Update: Critical Trends in Promo

Update - Recent Critical Trends All of us have lived through some pretty interesting times in recent months, and buyers of promotional products, like yourselves, have asked some hard questions.   Well, we have answers to several of the most pressing trends in our industry. What happened to the price of my Tee-shirts? 100 % cotton tee-shirts are one of the most popular items we sell today.   It is versatile, easy to decorate, and appeals to a wide audience, and until recently, was very inexpensive.   Between 2000 and 2010, the average cost of cotton was about 60 cents per pound but by March of this year, the cost had jumped to about $2.20 a pound!  Gildan, one of our favorite and highest quality suppliers, raised prices 4 times in 6 months - an unprecedented situation for this long-time supplier to the promotional products industry - and many other apparel-providers followed their lead.   So what happened?   A "perfect storm" of events globally influenced the price of cotton in dramatic ways. According to industry experts, the cost jump was caused by multiple factors spanning several growing seasons including: increased demand in emerging markets and first-world countries as their economies began to expand or recover production shortfalls caused partly by farmers who opted to plant other crops that were, at the time, more profitable bad weather in major cotton-producing countries such as the US and Pakistan India, the world's second-largest cotton exporter limited exports in an effort to stabilize prices in their country market speculation in cotton futures (Gordon Gecko, in other words)   So what's the off-shoot of all this, besides higher priced tee-shirts and other cotton apparel?   As a result of the increase in cotton prices, other apparel that was previously thought to be "too expensive" is now a lot closer in price.   For example, according to Mary Ellen Nichols, Director of Marketing at Bodek and Rhodes (a top supplier in the promo apparel industry), the increase in cotton cost has made "performance wear" much closer in price, and as a result has made the more expensive items much more attractive.  In fact, 29 % of Bodek's line is now considered in that category, up from only 3 % just 5 years ago.  Other suppliers report similar trends, especially with the improvement in decorating techniques now available for this category.   Weekend Warrior has seen a spike in very thin moisture management apparel that would be difficult and/or expensive to decorate in multiple colors without the use of the new-age transfers (as shown in the pics below). Can I get my USB Drives now, please?    Yes, you certainly can!   Besides all the normal "fun" economic activity of the last several years, we faced the added challenge this year of memory chip shortages due to the disastrous earthquake in Japan.   Although most of the USB drives used for the promo industry are assembled in China, many of the key components come from Japan, so any delay in the shipment of the Japanese parts could, and did, cause delays, uncertainty and dramatic (but temporary) price increases.  There is good news on this front! According to Nate Tangerini, National Accounts Manager at leading supplier US Flash and Technologies, LLC, "the feared supply shortages that caused the immediate spike in chip prices after the earthquake have proven to be largely unfounded as other chip manufacturers boosted production to fill the supply gap.  Not only are chip prices below where they were at this time last year, but they are at or near where they were just prior to the earthquake" (see pricing sample below).   For any company considering a project involving memory drives, availability and speculation currently is not an issue.  Even so, by its nature, the market remains so volatile that suppliers are reluctant to quote prices for more than one or two weeks in advance.    The good news is that turn-around time has dropped dramatically, even on custom shapes or designs, so the price fluctuation issue has been largely muted. For more information, please contact Ed Burgess at:  ecb@weekendwarrior.biz or (412) 922-8389;  or visit us online at www.weekendwarrior.biz