Can someone explain how to make a sorted list with mail merge?

Here is the Microsoft explanation of what I want to create, but I can't seem to figure out how to make it work.
http://support.microsoft.com/kb/294686#2

Basically what I want is a mail merge from an excel sheet that has more than one row per record (maybe not the best wording, but here is what I have):

**Excel List**

Vendor	Stock	Item
Vendor 1	111	Item 1
Vendor 1	222	Item 2
Vendor 2	333	Item 1
Vendor 2	444	Item 2
Vendor 2	555	Item 3
Vendor 2	666	Item 4
Vendor 3	777	Item 1
Vendor 3	888	Item 2

And here is what I want:

**Mail Merge**
Vendor 1
12345 - Item 1
23456 - Item 2

----Page Break----

Vendor 2
34567 - Item 1
45678 - Item 2
56789 - Item 3
67890 - Item 4

----Page Break----

Vendor 3
98765 - Item 1
65432 - Item 2

Each vendor has a different number of items.