Q1 Distributor Sales Up 5.7%; Confidence Metric Introduced

CCI Measures Distributor Health And Optimism

Q1 Distributor Sales Up 5.7%; Confidence Metric IntroducedAd specialty industry distributors increased their revenues by 5.7% in the first quarter of 2013, a total year-over-year gain of $214 million, according to a report released today by ASI. As part of the report, ASI also introduced a new metric – called the Counselor Confidence Index (CCI) – that's designed to measure distributor health and optimism. The CCI, which weighs current data against over a decade of past State of the Industry reporting results, uses the score of 100 to represent average industry health. The initial Q1 2013 CCI is 102.6 and signifies, according to distributor respondents, that the industry is the healthiest it's been since 2007.

"It's great to see growth as overall business attitudes seem bullish," says Greg Muzzillo, founder of Counselor Top 40 distributor Proforma (asi/300094). "Most indicators are up, like stocks and real estate. Businesses are feeling positive and investing in growth."

As economic and industry confidence rises, distributors are increasingly optimistic about upcoming sales. More than one-half (58%) of distributor respondents expect their revenues to improve in 2013, with smaller distributorships (less than $250,000 in industry sales) expressing the most optimism. Distributors forecasting higher company sales estimated their revenues will increase 14% for 2013.

"We are bullish for the rest of the year, yet not overconfident," says Memo Kahan, president of Counselor Top 40 distributor PromoShop (asi/300446). "PromoShop's sales numbers are a bit higher than the industry's numbers. We attribute this to further client penetration and a very strong sales team."

Nearly one-half (46%) of survey respondents reported an increase in sales in the first quarter of 2013 compared to Q1 of 2012, with the largest distributors enjoying the greatest gains. Small firms reported an average Q1 sales increase of 4.7%, while medium-size distributors ($250,001-$1 million) reported an average revenue jump of 4.1%. Firms with annual revenues of more than $1 million reported an average Q1 2013 sales increase of 6.9%. According to distributor respondents and ASI data, industry sales have now increased for 13 straight quarters.

To see the latest ASI quarterly sales report and to learn more about how the CCI is derived, click here. ASI will continue to release the CCI as part of every quarterly sales report.