PPB June 2020

Orders Placed With Non-Industry Suppliers On average, the number of distributors doing business with non-industry suppliers declined in 2019. Fewer small distributors reported doing business with outside suppliers in 2019 (12.17 percent), down from 13.45 percent in 2018. The number of large distributors that reported doing business with non-industry suppliers increased in 2019, though only slightly, from 16.5 percent in 2018 to 16.99 percent (see Figure 8 ). Online Business Online sales are defined as buys resulting from orders placed through an online store or website. Web sales—not to be confused with salespeople transmitting orders online—are estimated to be $4,498,321,163 or 18.57 percent of the total sales in the promotional products industry. The proportion of online sales to total sales in the industry are lower for the first time since 2012, dropping from 24.3 percent in 2018 to 18.6 percent in 2019. Overall, the online sales volume decreased by 25.1 percent, which was driven by a 30-percent decline in online sales for large distributors, and an 8.3-percent decline for small distributors. Large distributors reported the harshest decline in online sales, from 33.83 percent in 2018 to 23.88 in 2019 (see Figure 9 ). Retail Branded Products Sales Retail branded products are defined as consumer-facing, brand-name products that add a sense of distinction to incentive and recognition programs as well as end- user gifts. Sales of retail branded products are estimated to be $5,359,867,165, or 22.1 percent of the total sales in the promotional products industry in 2019. This represents a *NEW ESTIMATION METHOD USED STARTING 2013 Figure 6: Percentage of Small Distributors Selling “Mostly Other Things” 2012 2013* 2014 2016 2017 2018 2019 % PROMOTIONAL PRODUCTS SALES BY SMALL DISTRIBUTORS WITH SALES UNDER 80% OF TOTAL SALES SMALL DISTRIBUTORS WITH LESS THAN 80% OF SALES IN PROMOTIONAL PRODUCTS 39.5% 25.7% 44.8% 26.1% 41.0% 23.5% 34.9% 23.2% 43.5% 32.7% 39.7% 27.5% 46.0% 28.0% HowThis SurveyWas Conducted PPAI has researched and released industry sales data since 1965. This annual distributor sales survey 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. The survey was conducted by Relevant Insights LLC, an independent market research, on behalf of PPAI. The survey was distributed both via email and mail to more than 29,000 distributors, both PPAI member and non-member promotional consultant companies. Companies had the option to answer the survey online or return it by mail. The top 50 distributors were also reached by phone to make sure their information was included in the analysis since omission of any distributor with a large volume of business could distort the statistics. A census of all distributors doing $2.5 million or more in sales was also included. Combining the samples from the different data collection methods used resulted in a projected total of 25,847 distributors (25,065 small firms and 782 large firms) covering the entire U.S. industry. PPAI Exclusive Research: 2019 Distributor Sales Volume Estimate | FEATURE | JUNE 2020 | 47