It has already happened at the reseller level with the likes of Corporate Express and OfficeWorks. Now convergence in the supply of office products and IT consumables looks set to move through to the distributor channel.
Daisytek is adding new meaning to the much-touted phrase value-add, giving resellers the chance to move into the lucrative office supplies arena when it expands its product offerings on February 1.
The move follows the acquisition of General Stationery Supplies in July. The marriage of office and IT products is nothing new in the retail channel, but distribution is a very different beast.
Daisytek believes it will shake up the office product distribution market with its low-cost distribution model; its current operational costs are around 12 per cent less than traditional office product distribution. Drop shipments remain the heart of the concept.
"In the IT supplies game, we are a logistical arm," said Daisytek managing director Paul Connelly. "We would probably supply 90 per cent of suppliers that go into retailers, and in retail it is all about 'delivery in full' and 'on time'. What Daisytek is good at is being a logistics partner."
"Our warehouse is over six acres -- an IT distributor could carry that whole value in a warehouse one-sixtieth of that size," said ACCO national marketing manager Mark Griffiths. ACCO is somewhat of a giant in the office supplies game, but uses distributors such as Tech Pacific to distribute IT products such as its Kensingston range. Griffiths agreed the line between the two markets was becoming increasingly indistinct.
"As a brand owner, the customers are doubling up on both the office product and the IT supplies side," Griffiths said.
The move will give resellers the opportunity to expand into a market that is worth more than $4 billion, by offering more than just the standard fare of IT supplies. Daisytek has quietly been adding a range of hardware products to its product line over the past 12 months, with vendors such as Iomega, Lexmark and Kodak. Additionally resellers can achieve cost savings of between 4 to 6 per cent, with Daisytek handling the logistics, Connelly said.
"As we move forward into office products the logistical side takes on a whole new meaning."
But the move will also be a challenging one, Griffiths warned. "It has so many unknowns and it relies on a lot of trust as well as excellent delivery and implementation. But it is a terrific concept. They do it overseas, so it will be interesting to see how Daisytek goes here."