SUPPLIER  Industry Sales

3Q 2013 Industry Sales Report: Industry Sales Increase 7%

Research by Larry Basinait

On September 26, 2013, ASI® commissioned an exclusive survey to estimate industry sales for the third quarter of 2013 as well as the outlook for all of 2013. Invitations went to ASI supplier 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 ASI press releases.

The 4Q 2013 Sales Study Report will be published in January 2014.

Methodology:

A total of 193 supplier firms responded to the survey request out of 2,339 firms invited, resulting in an 8.3% response rate. An incentive of an annual drawing for $500 was offered.

Conclusions:

  • During the third quarter, there was a year-over-year increase in sales among ASI supplier members of 7.0%. This is the 15th consecutive increase in sales vs. the corresponding quarter of the previous year and up slightly from the increase in the first quarter, which was 4.8%.

    • The percentage increase in sales for the second quarter of 2013 (7.0%) was considerably higher than the percentage increase in sales for each quarter since 3Q 2011.

  • Total supplier sales for the third quarter were approximately $3.6 billion. The net increase over Q3 2012 was $234 million.

  • Sales for all of 2013 are expected to be higher than 2012 by 61.2% of suppliers, the highest percentage of the year. During the second quarter, 54.3% of suppliers expected sales for the year to be up while 57.0% expected them to be up in the first quarter.

    • Large suppliers are nearly as optimistic now about sales for 2013 as they were in January, when 78.6% felt sales for 2013 would exceed sales in 2012. However, smaller suppliers are much less optimistic, as 73.2% felt sales would be higher for 2013 in January compared to 57.8% at the end of the third quarter.

  • Over two-thirds (68.6%) of suppliers plan to expand their product lines in 2014, consistent with findings from 2012.

  • Total marketing spend is expected to increase by 47.9% of suppliers in 2013, while 45.2% of suppliers plan to increase electronic advertising spending.

  • Distributors were also fairly optimistic about sales for 2013. Over one-half (55.2%) of all distributors feel sales for 2013 will be higher than sales in 2012. Distributor's revenues for the third quarter of 2013 increased by 4.6%.

Detailed Findings:

Supplier vs. Distributor Sales

  • Supplier sales for the third quarter of 2013 increased by 7.0%, the 15th consecutive increase.

Indusrty Sales Revenue

How did your third-quarter 2013 sales compare to your third-quarter 2012 sales?

  • Over one-half (53.3%) of respondents reported an increase in sales, while 18.5% reported a decrease. This is the greatest percentage of suppliers reporting an increase since 3Q 2012.

Sales results Qtrly Comparison

How did your third-quarter 2013 sales compare to your third-quarter 2012 sales? (Continued)

  • Both larger (more than $10 million in sales) and smaller (less than $10 million in sales) suppliers reported increases in sales as compared to the corresponding quarter from the prior year. Smaller suppliers reported a greater increase in sales (8.5%) than larger suppliers (6.2%). The increase was the most reported for both groups in over one year.

  • Total supplier sales for the third quarter were approximately $3.6 billion. The net increase over Q3 2012 was $234 million.

Current Quarter Sales vs. Quarter Year Ago

How do you feel your sales for all of 2013 will compare to your sales in 2012?

  • Nearly two-thirds of suppliers (61.2%) believe sales for 2013 will be higher than in 2012. Larger suppliers were much more likely to indicate that sales were forecast to be higher than smaller suppliers.

    • Large suppliers are nearly as optimistic now about sales for 2013 as they were in January, when 78.6% felt sales for 2013 would exceed sales in 2012. However smaller suppliers are much less optimistic, as 73.2% felt sales would be higher for 2013 in January compared to 57.8% at the end of the third quarter.

  • Among those anticipating an increase in sales over 2012, the average increase is 15.2%, while the minority anticipating a decrease estimated a decline of 13.9%.

Forecast 2013 Sales vs. 2011 Sales

Please select your anticipated action in 2014 for each of the statements below. Please select all that apply.

  • Over two-thirds (68.6%) of suppliers plan to expand their product lines in 2014, the most of any of the ten areas analyzed. This finding is consistent with what was anticipated for 2013 during the last quarter of 2012.

  • Total marketing spend is expected to increase by 47.9% of suppliers in 2013, while 45.2% of suppliers plan to increase electronic advertising spending. The planned increase in marketing spending for 2014 is up nearly five percentage points over plans for 2013.

Anticipated Actions in 2014

Do you currently have formal testing and inspection procedures in place to ensure the safety of your products?

  • Just over two-thirds (67.4%) of suppliers have formal testing and inspection procedures, which is up slightly from 65.0% in 2012. Nearly nine out of 10 larger suppliers have the procedures, vs. just 60.9% of smaller suppliers.

Safety of your products

Are you planning to increase your spending on product testing and safety?

  • Three-quarters (75.0%) are not planning to increase spending on testing and safety. Particularly concerning is that 76.6% of smaller suppliers are not, and they are much less likely to have formal testing procedures in place already.

  • Plans for increased spending on product testing and safety have not changed considerably since 2012.

Spending on product testing and safety

What percentage of your products are produced outside of North America?

  • Most (52.7%) of products are produced outside of North America, with larger and smaller suppliers indicating similar patterns.

Percentage of your products are produced outside of North America

Approximately what percentage of trade show leads you obtain do you follow up on within 7 days of the show closing?

  • Across the industry, suppliers claim they follow up on 58.0% of trade show leads within 7 days of the show closing, down from 69.1% in 2012.

    • Larger suppliers are somewhat more likely than smaller ones to follow up within 7 days, as they follow up on 60.4% of leads, while smaller suppliers follow up on 56.6% of leads in the same time frame.

    • In 2012, larger suppliers stated they follow up on leads within 7 days of the show closing 81.4% of time, significantly higher than the 60.4% reported this year.

Trade show leads