A Market Snapshot of Promotional Products Sales For The Fourth Quarter 2011
IRVING, Tex. (February 27, 2012) – Promotional Products Association International (PPAI; ppai.org), the not-for-profit association for more than 10,000 member companies of the $16.5 billion promotional products industry, today reported supplier and distributor industry sales barometer results for the fourth quarter 2011.
"The fourth quarter was strong and people are going into 2012 with a real belief that it's going to be a strong year for the industry," said Damian Want, COO of 99CentPromos.com. "Marketing budgets are beginning to expand and we have a lot to look forward to in 2012."
Supplier sales were up 5.04 percent for the quarter over last year, it was still better news when looking at the entire year. Looking at year-to-year comparisons, suppliers reported an average increase of 7.20 percent. The median increase reported was 7 percent. When looking at the distribution of numbers reported, 76.7 percent of suppliers reported an increase for the year, 2.33 percent stayed the same and 20.93 percent saw a decrease.
Also encouraging were the answers received when distributors were asked to look at total 2011 promotional product sales with that of total sales in 2010. Distributors reported an average increase of 6.67 percent and a median increase of 7.00 percent (i.e. 50 percent saw an increase of 7 percent or more and 50 percent saw less than that). A solid 70.41 percent reported that they saw an increase, while 27 percent saw a decrease and 2.59 percent saw no change. Note that the respondent make-up consisted of 85.2 percent of members and 14.8 percent of nonmembers.
Suppliers – Fifty-four percent predict that they will see an increase, 21 percent anticipate they will see a decrease and 25 percent think it will be about the same. With more than half of the suppliers predicting an increase for the first quarter, their reasons for optimism are many. Some see a trend in upward movement of sales, while others took in hefty orders and pre-bookings in December for the first quarter. Still others have expanded their product lines and shored up their marketing plans for the year and hope to reap the benefits in the first quarter.
Distributors – Fifty-eight percent of distributors predict an increase in sales for the first quarter of 2012. Distributors report breaking into new segments, more orders in the pipeline in late December, new clients and a steady trend in increased business. Most are optimistic after seeing continuous growth in the last four quarters. Only 11.5 percent predict a decrease in sales for the first quarter of 2012. For distributors, 30.4 percent predict that the first quarter of 2012 will be about the same as the last quarter of 2011.
Barriers To Business
Suppliers – In general, the economic climate is the main concern for 72 percent of suppliers. This figure is down from the 84 percent that were concerned about the economy in the last quarter. Raw material costs continue to plague suppliers with 54 percent of them citing this as major competitive threat. Four of ten suppliers worry about lower cost competitors and approximately 35-36 percent of them have concerns about increases in overseas product costs and shipping and handling costs. Other concerns voiced by suppliers were those about distributors going direct, internet sources and slow paying or delinquent customers.
Distributors – For seventy-four percent of distributors, the immediate threat on their mind is the economy. For 69 percent it is the client’s budget that they worry about. Restricted spending on the part of buyers, plus the fact that they want a lower unit cost and reduced quantities are of top concern to distributors. "Other" concerns voiced by distributors are increased competition from the internet and big box retailers.
Since 1903, the Promotional Products Association International, a not-for-profit, has been the standard-setting international trade association for the promotional products industry. PPAI offers education, tradeshows, business products and services, mentoring, technology and legislative support to its members. Today, PPAI serves more than 10,000 global members who lead the $16.5 billion industry. The multi-billion-dollar industry includes wearables, writing instruments, calendars, drinkware and many other items, usually imprinted with a company’s name, logo or message. PPAI created and maintains the UPIC (Universal Promotional Identification Code), the industry’s only free identification system and universal company database. For information regarding PPAI or to learn more about the proven power of promotional products (including research and case studies), visit the PPAI website at www.ppai.org.