By: Rick Marlette – Co-owner, OPSoftware, LLC
I’m a huge fan of the research Independent We Stand provides on what happens to your money once a chain store gets ahold of it. In my business, I focus on the front-end pricing practices of the chains, how they lure the money in to begin with.
Whether you have school-age children or not, it’s almost impossible to avoid the barrage of back-to-school advertising from the national chains. This includes all the office supply chains. Back to school is as big, if not bigger, than Christmas to office supply chains. But are the so-called deals really that good?
For the last ten years I have monitored the website pricing from the national office supply chains. Every year the national office supply chains have lowered the prices for a few back-to-school items, while at the same time they raise the prices on most other items. These price increases are often staggering. Fifteen, twenty and thirty percent higher than manufacturer suggested retail selling prices are very common.
Then there are the perception games the chain retailers play. One national chain is touting “essential back-to-school items on sale for under a dollar.” Who can resist such a great deal?
Let’s take a look at a very popular student ruler being promoted as on sale for back-to-school at this national office supply chain. The chain has this ruler priced for just $.99, under a dollar as advertised. However, the manufacturer suggested retail price for this ruler is $.80. If you buy this ruler at this chain, you will pay a twenty percent premium over the manufacturer suggested retail price. There are thousands of items like this, on all of the national office supply chain websites, priced well above the manufacturer suggested selling price.
The exact same ruler normally sells for $.49 at a typical independent office supply company. Also at the same independent company, this ruler is currently on back-to-school sale for just $.39, a sixty percent up-front savings over the national chain price.
The most common question I am asked is, “How is it possible for an independent to have such better prices than a national chain?” The answer is that a typical independent does not have the high overhead associated with most national chains. National chains frequently spend hundreds of millions on advertising, sports arenas, race cars, teen band sponsorships, they occupy high rent stores, pay stock holder dividends and have astronomical executive compensation packages. These are only some of the many expenses independents cut out and pass on to the public in everyday low prices.
Independent We Stand research proves conclusively that more of your money stays in the local community when spent with a local independent business. Now you also know that it takes less of it when you see through the hype, know the facts, and buy from the real deal, your local independent!
Rick Marlette is the designer and creator of OPSoftware and the industry’s most popular competitive database. He has worked independently for many years in various facets of the Office Products Industry developing specialized programs and databases for independent office products dealers.
As an outspoken and energetic advocate for independent dealers, Rick has successfully helped many dealers win record setting bids and exposed overcharging and bid mismanagement by several institutional players in the office products industry.
Rick created the very first chain cross-reference to wholesaler item numbers in 1998, added pricing in 2002, and partnered with United Stationers in 2004. In 2010, the relationship with United was expanded resulting in the premier competitive intelligence suite to date, United Market Xpert.
The future looks bright for independent dealers and Rick will be there with the vision making sure they have both the tools and data to keep on winning!