PPB June 2020

I t was a year of slow decline for all promotional product distributors. While industry sales in 2019 decreased 2.11 percent from 2018 sales, the total remained just above the $24 billion mark at $24,223,484,868. (See Figure 1 for a 10- year tracking summary). The decrease is the first drop in distributor sales since the 2008-2009 downturn brought on by the recession. Overall, the decrease was driven by declining sales from small distributors (companies with annual sales under $2.5 million). This group experienced a 3.68-percent decrease in 2019 over 2018, while sales for larger distributors dropped only 0.86 percent. Within this group, companies with sales between $500,000 and $1 million declined 11.8 percent and those with sales between $1 million and $2.5 million declined 11 percent. However, there was some growth in this segment. Small distributors with sales up to $250,000 experienced the highest growth (14.5 percent), followed by those with sales between $250,000 and $500,000, which saw a 10-percent growth. But the growth in these smaller tiers wasn’t enough to offset the losses in the higher tiers, resulting in an average decline of 3.68 percent for the small distributor segment. While annual sales for small distributors weakened, the estimated number of companies in this cohort grew to 25,065 from 23,400 in 2018. This rise may be due to an expanded list of companies invited to participate in the survey as more small printing and graphic design companies enter the promotional product space. However, the number of large The Tipping Point Realized As small distributor sales weakened in 2019, the industry followed, producing the first downswing in sales in a decade. by Michaela Mora FEATURE | PPAI Exclusive Research: 2019 Distributor Sales Volume Estimate 44 | JUNE 2020 |