The 2020 Rollercoaster Heads In The Right Direction For Industry Distributors

In October, PPAI released its third-quarter COVID-19 Impact Survey, tracking the state of the promotional products industry. The survey series was introduced earlier this year to serve as a tool for companies to compare how they are doing against others in the industry. As the year heads into the final stretch, PPB Newslink spoke to several distributors on their experiences to see if the survey’s findings are continuing to play out.

For the majority of distributors surveyed, 78.3 percent reported that sales were down in third quarter 2020 compared to the same quarter in 2019. However, for most respondents (54.6 percent), sales in third quarter 2020 were either flat or an improvement on 2020’s second quarter sales performance.

“The third quarter was a fantastic bounce back for us,” says David Regan, MAS, vice president of sales and marketing at The Vernon Company. “While we still sustained losses versus 2019, they were less than half of what we experienced during the second quarter of this year. Promotional products sales were coming back and this was just what the doctor ordered as we had some drops in PPE [personal protective equipment] sales compared to the second quarter.”

While 15.3 percent of those surveyed said sales in Q3 were generally in line with Q2, that stability can obscure changes in their business.

“I would say the rollercoaster continues,” says Tom Goos, MAS, president of Image Source. “In the past, second quarter has been Image Source’s largest quarter of the year; this year historical norms don’t apply. Reflecting back on the second and third quarters this year seems like years within themselves. The second quarter had a rush of PPE, and the third quarter had a better mix of standard branded merchandise but ultimately, for us, the sales were very similar quarter to quarter. Market opportunities certainly started to increase in the third quarter and the momentum felt much stronger as we progressed through it and look forward to the rest of the year and larger booked business that would push into 2021 delivery.”

Memo Kahan, president and owner of distributor PromoShop, adds, “We saw a third quarter similar to the second quarter. A lot of conversations and engagement, yet the numbers of orders and revenues were similar in both.”

PPAI’s third-quarter survey also asked distributors how they projected fourth-quarter sales to shake out compared to 2020’s second quarter. While almost a one-fourth of respondents expected it to be flat (22 percent) or didn’t know (five percent), 39 percent said they anticipated sales to increase, either a little or a lot.

“Based on a recent surge in activities, fourth quarter will be better than second or third quarters, yet will not reach 2019 levels,” says Kahan. “We are working harder for less but happy to be busy and in business.”

Goos adds, “We are experiencing increased opportunities for orders in the fourth quarter but ultimately with the holidays tied to it, so I expect an uptick in business compared to other quarters but nothing significant. Our business really slows down in mid-December so we have about three weeks to make it happen.”

Regan says, “We expect the trends to continue in the fourth quarter. We do believe that there is a great deal of pent up demand in the industry. When and how it is released will vary based on a variety of factors such as industry, region, business type, etc., but we believe it is coming. We are ready!”

For more results from PPAI’s third quarter 2020 survey, click here.

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Comments (1)
Kevin McHargue
November 25, 2020
PromoPlacement received a strong flow of inquiries about our search service throughout November and presented a record number of search proposals to clients, all looking to fill critical positions in January 2021. December will be an exciting month as political discord settles into the background and COIVD vaccines begin rollout. Bring on 2021!
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