EZ Office Products (EZOP) could be described as a young business – having been officially launched on 1 January 2006 – but there is a lot of office products experience behind it. VP Gary Molz is a well-known industry figure in the US, starting at age 13 at his family’s New Jersey-based business BF Molz (acquired by Office Basics in 2011) and rising to the role of President. President Rose Molz has been in the industry for over 20 years – leaving United Stationers after more than ten years to set up EZOP with husband Gary and brother Greg Gottschalk (now General Manager who can count on around 30 years of OP experience).
The Molz’s started the business from scratch in Rose’s home town of Madison after conducting thorough market research that revealed the potential for a local independent dealer in an area essentially dominated by the big boxes. Given BF Molz’s existing relationship with SP Richards it made sense for EZOP to align with the wholesaler and Rose says that it has been a strong partner over the years.
“Eyebrows raise when industry people learn I’m SP first call, given my tenure with United,” says Rose, “but as a start-up, I knew two things needed to happen. The first was to partner with a wholesaler that was sincerely genuine when it came to the success of my company; and the second was to have access to leadership at all levels, especially the senior level. I don’t want my ideas heard, I want action. I get that with SP Richards.”
Keeping it close
Rose’s passion for the Wisconsin region has shone through in EZOP’s involvement in the Buy Local movement, in which the dealership was one of the first Madison businesses to participate, and membership of a movement called Advance Now, a local initiative that aims to drive economic development in the Madison area.
“Buy Local goes much deeper than just local involvement,” she states. “I think the whole concept was misunderstood for a while and seen as a kind of local bartering system – I buy from you and you buy from me. Now there is a greater understanding of local business development, jobs in the community, and the economic and social impact of supporting local businesses.”
With Madison being the Wisconsin state capital, many local businesses have their headquarters there and the majority of EZOP’s business comes from the Madison area, despite Milwaukee – about 80 miles (127 km) to the east – being the largest city in the state. EZOP does have a sales presence in Milwaukee, and the ‘MadWaukee’ corridor located on the interstate highway provides potential for new business opportunities as the area develops economically.
The main competition in Madison comes from Staples – “they do a great job with marketing” – but EZOP’s success over the last few years has also spawned a number of new, independent rivals, which is why Rose is reluctant to discuss sales figures and profitability, although she said that top-line growth was set to be in the 12-15% bracket for 2012. Like many other independent dealers, EZOP has broadened its offering with breakroom and jan/san supplies as it takes the one-stop shop message to customers.
Managed print services (MPS) is another area that EZOP has moved into, partnering with Milwaukee-based service provider Print Command. Print Command is first and foremost an IT network security company, and Rose feels that there is a tendency for OP-developed MPS solutions to overlook this security aspect, with printer portals being a favourite target for hackers to worm their way into networks. She also warned about the ubiquity of MPS – “everybody has it and everybody is selling it” – although she recognised its impact on supplies sales.
When EZOP started up it was a purely stockless model, but now stocks around 1,000 items. It buys paper direct from the mill, uses TriMega’s TriSupply programme and buys direct from manufacturers using the dealer group’s pricing.
“As we grow, we can take advantage of buying group programmes and direct buy opportunities and this has a positive impact on margins,” noted Rose. “We know it’s not free to stock products, but we take a pragmatic approach based on things such as cash flow and customer requirements. After all, if we can’t buy it right, we can’t sell it right.”
EZOP is coming to the end of its second year with TriMega. So far Rose admits that they haven’t taken advantage of all the group has to offer, but is looking forward to using the new iPad catalogue app in 2013, an initiative she described as “forward thinking”.
Rose herself is pretty forward thinking when it comes to things such as technology and social media. Unusually for a dealership of this size, EZOP employs a full-time social media coordinator who encourages local consumers to interact with the company via platforms such as Facebook, LinkedIn, Twitter and, more recently, Pinterest.
“The jury is still out on what positive impact our social media presence has on our sales,” she admits, “but it is important to ensure that we are up to speed with technology; it’s easy for an independent dealer to fall behind.”
Rose is also a bit sceptical about marketing programmes run for dealers by technology providers and wholesalers. “From the perspective of a dealer like EZOP where we understand the importance of digital marketing and have our own marketing programmes – and there are plenty of dealers like us – I often wish that the service providers and wholesalers would focus more on their core competencies and put focus on enhancing or elaborating them.
“If you’re in a market with a competitor using the same platform, the only difference [in the digital marketing] is the URL. Everything else looks the same and end-users end up getting the same messages on the same day from different dealers. Whereas, if a dealer creates the marketing effort, it’s a bit different and reflects our own personality.”
The Amazon threat is certainly something that Rose is aware of and she has witnessed a shift in the purchasing habits of business consumers. “People that place orders are a lot more internet savvy than before,” she states. “The biggest change I see is the disappearance of loyalty. You can talk all day about relationships, but let’s be real, buyers purchase from where they get the best price – even if that means ordering from multiple suppliers and increasing their hidden costs.”
With easy access to the internet, Rose also notes the rise of what United Stationers coined the ‘empowered user’. “It depends on the company, but it is relatively easy, say, for a VP of Marketing to circumnavigate the usual purchasing channels to buy what they need for a large customer presentation. And the first place they usually look is online. That’s why, especially with large accounts, it’s important to develop strong relationships at C-level. They can then apply pressure to ensure all orders are placed through EZOP!”
Rose was a bit coy on future initiatives – for competitive reasons – but said that they were working on a couple of “interesting” projects that involve market expansion and new business relationships.
Watch this space!
EZOP at a glance
Headquarters: Madison, Wisconsin
Owners: Rose and Gary Molz
Annual sales: Not disclosed
Model: Hybrid stockless/stocking
First-call wholesaler: SP Richards
Dealer group: TriMega
E-commerce provider: Red Cheetah