Distributors demonstrated resilience with a 1.2% year-over-year sales boost, with the total annual tally surpassing the industry’s previous record of $25.8 billion, first set in pre-COVID 2019. The growth rate has moderated from 2022’s robust 11.4% and falls below the broader U.S. gross domestic product (GDP) growth of 2.5% in 2023. Despite the tempered pace, the promo industry maintains its upward trajectory, showcasing stability amid changing economic landscapes.
“Against last year’s backdrop of economic uncertainties, these results show great promise, speaking directly to the unwavering commitment and tenacity of our distributors,” said Timothy M. Andrews, ASI president and chief executive officer. “The positive momentum, fueled by an increasingly robust economy, positions the promo products industry for continued growth and exciting prospects in 2024.”
According to ASI’s sales analysis, the latter half of 2023 saw a deceleration in growth, with larger industry distributors especially struggling. The fourth quarter underscored this trend, reporting a nominal 0.1% year-over-year sales increase for all distributors. Although the quarter marked the 11th consecutive period of growth, the extent of the increase was the most subdued among the post-pandemic recovery phases, reflecting the industry’s nuanced journey through evolving market conditions.
Various factors, including inflation, marketplace uncertainty, recession fears among corporate buyers, and geopolitical tensions, influenced promo investment in 2023, particularly in Q4, promo executives told ASI Media.
“Distributors in our industry did show resilience in the face of what seemed like constant threats to the promo business,” says Nate Kucsma, ASI’s senior executive director of research, who spearheads ASI’s quarterly sales surveys. “Engineering a gain under those circumstances is impressive.”
Mid-sized distributors, with annual revenue between $250,000 and $1 million, experienced the most significant collective gain last year at 3.1%. Notably, 53% of these distributors achieved full-year sales growth, leading among different revenue categories.
Key success factors mentioned by mid-sized distributors included a greater willingness of key clients to spend, effective mining of current customer bases for expanded sales opportunities and successful prospecting leading to new business.
Seth Kaminstein, president of Florida-based mid-sized SK Promotions Inc. (asi/525995), more than doubled his distributorship’s business to $500,000 in annual revenue. His success was attributed to strong sales techniques and effective customer/order management, catering to diverse clients such as universities, high schools, healthcare providers, social media influencers, and social events like weddings and bar/bat mitzvahs.
“Our account base continues to grow thanks to referrals,” Kaminstein said. “There’s plenty of business out there for all of us. It just takes hard work, great communication, dedication, consistency and solid relationships to grow.”
ASI Research surveyed distributor members in January 2024 about Q4 and 2023 sales performance to determine results.
“Looking forward to the rest of 2024, the current positive economy indicators likely mean a transition to a period of more stable and healthy growth,” Andrews said.
For more information on ASI’s sales reports and research, contact Nate Kucsma at [email protected].