Despite criticism from health advocates and its own science advisory board, the Food and Drug Administration announced in late December that it is not changing its decision that bisphenol A (BPA) is safe in trace amounts. The organization did reveal, however, that it will study the cumulative effects of BPA in humans, though it gave no timetable for such findings.

The non-change, released in a letter from the organization, comes in response to the November conclusion by its science board (comprised of outside experts) that the FDA’s original finding was flawed. The board said the FDA erroneously relied solely on industry-funded data and studies that didn’t evaluate newborns, for example. The board also said the FDA was neglecting the cumulative effect of BPA exposures from multiple sources, something which the FDA is addressing with its recent announcement.

BPA, commonly found in reusable plastic water bottles, baby bottles and the linings of metal cans, has come under repeated attacks by new studies and health groups linking it to diseases and development problems in humans. Recently, President Barack Obama met with a coalition of health advocates who are pushing for a ban of BPA.

Many of those same advocates are displeased with the FDA’s latest decision. “More years of research by the FDA to determine what thousands of scientists worldwide already know about the toxic chemical is a waste of time, taxpayer dollars, and will place millions of babies yet to be born at risk,” said Alex Formuzis, a spokesman for the Environmental Working Group, to the Washington Post. – CJM

After 32 years in business, former Counselor Top 40 distributor Cyrk (asi/173519) appears close to shutting its doors. According to former employees, the company has laid off the vast majority of its staff, leaving only a skeleton crew for apparent liquidation at its corporate headquarters near Seattle, WA. “It’s a shame that it had to come to this,” said Eric Holloway, a senior merchandiser who was employed at Cyrk until November, in an exclusive interview with Counselor. “A lot of good people were let go.”

Repeated calls to Cyrk CEO Jeff Werner have not been returned. Multiple executives at Sun Capital Partners, which owns Cyrk, have refused to answer any questions about the situation. Several industry suppliers say calls and e-mails to Cyrk’s accounts payable department have been ignored. Some voicemail boxes at Cyrk no longer accept messages and are full. Until recently, calls to Cyrk were answered by an operator, but now calls are routed through an automated directory.

In November, Werner stated to Counselor that changes “were likely” at the company, saying a sale or merger were possible next steps to solving the company’s problems. But by late December, Werner was not returning any calls and his e-mail address was returning messages as undeliverable.

Werner admitted in November that Cyrk had slowed down on making payments to its suppliers. In fact, the company’s credit ratings in ASICreditConnect have fallen into the high-risk category while 14 of the company’s invoices have been turned over to collections and 19 other invoices have been marked as past-due in December alone. Indeed, Cyrk has suffered through a rapid decline in recent years, with sales dipping from $119 million in 2001 to $31 million by 2006. Its clients have included Caterpillar, Gillette Company and Chevrolet.

According to the Washington Department of Revenue and the U.S. District Court in Seattle, as of late December Cyrk remained an “active” company and had not filed for bankruptcy. – DV

Looking to reduce overhead, many companies are restricting the amount of money employees can spend on travel and other expenses. For some distributor salespeople this means fewer face-to-face meetings.

Many distributors began cutting back on personal visits during the summer when gas prices reached a threshold of pain. Others began better organizing their sales calls so they would hit clients in the same area, thus avoiding multiple trips. These habits have remained even as gas prices have waned, thanks to a reluctance to spend money in what could be a difficult revenue year.

A number of factors have allowed distributors to stay put. Mike Koop, co-owner of MBK Promotions (asi/257911), says, “Everything is word-of-mouth. We get referrals all the time so we don’t need to be in the car a lot.” Koop estimates he meets with clients once or twice a year to maintain relationships and will take advantage of meeting face-to-face when delivering merchandise to his end-users.

Pat Elfering, owner of PJ’s Enterprises (asi/288941), agrees with Koop. “I do so much repeat business, people come to me.”    

Koop says having a showroom helps draw clients in, while Elfering maintains a storefront. The Web has also reduced the necessity of the pressing-the-flesh sales call, says Koop. “People see our Web site and ask, ‘Can I get something like this?’ We use a lot of e-mail.” The one exception is apparel sales. “The only time I make personal sales calls anymore is for wearables. People still like to see that in person.”

Larger corporations like Accenture, Cisco and Hewlett-Packard are increasingly looking to the Web as a place to hold their meetings or they are opting to use videoconferencing. The trend is taking hold not only because of economic constraints, but also because the technology has vastly improved. A report late last year by the Global e-Sustainability Initiative and the Climate Group estimated that 20% of global business could be substituted with videoconferencing and Web-based meeting software.

Because ad specialties tend to be a relationship-based business, such technology may not be the answer. Barb Heiber, president of BP Promotions (asi/129404), believes it is good to do more face-to-face meetings when the economy is bad. “You need to keep steady contact to see what their needs are and try to help them.”

Instead of cutting back on travel, she is reducing her direct mail spend because of the high cost of postage and shipping. Rather than mail it, “I’ll service anyone in a hundred miles in-person,” she says. “It’s easier for me because my clients like me.” – KH

It’s a necessary evil for businesspeople today: You have less leisure time than ever before. The Harris Poll, which has been tracking the amount of hours people dedicate to rest and relaxation since 1973, found that adults only have about 16 hours of downtime per week. This is the least amount of free time it has recorded.

Hard working distributors, many of whom own and operate their businesses themselves, may even have less. “In our business you can work as hard as you want to work. It’s about how much money do you want to make?” says Eric Kramer, president of the two-year-old, one-man shop Mission Imprintable (asi/273725).  

Kramer, who finds himself working all hours, promised his wife he’d work less hours in 2009. “I told her I’m only working half days – from six to six.” Like many distributors he finds himself preparing presentations for clients during his leisure time. “I can do it at 10 p.m. when the news is on. At least I’m not in the office. It’s more relaxing.”

Paul Keith, president of Best Business Solutions (asi/138560), says he is bracing his staff for the economic realities of 2009. This includes the need to work longer hours. “The economic situation is changing,” he says. “Unless you’re willing to do things more aggressively, you’re going to give up a lot of ground. We’ve got to work more, better and a little smarter. You need to work proactively so you don’t get to the bad times.”

Keith says he is not only dealing with customers that may not be around much longer, but also a key supplier who may not be able to keep his doors open. His staff will spend extra time chasing more recession-proof clients like schools, government and medical. At the same time, they will work to retain existing customers and lure back lost business.

Not everyone, though, is changing their work habits. Jay M. Young, president of PS Printing, (asi/289052), says, “I’m not working more hours. I’m earning a little less. But, there is only so much business to be had and not much more.”

Young already works a 12-hour day including meals and sitting in on various boards. “I do get out of the office,” he says.

Any way you slice it, 16 hours is a far cry from the original statistic from the first study more than 30 years ago. Then, people had a luxurious 26 hours of free time. – KH

The reeling economy may have the incentive industry down, but certainly not out, according to a new study. Conducted by the Incentive Research Foundation (IRF), the 2009 outlook shows that while nearly 80% of respondents believe the economy is affecting the incentive travel industry, only 49% feel non-cash incentive programs have been compromised.

“This is certainly not a gloom-and-doom scenario for the incentive industry,” says Bob Dawson, chair of IRF’s research committee. “In fact, the survey’s results, with about half of respondents seeing no impact or a positive impact of the economy on merchandise non-cash incentive programs, are quite encouraging.”

In looking at incentive business in 2009, nearly 60% of respondents said there will be increased involvement in incentive travel programs; and 46% said non-cash incentive programs will get a boost. The implication is that the major hits taken by the travel industry will subside next year with lower fuel prices and other factors.

“Individuals might be even more motivated by incentive travel programs because their own financial situation may require them to cut back on their personal travel plans,” Dawson says.

Interestingly, perceptions of incentive extravagance in a down economy have grown in the wake of instances like AIG’s company retreats (occurring right after the insurance giant received federal bailout money). A full three quarters of the respondents said they were “sensitive to perceptions of program extravagance” which could “impact the type of company program awards and inclusions.” Only 45% felt that way in August, the last time the IRF commissioned a study.

Companies looking to cut costs are changing travel destinations from international to domestic, cutting down on days and reducing on-site “extras.” The survey was conducted from September to October and polled incentive travel providers as well as corporate incentive travel buyers and suppliers.

Every time his goods cross the U.S./Mexican border, it’s a problem, says Jerry Mulligan, vice president of sales for Chamberlain Marketing Group (asi/160501). “We almost refuse to ship to Mexico,” Mulligan says, “because 90% of the time anything that goes into Mexico will not be cleared or not received.”
That’s the polite way of saying that most of his products get “pilfered,” he says. Send a shipment of “50 Cutter & Buck shirts, and 20 or 30 may get to your event,” Mulligan says. For that reason, Mulligan, like many others in the industry, are more keen to do business to the north, focusing on opportunities in Canada instead.

But shipping items across the US/Canadian border can pose problems as well, unless you’re adequately prepared. Finding a good broker is key. How? Distributors might start with the Canadian Society of Customs Brokers which lists brokers in cities throughout Canada. But it’s not enough to phone one up and put them on the job. Ask shipping-related questions: Is there a guarantee on your service? What are your fee structures? What technology do you use? Do you work with tradeshows? Any reliable broker will be forthcoming and have answers to these and other questions, says Shelley Gares, vice president of customs/brokerage for UPS Canada. Follow questions by asking for references, Gares adds.

Too many American companies assume that NAFTA means they can ship virtually free into Canada. Not so, Gares says. “NAFTA eliminates duties if goods qualify, and that’s the key word,” she says. Goods that qualify must be made in the US – not purchased in China and decorated in the States. And even no duty charge does not eliminate taxes, she adds, which are always applicable, and not a part of NAFTA.

That said, there are other ways to cut costs going to and from Canada and the U.S. Firms shipping over the border often get tripped up in “line fees,” charges applied to customs entry forms. In Canada, for example, “right now the first five lines of the customs entry can fit on one form,” Gares says. Shipment listings exceeding five lines will be charged for each additional line.

The actual types of items that a distributor ships is also an important factor to consider. Ship 20 different books, and they can all be coded on one line, because they’re a single item category. Ship multiple clothing items – a jacket,T-shirt and baseball cap – and each needs a separate line, Gares says. They may all be apparel, but they don’t qualify as the same line item.

For that matter, Gares adds, boxes vaguely labeled (“tools” instead of “20-foot tape measures,” for example) are likely to be opened and held up along the way. And pasting a label over a box seam, she says, is always dangerous, since boxes are frequently opened and inspected. Inspectors cut through the label and then the box’s shipping address is ruined.

Finally, Gares says that right now all boxes shipped from one country to another are scrutinized by customs agents in both the U.S. and Canada. If you get flagged for breaking the rules once, then your company could be on the radar for inspectors for years to come. To avoid those troubles, distributors doing cross-border shipping should make sure they follow all shipping rules precisely. Render samples useless, for example, by sewing grommets into shirts, to avoid taxation as they cross the border.

And don’t, under any circumstances, Gares says, underestimate the value of shipments. “It’s considered an attempt to evade and an act of smuggling,” Gares says. “Customs can seize the goods, they can fine you, and they will certainly build a file and watch all of your future importations, even if they believed it was an honest mistake.” – BC

With companies searching for the most cost-effective ways to use their advertising budgets, ePromos Promotional Products Inc. (asi/188515) has released a list of specialty items that could thrive in the current economic downtown. “While goofy freebie items were seen as a symptom of dot-com excess, practical promos are the ideal advertising vehicle during a recession,” says Jason Robbins, president of ePromos.

A recent ASI study showed the average cost-per-impression of a promotional product is now $0.004. By comparison, per impression, traditional forms of print and broadcast advertising are more expensive. “During a time when we’re facing turbulent economic conditions, this research advises marketers and business owners to invest in advertising specialties now more than ever,” says ASI president and CEO Tim Andrews.

For its list, ePromos has chosen products consumers could be more likely to use in a recession. For example, the Jumbo Reusable Tote could become popular if taxes on plastic bags increase. The Insulated Lunch Bag may be used more often as people take lunch to work, rather than eating out. Instead of buying bottled water, consumers may opt to drink tap water, making The Aluminum Sports Bottle a helpful product. ePromos also suggests the Color Ring Stainless Steel Tumbler and Drawstring Backpack as good bargains.

“As people hold on to these items longer and use them more, the same investment in product gets you much more visibility,” says Mark Yokoyama, director of marketing and merchandising for ePromos. – DV

License plate frame makers will have to contend with a new provision in Arizona that can earn residents up to a $200 fine for covering up the state’s name on their license plates. The change – which went into effect at the beginning of this year – amended the state law to eliminate confusion when law enforcement runs license plate numbers through its system.

Directly targeted are custom license plate frames made by ad specialty suppliers that often cover up the state name. Gary Hellinger, CEO of Gary Line (asi/55990), says such laws are nothing new. “This has been in existence for several years with different states, and Arizona would be one of several states maybe modifying their rules,” he says. “What we do is offer license plates that do not cover up the state names.”

Hellinger, whose company is based in New York, notes that New York, New Jersey and Connecticut enacted similar laws in the past regarding the state name or inspection stickers. The CEO says his company prevents violation of state laws by sending samples to buyers to ensure they comply. “That’s the only way to do it,” he says. “That way the customer takes the time and the care to make sure there are no violations.”

Catherine Baron, owner of California-based License Frame Inc (asi/67355), was aware of the Arizona law change before it went into effect last month. Her company, which offers over a dozen different frame styles, worked proactively by calling clients in Arizona to notify them of the change and get them to order the newer style, which is no more than a half-inch thick at the top.

She says a similar law could be created in Florida. “We have somebody on staff that’s contacting the DMV all the time to get updates or searching online to find out,” she says about knowing the state laws. – CJM

After extensive talks, SnugZ USA (asi/88060) CEO Brandon Mackay and Vice President Charley Johnson have become sole owners of the company. Previously, Mackay and Johnson were minority owners. “The biggest thing is we now have control and we can map out the direction for the company,” says Mackay. “We’re extremely excited. It’s going to be a good 2009.”

SnugZ realized 2007 revenues of $23.5 million and Mackay expects 2008 revenues to be even higher. He says SnugZ will become even more aggressive and pursue expansion plans through further acquisitions. “There’s a ton of opportunities out there,” Mackay says. “We have two irons in the fire right now.” SnugZ opened in 1989 as a family-owned company. Today, its staff exceeds 200 people. “During the past few years, SnugZ USA has been one of Utah’s most successful companies,” Johnson says. “The total acquisition of SnugZ will better position our company to expand even more.”

Mackay and Johnson, who are both on the Counselor Power 50 list, purchased 100% ownership of SnugZ from two other owners. The deal was completed December 9. “We want to be large and go up from there,” Mackay says.

Boundless Network Acquires Two Firms
In December, Boundless Network (asi/143717) completed two acquisitions, bringing its 2008 total to seven. In the last few weeks of the year, The Austin, TX-based distributor acquired both Petty Marketing Group and Custom Solutions (asi/173250). “We’re built for speed,” Boundless CEO Jason Black says. “We’ve got a first-class infrastructure that can run really fast. We can do an acquisition a week if the opportunity presented it. But we’re not focused on doing any acquisition other than the right acquisition.”

Petty Marketing Group is a Tennessee-based distributorship started by Ralph Petty a decade ago that has grown into a multi-million dollar business. The three offices of PMG will be joining Boundless along with Petty himself and a “high percentage” of the distributor’s employees, according to Black. PMG will keep its name for now but will transition into the Boundless name sometime into 2009. Financial terms of the deal were not disclosed, though Black said that cash, earn-out pay and stock options were all part of the acquisition.

Boundless also added the Texas-based Custom Solutions to its rapidly growing organization. “Custom Solutions has strong relationships with some of the country’s top brands,” says Black. “Now, as part of Boundless Network, Custom Solutions will be able to leverage our technology platform to expand market share and offer quantifiable value to clients who are looking to save money in this recessive economy.”
According to company leaders, Boundless is looking to further its growth in the promotional products industry by acquiring more distributors in 2009. In just three years, Boundless has already added nearly 150 people to its staff, and now maintains 18 regional offices across the country. Founded in 2005, Boundless was recently named to Counselor’s Best Places to Work list.

The Icebox Acquires High Street Promotions
In a move that joins two Atlanta-based companies, The Icebox (asi/229395) has acquired High Street Promotions (asi/225059). Financial terms of the deal were not disclosed. “We’re very excited to have High Street under our umbrella now,” says Jordy Gamson, president and CEO of The Icebox.

Several High Street employees, including CEO Cary Romanoff, will join the staff at The Icebox. Annual revenues at High Street totaled roughly $1 million. “I’m incredibly humbled to join forces with such a trend-setting organization like The Icebox,” says Romanoff. “Over the years, we’ve admired a handful of competitors who share High Street’s values. The Icebox has always sat on top of that list.”

Clients of The Icebox include Gold’s Gym, The American Cancer Society and Verizon Wireless. The Icebox, founded in 2001, employs 30 people. Its annual revenues reach $11 million, and the company was named a Counselor Best Place to Work last year. As the head of a growing operation, Gamson says he’s open-minded about more acquisitions in the near future. “If the right situation presents itself, we’ll do it,” he says.