Fidget spinners — those mesmerizing ball-bearing devices that kids rotate between their fingers — skyrocketed in popularity this year, but the craze did not stop with youngsters. They surfaced in office cubicles, at board meetings and on Denise Cline’s desk.
Cline is director of business development and operations for Consolidus, an Akron-born distributor that helps multiple-location organizations — such as universities, health systems and large nonprofits — manage promotional products. That includes enduring giveaways like logo-embellished T-shirts, pens and water bottles but also anything new — think fidget spinners — that organizations think will resonate with employees, customers, conference-goers, clients, donors or students.
“If you see a new style of insulated mug at Starbucks, you are going to see it in our industry within the next six months,” Cline said. “It is a very fast-paced industry.”
It also is a very crowded one. The Advertising Specialty Institute, the promotional product’s largest trade group, says its membership includes more than 33,000 distributor firms (sellers) and 3,500 supplier firms (manufacturers) — each vying for a piece of the booming $22.9 billion annual business.
With revenue growth of 20% to 25% per year for the past five years, Consolidus is staking its claim.
“What’s really exiting is that we are starting to build a track record,” Consolidus CEO Jeffrey Jones said. “That track record, to me, began with retaining good strong professionals. They came on board and stayed.
“It is also the type of clients we have and their retention. But now we are starting to see the outward signs, too, like the financial performance, which gets attention more widely.”
In August, Inc. magazine ranked Consolidus among its list of the nation’s fastest-growing companies. The company ranked No. 3,461 on the 2017 Inc. 5000 list. The 15-person firm had a three-year growth rate of 90%, bringing 2016 revenues to $3.8 million.
This month, Consolidus will be named to the Inner City 100, Fortune magazine’s ranking of the country’s fastest-growing urban-core companies.
Ranking aside, “We recently calculated that we have delivered over 15 million branded products,” Jones said, “and we have a 99%-plus customer-satisfaction rating.
Those are the measurables we look at to determine how well the vision is coming to life.”
Jones laid the foundation for the company that would eventually become Consolidus in the early 2000s. The University of Akron graduate was an Akron firefighter at the time, moonlighting in promotional product distribution by taking supplier catalogs to area businesses and managing their purchases.
As his side business grew, Jones said, e-commerce evolved as a legitimate internet platform. He knew it would take more than throwing up a digital storefront, however, to compete in the booming promotional products space.
Jones formed Consolidus in 2006, defining the company as a “consolidator” of branded material purchases for large decentralized organizations via custom online portals.
It works like this: Consolidus creates a website for a client, say Big Brothers Big Sisters, where anyone from the organization — no matter what department they are in or where they are located — can log in and view a variety of promotional merchandise that has been chosen and vetted by the organization. Because of this, a T-shirt, banner or fidget spinner purchased from a Big Brothers Big Sisters post in Cleveland will look exactly the same as one ordered from a site in San Diego or Orlando, except for the name of the location.
Jones said big nonprofits such as Big Brothers Big Sisters — not unlike higher education, hospital systems and global franchises — can have up to 100 people in the organization responsible for buying promotional goods.
“At a university, there may be someone from admissions, another person from alumni or donor relations, someone from marketing and many different people from student groups — all buying branded materials for some promotional purpose,” he said. “That buying would go in a lot of different directions from a variety of vendors.”
One of the more obvious benefits to consolidating purchases is cost savings. By leveraging the collective spend of many different departments or groups, organizations can lower their logo merchandise expenses.
Jones said equally important to organizations today, however, is the ability to exert more control over what’s out there with their name on it.
“The brand standards in these organizations are very specific,” he said. “But a lot of vendors don’t know what those brand standards are, so they can’t help ensure that the imprint that is being requested from a department is in alignment. … A big part of our service is that brand control.”
Cline said time savings is another big plus. These “buyers” all have real day jobs, which are not purchasing promo products. On the front end, having popular items at a single site limits the amount of time they spend researching options and comparing prices.
On the back end, Consolidus’ order processing and fulfillment system, built in-house, streamlines the approval process, limits order errors and ensures orders arrive on time and at the right place, she said.
According to Cline, 70% to 80% of promotional product orders industrywide are not shippable, often because the customer did not provide all the information needed to process the order.
“With our system, that is not even a possibility,” she said.
More recently, Consolidus has taken workflow ease a step further by integrating customer procurement systems with its process management backbone. Cline said some newer clients tell her they already had a handful of promotional product distributors and were not necessarily looking for a new one, until they saw its procurement capabilities.
Jones, meanwhile, credits the homegrown process management system with Consolidus’ ability to scale but stay lean. Five years ago, he said, one order processor could fulfill perhaps $1 million to $1.5 million worth of promotional products each year.
“Now with the management system in place, we are looking for $6 million to $7 million (per processor). So we can have that same person — and that cost associated with that employee — manage three to four times the volume,” he said.