Not one to put himself in the spotlight, Office Partners founder and CEO Jim Hebert nevertheless found himself on the stage at this year’s SP Richards (SPR) ABC show when he was presented with the Industry Achievement accolade at the North American Office Products Awards.
A 40-year industry veteran, Hebert set out from humble beginnings to eventually establish his own dealer group in 1998, using the vendor relationships he had established prior to that to develop competitive buying programmes for his members.
17 years later, Office Partners has grown to around 150 members, but has very much retained its small, family business roots. Indeed, the dealer group prides itself on resembling, both structurally and mindset-wise, the small, family-run, entrepreneurial businesses that make up the bulk of its membership.
Office Partners has rarely featured in OPI over the years, so we are pleased to be able to put that right in this issue after Editor Andy Braithwaite caught up with Hebert shortly after the ABC show.
OPI: Firstly, congratulations on the award at the ABC. What did that mean to you?
Jim Hebert: Well, for 40 years I’ve tried to stay out of the limelight and in the past few months I’ve basically received two lifetime achievement awards: one from BSA and this one from you folks and the people in our industry. It’s kind of humbling and it’s hard to put into words when you’ve been round as long as I have, and all of a sudden people start to recognise you for what you’ve done in the industry all this time.
OPI: Well, it’s nice to finally feature you in OPI after all these years! Perhaps we could begin with a quick round-up of your career.
JH: I started out on the dealer side of the business, driving trucks and delivering products, so that’s when I first started to learn about the products. In the early 1980s, I went to work for a large contract stationer in Illinois and that’s where I really learned the business.
I learned the contract side, handled purchasing, contracts, the buying end of it and so forth, and got to sit down with Fortune 500 customers and learn their needs and wants. I was trained by an exceptional man, Mr Ralph Burgess, and he really put me on my road to success in this business.
We were one of the original dealers in the NPA [National Purchasing Association] buying group and I ended up going to Jackson, Mississippi, to help them get the group started, which really started me into the buying group side of the industry.
I then came to Birmingham [Alabama] to run NOB [National Office Buyers] for a year. They were going to merge with NPA, but I really didn’t want to do that, so my wife, Diane, and I sat down and decided we would start our own buying group, as crazy as that may sound.
OPI: Why were you against the merger between NOB and NPA?
JH: There was nothing political. I had moved from Jackson, Mississippi, to Birmingham and they were going to move it back to Jackson and be headquartered there, and I just didn’t want to move again.
OPI: That was in 1998?
JH: Yes, we started in ’98. We had no dealers or vendors and didn’t have any money, but the industry helped me and here we are today, almost 20 years later.
OPI: How did you get the ball rolling in terms of getting people on board?
JH: I had spent a number of years negotiating the first real large programmes with the vendors because we had a group of 40 of the largest dealers in the US at NPA. So I went back to the vendors and said, “Here’s what I want to do”. Virtually all of them turned around and gave me the same programmes I had negotiated with them in order to help our group, and then we took those and went out to the dealers to get them to join.
OPI: You’re not a cooperative, are you?
JH: We are not and the reason for that is when I originally started it, I didn’t want dealers to be intimately involved in the running of the group – they should be running their own businesses. And in a corporation, they’re not responsible for the debt that a group incurs, unlike in a cooperative structure.
OPI: How many dealer members do you currently have?
JH: It’s hard to say with us because we have so many multiple location-type people that are in the group, but it’s probably about 150.
OPI: Are they spread around the country?
JH: They’re mostly east of the Mississippi. We do have dealers all over the country, but for the most part the density is on this side. That’s just kind of the way it works. This side of the Mississippi is more densely populated and you’ve just got more office products dealers here.
OPI: How many staff members do you have working at Office Partners?
JH: Office Partners has six people, that’s it. And that’s because we started with the viewpoint that the only way we were going to be able to do this effectively in the future was with technology. Our dealers had to be on the internet to be part of the group, they had to pay their bills on the internet, they had all their programmes there, they got accounting functions and so forth, and that’s the only way you could do what you do with over 100 vendors and still do it efficiently.
OPI: You mentioned your wife, Diane, at the start setting up the business with you. Is she still part of the Office Partners family?
JH: Oh yes, she’s still on board. We have my son, my daughter, my son-in-law and my daughter-in-law who work there and myself.
OPI: That’s the six. So it really is a family-owned and family-run business.
JH: Yes, it is. The dealers feel there are similarities between their own businesses
OPI: I’m trying to imagine your family dinners. Do you have to ban business talk at these kind of things?
JH: After 6pm there’s no business. I’ve been doing this a long time and I’ve tried to tell them that when you leave the office and you lock the door, that’s where it stays. Heck, on the weekends we try not to see one another just to give everybody a break because enough’s enough. I mean, you see your kids every single day and your mom and dad every day and that’s difficult to do, so you have to find out where the happy medium is.
OPI: You seem to have found that – they’re still there.
JH: We’re doing ok. We’ve always said we just want to be a little country store.
OPI: When you look at your members, how are they embracing the changes in the office category, which is declining, and the need to expand and diversify?
JH: I think there’s a position of not being a stocking dealer; stockless dealers are more flexible because of the amount of product they can buy from the wholesalers that’s not included in their inventory.
It’s been my experience in the past 40-plus years that every ten years the products in our industry kind of rotate. Some come in, a lot of them come out and we’re selling something different every ten years.
We have a retailer here in the US called Dollar General with small town stores that sell everything. They sell pots and pans, they sell food, they sell anything you can think of, and that’s where dealers are going to have to go to be a one-stop shop for the customer.
OPI: Obviously, that one-stop shop helps if you’ve got a nice snazzy website with all the products available online. How up to speed are your dealers on that technology side and how do you help them in that area?
JH: That’s one place where the dealers are kind of between a rock and a hard place. There are only a few software houses left out there that can help these dealers. The wholesalers help them as much as possible, but dealers don’t have a lot of new ways to go to market on the internet because they are limited to the people that can help them run their companies.
OPI: Is it a case of they have to invest in this technology or else?
JH: It’s a lot of money to invest on the technology side of things. You’re talking about adding more SKUs to your offering and that’s very costly to get started and to maintain. In order for the buying groups to do that, we would have to get together to share the costs of something like that.
OPI: Is that something you’ve talked to the other groups about?
JH: Yes, we have talked about that.
OPI: And is anything likely to happen?
JH: They’re trying to figure out how to get it done. I talked to them again at the SPR show and we’ll be talking again soon. You almost have to set up a separate company to do something like this or outsource it.
Basically, on the wholesale side you have, let’s say, on average 50,000 SKUs that they offer through the internet. You’ve got Staples at over a million, you have Amazon – who knows how many they have in our business – so if you’re going to put up a million SKUs, we have that in our industry easily.
But how are the dealers going to buy them? Where are they going to source them from? How do you buy them with the kind of prepaid every one of these manufacturers has? It’s going to be a very costly thing to get involved in in the long run.
OPI: Do you see it as a bitter pill that dealers are going to have to swallow if they want to continue to sustain their businesses in the long run?
JH: It’s going to have to be. There are going to be dealers in parts of the country where that big guy can’t get to them, but for most it’s kind of the old saying of ‘the Russians are coming’! You’d better devise a way to protect yourself.
OPI: I guess dealers have been saying that for 20 or 30 years, haven’t they?
JH: 30 years ago it was Boise Cascade, and they had probably the most efficient way to do it: they knew how to be a contract stationer, they knew how to sell and they were also wholesalers. That was a difficult nut to crack.
OPI: But dealers are still here.
JH: Yes, that’s what I tell them. I say, “No matter what other guys have come and gone, you guys are still here”.
OPI: We’ve got the potential merger of Staples and Office Depot coming up. What do you make of all that?
JH: I hope that it all goes through this time. If you take two large entities like that and try to merge them, you’re going to have a few years of them not knowing what’s going on, so it presents opportunities for dealers in their marketplace or potential customers or even adding sales people.
The problem with that is the average dealer doesn’t know enough about that sales person or how they’re compensated or how they go to market in some cases to hire them. So that’s where they need help and I know that Steve Hilleard and Mark Hampton were working on something – and that’s a service I think they’ll need if this thing goes through.
I don’t know if it’s going to go through, though. They own 90% of the Fortune 500 business and if you only have one entity bidding on those contracts, are prices going to go up? It’ll be interesting to see how the FTC calls that. It’s a difficult scenario.
OPI: You get together every year in Nashville for your Grand Ole Gathering, don’t you? Is this your typical conference and trade show or is it something a little bit different?
JH: We have always had one-on-one meetings. We have dealers and vendors sitting down with a schedule and the dealers have to talk to every single vendor there and the vendors talk with every dealer that’s there.
We don’t arrange it to be a vacation – it’s work. They work hard and they play hard, but they get work done and that’s what’s key, especially in today’s environment where the vendors and the dealers don’t want to spend too much time out of their business. So you’ve got to make it be done efficiently and be worth their time and effort.
OPI: TriMega and IS are about to have their third EPIC show. Have they asked you to come along and be a part of that?
JH: Yes, they’ve asked us about it and we’ve discussed it, but it doesn’t fit with what we’re doing right now.
Even IS and TriMega have segments of their dealers who aren’t necessarily involved in EPIC because they have their own one-on-one scenarios.
OPI: When you look at the future of Office Partners, what’s your vision or your strategy for the business?
JH: Well, we’ve already made the transition as far as our succession plan goes. My wife and I are going to stay in the business and keep doing what we’re doing, but the kids actually run things day-to-day now and they’re the focal point for everybody.
So our future is we’re going to keep going and we’re going to keep viable and keep trying to help dealers like we already do.
OPI: But no kind of game-changing vision or change of direction that the kids want to bring in?
JH: We’re going to sit back and watch, especially in the next year or so, what’s going to happen. Is the Staples/Depot thing going to go through? Where’s the Amazon going?
Instead of jumping out there and coming up with a lot of things that may or may not work, in the immediate future we’re going to sit here and wait and see what’s going to happen, because it’s going to change, we just don’t know in what direction.
And if we do need to do something, it’s easier for us to do here because we don’t have a board of directors, and we don’t have anybody making decisions but us – so we can turn on a dime if we have to.