And there are a good amount of new products hitting the market this month.  Leeds a division of Polyconcepts has launched an entire umbrella line.  One of their newer offerings the 41" Classic Folding Umbrella is the very first custom printed umbrella Leeds has ever offered.  This is one of the first major leaps for Polyconcepts into a new market since they launched their technology line several years ago.  The umbrellas are scheduled to arrive in the coming days and as of this point there are no reports of difficulties in transit.  Meanwhile over at Bullet Line which is another division of the same parent company they have expanded their custom caps line.  Do you remember the big foam hats with a mesh back that were so popular thirty years ago?  They are back with a vengeance and the Solid Cotton Twill Trucker Cap is one of the additions to the offering this year.  Almost all of these hats and caps include custom embroidery in up to 7500 stitches which will cover almost all users.  A nice aspect off the foam hat is it presents a large decoration area, almost a billboard for that matter on the front.

It remains to be seen whether or not the big players in the industry will have problems with freight as the year goes along.  We should also be clear on another point.  It is not that the containers are totally unavailable it is that the prices have gone up so much for immediate shipments as they bring capacity back online that some manufacturers are electing to wait it out.   In some ways you cannot blame them if the alternative is shipping products that will eventually result in a loss or diminished profit.  Combined with what were some of the higher fuel prices in the past few years once products arrived in the States there is no choice for some producers but to wait it out.  Several of the major players have taken the time to write to their distributors explaining the shortages and this has gone a long way to repairing relationships and it also helps distributors maintain honest relationships with their end user clients.

As many of you may have read Google has announced that Caffeine is complete.  Like so many others online I have noticed a steady decline in the quality of search results.  One can only hope that in the coming weeks and months they fine tune this new product to bring it up to earlier higher standards.

With the increase in gas prices we will once again see people practicing staycations this year.  You have all heard the term now, instead of expensive trips people are electing to stay local.   This is where the Dunes Outdoor Game Set comes into play as it provides a unique branding opportunity on an item that has already sold out through May.  In fact this multiple piece set has been so popular so far it may well end up in short supply into June.  The true advantage of this type of corporate gift is that it provides a kid friendly summer promotion.   The Laguna Game Set which also is manufactured by Leeds has a slightly higher price tag do to the increased number of game pieces and does include the almost popular chess and checkers.  More importantly both game sets include a kite and beach ball as well as the Velcro paddle toss game.   The toss game is similar to the more extensive paddle ball game you have seen played on beaches for years.  Rather than decorate each piece in order to keep the acquisition costs down the carrying case or backpack is decorated.   This is both convenient and also not nearly as intrusive. 

The problem to date with both of these game sets is stock.  The manufacturer which is owned by Polyconcepts, continues to have severe stock issues partly attributable to the increase in economic activity.  As a result container ships have been delayed and that is resulting in long delays in getting products onto warehouse shelves.  It is still a little surprising that vendors were caught off guard particularly in light of how strong the economy was at the end of 2009 but that is where we stand today.  There are solid signs now that growth is slowing and with the increase in inventory dollars being spent and the subsequently increasing amounts of cargo capacity to and from Asia the favorable news is that stock issues should diminish as the year moves forward.

That leaves three real possibilities all of which have their advantages.  First a business can elect to not advertise at all.  Obvioiusly this is not the ideal approach to gain market share.  A second option is simply to spend less.  The promotional products market is being dominated right now by products like the Fuzz from Leeds.  A couple of years ago nobody would have even taken a look at this product at the top firms.  They would easily have passed it over for more premium items.  Lint brushes are hardly the giveaway of choice for top executives but they will carry a logo and do it in an economical manner.   Along the same lines the lightbulb keychain has all of the virtues associated with LED type keychains which can provide an end user with safety at night but is affordable and will not be viewed as breaking the bank.    A final approach would be to replace an item used on a dialy basis such as the Leeds Double Wall Ceramic Tumbler which can be used in place of a regular coffee cup.  The advantage of this type of approach is that it serves two purposes, first it reduces the cost to the end user employee or client and actually helps to decrease the amount of trash and second although it is a premium item it does not carry the baggage a high end leather or desk gift might.

Meanwhile the imaginary world our politicians live in continues to provide evidence on a daily basis that the disconnect grows.  Treasury Secretary Geithner indicated on the Sunday talk shows that the economy is growing more rapidly than they expected.  Of course he glossed over the 10% unemployment rate, growing commercial real estate problem and also increasing fuel prices.  These are all factors that are going to continue to impact families and as a result will temper any recovery.  Instead we will be left with a recovery that has fits and starts much like we saw at the end of 2009.  In addition there appears to be no acknowledgement of the shift going on overseas.  Instead of shipping products to the USA we are finding factories overseas are either holding containers or are shipping products elsewhere to economies that are recovering more rapidly than we are domestically. 

To see more of the Leeds product line take a look at Leeds site.  They offer over two thousand promotional products and the number continues to grow each day.

An alternative to buying an item that may be recycled from materials made half way around the planet is to buy a one trip item.  By this we mean an item designed to degrade in the ground.  The Biodegradable BPA Free Sport Bottle not only has the advantage of falling into the eco-friendly category but it does so at a much lower cost to the environment.  Almost all of our current recycled promotional items manufactured by ASI suppliers are of questionable origins.  The underlying first use products such as the water bottle are used domestically before being piled into containers.  These containers often end up being loaded into larger containers before they are shipped to Asia.  At that point they are recycled into new products which are then again shipped back to suppliers throughout the country.   Rather than going through all that trouble and burning all that fuel it makes more sense instead to choose a product that will break down in a landfill at no additional cost to the environment.  This particular bottle is one of the few we have come across that is also BPA free.  Although the debate rages on about BPA there is no sense in having a product that contains it at this stage.

Last week witnessed some mediocre economic news.  There are several reports due out this week that will shed a lot of additional light on how business is going.  In our eyes it is pretty clear though that with job losses still mounting and gas prices also increasing there is little hope for a substantial recovery.   Instead we are in a pattern once again of fits and starts as the economy grows for short periods after intervention from the government only to slow again later.  We will begin daily updates on Monday and look forward to providing additional reviews.

It was only a few years ago that ABC started the nonsense by taking a popular show in NYPD Blue and putting it on a multi-month hiatus only to bring it back after winter ended.  The net result was a loss of audience as viewers got confused or just lost general interest.  It reminded me a lot of what a major soft drink manufacturer tried to do in telling consumers how they wanted to behave.  You will all remember the brightly colored bottles on store shelves that were gradually replaced by the "classic" version of the soda.  NYPD eventually ended up off the air even as some of the greatest episodes were being produced.  That same network continues to ruin shows that if given the chance may well have the success of classics such as Lost.  Instead of working to extend the brand and allow consumers to get into an established pattern of consumption they continue attempt to tell us how we want to view their product.  Anywhere north of about the 38th parallel is busy shoveling or being cold in December and January.  It is a great time of the year to cuddle up by a fire or with your family and watch television.  Unfortunately we are bombarded with repeats during that time or worse the dreaded middle of the season launches.

There is a lesson to be learned in all of this and in the next day or two we will tie this back to the promotional products industry which is suffering right now from major product shortages.   Part of that is due to major increases in business since last year but a good part of it is the same poor decision making that plagues the networks.   Give your customers what they demonstrate they want and more importantly give them time to determine whether or not they actually want your product or service.  If interest is shown continue a consistent approach and avoid the random and unsuccesful marketing strategies that continue to make failures out of what would be successful shows.  With news that Flash Foward is likely to be cancelled and with V struggling the long term guaranteed method of ruining ratings by boring customers for months at a time has struck again.

Economic news was wobbly at best yet we continue to see fuel prices accelerate northward.   Astounding that the major media outlets have ignored what was one of the warmest winters in recent memory over a good majority of the USA and instead continued to tow the line for the major oil companies.  Our economy will pay a steep price later this year.  We have talked about keeping your message cool and that is all that much more important as we head into the buying season where picnic items are important.  The same unfortunate marketing strategy was employed by Congress as we discussed in Proper Promotional Could Help Health Care Reform and in a few months they too will see there are consequences to not marketing a product properly.

When providing a proposal to your client be sure to check and make sure the inventory is deep.  If you are quoting a thousand piece order and the supplier only has a thousand pieces in stock your best bet is to find another product.  Nothing screams amateur more than giving your client a product to select and then having to go back and tell them it is out of stock.  Take the Colorband Stainless Bottle which is made in three colors.  All of these colors are available to the point of several thousand in immediate inventory.  Surely you cannot control quick and unexpected shortfalls but there are enough color options and enough pieces in each that you should be safe even if it takes a week to decide.  With deep availability in the same three colors the Leeds Deco Band Stainless Bottle is another choice that will provide you and your client with some level of security in the coming weeks and months.  If you are researching large orders you may want to even check with the manufacturer to check into overseas production at a discount.  Be aware though that there are some significant difficulties getting containers across from Asia as prices have skyrocketed.  In either case please remember to check inventory before recommending a product to your customer.  Almost all of the major vendors provide instant public access to this information so there is no excuse for leading your client down the wrong path.

Apple announced the release of their 4.0 software this Summer.  Hopefully it will take care of some of the existing problems such as the voice control issue I discussed earlier.  It is likely that the introduction of multi-tasking may get around the issue entirely as it would no longer overtake the other controls.  At the same time news of initial sales of their newest product have been strong but whether or not that continues in the weeks ahead remains to be seen.

Little did I know I was just picking up another phone with a new set of problems.  After picking up the phone at the AT&T store I could not make calls for several hours.  Calls to the service center yielded apologies for problems with the activation servers which seemed strange as we were months from any product launches.  I took that time to update to the latest software and setup the phone.  That evening I headed to the gym with a phone that still would not make calls but at least a functional music player.  Upon arriving to the gym all seemed great until I accidentally bumped the voice control interrupting my workout and music.  Ten minutes later it happened again, five minutes after that it happened once again.  A month later it has probably happened a thousand times with no clear resolution available from the manufacturer and widespread forum reports of the problem.

The only fix to the iPhone voice control issues seems to be a hard reset.  At least in the case of my phone it buys me another twenty or thirty minutes of uninterrupted usage before it happens again.  I have tried new headphones and different model headphones to no avail.  I have tried to reset and restore the iPhone as the troubleshooting pages indicate without any success.  The only thing that seems to help is a hard restore which would seem to indicate a potential software problem. Between the issues of reduced battery life and inaccurate battery gauges I am at the point of wondering whether or not Apple® is back where they were in the 1990's where success went to their head.  With so many other smart phones touting higher resolution cameras, faster processors and greater battery life one of the key features that separates this device is the access to iTunes.  If that feature is defective as it is now for some users you have to wonder if the loyalty of customers will change down the road.

Take for instance the local fitness center that is struggling to increase their membership base as customers have moved to a newer less expensive nearby competitor and others have just decided there was no longer enough money in their personal budgets to pay dues.  There are three ways this business could have made an effort to make up for the lost revenues.  The first and easiest method would be to increase the per person revenue.  In this setting that would be accomplished by extending the services offered such as opening a juice bar or adding equipment or classes that require additional fees.  Other opportunities would exist in terms of selling promotional gear to clients but that ship has sailed so to speak and the days of "cool" gym gear are gone.  Another option is to simply raise monthly rates which in good times might work but in the recession it would simply result in customers either forfeiting their memberships or going elsewhere.  That leaves the third option which is the age old method of increasing sales which is to obtain new customers.  This is easier said than done and most gyms have already exhausted potential clients in any given area.  After newspaper ads have failed and signage in the streets have blown over the only way to draw people into the gym are special offers.  The problem with any second tiered pricing strategy is that it will inevitably alienate the customers that have stayed with you all along.

In this case new customers off the street or those that have been gone for a few months are rewarded with paying one third of what steady clients are required to pay.  It may increase sales initially but it will create a significant amount of negativity amongst old members and will cause some to outright leave and go to other facilities.  The only way to pull off this type of discounted membership is to offer existing clients something in return which is either a discount on premium classes or at the juice bar.  Perhaps giving them a piece of clothing with the gym logo would also help but all too often the gym owners blinded by the influx of what will mostly turn out to be short term customers see the money coming in the door without realizing they have won the battle but lost the war.  Newspapers are littered with stories of these types of programs going bad and facilities vanishing.  In fact many States have now adopted laws that protect citizens with insurance in the case that a facility were to vanish. 

Consider your sales activities closely and weigh the possibility that an existing client may not view it as favorably as new clients.  In the end it is customer retention that will keep you profitable not new customers constantly jumping from vendor to vendor shopping only on price.  No business will ever survive catering to clients that shop purely on price.

The single biggest factor that argues for continued difficulties is the rapid contraction again of available credit to both consumers and small businesses.  For various reasons this critical issue remains under the radar of the major media outlets and most financial reporters likely because they are disconnected from that segment of the economy.  When they report from the floor of the Dow they are not capturing the pulse of a majority of the economy that produces a majority of the new jobs over the last few decades.  What they instead see is the one portion of the corporate sector that can borrow which  is large corporations.  Last week I had "Fools Rally 2009" stamped on an Alicia Klein Bookmark and sent it to an associate in the markets.   Why do I say this with certainty?  Because the lifeblood of the economy is being cut out of it as credit to small businesses has already contracted 25-30% or trillions of dollars since last year.  Even worse leading expert Meredith Whitney reported in a recent Wall Street Journal article that another 1.5 trillion will be chopped from available credit to small businesses and consumers by the end of next year.   Some may shrug off this news thinking they are immune as their customers pay via cash or check but that does not account for the fact that your customer may pay you with a check but they likely pay at least a few vendors with credit cards or lines of credit.  When those vanish entirely or are decreased they now have less spending power and the previously rapid paying check customer may be on a restricted cash flow.  Worse yet the psychological impact of reduced lines or the fear of reduced lines changes consumer behavior and will have a negative effect on commerce as the dismal September retail sales figures show.

So what is being done to support 38% of the US GDP?  Not a thing is being done.  There are no government programs providing direct loans to small businesses.  Banks are not lending which means the engine that drives a third of our economy and 50% of our employment is being strangled.  The pace is accelerating and anyone reading financial forums such as creditboards or myfico forums will see that in the past week many big name banks have been furiously chopping lines.  Their favorite tactic is slashing lines right after payments are made in full.  It's a trap as they don't want to see high balances but the moment a consumer pays off the line to avoid interest they are sometimes being closed out entirely.  This can be absolutely fatal blow to a business that had expected to be able to use that credit again the following month.  Profitable businesses are failing all over the US not because sales are poor but instead because the recent changes have left them without the cash to operate.  Take for instance recent reports of a new tactic by the banks that involves them holding the available credit for up to two weeks after a payment is made.  In essence a customer makes a payment today prior to the due date or statement date expecting to be able to use it the next day.  Instead the payment is made and credited against the balance but the bank does not release the funds for 7 or sometimes 14 days.   No doubt it is a temporary mechanism for reducing potential exposure without directly cutting the lines.

It is likely that banks are about to accelerate the credit closures to prevent the potential exposure that the holidays bring.  This may be good news for their losses but it is terrible news for the economy and for anyone running a small business in this country.  The question now becomes what will it take for Washington to offer support for small businesses when trillions have been given out with little explanation to major corporations foreign and domestic?

The promotional products industry started decades ago from the concept that there was a market in the corporate arena for branded items.  For most of the last few decades that relationship involved three parties, the end user, the distributor and the supplier.   Distributors worked to open new accounts by traditional means of cold calling, knocking on doors and networking.  They relied on small groups of suppliers to provide product for them and the average distributor historically did well under $200,000 in sales.  Along came the associations to act as the de facto referees and central database for the industry.  All of these associations would require a membership fee and in turn provide the distributor access to information that would be difficult to obtain elsewhere such as catalogs, pricing, ratings information on the suppliers and credit services for the suppliers.  In short they provided a useful service and acted as a go-between greatly reducing acquisition costs for both sides of the aisle.   Distributors that did not have entire sourcing departments now had access to hoards of information they would not otherwise be able to gather and suppliers had a targeted and priceless mailing list. 

This all began to change in the late 1990's as major online distributors like Branders began to appear.  At the same time the use of the internet for sourcing products began to skyrocket circumventing the need for expensive membership services that often did little when subscribers needed them most.  Indeed most played a hands off role even in blatant abuses of the system such as suppliers stealing customers directly from distributors.  As suppliers began to ramp up their online product listings the ability to jump online and search for the needed product information began to trump the need for expensive and non-eco friendly catalogs.  Along came Sage which provided the same basic services as ASI but at a much lower price and the fight was on for the remaining market share.  Sadly what the increase in competition did was drive the desire to report success within each association.  However the PPAI annual survey has probably summed up the trends most appropriately.  Prior to 2000 the industry had experienced consistent and rapid growth.  After 2000 the industry has been contracting 50% of the time.  Sales are probably still being grossly overestimated as the few companies that reported publicly have taken a huge beating.  Several like Norwood and Broder Bros.  which occupies the number one spot in the industry for supplier size either threatened bankruptcy or have gone bankrupt.  Major suppliers such have Cyrk have also gone off the grid and are no longer in business.  Sales for 2008 were atrocious dropping at least 10% and most major suppliers are reporting 20-40% drops in 2009.  I am sure the major associations will spin it as just a slight drop but when two of the top 5 suppliers were in danger of or went bankrupt and most of the top 10 had significant staff layoffs the situation is grim.  Actual sales will likely be down more than 20% in the promotional products industry in 2009.  There will be more failures on both sides of the aisle as distributors collapse under the weight of shrinking credit and increasing delinquencies of customers.  Suppliers face the same concerns as distributors are increasingly stressed.   Although the data is rarely released it is obvious the credit departments of many suppliers are under strain trying to deal with collections.  In general the business credit reporting agencies report the average days beyond terms has extended to 10 up from 2 earlier in 2009.  That's a rapid descent and with credit availability scheduled to shrink in the trillions this year and next it will only get worse.