Normally, business at Cartridge World in Salem is ramping up during March. Tax season is the busiest time of year for the business, which provides ink and printer solutions for individuals and businesses. But last year, after a stellar first-quarter, tax time was a bust.
“April was terrible because none of that happened,” said Brian Gallagher, president of Cartridge World.
As tax deadlines were extended and offices closed, Cartridge World saw a major shift in business. Years earlier, Gallagher realized that it was more profitable to focus on a business to business sales strategy, rather than business to consumer.
“We had been transferring from business to consumer to direct to business, which is more profitable to us,” he explained. “I could spend an hour with one person walking into the store and make $10, or spend that hour on a business account and make $1,000.”
Because of that shift, 90% of revenue at cartridge world came from business clients. But as offices closed that dwindled to about 20% of the normal rate, Gallagher said. Not only were companies printing less, but they weren’t interested in having Cartridge World employees come into the office to service printers and other equipment.
Luckily, there was a small silver lining: with more people working from home, the demand for direct to consumer sales rose.
“We doubled our in-store sales, but at same time we got nothing on the back end,” Gallagher said.
Revenue at Cartridge World was down 28% during the second quarter. Gallagher laid off the eight employees that service printer clients at their businesses and offices. Although most of the accounts are casual, Gallagher said that he didn’t feel right charging people for ink even if they were on contract to buy a certain amount each month.
“Technically we could, but I didn’t feel right doing that,” Gallagher said. “I can’t in good faith bill you.”
That decision created a lot of good will with clients, Gallagher said. As the year went on and people began returning to their offices, clients came back to Cartridge World. Gallagher hired three people to take care of on-site servicing. He was surprised to see that three could handle the work that eight people did before, in part because Cartridge World still aims to limit visits to clients’ offices.
“Going into offices every day is not a smart way to do things,” Gallagher said. Now, the business relies more on shipping or drop-offs to get supplies where they’re needed.
Thanks in part to a strong first quarter and streamlining operations, Cartridge World ended 2020 with business only down 11%, Gallagher said.
Gallagher hopes that with many businesses trying to streamline their operations, more people will look at having their printing needs serviced. Many small businesses “have no idea what they’re spending on ink and cartridges,” he said, because the supplies are purchased here-and-there with little oversight. Having an invoice from one vendor, like Cartridge World, can be eye-opening.
“I think our market is still there, still strong, still growing,” Gallagher said.
This story is part of the 50 Businesses, 50 Solutions series, shared by partners in The Granite State News Collaborative, that aims to highlight how business leaders across the state, from mom and pop shops, to large corporations have adapted to meet the challenges and disruptions caused by the novel coronavirus in the hopes others may be able to replicate these ideas and innovations. Tell us your story here. For more information visit collaborativenh.org.