Survival of the Fittest
Do lower sales figures spell trouble for distributors?
November 2010 By Elise Hacking Carr
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As reported in the October issue of Print Professional, total annual sales figures for the top 100 manufacturers took a hit. Would the industry's leading distributors also fall victim to the economy? Would the naysayers' accusations come true—is this a dying industry? This year's numbers spoke volumes.
Total annual sales figures for the top 100 distributors were the lowest they have been over the past few years, coming in at $2.6 billion (2007: $3.2 billion; 2008: $3.5 billion; and 2009: $3.4 billion). With the exception of a few distributors, the majority reported lower overall sales figures—some more significant than others. For instance, even though Dayton, Ohio-based WorkflowOne managed to hold on to the number-one ranking, its sales took a rather noticeable fall from 2009 figures of $949 million to 2010 figures of $662 million.
A low participation rate offers another explanation for lower sales volumes. Similar to the manufacturers, the distributors appeared more reluctant than normal to disclose sales figures. After evaluating 2010 results, it no longer comes as a surprise.
Naturally, lower total sales figures led to a decline practically across the board for individual product sectors. However, it is important to note that a noticeable number of distributors opted not to break down their individual product sales, skewing true results.
Business forms still kept its winning record with $446.5 million (2009: $558.5 million), proving they have fight left in them. Commercial print sales averaged at $295.2 million (2009: $368.2 million); promotional products rounded out the top three product categories with sales totaling $285 million (2009: $343.2 million); labels and tags sales fell to $131.6 million (2009: $185.9 million); digital print sales comprised $139.6 million of sales (2009: $185.9 million); and envelopes/folders/stationery sales landed in at $106.8 million (2009: $183.5 million); and finally, the "other" category put forth $171.1 million (2009: $250.2 million).
Office supplies, by far, were the most common response for the "other" category. Additional responses included furniture, software, statement processing, packaging, website development and DVDs. It can be argued that office supplies such as filing products belong in the envelopes/folders/stationery category, but the decision to mark one product under a specific category remains at the distributor's discretion.
Companies Mentioned:
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