North American sales leap 4.9%, breaking record for 9th consecutive year
TREVOSE, PA – January 29, 2019 – The Advertising Specialty Institute® (ASI) today announced North American sales of promotional products hit a record $24.7 billion in 2018, up 4.9% from 2017 and breaking a distributor sales record for the ninth consecutive year.
The growth was fueled by sales of branded items like T-shirts, caps and pens that companies typically give away to promote their business, brand or event. ASI’s most recent Global Advertising Specialties Impressions Study on ROI shows promotional products consistently rank among the most influential, enduring and cost-effective advertising mediums available.
“Distributors in our industry are responding to monumental changes in today’s business world, rising to the digital challenge and clearly convincing more and more clients of the power of promotional products,” said Timothy M. Andrews, president and chief executive officer of ASI, the largest membership organization in the promotional industry, with a network of over 23,500 distributors and suppliers throughout North America. “I’m bullish on our industry and optimistic that smart brands will continue investing in affordable promo products, which hold their currency through good times and bad.”
In the fourth quarter of 2018, nearly 40% of distributors reported a sales surge over the prior year’s Q4.
At the same time, the Counselor® Confidence Index, which measures the health of distributor companies, dipped amid import tariffs, stock market instability and growing concern over domestic and global economies.
Still, distributors consistently used words like “hopeful,” “optimistic,” “better” and “growth” when asked for their outlook on 2019, according to ASI research. The Index scored 115 in the fourth quarter – just two points down from Q3’s 117, which was a record high. The 115 score was also spot-on Counselor’s rolling six-quarter average reading for the Index, while also being above Q4 2017’s reading of 114.
“In 2018, we saw organic growth across all aspects of our business as well as new opportunities in programs and acquisitions that resulted in a double-digit increase,” said Jo-an Lantz, president of Top 40 distributor Geiger (asi/202900). “The global economy was strong, and businesses capitalized upon this. The good news is that same strength is continuing into this year. We are positive and anticipate similar results in 2019.”
In all, nearly half of distributors (48%) increased revenue last year, while 30% held steady on sales. The industry’s bigger firms performed best overall: 70% of distributors with revenue of $1 million or more reported a 2018 year-over-year sales rise.
Nathaniel Kucsma, ASI’s executive director of research and corporate marketing, authored ASI’s 2018 sales report and said, “There’s no question that 2018 was a very strong year for promo, with a sales surge that outpaced 2017’s growth, which was 3.2%.”
Consolidation within the promotional products sector continues to impact sales, with ASI’s Counselor magazine reporting that larger distributors are gaining market share through organic growth and acquisition. Top 40 firms like AIA Corporation (asi/109480) reported an 11% gain in 2018, while 4imprint’s (asi/197045) preliminary full-year sales results indicate an 18% rise.
That said, many smaller distributors held their own in 2018. About four in 10 firms with revenue of $250,000 or less recorded an annual increase, while 48% of distributors with sales between $250,001 and $1 million also made gains, ASI data shows.
“I had record sales in 2018, partly due to winning large bids, with repeat customers making up a huge part as well,” said Kelly Moore, owner of Moore Promotions. “These loyal customers have all referred me so many times that my small business is booming. I am worried about tariffs, but as of now my overseas bids are holding firm until after the Chinese New Year.”
For more information on ASI’s sales reports and research, contact Nate Kucsma at [email protected].
The Advertising Specialty Institute (ASI®) serves a network of 23,500 suppliers, distributors and decorators in the $24.7 billion promotional products industry. ASI’s flagship product, the technology platform ESP®, manages the industry’s entire supply and marketing chain. ASI also produces award-winning digital and print content, live events and educational programs that enable companies in 55 countries to be more efficient, productive and profitable. ASI’s Counselor® magazine provides the most authoritative business content in the industry, and the ASI Education Certification Program features 200+ live and online education courses for industry professionals. The company, family owned and operated since 1962, is proud to have been consistently ranked among the “Best Places to Work” in Philadelphia and Bucks County, PA. For more info: www.asicentral.com.