The Promotional Product Industry/ A Unique Business Model


Over my 42 years in the promotional products industry, I’ve come across many a client who was confused about my industry and what I do. Am I a manufacturer, importer, printer, middleman or just making sales?

So I decided to sit down and answer these questions, hopefully helping others understand how this industry works. First of all, it’s a large industry that has annual sales of over 23 billion dollars in the United States alone. Most of the products we sell are decorated with a company, school, team, church, or organization name. In addition to t-shirts and other sportswear items, the products we sell include writing instruments, drinkware, headwear, desk accessories, electronics, calendars, and umbrellas, among many other product categories. 

This industry holds an interesting model. It is made up of over 3,000 manufacturers located across the United States. These manufacturers purchase or develop products with their overseas factory partners, import the products, and hold substantial amounts inventory that are ready to be printed with a logo when they receive an order. That number doesn't account for the thousands of independent garment decorators in the US not belonging to industry groups who aggregate these statistics. The other part of the model includes distributors, like myself. There are over 20,000 promotional product distributing companies in the US, with thousands of employees and over 100,000 sales people. 

You may be wondering how the distributors in this industry connect to the manufacturers? In 1950, a businessman by the name of Joseph Segal, a promotional product sales person, wanted to create his own directory of manufacturers. Realizing that this directory information could be a goldmine for distributors and manufacturers alike, he decided to start a for-profit company called the Advertising Specialty Institute, also known as ASI. Membership in ASI allows distributors to more easily find manufacturers while manufacturers have a wider base to market their products. Generally, ASI manufacturers are only allowed to sell to ASI distributors, who then sell to the end user. Each ASI manufacturer and distributor is assigned an identifying number, enabling each side to rest assured they are either ordering from or selling to a fellow member of ASI. This rule has exceptions, especially for garment manufacturers and wholesalers, as they would be disallowed from selling their blank goods to retail or to the thousands of screen printers and embroideres who are not members of ASI. Most hard good manufacturers abide by these ASI guidelines to this day as well.

When I joined in ASI in 1977 as a distributor, membership qualifications required me to prove by showing invoices that I had purchased from 3 ASI manufacturers. Because ASI manufacturers do not sell to anyone except ASI distributors it was difficult for me to come up with the proof of purchase. Fortunately, I owned Two's Company, a sportswear screen printing factory that had purchased from several garment wholesalers who were members of ASI.

Manufacturers often receive calls from end users looking to place orders, but these manufacturers point these prospective clients to their distributor partners to service these orders. This allows the manufacturers to continue focusing on product development while the distributor is able to focus on the sales of the product. However, with the advent and ease-of-use of technology, manufacturers' websites are easy to find. While most of these manufacturers won't sell to the end user, distributors use them as a helpful sales tool, often replacing the need for lengthy catalogs. Pricing is available on these sites, but you should always contact a distributor, as these relationships can often work to the client's benefit, financially. 

With companies likeAmazon offering cost-effective two-day shipping and Zappo's offering free next-day shipping, we're aware that shipping costs are a concern for many of our customers. Because this industry is so widely represented across the US, Payden & Company will always do our best to pair your hard good needs with the manufacturers that are close to you. Purchasing specific brands will call for shipping from specific warehouse locations, however. If you're looking for theKoozie brand of can cooler, the manufacturer keeps those warehoused and decorates in Red Wing, Minnesota. Regardless of whether you order Koozies from a distributor next door to you or across the country, that product will always ship from Minnesota and correlating shipping charges cannot be avoided. A Bic pen is going to be shipped from Clearwater, FL. 

You may find that when purchasing garments for decoration, shipping costs tend to be a little higher. Although many ASI garment manufacturers offer decoration, it's often easier for smaller, local decorators to do the screen print or embroidery for an order. This does usually require two sets of shipping costs to be assessed (from the garment mill to the decorator and from thedecorator to the client). However, these garment manufacturers often offer programs for freight allowances, and at Payden & Company, we pass those savings on to our clients.

Almost everyone owns a promotional product with a logo on it. The promotional products industry has become an important part of the advertising and marketing fields. Having your logo or name on a product makes sure that recipients will remember who you are and where you met. In addition, promotional products have staying power. They may be worn or displayed on a desk for years to come, gaining additional advertising along the way for the company that put their logo on it. 

Written By,

Payden

Managing Partner

Payden and Company, LLC