The reduction of the sales force has begun. 80% of the reps need to re-apply for their positions under the farce of a sales reorganization. They will be interviewed and then told whether or not they will be a part of the "new" organization. The result will be less reps making less money. The long term result will be less motivation to service and sell resulting in lost business. If the management of OMX were any more stupid, they'd have to be watered twice a week.
Late October of this year a Black Friday Add featuring the OfficeMax Logo was leaked onto the internet. The add featured many 'door buster' deals including, but not limited to an Acer Netbook at half off the normal MSRP.
Within 48 hours of the add being posted to numerous websites, the OfficeMax legal team began to send out letters demanding the add be removed stating, 1: The images used violated OfficeMax Copy Rights, 2: The adds were misleading, 3: Breach of Confidentiality.
In short many people thought the add to be authentic, but in reality it was at best an early draft never intended for circulation, at worst a complete FAKE. Either way there was a lot of people who thought it to be valid, despite the fact OMX corporate quietly denied it.
The only 'misconduct' by OfficeMax was a Public Relations SNAFU trying to downplay the leaked add hoping that it would be blow over, versus making any real public statement on the subject.
I am selling all my shares Friday. I jumped in at around 2.00 buying 10,000 shares, and am taking my profits now, before this company destroys itself.
The final straw for me is their potentially criminal behavior regarding Black Friday, and misrepresentation.
According to Duncan:
Integrity and Accountability. Think Company and Customer First. Teamwork and Trust. Focus and Discipline. A sense of Urgency. These are OfficeMax’s core values, the shared principles that bind us and help us to move OfficeMax’s business forward. They require us to take responsibility for our actions every day and to do the right thing, no matter what. Taking unethical shortcuts, even with the best of intentions, never works in the long run.
Maybe they should practive what they preach!
The reason they will lose customers is that with the reduction, the remaining reps will not be able to effectively handle the amount of accounts that have been assigned to them. Reps at OfficeMax were drowning in administrative and customer service work before the reduction and with more accounts per rep, it only gets worse. I left Staples for a sales position at OfficeMax but quit after 2 years because it was impossible to bring on new business. Their model is a path to failure with too much paperwork, too many approvals, policy changes, personnel changes, no or poor training of support personnel, too many managers, too many meetings, weak centralized support, constant pressure by managment to sell more with no support from them to provide an atmosphere that promotes sales or the desire to sell and worst of all, management had no clue or was in denial about all of the above. Good luck to all who survived there and better luck to all that were let go.
Many a company has underestimated the loyalty factor. Your right most reps will not land at ODP or SPLS, they have different plans. Though the independents will make room. The size of the accounts that will travel with a rep is the last size OMX can afford to lose, small and mid size, the one with the highest margins.
ODP and SPLS are not hiring reps like crazy so I do not think that is a worry. I doubt they will be making room for the reps OMX did not keep. My guess is that most of the customers who are under contract with good pricing wont go anywhere unless the service changes. Maybe a few small customers follow the reps but I doubt it. Most significant organizations do not make major supplier decisions based on a single relationship. Even if a few small fish go resulting in a minimal sales decrease the huge overhead reduction of the sales force should make this a very profitable decision for the contract segment.
most definitely, the rif'd reps will be seeking positions with other suppliers like ODP, SPLS or strong local independents and bringing their clients with them. Don't think that ODP and SPLS haven't thought this was coming and planned for it.