Waupaca man-made ink vending machines have found a niche during the pandemic

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Have you ever been printing an important document when your printer ran out of ink? And, when you tried to find some, you discovered that all the office supply stores in your area were closed?

If you answered yes, Bill Zimmermann, owner of Ink Box, has a solution. Zimmermann, which was a finalist in the NEW Launch Alliance pitch competition at the Urban Hub in Green Bay, has developed a vending machine that dispenses top-selling ink cartridges. It all started in 2017.

“As the owner of the business (he owns Office Outfitters in Waupaca), I had a lot of information about ink cartridges,” he explained. “I identified the 50 best-selling ink cartridges and these are the ones that are stored in the machines.”

After coming up with the initial idea for a vending machine, he spent four months researching and finding a manufacturer who could design a machine that accepted credit cards, couldn’t be vandalized, and could be personalized. After doing a financial analysis, he decided on pricing and determined what his break-even point was.

“I knew what we needed to make it work, but from 2017 to 2019 we weren’t getting the necessary numbers,” he said.

Its initial expansion plans were put on hold. But then the pandemic hit and vending machine sales skyrocketed. Zimmermann said the growth was driven by multiple factors. More employees were working remotely and using home printers, and online orders were on hold. The machine became a way for people to get ink right away.

It was a bit harder to refill the machine with ink due to supply chain issues, but he was working with vendors he had established relationships with.

“In 2020, sales tripled and I thought, given retail buying trends, it was time to take the plunge and buy three more machines,” he said.

While its long-term goal is to franchise the concept, its current business model is to place machines in rural, high-demand areas in communities underserved by physical stores. Specifically, he selected communities that once had Shopko stores that closed in 2019.

The next three machines were placed at Ripon, Wautoma and Adams. Finding locations was not difficult. Zimmermann said he was driving and looking for a busy place like a hardware store or a grocery store. So far he has found that these stores are happy to work with him as it adds another layer of convenience.

“Even though the pandemic meant that many people preferred ATM to in-store access for safety reasons, there are still people who prefer to buy from an ATM,” Zimmermann said.

Since ink is one of the main items that customers need to buy, having the machine in his store allowed him to reduce opening hours.

“I bought the machine and closed on Saturday,” he noted.

His review of Saturday sales had shown that more than 80% of the total was for ink cartridges and being open did not even cover the cost of electricity. This attention to detail allowed Zimmermann to not only come up with a great idea that other office supply stores might consider as a future opportunity, but also how he built his existing business.

Bill Zimmerman, owner of Office Outfitters in Waupaca

“The office supplies industry is shrinking, but I see some growth for us in terms of market share,” he said. “We plan to steal business from the big box stores by doing more with each customer and increasing the number of customers. Our main growth areas are office furniture and janitorial supplies.

These are areas that Zimmermann added to Office Outfitters, a company that’s been around for more than 50 years, which he bought in 2007. He was an experienced marketing executive, and when a merger would have required a transfer, he jumped into entrepreneurship. His goal of transforming the store into a “business center” was achieved and the store now offers printing services, office furniture and equipment, and a full line of supplies.

As the business grew, Zimmermann moved to a larger location and grew 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.” For convenience, Zimmermann said the vending machine idea was a logical step.

“I’ve been in this business for 15 years and I’ve seen the panic people feel when they run out of ink,” he said. “When I was preparing for my master’s degree, I remember this feeling of having paper to print on and no ink. I was lucky because the previous store owner came and opened the doors for me to 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 looks forward to future growth. As vending machines took hold, he thinks he could manage to have 20 locations that would be serviced by his existing truck drivers, and beyond that, franchise locations in small communities everywhere.

Tina Dettman-Bielefeldt is co-owner of DB Commercial Real Estate in Green Bay and former district manager of SCORE, Wisconsin.

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