State of the industry
by Jack Miller, founder of Quill Corporation
When two or more old-timers meet these days, one of the first things they say is: "Boy, am I glad I’m not in the industry anymore," followed by, "There’s no loyalty left. It’s just price, price, price."
And that about sums it up. In the old days, before the OP superstores, it was pretty much a mom-and-pop industry, with about 15,000 mostly small neighbourhood stationers. There were some contract stationers around the US, most selling locally, with sales around $5 million.
I started in 1956 with a phone in my Dad’s chicken store, knocking on doors of businesses in the Chicago area, using United Stationers’ catalogue and offering 10-20 percent off of list prices, depending upon how big I thought the business was. My first mailing was a penny postal card sent to 156 businesses I had called on.
My brother Harvey joined me 18 months later – followed by Arnold later still – and we sort of "slid" into the mail order business, vilified as the "dirty discounters" by much of our competition. Our business was based on "uncompromisingly outstanding" service and integrity.
For over 30 years, the industry remained pretty much the same. The annual office products convention in the US brought most of the dealers together to walk the show and listen to the industry pundits. I still remember one session on what a "sin" it was to sell at a discount and how much more you would have to sell to make up for the "lost" profit. In another session one year, a "large" contract stationer from Baltimore gave the dire commentary that we would all have to prepare for when we would become a "paperless society" because of the advent of the computers.
Many years later, I thought of that prediction when I was in our HQ warehouse watching paper being unloaded from trailers, being labelled and then put on United Parcel trailers, never even hitting our warehouse racks.
Over the years, we made friendships with both dealers and manufacturers and from year to year we watched their kids grow up and then enter the business. It truly was an industry of family businesses.
And then Tom Stemberg opened his first Staples store in 1986. When he went public in 1989 and raised $37 million, he caused quite a stir in the industry. Almost no one in the industry felt he could survive at the prices he was selling. But in my State of the Industry reports, which I wrote and sent to suppliers several times a year, I began to predict that they were going to be a force to be reckoned with.
Staples continued to grow. Others copied them. At one time, there were as many as 35 so-called superstore chains. Most failed and three survived. The business changed from that cozy family-type business into a big, much more impersonal, corporate-style business. Over 10,000 dealers closed their doors, no longer able to compete.
The superstores began to dominate the industry, setting the rules. In defence, manufacturers began consolidating. It became an industry of large, impersonal corporations.
At Quill we continued to grow and to compete. At one point along the way, we decided to cut our already discounted prices to match those of the superstores. For six months, until we were able to cut costs and wheedle additional discounts from manufacturers, we didn’t make any money. After that, we did well.
Along the lines of the saying that "there is nothing permanent except change," let me make one more of my State of the Industry predictions. One day the superstores are going to face a new challenger that will take over the industry with a new and different business model. And the superstores may be reluctant and slow to change to meet the new competition. Think of Montgomery Ward, once the largest retailer in America and now gone. Or the much diminished Sears Roebuck. Or even Xerox and IBM, both of which never saw the new competition coming and both of which failed to react fast enough.
It was a great run and I enjoyed every minute of it. My brothers and I have always been proud of the company we built and the fantastic service and integrity upon which it was based. I hope some of those values remain in the "new" industry.