Distributor Sales Jump 4.6% In Q3
Ad specialty industry distributors increased their revenues by 4.6% in the third quarter of 2013, a total year-over-year gain of $232 million, according to a report released today by ASI. Read Article
This is the 15th consecutive quarter of sales growth for distributors of promotional products. Further, the latest Counselor Confidence Index (CCI) – a measure of industry health – rose during Q3 to a score of 111, a 1.4 point improvement compared to the second quarter.
“Overall, I’d probably say this is the healthiest recent year,” said Jeff Becker, president of Kotis Design (asi/244898). “The last year or so has been much better. Some of our clients are definitely spending more, but there are also those clients spending less. The market is stronger, but not amazing.”
Large firms (annual sales of more than $5 million) reported an average sales increase of 6.1% in the third quarter, the highest of any group. Distributors with yearly revenues under $250,000 reported a 2.3% average increase in Q3 revenues, up from 1.1% in the second quarter. Nearly half (49%) of distributors reported their third-quarter sales were better this year than in Q3 of 2012.
“The popular answer, I suppose, is that the economy is improving and that is prompting customers to spend more,” said Ross Silverstein, president of Top 40 distributor iPROMOTEu (asi/232119), which has grown its sales by 20% in 2013. “Maybe that is partially true. However, another factor may be that distributors, instead of just waiting for the economy to improve, are actually working harder to secure new customers and increase their sales.”
Large distributors are the most optimistic about sales, as two-thirds expect their revenues to be higher this year than they were in 2012. Still, optimism among these large firms has faded a bit – in Q2 about 83% anticipated higher 2013 sales. Among all distributors surveyed, 55.2% now believe their 2013 sales will be stronger than their 2012 sales, a modest drop in optimism when compared to earlier this year.
“The spend is in reasonable shape but the margins continue to be challenging,” said Dan Craig, general manager of Top 40 distributor Accolade Promotion Group (asi/102905). “Luckily, we are strong in a couple of sectors that are in good shape and are spending. Our numbers are ahead of last year and we feel confident about the close of 2013.”
CPSC Recalls Hooded Jackets
The Consumer Product Safety Commission, in cooperation with retailer Vans, said last week that it is recalling a line of boys’ hooded jackets because the product has drawstrings through the hood. Read Article
In a ramped-up effort this year, the CPSC has cracked down on companies that are selling any upper outerwear children’s products (sweatshirts or jackets, for example) that contain drawstrings anywhere near the neck area. The CPSC says these types of children’s apparel items cause strangulation hazards, and has warned that selling or distributing these products violates current federal regulations.
The products in question in the most current recall were sold in Vans retail stores and online at www.vans.com between September 2012 and September 2013. While no injuries were reported in connection with these products, the CPSC says that about 2,400 of them were sold over the year time-period in question. It asks consumers to immediately stop using the jackets and to return them to Vans for a complete refund. The products were manufactured in India and imported by non-industry company Vans Inc. of Cypress, CA.
In its statement announcing the recall, the CPSC again warned apparel manufacturers and sellers about the dangers of children’s clothing with drawstrings near the neck or waist areas. “In July 2011, CPSC issued a federal regulation regarding drawstrings in children’s upper outerwear,” the federal consumer product watchdog said. “CPSC's actions demonstrate a commitment to help prevent children from strangling or getting entangled on neck and waist drawstrings in upper outerwear, such as jackets and sweatshirts.”
Vote Now For Your Favorite Suppliers
Every year Counselor magazine honors the best industry suppliers with our Distributor Choice Awards (www.asicentral.com/asiawards). Read Article
Of course, we can’t name the winners without distributors, because these awards are chosen solely by representatives of industry distributor firms. As a valued ASI distributor, we want your opinion about who the best suppliers are to work with in the industry. Please go here to vote in the Counselor Distributor Choice Awards.
These valued awards will be given out to winning suppliers at the ASI Show in Orlando on Monday, January 6, 2014. Your vote counts and we thank you in advance for your participation. Voting ends Friday, November 22. Go to www.asicentral.com/asiawards to vote now.
The Joe Show: Keep The Chill Away
In this episode of The Joe Show, Managing Editor Joe Haley shows off some new items that are perfect for a variety of upcoming cold-weather promotions. Read Article
Looking for a jacket or sweater that will surely keep users warm? How about a glove, scarf, or cap to help promo recipients accessorize in the coming months? Watch The Joe Show for new product and promotional ideas.
Click here to watch this new-products episode of The Joe Show.
Wholesale, Online Business Up At American Apparel
Driven by a rise in wholesale and online business, Top 40 supplier American Apparel (asi/35297) increased sales 1% in October to $59.5 million. The apparel company reported that business in its wholesale channel – which includes sales in the ad specialty industry – climbed 8% last month when compared to October of the prior year. While net sales in American Apparel’s online business channel soared 12%, the positive momentum was tempered by a 3% decline in comparable store sales in the company’s retail business.
“Although disappointed with the negative comparable performance of our retail stores in October, we are encouraged by the strength in our online and wholesale businesses,” Dov Charney, American Apparel’s chairman and CEO, said in a statement.
For 2013 as a whole, American Apparel’s wholesale business has increased 6% year-to-date, the supplier reported. Meanwhile, online sales have shot up 19% and retail channel sales have risen 3%. While Charney said a “weaker consumer spending environment” has hurt traffic at retail stores, he emphasized that he and his team are working hard to produce a strong end to 2013.
“As October came to a close, we began to feel some encouraging incremental sales momentum in some markets,” he says. “We are beginning to breathe a sigh of relief that we are overcoming some of the challenges we were experiencing at our new distribution center and we are pleased that our stores and customers are now being shipped product in a timely fashion.”
American Apparel ranks as the 14th-largest supplier in the industry, after reporting 2012 North American ad specialty sales of $96.8 million, an increase of 7.3% over the previous year.
Counselor How-To: Raise Prices & Retain Clients
The best time to increase prices, really, is any time you need to. There's no perfect time. "Raise prices when it is warranted and justifiable," says Scott Gingold, principal of consulting firm Greater Business Solutions. "In other words, it's when the distributor legitimately needs to raise prices due to increased fixed costs, such as electric, health insurance or rent. In turn, the distributor needs to carefully and thoroughly explain this to customers."
When it's time to increase prices, Mike Emoff, CEO of Shumsky (asi/326300), says distributors must carefully comb through their current accounts and decide who may be receptive to a hike and who might not be. "Do they have a lot of potential for growth? Am I their secondary or primary vendor? Am I their only vendor? All of these are factors I use that I recommend to all of us to determine which ones I want to take a risk on," he says.
Emoff thinks this is also an opportunity for distributors to dump some of their most difficult customers who use up too much of their time and hurt their bottom line. "Everyone's got them, and I think now is a good time to raise prices on that customer, because one of two things is going to happen: They're going to pay you more, or they're going to go away," he says. "Give them the option of staying with you at a higher price, or self-select out. Either one benefits you."
With your remaining clients, Emoff recommends going through them one by one to determine which are most likely to remain loyal even after a price increase. "You can sort by the easiest – the relationship is strong, they like you, it's not going to rock the boat – and then you can look at the other ones that are higher-risk," he says.
For more tips on how to raise prices while also retaining your best clients, click here to read the full Counselor article.
ASI Radio: Sales-Building Strategies For 2014
On today’s Tuesday Morning Show, the hosts provided listeners with advice for how they can start planning out their business for the New Year. Plus, we shared our Favorite Things, revealed the best ways to ensure your e-mails are opened, and debated the secrets that bosses hide from their employees.
If you missed the show, a recording is now available at www.asicentral.com/radio. And, don’t forget to join us for our next broadcast – Tuesday, November 19. Log on at 10:30 a.m. ET to listen to the show – and give us a call at (215) 953-4979 to hear your voice on the air.
What’s Your Apparel Blind Spot?
Whether you have decades of experience or are just getting started, is there an area of apparel in which you wish you knew more? It could be anything: staying current with trends, choosing clothing for the opposite gender or knowing which decoration method to pick. Or maybe you want to improve in all areas. We’re looking for people with “apparel blind spots” to participate in an upcoming article for Wearables. You will receive coaching and tips from industry experts. Our goal is to make you a stronger and more knowledgeable apparel authority.
To participate in this article, please send an e-mail to Editor C.J. Mittica at firstname.lastname@example.org. Please include information about yourself and your “blind spot.” Thank you to all of our potential participants.
In The News
Ash City (asi/37127) announces that website enhancements are now in effect including a new home page, a quick-order tool, added social media functionality, and a new check-out feature. Go to www.ashcity.com to view the site.
Royce Leather (asi/52390) now offers a wallet with stored GPS technology retrievable from an accessible mobile application available on the Apple App Store and Android Market. The product will be available beginning November 29 in stores and online.
World Emblem (asi/98264) announced that it is introducing the territory account manager position into its sales structure. This new fleet of territory account managers will be in charge of managing, as well as building, current customer relationships within their respective territories.
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The following are the dates and locations for The ASI Show in 2014:
Orlando, January 5-7, 2014
Dallas, February 4-6, 2014
Long Beach, March 25-27, 2014
New York, April 3-4, 2014
Chicago, July 15-17, 2014