Ex-sales rep's office supply system pushes the envelope

Tired of what he called "the bureaucracy of the big corporation," Ron Weber ended a 25-year career as a sales rep for manufacturers and dealers of office supplies and in 2005 bought Minnesota Computer Supply Co., a company that distributed computer accessories in the Twin Cities area.

Weber, 50, proceeded to expand the scope of the Plymouth-based business to include a broad array of office supplies and hoisted sales nearly 50 percent in three years, from $400,000 in 2005 to $590,000 last year. The company, now called Minnesota Computer & Office Supply, is on track to gross $650,000 in 2009 sales.

But all this was just buying time for Weber to reach his main objective, which was to mine the Internet in pursuit of some real growth.

It appears he hit the mother lode. Late in 2007, he founded iBuyOfficeSupply.com, an e-tailer of 50,000 stock-keeping units (SKUs) of office supplies and furnishings ranging from pencils and paper clips to clipboards and clocks and from calculators and vacuum cleaners to desks and chairs. Oh, yes, and Starbucks coffee and the equipment to brew it.

With a price-driven strategy based on a low-cost business model, Weber built iBuy's sales in 2008, its first full year, to $2 million. And with sales growing 10 percent a month for the past six months, the business is on track to approach $4 million in 2009 sales, he said.

"The perfect order for us is one we never touch," Weber said of iBuy's business model, which allows the company to survive in competition with the brawny likes of Staples, Office Depot and Office Max.

Translation: The company has no warehouses, owns no inventory and has most of its orders entered by customers online and processed automatically.

The upshot: iBuy has just seven employees, including Weber and John Jordan, a veteran Internet marketing specialist who labors as iBuy's director of online operations and makes the business click with optimization strategies that maximize website hits when consumers go searching for office supplies.

Equally important, Jordan, 48, has built relationships with more than 400 affiliate websites on which iBuy can be found and which collect small commissions on each sale they generate.

In short, their skills and experience complement each other perfectly, Weber said.

The focus, from top to bottom, is on price. Pricing on key items is changed up or down daily to reflect competitive moves or consumer demand. And across-the-board analysis of the pricing structure is conducted quarterly to assure competitiveness.

Meanwhile, the hunt for cost savings can involve even small items in the budget. For example, growing volume and tough negotiation have reduced payments to processors of iBuy credit-card sales from 3 to 2 percent of sales, which saves nearly $1,700 a month.

Weber expects growth trends to continue for several reasons, including the addition of 15,000 new products to the iBuy website in January and the listing of 14,000 SKUs on Amazon.com in February.

In addition, Weber cut a deal in March with an international shipping company to distribute orders overseas, and in the second quarter iBuy will add a Canadian website to be served by one of its U.S. wholesalers with five Canadian warehouses. Initially, the website will offer about 9,000 of the bestselling SKUs.

Perhaps most important, iBuy has reached agreement with a wholesaler of medical supplies used in the home to begin marketing items ranging from walkers, wheelchairs and adjustable canes to blood-pressure kits, diabetic supplies and carpal-tunnel braces.

Weber also is in negotiation with another wholesaler to add industrial items to his catalog such as safety helmets and glasses, hand tools and ladders and small engines and power washers.

All of which raises the question: What recession? Indeed, iBuy's pricing strategy clearly is attracting customers bent on savings as the economy nosedives.

The customer: the Staples corporate office in New Jersey.