Euroffice, Emerging Reseller of the Year at last week’s European OP Awards, is moving into wholesale, OPI+ can exclusively reveal
"How do we disrupt the industry? How do we get to tipping point- These are the questions that George Karibian, CEO of e-tailer Euroffice and his team have been asking themselves.
"Tipping" is Karibian’s way of describing a phenomenon that "suddenly takes off". He uses the examples of the Hush Puppy. Why did a shoe that was so big in the 1970s suddenly take off again so dramatically in 2000?
After a number of motivational team exercises, a brainstorming weekend in the country, and the compulsory reading for all 17 Euroffice staff of Malcolm Gladwell’s book The Tipping Point: How little things can make a big difference, the company finally came up with 100 ways to improve the business.
These largely translate into two paths that Karibian hopes will "tip" the business: the expansion of the Euroffice site into a business portal; and the launch of a wholesale operation called, rather predictably, Eurwholesale.
Eurwholesale.co.uk, which will be in direct competition with the likes of Staples and Viking, has been in a testing phase since its launch on 9 January this year. Karibian explained: "Eurwholesale is an OP-specific new site that will feature 3,000 products [as opposed to Euroffice’s 20,000 products]. It will be more focused and feature incredibly low prices."
Karibian is confident that the nature of his wholesale operation, based on Sam’s Wholesale in the US, is sure to "tip". The wholesale business, which will primarily target medium-sized companies of 20-25 people, will offer the lowest price in the market in exchange for a subscription fee and raised minimum order quantities.
"Eurwholesale will have the same profit margin as Euroffice but the value of the order will be much higher," said Karibian "Eurwholesale is about price, price, price – we are looking at every piece of the business to give that great price combined with great service. We will reduce the selection of products so we can negotiate better prices from suppliers and streamline the process. Spicers is to be one of these suppliers," he added.
The new Euroffice business portal, which was set up at the end of last year, will continue to sell office products as well as new product lines such as flowers and business cards. It will also offer business services such as legal advice and insurance.
"We already have an ad server that does all the artwork to create a beautiful and automated backend, inspired by that of Google. This artwork is kept in a library we have created. Going forward, we will treat every part of the site like an expensive piece of real estate – this enables us to take the artwork out when we want it and change specials and deals everyday."
Karibian is hoping to grow the company from £13 million ($23.2 million) to £50 million within three years. With his track record, he could well pull this off. Having completed five years as one of the fastest-growing online companies, Euroffice scooped the Emerging Reseller of the Year award at last week’s European Office Product Awards in Frankfurt. In 2005, the company posted 36 per cent growth year-on-year, a respectable rate, but Karibian says he will not be satisfied unless that growth rate has gone up to 100 per cent by March 2006.
Some of the projects implemented as a result of the brainstorming sessions, such as the business portal, have already pushed the company’s growth rate up to 70 per cent. "If we carry on growing at this rate, we should be at £50 million within three years," says Karibian.
On Eurwholesale, Karibian admits it’s a waiting game to gauge the market’s reaction. "Eurwholesale will work, but we are not yet sure whether it will ‘tip’ us. We are sure that when the likes of Ryman and Viking compare our prices, they will be gunning for us. But we are ready to fight."