Mike,
Venturing into the promotional product area is a natural progression for any award and recognition business. You are smart to begin researching the feasibility to expand into this market. It is a huge, huge market, and stretches into areas you have never imagined. I guess in that respect, it is much like the engraving industry.
I will give you one small example from this past week of why to get into this business.
I had a new customer referred to me by one of my current small town customers. This prospective customer was in charge of buying customized items to sell at the upcoming sesquicentennial celebration for their town. To make a long story short, she ended up spending over $5,000 on pens, pocket knives, mugs, shot glasses, commemorative porcelain plates, etc. The best thing is that I don't have to touch a single item. I create and send in a few PO's, e-mail a few layouts, shuffle a few papers and almost have my monthly rent paid for on this one transaction.
You will find one of the biggest challenges of the promotional product business is maintaining cash flow. The trick is to get deposits whenever possible. In the real world, you will not be able to demand deposits from everyone if you want the business. You just have to assess the risk-reward with each situation.
Another challenge is pinpointing the suppliers with quality products and customization processes to match.
I would start out by researching the industry through www.distributortalk.com and www.distributorcentral.com. As others have mentioned, there have been some great discussions on this forum as well.
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