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Business Observer Friday, Aug. 8, 2014 4 years ago

Purchasing Power

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Donna Marks knows how to get the best deals on supplies and services. She learned from a billionaire nicknamed 'grave dancer.'
by: Jean Gruss Contributing Writer

Donna Marks learned cost cutting from one of the best in the business: Sam Zell.

Zell is the Chicago billionaire investor known as the “grave dancer” for building a fortune by turning around money-losing businesses. Marks was part of a five-person team that negotiated contracts on behalf of Zell's 50-plus manufacturing companies for everything from freight to car leasing, travel and office supplies.

“Our team was saving millions of dollars,” Marks says, delighting in the task. “That was the most fun I had at work.”

When she moved to Cape Coral in 2007, Marks used those skills to start a group-purchasing organization called Windfall, helping small- and medium-sized businesses save money on a wide range of supplies and services. Last year, Windfall participants bought $35 million worth of supplies and services. Today, the Cape Coral-based company is one of Office Depot's fastest-growing group-purchasing organizations.

“Her growth has been phenomenal,” says John Moran, director of buying groups for Office Depot. “She's a true innovator. There's never a 'no' with Donna.”

When she worked for Zell, Marks and her team of cost cutters would earn commissions from suppliers, turning it into a self-sustaining business. Windfall operates in a similar way: there's no cost for businesses to join the organization and Windfall earns a commission from suppliers like Office Depot and others. On average, Windfall earns about 5% of sales.

Marks doesn't disclose specific revenues, but she says sales grew 35% last year. Windfall has five employees and 14 independent agents and Marks outsources tasks such as accounting and marketing.

Now, about 50,000 businesses and 200 associations use Windfall to buy supplies services such as credit-card processing, shipping, travel and office supplies. For example, Marks says companies can save as much as 30% on office supplies by participating in the group.

As it turns out, 2007 was a good year to start a cost-cutting business because companies were more careless about expenses during boom times. “Who cares about office supplies when you're making money?” Marks says. But during tough times, every expense gets scrutinized: “Every dollar you don't spend goes to the bottom line,” she says.

To start the company, Marks called on former colleagues at Zell-backed Anixter, a wire and cable distribution company. Anixter executives gave Marks the company's $1 million buying power to become Windfall's first customer.

“Her willingness to innovate certainly is the reason her business has just skyrocketed,” says Office Depot's Moran.

For example, Windfall recently partnered with Office Depot and the South Florida chapter of the U.S. Green Building Council to create a “green” purchasing program for supplies such as pens made from recycled water bottles. “We're testing it in South Florida,” Marks says.

“Her marketing genius will reach those constituents that we perhaps couldn't,” Moran says.

Negotiation tips
Donna Marks, the CEO of Windfall, has negotiated millions of dollars of contracts for business services ranging from office supplies to travel and auto leasing. She recently shared some tips:

Get bids from three suppliers. “There's always more than one supplier,” she says.

Invite suppliers to visit your business. “Every supplier can customize what they do,” Marks says. “Make sure they understand your business.”

Give suppliers a firm deadline to bid and one chance to revise their bid so negotiations don't drag on.

Talk to the experts. Find out how much leeway you have to negotiate. “Every cost area is unique,” Marks says.

Not happy with current pricing from a supplier? “Tell them you're leaving,” Marks says. Re-examine your expenses regularly.

Follow Jean Gruss on Twitter @JeanGruss

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