Have you ever been in the middle of printing an important document when your printer ran out of ink? And, when you tried to find some, found out that all of the office supply stores in your area were closed?
If you answered yes, Bill Zimmermann, owner of Ink Box, has a solution. Zimmermann, who was a finalist in the NEW Launch Alliance pitch competition at the Urban Hub in Green Bay, has developed a vending machine that dispenses the best-selling ink cartridges. It all started in 2017.
“From owning the business (he is owner of Office Outfitters in Waupaca), I had a lot of information on ink cartridges,” he explained. “I identified the top 50 bestselling ink cartridges and those are what are stocked in the machines.”
After coming up with the initial idea for a vending machine, he spent four months doing research and finding a manufacturer who could design a machine that accepted credit cards, couldn’t be vandalized, and could be customized. After doing a financial analysis, he decided on pricing and determined what his break-even point was.
"I knew what we needed to make this work, but from 2017 to 2019, we weren’t getting the numbers needed,” he said.
His initial plans to expand were put on pause. But then the pandemic hit, and the vending machine sales skyrocketed. Zimmermann said that growth was driven by multiple factors. More employees were working remotely and using printers in their homes, and online orders were backlogged. The machine became a way for people to get ink right away.
It was somewhat harder to fill the machine with ink because of supply chain issues, but he worked with vendors he had established relationships with.
“In 2020, sales tripled and I thought that, given the trends in retail buying, the it was time to take the leap and buy three more machines,” he said.
While his long-range goal is to franchise the concept, his current business model is to place machines in rural and high-demand areas in communities that are underserved by brick-and-mortar stores. Specifically, he has selected communities that once had Shopko stores that closed in 2019.
The next three machines were placed in Ripon, Wautoma, and Adams. Finding locations hasn’t been difficult. Zimmermann said he drives around and looks for a high-traffic location like a hardware or grocery store. So far, he has found that these stores have been happy to work with him because it adds another layer of convenience.
“Even though the pandemic meant that many people preferred the vending machine to in-store access because of safety, there are still people who prefer to buy out of a vending machine,” Zimmermann said.
Because ink is one of the main items that customers need to purchase, having the machine at his store allowed him to reduce store hours.
“I bought the machine and closed on Saturdays,” he noted.
His review of Saturday sales had shown that more than 80% of the total was for ink cartridges, and being open didn’t even cover the cost of electricity. That attention to detail has resulted in Zimmermann not only coming up with a great idea that other office supply stores might want to consider as a future opportunity, it is the way he built his existing business.
“The office supplies industry is shrinking, but I do see some growth for us in terms of market share," he said. "We plan to steal business from big boxes by doing more with each customer and increasing customer count. Our major areas of growth are in office furniture and janitorial supplies.”
These are areas that Zimmermann added to Office Outfitters, a business that has been around for more than 50 years, that he bought in 2007. He was an experienced marketing executive, and when a merger would have required a transfer, he took the leap into entrepreneurship. His goal of transforming the store into a “business hub” was realized and the store now features printing, office furniture and equipment, and a full range of supplies.
As the business grew, Zimmermann moved to a larger location and went from 2,500 to 7,000 square feet. An established promotional products business was purchased and added to make it “a one-stop shop for businesses in our community.” With an eye to convenience, Zimmermann said the idea for the vending machine was a logical step.
“I’ve been in this business for 15 years, and I’ve seen the panic that people have when they run out of ink,” he stated. “When I was working on my master’s degree, I remember that feeling when I had a paper to print and no ink. I was fortunate because the previous owner of the store actually came down and opened the doors so I could buy some. I thought, ‘How many people are like me? You need to print a paper and need ink, what are you going to do?’”
Now Zimmermann has provided the answer and is looking forward to future growth. As the vending machines have taken root, he believes that he could successfully have 20 locations that would be serviced with his existing route drivers, and beyond that, franchised locations in small communities everywhere.
Tina Dettman-Bielefeldt is co-owner of DB Commercial Real Estate in Green Bay and Past District Director for SCORE, Wisconsin.
This article originally appeared on Green Bay Press-Gazette: Waupaca man's ink vending machines found niche during the pandemic