Distributor Q3 Sales Increase 4.6%
11th Consecutive Quarter For Gain In Sales
According to ASI's latest Quarterly Sales Report, released today, distributors increased their revenues in the third quarter of 2012 by 4.6%, reaching $5 billion in total. The industry has now realized a gain in sales for 11 consecutive quarters. "A 4.6% Q3 increase is in line with my expectations," said Marc Simon, CEO of Counselor Top 40 distributor Halo Branded Solutions (asi/356000). "In general, the continuing modest or tepid improvement in our economy is allowing our industry to continue its slow rebuild."
More than half (54.4%) of all distributors surveyed reported a year-over-year sales rise in Q3. Those with annual revenues under $250,000 grew sales by 3.8% in the third quarter, while medium and larger distributors (greater than $1 million) improved sales by 4.7% and 4.6%, respectively. The majority of respondents (59.7%) expect an increase in their sales overall in 2012, down from a reading earlier this year when 70% of distributor firms predicted a rise in revenues. Still, the number of distributor firms anticipating a 2012 sales increase is nearly four times greater than those anticipating a decrease.
"I am an optimist and think industry sales will improve as world markets do," said David Woods, president of Counselor Top 40 distributor AIA Corporation (asi/109480). "The economy is growing slowly. The election will reduce uncertainty."
While a larger number of future economic indicators are positive, distributors don't see dramatic changes in buyer habits in Q4 or in 2013. "We are operating on the basis that our clients' budgets will be flat for the foreseeable future," said Mark Freed, president of Counselor Top 40 distributor Genumark (asi/204588). "We believe that adding new accounts is the only way to continue to grow our business."
Adds Teresa Moisant, president of Moisant Promotional Products (asi/275276): "I think health-care facilities and some banking institutions are overly cautious at this time. However, I believe that those industries that have a product to sell directly to an end-user will continue to utilize promotional products to establish a presence."