Last summer, Paul Cohen of JPS Group, one of the UK’s most successful dealerships, hit the headlines when he helped to found United breakaway group Challenge Consortium.
Almost a year on, Cohen shares the secrets of his company’s success with OPI+ and claims that, so far, Challenge Consortium is going exactly to plan.
Contact details: JPS House, Tower Estate, Chalgrove, Oxfordshire OX44 7XZ, UK. Tel: +44 (0)1865 400 044; Fax: +44 (0)1865 400 022; Email: firstname.lastname@example.org
Products and Services: Office supplies dealer, print management, office interiors fit-out
Annual revenue: £6 million ($10.9 million)
No. of employees: 38
Contact names and positions: Paul Cohen, chairman, Frank Brazier, CEO, Jeanne Cohen, director
Company background: Founded as a partnership in 1984, JPS moved to offices in High Wycombe in 1986. We then moved to Chalgrove near Oxford in 1994 and became an incorporated business at the same time. Turnover in 1994 was £1.8 million. The company has grown to its present size by a combination of acquisitions and organic growth.
Stockless or stocking dealer: Stocking a limited number of SKUs
Preferred dealer group: Challenge Consortium
Are you diversifying into non-traditional OP product areas? Which ones? How necessary do you feel this is for dealers today?
We are constantly looking to diversify into new areas. Although the figures vary, there is no doubt that the traditional stationery market is shrinking, and I believe it is crucial that dealers expand their product offering. Over the past three years we have increased our catering and janitorial offerings, and have expanded our interiors division to include commercial fit-out. We are also offering a print management service.
Which wholesalers do you use? Do you feel your relationship with your wholesaler could be improved in any way and if so, how?
We moved our business to Kingfield Heath about a year ago. Since then it has given us a first class service and has worked closely with us on a number of projects, including production of our own Challenge Consortium catalogue.
Do you source any product direct from the manufacturer? If so, what percentage? Do you plan on increasing this percentage?
We only buy paper, key envelopes, some EOS products and a few specials direct from manufacturers. It amounts to about 35 percent because of the high volumes of paper and the high value of toner cartridges.
What would you say has been your company’s best decision and what has been its worst?
Our best decision has been to diversify into other product areas. Our worst was to buy a company at very short notice from the receivers.
How do you cultivate customer relations to ensure you are the first point of call for your customer’s OP needs?
It is always difficult to get customers excited about high-volume, low-value products like office supplies. Our philosophy is to "take the hassle out of buying office products". We try and work with our customers to demonstrate the financial advantages of dealing with one supplier for a range of items. We carry out regular review meetings and always try and bring something to the table, be it increased savings or added value.
How do you aim to differentiate yourself from other dealers?
We try to offer a comprehensive range of products at competitive prices, backed up with the best service possible. From our customer’s point of view we aim to be friendly and efficient. When our customers call or email us they get a friendly response from somebody who is genuinely interested in them and their needs.
Our experience has shown that customers don’t like change. Providing we offer a fast, friendly and effective package, our customers will stay with us. Assuming of course that we are competitive!
What do you feel is the secret of your company’s success?
Our secret is a combination of the last answer and staying ahead of the game regarding our internal systems. We began trading electronically with our customers over five years ago. At the time we were one of the first to trade online and we went through a very steep learning curve. Now, some 55 percent of our business comes in electronically, with all the increased efficiency that this brings. We also monitor all aspects of our financial performance very closely, and in particular changes in our operating margin.
We also have a great bunch of people working at JPS. Without their commitment we would be far less successful.
What do you expect to be your greatest challenges over the following year and how do plan on overcoming them?
Staying ahead of the competition is probably our biggest challenge every year. In particular I think next year will see the internet playing a bigger role, and we are bound to see growth from companies in this sector. We will be improving our website, and we are currently looking at niche markets within the online sector.
What are your priorities for the coming year?
We want to further develop our interiors division, with particular emphasis on the fit-out sector. We will also introduce a marketing initiative for our print management programme. Moving more of our business through the wholesale sector has freed up space in our warehouse and we want to utilise this by introducing stock management programmes for our customers.
How is everything going at Challenge Consortium? Is it working out as planned and what are your priorities for the group in the near term?
The Challenge Consortium has gone according to plan. Our first catalogue has been a great success and we are in the middle of finalising our 2007 publication. We have no immediate plans to increase our membership as the current members are very like-minded and we are all working towards similar goals. We have no central overheads, and our suppliers know that we can deliver the support that we promise.
Our priorities are to continue to build strong relations with our suppliers, to set up reporting systems within the group that will enable us to be more focused and to develop a catalogue that will deliver increased margins, whilst offering our customers a competitive price (a bit tricky that one!)
What trends do you expect to most impact the dealer community over the next five years?
I think the Challenge Consortium has started a trend that will continue. Larger dealers in particular are increasingly aware of the hidden costs of buying groups and of course the manufacturers are happy for the groups to dissipate, especially when they can sense the Holy Grail of compliance. I would foresee some groups merging and supporting the smaller dealers whilst the larger ones follow the path set by the Challenge Consortium — indeed this has already happened with the remainder of the United dealers forming a new group with very similar objectives to our own.
The other key area will be the internet. We still have only a tiny percentage of office supplies being ordered over the net, and you only have to look at the growth of the new players in this sector to see the potential.