Eakes Office Solutions thrives by providing customers with almost everything they need to run their businesses.
Above: Mark Miller, president Eakes Office Solutions.
I may be wrong, but you can probably count on one, maybe two hands the number of dealers selling document imaging technology, light production, wide format, document management, office furniture, office supplies, and janitorial supplies and service, as well as a few other odds and ends. One of those is Eakes Office Solutions in Grand Island, Nebraska.
One might think there’s no way a dealer can sell all of it well, especially when competing with the office superstores on the supplies side of the business. However, $60-plus million in yearly revenues proves it can be done.
Under Pressure
When I interviewed Eakes President Mark Miller on February 11, a little over four months into Eakes’ fiscal year, things were looking up. “Demand is good, and our top line is good,” he reported.
That’s not to say everything is rosy. “The pressure is on pricing,” lamented Miller. “In the copier world, the pricing pressure has not been as significant as the pressure in the office supply, janitorial supply, and furniture business. It’s something I’ve never seen before. In any given moment, we could be dealing with price increases from 50 different vendors.”
The biggest culprits are petroleum-based products and those made of steel and aluminum. “It’s not just the raw materials problem,” he said. “It’s also transportation. You just can’t get it. As the supply goes down, the demand is going up. It’s not so easy to raise prices repeatedly. And most dealers are not naturally equipped to raise prices this quickly.”
And the hits just keep on coming. One vendor recently notified Miller that the prices for all its products were going up on average 10%. “This was the fourth increase in 11 months,” noted a frustrated Miller. “It’s hard to keep up.”
Back Story
The dealership, known originally as Office Equipment Company, was founded by Howard Eakes in 1945 as a machine sales and service business. Over the years, it diversified its offerings and changed its name to Eakes Office Plus. Five years ago, it rebranded as Eakes Office Solutions. Today, it is one of the largest independently-owned office products dealers in the Midwest, with 14 locations and 275 employees servicing Nebraska, Iowa, Kansas, Colorado, and South Dakota.
Above: Howard Eakes (second from left) with his employees in 1951.
Howard retired in the late ‘80s and was succeeded by his sons Dan and Ron, who then turned the business over to Miller in 2000. Miller had spent the previous six years as Eakes’ IT manager. The key to carrying on the business was a good succession plan.
Above: Left to right, Ron, Howard, and Dan Eakes.
“In 2018, we created a financial succession plan, which included the ability for our employees to buy more stock in the company,” said Miller. “Before that plan was created, we had eight or nine owners. Now, we have about 30. This will allow me, as we grow these people and develop them, to slow down a little bit over time.”
Vendor Appreciation
Eakes sells Sharp, Ricoh, and HP A3 and A4. Eakes also sells Ricoh and Sharp light production and some Ricoh higher-end production machines. “Light production is in our wheelhouse, but production is intentionally not our focus,” admitted Miller. “We’ve got a big market though. When someone needs one, we have the expertise to sell it and we do.”
Above: In addition to wide format, Eakes also sells light production devices from Ricoh and Sharp.
Eakes’ copier division hasn’t been as challenged by supply chain issues as some of its competitors or been impacted by the same pricing issues it experienced in its other divisions. “In the copier world, most manufacturers have increased prices, but not at the same pace and frequency,” reported Miller.
As far as the supply chain, Miller noted, “We hear that Sharp has managed their inventory the best of all the manufacturers, and we feel that’s probably true. We hear that Ricoh’s second best, and that’s probably true. In the early stages of the pandemic, Sharp made some tough decisions about where to allocate chips, and those decisions have made a big difference.”
Eakes software providers include PaperCut for print management, docMgt for document management, and eGoldFax for cloud faxing. docMgt, a company based in Lincoln, Nebraska, is not a familiar name in the dealer channel, but its product serves Eakes’ customers well. Miller describes docMgt as a “functional, reasonably easy to use document management solution.” It’s scalable, enabling Eakes to place it in organizations of all sizes.
Some of the best placements for eGoldFax are in healthcare and education. “It’s a good recurring-revenue product,” said Miller. “I don’t want to take on anything that’s not going to have some kind of recurring revenue either from a subscription base or term agreement.”
Managed IT is currently not something that Eakes offers, although that could come into play as the dealership rounds out its solutions division. “Ten years ago, every copier dealer had to have some kind of managed service division,” recalled Miller. “I remember going to Sharp dealer council meetings and Sharp dealer meetings and thinking, we’re getting behind. We did fall behind to a degree. That’s why we created our technical solutions division, which is doing great and has helped us accomplish much of what the other guys’ managed services divisions did in terms of recurring revenue.”
Miller also determined early on that if he couldn’t buy an MSP, he didn’t want to create a managed services business from scratch because, he said, “the ones that are out there are really good, and it’d be hard to be that good.” He added, “I watched my peers work hard to make those work, and some of them did, and some of them didn’t. We are training to an approach that makes sense and can allow us to tag onto some of our good customers and provide some MSP services that will not only help them but provide us some profit on the bottom line.”
Above: Eakes’ Grand Island showroom showcases the many products it sells and also offers a comfortable environment for visitors to relax and ponder their next purchase.
As a Steelcase dealer, Eakes aligns with one of the premier furniture brands in the industry. In addition to a full line of office supplies, it also offers customers imprinting services for forms and checks as well as on mugs and whatever else might need imprinting.
The janitorial supplies division, which launched five years ago, has grown to become one of the larger divisions in the company. It encompasses a wide range of cleaning products and chemicals, as well as equipment such as scrubbers and sweepers. Eakes also services that equipment. “In order to be a good equipment sales company of janitorial products, you need a good service division just as you do with copiers,” said Miller.
The copier division represents about 35% of overall revenues while janitorial is in the 15% range, and the office supplies and furniture division make up the remaining 50%. “Office supplies and furniture are strong divisions and continue to grow,” said Miller. “In a lot of ways, we need to continue to push a combination of organic growth and acquisitions to make that happen.”
Above: A dealership like Eakes that sells so many different products needs a large distribution center to handle all this inventory.
Asked if he’s surprised that the office supplies division continues to thrive despite competition from the office superstores and Amazon, he said, “to a degree.” “It’s how you run your business, how you work with your employees, how you see the market, how you treat your customers, and what you do to make it grow. To be honest, the decline of the click puts the copier division at the same kind of risk. But, in all fairness, good dealers see that coming and bring on additional services or products to help supplement that revenue.”
Until about three years ago, Eakes had more than 300 employees and 10 retail stores where customers could walk in and buy their office supplies. Things have changed. “That model isn’t the world’s greatest anymore,” said Miller. “We’ve seen a lot of companies pull out of retail over the years. Oftentimes, they moved to a different facility, but we didn’t do that. We kept our facilities and revamped the showrooms for copiers and furniture. In the downtown areas, we have a little more space than we need, but we’ve kept our brand and image intact.”
Each division of the company has dedicated reps with a product manager responsible for overseeing that division. “They’re pretty much the expert in the category,” said Miller. “Their job is to make their division great and better than the competition. “Most competitors don’t have all the divisions we have, so they can be—and have to be—pretty focused on it.”
The dedicated reps for each product category are responsible for hitting their numbers and focusing exclusively on that product category. If a customer is interested in a product or products from a different Eakes division, those leads are passed on to the rep in the appropriate division. “That’s a very powerful component of our business,” said Miller. “A supply rep doesn’t sell copiers, and a copier rep doesn’t sell furniture. They’re somewhat siloed, and yet, we enjoy a good advantage by them being able to share what they know [with each other].”
Growth Through Acquisition
Acquisitions have been a key contributor to Eakes’ growth. During the past 10 years, the company has averaged about one acquisition per year. Some were copier companies, others office supply stores, and still others janitorial-based companies. Eakes has expanded into South Sioux City, Nebraska, which Miller said is the farthest northeast it goes, as well as Scottsbluff on the western edge of Nebraska. Most of the other acquisitions were closer to its home base in Grand Island. Its most recent acquisition in January 2022 was OfficeNet in Fremont, Nebraska. “It’s always a challenge to buy a larger company like that, but our team’s done a great job of folding them in,” said Miller.
Eakes’s acquisition strategy is centered around buying market share while ensuring that the deal is fair. “I always want the selling owner to have a win,” he said. “They tell us what they want, and we try and make it that way. Then, they’re happy and willing to work with us to tell the story in their communities that they selected a partner to carry on what they started. It’s a story we want to share with all the customers of the acquired company.”
Looking Ahead
As Eakes approaches the midway point of its fiscal year, Miller sees continued growth ahead. “We look for slow and steady,” he said. “We don’t have any vision of trying to bump up double-digits every year. Our market is not that big. But, we also don’t have any vision of not growing. We create a strategic plan in the fall of every year that will give us slow and sustainable growth for the long term, and that strategic plan will guide us by category.”
Looking longer-term, he references the importance of having a solid succession plan. “We can be around for a long time, and we want to do that.”
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