As revealed in the previous issue of Workplace360 (read New wholesale models emerge), new propositions LSM Wholesale and Consolidis have emerged in the workplace supplies wholesaling channel to fill the void left by Exertis Supplies’ collapse earlier this year. However, they are by no means the only players in town offering an alternative to market leader VOW Wholesale.
Existing distributors not previously specialising in traditional OP have been steadily broadening their ranges, providing dealers with additional sourcing options and manufacturers with alternative routes to market. Among them are JGBM, CTS Wholesale and H-Squared: three businesses with very different backgrounds but a common goal to capture more of the business products basket. “The market doesn’t lack options,” JGBM’s Commercial Manager David Vann tells W360. “It’s how you then work with those options which is important.”
Technology is helping to make omni-sourcing possible, with dealers increasingly able to incorporate different suppliers into their back-office systems and compare stock availability and pricing. Some will continue to favour the efficiency of a single-source model, Vann acknowledges, while others are prepared to spread purchasing across several suppliers.
There is a similar argument from the manufacturer perspective. “No one from a selling point of view wants so much of their spend through one particular customer because then – obviously – you’re at risk,” Vann affirms, pointing to the potential consequences when a major customer encounters financial problems. “It’s just good, sensible business to have a suite of customers that de-risks your turnover.”
Accelerating expansion
CTS Wholesale – which was originally an EOS-focused distributor – had been diversifying for several years before Exertis disappeared (read In Conversation With… Steve and Debbie Clayton). Paper and labels were among the first additions, followed by other categories as customers increasingly asked the wholesaler to source products on their behalf.
The strategy took another step forward when Nemo Office Club approached CTS to distribute its Style range. This helped to convince the company that there was an opportunity to broaden its stationery offering to its wider customer base, eventually contributing to the 2023 decision to change its name from CTS Toner Supplies to CTS Wholesale.
Then came Exertis. “Things changed overnight,” says CTS Wholesale Head of Sales and Marketing Mark Allan. The timing was challenging. There were plans to expand the OP offering, but the scale and speed of the additional demand following the Exertis closure forced CTS to accelerate those plans dramatically.
More than 100 new accounts were opened in two months, with Allan estimating that around 90% came from former Exertis customers. At the same time, existing CTS customers substantially increased their
OP purchasing. “It was challenging; it was hard work; but it was an opportunity for us,” recalls Head of Operations Wanda Colebatch.
Dealer involvement proved helpful. Rather than CTS attempting to second-guess what the market wanted, customers supplied product codes, SKUs and run rates for items they needed the company to stock. CTS has gone from fewer than 1,000 OP SKUs around a year ago to approximately 6,000 today. At one point, it was introducing 150-200 OP SKUs a week as it rushed to meet demand.
The business now stocks around 22,000 products overall, including approximately 200 SKUs under its Up own brand, while the company is preparing a warehouse extension to support its expanded operations. For now, however, the emphasis is less on adding products at breakneck speed and more on ensuring adequate availability. CTS currently services around 1,000 dealers each month and Colebatch and Allan stress that the company is conscious of not adding major customers if doing so risks compromising service to its existing base.
Complementary products
JGBM’s route into traditional OP followed a similar logic. Its core expertise remains business machines and technology, but it has been offering complementary products from existing suppliers for some time.
The disappearance of Exertis then accelerated the opportunity, with Vann joining the Plymouth-based company from the now-defunct wholesaler in February this year to help develop partnerships with selected OP brands.
Since then, JGBM has added approximately 500 products from 30 brands and has extended its offering with existing suppliers. The range now encompasses categories including notebooks, writing instruments, correction products and sticky notes. “Both dealers and vendors alike were approaching JGBM,” Vann notes. “It didn’t just come from us going to market; it came from the market coming to us.”
Expanding the basket also strengthens JGBM’s existing proposition. A dealer that cannot source one required product may place the entire order elsewhere, Vann points out, so plugging gaps gives customers more reasons to consider JGBM for regular purchases. The company is not attempting to reinvent itself as a conventional full-line OP wholesaler. Business machines and technology remain its bread and butter, supported by product specialists offering consultative expertise.
Powering a broader basket
H-Squared approaches diversification from another direction again. The company’s heritage is batteries, and Area Sales Manager Emily Vardon affirms that this will continue to be its most important category. However, the product generally represents a small proportion of the overall customer basket, creating a clear opportunity to use H-Squared’s existing infrastructure to supply more of what customers buy.
The first move was coffee, with a positive reaction encouraging the wholesaler to add further established brands and frequently purchased consumables. Its strategy is deliberately broader than traditional stationery because its customer base extends beyond OP dealers into areas such as electrical wholesaling, hospitality and healthcare.
“This gives us a much wider view of purchasing behaviour and allows us to identify high-volume, frequently purchased products that can be relevant across multiple industries,” states Vardon, who adds that, for manufacturers, this can boost opportunities outside the stationery channel.
Longer term, the ambition is to develop from a specialist battery wholesaler into a broader B2B fulfilment partner, although Vardon emphasises that this does not necessarily mean becoming a traditional general wholesaler. She also believes that as dealer expectations continue to evolve, flexibility will become increasingly important. She points to demand for a blend of stocked products, drop-ship and integrated ordering, depending on the reseller’s business model.
As she notes: “Developing those capabilities would allow H-Squared to remove some of the barriers that currently prevent dealers from changing or adding suppliers, while making us a more attractive route to market for suppliers looking for incremental volume.”
The days of multiple broadline OP wholesalers are undoubtedly behind us, but the arrival of new entrants and the diversification of existing specialists have provided a degree of competition that will keep VOW on its toes – which is a positive development for the sector.
