Small companies are back.

At least that’s what the 2022 results from PPAI’s Sales Volume Estimate suggests. One year ago, the results indicated that small businesses were being left behind as the industry’s biggest companies bounced back from 2020.

This year, early responses from PPAI’s annual Sales Volume Estimate show a much more equal story, with small companies nearly equaling the total sales of their larger counterparts.

  • For the purposes of the Sales Volume Estimate, PPAI defines small companies as those that report less than $2.5 million in annual sales.
  • The Sales Volume Estimate reports nearly $12 billion in 2022 sales came from small distributors, making up almost half of the promo industry’s first $25 billion year.

 

Factors For 2022’s Success

Numbers are far less valuable without context.

PPAI Media spoke with various industry leaders about why and how 2022 was a record sales year for promotional products. Some factors are promising signs for the future, such as:

  • An improved global supply chain.
  • The return of in-person events.
  • An increased focus on better quality and sustainable products with higher price points.

Other 2022 factors are a bit more complicated and could prove specific to the year:

  • Some brands and clients had “stockpiled budgets” from their reduced marketing spending in 2020 and 2021, resulting in greater promotional spending in 2022.
  • Inflation was the biggest story of 2022. Inflated prices naturally result in inflated sales totals.

Benchmarking Small Companies’ 2022

So, how should small companies evaluate 2022’s big picture success going forward?

In addition to the Sales Volume Estimate, PPAI conducted additional benchmarking research in order to get a more specific look at how small companies fared in 2022.

PPAI Media received sales information on 2022 from 277 small companies. The information was partly gathered in December, making the results a projection instead of an exact total. All 277 respondents fit the criteria of reporting less than $2.5 million in sales annually.

  • The average number of orders for small companies: 948
  • The average number of customers: 159
  • The average number of orders per customer: 6

 

Early returns from PPAI’s Sales Volume Estimate provide average revenue information for distributors under $2.5 million, which make up the vast majority of the promotional products industry.

  • The average 2022 revenue for the estimated 23,014 firms in the small company segment was $519,000.
  • This average revenue is considerably higher than 2021 ($409,477) and even higher than the pre-pandemic peak in 2018 (just over $470,000).

 

The resulting data provides insights on the average value of the segment’s customers and orders.

  • The average order for the segment totals $547.47.
  • On average, customers spent $3,264.15 with their distributors in this segment for 2022.

Companies in this segment can vary significantly, from part-time graphic designers creating promotional products on the side, to true creative agencies with double-digit staffers. Distributors who PPAI Media ran the benchmarking numbers by suggest that sales strategies can vary widely by company on either side of the segment’s median.

  • The median revenue of the under $2.5 million segment – the midpoint where half the population is above and half is below – in 2022 was just over $200,000.
  • The median for small companies in 2021 was under $140,000.