Each year, businesses spend billions of dollars on office supplies such as pens, paper, toner, paper clips, and notepads. Since most purchases consist of many inexpensive items, it can be difficult to get a sense for whether you are paying a fair price for these supplies. However, with a bit of comparison shopping, businesses can save as much as 10%-20% per year on office supplies.

This guide is designed to help you save money on office supplies. The various sections are listed in the box above. You can choose to read this guide from beginning to end, or jump directly to a section of interest by clicking on the links above.

Sources

Office supplies can be purchased from office superstores, mail order companies, local independent dealers or through a contract stationer.

Office superstores
Superstores combine outstanding marketing with tight cost controls to attract customers. Suburban locations and warehouse-like stocking helps keep overhead low, while their enormous sales volume allows superstores to obtain deep discounts from manufacturers.

Mail order vendors
Mail order vendors cater to the same small businesses as office superstores, but tend to also appeal to larger companies. These vendors rely on catalogs for their marketing efforts, offering toll free order lines and inexpensive shipping charges to compete with local firms. With distribution centers strategically located, mail order vendors typically offer delivery within 1-3 days of an order.

Local independent dealers
Before the advent of superstores and mail order, the local office supply dealer was the primary source of supplies for most businesses. These dealers usually offer the broadest product selection, making them a good resource for hard-to-find items. Today, office supply dealers are a dying breed, with more than half exiting the market in the past ten years.

Contract stationers
Primarily targeting businesses of 75 or more employees, contract stationers offer a very broad product line, custom pricing, and full service offerings to attract larger businesses.

Breadth of Selection

When it comes to product selection, contract stationers and office supply dealers are the hands-down winners. Contract stationers and office supply dealers typically carry around 25,000 different products, or approximately five times as many items as an office superstore. Office superstores and mail order vendors usually supplement their basic catalog with a stationer's catalog to offer comparable depth. However, these goods will not be immediately available for purchase.

Pricing

When buying in small quantities, you will often find superstores and mail order vendor prices offering the lowest prices because of their ability to buy in bulk. Both channels commonly sell popular items priced at or below cost to attract customers. These losses are made up for by strategically placing higher margin generic items and over-priced impulse items.

Firms that purchase office supplies in large volume will often do much better negotiating prices with a contract stationer for frequently ordered items.

Because contract stationers know you will compare prices on the most commonly purchased items, they tend to offer very competitive prices for everything on your list of commonly purchased items. By including an accurate assessment of the items you expect to order, you can minimize the higher amount you will be charged for items not on your price sheet.

In addition to securing pricing for your most often purchased items, you may want to guarantee the prices for other items. See if the company produces an in-house sales catalog against which you can check pricing. In addition, it makes sense to agree upon a discount (as much as 35%-40%) on items ordered through the full-line catalog.

Service

Selection and price are not the only concerns when choosing an office supply vendor. You should also consider service aspects such as ordering, delivery, and reporting.

Ordering options vary quite extensively from one vendor to the next. In some ways, mail order vendors offer the easiest ordering, with extended hours or 24-hour service. Most also offer some sort of ordering via fax or online services.

For larger clients, contract stationers are often more convenient, offering bulletin board and advanced EDI (electronic data interchange) systems for automatic restocking and billing. In some cases, contract stationers will even come to your office and take inventory to identify which items you need.

Delivery practices tend to be more similar across vendors. Most offer free delivery, although some set minimum orders for free delivery. Mail order vendors are the most likely to charge for delivery, while office superstores and office supply stores often limit deliveries to businesses within a certain radius.

Reporting is one office supply service that can be very helpful, especially for larger firms that want to identify where money is being spent. Contract stationers usually offer the most comprehensive management reports, breaking down orders by department or product type.

Buying Tips

Some low prices do not indicate good deals all around
Although vendors may advertise very low prices for certain goods, do not automatically assume other products for sale are also good deals. This holds particularly true when buying non-essential office supplies such as shipping materials or computer accessories.

Getting better price quotes
To obtain the most favorable pricing from prospective vendors, draw up a list of the twenty products that are used most frequently in your office. Then, ask for price quotes for this list with a couple of contract stationers in your area and compare these prices to those of the same products at your local superstore.

Warehouse clubs
Warehouse clubs are a good option for discount pricing on many common office supplies. After paying an upfront membership fee, customers can take advantage of the bulk buying power and exceptionally low overhead of the warehouse format. The greatest drawback is that warehouse clubs tend to have a very limited, varied selection, which will be a problem for all but the most flexible consumers.

Only ask for services that you need
When comparing contract stationers, make sure to evaluate the services that you require. Although contract stationers do not explicitly raise your prices depending on the level of service you receive, it is certainly factored into future rate increases. You should ask only for the services that will help your business function more efficiently. Do not include services in your agreement just because they are "free."

Rebates for high-volume buyers
Some contract stationers offer a 1%-2% rebate if your total buying over a given year exceeds a certain level. In most cases, you should expect to spend at least $10,000 per year to qualify for rebates.