Distributors Enjoy Another Good Year
Despite changes in the make-up of the Top 100, distributors posted strong numbers for 2005
THE BIG CHANGE in BFL&S' Top 100 Distributor rankings this year is the absence of International Business Solutions Alliance (IBSA), which skews the results significantly. Because IBSA is an affiliation of distributors, rather than a single distributor entity with completely central billing, BFL&S decided that placing it in the rankings would be inappropriate. Make no mistake—with $447 million in total sales and almost 2,000 total employees at 283 locations—IBSA is having a huge impact on the distributor marketplace. Now under new management, expect to see IBSA grow even further by gaining additional national accounts.
Even without IBSA, total revenue for the Top 100 Distributors is still a solid $2.34 billion, albiet 16 percent lower than last year's $2.78 billion.
The top five companies this year increased their sales by a combined 15.2 percent, or $169 million.
Form sales for the Top 100 dropped by $234 million, and dropped as a percentage of total sales from 32.7 percent last year to 26 percent.
Top 100 label and tag sales decreased to $209 million from last year's $287 million. As a percentage of total sales, labels and tags dropped to 8.9 percent this year from last year's 11.1 percent.
This year, commercial printing sales accounted for 19.5 percent of total Top 100 Distributor sales, down from 21.5 percent last year. Meanwhile, promotional product sales dropped slightly from $391 million last year to $384 million this year.
Direct mail sales increased dramatically, to $175 million from $117 million a year ago. Direct mail now accounts for 7.5 percent of total Top 100 Distributor sales, an increase of 3 percent.
As a new category this year, envelopes, stationery and folders sales were $296 million, or 12.6 percent of total Top 100 sales.
Productivity Improves
This year's Top 100 reported 7,604 employees, a decrease of 1,405 people (although IBSA alone reports 1,986 employees). Distributor locations decreased by 7 percent to 1,633.
Productivity, as measured by sales per employee, increased to $308,004, compared to $286,117 reported last year. Sales per location was $1.43 million, compared to $1.46 million one year ago.
Top Companies Prosper
The Top 10 Distributors held steady in market share with 61.4 percent of total sales—$1.44 billion—compared to 61.8 percent of market share last year. The Top 10 Distributors employed 4,313 people at 1,331 locations, accounting for $333,431 in sales per employee and $1.08 million in sales per location.
The Top 10 sold $309 million in forms, $116 million in labels and tags, $275 million in commercial printing, $308 million in promotional products, $216 million in envelopes, stationery and folders, and $112 million in direct mail.
The top 20 companies accounted for 72.9 percent of total Top 100 Distributor revenue, totaling $1.71 billion this year. These 20 companies employ 5,146 people at 1,382 locations, for $331,917 in sales per employee and $1.24 million in sales per location. Last year, the top 20 companies employed 6,517 people at 1,484 locations for $295,798 in sales per employee and $1.3 million in sales per location.
Distributor Outlook
If IBSA's numbers were added in, total distributor sales would have reached $2.79 billion this year, a slight increase over last year. Most sales per category also would be steady.
The distributor segment of the printed products industry is changing rapidly. Distributorships now run the gamut, including small independents; franchises, employee-owned conglomerates, loose affiliations and large, national employee-based corporations. Expect more variations in the makeup of distributors within the next year. In addition, WorkflowOne's acquisition of Relizon could have a huge impact on both distributors and suppliers.
In January, BFL&S will offer a report on the many changes affecting the distributor segment. In the meantime, as long as the economy is good, just about everything works. Expect good numbers for 2006.
By Bill Drennan and Heather Morse