Prices are forecast to rise but high competition will temper growth.
Los Angeles, CA (PRWEB) May 01, 2014
Buyers of promotional products have a high level of power, as is indicated by the market's buyer power score of 4.3 out of 5. According to IBISWorld procurement analyst Kayley Freshman-Caffrey, “market characteristics that positively influence buyer power include low market share concentration and a favorable pricing environment.” The primary factor hurting buyer power is moderate vendor and supply chain risk. There are many promotional product distributors, leading to intense competition between distributors. As a result, no single distributor owns a sizable share of the market. This benefits buyers, because it means they have a wide variety of distributors from which to order their promotional products. They can therefore leverage the availability of other distributors in the market to negotiate lower prices from their preferred distributor.
The pricing environment for promotional products has also been favorable for buyers in recent years. From 2010 to 2013, prices remained relatively stable and volatility was low, which meant that buyers could purchase their promotional products when needed without fear that prices would rise in the future. This allowed buyers to make more educated purchases and reduce the cost of storing excess inventory. Although prices are forecast to rise at higher rates in the future, price increases will be marginal. “As a result, buyers can continue delaying their purchases of promotional products until they are required without worrying about price spikes,” says Freshman-Caffrey.
Despite a market that is predominately favorable for buyers, there is one difficulty that buyers must face: moderate vendor and supply chain risk. Moderate vendor and supply chain risk indicate that buyers may experience delays in the fulfillment of their order if their distributor or one of their distributor's suppliers goes out of business. However, buyers can mitigate this risk by choosing to work only with distributors that diversify their customer and supplier bases, which results in lower overall supply chain risk. The top four vendors in the market are Staples Promotional Products, Proforma, Bensussen Deutsch & Associates, and 4imprint Inc.
For more information, visit IBISWorld’s Promotional Products procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of promotional products. Promotional products, also known as advertising specialties, are materials imprinted with an organization’s name and brand. They are often passed out at trade shows and other events to advertise a company or cause and may also be given as gifts to clients to reward continued business. Popular promotional products include pens, tote bags, key chains and mugs. For the purposes of this report, direct suppliers of promotional products are referred to as "distributors" and the term "supplier" is used to describe upstream suppliers, as is standard terminology in the market. This report does not cover other types of sales promotion services or items personalized for nonpromotional purposes.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.