Full Version: Ad Specialties

From: LaZerDude (C_BURKE) [#1]
 15 Feb 2005
To: ALL

Hi all
Is anyone diversified into Ad Specialties? If so how much of your income comes from that? Is it a natural sideline to the Awards and Engraving business? Is it difficult to sell? Is it profitable?
Enquiring minds want to know.


Thanks
Chuck Burke
Pacific ?????????
Maui


From: John (ICTJOHN) [#2]
 15 Feb 2005
To: LaZerDude (C_BURKE) [#1] 15 Feb 2005

Chuck,

I do ad specialties and it has been steadily climbing up in sales, it ranks as one of my top 5 items. Yes I think it is a natural extension of awards, people all the time ask if we do pens & cups. Yes we do pens and cups and about 500,000 other items.

I was a member of ASI, but they just wanted a lot of my money to join and then a lot more for any additional services. I am now a member of SAGE for less than half of ASI, and it has more up to date computerized searches and photos. Sage has been at the ARA shows for several years now.

As far as being diffucult to sell, I don't have an outside sales person so it is sold just like my plaques & trophies.
I have a display area,
we mention it to customers as they are shopping,
I mention it in any advertising
and the best advertising in the world - word of mouth from other customers.

There is a little learning curve as far as the industry goes. Everything is priced retail and then there are codes that tell you the distributor what your percentage is. Like 50% of retail or 40% or 35% etc. The mfgs usually have an over run or under run amount of 5% that is common. If they make 5% more product, you will have to take it & pay for it. Most companies seem to hit the 5% mark ALWAYS. (a little profit booster!)

Then there are set-up charges, die charges, art charges......etc that also have retail prices with codes attached for your pricing. Oh, dont forget shipping.

Ad Specialties are no different than the engraving industry, the customer will give you a very low quality jpg file for artwork and expect you to blow it up and put it on the product.

It does help fill in the roller coaster sales effect of the awards industry, so YES, it pays to diversify.

 


From: LaZerDude (C_BURKE) [#3]
 15 Feb 2005
To: John (ICTJOHN) [#2] 16 Feb 2005

John,
WOW Thank you for your response and reply. Where can I find more information about SAGE?
Are you going to be at the ARA show? If so, could we get together and chat?

Thanks
Chuck Burke
Pacific?????????
Maui


From: Pete (AWARDMASTERS) [#4]
 16 Feb 2005
To: LaZerDude (C_BURKE) [#3] 16 Feb 2005

Go to www.sageworld.com

They also have a great credit card merchant program if you are a member.

 


From: Birdman (TBIRD1957) [#5]
 16 Feb 2005
To: LaZerDude (C_BURKE) [#1] 16 Feb 2005

I have sold Ad Specialties for several years. I do not do a lot of business
in ad specialties, but sales are more each year. I also do not promote them as I should.
I use PDMA marketplace on the net. No charge and I can use their search engine and find anything that anyone with ASI or other organazations can find for you.
Here is the link to their web site.

http://www.pmdm.com/index.cfm

Good Luck
TJ Bird


From: Engravin' Dave (DATAKES) [#6]
 16 Feb 2005
To: LaZerDude (C_BURKE) [#1] 16 Feb 2005

Chuck,

After being in business a year, I decided to become an ASI listed company. I did the same thing as John, in that I displayed a few things in the showroom and took the sales that came. After a couple years I dropped my ASI listing. I got tired of quoting customers prices and finding out that the pricing and information on their high-dollar product search tool was 2-3 years old. It was also annoying in that they were constantly badgering me to buy their marketing tools and services.

If you want to get a feel for the industry you can sign your company up for a free UPIC number at www.the-upic.com. More and more ad specialty suppliers are accepting this number as confirmation that you are a legitimate reseller in the industry.

After you get your UPIC number, I would recommend that you contact www.distributorcentral.com to get signed up for their free services. Distributor Central is a product database that puts the responsibility of price and data maintenance on the supplier, where with ASI, the product information was entered by in-house staff. With the hundreds of thousands of products on the market there is no way that ASI can keep information current.

About a year and a half ago I formed a seperate company for the promotional products side of my business. I wanted to keep my engraving business marketing more focused on our core services. It seemed like customers were beginning to get confused about what services we did in-house and what services we contracted out.

My business, Promotional Product Partners, has been growing in leaps and bounds. I have a sales rep in Texas (my sister) who does a great job with sales, and most importantly, servicing the customer. It doesn't hurt that she was also a graphic arts major in college.

Based on my first two months of ad specialty sales this year, I predict that my gross revenues from this business will exceed that of my engraving business. That is not to say that my profit will be greater, because I do a profit split with my sister's portion of sales in Texas.

Regardless of which route you go, ad specialties is a growing part of our industry. You will notice more of these types of suppliers advertising in our trade magazines. The ad specialty supplier market is getting a bit crowded so many of them are looking at markets for their products other than the traditional ASI-type distributors.

I believe that ad specialty suppliers are also beginning to recognize the great value of free retail showroom space that we can provide them to display their products.

EDITED: 16 Feb 2005 by DATAKES


Message 828.7 was deleted


From: John (ICTJOHN) [#8]
 16 Feb 2005
To: LaZerDude (C_BURKE) [#3] 16 Feb 2005

Yep, I will be at the ARA convention and I believe SAGE will be too, at least they have been in the past. They usually have a small booth with a little bit of brochures and a laptop to demostrate the online features, Not one of the "Mega" booths.

From: Engravin' Dave (DATAKES) [#9]
 16 Feb 2005
To: logojohn [#7] 16 Feb 2005

Logojohn,

You have made some very good points. If you don't have some cash to start with, I guarantee you will have some cash flow challenges. When sales are really good, cash flow becomes an even bigger monster.

I have mastered the use of my credit card grace period to hedge off these cash flow issues. I pay it off each month, but use the full grace period to allow me time to collect the outstanding invoice balances.

I would differ on one point in that promotional products are worth the time it takes to source out the items customers inquire about. I believe it is worth hiring an hourly-wage employee to market and cater specifically to that business. This would resolve the problem of the amount of time it takes to source out this products and prepare quotes.

While I do not co-mingle my business finances, my promotional product profits would be enough to pay for my rent, utilities and laser payment, with some left over. In my opinion, that is worthwhile.

 


From: LaZerDude (C_BURKE) [#10]
 16 Feb 2005
To: Engravin' Dave (DATAKES) [#6] 16 Feb 2005

David, thanks to you and everyone that has responded. I tried to post a seperate thank you without using the "reply" button, but it did not seem to work. Any idea how I can do that?

Thanks
Chuck


From: Harvey only (HARVEY-ONLY) [#11]
 16 Feb 2005
To: LaZerDude (C_BURKE) [#10] 16 Feb 2005

If you mean to post a new thread, click on the 'Post New' just below the heading of the folder.

If you mean to post 'To All' just click on the button 'Recent Visitors' when you have already clicked on 'Reply'. Then allow the default 'ALL' to remain.

 

EDITED: 16 Feb 2005 by HARVEY-ONLY


Message 828.12 was deleted


From: Pete (AWARDMASTERS) [#13]
 16 Feb 2005
To: LaZerDude (C_BURKE) [#1] 16 Feb 2005

Just to throw in my thoughts:

PMDM is great at the price (free), but still has only about 15 to 20% of the items that SAGE or ASI list, and I do not believe that they offer supplier ratings (which we find very useful).

I prefer SAGE partially because they treat me fairly and are not always trying to shove their products down my throat like ASI.

As far as cash flow problems, I seldom have difficulty getting a company to pay up front via credit card. Even the large firms are issuing cards to most managers now. There is usually a limit (most commonly $2500 per order), but that is not a big problem. However, it may be why we do not get too many orders over $2500. Not to worry, we get a lot of the $500 to $2500 kind, and we seldom see our customer - 95% of our sales are on the web.

Our gross sales for promotional products is a little more than our awards business, but the profit margin on the awards is considerably better. Still with average profits of 30 to 50%, the promotional products are not to be taken lightly.

Promotional Products and Ad Specialties can be an excellent compliment to most award businesses - go for it.


From: LaZerDude (C_BURKE) [#14]
 16 Feb 2005
To: Pete (AWARDMASTERS) [#13] 16 Feb 2005

Pete,
Thank for your input. I have a question however for everyone.
There is much talk about cash flow. When I was in Washington, I spoke with an associate of mine that is in the ad specialty business, and he mentioned it as well.
In my previous life in the upholstery business, we did not take a job without a 50% deposit to cover costs. NO EXCEPTION! Then balance upon completion.
Does the same concept not hold true in Ad specialties? Or in The Awards and engraving business?

Thanks
Chuck
Pacific ( I don't know what to call i now )
Maui


From: Pete (AWARDMASTERS) [#15]
 16 Feb 2005
To: LaZerDude (C_BURKE) [#14] 17 Feb 2005

We require full payment upfront with the order. We will make minor exceptions for odds and ends like over/under runs or other things that may come up when we do not have enough information to know what the final charge will be. We have lost sales because of this policy, but not many, and we don't have to sweat cash flow or the hassle of collecting money. Most companies that are willing to order from you are willing to pay you up front. If you are more comfortable with a 50% deposit, I see nothing wrong with that approach.

There will be many different opinions concerning payment, down payments,etc. I, personally, long ago grew tired of collecting money after I had paid for the product. I just do not do it anymore. We always try to treat the customer with respect and provide excellent service and have not really had a problem with many companies about payment.


From: Stunt Engraver (DGL) [#16]
 16 Feb 2005
To: Pete (AWARDMASTERS) [#15] 16 Feb 2005

Pete,

If a customer balks about 50% down, for an order of considerable expense, I get VERY suspicious.

Q: If you can't get the 50% up-front, what are your chances of getting anything when the job is finished?

A: Very slim

David "The Stunt Engraver" Lavaneri
DGL Engraving
Port Hueneme, CA


From: Pete (AWARDMASTERS) [#17]
 16 Feb 2005
To: Stunt Engraver (DGL) [#16] 16 Feb 2005

David,
I agree. That coupled with the fact that almost all of our business is done on the internet makes the "collect first, produce later" policy a much safer approach.

From: Jim (RETAIL74) [#18]
 16 Feb 2005
To: Stunt Engraver (DGL) [#16] 16 Feb 2005

I see no problem asking for a 50% deposit and the balance due upon completion. If I go to a store in almost every other industry I must pay for the things I take up front. That should be the same with awards or promotional products.

Since I sell a lot of finished goods, ie. caps, shirts, and sweatshirts, customers know that they need to pay before they receive finished products. If you have a FIRM payment policy, it should never be an issue.

Every customer that I have gets terms from their credit card company. If their bank will not give them terms, then why should I?

Just an idea...If you have very good customers who take a while for payment. Give them a 2% to 5% discount for pre-payment. It will improve your cash-flow. Cash is King.

Jim


From: Stunt Engraver (DGL) [#19]
 16 Feb 2005
To: Jim (RETAIL74) [#18] 17 Feb 2005

Jim,

Makes perfect sense to me. Thank you for the solid words of wisdom.

David "The Stunt Engraver" Lavaneri
DGL Engraving
Port Hueneme, CA


From: LaZerDude (C_BURKE) [#20]
 17 Feb 2005
To: ALL

Thanks everyone for your input. It makes sense to me, and seems that it would prevent "those" cash flow problems.


Chuck


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