Another Big Year for Distributors

Sales soar as diversification pushes growth.

Despite the loss of last year's fourth largest distributor, Dallas-based Precept, total revenue for the BFL&S Top 100 Distributors pushed over the $2 billion mark to $2.16 billion, compared to $1.92 billion last year. This 12.5 percent increase is due to acquisition and enlargement of franchises by the leading distributors as well as continued product diversification.

Although form sales for the Top 100 increased to $831 million from $780 million last year, they now account for only 38.6 percent of total revenue, compared to 40.6 percent of revenue last year. Label sales increased to $205 million from $177 million last year accounting for 9.5 percent of total sales.

Big gains were made by commercial printing, promotional products and direct mail. Commercial printing now accounts for 22.3 percent of Top 100 sales, having jumped to $481 million from $414 million last year. Promotional product sales at $221 million, up from $175 million a year ago, accounted for 10.2 percent of revenue. Direct mail increased from $89 million last year to $106 million, which accounts for 5 percent of total Top 100 revenue.

This year's Top 100 Distributors reported 8,512 employees, an almost 22 percent increase over last year's 6,987 employees. Distributor locations grew by more than 9 percent to 1,419 offices, much of which is due to acquisitions.

While productivity of sales per employee decreased to $253,330 from $275,172 last year, sales per location held steady at $1.5 million. As such, the overall increase in Top 100 revenue of $240 million was accomplished by an additional 1,525 people working at an additional 122 offices.

Top Company Growth

Share of market for the largest distributors dropped slightly. This year's top 20 companies accounted for 68.6 percent of total revenue ($1.5 billion), compared to 70 percent last year ($1.3 billion). They employ 5,691 people at 1,064 locations for $259,839 in sales per employee and $1.4 million in sales per location.

The Top 10 Distributors drop-ped in market share from 56 percent of total Top 100 revenue, or $1.08 billion last year, to 54.6 percent of overall revenue or $1.18 billion. This is attributable to the loss of Precept. The Top 10 distributors employed 3,722 people at 1,064 locations, accounting for $316,296 in sales per employee and $1.1 million in sales per location.

The Top 10 companies sold $461 million in forms (43 percent of Top 10 overall sales), $110 million in labels, $141 million in promotional products, $31 million in direct mail and $270 million in commercial printing.

Five-Year Plan

In 1997, the Top 100 distributors totalled $1.59 billion in sales, 36 percent less than this year's $2.16 billion. Since 1997 this year's top company, SFI, has increased its sales by $151 million to almost $278 million.

In 1997, forms accounted for 51 percent of sales, compared to 38.6 percent now. Forms sales for the Top 20 Distributors in 1997 were $560 million (56 percent of 1997 Top 20 total sales). This year the Top 20 reported $566 million in forms sales (38 percent of 2001 Top 20 total sales).

Total sales for the Top 20 were $991 million five years ago,

compared to $1.48 billion this year, an increase of 49 percent. In 1997, these Distributors em-ployed 3,087 people at 731 locations. This year they report 5,691 employees at 1,124 locations. Over five years, the number of employees increased by 84 percent and locations increased by 54 percent.

Outlook

The diversification trend has continued as the percentage of sales attributed to products other than forms has increased. Distributors continue their evolution from a high percentage of total sales in forms to full suppliers of printed products and related services. Promotional product and commercial printing sales are growing rapidly. Direct mail may be about to join them as busy buyers look to outsource more of their needs to distributors who can offer a complete program.

Consolidation will continue as large distributors pursue growth and smaller distributors look to cash out or seek protection under a larger umbrella organization.

All distributor sales charts provided in this issue were produced from information voluntarily supplied by the distributors themselves.

By Bill Drennan and Allan Kemler