Over the past couple of years, the promotional products industry has run up against significant challenges, but has persevered. The promo industry has been in a tough fight against many obstacles and disruption — business was anything but normal. Many companies have taken hits to the bottom line, others have had to find new suppliers and products, a number of companies had to lay off people and some had to close their doors for good. The two major issues that hit the promo industry the hardest are lack of inventory and changing prices.
The First Blow — Tariffs and Fluctuating Prices
For the 10 years between 2007 and 2017, the promotional products businesses grew steadily. Then in 2018, the industry got the first unexpected blow to the gut — the 25% import tax levied by the US government on merchandise imported from China. This dramatic tariff increase caused a chain reaction resulting in price increases that spread like wildfire across the entire industry. The more the US government imposed tariffs on Chinese imports, the less secure and more volatile promotional product pricing became.
The Second Blow — COVID-19, Supply Chain Disruption and Lack of Inventory
The promo industry slowly re-emerged from the confusion the new tariffs caused in the supply chain, and inventory and pricing became predictable again. Then in early 2020, a second, more powerful punch landed across the industry’s jaw — COVID-19. The resulting damage included businesses closing, supply chains drying up and people sheltering at home for most of two years. Following the pandemic, we saw the Great Resignation sweep the country with a significant percentage of our established workforce electing to quit their jobs.
Unlike the decade prior, it was not pricing disruptions, but rather decreased manufacturing that led to major supply chain disruptions and lack of inventory availability. In early 2022, the pandemic restrictions were lifted, and the promotional products industry started growing once again. Now the challenge is having sufficient inventory to sustain growth. Some positive steps have been made to improve supply product selections and shorten turnaround times. However, companies are still dealing with challenges from limited product supply along with rising prices. Additionally, and further complicating matters, the industry is also having to navigate the low availability of workers, which has caused labor costs to dramatically increase.
What’s Next?
The promotional products industry is both creative and resilient. Companies continue to find ways to face challenges and overcome obstacles.
Most importantly, the promotional companies that have thrived despite these challenges are the ones that have embraced progress in technology and communications. The right digital solution is robust and efficient and provides the necessary equipment to counter new threats, disruptions and challenges. The promo industry is making great strides in supply chain transparency, new technology to provide lower costs, more efficiency and reduced delivery times.
The promo industry is strong. It has faced challenges before, taken the punches thrown and is winning the fight. So, keep your chin up, move to the center of the ring and take on the next challenger.
How QAD Digital Commerce Can Help
QAD Digital Commerce is a leading eCommerce platform for medium to large-sized businesses. We provide a complete range of website set-up, custom programming, support and online marketing services. QAD Digital Commerce is a software-as-a-service (SaaS) platform containing more than 100 features to maximize sales and reduce costs for B2B companies and retailers.
We offer any adaption CPQ digital commerce solution for the promo industry that includes:
- Customer dashboards
- Online proof approval
- Embroidery auto-digitizing plus stitch count calculator
- Client logo libraries plus logo-drop feature
- Product configuration including multiple decoration locations, apparel sizes and PMS color selections
- Interactive quotes
- Order management
- Multi-warehouse manager
- Interactive VS Studio
- Marketing automation, including automatic creation of flyers and brochures with “Order Now” links
To learn more and see our Logo Drop video, please visit our website.
