New data from ASI reveals that distributors grew revenues by 3.5% in the first quarter of 2015, the 21st straight quarterly rise. Meanwhile, the Counselor Confidence Index – a tool that measures distributor health and optimism – ticked upward from 114 to 115, hitting its highest ever point in the 14 years for which data exists.
Distributors say everything from a stronger domestic economy to internal initiatives at their companies are driving sales and positive sentiment. “Overall consumer confidence is higher than a year ago as key economic indicators reflect continued tailwind in the economy,” said Terry McGuire, senior VP of marketing at HALO Branded Solutions (asi/356000).
HALO – and other leading distributors – made sure to get the most out of the improving economy by focusing on strengthening their businesses. “Our growth has been achieved through recruiting – adding high-performing industry sales professionals – and organic growth,” said McGuire, noting HALO experienced a double-digit revenue rise in Q1 compared to the same quarter the previous year. Similarly, Kotis Designs (asi/244898) engineered Q1 growth. “We’re making every single part of our business better so the product we deliver to our customer improves every day,” said Jeff Becker, the firm’s president.
While the industry-wide distributor sales growth is encouraging, the 3.5% increase in Q1 is the smallest quarterly rise in the last five years. The previous slowest rate of growth - 4.6% - occurred several times during that period, most recently in Q3 of 2014. There is no consensus on what caused the slight Q1 slow down. It could be everything from the harsh winter that parts of the country endured to a possible plateauing effect that’s happened as buyers, past the period of rapid spending swells that occurred post-recession, now purchase at more consistent dollar levels.
Regardless, the slower rate of sales growth has not dampened optimism about 2015. More than 60% of distributors expect sales will increase this year, while 31% anticipate that business will remain steady. Only 8% expect business to drop. “We’ll definitely be up compared to 2014,” said Becker. McGuire is confident that HALO’s sales will continue to surge, too. “HALO account executives are working harder – and smarter – than ever to grow their business,” he said. “We have had several new account executives join HALO since the beginning of the year. Once they ‘settle in’ and start utilizing our sales and marketing tools, their business increases as well.”