It was recently reported that Staples and Office Depot are in advanced talks to merge, which begs the question: what should our firm do with our office supplies contract? There are several options.
If you are with Staples you can sit on the sidelines and watch what happens to the market, but chances are you will see your pricing increase. If you are with Office Depot and you don’t want to become part of the Staples family, what are your options?
Will it actually happen?
Chances are it will; the last time this merger was attempted the online aspect of purchasing was just blossoming, which creates a new environment ripe for this type of merger to be approved.
Opportunities for regional players.
This merger, which leaves only one major national bricks and mortar player, is a great opportunity for regional players to expand their turf utilizing their wholesaler network for logistics. Players such as W.B. Mason are in an excellent position to capitalize in this marketplace.
What about online retailers?
Online retailers such as Amazon, Quill, Shoplet and Reliable will also greatly benefit. They are currently offering options for multiple buyers and ship to addresses, but lack the contract and non-contract pricing structure most firms are accustomed to which will be problematic businesses that like this protection. Rumors have it that they are looking to expand their options in this area.
How will the wholesalers like SP Richards and United handle this merger? Obviously they are losing distribution channels so they are not expected to sit on the sidelines.
Regardless of which option you are contemplating, it is great time to review your contract and conduct a Request for Proposal. Staples and Office Depot are still competing up until the actual merger plus the regional players will be aggressive. In the right situation, the Amazons of the world may not be a bad choice. Watch this space for future developments.