Rick Spence’s recent National Post article on how Branders.com succeeded in “marketing just one point to triple volumes” was a fascinating look at one of the promotional products industry’s largest players. The single point Branders markets is price. It’s the one thing most experts tell you not to compete on – but alas Branders has owned it and succeeded. Succeeded in short term financial terms anyways.
The article boasts of extreme cost cutting measures, constant shifts to lower cost production and massive layoffs as tenants of success. Branders success is pegged on their target customer – ones that scour for low cost and nothing else. While it’s proven successful – it’s not without risk.
The Branders model doesn’t leave much room for developing deeper connections with your clients, relationships that ensure their custom products are a) needed and b) on brand with the campaign or promotion and c) align with their values.
The Branders model runs the risk of amplifying all that is wrong with the promotional product industry. Specifically, the issue of quantity over quality and the issue of more and more useless stuff being handed out, likely destined for landfill. There is an emerging backlash against the industry and the products it creates – recently the State of California banned the use of promotional products as a cost cutting measure.
Increasingly, our clients are becoming aware of the brand risk using promotional products can pose. Can a price driven model account for supply chain risks similar to the likes we’ve seen with the recent cadmium laden McDonald’s Shrek Glasses (also reported in the National Post)?
That Branders has succeeded by owning the race to the bottom is nothing new in this industry – what is new is the scale at which they’re doing it (according to industry stats only 4-5% of distributors are over 2.5M a year in sales – Branders does 120M).
We entered this industry with a very different intent – to build relationships with our clients, to ensure that any promotions they do drive real outcomes, reflect their values and don’t’ put their organization at risk. In short, we’re the opposite of Branders. But given that we’ve seen an average annual growth of 86% over the past 5 years – in an industry that has according to industry stats averaged -3% in the past 4 years – it seems there is a place in the world for custom branded products that consider more than price.