PPB June 2020

companies reporting sales over $2.5 million declined from 840 in 2018 to 782 in 2019. The total number of U.S. distributor companies participating is estimated at 25,847, compared with 24,240 in 2018. Another area that contributed to the decline in overall sales was the share of online sales of promotional products. This segment represented 18.6 percent of sales in 2019, down from 24.7 percent in 2018. Total online sales volume declined by 25.1 percent to $4,498,321,163, compared to $6,007,044,117 in 2018, disrupting the previous years’ trend toward growth in online sales for both large (down 30 percent) and small distributors (down 8.3 percent). The trend of distributors buying from non-industry providers was also interrupted in 2019. On average, distributors sold $3,605,923,177 worth of products purchased from non-industry providers, or 14.9 percent of the total dollar volume. Sales from non- industry providers declined by 3.4 percent over 2018. The bright spot in this survey was the rise in sales of retail branded products with a 46-percent increase over 2018 and estimated sales of $5,359,867,165 in 2019. Comparisons By Company Size In terms of market share, the 782 firms representing large companies with over $2.5 million in annual sales captured $13,634,410,069 of the business—a 56.29-percent share. These included franchisors like AIA Corporation, Proforma and HALO Branded Solutions, and these firms report for their franchisees. Sales from smaller distributors as a group amounted to $10,589,074,799 or 43.71 percent. (see Figure 2 ). Last year’s sales decline didn’t discriminate—both large and small distributors experienced negative growth. Small distributors with total orders of approximately $10.6 billion dropped 3.68 percent from a strong 12.27-percent spike in 2018. For large distributors, the average decline wasn’t as severe. Distributors in the $2.5 million-plus bracket recorded Figure 1: A 10-Year Look At Distributor Sales SHOWN IN BILLIONS OF DOLLARS. 2019 $24.2 2018 $24.7 2017 $23.2 2016 $21.3 2015 $20.01 2014 $20.04 2013 $19.8 2012 $18.4 2011 $17.7 2010 $16.5 2019 2010 2011 2012 2013 2014 2015 2016 2017 Figure 2: Market Share By Distributor Size, 2010-2019 OVER $2.5 MILLION UNDER $2.5 MILLION 56 % 50 % 50 % 49 % 49 % 49 % 54 % 55 % 50 % 50 % 44 % 51 % 51 % 51 % 46 % 58 % 42 % 2018 56 % 44 % 45 % Figure 3: Annual Estimate Of U.S. Distributor Sales In 2019 vs. 2018 DISTRIBUTOR COMPANY SIZE Under $2.5 million NUMBEROF DISTRIBUTORCOMPANIES 2019 SALES VOLUME 2018 SALES VOLUME TOTAL DIFFERENCE % INCREASE/DECREASE IN SALESVOLUMEOVER2018 $2.5 million or over TOTAL 25,065 782 25,847 $10,589,074,799 $13,634,410,069 $24,223,484,868 $10,994,099,736 $13,752,479,103 $24,746,578,839 $405,024,937 $118,069,034 $523,093,971 -3.68% -0.86% -2.11% 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. PPAI Exclusive Research: 2019 Distributor Sales Volume Estimate | FEATURE | JUNE 2020 | 45