Large companies include Office Depot, Staples, OfficeMax, Unisource, and the distribution arms of large paper manufacturers. The industry includes "contract stationers," wholesale-retail chains, small dealers, and mail order companies that sell through catalogs or the Internet. The industry has become concentrated: the 50 largest wholesalers hold about 70 percent of the market. A large regional distributor has annual revenue close to $30 million.

COMPETITIVE LANDSCAPE

Demand is closely tied to the level of business activity. The profitability of individual companies depends on merchandising and an efficient delivery system. Big companies have economies of scale in distribution because they can supply a wide range of products to the same customer. Small companies can compete successfully by distributing specialty products or providing superior customer service. Operations are highly automated. Within the wholesale segment of the industry, annual revenue per employee is about $300,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

The industry distributes general office supplies, technology products, and office furniture. Paper and paper forms and envelopes account for about 35 percent of wholesale revenue. Technology products include personal computers and software, printers, calculators, telephones, etc. Toners and ink cartridges account for 10 percent of revenue.

Big chains, like Office Depot, buy products directly from manufacturers, but also buy specialty items from big wholesalers. Office Depot stocks 13,000 items at its customer service centers.