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Distributor Sales Increase 5.1% In Q3


Marking the seventh consecutive period of gains, ad specialty distributors increased their revenues by 5.1% in the third quarter of this year, according to data released today by ASI. Industry sales for the third quarter totaled approximately $4.6 billion, rising by $221 million compared to the same period in 2010. The Q3 increase in industry sales follows a 7.6% revenue gain in the first quarter and a 5.9% gain in the second quarter.

"Most people were predicting the industry to see anywhere from 5%-10% growth this year," says Fred Parker, president of Bluegrass Promotional Marketing (asi/141964), whose sales have increased 20% this year. "Generally speaking, companies have preserved cash over the last 36 months and most know they can't just stop their marketing efforts."

Data from the ASI quarterly sales report shows about 50% of distributors increased their revenues in the third quarter, with larger firms demonstrating the most success. Companies that generate more than $1 million in annual revenues reported a 7.8% increase in third quarter sales. Small and medium-sized distributors reported very similar changes in sales to the first and second quarters of the year, with average Q3 gains between 3% and 4%.

And, the industry's outlook for the remainder of 2011 also shows growth expectations. More than one-half (56%) of all distributors believe their 2011 revenues will be higher than those in 2010. About 70% of larger distributors ($1 million sales or more) are forecasting higher 2011 revenues. The number of distributor firms anticipating a sales increase is nearly three times greater than those predicting a decrease.

"Our bookings are on the high side and the activity levels are extremely positive," says Memo Kahan, president of Counselor Top 40 distributor PromoShop (asi/300446). "My industry gauge is the supplier base, which I believe is seeing an uptick. I believe the next four weeks will be critical to setting up the expectations for the remainder of this year and Q1 2012."

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