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.

Responsible and Timely Ideas During the Crisis

The news continues to vary depending on the source on the first major influenza outbreak of a novel virus in three decades.  Some sources seem to indicate things are moderating while overseeing agencies such as the World Health Organization continue to urge caution.  With somewhere near one thousand confirmed cases and probably many thousands more unconfirmed cases the bug has spread to all corners of the world rapidly.  As we enter the busy promotional season with trade shows and conventions the opportunity is there to provide your clients and employees with some protection. 

Although these types of items have never been among our favorites due to the limited usability a wave of new products such as the Sanitizer In A Clip which provide a long term carrying vessel as well as the custom hand sanitizer.  Unlike other single use versions the hand sanitizer itself can be replaced over and over again.   These types of items will sterilize your hands and kill close to 99.9% of all germs when the instructions are followed.  The flu is easily transmitted via coughing as well so this is by no means complete protection but it is a significant help.  For brand recognition the Purell Sanitizer On A Clip adds a 2 ounce aloe version of the popular Purell cleaner that when empty can be replaced very quickly with any off the shelf brand but while keeping the convenient clip and printed carrier.  What we particularly like about these products is that they can be clipped to your pants or belt for use in the gym, while playing with kids or out and about on the job.

The varying data on this particular outbreak is disconcerting and probably confusing the public.  A great source of historical information on the last serious flu outbreak resides on the Centers for Disease Control page 1918 Influence: the Mother of All Pandemics.   What you will see in scanning that document is that the flu itself was no more fatal initially than the current version circulating the planet.  It was not until the following fall that people started dying in large numbers after what most scientists agree was a mutation within the virus.  Keep in mind back in 1918 it took months for the virus to span the Globe when it took only days this time thanks to modern air travel.   Although the steps being taken by public health officials may seem extreme they are acting with excess caution because they know what happened 91 years ago and do not want to repeat the same mistakes.   Basic tips still apply, if you touch a public surface do not touch your mouth face or eyes before cleaning your hands.  Make sure you and your children cover their mouths when coughing and in all cases thoroughly disinfect your hands after sneezing or coughing.  The use of sanitizer gels on plastic products is generally not recommended as their is some potential for damage but in our experience we’ve never seen it happen.  Obviously though do not use it on any type of screen and you certainly do not want to get it into your eyes.

Friday saw the release of the most recent auto sales reports.  The payment assurance plans  appear to be having a positive impact as the brands now offering them faired the best while others like Toyota lagged near the bottom.  There were rumors over the weekend that the big overseas competitors may be about to announce similar plans but there is also talk that there is a building consensus that these plans will cause great distress in teh future.

Appropriate Ideas During Difficult Growth

When the recession gets to a point that the worlds largest retailer has begun to feel the effects consumer and business buying patterns have certainly been modified.  The increasing belief that the “curve” of this current downturn will not be the typical V shaped but instead a protracted slow recovery only increases the likelihood customers with continue to change behavior. For the first time in 2009 consumers slowed their purchasing and the continued tailspin in the economy is not going to help.

Businesses meanwhile are faced with mounting cuts to staff and in some industries the perception that money spent is money wasted.  The slew of banks cancelling major trade events last fall dealt a serious blow to the promotional industry.  In the medical industry health organizations are significantly reducing the amount and frequency of gifts given to doctors.  That leaves low profile gifts at the top of the chain such as the Nylon Drawstring Backpack which boasts basic functionality while remaining within a sensible budget.  For a few dollars any bank, school or organization can give away a decorated item that customers will use and keep for months or years.  For a slight bit more the Fashion Drawstring Backpack ads some color block type styling that is the rage right now in the corporate apparel industry.  Neither gift would be considered extreme and we heard of one client today that was planning on handing these out as part of a flu prevention kit at their next meeting.  Rather than spending money on branded sanitizers their plan was to buy in bulk at the local Costco and stuff those into the imprinted bags along with wipes.  For under three dollars they will be presenting clients and potential clients with something that shows they care about their well being and their money.

We talked yesterday about catching the chill on the rebound in reference to summertime products. One of the sad trends we continue to see so far is that manufacturers choices in product names continues to stink.  In a rush to release low cost products to fit the current economic situation vendors have rushed out the door products that have names that have no relation to the product or that are so common they will be lost in the forest of competition.  In naming your products is serious business we used the case of Life on Mars that had an all-star lineup of actors and actresses but still failed.  The show likely failed as the name alluded to a sci-fi type storyline when in reality probably five minutes of the entire season (ironically at the end of the last episode) had anything to do with sci-fi.  On that same token we see vendors release coolers are names of sports teams, apparel makers putting out shirts under names so common any potential customer will have no idea of the brand identity they may want to buy.  In the article we previous mentioned there are products with the words “free” in them which is akin to putting “cheap” in the name as it immediately lowers the customers perceptions of quality significantly.

Our useful link of the day is an explanation behind the previous major outbreak of a bug similar to this one back in 1918 from the CDC.

Catching the Chill on the Rebound

I could not think of anything else to give for a title today and this one seemed to encompass a couple of notable news stories ranging from the spreading virus to the approach of Summer 2009.  This day marks many firsts which includes the first major failure of an American automobile manufacturer which in and of its own is groundbreaking but it is also being shadowed by the looming spread of a potentially pandemic virus.  Both have the ability to land a heavy body blow to the economies of the World and truth be told none of us yet know how it will play out.  We are approaching the tipping point as the economy has certainly begun to rebound but both of these situations have the ability to stop any recovery.   As of lunchtime today approximately 236 cases have been confirmed and will use our frequent writings here as a barometer tracking the spread.

With the grim news out of the way we will now switch to the chill portion of today’s rambling.  It is late Spring and with some scorching heat now occurring in parts of the region we are seeing a sharp uptick in searches for insulated items.  As a result we have rolled out the Contemporary Six Pack Cooler at an ultra aggressive price point.  We like the solid construction and attractive looks of this product over that of other brands.  It does not have the flimsy feel of lesser competitors.  The Gemline All Sport Cooler II is a remake of a popular earlier model from the same manufacture and like all of the cooler products from this brand feature safe PEVA lining.  We still sell items made from PVC as the FDA among others say they are safe but are glad to see a major vendor pulling away from incorporating these volatile materials.  Gemline has extended an existing line with the Vertex Cooler  which has been an annual best seller.  This particular item features there class leading logomagic which allows for easy dual branding.  The ability to use dual logos has been a huge selling feature this season as it allows customers to split costs.  Another opportunity for budget pruning exists when new less costly products are released such as teh Bungee Six Pack Cooler which we are using as a dual function product by stuffing a water bottle in the package.  We expect the trend towards bundled goods to continue as it gives the best dollar value on a weighted scale.

As many have heard by now industry giant Broder Brothers is threatening to declare bankruptcy next month if creditors do not relent to their demands for changes in terms.  This is much the same as what happened today with Chrysler but unlike that case investors would be wise to renegotiate with them versus taking a potentially much more severe hit.  The problems in securing financing continue for many of these firms and really they have no choice apparently.  Any failure of such a large firm would send terrible ripples down through the supply chain as many small embroidery shops would be left scrambling to find new suppliers that are willing to extend credit.   Investors seem to continue reflecting upon good times long gone instead of realizing we are in a much different economy.