For Promotional Distributors, Is it Now Brands or Else?
For a multitude of reasons, many distributors and promotional industry institutions have not enthusiastically embraced the use of brands as promotional products. With the largest promotional suppliers now featuring brands, and with the focus on sustainability continuing to grow, it might be time for more distributors to take a second look at brands for gifting, rewards, and recognition.By Bruce Bolger
Barriers to Selling Brands
Why the Growth of Brands Is Invitable—Customer Demand
Resources for Distributors
Resources for Brands
Click here for links to RRN Preferred Solution Providers.
Is it time for promotional products distributors to take a second look at selling brands? Despite decades of resistance to brands in the promotional products industry at large, this isn’t stopping the industry’s largest players: Both 4imprint.com and Customink.com, both of which advertise aggressively on television and elsewhere, now prominently feature brands on their home page.
One would hardly know of the importance of brands when attending the industry’s events. Walk into the halls of any department store where consumers shop, and the first thing one notices in signage are the names of leading brands. Walk into the halls of any promotional products event where the industry shops, and the first thing one notices is the plethora of non-retail products.
The reason these two leading suppliers feature brands is because people want them. No industry has ever survived by sticking to a self-serving business model out of touch with what people really want. As someone who has worked to educate promotional distributors on the power of brands since the 1990s, I know why corporations, distributors and their associations have long resisted brands.
Barriers to Selling Brands 
1. Cost. Brands generally cost more than non-retail brands. Since corporations want to emphasize their own brands on promotional products, spending more for brands made little sense in the past.
2. Margins. Because of the higher cost of brands, the transparency of retail pricing, and the ability for corporate buyers to easily get a sense of a product’s retail price, it is much more difficult for distributors to achieve the margins possible selling non-retail brands. The argument that the average order size for brands over non-retail brands can compensate for that issue apparently has not convinced most distributors to focus on brands.
3. Channel conflict. The industry associations have done an effective job of controlling distribution through the membership numbering system, making it dangerous for non-retail brands to sell direct to the end-customer. Because brands are available through so many wholesalers and retailers, distributors understandably lack faith in their ability to offer the best price or to stop their clients from “going direct.”
4. Expertise. Salespeople sell what they know. Being in a highly transactional business, many distributors have little patience with the elements of incentive and recognition program design and technology often involved with selling brands. For many, it’s enough to focus on helping the client find the right product at the right price, write up the purchase order, and make sure the product is produced to specification and delivered on time to the right place. Learning the science of incentive and recognition program design, and the technologies that support effective programs involving brands is the equivalent of entering a new field for many distributors.
5. Brand ambivalence. Because of their lack of knowledge of the promotional products, incentive, recognition, and promotional business, many brands have resisted active participation in the market in the last decade. Beyond Citizen Watch America, Seiko, and a few other brands, most of the brand exhibitors at the industry events are master fulfillment or related wholesalers. Many brands remain cautious about having the logos of other companies imprinted on their own products. Others are dubious about where their products could end up—shipped overseas or sold online in competition with their own distribution channels. Brands used to dominate the membership of the Incentive Marketing Association, the incentive and recognition industry’s only association. Today, gift card companies are the predominant members.
6. Industry association ambivalence. Each year, the leading promotional industry associations and shows have sections for brands and their master fulfillment companies, along with education, most of which is lost amid the focus on non-retail brands. Because most association members are non-retail brands, it is hardly in the interest of the associations to proactively promote a category which threatens to eat into the non-retail brand market share.
Why the Growth of Brands Is Invitable—Customer Demand
It probably wasn’t until Yeti came along that the promotional products industry finally recognized the power of brands. Many in the industry were surprised by the high prices their clients were willing to pay for a water bottle or mug.
When 4imprint.com and Customink.com put brands on their home pages, it’s apparent they have recognized the demand. Combined, the two companies have about $2 billion in sales, just shy of 10% of the $26 billion US promotional products business, according to the Promotional Products Association.
There are three reasons why brands will continue to gain traction.
1. Desirability. Customers increasingly want brands and will pay for them because they have higher perceived value.
2. Sustainability. People are increasingly sensitive to needless waste and would rather give out fewer items to the people most likely to value them. By letting people access promotional products online, rather than distributing them randomly, companies can spend more on quality with much less risk of waste. People not interested in the product won't bother to access it.
3. Increasing brand interest. Based on the stream of new brands being offered by master fulfillment companies in the incentive marketplace, and the involvement of companies such as Apple, Citizen Watch, Seiko, 1-800FLOWERS.com, Weber, etc., there are good reasons for brands to refocus on this important channel. In the world of omni-channel marketing precipitated by e-commerce, the idea of tapping a corporate market offering considerable marketing impact and incremental revenue has growing appeal.
While it took far longer than the promotional products industry expected, the risk of disintermediation as a result the Internet is coming to pass with the rise of 4imprint.com and Customink.com. Through their significant advertising, companies like these will indeed take a bite out of the business of many distributors who focus on the transactional rather than the creative, program design, and measurement needs of their clients.
In fact, companies like 4imprint.com and Customink.com will put increasing pressure on all distributors to focus on creating value through expertise in program strategy, design, and measurement; creative product selection and messaging, and a willingness to help facilitate whatever engagement medium is right for the client.
Resources for Distributors
BrandMediaCoalition.com—a marketplace of leading brands, master fulfillment companies active in the market.
RRN Library---A comprehensive library of information on the incentive, rewards, recognition and related field.
Resources for Brands
The following resources provide essential information for brands seeking to enter the market.
Industry Primer for Management: Can Your Brand Profit From the IRR Market? A primer for brand management on the incentive, reward, and recognition field.
Brand media library. A series of white papers and Enterprise Engagement Alliance YouTube shows on brands on the IRR marketplace.
How RRN and Brand Media Coalition: Your Partner in Success in Incentives, Rewards, and Recognition
Published by the Enterprise Engagement Alliance at TheEEA.org
- The only weekly news, how-to and resource publication of record for the Incentive, Rewards, and Recognition field.
- The only marketing agency focusing specifically on the IRR and broader engagement marketplace.
The Industry’s Only Combined Media Platform and Marketing Agency to Help You Expand Your Business 
- All the industry news, research, announcements, and how-to articles read by over 20,000 end-users in sales, marketing, and human resources; incentive, recognition, loyalty and promotional companies, as well as marketing and human resources agencies, seeking to enhance performance through effectively designed incentive programs.
- Unparalleled business development services for engagement, incentive and incentive travel, recognition firms; brands, gift cards and master fulfillment companies, and technology firms, featuring ROI-based business development strategy design and ongoing digital and social media and e-newsletter communications to help marketers profit in the coming era of cookie-less marketing.
- Unique abilities for solution providers to sponsor authoritative, evergreen content directly related to what they sell through the EEA’s Effective Practices series on articles in our media platforms.
- EEA YouTube Channel with over three dozen how-to and insight videos and growing with nearly 100 expert guests.
- Access to new technologies from EEA preferred solution providers enabling brands to create their own points-based or transactional redemption site.
- Unparalleled expertise in program design, return on investment measurement, reporting, and prescriptive analytics.
