As reported in the October issue of Print Professional, total annual sales figures for the top 100 manufacturers took a hit. Would the industry's leading distributors also fall victim to the economy? Would the naysayers' accusations come true—is this a dying industry? This year's numbers spoke volumes.
Total annual sales figures for the top 100 distributors were the lowest they have been over the past few years, coming in at $2.6 billion (2007: $3.2 billion; 2008: $3.5 billion; and 2009: $3.4 billion). With the exception of a few distributors, the majority reported lower overall sales figures—some more significant than others. For instance, even though Dayton, Ohio-based WorkflowOne managed to hold on to the number-one ranking, its sales took a rather noticeable fall from 2009 figures of $949 million to 2010 figures of $662 million.
A low participation rate offers another explanation for lower sales volumes. Similar to the manufacturers, the distributors appeared more reluctant than normal to disclose sales figures. After evaluating 2010 results, it no longer comes as a surprise.
Naturally, lower total sales figures led to a decline practically across the board for individual product sectors. However, it is important to note that a noticeable number of distributors opted not to break down their individual product sales, skewing true results.
Business forms still kept its winning record with $446.5 million (2009: $558.5 million), proving they have fight left in them. Commercial print sales averaged at $295.2 million (2009: $368.2 million); promotional products rounded out the top three product categories with sales totaling $285 million (2009: $343.2 million); labels and tags sales fell to $131.6 million (2009: $185.9 million); digital print sales comprised $139.6 million of sales (2009: $185.9 million); and envelopes/folders/stationery sales landed in at $106.8 million (2009: $183.5 million); and finally, the "other" category put forth $171.1 million (2009: $250.2 million).
Office supplies, by far, were the most common response for the "other" category. Additional responses included furniture, software, statement processing, packaging, website development and DVDs. It can be argued that office supplies such as filing products belong in the envelopes/folders/stationery category, but the decision to mark one product under a specific category remains at the distributor's discretion.
Two product categories took a hit far from modest. Direct mail sales tumbled down to $68.3 million (2009: $152.5 million), while RFID sales only reached $11.2 million (2009: $114.8 million). It is particularly puzzling to see the latter's dramatic decline since this technology was expected to be the wave of the future. At the same time, RFID may require more dollars and manpower than struggling businesses can handle right now.
On a more positive note, plastic product sales climbed up to $20.7 million (2009: $15.1 million) and e-commerce sales inched their way to $126.5 million (2009: $119.8 million).
According to the National Bureau of Economic Research, a panel of academic economists based in Cambridge, Mass., the 18-month recession finally ended in June 2009. Nevertheless, high unemployment rates remain stagnant, indicating the country is still in a phase of recovery. This time last year, our staff hoped distributors would get their chance to compensate for any lost revenue caused by a rocky road, but even lower sales support the slow recovery theory.
The Print Professional team remains optimistic for next year. Open-minded distributors will continue to evolve with the times. There is still a large market for business forms as indicated by their endless repeat victories over other products. But, industry direction might take a slight turn as promotional products and commercial printing make strides in the race to beat business forms. Finally, the young blood of the industry is just waiting for its chance to show the capabilities and wonders that technology will bring to business. Wait and see the numbers this area generates in the future.
We congratulate each and every distributorship that participated on its latest fiscal year and toast to better times in 2011.
Until we meet again...
(*Factors to consider when interpreting sales figures are ongoing industry consolidations and responses reporting idiosyncrasies.)
Related story: Top 100 Distributors 2010
- Companies:
- WorkflowOne
- Places:
- Dayton, Ohio