The future of promotional products lies largely in the hands of the next generation. In the coming years, it is up to the younger cohorts to harness, leverage and promote brands’ continued use of promo in marketing strategies to strengthen company presence and enhance ROI. It’s Millennials, Gen Z and those who follow who will educate businesses about the wide uses, returns and impressions associated with promo, and it is they who will continue market research into effective advertising, and how promo impacts the consumer experience.
Perhaps things will change in the future, but in this growing age of technology, promo continues to provide the touch (literally) and sensory experience that consumers look for. To prepare for ongoing success in future decades, suppliers, distributors and business services companies must be working now to pass their knowledge and experience into the waiting hands of the next generation.
SPARK, PPAI’s annual conference catering to young professionals in the promotional products industry, is designed to do just that. Providing networking opportunities, education about top-of-mind industry topics, discussions of issues facing the promo industry and opportunities to consider new strategies to strengthen one’s efficiency and accountability, this year’s SPARK, held July 17-19 in Charlotte, North Carolina, attracted 67 attendees, 39 who were first-timers.
Throughout the conference, industry-related questions, concerns and challenges were discussed from the perspective of young professionals, underscoring the need for companies (and their policies) to remain fluid and open to change in order to meet consumers’ and clients’ needs, and to remain relevant.
To better understand the perspective of some of the industry’s youngest professionals, PPB asked select SPARK attendees to answer three questions about their role in promo, and how their companies can better prepare for the future.
Content strategist, Cap America, Inc., Fredericktown, MissouriYears in the industry: 2
Years attending SPARK: first-time attendee
How would you describe your job in the industry to your peers? As a content strategist, I help Cap America’s marketing team create and deliver content through a multitude of platforms—social media, email, industry publications, etc.
How do you think companies can better attract and retain Millennial and Gen Z employees? I think a very important part of attracting and maintaining employees from the younger generation is allowing and even encouraging individualism—I’ve never met anyone my age or younger who was excited to wear a uniform. I love that this industry doesn’t turn its nose up at tattoos, piercings, bright hair colors and all the other ways that the younger generations have chosen to individualize ourselves. We embrace our differences and rather than being a distraction in the workplace, they are actually a way to bring us together and allow our creativity to develop and flow.
What do you think is the biggest issue facing the promotional products industry this year, and why? I think one of the biggest issues facing the industry is the recent tariffs. Prices are rising and because of that, demand is dwindling and many suppliers and distributors are really feeling the burn of this. For companies that are well-established enough to survive these turbulent times, the constant turmoil and uncertainty creates unwanted headaches and distracts us from other important responsibilities we would rather be focusing on. For smaller, less established companies, these tariffs could be the death of them.
Sales specialist, Gill Studios, Inc., Lenexa, KansasYears in the industry: 1
Years attending SPARK: first-time attendee
How would you describe your job in the industry to your peers? I explain my job to my peers and friends as a sales rep for a promotional printing company. I always make sure to let them know the founder of my company actually invented the bumper sticker. This usually helps them understand what kind of printing we do—and it’s a fun trivia fact.
How do you think companies can better attract and retain Millennial and Gen Z employees? There are a few ways I know would have worked for me personally, as a young Millennial, including attending career fairs and being more visible online. However, there are two things we talked about in one of the SPARK workshops that I think would help attract younger employees to our industry. First, knowing that our industry, companies and cultures care about their social responsibility. For me, this was a deciding factor when I was picking which company I wanted to work for right out of college. It meant a lot to me that the company I worked for had a purpose and strived to make an impact on their community and/or environment. Along those same lines, the second aspect I know is very attractive to me, and I think a lot of Millennials would agree, is having the environmental impact of their business front of mind. This goes back to social responsibility, but I think it can also stand alone. I know my peers and I hold a lot of importance in products that are organic, reusable and green. So working for an industry that has the environment set as a priority is a huge selling point for a lot of people, and I think will continue to be the case, as society continues to move away from one-time-use products.
What do you think is the biggest issue facing the promotional products industry this year, and why? I think the biggest problem facing the promotional products industry, including my company as a supplier, is finding a way to provide the same quality of service and product in a shorter amount of time. We have continuously found that customers need their products faster and faster, which has been a trend forever. However, now it’s getting to the point of trying to find a same-day production solution, where just a couple of years ago the same kind of product would have had a 10-working day production. Technology is a great tool at our disposal, but it will take more than technology to find a resolution. It will take the industry working together as a whole, suppliers and distributors, to find ways to make the impossible possible.
National sales representative, Raining Rose, Inc., Cedar Rapids, IowaYears in the industry: 1
Years attending SPARK: first-time attendee
How would you describe your job in the industry to your peers? My job as a national sales rep is to be an advocate to our customers. I am here to listen to their needs and maybe some obstacles they are facing, and help to develop a solution for them to present to their customers. As an advocate, we are well-versed in the markets they are working with so we can be a reliable resource when they need ideas/applications. I am not just a product pusher; I am an educator, a subject matter expert within our niche line and can deep dive into our products so our customers can feel confident with the products they are presenting. The best part of being an advocate is that I also learn from our customers from the stories and experiences they share, which then helps with building the relationship, as it isn’t one-sided. It also helps develop solutions for other customers facing similar issues.
How do you think companies can better attract and retain Millennial and Gen Z employees? I think companies first have to take a look at what is important to them. What are their core values? What is their purpose? Then develop a plan surrounding those core values and their needs. At times companies try to do what their neighbors are doing and it fails because they aren’t being true to themselves. From there, poll your employees, go to local colleges, maybe take a look at top local companies—ask them what they are looking for in an employer and what is needed to ensure they stay with a company. Dive into the information and then see what follows the core values/purpose, see what can be implemented immediately or what might need a long-term plan. Sometimes it is as easy as planning food days, or it could go to developing a voluntary time-off policy because there wasn’t one in place.
What do you think is the biggest issue facing the promotional products industry this year, and why? I think the biggest issue is sustainability and the environment. We have the issue with the ban on plastics and suppliers needing to find alternative resources, but we also have the issue where if a supplier or distributor isn’t willing to make the necessary changes to become more sustainable or develop a giveback program, customers will not use them. When an item is impactful beyond its use, it resonates with customers; there is a story behind it and they are more apt to use it.
Marketing coordinator, Terry Town, San Diego, CaliforniaYears in the industry: 4
Years attending SPARK: 2
How would you describe your job in the industry to your peers? I usually have a blast trying to explain what it is we do, exactly, in our industry to my friends and outsiders who may have no idea that we even exist. I like to start off with what we specifically do at Terry Town, which is print and decorate custom beach towels, blankets and spa/home accessories. Then I move onto the bigger picture, where I like to explain the supplier-distributor relationship and how both are mutually beneficial to each other within our little promo ecosystem. As suppliers, we not only provide the products our distributors sell, but we supply the idea: a somewhat tangible message that can be utilized to bring together people from all walks of life. We like to offer more than just a promotional product. We offer success stories of strengthened relationships and a renewed sense of community. We’re all in this together and being able to foster new partnerships from supplier to distributor and distributor to end user is one of the best feelings in the world.
How do you think companies can better attract and retain Millennial and Gen Z employees? You’ve got to sell your company in the best light possible and follow through on those promises. Create a company culture that not only fosters hard-working individuals, but those who understand the nature and scope of how our industry operates as well. What we do is fun, and doesn’t have the stress and pressure that other industries may experience. Have a relaxed, but professional approach when it comes to attracting the next generation, and be open and willing to change. Being able to constantly ask, “How can we improve?” will get those new hires of the next gen thinking in the mindset of, “I’m here to shake things up.”
What do you think is the biggest issue facing the promotional products industry this year, and why? Right now we are in a weird limbo stage where the generation of those who helped shape the industry with a solid foundation [is working with] those who are just getting their feet wet right out of university. You’re going to have a push-pull factor from every direction in terms of what new products will make their way into our catalogs, how marketing will be affected by new technologies and how our entire industry will strive for social responsibility. But it’s not so much a “them against us;” the way I like to see it is more of a friendly challenge among colleagues who you still wouldn’t mind sharing a beer with after a long day on the trade-show floor. Striving for change is comforting. Complacency is scary.
Senior account executive, SAGE, Addison, TexasYears in the industry: 6
Years attending SPARK: 3 (second year in the SPARK workgroup)
How would you describe your job in the industry to your peers? I am a senior sales associate and account manager for the leading technology provider in the promotional products industry. I work with hundreds of promotional product distributors around the country to streamline their business processes using a combination of our tools, such as product research, digital presentations, order management, CRM and websites.
How do you think companies can better attract and retain Millennial and Gen Z employees? I think one of the best ways companies can attract and retain younger generational employees is acknowledging and empowering some of the values those generations hold in high regard. Salary and benefits, while important, are not the single-most important driving force. Employee engagement, giving them a voice with company decisions, corporate social responsibility, providing mentorship and growth opportunities and a willingness to embrace change, both technological and otherwise, are all factors that will influence the younger generations.
What do you think is the biggest issue facing the promotional products industry this year, and why? There are a number of issues that are facing our industry: globalization, generational workforce changes, tariffs, etc., but I feel the most prevalent is technological and the willingness to embrace pending advancements. Working as a technology provider provides me with a unique perspective, and the unfortunate truth is many distributors and suppliers (industry-wise and individually) are unwilling or uninformed to adapt to any sort of change. So much has already advanced in the last 10 years. Companies and individuals that continue to embrace those advancements, push the envelope and are willing to also confront failure, are the ones that are going to be successful. Those that continue to utilize the same old tools and techniques because it’s what has worked in the past, will see the industry, and business as a whole, pass them by.
President, Perfect Promotions & More, Inc., Apex, North CarolinaYears in the industry: 11
Years attending SPARK: 3 (first year in the SPARK workgroup)
How would you describe your job in the industry to your peers? Most jobs you can explain in a few short words or with a title that everyone can relate to. With promotional products, that’s not the case, so I typically explain it through examples. My go-to is: “I work for a marketing agency where our marketing medium is product. We take client events, objectives and problems and turn them into fun product solutions.” I’ll then look around the room and say, “See those bags and that t-shirt over there? Those are examples of the types of products we can help you create for your events and marketing teams.” The on-the-fly examples always help explain what we do.
How do you think companies can better attract and retain Millennial and Gen Z employees? We have recently hired and are consulting to hire young employees into our company. It is clear that one of the biggest advantages you can provide the younger generation of talent is a clear career path or career path options. Most of this new generation will not be content with the same routine of work, day in and day out, and will look for other workplaces if they do not feel the work they are doing can help them advance in their careers and lives. We also pay attention to the company culture, providing fun team activities, incentives, fun work space—doing things like Spirit Week, holiday parties, community service projects, etc. Having fun in the place you spend the most time of your day is vital.
What do you think is the biggest issue facing the promotional products industry this year, and why? If it’s just for 2019, there has been no greater impact than tariffs. The increase in pricing and the uncertainty in costs have caused the workflow process to slow down. We have to double- and triple-check pricing for orders that have already been quoted and deal with the constant fluctuation of costs. I don’t think it will truly impact overall sales for us, but I do think it is changing the types of products that are purchased. For example, if the budget my client had was $10 per piece, their budget does not necessarily change with the tariffs, but the types of products they can purchase for $10 may adjust.
Danielle Renda is associate editor of PPB.
This article was originally published in PPB Magazine. Used with permission from PPAI.
The Specialty Advertising Association of California’s (SAAC) annual SAAC Expo brought the promotional products industry to San Diego, California, earlier this month. Held August 6-8 at the San Diego Convention Center, the SAAC Expo drew more than 700 attendees to experience its 200-exhibitor trade show, networking and professional development opportunities.
“I feel honored to have been part of such a successful show for SAAC,” says Jennifer Bingham, SAAC executive director. “The members, the SAAC board and the numerous volunteers that made the event possible also helped to breathe new life into our association. The energy and excitement felt on the show floor made for an incredible experience for all involved. This was just a glimpse into what the future holds for SAAC members and I’m excited for the next chapter. We’re just getting started.”
The SAAC Expo featured education opportunities for attendees throughout its run. On August 7, before the show floor opened, PPAI President and CEO Paul Bellantone, CAE, delivered a town hall-style keynote on current issues and opportunities facing the promotional products industry. The following morning a series of select suppliers delivered fast-paced presentations on case studies and marketing strategies. The bulk of the SAAC Expo’s education, however, took place in an area alongisde the trade-show floor. Sessions included panel discussions on building a strong community of empowered women in the industry, generational differences and their impact on businesses, the end-buyer/distributor relationship, developing successful websites with SAGE Website Professional Plus, and Prop 65 and state regulations.
“What stood out to me at the show was the optimism for SAAC and the future, and our sense of community,” says Craig Weiss, vice president of sales and marketing and distributor Initial Impression. “For me, it’s always the quality of the suppliers and distributors that come. It’s never about quantity. A standout for me were the breakout sessions off the show floor. They were short but sweet and you could pop your head in and didn’t have to make the commitment of getting there early or staying late.”
Steve Parker, regional sales manager at supplier Starline, says, “This year’s show was amazing on all levels. We as part of the supplier community want more touches and contacts with people and the show outperformed expectations. It’s a great community, and in typical fashion, the SAAC show had a great atmosphere that was warm and friendly. The quality of participants on both sides made for a great promo atmosphere and place to do good business.”
The SAAC Expo allowed attendees and exhibitors to connect and celebrate each other’s successes at the SAAC Awards reception, held at the San Diego Convention Center at the end of the show’s first full day, and a meet-and-greet opportunity at the Stone Brewing Tap Room a short walk away.
“The SAAC show is a great opportunity for distributors to pick their suppliers’ brains in a casual and fun setting,” says Kaitlin Kennedy, West Coast business development and event specialist at supplier Orbus. “Without these face-to-face interactions, we’re all just sitting behind a computer screen. My favorite moment from any show is when the doors open for the first time. There’s an electric feeling that’s buzzing through the air. I see curiosity and excitement in the attendees’ eyes and it reassures me that I’m in the right industry.”
Kennedy adds, “I haven’t talked to one person about their start in the industry with ‘I’m going to sell mugs for a living.’ They’ve all said that they wanted to help others and there’s nothing wrong with earning a living while doing it. I believe attending SAAC as a supplier or distributor will help grow your brand.”
When you're not properly using your time, you end up losing money for yourself and your company. Nearly all workers (89 percent) admit to wasting time at the office, but that's just through distractions or momentary diversions. Structural time lost through bad time management can lead to hours, weeks or months of waste.
John Hall, co-founder and president of Calendar, says that an effective schedule goes a long way toward improving work-life balance. When you better manage your time, you get more work done and the work is better. In this issue of Promotional Consultant Today, we share Hall's perspective on why it's important to get your schedule under control.
Increased productivity.Hall says that a daily schedule doesn't just tell you what you're going to be working on during the day—it can help maximize your productivity, too. One of the biggest drags on workplace productivity is an unfocused working style, constantly switching from task to task as new problems need addressing. While it's important to stay flexible and dynamic in your role, endless task-switching is likely to result in a massive productivity dip. Use your schedule to safeguard against this. Organize your day into time blocks, with each focused on one specific type of activity. Keeping each of these blocks highly focused and limited to 90 minutes is shown to raise peak productivity overall.
Maximized synergy. An effective schedule isn't just one that fits your needs—it needs to fit the needs of those around you as well. In the modern workplace, it's nearly impossible to work at maximum productivity if you and your team are on completely different pages. Scheduling meetings and calls can transform from a never-ending back-and-forth dialogue to a simple assessment of available time slots. Shared schedules also allow others to know exactly what project you're working on, reducing the need for constant "catch up" meetings, according to Hall. Getting ahead professionally means surrounding yourself with people just as prepared for success as you are, and a team of people with well-managed schedules is one ready for any professional challenge.
Side hustle development. As valuable as a side hustle can be, you never want your second job to impact your primary job. Lazy scheduling can leave you juggling responsibilities across jobs at the wrong times. Use your schedule to keep your hustles from intermingling, allowing you to focus specifically on what needs to be done at exactly the right time.
Personal assessment time. One of the best ways to become more productive is also one of the most forgotten: sitting down, taking a look at your slate and thinking about what could work better, Hall says. Plenty of workers are so slammed with professional and personal responsibilities that they never really have the time to make long-term plans for themselves or their careers. Getting your schedule under control can give you the time you need to sit down and make a strategy.
To keep advancing in your career, you don't need to sacrifice your time and happiness. Often, all you must do is turn your schedule into a pathway for success.
Compiled by Audrey Sellers
Source: John Hall is the co-founder and president of Calendar, a scheduling and time management app. He's author of the best-selling book Top of Mind.
This article was originally published in PCT. Used with permission from PPAI.
Vice President, Western Region
Brown & Bigelow Inc.
Western Regional Sales Manager
We’ve lost another member of the SAAC past presidents family, and this one really stings.
Richard “Rich” Anderson was president of SAAC in 1996 and worked as a supplier rep in our industry for more than a decade. Rich was a tall, lanky guy with a thick mustache and a winning personality. He worked for both Benchmark and Earl Butler in the late '80s and the '90s and later left the promotional products industry to become a Christian minister with his wife—which he did for the rest of his life.
The reason this hurts so much is that even 20 years after he left, he still maintained many friendships in our promo world, because Rich was one of the good ones. A great guy, a loyal friend and a deeply spiritual and honest man. He cared about his lines, about our industry and his many, many friends. Rich made friends every single place he went, exuding warmth and genuine care for those around him.
In addition to his spiritual endeavors and his work in our industry, Rich was a dedicated musician, playing in several rock-and-roll bands over the years, and playing with a SAAC group at several SAAC shows in San Diego and Long Beach. He was also, late in life, an entertainment industry voice-over artist, landing several national television spots for brand name products.
We lost Rich last month in June after a year-long battle with leukemia. He was born in 1953. Rich visited us at several SAAC shows in recent years and attended the funeral for Reg Ross several years ago. Patti Lawrence was SAAC president in 1995 and Rich was vice president. She said, "To tell you I am heartbroken about hearing the news about Rich's passing would be an understatement. I have known Rich since the early '80s and was honored to serve on the SAAC board with him in the '90s. He became my confidant, supported me as my vice president and, as in the attached picture, he always had my back. Over the years we lost touch but when he was the officiant at the memorial service of another friend and fellow board member, Reg Marsh, a year- and-a-half ago, it was like all those years melted away. We spent quality time talking about old times and shared memories of those good ol' days. RIP my friend. You are missed."
Distributor Bensussen Deutsch and Associates, LLC (PPAI 109381, D14) has entered into an agreement with BrandVia (PPAI 105536, D11) to acquire the San Jose, California-based distributor. The news was first reported in a Breaking News alert on Wednesday. With this acquisition, Woodinville, Washington-headquartered BDA significantly expands its operations in California and its portfolio of major technology clients and increases resources to further support high-performing industry sales professionals and the ever-changing needs of their clients.
The deal marks the latest in BDA’s growth strategy; in 2017 the company acquired SwervePoint, Dukes of London and Sports Merchandise Global. BDA operates out of over 40 domestic and six international offices serving clients such as Bank of America, Dell, ExxonMobil, FedEx, Johnson and Johnson and Major League Baseball.
Speaking to PPB Newslink, Jim Childers, founder and CEO of BrandVia, says, “Jay and I have been friendly for years and developed a great relationship dating back to the early ‘90s. We’ve stayed in touch and often run into each other at industry events. We’ve talked off and on about vision and what could be and decided to explore the specifics of what a deal would look like a few months back.”
Jay Deutsch, co-founder and CEO of BDA, says, “The team at BDA is both ready and excited to work with BrandVia. Jim and I share the same vision for client value creation, and how we will drive client value via BDA’s world-class suite of services. From BDA’s creative and merchandising teams to innovative sports sponsorship activation strategies and global assignments, we see this as a tremendous platform for growth and an example of what the future holds for leading client-side business models.”
BrandVia’s clients, including well-known technology giants like Adobe, Facebook, Oracle and Salesforce, will gain access to BDA’s global fulfillment and supply chain, award-winning creative team and comprehensive e-commerce, merchandise and marketing solutions.
“BrandVia has long been recognized as an innovative company with great people and great clients,” says Deutsch. “They’ve built a tremendous culture of customer service that is a natural extension of our BDA Tech division. We now have an even larger presence in Silicon Valley with a talented team that will only further enhance our compelling offer to high-tech enterprise clients who need a true merchandise agency partner.”
BDA and BrandVia will be one brand in the future to create clarity, Childers says, although this process will take some time. He adds, “Our plan is to work closely with the brand team at BDA to be thoughtful about the character and promise of the BrandVia brand and to try and incorporate the things that our clients and employees have loved about BrandVia, where it makes sense within the BDA brand system.”
On what the acquisition means for staff at the two companies, Childers says, “We expect more opportunities will be available for professional training and education, promotions, earning potential, recognition, travel opportunities, brand opportunities and fun. There will be a lot of new client assignments which will create growth personally and professionally for our employees. It’s obviously in the early days and we’re focused on trying to communicate as clearly as we can about what the future holds while doing the practical work that comes along with bringing two companies together.”
As for what’s up first for BDA and BrandVia, Childers says, “We have goals and timelines across all functional areas of the business looking out over the next 30, 60, 90, 120 days and beyond to ensure that we are capturing best practices to operate the combined entity the best way we can for clients, employees and our supplier partners. We see tremendous opportunity to scale and deliver more value, not just in the technology sector where we’ve been primarily focused, but we see a path to take that playbook into other vertical markets on a global level.”
This article was originally published in PPB Newslink, August 15, 2019. Used with permission from PPAI.
Today's buyers have more leverage and expectations that ever before. They can find any products or information online, making it all the more critical for sales professionals to successfully engage and sell. Devin Reed, content strategy manager at Gong, says that to become and remain successful, sales professionals must communicate in a meaningful way. This means using your words—or sales phrases—better.
In this issue of Promotional Consultant Today, we discuss Reed's thoughts on the six sales phrases to avoid in order to cut through the noise and be memorable to potential buyers.
1. "Just checking in."This is notoriously known as the laziest and worst sales phrase on the planet, says Reed. "Just checking in" is a zero value-add for your prospect, and therefore very easy to ignore. Why are you checking in? This line is so lazy, it doesn't even bother to say why. Your recipient has to spend time and energy opening the email, figuring out whether they're missing something (surely you didn't send an email for no reason, right?), then answer. What you're really trying to say is this: "Are there updates on ___ (that thing you care about)?"
2. "Any questions?" This lazy sales phrase plagues discovery calls and demos across sales floors everywhere. Reed admits he has also used it as a quick out to spark a dialogue. What sellers and (most) buyers want is a conversation that is challenging, insightful or simply interesting. Many sales leaders would call this "meaningful." There's a time and a place to ensure questions are all answered, but "Any questions?" is the laziest of them all. Similar to "Just checking in," you put the responsibility on your prospect to generate a topic of conversation.
3. "List price." Aside from making you sound like a used car salesperson who's reading the sticker price off a used Nissan, when you use the phrase, "list price," you completely negate the validity of your asking price, says Reed. You're subliminally saying, "Here's our starting point. It's your turn to take a hack at it." Worse still, when you say any of these words — list price, typical price or standard price - at any point in a deal, you can expect your sales cycle to extend 19 percent longer than when you don't use these terms.
4. "Pick your brain." This sales phrase is a big loser, according to Reed. Getting your brain picked sounds taxing and, frankly, unenjoyable. It also means the person doing the picking is getting value at the expense of the pickee. The mistake is that salespeople try to preface an "ask" with an unattractive, one-sided dialogue.
5. "Just wanted to." This sales phrase doesn't work on multiple levels. It feels passive. It's casual. And it's selfish by definition. In speech, this phrase often goes unnoticed. We hear it as "simply confirming," which isn't terrible. Via email , however, it has much more of a negative impact. People often read the first few words of an email via mobile notification or very quickly via desktop. Leading with "just wanted to" makes it sound like you're setting up an ask or a task — and no one wants either.
It's important not to get lazy with your sales phrases. By paying attention to the words you use, you can level up your conversations, win your prospects' trust and earn their business.
Source: Devin Reed is the content strategy manager at Gong and host of the Gong Labs Live, a weekly show designed to provide tips and insights to sales professionals.
When asked to recap an old picture from a SAAC event, I gladly obliged. I was not sure where my box of photos was stashed, but I was sure it was somewhere among my collections of stuff. Once found, it opened a flood of memories. All good ones, which included a photo collection of Robert Collins, the Minkus brothers, Bob Dorr, and Tom Mann, who I had met in 1967 while we worked together at National General Corp.
But the one photo that remained atop my sorted pile was of my three departed friends from the 1992 SAAC show golf tournament. Reg Marsh, Bob Cornell and Vince Tringali were three giants in my world. Reg was a pure craftsman. You would not know it due to his humble demeanor, but he could do things with an engraving machine that put all the current computer engravers to shame. He also was the best golfer in the group. Bob was a dreamer, always searching for nirvana, always the most fun at parties and, by far, the best looking of this group. And Vince, "the Coach," was perhaps the greatest salesman I ever met. His background as a football player and coach gave him the ability to lift me up whenever I felt down.
I miss these three guys, along with Alex Kreever, Cal Wofford, Ron DeChamplain, Gus Gustafson and a bunch of others. And just yesterday I heard about the passing of Richard Anderson, and another SAAC show golf memory came to mind. We were riding together and Rich ordered a hotdog at the turn. When we got out of the cart at the No. 10 tee, we were no more than six feet away when a bird swooped down and grabbed his hotdog. One bite for Rich and the rest went to the bird. Rich may have been the kindest past president in the history of SAAC.
Thirty-nine years in this business has been a pleasure, and introduced me to some fine humans, whose friendships I’ll treasure for a lifetime.
It’s been more than a year since the Trump Administration announced plans to impose tariffs on products imported from China. On July 6, 2018, the tariffs became a reality with $34 billion worth of Chinese goods subject to tariffs. As the year wore on, news on the tariff negotiations continued to make headlines while threats to increase the tariff rate and the list of products subject to tariffs grew. As of June 1, 2019, $250 billion in goods from China are now included in the 25 percent tariff including bags, backpacks and luggage, some drinkware items, technology products and related accessories, hats, notebooks and other stationery items, fabrics and sporting gloves, among other items.
At press time, the threat still lingered of extending the tariffs to virtually all Chinese imports—more than half a trillion dollars—should the two sides not come to a satisfactory agreement. This latest turn in the ongoing trade dispute has roiled markets and raised questions throughout the promotional products industry.
When the threat of adding tariffs on products imported from Mexico was announced in late May, it stunned industry suppliers and distributors who were already dealing with the impact of the Chinese tariffs. Mexico is one of the U.S.’s largest trading partners, surpassing China and Canada in the first three months of 2019. While the majority of imported promotional products come from China, a percentage are imported from other countries, including India, Vietnam and Mexico.
Fortunately, the Mexico tariff was lifted just days before it would have gone into effect, but the China tariffs continue to confound suppliers and distributors who are trying to find their way through it.
In May, the U.S. Trade Representative (USTR) announced a proposed List Four of Chinese imports upon which tariffs will be levied on approximately $300 billion in additional products, representing almost all imports from China not already covered under the previous tariff lists.
As this issue went to press, the USTR was due to complete the public hearing and comment period on June 25 on the List Four tariffs and a final decision on the tariffs’ implementation was expected soon.
“PCNA has submitted comments in opposition to the List Four tariffs,” says Larry Whitney, director of global compliance at supplier Polyconcept North America. “While in Washington with L.E.A.D., I brought up the costs related to List Four, and why it’s bad for our business, in every meeting that I had on the Hill. I’ve also had subsequent calls with one of the Pennsylvania senator’s staff members to go into more detail on the potential impact to PCNA.”
Whitney adds, “If List Four goes into effect it will have a horrible impact on our industry. While some of the suppliers have made efforts to diversify out of China, many have not, and there is not sufficient manufacturing capacity out of China to replace the Chinese factories.”
Brett Cutler, vice president of sales at supplier Greater China Industries, says, “Most promotional products come from China and the pending next tariff that taxes essentially everything from China will be more damaging than we have seen thus far. However, an interesting occurrence is taking place around the world and that is the more important element to be aware of. Almost every other manufacturer of goods around the world has had to compete against factories in China and Mexico for market share. They’ve had to reduce profit margin to remain competitive. With a 25-percent tariff on goods from China, everyone else is raising—or saying they are about to raise—their prices, because they can. Especially factories in East Asia—we see prices rising, in part, because they source raw materials from China and these Chinese suppliers have raised rates. But, also because they are competitive now by a significant amount, and they know they can charge us more and still be less than China prices with the tariff.”
Cutler adds, “Combine the tariffs and the response of factories in other countries and all we have done is drive up the cost of goods we use everywhere in our industry and economy. And, we all know that once prices are high, it will take a long time for them to come down to where they were. So, it’s all tied together. While tariffs are good negotiating tactics, they are not a very good long-term solution. Hopefully the shared pain in each country will be enough to move all parties to a solution quickly.”
The tariffs are also requiring additional communications with clients on both sides of the industry to prepare them for possible pricing fluctuations.
Richard Anderson, owner of distributor AAAA Designs LLC in Morrison, Colorado, replied to a post on PPAI's Promo Connect about the verbiage he is using when communicating with clients about the tariffs. “I added this line to my SAGE website: Please confirm pricing with your AAAA Designs representative due to new tariff implementations as of May 10, 2019. Prices shown on our website may not reflect these new changes and are therefore subject to change at any time,” he says, adding that he also included the line to his default presentation template in SAGE, just to be safe.
When communicating with her customers, Janie Holbrook, co-owner of distributor Tee It Up Promotions in Oakton, Virginia, says, “I often send out quotes that do not become firm orders for days, weeks or months while customers wait for internal purchase orders, work with committees, etc. Since last September, I have been adding notifications that read: ‘Pricing subject to change as a result of tariffs on Chinese imports. Pricing will be confirmed when order is finalized.’”
Jo-an Lantz, MAS, CIL, president and CEO of distributor Geiger in Lewiston, Maine, says the company has had to address the ongoing issue of tariffs and pricing uncertainty for quite some time, so it has implemented several measures relating to communicating with clients.
“When sending a client a quote, we state the price is only valid for X days (it depends on the product) due to tariffs. If the client orders after that time period, we double-check to make sure pricing is valid, and if there is an increase we go back and explain,” she says. “There is so much in the media about tariffs, clients truly understand.”
Geiger took a proactive approach beginning last year by providing an explanation of what the tariffs are and preparing clients for what they could mean for prices. “In many cases, we urged clients to order earlier, and some did,” she says. Although Geiger has absorbed some of the tariff increases and has seen a decline in margins on some products, she says that “overall, the suppliers have been terrific in communicating, our sales partners have done a really fine job in communicating and our customers understand.”
“We have been really proactive about this issue with our clients,” says Larry Cohen, CAS, president of distributor Axis Promotions in New York City, adding that the company is including the following clause in all customer quotes: “Due to the impending tariff increases, all pricing must be confirmed at time of order. Pricing is subject to change.” On sales orders, this copy is included: “Please note that on May 10, U.S. Customs Border and Protection implemented the additional 25% tariff. This item is currently NOT subjected to the additional tariff. However, please note that there is a potential for duty rates to increase an additional [X percent] for this item prior to shipping.” In addition, prior to the announcement of the tariff escalation, Axis Promotions emailed a nearly 500-word letter to all clients explaining the tariffs and their impact on pricing, the product categories included and how the new trade regulations, along with spikes in gas and freight costs, are affecting the cost of raw materials. The letter noted that Axis Promotions would keep clients updated and fully aware of the impact on the promotional products industry despite the uncertainty of the situation at present.
“Once you know what the tariffs are going to be, you have some options,” says Cohen. “Everybody is going to adjust. Once you know what’s going to happen, you just adjust. If it costs more money, the impact will be maybe choosing items that aren’t subject to a tariff or trying to find another location to get them from.” One thing he has not heard from customers, fortunately, is that they won’t buy promotional products because of the tariffs. “We’ve not heard that at all,” he says.
For companies that have a certain budget for an event, he believes that if prices increase because of the tariffs, it may affect quantities. That means his team is constantly adjusting to what’s going on. “We have flexibility; there are so many products at so many price points that if the budget was $X [per product], now I can show you one for $X [per product], and move things that way. Other industries don’t have the flexibility that we do. Look at car manufacturers. There’s not a lot of elasticity there,” he says.
Tom Goos, MAS, president of Kirkland, Washington-based distributor Image Source, Inc., describes the current situation as very dynamic. “It’s not black and white—there’s a lot of confusion for my sales team and our clients. What they are hearing is it’s a set percentage increase and that’s not really true. If it’s a component part, on a lanyard for example, the increase may be on the clip but not the strap. It’s impossible for us to say, with all the million different variations of products we sell, exactly what that increase will be for our customers in overall, broad categories.”
Instead, Goos is educating his sales team and, in turn, his customers. He sends out a weekly newsletter, the Weekly Heartbeat, to report on what’s going on with the business, industry and employees, and recently has been including tariff updates in every issue. He’s also looking at factories outside of China. “We moved a program out of a factory in China to one in Cambodia because at least we’ll have consistency in pricing,” Goos says. And the company has begun adding a disclaimer on quotes for large projects that reflects potential changes in pricing because of the tariffs. “But if you are going to add a disclaimer, I don’t think it’s a good idea to hide it under an asterisk,” he says. “For me, it’s much better to have a really good conversation with the customer about it instead.”
Bill Mahre, CAS, president of supplier ADG Promotional Products in White Bear Lake, Minnesota, says he has not added any tariff-related information to the company website, but is making sure everyone knows that published prices—especially in catalogs—may change if the company sees significant impact to its raw material costs. “We do not intend to make changes that amount to a couple of pennies but dramatic cost impacts to certain categories may necessitate a price change in the future,” he says. “Overall, we still believe the tariff issue is essentially an economic tool for the administration to negotiate better trade deals. Never before have we seen this type of strategy, so we are definitely in unchartered waters on how to handle the costing impact on a short-term and long-term basis. Our intent is not to raise and/or lower prices broadly or without specific rationale. For example, just because an X-percent tariff has been announced today doesn’t mean it will impact our product costs immediately. In some cases, we have existing inventory that will keep us status quo from a cost structure for months.”
Mahre adds that his sales and customer service team members are being communicated with on how to answer questions and provide the best information available at the moment. “The difficulty is that things seem to change on a day-by-day basis and we are just one tweet away from a whole new direction,” he adds.
Ira Neaman, CAS, owner of supplier Vantage Apparel in Avenel, New Jersey, recently recorded a video designed to communicate with customers about the tariffs. In it, Neaman speaks directly to the camera letting customers know that the company has a diverse supply chain and is not solely dependent on China to source products, so it won’t be raising prices in the near term. The video also reassures customers of the company’s continued commitment to its current level of quality and service. The video was shared internally to guide associates in answering questions, and externally via email to all active distributor contacts, and it was posted on the company’s social media platforms—specifically Facebook, Twitter and LinkedIn. “To date, customer responses have been positive, affirming the importance of keeping them up to date,” says Gina Barreca, Vantage Apparel’s marketing director.
On June 3, supplier Polyconcept North America in New Kensington, Pennsylvania, emailed a letter to customers explaining the actions the company needs to take as a result of the tariffs and outlining a new pricing schedule effective July 1. “Consistent with our strategy to date, we will continue to take a measured and moderate approach to passing along price increases,” the letter stated.
Supplier Hit Promotional Products, Inc., in St. Petersburg, Florida, is also keeping customers informed. The company sent a letter to customers in early June to let them know it was working to keep the tariff’s impact on pricing to a minimum and it also shared a new price schedule. With no relief in sight from the possibility of more tariffs, the letter stated that, “The next couple of months bring a level of uncertainty as to what will transpire regarding what would ultimately be the balance of our product line that would be impacted by newly imposed increased tariffs. Please be prepared for this possibility, and additional price increases, accordingly.”
Cohen forwards letters such as these to his internal team and sometimes they are included in communications to clients. He says this kind of supplier communication adds credibility to what his team is telling customers. “It’s good not just coming from us,” he says of the tariff updates. “It’s a good way to show your clients that you aren’t selling them; you are educating them on the impact of tariffs. And if you have items in a program that just went up [in price], well, you’d better tell your clients.”
Jonathan Isaacson, president of supplier Gemline in Lawrence, Massachusetts, says his company is not getting inundated by questions from distributors at this point but the interest will likely pick up steam as more tariffs are applied. “We had seen this eventuality for quite a long time, so we had prepared as much as one can and are executing on the plan we put in place,” he says. That plan includes solid customer communications. “We’ve taken some time to make sure that we had a good assessment and we will be feeding back information to our internal team and our customers. This is a very fluid situation. There’s likely to be a number of twists and turns but business has to continue one way or another. Businesses can prepare and take action to mitigate some of the impact of this; there are some areas that will be very difficult. Communicating [that] will be very important.”
Still, Isaacson is positive about the industry’s future. “We, as an industry, need to do this in a way that is not going to panic our end user. We can work our way through this without turning it into a giant demand detriment for promotional products. We have to find our way through this as an industry. It’s a difficult issue but there will be suppliers who can work through it and help mitigate some of the impact from the tariffs. There’s a lot we can do as an industry. There will be hard work involved but it’s not impossible.”
He is expecting tariffs to be an issue for quite some time. “Part of that is the domestic politics on both sides, they are difficult issues. It’s an issue we’ll have to manage around for the foreseeable future. We will find ways to mitigate a reasonable portion of this issue—we have long understood that there is risk everywhere we do business, so we have contingency plans. That doesn’t mean it’s perfect, but we are better positioned than many to be able to react to the changes in the market that we are seeing today.”
Tina Berres Filipski is editor of PPB. James Khattak, PPB’s news editor, also contributed to this article.
This article was originally published in PPB Magazine, July 1, 2019. Used with permission from PPAI.
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