PPB May 2018

Figure 9: Distributors’ 2018 Sales Predictions UNDER $2.5 MILLION 72 % GREATER THAN 2017 24 % SAME AS 2017 4 % LESS THAN 2017 OVER $2.5 MILLION 85 % GREATER THAN 2017 13 % SAME AS 2017 2 % LESS THAN 2017 ALL DISTRIBUTORS 73 % GREATER THAN 2017 23 % SAME AS 2017 4 % LESS THAN 2017 Figure 10: Distributors’ 2018 Pro t Predictions UNDER $2.5 MILLION 66 % GREATER THAN 2017 29 % SAME AS 2017 5 % LESS THAN 2017 OVER $2.5 MILLION 79 % GREATER THAN 2017 17 % SAME AS 2017 4 % LESS THAN 2017 ALL DISTRIBUTORS 68 % GREATER THAN 2017 27 % SAME AS 2017 5 % LESS THAN 2017 Figure 11: Top 10 Reasons To Expect A Pro t Increase In 2018 10 9 8 7 6 5 4 3 2 1 YEAR-TO-DATE SALES COMPANY GOALS CHANGE IN PRICING STRATEGY/BETTER MARGINS ADVERTISING AND MARKETING EFFORTS EXPANSION TO OTHER MARKET SEGMENTS & PRODUCT CATEGORIES BETTER BUSINESS ENVIRONMENT/ ECONOMY EXPERIENCE AND COMPANY HISTORY INCREASED SALES FORCE IMPROVEMENTS IN BUSINESS PRACTICES NEW BUSINESS DEVELOPMENT 19 % 15 % 12 % 8 % 5 % 6 % 4 % 4 % 4 % 4 % Study Methodology PPAI has researched and released industry sales data since 1965. This annual distributor sales study for PPAI is generally considered the most definitive and comprehensive of its kind in the industry based on actual sales reported by U.S. promotional consultant companies. In 2017, the survey was conducted by Relevant Insights LLC, an independent market research agency, on behalf of PPAI. To compile the 2017 Estimate of U.S. Distributors’ Promotional Products Sales for PPAI, the survey was distributed both via email and mail to more than 25,000 distributors, both PPAI member and nonmember promotional consultant companies. As in the past, the sample was drawn from a merge/purge of several separate industry databases, including PPAI lists and the Industry Directory. PPAI Exclusive Research: 2017 Distributor Sales Volume Estimate | FEATURE been the industry’s leading product category. For the first time, this year’s report separates sales in two new subcategories: Apparel and Accessories. Also, the Bags category has been renamed Travel and shows the total percentage of sales for bags and wallets separately. Health is another new category that is comprised of Medical & Safety and Beauty &Hygiene products. Games and Toys are now subcategories under Entertainment, and Kitchen and Tools are subcategories of the Home category. For a full list of the types of products within each category, see the chart in the summary report at www.ppai.org/research. Will 2018 Be Another Banner Year? Most Distributors Think So. Nearly seven in 10 distributors who participated in the 2017 study are optimistic about both sales and profits for 2018, especially large distributors (see Figure 9). Compared to predictions made for 2017, a greater number of large distributors feel bullish in their 2018 sales predictions, while smaller distributors seemmore cautious about what the year holds. Read the anecdotal thoughts and predictions from a sampling of distributor business owners beginning on page 50. Likewise, nearly seven in 10 distributors expect higher profits in 2018 (see Figure 10). About one in five companies expecting greater profits in 2018 based their predictions on new business development efforts. Many also considered increased sales during the first quarter of 2018, while others have implemented changes in their pricing strategy to increase profit margins. Only four percent of those 764 distributors who predicted higher profits and answered this question attributed their expectations to the current state of the economy (see Figure 11). Michaela Mora is principal of Relevant Insights, LLC. | MAY 2018 | 49