Wednesday, April 28, 2010

The Supplier Inventory Challenge - Part 2

A short time ago I blogged about inventory shortages that I personally had encountered with our suppliers - a trend that, to me, seemed to be occurring a lot more frequently than normal in recent weeks. Turns out I was definitely on to something. This past week, the President of Polyconcept, one of the larger suppliers in our industry (owner of Bullet Line) advised all its affiliated distributors that it has been having major issues with its supply chain and product inventory. He also said the situation will not be immediately rectified.

He alluded to reasons that I had cited in my previous post, but also noted a few more that I'm going to pass along, as I'm sure this will be affecting all industry suppliers if it hasn't already.

I had previous blogged about my belief that the continued tight credit market and the downturn caused by the Fall 2008 economic meltdown had forced suppliers to make hard decisions on inventory. Now factor in news that China's own domestic economy has recovered far more quickly than the U.S. and Europe -- in fact it's booming right now --and that recovery has caused a labor shortage in their factories. As a result, production timelines are longer and the costs of doing business over there are increasing. And since at present, 80 to 90% of all promo items are manufactured in China, this is all a recipe for inventory trouble.

My own view is that near term, I see prices increasing and more product shortages. However I also see an advantage here for the deeper pocketed suppliers because they'll be in a position to allocate more money to grab as much inventory as they can to meet their distributors ever increasing needs. Bullet announced that they're responding by pouring more dollars into inventory and adjusting their Substitute Item policy to one where they'll always offer either items of higher value or generous discounts on similar priced items for anything that's out of stock long term.

However, small supplier operations that rely on Chinese made product are in for a very rough go of it in the near term because they lack the resources to react the same way a Bullet Line would.

We at Geiger will continue to monitor this situation and will utilize our own resources to the fullest to help steer our clients through the rocky 'inventory road' that lies ahead.


Sunday, April 18, 2010

Promotional Pens - A Very Effective Advertising Vehicle

In this edition, I'd like to champion the cause of promotional pens. And when I say 'promotional', I'm referring to the classic plastic pen that costs less than $.50. Sure, some will say 'People get a million of those' or 'You give out a pen and it goes right in the drawer'.....And while there may be some validity to those concerns, the ‘upside’ of promotional pens is too valuable to dismiss.

Cost Per Ad Impression- The Advertising Specialty Institute recently completed a study on actual cost per ad impression of the most popular promotional products...and it found that plastic pens actually have the LOWEST cost per ad impression of any promo item at $.002 per view. That's $.001 lower than even calendars.

And There’s More - Consider that the average plastic pen has 8 different owners in its lifetime. Pens are also the most remembered promo item (54% of owners, according to the study recall owning a specific pen and a whopping 84% recall the advertiser on the pen they currently own. And the study adds that the average pen gets used at least twice a day.

People Still Write- Yes, we’re in the age of Laptops, PC's, I-Phones and now I-Pad’s, but we all still need pens. Whether you’re jotting down notes, taking a message from someone calling the house or making out a grocery list, we all still use a ton of pens.

Puts logo in places other media can't reach- Do newspapers, the internet or billboards put your ad literally at a person's fingertips? Pens do. Branding Advantage- The pen itself can deliver a subtle message about your brand - i.e. is your company or product edgy, reliable, consistent, inexpensive, etc.....? Whatever your major selling point, here's usually a promotional pen available to match it.

3 of My Favorites-

Javalina- This pen from industry supplier, Hub Pen, burst on the scene a couple of years ago and has been so popular that it's spawned several different varieties, and tons of knock offs that frankly aren't as good. The real Javalina features a unique compressed ink delivery system that allows it to write far more smoothly than most pens - including many that cost a lot more than the Javalina. This year Hub introduced new 'Splash' color trims: Lime Green, Orange, Pink, Purple and Sky Blue. Cost with Geiger through June 30 - 250 @ $.40 each.

Rita Writer- This under the radar stick pen features the same compressed ink system as the Javalina, so it writes just as well. It also has a much larger imprint area than the Javalina or most other pens in the category. Available in white with a choice of 4 trim colors, the best feature of the Rite Writer is its $.25 cost.

Bic Clic Stic- This old standby makes the list because Bic’s graphic capability is the best in the industry. The vast majority of low end pens can still only be imprinted with one color – Javalina and Rita Writer included. Not so with the Clic Stic. Multiple imprint colors, tight registration – no problem. They also have a bunch of barrel and trim colors to choose from and there's even room for a web address or phone number on the clip (for additional cost). Bic has also introduced a new Easy Glide ink technology that’s similar to Hub’s compressed ink.
Cost @ minimum qty: $.48 ea.