Cyberspace as a source for paper

Would you buy your paper from eBay? A growing number of Web-based companies believe that catalogers and other high-volume paper buyers will soon comb the Internet for some or all of their paper needs.

There are two primary Web-based alternatives to purchasing from a mill, a broker, or a printer. The first is the Web auction. Sites such as PaperDeals.com, Forestweb, and PaperExchange.com allow mills, printers, and publishers to anonymously offer their overstocks to the highest bidder. Sellers and bidders must be registered members to participate in auctions. PaperDeals.com and PaperExchange.com collect auction fees from the sellers and ensure that any bids are contractually binding. Forestweb, launched in January as a portal for the forest products industry, does not collect a fee but instead arranges “handshake auctions” in which the bids aren’t legally binding.

“Our auctions are informal,” explains Forestweb spokeswoman Mary Cesar. “It’s a good way for sellers to liquidate overstock. We’ve seen everything from wood chips to acres of forest land up for bid.” As of March, the Los Angeles-based firm had signed up 1,700 registrants.

FobPaper.com, which launched in March, offers a second online purchasing alternative. Unlike auction sites, the Chicago-based firm organizes co-ops and actually buys paper for its clients. According to president/chief operating officer Glenn Trout, FobPaper.com is able to cost-effectively buy paper for small companies that are considered credit risks by mills because of their small size, or whose orders are too small for them to benefit from buying direct.

Via the Web, FobPaper.com pools the orders of the small companies, organizes the purchase, buys the paper from mills, and arranges distribution. The company collects a transaction fee on each sale, but Trout contends that by gaining access to volume discounts, its members still cut their paper costs.

A good idea, but…

Although catalogers concede that such paper-buying alternatives sound promising, few if any have yet to adopt them. John Bales, marketing manager of Moscow, ID-based rafting outfitter Northwest River Supplies, is one catalog marketer who isn’t prepared to take the plunge yet. “I’m aware of the Web-based alternatives, but because of the low quantity we buy and our inexperience in the paper market, we stick with our printer,” he explains. “I can usually get a good deal on its stock paper, and I’m happy with its service. Paper just isn’t my area of expertise.”

“Eventually, we probably will consider buying paper online,” says Jim Ray, president of Lynchburg, VA-based hardware cataloger McFeely’s Square Drive Screws. But for now, Ray also prefers to leave paper buying to his printer. “I’ve got enough on my plate without worrying about delivery, how a paper will run on press, and how much I need on hand.”

At High Point, NC-based framing products supplier Graphik Dimensions, catalog production manager Craig Rogers buys paper from brokers and from his printer. And while he hasn’t used online paper sources, rising prices may prompt him to consider it. “It’s definitely a leap of faith, though. There are so many details to get caught up in when buying paper, especially without the hand-holding that you get from traditional sources.”

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