Distributor Industry Sales

4Q 2013, Year-End 2013 Industry Sales Report

Research by ASI

On January 7th, 2014, ASI® commissioned an exclusive survey to estimate industry sales for 2013. The industry outlook for 2014 was also included in the study. Invitations went to ASI distributor members who were the primary contact with their firms and had been in business at least one year. The results of this survey will be published in Counselor® PromoGram®, ASICentral.com and in multiple external media outlets.

A total of 504 distributor firms responded to the survey request out of 13,000 invited, resulting in a 3.9% response rate. An incentive of a drawing for $500 was offered. Larger distributors were over-sampled, with results then weighted for a more accurate analysis.

Beginning with the 1Q 2010 Sales Study, an ongoing participant panel has been implemented. There are 31 ASI members, all among the largest players in the industry, who have agreed to participate in each Quarterly Sales Study.

The 1Q 2014 Sales Study Report will be published in April 2014.

Conclusions:

  • Total industry sales for 2013 were $20.5 billion, up 5.3% from 2012. Eighty-six percent of larger distributors (over $5 million in revenue) reported an increase in sales, while more than two-thirds (68%) of all distributors reported an increase.

  • During the fourth quarter, there was a 5.7% year-over-year increase in sales among ASI distributor members. The largest distributorships again reported the highest percentage increase in sales (6.6%). Over one-half (53.8%) of all distributors reported an increase in total sales for the fourth quarter.

  • Distributors are optimistic about sales for 2014, particularly the largest distributors. Nearly three-quarters (74%) of all distributors feel sales in 2014 will be higher than sales in 2013, while 86% of distributorships with at least $5 million in revenue expect an increase in sales.

    • Optimism at the start of the year is generally pervasive in the ad specialty industry. But this year, optimism is higher than last, when only two-thirds (67%) felt sales for the year 2013 would be higher. All sizes of distributors are more bullish about 2014, led by the largest-sized group.

  • Results for the fourth-quarter Counselor Confidence Index show a score of 113.2, up each quarter of 2013. This suggests distributors feel the industry as a whole is healthy. The baseline was set at the 2001 confidence level, equal to 100.

Detailed Findings:

How did your annual 2013 sales compare to your annual 2012 sales?

  • Two-thirds (67.9%) of distributors reported higher sales in 2013 than in 2012. Three times as many distributors saw an increase as experienced a decrease in sales in 2013 compared to 2012.

2013 Sales vs. 2012 Sales

How did your annual 2013 sales compare to your annual 2012 sales? (By company size.)

  • Generally, as the size of the distributorship increased, so did the proportion with higher sales in 2013 than 2012. Over 86% of larger distributors (over $5 million in sales) reported an increase compared to less than two-thirds (64.7%) of smaller distributors (less than $250,000 in sales).

2013 Sales vs. 2012 Sales By company size

How did your fourth-quarter 2013 sales compare to your fourth-quarter 2012 sales?

  • Over one-half (53.8%) of respondents reported an increase in sales in the fourth quarter of 2013 compared to the fourth quarter of 2012.

4Q '13 Sales vs. 4Q '12 Sales

  • The fourth-quarter year-over-year sales increased 5.7%.

  • Distributors with revenue under $250,000 reported a 4.5 percentage point increase in revenue – the smallest of any group. However, this was up from the 2.3% increase reported by this group in the third quarter. The largest distributors showed the greatest increase in sales, of 6.6%.

Current Quarter Sales vs. Quarter Year Ago

Industry Sales vs. Same Quarter Prior Year

  • The fourth quarter of 2013 resulted in a sales increase of 5.7%, the sixteenth straight quarterly increase.

  • Over the last four years, the fourth quarter has had the greatest increases in sales. This is particularly significant since over 30% of annual sales come during this quarter.

Industry Sales Revenue % Change vs. Year Ago Quarter

Current Quarter Sales vs. Same Quarter One Year Ago

  • Findings for 4Q 2013 vs. 4Q 2012 show 54% of distributor firms reported an increase in sales vs. the corresponding quarter in the prior year. This percentage was the highest in reported in 2013, and the most since the third quarter of 2012 (54%).

% Distributor Firms with Increase in Sales Qtrly Comparisons
(Source: ASI Quarterly Sales Study Reports)

What is your forecast for your overall sales in 2014 compared to sales in 2013?

  • Nearly three-quarters (74.2%) of respondents expect an increase in sales in 2014.

  • The number of distributor firms anticipating an increase is over sixteen times greater than the number of those anticipating a decrease.

Sales Forecast 2013 vs. 2012

How do you feel your sales for all of 2014 will compare to your sales for all of 2013? (By company size.)

  • The sales forecast among distributor firms for 2014 vs. 2013 shows optimism across different sized distributorships. The largest distributors (over $5 million) were again the most optimistic, with 85.7% anticipating higher sales this year.

  • Distributors forecasting an increase estimated an aggressive increase in sales of 13.1% for 2014. Those forecasting a decrease estimated a decrease of 10.0%.

Sales Forecast 2014 vs. 2013 By Company Size

Counselor Confidence Index

Please rate the "health" of the promotional products industry for distributors in general for the fourth quarter of 2013.

Beginning with the first quarter of 2013, ASI is producing another measure of industry sales results. Taking data from over a decade of Counselor magazine State of the Industry survey results, ASI has developed the Counselor Confidence Index.

Patterned after The Conference Board’s Consumer Confidence Index®, the Counselor Confidence Index is an indicator designed to measure distributor health, which is defined as the degree of optimism on the state of the industry that distributors are experiencing through the results of their business operations. The value from the industry health question is compared against each respective score since 2001, and an index is derived. The year 2001 was chosen as a benchmark because it was neither a peak nor trough in the business cycle.

The chart below shows annual results of using the index. Results for the third quarter show a score of 113.2. Confidence increased throughout 2013.

The 2014 Counselor magazine State of the Industry report will reveal the confidence index for 2013 in aggregate, which will be a more standardized comparison than quarters vs. years.

Counselor Confidence Index