Q3 Distributor Revenues Increase 4.6%

Data released by ASI at the end of October shows that distributor sales rose by 4.6% in the third quarter of 2014, continuing a stretch of 19 consecutive quarterly gains. Meanwhile, the Counselor Confidence Index, a measure of distributor health, was 112 in Q3 – identical to the six-month rolling average and a dozen points above the baseline that indicates industry growth.

“I believe the general economic indicators, especially the unemployment report, are the reason why sales numbers are high and companies feel bullish,” said Memo Kahan, president of Top 40 distributor PromoShop (asi/300446). “It makes sense and I am optimistic this can last for a few more quarters.”

About 54% of distributors reported a year-over-year rise in third-quarter sales, while 27% reported their sales were unchanged and 19% reported a decline in revenues. Small firms (less than $250,000) averaged 2.4% growth, while mid-sized distributors ($250,000 to $1 million) averaged 1.5% growth, data showed. Large distributor firms (more than $1 million in annual revenues) had an average sales increase of 5.7%.

“In our third quarter, we were up 21% over the previous year,” said David Woods, president of Top 40 distributor AIA Corporation (asi/109480). “We have been particularly successful in attracting new distributors to AIA. We’ve also had an outstanding year – our sales are up 14% over 2013 through the end of October.”

Most distributors are optimistic about their total sales in 2014 with nearly two-thirds (61%) expecting an increase in revenues over 2013. Just fewer than 60% of small and mid-sized distributors now expect their sales to rise this year. Larger revenue distributors are more bullish, with 70% forecasting a sales increase in 2014.

“Our future outlook is generally higher,” said Jason Robbins, CEO of ePromos Promotional Products (asi/188515). “I do think Web distributors like us are taking share away from the traditional distributors. Many buyers know what they want, have a few questions and don’t like too much human interaction. We like this part of the promo business.”