Poised for growth

As German dealer group Büroring completes its restructuring process, MD Ingo Dewitz gives an update on its new, proactive approach

This week marks the beginning of the end of Büroring’s restructuring process. On Monday, the last stage of the German dealer group’s new-look efforts began, with the retraining, re-deployment and expansion of its 76-strong workforce, all due to be completed by October.
          
It was not that something had been fundamentally wrong, Managing Director Ingo Dewitz told opi.net, more that the rather “sleepy” and “cozy” workings of the cooperative had stopped it from growing the way it should be able to. A more proactive and dedicated approach was needed.
Dewitz said: “Büroring had a lot of positive attributes, such as its close relationships to dealer members. But it just wasn’t progressive enough and didn’t have room to grow. To give an example, up until recently, if we produced a new catalogue, everybody at Büroring would be involved in the production of that catalogue for three months, leaving every other project short-staffed.
"Essentially, a lot of employees did many things, but there was little in the way of specific job descriptions and the skills and, if necessary, training, that went with it.
“Now we have separate departments for product management, for sales, for distribution, and so on, and everybody has specific roles and responsibilities. We are also for the first time building a dedicated team of Büroring representatives that works exclusively in the field, visiting members and helping them with any aspect of their business.”
Last month’s appointment of Guido Herkenrath is the first of four such representatives who will cover specific geographic areas and are tasked to help dealers with anything from succession planning and financial problems over understanding managed print services (MPS) to product selection.
Although the benefits of its staff-related changes are just beginning to filter through, Dewitz has already made progress with the group’s other new initiatives.           
Büroring’s half-year results certainly made for very positive reading. It posted total revenue increases of 10.6% for the first half of 2011, way above its annual growth ambition of 5%. This was broken down into a rise of 8% (up €5.8 million – $8.2 million) for its central billing business, while its warehouse operation generated increases of an impressive 23.6% (up €3.4 million).
The reason for these unusually high increases are multifold, says Dewitz. “We’ve never been competitive and in line with market prices with our ink and toner products.
"It’s partly because we give our dealers bonus payments on the products they buy from our warehouse; however these types of products are in a different league as far as margins are concerned and the old system didn’t make any sense.
"So what we did first was to introduce a new price and bonus system for consumables, which meant we became more competitive. As a result, we attracted lots of dealers that bought consumables from our warehouse, resulting in a 43% increase in revenues between January and the end of April his year.
"A knock-on effect of that was that while they bought consumables they also often bought other – higher margin – office products from us.
“Another factor was our close partnership with our dealers. This has really helped them during the difficult economic times over the past few years. We’ve basically been constantly there with them and it has undoubtedly played a role in them coming out of the dark economic tunnel a bit more unscathed.
“Lastly, we have gained about ten new members over the past few months which contributed to the good overall results."
Getting techy
While the growth was fairly evenly spread across its membership with retail-based members faring only slightly worse, Dewitz points to the tech-orientated members as the ones with the most potential.
70 of them are organised in Büroprint, one of Büroring’s three marketing groups (the other two are Redoffice, mostly retailers supplied exclusively by Büroring’s warehouse and OfficeStar, the Spicers-attached B2B operators). About 50% of the group’s revenues are generated from technology products, followed by 30% office supplies and 20% furniture.
He says: “One of the reasons I was employed last year was because of my technical background and business relationships. Historically, system houses and IT/copier/print dealers have not been organised terribly well in cooperatives and we’re hoping to change that."
Last month, the dealer group signed a deal with Dewitz’ former employer Samsung Electronics Germany. With this partnership, Büroring has gained another supplier of technology products that, among other benefits, will also enable it to offer its dealers a wider array of hardware products as part of its MPS programme (hosted directly by Büroring in cooperation with software solutions firm FMAudit).
For Samsung, it opens a path into the SMB segment that it hasn’t had up until now in terms of MPS (unlike other OEMS, it also doesn’t have its own, direct-to-customer, MPS programme).
           
Add to that the group’s recent deal with hardware and software provider UTAX and it becomes clear where Dewitz’ ambitions and priorities lie.
           
More changes are to come, especially for Büroring’s closely associated member group Büro Forum 2000 (made up solely of stationers) and its logistics operation which, from next April, will be vastly expanded and run more efficiently, allowing for a 100% rise in revenue.
           
It’s been a busy ten months in office for Dewitz, but he’s clearly not ready to take a break just yet.