Moore Promotions: Pulling a Rabbit Out of a Hat

Kelly Moore, owner

Kelly Moore just may be a magician.

Sales were trending down to flat year over year for much of Q3, but she pulled a proverbial rabbit out of the hat in the latter stages of September. That’s when a burst of business activity helped the solo-operating owner of independent Florida-based distributor Moore Promotions (asi/601617) increase sales about 20% year over year for the quarter ended Sept. 30.

“Early holiday gift ordering helped and so did school starting, with a lot of projects tied to that,” says Moore, noting that backpacks and blankets have been in high demand. “Overall, schools, colleges and preschool centers have been among my top buyers lately.”

Moore is upbeat about her prospects in Q4.

“Clients and prospects are wanting to hurry and spend their dollars,” she explains. “They realize the supply chain issues are real and that prices and lead times are continuing to go up, so they have a sense of urgency about placing orders now to make sure they get their stuff.”

It’s all made business much more difficult – and, in cases, cost Moore sales.

“A huge frustration has been that I’m forced to give quotes that I can’t honor for very long,” she shares. “Clients hate that. I have so many bids out from earlier this year, and they’re just now starting to come to fruition. However, I’m having to rebid and thus losing the order because the cost of shipping overseas is just crazy. I’m also missing out on some choice orders because I can’t fulfill them as there’s just no stock – especially T-shirts. I just lost an $8,000 shirt bid because I couldn’t get any 50/50 white T-shirts.”

Moore says her patience with some suppliers has worn thin. She says she understands that pandemic-related challenges are at the center of issues with stock and pricing, but feels strongly that certain suppliers could be doing a much better job of mitigating the impact.

“I’m tired of suppliers failing to keep their stock current and in real time,” she says. “I check stock and place the order, only later to be told, ‘Sorry we have no stock.’ ”

Moore continues: “If I see 4,000 totes in stock and then am later told there aren’t any, it’s perplexing and frustrating in the extreme. I’ve missed four events because of this negligence of not keeping stock updated in real time. It’s one thing for me to tell the client ‘Sorry, there’s no stock, I can’t fill your order,’ but it’s another thing to tell them stock is fine and then have to eat crow because a supplier isn’t doing their job.” – Christopher Ruvo

Full Line Specialties: Finding Opportunity During Ongoing Uncertainty

Sam Singh, president and CEO

The province of British Columbia is moving forward with lifting COVID restrictions – officials did away with capacity limits on gatherings in late October – but the situation remains subject to sudden change. And that’s making it difficult for companies like Full Line Specialties (asi/199688) in Surrey, BC, to plan for the long term.

At the moment, the team is mostly focused on procuring enough inventory for Q4 orders. Many of the sales reps started filling them in June, which has eased the process, but it’s becoming increasingly more difficult to fill orders coming in now, well into the fourth quarter.

But the numbers across the board are looking up. President and CEO Sam Singh says year-over-year top-line revenue is now up more than double compared to October 2020. And compared to last month, revenue is up 70% and margins are stronger.

For companies that rely on cross-border tourism for business, it’s been challenging. The U.S. government has announced that the land border with Canada will reopen next month for fully vaccinated Canadians, so that may help in the coming months with increased business for hospitality companies on both sides, but “it’s still too early to tell,” says Singh, adding that “the testing required by both countries has been a deterrent to booking travel.”

As with much of the year, Singh and his team are still concentrating on e-commerce stores, warehousing, kitting and fulfillment. Strong markets include construction and transportation, and popular products include apparel and headwear, along with cloth masks and rapid test kits as employees gradually return to the office.

In the coming months, Singh says he has plans to expand the team to meet demand for new business: “We plan to hire more staff to help service the new RFP program and e-commerce contract clients we’ve been able to add to our roster.” – Sara Lavenduski

Custom Logos: A Renewed Interest in Acquisition

Jeff Golumbuk, co-founder/owner

After the COVID-19 pandemic derailed Custom Logos’ (asi/173183) aggressive acquisition phase (four companies from 2018 to 2019), the San Diego-based distributor plans to resume its strategy by the end of 2021.

“We’re in the final stages of contract negotiations with a company, and our goal is to go live on December 1,” says co-founder/owner Jeff Golumbuk.

It’s refreshing news for the company while it contends with unprecedented supply chain disruption delaying product shipments. Although interest from clients has exceeded pre-pandemic levels, especially for imprinted sportswear, it’s been challenging for Custom Logos to complete transactions.

“Shipping,” Golumbuk says, “continues to be a nightmare.” – John Corrigan

Jack Nadel International: Turning a Corner Toward End-of-Year Success

Craig Nadel, president

Make no mistake: the folks at Counselor Top 40 distributor Jack Nadel International (asi/279600; JNI) have had one hell of an October. “It’s been amazing,” says President Craig Nadel, pointing to the economy opening up and holiday gift purchases from clients. “We might have our biggest month ever.”

Nadel notes that regarding client buying trends, brand-name and high-end items are still a preference, and while there’s a bit more bulk shipment, orders are still mostly drop-shipped to individual recipients. Further, he points out that the items clients are gravitating to are simply those that are available – not necessarily a chosen product category. “There’s no doubt that clients are having to settle for items that are in stock, and even with that there are a lot of orders that get canceled,” Nadel says.

Still, even as there are 100-plus container ships waiting in the ports of L.A. and Long Beach and Gavin Newsom, the governor of California – where JNI is headquartered – has declared a state of emergency, Nadel is surprisingly optimistic about the supply chain situation. “I think the supply chain problems are no worse for sure and maybe slightly better,” he says. “The complaints are down, but part of that is client behavior has adapted as well – we have clients who know they need to have options with the items they want as their first choice may not be available, and they also know to order early. I suspect it will be quite some time, at least six months, until things start to normalize, but, of course, it won’t go from terrible to all better overnight; it will be more gradual, but it might have peaked already.”

Nadel believes that as goes the U.S. economy, so does the health of the promo industry. “But I also look at it this way: There’s opportunity for our industry to grow because we’ve become, in some cases, outsourced marketing departments for clients that are having a difficult time hiring people for those in-house roles,” he says. “And I do think there will be hiring issues for many months to come, so clients will continue to lean on those who consult as a part of the sales process rather than sell on price for marketing help.”

With the crush of January events such as CES, ASI Orlando, PPAI Vegas, PSI Düsseldorf and Merchandise World in the U.K. on the horizon, Nadel has some thoughts on what the new normal for trade shows will look like. “I think the shows may fare poorly with a lot of people still not wanting to go because of COVID,” he says. “We just did a survey and more than 20% of our company does not want to go to Vegas. We’re still going, but that’s a big percentage who will be missing. CES requires vaccines, which makes some people feel more comfortable, but on the other hand there are folks who won’t get vaccinated, so for a trade show, you’re going to lose people on either end. But let’s see what happens – I feel a below-average show in terms of attendance is still a semi-win these days, and it’ll take time to build things back up.” – Michele Bell

Whitestone Branding: Building on the Best Quarter Ever

Joseph Sommer, owner/founder

When final sales were tallied in October, Q3 2021 was officially Whitestone Branding’s (asi/359741) single greatest quarter in the company’s almost nine-year history.

“We were up 89% compared to the previous year and up 35% compared to the previous quarter of this year,” says Joseph Sommer, owner/founder of the distributorship with New York City roots that now has a remote workforce spread around the U.S.

Creating top-notch employee recognition initiatives for clients was a success driver.

“We helped with a lot of large internal gifting projects,” Sommer says. “We’ve also seen steady influencer kitting projects throughout the year, with a large number wrapping up last quarter.”

So far, fourth-quarter sales are sprinting along at the same breakneck pace as Q3.

“October is going great,” Sommer says. “The momentum carried over from last quarter with lots of holiday projects occupying our time. Right now, we’re having success with every end-market. I do not see an industry that’s going backwards.”

All that has Sommer optimistic that business will keep booming during the final months of 2021.

“I absolutely think Q4 will beat last year, primarily because we’ve invested a lot in growing our team,” Sommer says. “In addition to that, we’ve seen that companies are buying bigger-ticket items more regularly for their staff throughout the year as a way to show their appreciation. I think it’s mainly because there’s less face-to-face interaction, and gifts help bring people together in a virtual world.”

Speaking of products, Sommer says client tastes are trending to higher-end items.

“We’re selling a lot of premium products,” he says. “Clients want name brand over non-name brand. The market is definitely willing to spend on quality.”

Of course, Whitestone Branding has hurdles to jump over, too. Staffing is chief among them.

“Our biggest challenge is supporting the number of leads we have with active staff,” Sommer says. “We need to hire several experienced project coordinators to go into next year in pole position.”

Like everyone in promo, Whitestone Branding is also contending with supply chain issues. Still, Sommer says dexterous sourcing, educating clients about the issues, and even supply-related problems at retail have all helped the distributorship succeed despite the struggles.

“It may sound odd, but I’m celebrating every time I see disruptions in my everyday life,” Sommer says. “Panera was out of eggs this morning, and that’s a big win for us from a business perspective. The more our customers experience these disruptions in their everyday life, the higher likelihood that our news about price increases, shipping delays and stock shortages will hit home and be better received with our buyers.”

He continued: “It means that when we pitch Plan B, C and D, they’re more receptive. When we advise the shipment will be delayed for whatever reason, the more understanding they’ll be. Overall, we’ve not seen supply chain issues to be a huge problem, mainly because we’ve gone on the offensive educating our clients.” – CR

Rowboat Creative: Touring Musicians Bring Merch Orders

Lucas Guariglia, owner

At Chicago-based Rowboat Creative (asi/313715), sales in October were down roughly 10% compared to the previous month, but owner Lucas Guariglia isn’t worried. “We’ve been turning away business that’s not a good fit, while larger-scaled production scopes from September are still moving through October and into November,” he says. “The quantity of orders is down this month over last year; however, that’s likely because of the scale of certain projects we’re currently producing.”

In particular, Rowboat has been doing a lot of work for touring musicians, collaborating closely with a major record label. “The touring schedule has been wild and only getting more insane,” Guariglia says.

Inventory and supply chain issues continue to be a concern, which has stretched beyond stock of apparel blanks and into things like decorating equipment as well. “We’ve been adding some new machinery to help increase efficiency in replacement of old,” he says. “Even sourcing parts for machines has been difficult, but it’s just a dance we all have to do right now.”

From a broader perspective, Guariglia has noticed a marked increase in mergers and acquisitions. “It looks like a lot of the larger promo companies are seeking to acquire decoration facilities under their wing,” he says.

Overall, though, Guariglia believes the industry outlook is a positive one. “I think a key for everyone is going to be moving smart and not just fast to keep up with demand,” he adds. “There are very concerning underlying factors in the world that are and will continue impacting our industry, so I really feel it’s best to keep a keen eye on all sides, instead of just chasing the bubble right now.” – Theresa Hegel

Rockland Embroidery: In Very High Demand

Andy Shuman, general manager

Demand in October has reached pre-COVID sales levels at Topton, PA-based contract decorator Rockland Embroidery (asi/83089).

“It absolutely amazes me just how insatiable the demand is for promo merch,” says Andy Shuman, general manager. “I’m not sure I’ve seen the demand for corporate apparel at levels of this nature in my 25 years in the industry.”

Orders for cold-weather apparel have been submitted at much earlier dates than in years past, which Shuman attributes to customers heeding warnings about inventory shortfalls. Those shortfalls continue to be an issue for Rockland, as well as product mis-shipment and material shortages. But in October, the biggest challenge has been carrier delays, according to Shuman. “Especially in screen printing, it’s not really cost-effective or feasible to print some products while you wait for the rest,” he adds. “The snowball effect of delays can really create a production logjam very rapidly.”

Shuman sings the praises of his staff for being able to manage the “juggling act” that the current situation requires, but notes that staffing continues to be an issue for his firm and the industry in general, even with good people in place. “Given all the challenges, it actually takes more people to do the same amount of output,” he says. “Simply put, we need a larger staff to chase the issue and troubleshoot even before the decoration process has begun.” – TH

Starline USA: Managing Q4 Supply Chain Challenges

Brian Porter, senior vice president of sales and marketing

Continuing the upward trend, Starline USA (asi/89320) is tracking to see sales up 85% over the same month a year ago, which was the best October in company history. The New York-based supplier is also poised to hit sales 120% above October 2019.

But the supply chain has caused significant headaches. “The next challenge will be delivery companies putting daily caps on shipments,” says Brian Porter, senior vice president of sales and marketing. “We have key relationships in place with our top carrier, so we’ve been able to avoid those caps, and we see that being in place for us this year. Thankfully, we’ve been able to stay ahead of the inventory curve.”

Porter is confident that Starline will be able to maintain stock levels for key product categories for the rest of Q4, though some larger orders that would normally have gone to overseas factories have come to Starline, which has been eating into inventory. “I can’t stress enough how important it is to buy when you see the stock,” says Porter. “End-users can’t sit and hope it’ll be there in a month.”

Personalized coolers and drinkware for employee and client recognition are “absolutely killing it” right now, says Porter. Clients are also looking for home goods and kitting products with a high perceived value.

“We’re finding that customers in all kinds of markets are buying right now, and aggressively,” says Porter. “It’s not about what’s new; they’re looking for what’s in stock and how many they can get. They have excess cash and need to take care of their existing employees, because hiring is so difficult.”

In the months to come, Porter says he and his team will continue to stay the course by delivering quality products on time and maintaining open lines of communication with customers. “It seems so simple,” he says, “but it’s become the gold standard over the past year.” – SL

Compass: Ready to Go

Josh Levy, CEO

Compass (asi/46170) is built for the home stretch.

“We’re a Q4 company, as we sell higher-end items,” says CEO Josh Levy. “The fourth quarter is always our strongest and looks like it will be this year as well.” On that note, the supplier of brand-name tools and outdoor products has kicked off Q4 with extremely strong October sales. Levy says the company’s Leatherman tools and Maglite flashlights have been its strongest product lines so far. “They’re U.S.-made and very high quality,” he says. “It’s a perfect high-end gift, and since the supply chain issues are affecting imports from China, customers are definitely buying more USA-made goods.”

Based in New York City, Levy says the vaccine mandate for all city workers hasn’t affected the company, with most team members vaccinated and the ones who aren’t being able to work from home. Since last year, the supplier has used a hybrid model – some people go to the office every day, others two to three days a week, and the rest work fully remote.

“It’s been working for us,” says Levy. “Communication can sometimes be an issue because instead of just asking a quick question to the person in the next office, you now have to send a couple emails or texts. That’s definitely not ideal. But it is what it is. Because most of our employees have long commutes into New York City, we will most likely always offer the ability to work at least a few days a week from home. Our employees like it, and happy employees are more productive employees.” – C.J. Mittica

Fairytale Brownies: A Sweet, But Tough Season

Eileen Joy Spitalny, co-founder

Pumpkin spice morsels are flying off the shelves at Phoenix-based Fairytale Brownies (asi/53518).

Since unveiling its new assortment of holiday treats in September, the supplier has been very busy. Despite supply chain struggles, the company’s packaging inventory has been received and baking production is on track. Although the average order size has been smaller over the past month, total orders have increased, according to co-founder Eileen Joy Spitalny.

“Company morale is high, but we’ve had some tough times recently,” Spitalny says. “Sometimes, we have to share bad news about things out of our control, such as price increases and shipping delays. Some customers are just not understanding. It’s challenging when everyone here has been working so hard to exceed expectations.” – JC