Distributors Forge a Comeback

Sales increased in almost every category in 2003.

Distributors had a healthy year in 2003, with a total BFL&S Top 100 revenue of $2.35 billion, which was 8.8 percent higher than last year's $2.16 billion.

The main reason for the $190 million increase in sales is the rapid incursion of promotional products into distributors' product portfolios. Led by Proforma, which more than doubled its promotional product sales, the category increased by 45 percent overall. All other categories, except forms, also showed sales increases this year.

Form sales for the Top 100 decreased to $774 million from $793 million last year. Forms accounted for 32.9 percent of the total revenue, compared to 36.7 percent last year, reinforcing last year's downhill trend.

Top 100 label sales rose to $247 million from $218 million in 2002—a 13.3 percent increase.

Commercial printing, promotional products and direct mail all fared well in 2003. Commercial printing now accounts for 20.8 percent of Top 100 sales with $488 million, vs. sales of $484 million last year. Promotional product sales account for 14.7 percent of total sales at $345 million, up $107 million from $238 million in 2002. Direct mail sales ($135 million last year) rose to $141 million—a 6 percent increase.

Employees and Production

This year's Top 100 reported 7,872 employees—an increase of 8.2 percent from last year. Distributor locations increased by 6.1 percent to 1,590 offices.

Productivity, as measured by sales per employee, rose from the $296,948 reported last year to $298,633. Sales per location reached $1.5 million, compared to $1.4 million reported in 2002. The $2.35 billion in Top 100 sales was accomplished with 598 more employees in 92 more locations.

Share of market for the largest distributors was higher than last year, with the top 20 companies accounting for 72.9 percent of total Top 100 revenue ($1.71 billion). These 20 companies em-ploy 5,460 people at 1,370 locations for $313,645 in sales per employee and $1.3 million in sales per location. Last year, the top 20 companies employed 4,820 people at 1,218 locations for $311,203 in sales per employee and $1.2 million in sales per location.

The Top 10 distributors gained in market share from 56.9 percent of total Top 100 revenue, or $1.23 billion, last year to 59.7 percent of total Top 100 revenue—$1.4 billion this year. The Top 10 Distributors employed 4,073 people at 1,282 locations, accounting for $344,389 in sales per employee and $1.09 million in sales per location.

The Top 10 sold $428 million in forms, $149 million in labels and tags, $250 million in promotional products, $298 million in commercial printing and $55 million in direct mail.

Outlook

Product diversification continues as form sales are replaced and supplemented by increased sales in all other product categories. Consolidation also continues as the top companies increase their acquisition trend. New conglomerates may also appear, following the example of the 61-distributor member International Business Solutions Alliance (IBSA).

With the country's economic news gradually getting better, look for higher sales and renewed activity for 2004.

Note: All distributor sales charts provided in this issue were produced from information voluntarily supplied by the distributors who completed a BFL&S research questionnaire.

By Bill Drennan, Pamela Newman and Kirsten Terry