PPB May 2018

complete methodology and detailed findings (available to PPAI members only) at www.ppai.org/research. Comparisons By Company Size In terms of market share, the 843 distributor firms representing large companies (over $2.5 million) captured $13,493,850,947 of the business—a 57.95 percent share. This segment included franchisors such as AIA Corporation, Proforma and HALO Branded Solutions, and these firms report for their franchisees. As a group, sales from smaller distributors (revenues less than $2.5 million) amounted to $9,792,129,462, or 42.05 percent of the total. Compared to the past 10 years of industry sales, the large distributors’ share of total sales volume saw the largest increase (see Figure 2). In 2017, the growth pattern was reversed. Unlike in 2016 when small distributors experienced most of the growth, in 2017 they saw almost negligible positive growth, while large distributors achieved double-digit increases. Specifically, distributors in the $2.5 million-plus bracket recorded sales of nearly $13.5 billion, showing a gain of 16.34 percent over 2016 (see Figure 3). Smaller distributors saw an average increase of 0.89 percent, with total orders of approximately $9.8 billion. It wasn’t by much, but all small companies—except for those earning between $1 million and $2.5 million— saw an increase in sales in 2017. The most notable growth was found among companies in the $250,000 - $500,000 revenue segment; these reported 10.89 percent growth. However, sales from companies in the $1 million - $2.5 million segment declined by 4.98 percent compared to 2016, dragging down the average for the entire small- company category (see Figure 4). The average revenue for the 22,721 firms in the small-company segment was 2012 2013 2014 2015 2016 2017 CHANGE OVER 2016 $1.6 $1.7 $1.8 $1.8 $1.6 $1.7 6.40 % $1.9 $1.5 $1.5 $1.5 $1.6 $1.8 10.89 % $2.3 $2.5 $2.2 $2.6 $2.5 $2.5 0.48 % $3.3 $4.4 $4.3 $3.4 $4.0 $3.8 -4.98 % $9.3 $9.7 $10.1 $11.5 $11.6 $13.5 16.34 % TOTAL $18.5 $19.8 $20.0 $20.8 $21.3 $23.3 9.30 % <$250K $250K- $500K $500K- $1M $1M- $2.5M $2.5M+ Figure 3: 2017 U.S. Distributor Sales Vs. 2016 Figure 4: Industry Sales By Company Size, 2012 - 2017 Figure 5: Small Distributor Sales Average, 2008 - 2017 FIRMS WITH LESS THAN 80% OF SALES IN PROMOTIONAL PRODUCTS % OF PROMOTIONAL PRODUCTS SALES BY FIRMS WITH SALES UNDER 80% OF TOTAL SALES BY THE UNDER-$2.5M FIRMS 43.5 % 32.7 % 38.8 % 32.5 % 37.4 % 39.5 % 25.7 % 44.8 % 26.1 % 41.0 % 23.5 % 34.9 % 23.2 % 46.1 % 2017 2010 2011 2012 2013 2014 2016 2017 2010 2009 2008 2011 2012 2013* 2014 2015 2016 Figure 6: Percentage Of Small Distributors Selling “Mostly Other Things” $468K $368K $407K $423K $415K $443K $431K $418K $450K $431K PPAI Exclusive Research: 2017 Distributor Sales Volume Estimate | FEATURE Figures shown in billions of dollars. COMPANY SIZE | MAY 2018 | 45