Online sales impacting earnings and profit margins despite rise in overall industry revenue
TREVOSE, PA – May 26, 2016 –An exclusive report fromAdvantages® magazine says competition from online sales is cutting into profit margins and the average incomes of promotional products salespeople, despite a rise in overall industry revenue.
In “Fixing the Funk,” Advantages provides distributor sales reps with a seven-point plan to counter negative trends and increase earnings, such as focusing more on referrals and upsells and selling value versus price.
“As our report shows, until just recently, salespeople in our industry were earning far more than the average American and enjoying moderate to very good salary boosts each year,” said Advantages Editor Dave Vagnoni (@VagnoniASI). “To help sales reps regain their earnings momentum, our June issue provides specific steps they can take starting right now to adapt to the changes impacting our industry.”
In 2015, following three years of increases, average annual earnings decreased by about 1% in 2015, according to an exclusive compensation report in the June issue ofAdvantages magazine. The B-to-B magazine is published by the Advertising Specialty Institute® (ASI) and delivers award-winning content to executive-level distributors and small-business owners throughout the $22 billion promotional products industry.
In “Fixing the Funk,” Advantages Senior Writer Christopher Ruvo (@ChrisR_ASI) attributes the earnings dip to greater competition from online prices and the ensuing drop in profit margins, with distributorships increasingly giving salespeople 30% or less, versus the standard 50/50 profit split.
In 2014, e-commerce accounted for 16% of distributor sales, or $3.44 billion, with some of the fastest-growing, highest-revenue-generating distributorships now operating on Web-driven models.
Furthermore, says Ruvo, some distributorships are now holding on to a greater portion of the profit because they’re providing additional services and supports to sellers – measures they say are necessary to keep sales pros in the game in a tech-disrupted, highly competitive marketplace.
The annual Advantages Compensation Study shows both average and median monetary compensation for sales reps and managers declined 0.88% to $82,361 and by 1.8% to $55,000, respectively, in 2015. At the same time, total distributor sales increased by 3.4% in 2015, marking the sixth consecutive year of annual growth.
The Advantages report also points out that:
The June issue of Advantages is now available in print and online.
For more information, contact Advantages Editor Dave Vagnoni at [email protected]. Toadvertise in ASI’s magazines, contact Matt Barnes, ASI’s vice president of publishing and media services, at [email protected].
The Advertising Specialty Institute (ASI®) serves a network of 25,000 suppliers, distributors and decorators in the $22 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 61 countries to be more efficient, productive and profitable. ASI’s Counselor magazine provides the most authoritative business content in the industry, and the ASI Certification Program features 500+ live and online education courses for over 40,000 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.