Distributor Sales Rise 5.1% In 2014
All-Time Industry High For Distributor Sales
Ad specialty distributors increased their revenues by 5.1% in 2014, driving total industry sales to approximately $21.5 billion last year, according to a report released today by ASI. The result is an all-time industry high for annual distributor sales, surpassing the 2013 mark of $20.5 billion. Data also showed distributors grew sales by 5.9% in the fourth quarter of 2014, the 20th straight quarterly rise. Meanwhile, the Counselor Confidence Index – a tool that measures distributor health and optimism – improved slightly to 114 in the fourth quarter, hitting its highest point in nearly a year.
“I believe the economy is better, there is consumer confidence and clients feel it,” said Memo Kahan, president of Top 40 firm PromoShop (asi/300446), whose sales increased by double-digits last year. “When we feel good, we tend to spend more. Couple all this with gas prices going down, a stronger dollar and steady GDP growth and things are good.”
In 2014, 62% of distributors reported an increase in sales, with the largest firms seeing the most significant jumps. About 78% of larger distributors (more than $1 million in annual revenues) reported a rise in sales, data showed. Nearly two-thirds (64%) of medium-size companies ($250,000-$1 million) and 57% of smaller firms (less than $250,000) also reported an annual sales increase.
“Our sales were up 7.8% in 2014 and we hit $43 million in total,” said Larry Cohen, president of Top 40 distributor Axis Promotions (asi/128263). “This is a big increase over 2013, which was also a good year for us. I think that many of our clients loosened some of their restraints as they became more comfortable with the overall direction of the economy and their own profit forecast.”
Going forward, most distributors feel 2015 will be another strong sales year. “For 2015, I would estimate industry growth at another 5%, and our growth should be a multiple of that,” said David Woods, president of Top 40 firm AIA Corporation (asi/109480). “Relatively solid economic growth in the U.S., plus very low interest rates, substantially lower oil prices, and an election year looming in 2016 are all factors that play into it.”