In December of 2009, I published a report comparing Staples .COM prices to the prices a Staples Business Advantage customer was paying. The Business Advantage customer uses a different site from the .COM customer and Business Advantage is operated as a separate division by Staples. Business Advantage is often refered to as Staples delivery business, or commercial division.
The 2009 report showed that over 52% of the business customer prices were higher than the .COM customer pricing. Thirteen percent were exactly the same price as the .COM customer while 34.5% were lower priced for the business customer. This comparison was made on the exact same items being sold in the exact same unit of measure on both sites.
Many people found this hard to believe, including some independent office supply dealers. I see this phenomenon all the time from consumers and independent dealers alike. I recon it is akin to Stockholm Syndrome, except in this case, they are defending the Staples’ advertising instead of captors.
It’s been over three years, so I thought it was time for a second look. Has anything changed in the last three years? It has changed, and not for the good if you are a Staples Business customer.
The same criteria was used in this new comparison, the exact same Staples SKU, the exact same item with the exact same unit of measure on both sites were compared. Here is how the numbers broke overall for the business customer prices compared to .COM customer prices:
Now the business customer is paying higher prices on 62% of the items as opposed to 52% in 2009. The items priced the same on both sites remained constant at around 14%. The 10% difference was all in the items that were previously lower priced to the business customer.
Last time, I only compared the items overall. This time, I decided to look deeper into the mix. I did this because many believe that while there are some items the business customer pays a higher price than the .COM customer, the business customer gets much lower prices on the everyday “A” items that they buy the most of.
“A and B Items” are commonly used terms in the office products industry to differentiate popular and fast-moving “A Items” from less common and slower moving “B Items.”
When I limited the comparison to only the A Items, this is how the numbers broke for the business customer prices compared to the .COM customer prices:
The business customer is still paying more than the .COM customer for over 50% of these common, every day, A items. While the percentage is a little better, it’s not what many think.
The business customer is getting a better deal on some of these A items. The items priced lower than the .COM customer percentage did go up to 35% verses 24% overall, but when I looked at these individual items that were lower, they were low dollar items: gem clips, staples, lots of items under a dollar with few over $10.
Those familiar with how these pricing games work always figured Staples was making up any A item discounts on the B items, but no one had ever done a thorough analysis to my knowledge. While it was not a surprise to me that Staples is making up A item discounts on the B item pricing, how much they were making up was a surprise.
When I limited the comparison to only the B items, this is how the numbers broke for the business customer prices compared to .COM customer prices:
The Staples business customer is really getting hammered on these B items when compared to the .COM customer prices for the same items. Seventy three percent of the B items this Staples business customer buys are sold to anyone, the general public, cheaper than their price on the Staples.COM site.
I am constantly challenged by independent dealers regarding the accuracy of this pricing. Many continue to assume that because they have encountered some pricing from Staples that was below their cost, really cheap products, that everything Staples sells must therefore be incredibly low-priced well below the dealer cost. This assumption proves false, year after year, analysis after analysis.
Another common question: So if it is accurate, why is it the way it is? I don’t know the answer to that question for certain, but I do have a guess.
The retail .COM sites are public and have to compete with Amazon, Google and others. The chain business sites are closed and customers cannot easily compare pricing on these sites. Prices from the retail sites have to be competitive in search engines while the contract sites are completely hidden.
This problem for the Staples business customer, the fact that thousands of items are being sold to the general public cheaper than the great contract pricing they were promised, is the biggest secret over at Staples. They don’t want the business customer shopping, they can’t afford it, so they use other tricks to keep them off the .COM sites. One of those tricks is rebates.
Staples uses rebates to keep the customer off the .COM site and buying everything from the business site. If you go off the reservation, you don’t get your rebate credits. Of course the rebates never equal the price differential, but that’s a topic for another post.