North American promotional products distributors collectively increased sales in 2019 to $25.8 billion, a 4.7% year-over-year rise that sets a new record high for annual industry sales, according to just-released research from ASI. The previous record was set in 2018.

While last year’s sales growth rate of 4.7% was down a pinch from 2018’s 4.9% annual rise, the 2019 increase occurred despite persistent headwinds. Those included the U.S./China trade war and its related import tariffs, marketplace uncertainty, recession fears, and a vitriolic political climate.

Nathaniel Kucsma, ASI

“Despite concerns that the trade policy with China would have detrimental effects on the promotional products industry, distributor sales proved quite strong in 2019, as they were buoyed by strong business spending and an economy that has thus far resisted expectations of falling into recession,” said Nathaniel Kucsma, ASI’s executive director of research and corporate marketing. ASI, Counselor’s parent company, is the promotional products industry’s largest membership organization.

Kucsma continued: “Demand for promo products continues to outpace the overall economic growth rate. Consumer demand for promo products is showing no signs of weakness.”  

In 2019, 47% of distributors reported that their annual sales increased, with 36% saying sales stayed the same. Firms with more than $1 million in annual revenue generated the greatest growth, increasing sales 6.1% on average. Mid-sized distributors – those with $250,001 to $1 million in annual revenue – increased sales an average of 3.5%. Distributors with yearly revenue of $250,000 or less drove an average 3.2% year-on-year gain.

Encouragingly, 2019’s fourth quarter saw the greatest year-over-year growth of any quarter in 2019. Distributors’ collective sales were 5% better than in 2018’s Q4. In 2019’s final quarter, 46% of distributors reported a sales rise, while 33% said revenue was steady with the prior year.

Seattle, WA-based Gifts by Design (asi/205947) was among the promo distributorships that engineered an excellent 2019. President Jamie Stone (pictured on the right) said the company had its best year ever, increasing sales by 35% over 2018.

“We had an aggressive marketing plan that resulted in some great new client partnerships, in addition to experiencing organic growth with many of our existing clients,” Stone told Counselor. She explained further: “We were focused on new business development and our talented sales team did what they do best, which is provide amazing customer service and innovative solutions. Some of our clients are also experiencing growth, which resulted in them increasing their business with us.”

Meanwhile, Top 40 distributor Quality Logo Products (asi/302967), an ecommerce-driven company, engineered a 3.5% 2019 revenue rise that saw sales reach approximately $45.6 million. “While sales growth was slightly below the average 5% we have seen in prior years, our profit was up, as many of the improvements and initiatives we put into place in late 2018 came to fruition in 2019,” President Bret Bonnet told Counselor.

Bret Bonnet, Quality Logo Products

In a sign that distributors could be feeling increasingly optimistic about their prospects in 2020, the Counselor Confidence Index rose to 112 in the fourth quarter of 2019. The uptick ended a run of four straight quarterly declines for the index, which gauges distributors’ financial health and optimism.

The rise in confidence came as trade tensions between the U.S. and China eased in the lead up to the recent signing of a ‘Phase One’ trade deal. The reading of 112 is below the index’s all-time high of 117, but still signals healthy optimism, being light years away from the low of 79 experienced during the dark days of the Great Recession in 2009.

“We are cautiously optimistic for 2020,” Stone told Counselor. “We are still aggressively going after new business and working to build our business with the clients we have. We’re not expecting 35% growth again, but we’re definitely working towards another increase this year.”  

Bonnet told Counselor that a key to success in 2019 was implementing programs and technology that let QLP measure the value of every lead, sale and customer with pinpoint precision. That allowed the distributorship to make sure its advertising spend and investments in marketing were measurable, and more importantly, profitable. Bonnet expects to build on that momentum in 2020 – and to power sales and profit growth through related means.

“Sales will be up in 2020,” Bonnet said. “We’ve had to focus a lot of our development efforts in the past 18 months on technologies that are not super sexy, like sales tax management and accounting activities. We’re just about over that hump. Once we’re fully over it, probably Q2 of this year, expect some really exciting things from Quality Logo Products.”

The words distributors most commonly used to describe the 2020 selling environment