Sliding into Summer with Growth

With all signals now pointing to a stabilization in the economy now is the time to work aggressively to build your client base.  Indeed the promotional industry has at least temporarily eased after being in a near crisis state for much of the month of May with near bankruptcies of several major suppliers and the actual Chapter 11 filing of Norwood.  Broder Bros. was able to avoid filing by getting enough debt holders to agree to reduced terms.  Either way things appear to be leveling.

Most of the industry is down up to 50% through May.  The only way to grow and to be profitable is to establish new relationships with clients, particularly those orphaned as existing distributors fold up or employees previously in charge of projects have been released.  The best way to get that done is via cold calls which continues to be one of our largest sources of new business.  To better facilitate ongoing growth we have also upgraded our website to the latest and most powerful equipment on the market.  Customers should experience considerably faster response times and we’re also expanding the number of online operators later in the week.  We continue to add items such as the Alicia Klein Deluxe Zippered Padfolio which carries one of the most fashionable names in the industry.

The tragic news of the loss of the Air France flight over the Atlantic Ocean will likely only hurt air travel further.  It is outstanding to see the cooperation between nations to bring closure to the grieving families of this tragedy. 

We will continue to provide updates in the coming days but in the meantime check out earlier articles such as Subtle Ways to be more earth friendly among others.

As Prices Rise Cotton A Logical Choice

Here we go again, Memorial Day is approaching and as it does gas and oil prices are going up.  In many parts of the United States gas prices have risen 30 percent since New Years Day.  So what does cotton have to do with oil prices?  Plenty when it comes to buying your convention or show items this summer.

A majority of the items you would normally buy for your next project are made from plastics of one type or another.  All of those plastics require the use of petroleum products in the actual construction process.  Cotton items typically do not, take for instance the Classic Cotton 6 Oz. Convention Tote which is made from all natural cotton.  Sure there are costs associated with operating the farm, manufacturing and transportation but oil based products themselves are not consumed in the product materials.  Taking this a step further the Classic Cotton 6 oz. Foldable Tote folds into a tiny footprint which will make the ultimate end user destination a little less expensive to reach.  Lighter versions such as the Leeds Cotton Convention Tote offer wide color choices and again offer some unique touches such as the mock rivets at the top of the bag. 

Although none of these items are purely organic they are a bit more earth friendly and oil friendly than pure plastic products.  The next logical step for domestic manufacturers would be to source non-organic cotton in the United States creating a Made in USA line of bags.  Whether this is the time to do that given the economy is debatable but with product planning taking years it would be nice to see some consideration being given to the idea.  As of right now little or not tote type products are sourced in the United States for this industry.  Slowly some of the lower end items are being brought back to the States but what may have been a more rapid transition is being delayed by the sales downturn.

Several industry suppliers have failed in one form or another in the past few weeks.  Most sources pin supplier sales at down 20-40% and as history has shown that is probably not the most accurate representation.  One of the industries largest suppliers appears to have avoided Chapter 11 last week but that has not yet been made official.  Another Top 5 supplier already filed earlier in the month although all signs point to their continued operation as they emerge from a Chrysler type arrangement.  Distributors are also vanishing at an alarming rate as with sales plummeting like they have there is only so much room in the marketplace.  Traditional web based business continues to flounder but traditional offline sales are amazingly strong as representatives that had previously called on clients have left their old employers.  Much like brokers in the financial industry this leaves the doors wide open for new distributors to get a leg up on business.  Despite what many people would think it is actually a fantastic time to make a concerted effort in traditional offline sales tactics.

As we discussed in keeping your coolers safe this summer and A Real or Fools Rebound the economy is making little headway.  Despite the more optimistic appearance to the unemployment numbers truth be told many have just given up.  Worse the numbers continue to be revised downward from previous months.  The recovery will be long and difficult.

Keeping Your Coolers Safe This Summer

Not all coolers are created equal.  Especially in the promo products business many low end products are made with potentially dangerous materials.  Under described usage they are generally safe but add loose ice to your soft sided cooler and toxins can be released.   New coolers are becoming readily available which reduce any possible contamination in time for your summer promotional event.

PEVA lined coolers have finally arrived in good numbers this spring.  The Collapsible Party Cooler has rapidly become a favorite in that it is semi-economical to ship and provides a series of appealing colors.   Prime consideration is being given this Spring to the total costs of acquiring a product and you will find no other cooler with this capacity that is this economic to ship.   The PEVA Ultra Safe lined California Innovations Convertible Carry-All has an equally large capacity and can be squashed down to fit 20 per carton.   The neat thing about this tote is that the carry handle is actually convertible allowing for horizontal or vertical carrying depending on the cargo.   Of all the new items the California Innovations 24-Can Access Cooler has been out of inventory since April due to intense popularity.  This item also is able to be condensed significantly for more reasonable freight and has the backsaver technology built in that makes it easier to carry.  Twenty four cans and ice can weigh quite a bit which is why the carrying feature is a great selling point.  The smaller sibling the California Innovations 12-Can Cooler likewise has the adjustable padded shoulder strap and leakproof PEVA lining.   The patented thermal drink pockets act like a can koozie on the top of the cooler.  You will not find that feature on any other cooler in the market today.

What is important to remember is that soft sided coolers are more susceptible to potential inadvertent contamination than items like the party cooler.  Although a definitive link remains to be seen the shift is clearly underway towards PEVA coolers.  PVC lined coolers not only pose a potential harm to the end user but consider that they are made with chlorine among other environmental toxins.   What distinguishes PVC from other vinyls is the addition of chlorine.  Chlorine and the generation of dioxin is a major concern due to its ability to travel up the food chain.  PEVA does not have chlorine and in addition there is much less of a threat of lead contamination in a PEVA based product. 

The entrance of California Innovations into the promotional industry was major news many years ago.  Their eventual exit and subsequent licensing arrangement with Leeds was even bigger news in the past year or two.  What it effectively has done is combine the world’s largest manufacturer of soft sided insulated products with one of the world’s largest promotional products suppliers.  The combination has resulted in what will surely be an ever expanding presence in the corporate environment.  Already the introduction of FDA compliant, PVC free and lead free coolers has put pressure on other manufacturers to follow suit.   CA uses their own innovative lead detection system that is far more stringent than even the FDA.  Known as the LSDS or Lead Safe Detection System is essentially a technological marvel that is basically a computerized gun that can detect lead and other metals in the coolers.  This should provide great comfort to end users particularly those buying these insulated products for kids.

Long Road to Recovery Getting Longer for Some

The continued run in the equity markets does little to help small to medium sized businesses in the United States desperately looking for credit.  With massive cuts still being made to credit facilities in the business and consumer sector overall spending ability of both groups has diminished.  Many firms will be able to recover as sales begin to increase during the summer but for many others the stranglehold of available credit is too much to bear.  Yesterday Norwood Promotional Products filed for Chapter 11 bankruptcy and with that two of the top five distributors in the industry are bankrupt or have plans for bankruptcy in May 2009.  With rumors swirling about at least one other major supplier the road to recovery for many just got longer.  What is even more troublesome is that distributors who have relied on these vendors will now have to attempt to establish credit lines with new vendors which is a tall order in this market.  Norwood blames a flood last year, the recession and inability to refinance debt as commercial paper markets are still very thin.  We do not expect this to be the last supplier to file.

Air travel has finally begun to level off after plunging for the past two years.  As travel begins to increase again this summer many business travelers will encounter tighter TSA restrictions that were not in place the last time they were on a plane.  To counter this suppliers have released TSA friendly products including the Aero-Safe Travel Kit which is compliant with guidelines.  The kit includes four bottles that allow someone to fill them with soaps, shampoos and other liquids while still being able to slip through screeners without having to dump your items.   The Aero-Fresh Travel Kit does essentially the same thing but instead actually includes shampoo, shaving cream and soap in individual packets of ten.   Both of these items get an imprinted on the front of the actual kit.    Another trend seen this spring is the increasing size of lighter laptops.  As a result customers now desire 17″ capacity which is why the Wenger Optimus Compu-Backpack provides the ability to carry a 17″ laptop while also including all of the features customers are looking for and some that they are not such as the carabiner which is a great addition.  Both this and the Wenger Transit Compu-Backpack have cell phone carriers on the backpack strap.  We would advise you to be careful in utilizing this though as out of sight behind your back is not the place you would want to place a highly valuable phone.    These are highly durable backpacks that carry the genuine Swiss Army brand name.  The travel kits are inexpensive and provide some real value.  People still have not adjusted to the changes in air travel regulations.  Handing a captive group of travelers either of these items will produce an immediate and permanent impact.

The economic miracle that is now an economic mirage for so many continues to fluctuate with each day.  On one hand there is positive news in terms of some bottoming in housing but on the other hand we have news that our major banks are still needing more money.  To our eyes that is terrible news as it will mean continued cuts in available credit which will only produce more “Norwoods” on both the distributor and supplier side of the industry.   About all anyone can do is continue to work hard to distinguish yourself from the competition by either putting some thunder into your message or by providing exceptional service.  The military uses a term “make it rain” when they call in the proverbial cavalry and that is where many businesses are today.  Sadly many will probably fall in the coming months.

Assurance Programs and How Little We’ve Learned

We are being inundated with offers from the major automakers these days as sales continue to slump beyond historic levels.  In the month of March by most reports the numbers were just as bad as February or perhaps a good deal worse depending on the manufacturer.  No matter how many promotions they run nothing can turn around the market.  In a press conference last week the Marketing Vice President from General Motors admitted traditional financing and rebate offers have had no positive effect.  The solution?  Credit insurance which at the core is not going to be that much different than the derivatives we just watched bring the world into a recession.

Hyundai was first announcing the Hyundai Assurance Plus a few months ago.   The program allows the consumer to return the vehicle within the first twelve months if the person loses a job.  Apparently already being burned by the returns they recently modified the plan – hence the plus to include 90 days of payments.  Ford and General Motors have now followed suit offering to pay your bills for many months in the event of job loss.  These programs are insuring up to $700 per month for up to a year which is staggering given the fact that these same automakers are already leaking cash at alarming rates.  These programs are the result of desperation and not the result of any good business sense.  Ford has removed the limitation of requiring two payments before qualifying for the program and now requires only one payment to be made.  A customer can literally make one payment and then Ford will pick up the tab for a full year.    Interestingly enough Ford is paying for some of this with their marketing funds.  I believe they are going to find what Circuit City and the rest found years ago, customers will return anything and everything.  The move to allow returns and to pick up the bill if a customer cannot only further tarnishes our credit system and more importantly degrades our credit scoring.  A customer in total default on a Ford loan will now show a sparkling history while a customer not paying a Sallie Mae student loan will see their reports devastated.   More on this later.

BPA Free drinkware continues to be one of the few hot items in the industry.  The Extreme2 Bottle features a molded grip and an ounce chart on the side.  The ounce chart is convenient as it allows for easy measuring or mixing.  The Vista Bottle actually includes a metal carabiner which is unusual in this range.  It is also available in some pretty colors that will gel well with many logos.  On the larger side of capacities the Glacier Bottle 28 oz. is another product with no BPA and has a large opening which makes it easy to mix a drink or use ice cubes.   The wide mouth also makes it easier to keep the item clean.  Available with a full wrap, the Emersion Bottle is made from PETG which by nature is free of harmful chemicals.  If hiking or traveling is your thing you have the choice of using the bottle above of bringing your own gear and attaching it to the Expedition Carabiner Bottle which has an easy to use clip at the top of the bottle.   These are all rugged and shatter resistant bottles although they are not shatter proof and that is an important distinction.  While we are on the topic of poly materials, the PolyPro FileFolio is another one of the new items to the market made of lower cost materials.  As a result they hit a point in the market that is going to be attractive given the situation.

We will discuss the new assurance programs more on Sunday.   Meanwhile check out our tips on rebounding your business and other topics up in the archives.

Teaching Your Kids To Be Environmentally Friendly

With so much focus on the ecological impact or carbon footprint we leave on the planet it is important to start to teach our youngsters about these matters.   Earth Day provides the perfect opportunity and setting to teach children about the benefits of being environmentally friendly.  Almost everyone has a different position on global warming and what impact humans may or may not have on global climate change but it is important to understand there are things we can and should do on a daily basis no matter what side of the debate you are on.

Kids usually are not all that enthusiastic about recycling in general.  It can be messy and it can also be inconvenient.  Rather than running to the trash bin between commercials of their favorite tv show they may have to run downstairs or into the hallway to find the recycling bins.  Each week they see these recycled goods vanish either in the local recycling truck or at the local recycling center without ever really seeing the rewarding part of what they are doing.  We can tell them that many of the bottles they use are recycled but does it really matter to them?  This is where the use of recycled products in your home can be critical to closing the circle environmental responsibility.  Recycled plastic bags that are also biodegradable have become available in the last few months.  Rather than sitting in the trash dump for centuries they degrade quickly.  Recycled towels and other paper products are available at slightly higher prices but by purchasing them you are helping to create a market that will eventually drive prices down.  Unlike other markets the recycled products market ends up more expensive not because of demand but because the costs of manufacturing are still significant.   We heavily promote the use of recycled goods such as the Recycled Essential Lunch Kit which provides a complete solution including a recycled bag and reusable lunch and water bottles.  In fact for children it can make the perfect lunch bag to carry to school and gives them some understanding of how their efforts pay off.   Instead of using a polyester book bag kids now have the ability to use recycled book bags such as the Gemline Recycled Circuit Cinchpack which is made from 51% recycled fabric.   The benefit of not going with a totally recycled product is that costs tend to be a little lower and at times durability a bit higher.  We like the Gemline brand of products as their reliability continues to be impeccable.  The Recycled Venture Vertical Portfolio has been a top seller this spring.  Unlike a lot of other recycled products it does not suffer from a case of the coyote uglies.  We really like the moss green look which carries a decoration well, hides dirt and grime over time and blends well with the entire Earth Day theme.   For those that like to hike, bike or Rollerblade we have now introduced the imprinted Gemline Recycled Walking Enthusiast Kit which can carry an optional BPA free water bottle on the road.  Again we like to promote all of these products and like to see youngsters in particular using them on a daily basis.

Kids can learn more about Earth Day and recycling in general at the Kids For Saving Earth website which has a large amount of information on environmental concerns.   We do not advocate any particular position but it is hard to argue that in most cases the use of recycled goods, particularly those that are certified and that we know are safe and produced in factories in a safe and responsible manner are helpful.   The more we can recycle domestically the less we have to rely on counter parties overseas which in the end is good for the country.   You can read more about certified recycled promotional items in our earlier articles on certified goods and PolyPro promotional items.

Rebound Your Business During March Madness

With so much sullen news over the last year regarding the economy the recent stabalization in several key economic indicators is welcome news. Last week the stock market had a robust uptick and although it may be short lived it was much needed to being to turn attitudes towards the positive. Much like the feud between CNBC and Comedy Central over the past week we believe the economy is showing definite signs of a turnaround. We have continued to roll out new products and our business continues to grow strongly through repeat customers and sustained cold calling efforts.
With marketing funds tight we are noticing a strong trend towards lower priced, higher value promotional products. Chief among these are branded items such as the PolyPro Big Grocery Tote which can be purchased with a one color logo for under two dollars in reasonable quantities. This tote is essentially a knock off of more expensive offerings from other brands but sports a large decoration area and a strong weight capacity. We just used them for a self promotion in our own office along with the Leeds PolyPro Convention Tote which although slightly thinner featurers a similar large logo area and heavy weight capacity. Both of these items are fully recyclable which means they can be disposed off at the end of their useful lifes at most major landfills or recycling centers. PolyPro is one of the newer and more fashionable materials as it carries some eco-friendly attributes like being able to recycle the item and most have significant capacity in terms of how much they can carry. In addition to the previously mentioned items we are now also offering the PolyPro Box Deluxe Convention Tote which is a slightly upscale version of our other offerings. Of all our new PolyPro items from Leeds this is probably the best looking with striking lines and availability in two of the more popular colors of red and navy. Rounding out the category is the PolyPro Strong Arm Tote which is available in black only but likewise has become incredibly popular with the price being well under three dollars decorated.

As we discussed a few weeks ago in Growing Through Difficult Economic Times we have extended our marketing efforts and dollars. Instead of cutting our budget we’ve aggressively marketed to new and existing customers using the tried and true email campaigns as well as on site visits and cold calling. In the first three months of the year over 90% of all new business has been the result of direct outbound marketing efforts with web business continuing to decrease. What’s even more striking is that we’ve found repeat business from online customers is significantly lower than offline sales. We will keep tracking the data as the year goes along and will report monthly.

It was interesting to hear Warren Buffet describe the economy as going “off the cliff” a term we used way back on October 24th, 2008 with the article Commerce Goes Off the Cliff. It is a little discouraging to see it take so long for the proverbial experts on CNBC and elsewhere to realize how bad the economy had become. We had highlighted the difficulties we were seeing throughout 2008 in various posts including The Fall and Shrugging Off The Bad Economy among other posts. It does appear we are seeing at least a slowdown in the decrease in economic activity but questions remain and any further surprise bad news could topple the economy. Since our last post Circuit City has gone out of business and with it some thirty thousand employees are jobless. Likely it is one of many retailers to fail in 2009 which makes self promotion all that more important. Use promotional items to your advantage in 2009.