Promotional products play an important role in building brand awareness and support global sales activities. However, managing the production and fulfilment through multiple suppliers leads to inefficiencies, increased costs, and reduced flexibility. Ciloo proposes that consolidating promotional product management with a single, modern supplier offers numerous advantages, including cost savings, increased efficiency, and a reduced environmental footprint.
Traditional vs. Modern Suppliers: A Comparative Analysis
The market for print-on-paper (commercial products) has already transitioned to on-demand production. Although the transition has started, this has yet to happen for promotional products. Key driver is the focus on sustainability. Companies no longer want to offer unnecessary plastic products to their customers or stakeholders.
The table below highlights the key differences between traditional and modern suppliers of promotional products:
|Traditional Promo Supplier||Modern Promo Supplier|
|Brand Control||Medium to low – Less control due to the use of different partners with different production capabilities||Medium to high -Increased brand control from a vetted network of partners with unified production capabilities|
|Environmental impact||Contributes to higher carbon footprint||Prioritizes environmental sustainability|
|Reporting||Multiple suppliers result in multiple data sources||One data source for all orders|
|Warehousing||Upsell warehousing to increase profit||Eliminates need for warehousing|
|Fulfillment||Upsells fulfillment services||Eliminates need for additional fulfillment services|
|Volumes||Requires minimum order quantities||No minimum quantities (could be some exceptions)|
|Product range||Encourages large product offerings||Recommends a narrower, more focused product range|
|Storefront / portal||Different stores for different countries||One global store / portal for all use cases|
Benefits of Using a Single, Modern Supplier
Consolidating promotional product management with a single, modern supplier offers several advantages:
|Cost savings||A single supplier relationship can lead to economies of scale, resulting in reduced production, warehousing, and shipping costs|
|Enhanced brand consistency||A single supplier ensures consistent quality and branding across all promotional materials, strengthening the company’s overall brand image|
|Improved sustainability||By focusing on local, on-demand production and a narrower product range, modern suppliers help companies reduce their environmental impact|
|Simplified management||Working with one supplier streamlines communication, simplifies invoice processing, and reduces administrative overhead|
|Greater control and visibility||A unified approach provides a clearer view of the entire supply chain, enabling better decision-making and more effective inventory management|
The Internal Costs of Managing Multiple Suppliers
Managing multiple suppliers is not only a complex process, but it also comes with significant internal costs. By working with a large number of promo suppliers globally, companies face increased administrative overhead, resource allocation, and inefficiencies that can negatively impact the bottom line.
- Administrative Overhead: Managing one supplier typically involves coordinating communication, contract negotiation, invoicing, and performance monitoring. Each additional supplier increases the complexity of these tasks exponentially. The average internal cost of managing a single supplier ranges from $1,000 to $2,000 annually. For a company working with 50 suppliers, this translates to an annual expenditure of $50,000 to $100,000 on supplier management alone. By consolidating to a single supplier, companies can drastically reduce these administrative costs.
- Resource Allocation: Managing multiple suppliers requires dedicated resources, including procurement specialists, supply chain managers, and logistics coordinators. These resources are responsible for negotiating contracts, tracking orders, and resolving any supplier-related issues. As the number of suppliers increases, so does the demand for these resources. By working with a single supplier, companies can optimize resource allocation and reduce the need for additional personnel, resulting in significant cost savings.
- Inefficiencies and Increased Risk: With multiple suppliers, companies face greater risks associated with supply chain disruptions, such as shipping delays, quality issues, and inconsistent branding. These challenges often lead to additional costs, as resources are diverted to resolve problems and mitigate risks. By working with a single, modern supplier, companies can minimize these risks and streamline their supply chain processes, leading to greater efficiency and reduced costs.
- Reduced Visibility and Control: When managing multiple suppliers, companies often struggle to maintain a clear view of their supply chain, making it difficult to identify inefficiencies and implement cost-saving measures. This lack of visibility can result in higher overall costs, as companies struggle to maintain control over their promotional product management. By consolidating suppliers, companies can regain control over their supply chain and make more informed decisions, ultimately leading to better cost management.
There is no single promo supplier on the market today that can manage promo globally in a unified way. There are players in the market that position themselves as a global solution, and although they provide account management services, they are not technically integrated and in many ways working with them is similar to working with individual companies. Meaning, these are networks of distributed local companies that operate files and payments often in a manual way. We recommend being cautious about engaging these networks without drilling down in terms of depth of integrations and how they deal with global payments and taxes.
Ciloo has supported global companies like Honeywell (US based, 100,000 employees), Jacobs (+50,000 employees) and also many others since 2008, and is probably the leading company when it comes to experience in managing promotional products in a unified global platform. We have not found any other company that offers print and promo on a global scale through one portal, including integrations with core enterprise business systems (ERP/procurement, SSO and more). We have a robust supplier network in Europe, North America, Australia, however we will continue to grow our network in Latam, APAC and Africa in the coming 24 months.
By transitioning to a single, modern supplier, companies can reduce administrative overhead, optimize resource allocation, minimize inefficiencies, and regain control over their supply chain. This consolidation not only leads to significant cost savings but also simplifies the promotional product management process and strengthens the company’s overall brand image.
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