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Business-supply purchases stuck in deferral mode in aftermath of recession [Central Penn Business Journal (PA)](Central Penn Business Journal (PA) Via Acquire Media NewsEdge) REGION As business owners contend with the economy's struggle to recover by doing what they can to control office expenses, a scent of hope wafts from the break room. Coffee sales are increasing even though commodity costs more than doubled during the past year, said Mark Sakalosky, general manger of Coffee Time Inc. The Lower Allen Townshipbased firm sells coffee supplies to convenience stores, restaurants, offices, health care facilities and factories. "Our sales trend has remained positive overall, even during the down economy," he said. "Our office coffee service has enjoyed that same positive trend. We have seen modest movement in product changes, but that is generally a result of the 100-plus percent increase." Also, office-supply behemoth Staples reported its delivery service earnings grew by 2 percent in the first quarter, spurred by favorable exchange rates and higher sales in areas such as paper and break-room supplies, compared with the same period in 2010. Retail sales at its 1,901 North American stores, including nearly 20 in Central Pennsylvania, inched up only 1 percent. Gently used furniture gains a seat Another way businesses are holding the line on expenses is buying or leasing used furniture, said Ron Vestal, owner of Office Furniture Outlet in York. "We have used and reconditioned furniture. What we've been doing for 30 years is suddenly cool. It's called 'sustainable,' " he said. That portion of his business has doubled over the past couple of years to about 10 percent, Vestal said. It's a small segment, but it kept him going when some of his peers disappeared. Sales are starting "to creep back," with customers looking for lower costs and more function for their dollar, he said. "We're dealing more with smaller companies," Vestal said. "Larger companies downsized, and they have products from when they closed down other divisions. They consolidate material and move it from place to place." Leased furniture enables emerging businesses to dedicate their capital to staff, production and promotion, rather than sinking it into furniture, Vestal said. The option also has tax benefits in that leasing furniture is considered an expense and doesn't have to be depreciated. he said. Vestal said he doesn't have to do much searching for used furniture. "It finds me," Vestal said, adding that there is no primary source, but it comes from all over. "Most furniture companies won't deal in used furniture," Vestal said. "They think it tarnishes them. They think all the furniture has to be bright and shiny. That's not very environmentally friendly." As for new furniture, Vestal said suppliers are being more aggressive in their marketing. "Suppliers are much more proactive than they used to be," he said. "They offer a monthly special much more readily. We pass that along to our customers, so we order more. They see that their promotions are working. When they offer you a carrot, you've got to grab it, or they won't offer it anymore." He said he's accustomed to toughing out recessions, which, he added, occur every four or five years. "I've been doing this for 32 years. Nothing surprises me. I'm happy to see a dollar come through the door," Vestal said. But this downturn won't go away, he said. "We are at the bottom of this long, long climb," Vestal said. His workload now includes searching several suppliers to round up what his customers want, when they want it. "(Suppliers) don't have their lineup filled as wide or deep as they used to," Vestal said. Meanwhile, suppliers work harder to please him. "We're one of the people still alive, and our vendors know it," he said. Ink refill business runs dry The old cost-cutting standby of refilling printer ink tanks and copier toner cartridges isn't as easy as it once was, said Patrick Byrne, co-owner of 5-year-old Cartridge World in Carlisle Commerce Center in York. "(Manufacturers) are making cartridges much more difficult to refill," either by sealing them or putting in computer chips that render the tanks inoperable if refilled, he said. "For (Hewlett-Packard) cartridges, we have some workarounds. Dell is the most difficult to work with," Byrne said. "We're selling more OEM (original equipment manufacturer) cartridges, but we're a small business. We can't compete with big box stores." Copier manufacturers slightly alter their toner cartridges nearly each year so the refill market has to struggle to keep up. The cartridges also are smaller, but their prices remained the same, Byrne said. Byrne advised small companies to assess usage before grabbing the first inexpensive printer or copier they see. Some machines guzzle ink or toner, and others won't allow you to refill reservoirs. Those cheap printers cost much more in the long run, he said. As the refill market dries up, the franchise is shifting its focus to printer sales and maintenance. Byrne and his partners also opened a computer repair store. On a positive note, trying to keep all that going likely will require more coffee. "I've been doing this for 32 years. Nothing surprises me. I'm happy to see a dollar come through the door." Ron Vestal, Office Furniture Outlet By Lisa Allen Contributing Writer (c) 2011 Journal Publications Inc. |