God And The Art Of Office Supply Sales
by Alf Nucifora
Outside the realm of organized religion, and the sophisticated management practices that drive today's mega-churches, one rarely has the opportunity to see God and the entrepreneur toil in tandem within the fields of commerce. But recently I encountered an intriguing success story in Father Bernard McCoy, a Cistercian monk who has turned a pressing economic need into a small and growing business empire that trades under the name of Lasermonks.com. As the following interview reveals, all it takes is the idea, the strategy, the commitment, and presumably a little help from the Big CEO above.
NUCIFORA: What was the genesis of the idea behind Lasermonks?
FATHER MCCOY: Contrary to popular belief, monasteries are required to be self-supporting. We had moved to a new location and were just in the process of looking for a new income source to support ourselves. In the middle of all this, I needed a toner cartridge for my printer. It just struck me at how incredibly expensive a bunch of black dust was. I said to myself, "This is way too expensive…there has to be a better way!" I started poking around and discovered a better way and thought, "If I can save this kind of money for a small monastery like ours, just think how much I could save non-profits, schools, etc."
NUCIFORA: Just toner cartridges?
FATHER MCCOY: In the beginning it was just toner. These cartridges for ink jet printers are so expensive, with mark-ups ranging from 500% to 3000%.I approached the non-brand name vendors, those who make the remanufactured cartridges, and told them who I was and what I was thinking. They said, "Oh, Father, you've got something here and you can't stop with just the non-profit sector. You've got to offer this to everybody! You could have major market share if play your cards right." We started out marketing ink jet and toner cartridges in the fall of 2002. We expanded the next year to include brand name imaging products, everything from printers to fax machines, and people started asking us if we had paper clips, pens, etc. That developed last year into offering a full line of office products, 40,000 items, everything you could get at any of the major office supply retailers.
NUCIFORA: Then you are direct shipping from the manufacturer or wholesaler?
FATHER MCCOY: Exactly. We are signed up with several of the wholesalers who provide to all the big boys as well. We have about 40 warehouses scattered around the country and whichever one is closest to your location is where it's shipped from.
NUCIFORA: So when I place my order, who processes it?
FATHER MCCOY: It comes here to monastery where our staff processes the order and then it's shipped out from the appropriate warehouse.
NUCIFORA: How big is your support staff?
FATHER MCCOY: There are the three Brothers and we currently have six people here on the property who handle administrative and financial functions.
NUCIFORA: 2005 revenues…what are you projecting?
FATHER MCCOY: I'm expecting somewhere in the $4-$5 million range. We did $2000 in 2002, our kick off year; $150,000 in 2003 and last year it was about $2.3 million. Next year things will probably change astronomically.
NUCIFORA: Why is that?
FATHER MCCOY: We are in the process of closing contracts…one that we already have for healthcare purchasing groups but which won't kick in until late Fall … and major contracts for larger corporate based groups.
NUCIFORA: In the beginning did you approach this in a sophisticated business fashion, or did you just trust in God?
FATHER MCCOY: A little bit in-between. We didn't do any sophisticated work because the format is just so simple, given today's technology. Ultimately, we outsource everything, which is plausible now because of all the Internet possibilities. And, the capital outlay was almost zero. So, we couldn't lose. We didn't do major projections or call in people to conduct test marketing. We just offered it to some folks and see if it was going to work.
NUCIFORA: How did you get your first order?
FATHER MCCOY: I think it was a local church because that was our best first target…Catholic entities. We started there because it was easiest to get into the door. I knew that in this business, the hardest part was going to be getting into the door. For us, it was different because of who we are. Our branding, so to speak, is unique and untouchable.
NUCIFORA: So there was no professional help initially…attorneys, accountants, etc. Essentially you got the idea, sold it in internally, and then rolled it out?
FATHER MCCOY: Of course after we got going, we saw that there was major potential, so we sat down with our attorney and tax advisor to determine how we wanted to structure this. The non-profit Abbey, a 501 C (3), owns Lasermonks Incorporated, which is a for-profit corporation. That's important, because initially people were saying "no wonder you can do it cheaper; you don't pay taxes." That's absolutely not true. We pay taxes just like everybody else.
NUCIFORA: Except your profits are going to charity are they not?
FATHER MCCOY: Exactly. The profits from the corporate entity are.
NUCIFORA: Do customers treat you differently or cut you slack because you're a monk and represent religious Order?
FATHER MCCOY: I think they do. It gets us in the door. And one of the nice things that distinguishes Lasermonks from other companies is the focus that we place on what we call our commerce hospitality. The monastic life has a 900 year tradition of monastic hospitality…every guest is received as Christ himself. We translate that monastic hospitality into a commerce hospitality by treating every client, customer or vendor with genuine human dignity.
NUCIFORA: What's the key element of your positioning?
FATHER MCCOY: Our tagline really says it all… "Real savings, real monks, supporting real people." Yes, you're saving money, so, from the business perspective, you're going to win. On top of that, we use the profits to do good things and you can't go wrong with that.
NUCIFORA: So the bulk of your business I assume is still with religious institutions?
FATHER MCCOY: Actually, no. We had a lot of individual customer business that was initially fueled by a lot of good media we received. But now our business is coming from the small-medium business sector and with a specific focus on corporate contracts and institutional business.
NUCIFORA: Where is the major overhead with this venture?
FATHER MCCOY: The overhead is comprised of operational staff salaries and recently ramped-up marketing support. That's pretty much it. We have telephone and internet expenses…some of our back-end database programs that we contract for.
NUCIFORA: Theoretically, you are a highly profitable business?
FATHER MCCOY: Yes, we are.
NUCIFORA: Would you ever sell the company?
FATHER MCCOY: No. We've already gotten a few inquiries. The difference is that we can't sell it and enjoy royalty-based revenues. The hallmark of our business is the good works that we're doing, and the kind of presence and hospitality that we present through our customer service. That's something we will never outsource. It will never go to India. It's because of who we are, that we are doing so well. And if we sold to a private company, at some point Lasermonks would lose its underlying foundation because there would no monks involved.