PPB December 2018

lineup, offering not only every kind of stress reliever imaginable but also technology items, bags and many other products. “Ariel stays on the cutting edge of product design by doing a lot of different things,” Lu says. “We are always proactively looking for new ideas. We takemultiple trips to Asia every year, both to see shows and visit factories. I amalso still actively involved in this process.” The pair stays on top of product trends by leveraging the relationships they have built with their vendors overseas. “We work very hard to create strong relationships with our core vendors who look out for us,” says Lu. “They present us with new ideas and keep us up-to-date on new trends. They see things early and have their own great network that they share with us.” Asian Advantage Lu’s Taiwanese heritage gives her an advantage with Asian manufacturers. “Coming from Taiwan and being able to speak Chinese, and since I know the culture so well, it offers me a unique advantage to develop better, stronger relationships,” she says. “Several of our top managers are also from Asia and that adds to this strength. It has enabled us to open two Ariel sourcing offices in Asia.” With these relationships, Yuhling also spends time building strategies for each of Ariel’s product categories. “We look at their scope for design, price points and color offerings. Any new product we choose must fit into this structure and make good sense to the overall mix of the category collection,” she says. The husband and wife team also listen carefully to customer feedback. “So many customers offer good ideas on how to improve a product or on a trend they see in their market,” Lu says. “We then do more research.” Trade War Trouble Even with her strong relationships with manufacturers in Asia, Lu says the trade war between the United States and China is creating significant insecurity in global markets— and the promotional products industry is no exception. “This developing trade war between the U.S. and China has brought us a lot of uncertainty and is making us look at our business in many new ways,” Lu says. “We have to find new ways to mitigate costs so that we can try to pass on less of the tariffs. For those suppliers heavily dependent on importing from China, and who do not pass on all the tariffs, they will see less profit and may have less of a budget to buy inventories.” From the distributor side, Lu says higher prices may drive their customers to buy lower quantities or less expensive products. “Fixed end-buyer marketing budgets combined with higher product costs will mean fewer items being sold,” she adds. Lu believes the No. 1 issue in the promotional products industry right now is the trend toward thinner margins. “This is based on several factors, mostly the trade dispute, but also increased costs in raw materials, exchange rate fluctuations, increases in shipping and logistical costs, and increasing product safety compliance costs,” she says. “There is also the big matter of a labor shortage,” Lu adds. “It is hard to grow the business with the ongoing shortage in finding more qualified people. This results in growing labor costs. You have to pay more to get people.” The American Dream In 2015, Ariel Premium Supply was named ASI’s Supplier of the Year. “In the beginning, I was not looking to build an ASI Top 40 supplier, but over the years the team has come together and they all work so hard,” she says. Lu attributes a great deal of Ariel’s success to her employees. “We have put together a truly multi-cultural team at Ariel and we work so well together to grow the business,” she says. “Most of our staff members are minorities. I am proud to provide jobs for many who are not native English speakers. It is not easy for them to find jobs or careers here. But Ariel offers them language and cultural classes to help them establish a life here in the U.S. Though we come frommany parts of the world, I think we are a real American success story.” Despite the company’s success, Lu and her team are careful not to rest on their laurels but to remain in a state of expansion. “We are always “Thoughwe come from many parts of theworld, I thinkwe are a real American success story.” —Yuhling Lu | DECEMBER 2018 | 79 THINK