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"This order alone exceeds the capacity of 10 tractor trailers"
July 26, 2014 10:57 PM   Subscribe

Keen to win the contract to supply The State of New York with office supplies, Staples offered to supply many expensive items at one cent apiece, on the theory that profits on the sales of full-priced items would cover the losses on the one cent stuff. Um...not exactly.
posted by w0mbat (64 comments total) 40 users marked this as a favorite

 
Wow, what an amazing thing! Thanks for posting this, I had no idea. I'd have gone utterly hog-wild on penny items too, if I were eligible for them.
posted by hippybear at 11:08 PM on July 26


Kinda fucked up it required an insane pricing stunt for places to get needed supplies but hey, lots of places have chalk and toilet paper now.
posted by The Whelk at 11:24 PM on July 26 [7 favorites]


We're losing money on every sale, but we'll make it up on volume!
posted by five fresh fish at 11:31 PM on July 26 [38 favorites]


Hahahahahaha, oh my god. I structure deals for my company with similar companies and, oh my god, the sheer hubris of Staples.

Wow. Just. Wow. Just... $249.98 per item of wow.
posted by OnTheLastCastle at 11:41 PM on July 26 [7 favorites]


+1 for the dundermifflin tag.
posted by katemonster at 11:46 PM on July 26 [17 favorites]


This made me happier than anything I've read in days. I'm just picturing all these schools and charities ordering tons and tons of toilet paper or whatever and being delighted. Think of entire schools of children whose parents aren't going to have to buy classroom tissues and paper towels and hand sanitizer. I dunno, it pleases me.
posted by MeghanC at 11:54 PM on July 26 [36 favorites]


Holy cow--a single pad of Post-It Notes cost almost two dollars?!
Who buys a paper shredder that costs eleven-hundred dollars--are the cutting blades made from Fabergé eggs!?
$250 for a 64-gig thumb-drive?
This "one-penny" fiasco seems like karma in action.

Also, The Columbia Record and Tapes club business model does not a sound business decision make.
posted by blueberry at 11:56 PM on July 26 [14 favorites]


I only go into Staples as a last resort b/c everything they sell is absurdly overpriced. I always resent the mark-up I am forced to pay. So, you know, hahahaha! Glee at the misery of a corporation, how sweet it is.

That said, "tacky" does not begin to describe some of the examples cited in the article. A shredder for herself and one each for her four adult children?
posted by mlis at 11:56 PM on July 26 [5 favorites]


Honestly, state agencies here in NY have been so starved for resources, this is pure karmic justice. I started working at a state agency here in Albany about a month ago, and when I was being interviewed for that my now-boss remarked that this was a bad time to get into state work, as she tied a stack of papers together with a broken rubber band. Which had been holding them together before it shattered, presumably of superannuation.
posted by clockzero at 11:58 PM on July 26 [25 favorites]


"inmates are prohibited from having paper clips " sounds like something someone says in a Christopher Guest movie.

Oddly enough my husband was in a Staples TODAY and he said it was like visiting an alien planet, nobody there except for VERY VERY AGREESIVE SALESFOLK and random inventory all over the place.
posted by The Whelk at 12:02 AM on July 27 [4 favorites]


And yeah, state agencies arp have been so starved, fucking karmic justice, let us restribute the paper towels and memo folders!

I think we agree toilet paper should be a universal right, free as air.
posted by The Whelk at 12:04 AM on July 27 [4 favorites]


Sometimes karmic justice is absurd. Haven't you ever read every magic realist novel ever?
posted by clockzero at 12:08 AM on July 27 [3 favorites]


All my current magical realism intake involves antler murder so this is nicer.
posted by The Whelk at 12:11 AM on July 27 [14 favorites]


Hannibal?
posted by clockzero at 12:14 AM on July 27


....yes ...sure ...TV ( hides in shadows)
posted by The Whelk at 12:14 AM on July 27 [3 favorites]


The paper shredders are tacky, yes, but I'm delighted that at least some institutions got lots and lots of tissues and paper towels. Disposables like those make a huge difference to people's lives, and it's hard to feel sorry for Staples' short-sighted error.
posted by Joe in Australia at 12:20 AM on July 27 [2 favorites]


I am interested in hearing more about the products they have available up the yin-yang. Will I need a boat to get there?
posted by mannequito at 12:24 AM on July 27 [8 favorites]


I initially felt bad for Staples, but then I saw that they stopped delivering the ridiculous orders. People ordered 128,000 flash drives but they only shipped out 1,000. I doubt this will seriously hurt them in the long run, that's why they made the deal.
posted by breath at 12:32 AM on July 27


People ordered 128,000 flash drives but they only shipped out 1,000. I doubt this will seriously hurt them in the long run, that's why they made the deal.

Well, they're now wide open to a breach of contract suit.
posted by His thoughts were red thoughts at 12:39 AM on July 27 [9 favorites]


What was that Brooklyn Charity going to do with 240,000 boxes of tissues all ordered at once?

Staples should have fulfilled that order just for the spectacle.
posted by Ommcc at 12:46 AM on July 27


...some of the examples cited in the article.

Keep in mind that the WSJ is a Murdoch property, and any examples are bound to be Daily Mail-level of outrage over "welfare queens" and poor people abusing the system.
posted by drinkyclown at 12:46 AM on July 27 [10 favorites]


I don't blame them for going to town as long as it was stuff they really use. I used to have jobs where I had to place orders from Staples and I don't know what most of that is for these days.
posted by bleep at 12:46 AM on July 27


It seems that there are several escapes for Staples here. They could probably just slow down shipping to take months, or stop selling those SKUs all together. "You can't buy That 1 cent flash drive but we have this other one in stock for 50 bucks"
posted by Megafly at 12:56 AM on July 27


This is like the time I went to the monster truck rally and I saw the truck spin around in circles until it fell over. Why was the truck doing that? What purpose did it serve? I don't know, but I'm glad it happened.
posted by compartment at 1:06 AM on July 27 [71 favorites]


We have cameras.
posted by PareidoliaticBoy at 1:28 AM on July 27 [7 favorites]


Government should be run like a business!!!

This was initially delighted, but I guarantee they're not going to have to fulfill the orders AND are still going to get to keep the contract. They knew that going in, and this just follows the Big Business Way of doing illegal shit and accepting the penalty as a cost of business.
posted by maxwelton at 1:39 AM on July 27 [4 favorites]


Reminds me of Hoover's free flights fiasco and (in a lateral kind of way) New Order's Blue Monday.
posted by Paul Slade at 2:27 AM on July 27 [2 favorites]


Sometimes little guys get to be penny-ante kleptocrats! Hooray for this state of affairs!
posted by save alive nothing that breatheth at 3:31 AM on July 27 [2 favorites]


This doesn't even make cents.
posted by Chitownfats at 4:04 AM on July 27 [5 favorites]


"We were just wondering whose idea this was," said [the finance officer at Monroe Woodbury High School], "and if they still had their job."

Staples declined to comment on personnel matters.


ZING
posted by showbiz_liz at 4:10 AM on July 27 [12 favorites]


Sometimes little guys get to be penny-ante kleptocrats!

The formation of "kleptocrat" doesn't just indicate theft, it indicates political ascendancy through theft. It's oxymoronic for the "little guy" to be a kleptocrat. That's why we like Robin Hood and not the Sheriff of Nottingham.
posted by howfar at 4:12 AM on July 27 [13 favorites]


I'm no mathamagician, but if you're giving things away for (basically) free, why wouldn't you limit the quantities allowed?
posted by blue_beetle at 5:17 AM on July 27 [9 favorites]


Doesn't have the same appeal to cinch the contract. But I think maxwelton is right and Staples had zero intention of fulfilling these 1 cent items long term. It sure is going to suck if as part of the legal settlement NY state can't order post its.

Some of the 1 cent items seem like a bad idea from the get go (post it notes, pens and tissue paper; I'm surprised their order system didn't melt down). I work in purchasing and at the places I was locked into buying from Staples you better believe I would have been buying pallets of these materials for stock plus a shredder and 4 flash drives for everyone in the company. If they also sold reams of paper for a cent that would have been 80% of my supply budget right there.
posted by Mitheral at 5:36 AM on July 27 [3 favorites]


I'm no mathamagician, but if you're giving things away for (basically) free, why wouldn't you limit the quantities allowed?

That oversight leads directly to the question showbiz_liz quoted: what is the chance that the person who signed off on something this dumb still has their job?
posted by Dip Flash at 5:45 AM on July 27


So, in the article it says:
Office supply stores long have offered penny pricing on items that aren't expected to be big sellers, said Jay Baitler, a retired Staples executive who until 2012 oversaw big commercial contracts.
If this is a typical feature of these kinds of contracts, what went wrong in this case? Do the contracts normally feature some kind of per-item maximum? And why would Staples have failed to implement that? This piece feels underreported, somehow.
posted by yoink at 6:04 AM on July 27 [4 favorites]


From 2013
But as word spreads about the deals, some government agencies are having trouble finding many of the bargain items in stock. And there's no Easy Button they can push to make them appear.
"You get all excited and then reality sets in and you realize, if it looks too good to be true it probably is too good to be true. You can't necessarily get it," said Mary Rozak, spokeswoman for Albany County.

Penny pricing may seem crazy, but Staples actually may have much more to gain than it could lose on the nearly-free items, said Arun Jain, a marketing professor at the University at Buffalo School of Management.
Not only would Staples' bid have virtually eliminated any competition for the contract, he said, it also let the company gain a foothold with the state of New York, which has been overhauling its procurement procedures to increase savings and efficiency.


So pretty poor reporting from the WSJ
posted by Lanark at 6:19 AM on July 27 [10 favorites]


It is refreshing to see a state government taking advantage of a corporation. Because I can assure you, out here in California any way, it is always the opposite and on a more grand scale.
posted by vorpal bunny at 6:20 AM on July 27 [2 favorites]


Office supply stores long have offered penny pricing on items that aren't expected to be big sellers, said Jay Baitler, a retired Staples executive who until 2012 oversaw big commercial contracts.

I think we may have identified the person responsible.
posted by Joe in Australia at 6:25 AM on July 27 [3 favorites]


The article's time frame is a bit suspect. Staples unilaterally stopped performing its penny sale contract obligation a year ago. (Source). It has been negotiating a breach of contract settlement with the state ever since. Wonder if this story was fed to the WSJ by the state or Staples to try to affect the settlement negotiations?
posted by MattD at 6:31 AM on July 27 [9 favorites]


I worked on a government tender a few years ago that made it a condition that in order to be able to supply the stuff which made money, we would have had to offer some loss making items.
In my case, it was cellular phones with zero monthly fee, but we could charge any per minute rate we wanted.
The gov reasoned they had a lot of employees who had a very occasional need for a cell phone, so they didn't want to pay a monthly charge for a phone that might be used for a week one month, then not at all for the next six months, and we could make the per minute charges high to cover the cost of handsets.
We pointed out that there was no disincentive for a gov employee not to order 10 phones, ebay 9 of them and never make any calls.
The gov stood by the requirement, and they insisted on this as a precursor to getting considered for several $million of other business.

So I can imagine a set of circumstances where a careless sales rep might have agreed to the governments condition for penny pricing in order to get awarded the much bigger stationery contract.
posted by bystander at 7:10 AM on July 27 [3 favorites]


Mitheral: If they also sold reams of paper for a cent that would have been 80% of my supply budget right there.

vorpal bunny: It is refreshing to see a state government taking advantage of a corporation. Because I can assure you, out here in California any way, it is always the opposite and on a more grand scale.

I work in California state government and our department ran out of paper last month. And because it was near the end of the fiscal year it was kind of a production to purchase more. A coworker recently hired from the private sector couldn't understand why we didn't just run out to Office Depot to buy some.

If any of our office supply contracts offered penny reams I would absolutely buy as many as our building could hold.

And then I'd buy a few million more and store them in the warehouse.

And THEN I'd ask if we could print everything on white paper to save time and money. Stupid colored forms.
posted by elsietheeel at 7:58 AM on July 27 [2 favorites]


"I have some products up the yin-yang."

I'm pretty sure she actually said "up the ying-yang," which is a slang term for (as the dictionaries put it) the anus, and some WSJ idiot changed it to match the irrelevant Chinese term.
posted by languagehat at 8:25 AM on July 27 [11 favorites]


So, it's an outrage when the government pays $100 for toilet paper, and it's an outrage when the government pays 1 cent for toilet paper.
posted by dirigibleman at 8:37 AM on July 27 [5 favorites]


The invisible facepalm of the free market.
posted by tonycpsu at 10:03 AM on July 27 [11 favorites]


$249.95 for a 64 GB USB drive??? Even back then in 2013 I was buying those SanDisk 64 GB drives off Amazon, new, for exactly $37. The highest quality drives were $55, tops. Seeing that flyer makes me extremely distrustful of Staples' pricing.
posted by crapmatic at 10:57 AM on July 27 [2 favorites]


So does this balance out the federal government's penchant for $650 toilet seats and $1400 hammers?
posted by briank at 11:33 AM on July 27 [1 favorite]


I'm pretty sure she actually said "up the ying-yang," which is a slang term for (as the dictionaries put it) the anus, and some WSJ idiot changed it to match the irrelevant Chinese term.

Surely it's just as plausible that he happens to use "yin-yang" as a variant of the slang term.
posted by howfar at 1:19 PM on July 27 [2 favorites]


I was expecting this WSJ article to have been written by some intern in a hurry, but nope: @MarkMaremont Senior Editor at The Wall Street Journal. "I generally cover complex business and finance stories, but also have covered politics."
posted by Lanark at 1:28 PM on July 27


It is a pretty poorly written article, especially with the knowledge that this has been going on for over a year. What is Staples actually contractually obligated to deliver and what are they actually fulfilling?
posted by zachlipton at 1:32 PM on July 27


So does this balance out the federal government's penchant for $650 toilet seats and $1400 hammers?

Not that the feds don't waste money sometimes, but these examples are almost always somewhere between misleading and false.

The toilet seat, for example, wasn't a toilet seat. It was basically a complete toilet for a B-52. Likewise, the $LOTS coffee maker wasn't a Mr. Coffee, it was (IIRC) the complete service cart for a transport aircraft.

Other times apparent waste is just the consequence of federal accounting rules. The $300 hammer was one of these. The Navy bought a [tech] to [tech] their airplanes, and the company had to go invent it. They were allowed to bill the Navy for their R&D overhead, and the way to do that at the time was to split it up over each line item. So the $100,000 phased plasma rifle had about $300 in overhead added to it, and so did the $50,000 retro-encabulator, and so did the hammer for opening the crate. They never really spent $300 for a hammer, even though there was a line item that said "HAMMER -- $300."
posted by ROU_Xenophobe at 1:40 PM on July 27 [24 favorites]


There's also the fact that cock-ups of this scale undoubtedly happen in the private sector on a daily basis, but they're under no obligation to disclose them the way the government is. There's also only one federal government, so it's a juicier target for people looking for a story that fits the "government is the problem" narrative.
posted by tonycpsu at 1:45 PM on July 27 [5 favorites]


Surely it's just as plausible that he happens to use "yin-yang" as a variant of the slang term.

Surely you didn't notice who posted that, did you?
posted by Purposeful Grimace at 1:46 PM on July 27


Well, yes, I had noticed. That's why I was seeking clarification. It seemed like a very prescriptive interpretation, so I wondered if I'd misunderstood it, given who posted it.
posted by howfar at 3:21 PM on July 27


If you have evidence that "yin-yang" is a variant common enough that it's likely she used it, I withdraw my objection. I have only seen and heard "ying-yang" in that sense, and knowing the habits of copyeditors and proofreaders (look it up in the dictionary and correct the text to whatever it says), I think my version is far more likely.
posted by languagehat at 3:39 PM on July 27 [3 favorites]


What was that Brooklyn Charity going to do with 240,000 boxes of tissues all ordered at once?

They are a charity that proves community support to people with disabilities, so probably a lot of disabled children and adults on Long Island were going to have plenty of tissues at their homes, schools and workplaces! An org like that in a populous party of the state could easily have dozens of residences for adults alone, plus day schools, residential schools for kiddos, supported work sites and community dayhab sites. Maybe they did it for kicks (I would have), but they might have allotted 50 sites 1000 boxes of tissues a year for five years. Still overkill, but not a joke order, either.

I like this. The phrase "bleeding the beast" comes to mind.
posted by Snarl Furillo at 4:32 PM on July 27 [1 favorite]


Who buys a paper shredder that costs eleven-hundred dollars--are the cutting blades made from Fabergé eggs!?

-Commercial shredding companies, or their customers, who are mostly
-Agencies or companies with a regulatory obligation to deal with certain records in a certain way a certain time. Non-profits have to keep everything financial for seven years. I'm sure there are similar requirements for the state department of revenue, children and family services, anything financial (banks, etc) and health care records.

Have you ever seen those trucks that advertise on-site shredding? They don't have a bunch of consumer shredders in the back; they have 10 $1100 shredders capable of destroying a novel per minute.

This stuff is totally hilarious in aggregate but many of the individual purchases seem more or less defensible to me. One, huge organizations use a lot of stuff, way more than people realize. Two, can you imagine the shit these places would have gotten if it ever came out that they had paid retail for a pen or a paper clip when a state vendor was contractually obligated to give those items away for free?
posted by Snarl Furillo at 4:47 PM on July 27 [1 favorite]


I recently was surprised I could order a box of 500 supermarket styrofoam meat trays from Staples. With free shipping to an obscure rural location. Not 1 cent each but a great deal.
posted by Rumple at 4:56 PM on July 27


If you have evidence that "yin-yang" is a variant common enough that it's likely she used it, I withdraw my objection. I have only seen and heard "ying-yang" in that sense, and knowing the habits of copyeditors and proofreaders (look it up in the dictionary and correct the text to whatever it says), I think my version is far more likely.
posted by languagehat at 3:39 PM on July 27


This is really the sort of thing that's difficult to provide "evidence" for, but in my experience someone who uses the phrase "up the ying yang" is pretty likely to believe that the Chinese symbol/concept is also called ying yang. Different contexts, different meanings, same word.
posted by a box and a stick and a string and a bear at 6:21 PM on July 27 [2 favorites]


Oh, sorry... You're arguing the opposite. I still think the inverse (a hyper-correction) is as likely as not.
posted by a box and a stick and a string and a bear at 6:28 PM on July 27


I looked through old texts on Google Books, and "ying yang" was a common way of referring to the symbol now called "yin yang". Some texts also assert that "ying yang" means "Mexican silver" or "silver from overseas". The first joking references to "yin/ying yang" are quite recent, and I suspect that they were referring to the circular symbol as a sort of iconic reference to an anus; that implies that the spelling of the phrase and the symbol should be similar.
posted by Joe in Australia at 6:57 PM on July 27 [1 favorite]


If you have evidence that "yin-yang" is a variant common enough that it's likely she used it, I withdraw my objection.

A Google search shows, to my satisfaction at least, that it's a common enough variant. But even if it weren't, it seems (in this context) like the sort of nonsense word that people, quite reasonably, pronounce pretty freely, and more for effect than consistency. But I also wonder, like Joe in Australia, whether it's a visual reference to the symbol. I think there's a sort of similarity that goes beyond just circularity...

Well...I didn't imagine, when I got up this morning, that I would spend any of my day pondering the degree of similarity between the taijitu and an anus.

"Yin-yang" could, entirely plausibly, be shitty writing or subbing, but, personally, I'm not going to get too irritated at the possibility. I'm sufficiently annoyed by the things I'm sure are wrong with the article, without worrying about the things that I only suspect are wrong with it.
posted by howfar at 7:42 PM on July 27 [3 favorites]


As excessive as some of these purchases are, I do not sympathise with Staples in the slightest.

Governments get screwed on contract loopholes all the time, all of them subtler. This isn’t even a loophole; it’s an issue so large you could drive ten tractor trailers through it.

Stupidity does not adequately explain it. Staples executives absolutely knew what they were getting themselves into and were confident they could lawyer their way out of it.
posted by Fongotskilernie at 8:30 PM on July 27 [10 favorites]


We're losing money on every sale, but we'll make it up on volume!

It's okay - everybody gets a share.
posted by tiaz at 10:59 PM on July 27


Wish I could favorite MattD's comment above about 30 more times. The article he links to states that most of the penny items people were trying to order just two months in were always (mysteriously) out of stock and that a lawsuit has been ongoing since July LAST YEAR.
posted by purple_bird at 4:34 PM on July 28


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