Viability in the Promotion Specialty Advertising Marketplace

I am frequently asked to take a look at a “great new product that will change the promotional products industry”. I am assured that there has never been anything like it before. Many of these products already have patents or at least they are pending. With very few exceptions the product were designed as retail goods and upon learning about the promotional channel, these mostly new inventors think their product will have mass appeal. They are almost always wrong!

There are many obstacles. Price is always high on the list. Since these new items are in the formative stages, production is low making prices high. Few have sufficient financial underpinnings to get up to scale. Adding imprints/branding or other messaging seems to be an afterthought and little consideration is put in that area. Imprinting is always an additional cost not previously included - which drives the already too high cost - higher!

In about half the reviews I do I have the tough job of telling an enthusiastic marketer of their “new” item that it has been done before. The most recent example was a smartphone case that can also hold credit cards and attach to a water bottle. The MSRP is $29.95. It is nearly identical to a smartphone holder that attaches to your upper arm and is in the $2 price range in the industry and has been for several years.

The inventor/marketer expounded about the quality of their product and people would like their items better. That brought us to the discussion about what our promotional specialty advertising business is actually about. I started with an explanation that “features and benefits” are retail considerations. That an advertiser is concerned about delivering a message to an appropriate group of people in the highest number that a budget will allow. Reaching 10 times the number for the same budget and giving people a serviceable item they will use and enjoy is what will be selected. An individual consumer making a buying decision for their own use may very well choose the $30 item, but the advertiser will not.

Then I was on to price point competition. I explained that not only do we have to consider items that do similar things, we have to look at items with a similar selling price. At the $30 price point a quick look at an industry search site indicates 23,055 other choices! 

I have over the years seen some really fine new items and have connected the inventor/designer with an industry supplier who was able to bring the item to this market. But the number of successful new items is very low.

The reality of this industry is that most viable new items almost always come from the top suppliers in the industry. They are searching for new items all the time. They travel to merchandise shows in Europe and Asia looking for things they know will work well for your clients. When clients ask you for something new, industry suppliers should be the first ones you go to. Many suppliers will use their offshore contacts to source for you if you ask.

Avoid going online and searching for items from unknown sources in far away places! The number of stories of distributors seeing their deposits disappear along with the company they sent it to is staggering - and unfortunately growing. Why anyone would pay for an entire order (1/3 to 1/2 upfront deposit and balance when shipped) before the client can inspect it just does not make practical sense. Chasing the too good to be true price you found online - most likely is (too good to be true!).

With 750,000 to 800,000 items currently being offered by suppliers in the promotional specialty advertising industry, finding a new item for your client does not really need to be new to the industry, just new to the client. And knowing that the item has successfully been used by others, with no product liability, all the proper testing done and documented and available through a supplier you can rely upon, the likelihood of a successful promotion goes way up.

But - if you still want to try your hand at working with a new inventor or sourcing on the web, here are a few things to consider. If you have excellent credit deposits should be very low or not asked for at all. A business that can’t afford to handle your project without your front money will not be able to fix something if it goes wrong. Giving a large deposit also removes any leverage you have if delays occur or other problems arise. If your credit is not too good, work with an industry supplier even if they want a deposit. 

Ask for references. Unless you are the very first project there should be at least a few other companies that can share their experience. Be sure it is a real reference and not the inventor’s brother in law!  

Ask for a pre-production physical proof sample. Request two of them, one to be returned with your approval and the other to compare to what is eventually shipped to the client. But if you have already paid for the order it really won’t matter!