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DEBUNKING THE MYTHS ABOUT SELLING PREMIUMS & INCENTIVES
JULY 2015 •
PPB
• 55
that it is much more flexible than most PPAI sup-
plier models, mainly because there is no custom
decoration. The manufacturer’s rep (often a mem-
ber of the Incentive Manufacturers and
Representatives Alliance—IMRA), serves a function
that is not strictly paralleled in the promotional
products marketplace. Unlike the multi-line rep
that most PPAI members are used to dealing with,
the manufacturer’s rep is kind of what we would
think of as an “inside rep,” but on steroids. This
person is the interface through whom you can get
very detailed product and order support, even on
smaller quantities.
If you are using incentives frequently in pro-
grams, you might want to establish a relationship
with an aggregator. These are companies that
function as “wholesale to the trade only” and typi-
cally have a wide variety of merchandise you can
source and have drop shipped. Through this you
are dealing with a continuing relationship where
your business is not evaluated based on a single-
item buy, but rather the culmination of all of your
orders. Typically, to participate with an aggregator
requires that you be credentialed, such as through
membership in the Incentive Marketing
Association (much as a promo supplier might
require that you be a member of PPAI).
The Experts Say:
Hendrickson:
The margins on brand-name
products are usually lower, especially if you sell a
highly-discounted brand. But if you look at the
total dollars as opposed to the margin, you might
find selling brand-name products to be a great
second-income stream. You only need to sell a
few high-end pieces at a 10-percent margin to
equal several hundred of a lower-end promotional
product at a 40-percent margin.
Knollenberg:
Indeed, the margins for selling
incentive programs are much smaller, particularly
if the items are not imprinted, but the budgets for
incentive programs are significantly larger. Once
the program is sold, the amount of customer serv-
ice required on the part of the distributor is much
less than with imprinted bulk orders. Also, these
incentive programs can be ongoing and that
means steady income. Remember, at the end of
the day you go to the bank with dollars, not per-
centages. It is important to be aligned with experi-
enced, committed suppliers who know the impor-
tance of timely, accurate fulfillment.
Landry:
While it’s true that the margin in
branded upscale merchandise does not approach
non-branded merchandise from a percentage-
point perspective, it does from a dollar stand-
point. For example, one TUMI bag might be the
same dollar margin as 100 coffee cups. You take
“The margins on brand-name prod-
ucts are usually lower, especially if
you sell a highly-discounted brand.
But if you look at the total dollars as
opposed to the margin, you might
f ind selling brand-name products to
be a great second-income stream.”
—
Barb Hendrickson President, Visible Communication LLC
“
”
What Distributors Believe:
THE MARGINS
ARE TOO TIGHT
ON INCENTIVES
TO MAKE ANY
MONEY.