E-commerce continues to increase in importance at Essendant Inc., the distributor of office and industrial suppliers to thousands of other distributors, resellers and retailers.

For the first quarter, Essendant’s e-commerce sales were between 13% and 14% of total revenue, putting online sales within a range of $175.80 million to $189.32 million out of total net sales of $1.35 billion, chief financial officer Earl Shanks said today on a conference call with stock analysts. By comparison, total Q1 sales inched up 1.5%, to $1.35 billion from $1.33 billion.

Essendant defines its online sales as sales processed through its thousands of online distributors, wholesalers and resellers—many of which use the company’s technology and services to operate their own e-commerce sites to sell to their customers—and sales to the e-commerce operations of major retailers, including Target Corp.’s Target.com.

Robert Aiken, president and CEO, attributed the increase in e-commerce sales to several developments, including many of Essendant’s customers doing more of their business online. Many of those customers now process “50% to 60%” of orders online, he said on the conference call.

Aiken said the growth in online sales has also been aided by Essendant’s development of a new online platform that its wholesale customers can use to order products from multiple divisions of Essendant. Although the company didn’t specify the number or value of transactions placed through that platform, Aiken said it was built in-house and designed to make it easier for Essendant’s customers to order across multiple product lines, including such core categories of office products as furniture and breakroom supplies, and janitorial-sanitation products. Now customers can buy across those categories with “one order, one shipment, one invoice,” he said.

advertisement

Aiken noted that the common ordering platform now accounts for about 80% of Essendant’s business. The company plans to extend the platform this year to the rest of its business, including automotive, and industrial products for manufacturers and petroleum suppliers.

The new ordering platform has also helped Essendant to line up new large customers in recent months, which also helped drive up Q1 sales, Aiken said. He declined to name those customers, but said Essendant is also making plans to handle additional large customers if the pending merger of Staples Inc. and Office Depot Inc. is completed. Should the merger go through, Essendant will move forward with an agreement to pay Staples about $22.5 million to acquire a wholesale business representing more than $550 million in annual sales.

Essendant changed its name last year from United Stationers to reflect its broadening selection of products beyond office supplies.

For the first quarter ended March 31, Essendant also reported:

advertisement

Operating income of $32.40 million, up more than tenfold from $2.81 million in the year-earlier quarter. The company attributed the increase mostly to more efficient warehousing and other operations that resulted in a drop of nearly $30 million in operating expenses;

Net income of $16.5 million, compared with a net loss of $6.0 million.

Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web— Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Paul Demery, editor for B2B e-commerce, on Twitter @pdemery.

Follow us on LinkedIn and be the first to know when new B2BecNews publishes new content.

advertisement
Favorite