also continue our Zebra expansion. Last but not least, we want to achieve our 2021 financial forecast. Those are the things foremost on our minds right now.
