Promotional Products: A Great Fit

WHAT WOULD you say if you learned you could earn a 40 percent margin on a product you wouldn't have to manufacture or inventory? And what if we told you that this product would be desirable to the customers who are already purchasing your printed products?

As much as this sounds like the intro to a cheesy cable television informercial, it also happens to be 100 percent true. The products we're referring to are promotional products—cups, clothing, pens, bags and other similar items. Many in-plants and other printers sell them to supplement their other offerings.

This is hardly a well-kept secret, as different organizations estimate the industry at around $20 billion per year. But for those not actively selling promotional products, there are some obvious questions. Are they easy to sell? Is there a learning curve? How do you sell them? Must you go through a distributor? What are the hottest products?

We'll try to answer as many questions for you as possible, drawing on some prominent experts from the promo products industry.

Are Promotional Products Easy To Sell?

This is one area where printers can add a profit center without any capital investment, notes Gregg Emmer, vice president and chief marketing officer at Battavia, Ohio-based Kaeser & Blair, one of the industry's master distributors.

"It's a natural because printers are typically involved in the early phases of a client's marketing/advertising campaign," says Emmer, who himself joined Kaeser & Blair after a long stint in the printing industry. "Being able to coordinate a promotional component, along with a graphic component, puts you in at ground zero."

Theresa Hatcher, who sells promotional products for The Vernon Co., based in Newton, Iowa, counts many in-plants among her clients.

"Promotional products are a natural product line for most in-plants to add to their list of services," she observes. "It gives you an opportunity to become a true one-stop shop for your customers. You want your customer as well as your administration to think of your in-plant first when they need something printed or reproduced, whether that is a brochure, stationery, pencil, mug or T-shirt."

Virtually every department and student group on a college campus eventually orders some sort of promotional product, she points out, so adding this service can bring in a lot of business for an in-plant.

Still, adds Sherri Lennarson, board chairman for the Promotional Products Association International (PPAI), printers need to carefully consider their decision to add promotional products.

"It requires more than selling products," she says. "Successful campaigns don't just happen by chance. At first glance, it may appear to be not only a fun option, but an easy one. Fun yes, easy no."

Is There A Learning Curve Involved?

As is the case with printing technology, Lennarson points out, promotional products require specialized knowledge of decorating methods, imprint processes and industry terminology. She encourages printers to acquire an understanding of top buyers, their challenges, objectives and industry trends. PPAI offers a bevy of educational seminars and industry research.

"You may choose to either navigate these waters on your own or to partner with an established distributor in the industry," she says. "If you go it alone, be prepared for a steeper learning curve. Suppliers will no doubt require cash in advance and a solid list of references."

How Do You Sell Promotional Products?

The first thing an in-plant needs to do is seek out the proper contacts within its customer base, notes Greg Muzzillo, founder and co-CEO of Proforma, based in Independence, Ohio. Traditionally, they consist of sales, marketing and human resources professionals, as well as other executives, he adds.

Muzzillo sees value in developing relationships within the promotional products industry through the associations that serve it.

"In addition, printers should consider aligning themselves with an organization similar to Proforma, which enables them to drastically expand their product and service offering," he says. "The final option would be to go into selling promotional products alone, which is not an advisable route." Which brings us to...

Should You Go Through a Distributor?

While there is a very entrepreneurial quality associated with developing your own relationships to manufacturers of promotional products, there is far more leg work involved when you do it yourself.

"As someone who has worked both on the in-plant side and on the distributor side, I would highly recommend going through a distributor," notes Hatcher, of The Vernon Co. "You don't need to have quite as much expertise because your distributor will know the right questions to ask to make sure the order progresses smoothly. You will get preferred pricing, and you won't have to pay in advance."

Your distributor can also come in handy for those emergency "rush orders" that will inevitably arise, she adds.

"The benefits of working with an established firm are many," contends PPAI's Lennarson. "Line selection is easier, order submission is streamlined, credit terms are established and you'll benefit from an existing knowledge base of the promotional products industry. In the end, you'll save time and generate more revenues."

Emmer, of Kaeser & Blair, points out that the wide breadth of promotional products available to printers is staggering—about 4,300 vendors. It would require a good deal of time on the printer's part to establish relationships with these manufacturers.

"Independents need to be aware of credit loss and product liability, whereas Kaeser & Blair indemnifies its dealers from both," Emmer notes.

What Are The Hottest Products?

Lennarson says some of the hottest products include stainless steel drink ware, fashion apparel, flash drives, eco-friendly products and recycled shopping bags. Leading product categories are apparel, writing instruments, bags, drink ware, desk/business accessories and calendars.

The most popular applications include employee relations/events, brand awareness, trade shows, new customer generation, not-for-profit programs and public relations.

When it comes to selling promo products, however, it's not all about what's popular at the moment. Let the customer's needs guide you.

"The discovery phase of the sales process is very important," she says. "Ask probing questions. Learn what the client has done previously. Ask how they measured their success. Product selection can begin after you know the answers to these questions." IPG