Distributor Industry Sales

1Q 2013 Industry Sales Report: Industry Sales Increase 5.7%

Research by Larry Basinait

On April 2, 2013, ASI® commissioned an exclusive survey to estimate industry sales for the first quarter of 2013. The industry outlook for the remainder of the year was also included in the study. Invitations went to ASI distributor members who were the primary contact with their firms, and had been in business at least one year. The results of this survey will be published in  Counselor® PromoGram®  and on ASICentral.com.

A total of 527 distributor firms responded to the survey request out of 13,300 invited, resulting in a 4.0% response rate. An incentive of a drawing for $500 was offered. Larger distributors were over-sampled, with results then weighted for a more accurate analysis.

For the first time, ASI has included a new metric to quantify distributor business results. The Counselor Confidence Index (CCI) shows how well distributors believe the "health" of their business is relative to other years since 2001. The index uses 2001 as a base year to compare current findings. The index is patterned after the Consumer Confidence Index.

The 2Q 2013 Sales Study Report will be published in July 2013.

Conclusions:

  • During the first quarter of 2013, there was a 5.7% year-over-year increase in sales among ASI distributor members. The largest distributorships reported an increase in sales of 6.9%.

    • While overall sales are up, for the first time since 2009, less than half (45.8%) of all distributors reported increased sales.

  • The increase in sales reported indicates industry growth of $214 million over the first quarter of 2012. Sales for the first quarter of 2012 were approximately $4.0 billion.

  • Distributors are fairly optimistic about sales for 2013. Over one-half (57.8%) of all distributors feel sales for 2013 will be higher than sales in 2012.

    • However, in the first quarter of 2012, over three-quarters (77.5%) of distributor firms expected an increase in sales for the year. This suggests that distributors are less optimistic about their own sales this year than they were a year ago.

  • The first-quarter 2013 report contains the new Counselor Confidence Index. Results for the first quarter show a score of 102.6. The baseline was set at the 2001 confidence level, equal to 100. First-quarter estimates tend to be more optimistic than whole-year estimates, but the first-quarter score still shows distributors believe the industry to be the healthiest since 2007.

Detailed Findings:

How did your first-quarter 2013 sales compare with your first-quarter 2012 sales?

  • Just less than one-half (45.8%) of respondents reported an increase in sales in the first quarter of 2013 compared to the first quarter of 2012.

1Q '13 Sales vs. 1Q '12 Sales

  • The first-quarter year-over-year sales increased 5.7%. This was the largest increase since the first quarter of 2012. The first quarter showed the highest percentage increase in sales in both 2011 and 2012.

  • Distributors with revenue under $250,000 reported a 4.7 percentage point increase in revenue. The smallest distributors as a whole are the most volatile, with more distributor firms entering and leaving the industry than any other group. Medium-size and larger distributors showed an increase in sales of 4.1% and 6.9%, respectively.

Current Quarter Sales vs. Quarter Year Ago

Industry Sales vs. Same Quarter Prior Year

  • The fourth quarter of 2012 resulted in a sales increase of 5.7%, the thirteenth straight quarterly increase.

  • The quarterly increase in revenue was one percentage point what was reported for 1Q 2012, which was 6.7%. Typically, the first quarter of each year has the highest percentage gain over the same quarter the prior year.

Industry Sales Revenue % Charger vs. Year Ago Quarter

Current Quarter Sales vs. Same Quarter One Year Ago

  • For the third consecutive time, the percentage of distributor firms that indicate the current quarter's sales are greater than those of the corresponding quarter from the prior year declined.

    • For the first time since 2009, fewer than half of distributors reported an increase in sales vs, the same quarter the prior year.

% of Distributor firms with increaase in sales qtrly comparisons

What is your forecast for your overall sales in 2013 compared to sales in 2012?

  • Over one-half (57.8%) of respondents expect an increase in sales in 2013.

  • The number of distributor firms anticipating an increase is over four times greater than the number of those anticipating a decrease.

Sales Forecast 2013 vs. 2012

How do you feel your sales for all of 2013 will compare to your sales for all of 2012? (By company size)

  • The sales forecast among distributor firms for 2013 vs. 2012 shows optimism across different sized distributorships. In a change from recent trends, smaller distributorships (less than $250,000 in industry sales) were the most optimistic, with 60.5% expecting higher sales in 2013.

  • Distributors forecasting an increase estimated an aggressive increase in sales of 14.3% for 2013. Those forecasting a decrease estimated a decrease of 17.0%.

Forecasted Sales 2013 vs. 2012

Counselor Confidence Index

Please rate the "health" of the promotional products industry for distributors in general for the first quarter of 2013.

Beginning with the first quarter of 2013, ASI will produce another measure of industry sales results. Taking data from over a decade of Counselor magazine State of the Industry survey results, ASI has developed theCounselor Confidence Index.

Patterned after The Conference Board's Consumer Confidence Index®, the Counselor Confidence Index is an indicator designed to measure distributor health, which is defined as the degree of optimism on the state of the industry that distributors are experiencing through the results of their business operations. The value from the industry health question is compared against each respective score since 2001, and an index is derived. The year 2001 was chosen as a benchmark because it was neither a peak nor trough in the business cycle.

The chart below shows annual results of using the index. Results for the first quarter show a score of 102.6. First-quarter estimates tend to be more optimistic than whole-year estimates, but the first-quarter score still shows distributors believe the industry to be the healthiest since 2007.

Counselor confidence index