How to get started in the profitable world of promotions
By Carol Katarsky
Opportunities abound in the fast-growing promotional product market. The most recent estimates put total sales at $12 billion--and increasing fast. To help navigate some of the choppier waters, Business Forms, Labels & Systems brings you this three-step guide to mastering marketing.
1. Gaining Access
One issue many distributors encounter when they first begin selling promotional products is winning the trust of vendors.
"The problem [when you're first starting out] is proving you're not an end-user," said Ron Natinsky, vice president of SAGE--Quick Technologies, Dallas. "You can use other suppliers as references or use your industry affiliations, such as DMIA membership, to establish that you are a legitimate two-step distributor."
Getting listed with the Ad Specialties Institute (ASI) is not a necessity, but can sometimes help with credibility.
"ASI or another outfit helps when you're starting, [but] there are other companies that have cheaper annual fees," noted Brian Goodwin, senior vice president at Southern California Envelope & Printing (SCEP), an Augua Dulce, Calif., distributorship. "After a year or so of doing promotional products, you'll have developed your own vendors."
"You don't need to have an ASI number to sell promotional products, it's a private company, not an association--there seems to be some confusion on that point," said Natinsky. "For a forms distributor, the cheapest and easiest way is probably to join either the Pro-motional Products Association International (PPAI) or one of the regional associations."
"A certain percentage of manufacturers won't work with you if you don't have an ASI number," said Lee Marvin, CAS, general manager at Hugo, Minn.-based AdImages Promotional Group. "Mainly because, if you're ASI-listed it means you've been through the screening process, so they know you are a legitimate distributor and they'll be able to access ASI's credit reports on you. But, for every manufacturer that won't work with you, there's one that will. You just have to make the phone calls until you find them. Don't get discouraged if the first three suppliers you call aren't interested."
2. Dealing with Suppliers
"Most distributors are always looking for more and more suppliers," said Natinsky. "But you don't need 3,000 suppliers. You need to have maybe 50 solid suppliers--a few that do wearables, a few that do mugs, and so on. When you get the occasional oddball request, then you can do some research to find a manufacturer who can meet your needs.
"Ask around and find out about their customer service record and delivery times. If you find someone who does good work, on time, on a consistent basis, stick with them--that's how you'll build loyalty--not by shopping every order around to find a price a few pennies cheaper," he added.
Marvin emphasized the importance of doing your homework.
"A lot of new distributors don't know the jargon, don't understand the price codes or the workings of the industry, and that can hurt your credibility," he noted. "If you can call a supplier and say that his competitors are running such and such a special, you're more likely to get the best possible price."
3. Clinching the Sale
Natinsky advised distributors to stick with established clients at first and start out small--with pens and mugs for example, not a $500 lucite award.
"Promotional products suit every business. Approach the marketing department and find out if they attend trade shows. Find out what's new with the business. For example, if they are ordering labels to go on the containers of a new product, that's a perfect opportunity to suggest an item that can help promote the new product," he said.
"Know who you're selling to," advised Mike Raymond, president, ProForma M&E Promotions, Som-erset, N.J. "Keep your mouth shut and let them tell you what they want--find out what they need and who they're targeting."
Knowledge of your client's company and goals is the key.
"Ask the customers how they advertise. If they tell you they don't, then they need to see promotional products that have worked in a previous campaign. Ask if they exhibit at trade shows. Ask if they have any experience with promotional products. Ask, ask, ask. It may put doubt in their mind that not doing anything is not good and it may add to your credibility with intelligent and probing questions," Goodwin advised. "Ask them if they market themselves and ask if they've grown substantially in the past three years. It should be a no-brainer. Then ask if their competitors have grown. If the answer is 'no,' then they don't care and convincing them will be a tough one."
He also suggested offering fulfillment in order to win bigger sales. "They may need things shipped to multiple locations or hand-delivered to a trade show. They may need chocolates wrapped with their custom coffee mugs in a wicker basket, then labeled specifically with their customers' names on them. Try to have their promotional products achieve more than one purpose," Goodwin said.
"Everyone's out to get the best price possible," noted Raymond. "But I've found if I can develop a unique program, price becomes a secondary concern. It's the idea that sells. Marketing people realize the value of these products."