Incur Annually 2013
Table of Contents
Office Supply Expenditures Businesses Incur Annually | Research Report 1
Company’s Expenditures Overview 5- 6
Employee Evaluation of Office Supply Expenditures
Print Costs 7 - 8
Analyzing Print Costs
Annual Office Supply Expenditures 8
Past/Present Market Trends 10
Wholesalers Demand for Office Stationary & Supply Declines Technology & Purchasing Trends | Office Supply Market
Conclusion 11 - 12
Office supply expenditures incurred by businesses to perform daily functions is estimated to be in the billions of dollars of the global market. In the United States, wholesalers’ total revenue is estimated at $22 billion, according to an IBIS World Industry Report. This Office Supply Expendi-tures Businesses Incur Annually 2013 Research Report is focused on small companies’ spend-ing trends on office supplies; a company’s expenditures; type and cost of office supply expenses; print costs; and solutions for print management, control, and costs. Some of the information included in this research report was acquired from IBIS Research, Gartner, IDC (International Data Corporation), LyraResearch, and other sources
In general, e-Retail spending by consumers in all categories is projected to increase by 62% by 2016, which amounts to approximately $327 billion. Consumers, including companies of all sizes, home-businesses, and personal households, spentover $44 billion just on office supplies during 2012. Although there were billions of dollars spent on office supplies,while total revenue sales decreased from 2006 – 2011 by an average of 2.4%, theyincreased by 2.1% in 2012.
Spending and purchasing trends transformed over the years due to the recession, new technology, and print management.
Mid-size and small businesses are transitioning and/or including the use of mobile devices (BlackBerry and Smartphones) and tablets to the workplace.
Office supplies experienced a decrease in sales of items including the following; carbon paper, stationary products, cut stationary (folders, paper rolls, report covers, etc.), and envelopes. Pencils, mechanical pencils, and pens (ballpoint and refills) remained stable over the years. The demand for other office supply items, greeting cards, rubber erasers, wrapping paper, and tape declined. Ink and toner cartridges sales increased over six years. To promote a global green environment, ink & toner cartridges are being recycled and re-manufactured at a higher rate than ever. Recycling has created new businesses that offer quality recycled ink/toner cartridges and consumer incentives. Remanufactured cartridges and MPS (Managed Print Services) efficiently reduce office supply costs.
Office supply expenses account for 5% - 15% of expenses incurred by businesses. Companies which monitor office supply expense accounts save their businesses thousands yearly; companies failing to monitor those accounts, decrease their profitability.
A small business average annual cost of office supplies ($756.93), including print costs ($1,366.77) used by just one (1) knowledge employee, and is approximately $2,123 (based on a 4-employee office).
According to the “Global Managed Print Service Market 2011 – 2015 News Report”, the market for MPS services is a demand and is expected to grow in the future. Companies are requesting services to control, manage, and reduce printing costs.
Page 4 of 12 Small and mid-size companies’ office supply items include the
follow-ing; copier & printer paper, ink & toner cartridges, paper clips, staplers, staples, pens, pencils, markers/highlighters, business cards, envelopes, file folders, and similar items. Of all office supply items, the most costly are ink and toner cartridges. Copier/fax/printer paper is the next item that can be very costly. Monitoring the consumption of office supplies is a strategic way to help control costs. The cost of office supplies are often overlooked in terms of usage and controlling employees’ consumption.
During the most recent recession, wholesalers and retailers experi-enced a reduction in sales of office supplies, with the exception of ink & toner cartridges continued to experience a steady increase. The office supply industry has evolved in the last decade to include wholesalers and retail stores. The market of today now includes companies that remanufactured and sell ink and toner compatible cartridges, only the best of which offer quality services and prod-ucts.
Consumers and companies are increasingly relying on online e-retailers to purchase office supplies to reduce overall product costs and staff operational expenditures. Companies are now recognizing the need to manage and control these expenditures, and this is creating an increased demand by small and mid-size com-panies.
Previously, the trend of purchasing office supplies was only through catalogs and ordering by telephone/fax or visiting an office supply retailer or superstore. The emergence and acceptance of Internet E-commerce has made shopping convenient, accessible and efficient. New technology, including the Smartphone and tablet, are being installed with apps and used in the workplace to include print and shopping accessibility anywhere and anytime. This report exam-ines the expenses of a small busexam-iness, the different types and costs of office supplies, print costs, past/present market trends of the office supply industry, and solutions for print management.
The beginning startup process of a company consists of creating a budget of all potential sales and expenses. Office supplies is a category of expenses companies incur to start a business and for daily operation. Other expenses include expenditures such as, payroll, taxes, equipment, and miscellaneous (unexpected) expenses. Although office supply expenses account for only 5%-15% (10% average) of all expenses incurred by a company, it can be very costly, and requires control and monitoring, which can save thousands of dollars yearly.
Figure 1 below shows the different types of expenses and the percentile of each item included in an actual expense account.The main expenses that a corporation incurs on a yearly basis are salaries/wages, property lease, equipment, taxes, office supplies and other miscellaneous expenses. The amount of expenses varies according to a company’s spending habits, type of business, and the number of employees.
Office supply expenses can be very costly due to paper waste, theft, lack of document control & monitoring, and lack of print management.
There are different methods companies and corporations use to evaluate office supply expendi-tures. To evaluate office supply expenses of a small startup business, a budget is an essential tool. The expense budget includes estimates of expenses based on the number of employees and the amount of each expense item. Table 1 is calculated according to 4 knowledge employ-ees. Print expenses are evaluated separately because this reports primary focus is on the most costly expense - ink & toner cartridges.
Company’s Expenditures Overview
Employees Evaluation of Office Supply
ExpendituresSalaries/Wages 40% Equipment 25% Taxes 20% Office Supplies 10% Misc. Expenses 5%
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When analyzing office supply expenses, recurring items including toner & ink cartridges and printing paper are purchased on a monthly or quarterly basis. The information in Tables 1 and 2 below assumes the small company reorders supplies on a monthly basis because it is a startup business. There is one laser printer in the office that uses 4 toner cartridges (black, cyan, magenta, and yellow).
When estimating office supply expenditures, this report has only selected a small sampling of common consumable items. Many businesses require much greater demand for office supplies than is estimated here. The overall goal of this report is to provide actuate but conservative estimations based on an average knowledge worker within small and mid-sized companies.
Small 1 – 4 $181 – $725 $2,172 - $8,700
No of Employees Actual Monthly Print Cost Actual Annual Print Cost
Medium 20 – 75 $3,620 - $13,575 $43,440 - $162,900
Large 100 – 2,000 $18,100 - $362,000 $217,200 – $4,344,000
Table 1: Employees’ Actual Monthly and Annual Costs of Printing Supplies.
Office Supply Expenditures Budget
Office Supply Purchases Estimated Costs Actual Costs
Business Cards (4 - 250ct box) CDs (1 pack)
Calendars (desk & wall)
Letter/Clasp Envelopes (500ct & 100ct) File Folders (4 - 100ct pack)
Pencils (12 ct & 4 lead refills) Labels (750ct)
Paper: Copier/Fax/Print (5,000ct) Paper: Glossy Photo (100ct)
Paper Clips (4-Jumbo & Reg @ 200ct) Postage Stamps (100ct)
Stapler & Staples Staple Remover
Self-adhesive notes (4/12pk-100sheets) Tape Dispenser & Tape (refill-10ct) Miscellaneous $196.00 $140.00 $32.40 $27.54 $39.92 $33.93 $47.50 $40.38 $39.96 $33.97 $21.98 $18.68 $35.00 $29.75 $20.00 $17.00 $24.00 $20.40 $49.99 $42.49 $35.00 $29.75 $41.92 $35.63 $45.00 $38.25 $19.96 $16.97 $63.96 $54.37 $23.96 $20.37 $59.96 $50.97 $43.99 $37.39 $50.00 $42.50
For each knowledge employee, the per-page for printingis shown in Table 4.The total cost-per-page for each knowledge employee yearly is approximately $1,113 or $93 monthly. To print one black/white page is .2 - .05 cents per page. The total consumption of paper printed for one (1) employee is estimated at 10,101 sheets yearly. On a monthly basis each employee uses nearly 842 sheets for an average business. Printer-heavy businesses (like law firms, healthcare facilities and CPA offices) incur much higher costs than those shown below.
Analyzing Printing Costs
Knowledge Employee Print Cost-Per-Page
Black Toner $79.89 5,000.00 $0.02 $13.45 $161.44
Actual Cost Page Yield Cost-Per-Page Monthly Costs Yearly Costs
Actual Cost Sheets Yearly Usage
Cyan Toner $96.05 4,000.00 $0.02 $26.44 $317.25 Magenta Toner $96.05 4,000.00 $0.02 $26.44 $317.25 Yellow Toner $96.05 4,000.00 $0.02 $26.44 $317.25 Total Copier/Fax/Printer Paper (Case) Glossy Photo Paper (Pack) Total $368.04 $42.49 5,000 9,000 $7.08 $84.98 $29.75 100 1,101 $27.27 $327.25 5,100 10,101 $34.35 $412.23 $0.09 $92.77 $1,113.20
Monthly Costs Yearly Costs
Table 4: Knowledge Employee Print Cost-Per-Page Monthly and Yearly Costs
Printing is a daily task for both operations and administration. Print management helps avoid waste, monitors employees’ consumption, and avoids downtime. Downtime occurs when print-ing processes are interfered with because of havprint-ing to replace cartridges and/or printer mal-functions, causing productivity to decrease. The implementation of print management analyzes related printing costs associated to cost-per-page, regular maintenance, and consumptions of ink and paper.
Color Coverage Monochrome Coverage
1-2 cents 3-5 cents 4-6 cents 9-14 cents
TONER COST PER PAGE
2-5 cents 11-16 cents 16-25 cents 28-43 cents
TONER COST PER PAGE 1% Color
6% B&W 10% B&W 11% B&W 2% B&W 10% B&W 11% B&W 26% B&W
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The total estimated printing costs for 1-4 knowledge employees when adding color can increase dramatically based on page print coverage. (see Toner Cost Per Page) This estimate can conservatively range from $127 – $508 and the yearly printing costs can observe the difference in costs for a small company’s printing and office supplies. The printing costs for one knowledge employee are $1,525 and $171 for office supplies. The total office supply expenditures for the year are $1,697 for one employee and $6,786 for four employees (Table 7).
Knowledge Employee Printing Costs
No. of Knowledge
Monthly Costs Yearly Costs
1 $127.12 $1,525.43
2 $254.24 $3,050.86
3 $381.36 $4,576.29
4 $508.48 $6,101.72
Table 5: Printing Cost per Employee
Knowledge Employee(s) Office Supply Costs
No. of Knowledge
Monthly Costs Yearly Costs
1 $14.26 $171.12
2 $28.52 $342.24
3 $42.78 $513.36
4 $57.04 $684.48
Table 6: Office Supply Cost per Employee
Table 7: Annual Office Supply Expenditure Account
Annual Office Supply Expenditures (Office Supplies & Print Costs)
No. of Employees
$171.12 $1,525.43 $1,696.55
Printing Expenditures Total Yearly Expenditures
2 $342.24 $3,050.86 $3,393.10
3 $513.36 $4,576.29 $5,089.65
4 $684.48 $6,101.72 $6,786.20
Office Supply Expenditures
Annual Office Supply Expenditures
Use the figures above, a small business incurs total office supply costs of $6,786 (with 4 knowl-edge employees), with printing (ink/toner and paper) as the most costly expenditure at 90% of all office supply expenditures.
Despite billions spend on office supplies; wholesalers have seen a decline in revenue sales, especially because the Office Stationery Wholesaling industry demand for office stationery and supplies declined in past years as more individuals and businesses are printing their own, rather than sending it out to professional printers. Wholesalers are challenged with higher rate of competition including consumer on-demand printing accessibility and office supply super-stores offering additional print services. Online alternatives will continue to impact the office stationary and supply wholesalers due to constant technology changes and global environmen-tal consciousness. Statistics and data revealed that in 2011 there were 7,894 wholesalers in the United States with total revenue of $42.4 billion.
Wholesalers Demand for Office Stationary &
Past/Present Market Trends
Wholesalers were the top competitors before 2006 - 2011 and have loss revenue sales to superstores such as Office Depot, OfficeMax, and Staples. The superstores are considered as the largest office supply industry competitors in the United States according to the Market Research Report, Office Supply Stores in the U.S. (September 2012). Today, superstores are losing toner sales to compatible and remanufactured companies like Cartridge World, InkMart and Rapid Refill, which are providing both direct B2B and online sales to consumers. Re-manufacturing companies of ink & toner cartridges are introducing quality products, print management, installation, maintenance, and repair services. The target market focus includes home businesses and small to mid size businesses.
Office Suppy Expenditures Printing Expenditures
Annual Office Supply
coverage. The page yield is an estimate of the number of standard pages that can be printed with one cartridge at 5% page coverage. If the page coverage exceeds the standard coverage of 5%, the consumption of ink and toner cartridges will increase, as will office supply expendi-tures. Most photo printing coverage is almost 100%.
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Because of technology printer advancement, new trends of office supply selling, specifically print services and supplies has transformed and are being used to control costs and excessive consumption. Companies are using Wi-Fi, touch screen interfaces and double sided printing. Wi-Fi technology has spread globally and is now an important feature in today’s printers. These features are found in high technical models. The touch screen interface improves productivity and work flow of daily business processes.
Consumers purchasing trend has changed within the last 20 years. Catalog and telephone ordering arerapidly becoming things of the past. E-commerce is the primary source to shop and purchase office supplies. Online purchasing of office supplies save time and money with the various programs offered to companies. Discounts are often offered to customers purchasing in bulk quantities. There are over 30,000+ office supply items, furniture, and equipments offered from an online retail store.
Technology & PurchasingTrends| Office Supply Market
According to the Global Managed Print Service Market 2011 – 2015 News Report (November 26, 2012), the major influential factor for the global MPS market growth is to reduce costs. The market is expected to grow at an estimated rate of 20.61% from to 2011 – 2015. Some of the key competitors include, Canon, HP, Ricoh, Xerox and others.
Smartphone and tablet devices are being deployed more and more in the workplace today. Such mobility permits knowledge employees to create a high performance workspace accord-ing to Gartner, Inc. Technology Research. It transformed the office environment and changed how employees can work anytime, 24/7. Mobile and tablet devices have allowed them to efficiently network and print anywhere with Wi-Fi connections.
The office supply market today is shared amongst retail stores, superstores, and wholesalers. The billion dollar office supply industry is competitive even after a slow economy, with ink/toner cartridges and paper the top selling products. In 2010, the desktop ink jet cartridge revenue was $29 billion. This is expected to grow to $33 billion by 2015, with approximately 445 million units expected to be shipped to consumers in 2015.
What makes the office supply market competitively viable? The demand for on-site printing is increasing
e-commerce acceptability by consumers
e-retailers ability to increased inventory and convenience Greater recycling awareness by consumers
Volume and bulk purchasing incentives Free or priority shipping options
offers solutions including maintenance, repairs, copier/fax/printer paper, ink/toner cartridges, PMS, printer equipment & parts, fuser & maintenance kits, and other office sup-plies. Consumers conveniently order products and services online, call a toll-free number, or visit a retail store near them. Next day shipping and other economical shipping options are offered.
Most businesses incur office supply expenditures to run an office efficiently. The annual office supplies and printing costs for one knowledge employee can be as higher as $2,123. Printing supplies make up the majority of the office supply expense items, so the total annual printing expenditures are $1,367 (or $114 monthly) per knowledge employee.
Cost of office supplies varies according to the size of a business and number of employees. The data in this report was determined for a small business that employs four employees. Print management helps to resolves issues of excessive usage of office supplies, environment con-scientiousness, high costs, quality of products, and performance.
SBWIRE. “Global Managed Print Service Market 2011 – 2015 News Report”. 2012: 29 Dec. 2012 <www.mpsconnect.com/articles/share/449126/>
Gartner, Inc. Technology Research. 15 Dec. 2012:
IBIS World. “Office Supply Stores in the U.S.: Market Research Report”. (2012): 15 Dec. 2012
Haber, Lynn. “Lyra Research Report on Cartridge Markets”. 11 Nov. 2011.
Table 3. A basic business letter can cost around $0.10 to print: black printing only, bold in the address and signature lines, a little underlining, perhaps a simple logo, some emphasis in a different font, and this is when using a well-built toner cartridge. Even changing the font from Times New Roman to Arial increases the print cost. (Pharos Systems)