NFIB

Teaming Up with Competitors
03/ 28/ 2002

Joining together with your competitors might help boost your business during a tough economy. Whether you join a national organization or just have a standing lunch with local business owners in your industry, teaming up helps you find support and ideas.

By joining together, a national group of independent office supply stores found a way to offer better prices without compromising the service customers enjoy at locally owned shops. The secret? Purchasing power.

Since 1977, the IS Group has provided its members access to vendors and product prices normally only enjoyed by large chains. The 555 members, found in all 50 states, pool their resources to negotiate better prices with large distributors that might not deal with them on an individual basis. The member-owned group also publishes customized supply catalogues that are branded for each member's store.

"It helps us stay competitive with the large chains," says Harry Macey, owner of Perry Office Plus in Temple, Texas, and member of the IS Group since the early 1990s.

In recent years, independent office supply and furniture stores have faced severe competition from large office product corporations. By joining IS Group, members can offer their customers broader selections and better prices along with the quality customer service that locally owned stores can provide.

"Our memberships allows us to keep customers from going somewhere else," says Macey, who has 57 employees at four stores across central Texas. "Independent folks do the best job meeting the needs of customers. Some of the big chains just concentrate on volume selling."

The IS Group recently created an online ordering network for its members' customers, something Macey says he never would have been able to afford on his own.

"A big part of this business is moving to electronic ordering," he says. "I couldn't have spent the money to build a computer network system, but this will definitely help me compete."

IS Group has no rules that limit the number of members in a geographical area. In fact, there are a few other group members in Macey's market.

"I don't see the other independent guys as a major threat," he says. "It's the contract folks that come in and take the market share away. And they aren't servicing the customers better."

Some partnerships with competitors are forged by accident. Maxine Turner, owner of Salt Lake City-based catering company Cuisine Unlimited, was forced to turn to her competitors last March when the invitation list for a sit-down dinner suddenly grew from 350 to more than 900 just two days before the event.

"We immediately started making calls to other catering companies, looking for anyone to supply additional wait staff and kitchen space," says Turner, whose 21-year-old catering company is one of the largest in Utah.

Surprisingly, five smaller companies that had initially bid against Turner on the event agreed to help, and the dinner went smoothly. Turner says she never worried about revealing any secrets to her competitors on running her business.

"The other caterers all said they looked at it as a learning opportunity, to see how an established company like ours handles a job," she says.

Their generosity paid off. As one of the host caterers for the Salt Lake City Winter Olympics, Turner has recommended many of the smaller groups for the large corporate-sponsored catered events surrounding the Games.

This Web extra is a supplement to the MyBUSINESS story, "Rivals in Harmony," which appears in the February/March 2002 issue.

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