Thursday 9 June 2011

Buying or Selling a Promotional Products company

Is your company is expanding or contracting - either way this blog could be for you.  Consolidation in the Promotional Products industry is strong at the moment and those standing still could be left behind.

Here are a few options you might like to consider...(we are happy to list anonymous Buy or Sell requests free of charge on this website.)

Sell my Promotional Products Company.
There are many Promotional Products companies with Economies to Scale out there.  It can really difficult for the smaller companies to compete given the changing field of play.  Bigger Promotional Products players are looking to keep growing and consolidating their positions.   Big clients are constantly putting new regulations (barriers to entry) into place.

Another key factor are Chinese Factories.  Many are are looking for Sales Representatives and strong players on the ground to get closer to their clients around the world.  Many are cash rich.  Local market knowledge is invaluable for them as they look to develop new markets and innovative products.

Acquire a Promotional Products Company in my country.
Expand your reach Geographically and cover the whole country.  This gets your company Press/Media and enhances your position on the radar.   Having an extra location allows you to close sales that you might not have been able to get in the past due to location & hand holding issues.

Acquire a Promotional Products Company in another country.
Benefit from Economies to Scale.   Leverage the design work and moulds you are creating for the FMCG's of this world and open new markets to maximise revenue.

Acquire a Pure Promotional Products Supplier.
A Buying Office in Hong Kong or China adds a lot of value to your business.  Maybe now is the time to set up in Asia and give your clients the opportunity to order from you on an FOB basis.  Having an operation in Asia will give clients the perception of lower costs and better control - the perception can become fact.   You could opt to set up own operations or partner with an existing player.  Setting up a Rep Office in China can be a nightmare with lots of hidden costs.

If you are not ready to buy or sell, consider long term strategic partnerships with other Promotional Products Agencies and Suppliers.  

How do you value a Promotional Products Company?

The Promotional Products business can be very cyclical and some businesses suffer/enjoy huge swings in fortune.  Big orders can hinge on a few cents profits and some sales people can make most of their revenue from just 1 customer (sometimes even 1 order).  

With this in mind it can be a struggle to value promotional products businesses.   Key indicators include..

Profit based Valution & 

Asset Based Valuations

  • What are the Current Profits or Losses.
  • Assets Current Staff & Clients
  • Other Assets & Debtors
  • Is the business being being split up
  • Does the business have goodwill
  • Is business is going into liquidation
  • Depth of the Business - overly reliant on 1 market/client?
  • What other factors should we add - leave comments...............

1 comment:

  1. Russian nesting dolls serve as a great idea for promotional gifting for both your employees and clientele. For wholesale purchases please visit


Unveiling the Hottest Promotional Product Blogs 2023

As we step into 2023, the world of promotional products is evolving, presenting exciting opportunities for businesses to leave a lasting imp...