Episode 136: The Decade Ahead, Distributor's Perspective with Jamie Mair

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

He's the marketer, he's the customer, and his team are the marketers and the customers. And you think of how they talk and what they talk about. They talk about, let's do something that's going to engage our customers and drive, you know, participation, or let's do something that's going to generate leads based upon, you know, this event that we're planning. I don't think the conversations are, wow, let's buy hats. Oh no, let's buy jackets. And that's to me is the whole broken telephone game from the supplier to the distributor to the customer.

Hi friends, I'm Bobby LeHew, the Chief Content Officer at Commonsku. A few weeks ago, Mark Graham, Commonsku's President and Chief Branding Officer, and I started a 3-part series on the future of the industry. Visiting with some of the most respected leaders of the largest organizations as we reflect on the changes that have accelerated our success over the past decade, and most importantly, what opportunities and challenges lay before us in the decade ahead. Our first episode featured perspectives from the industry's two largest trade organizations, and we were honored to have Tim Andrews with ASI and Paul Bellantone with PPAI join us. Our second episode featured the supplier's viewpoint with David Nicholson, the president of top 40 supplier PCNA, parent company of Leeds, Bullet, Trimark, and Journal Books, and Jonathan Isaacson, president and CEO of top 40 supplier, The Gem Group, parent company of Gemline. Today, Mark and I sit down with Jamie Mayer, that's Jamie's voice you heard at the top of the program, as the three of us share the distributor's viewpoint and our perspectives on the decade ahead. If you're a new listener, I was a distributor for years with Robin prior to joining CommonSkeew, and Mark is the founder and now former co-owner of Right Sleeve, Toronto-based distributor recently sold to Gennumark. Jamie Mayer, after working at Cirque and Osterman API, two of the industry's largest distributors, set out on an adventure in 2004 to launch Swervepoint, a boutique merchandise agency headquartered in Boston. As an entrepreneur, Jamie managed the startup phase through the scale-up and exit phases with a focus on brand building, customer experience, and corporate culture. In August 2017, BDA acquired Swervepoint and Jamie became the top marketing executive at the $427 million company. Over his career, Jamie has worked on global e-commerce programs, sports sponsorship activations, and promotions that drive awareness and engagement for companies such as BlackRock, Fidelity Investments, and MasterCard. Today, Jamie is a strategic advisor to growth-oriented firms in the industry. By the way, registration will open soon for SKU Camp. We'll open registration around mid-February.

I'm mentioning it now for two reasons.

One, so that you can get the dates of September 13th September 16th on your calendar, and two, because SKU Camp always sells out really quickly. SKU Camp is the industry's only bootcamp experience led by entrepreneurial eccentrics, industry independents, as well as outside experts featuring high-impact lessons from the trenches. Those dates again are September 13th through September 16th. You can visit skucamp.com for more information. Today's episode is brought to you by CommonSKU, the platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales.

You can learn more or start your free trial now at commonsku.com.

Now on to our conversation with our great friend Jamie Mayer, where we talk about the opportunities and challenges ahead, including direct sourcing, sustainability, pricing challenges, distributor consolidation, and much more. One quick note, often with our guests, we'll start chatting with each other about some topic before we've officially started the program, and this was no exception.

So you're joining us in the middle of a conversation.

To give you some context, minutes before we hopped online to record this, Mark read an article about the new collection of merchandise from Herschel Supply. It was a collaboration with Coca-Cola as a limited edition collection available on Herschel's retail website. The collection was shared on Twitter by Jeremy Picker, creative director and CEO of Amber Creative.

Mark is in the middle of sharing his early days story of trying to work with Herschel and weighing the pros and cons of brand-to-brand collaborations like these.

I decided to just leave the conversation in and let it play. After all, our best episodes are simply that, not performances, but conversations. Just pretend you've grabbed your cup of coffee and took your seat at the table to join us.

You know, so you've got Herschel, which is somewhat antagonistic towards the promotional products industry. I know that because we called them all the time at Right Sleeve to say, hey, you We've got cool clients. Can we set up an account with you? And they were really difficult to work with.

Like, just at first.

Yeah, just like basically, you know, go away, little swag guy, right? You know, we're in a real business. That is what their approach to the promotional products industry is. Then I could imagine them having no interest whatsoever in working with some distributor who would just come in and get in the way. And so what I wonder when I see these kinds of things, on one hand, I think they're They're magical for the promotional industry because this is promotional merch at its very, very best, but with the asterisk of like, well, hang on a second here, this was a brand-to-brand direct collaboration. So you could say this is a supplier going direct, maybe, but Herschel's not really a promotional product supplier like a Gemline or a Leeds. They're a retail brand that has said, hey, we've got a promotional products channel, Thank you very much, Leeds, for having done a deal with us where we're going to give you 3 SKUs or whatever the case is, and you can go deal with Right Sleeve and Robin and those guys. But when it comes to the really sexy business, we're just going to take care of it ourselves. Thank you very much. And to me, I find that troubling.

Well, yeah, there's— that's that aspect. But, you know, I'm kind of inspired by it because, um, you see a lot of this collaboration happening in the boutique fashion world right now, where you see this big brand partner with some obscure— might even be a recording studio— but they both have these cool brands that have a very unique vibe and a very unique audience. And the marriage of the two— this kind of stuff is something to learn from as well about how we go to corporate clients and, and say, hey, let's, let's do this in a big way because it's big press. It, it puts all the power and energy of the PR behind both, and it matches the merchandise and the attitude and style with, with these, you know, seemingly disparate companies.

Yeah, I think, you know, my experience, this is definitely not a traditional promotional products arrangement. And usually there's a licensing agency that sits in the middle of this and brings these parties together and says, "Hey, there's money to be made on both sides of the equation and we'll negotiate the contracts and we'll bring the parties together." But I think at this kind of level, take two really great lifestyle brands and you can put a collab collection like this together for some limited period of time or limited quantities and create a ton of press around it. I mean, for Hypebeast to pick this up, there's going to be an audience who will find these products viable or interesting, and people will want to spend their own personal money to buy them. I think some of the things that we're seeing in our industry with the quick-serve restaurants and see McDonald's is developing their collections and Popeyes has their collection that Popeyes is now selling their staff uniforms online. And so I think people are just recognizing recognizing that merchandise is another alternative avenue to drive revenue and create awareness. And I think you've got some distributors who've done a really nice job recognizing this and they've kind of elevated the game. But for most, I think we're still kind of selling stuff.

Yeah. One thing too, I know this is derivative, but this is also this collab with Coke and Herschel is the kind of thing you can look at your client list and determine that you could do the same thing because you can source Herschel. In this industry now, and you can actually use it as a jumping-off inspiration point to building collabs for your clients.

Yeah, I like that approach. And, you know, even, even if I was being a little bit down and negative at the outset because a traditional distributor would have been cut out of this in all likelihood, I definitely see it as a net positive because that traditional distributor could take this, this article with all the emotional connection and the magic around this well-designed merchandise and bring it to one of their end client brands that may not quite be a Coca-Cola, but may not also be like the local divorce lawyer in town, maybe somewhere in between, talk about the art and science of building one of these things and to talk about building a collection that inspires and has emotional connection where there's a design ethos that's wrapped around the whole thing. Because at the end of the day, that's really what they've done. And could that be done for that beloved local brewery in, you know, your local market, right?

Yeah. And Mark, you're right to be concerned though. This is where we as merchandisers have to be on our game. Otherwise, this stuff will happen outside of the industry. If we're not positioning ourselves to these kinds of exciting custom merch deals and think strategically with a customer like this, then, then we'll get excised out of it. This is where we— the difference between industry sales versus the market. You know, this is the market. This represents the market right here.

Yeah, and I think anyone who's involved in projects like this or programs, even for the example Mark gave, your local microbrewery that may have a really cool brand and a really cool product lineup and a local following who's happy to spend their personal money on merchandise, I think for the most part, these types of things don't have broad commercial appeal. I think they've got really great marketing appeal, appeal, and I think that's the name of the game. So if that's really what all of this is about is really good marketing and good branding and the medium is merchandise, then I think the whole positioning around being a distributor, which is just, I buy X from Y supplier and I sell it to Z customer, that to me is kind of the fundamental problem in how we really define ourselves. And I know that's a whole conversation for another time because that's just a can of worms, but I do think if you want to do these kinds of things and you want to think this way, you got to get away from calling yourself a distributor.

I'd also be remiss to say that kudos to Jeremy Picker with Amber Creative for being the person who tweeted this article out and formed the basis of this conversation. So thank you, Jeremy, for curating this and putting it out on the Twitters.

Well, he's a great example too because he doesn't really come from our industry, right? He's a garmento, he's a decorator, he's an apparel guy, and he's now kind of bringing this fresh perspective and looking at things differently. And, and that's, I think, pretty exciting. And you see, that's why he's got a good following very quickly. And, and I think people really look to his input and his, his insight.

This, I think, is a good jumping off point to talk about the pricing challenges since we're just going to segue right into this whole discussion about the decade ahead, because this is a great example, Jamie, you just pointed out that you could build this type of program for a customer and it might be a PR play. The merchandise sales that you, that you were hoping would come, that you, you depended on coming, and many of us who have done program business in particular know what a red herring that can be, that you think you're going to suddenly land a quarter million dollar deal and then you end up, you know, with $20,000 in revenue. This gets into the pricing challenges of the industry. Many of the projects distributors are working on today are growing in complexity compared to the simple one-color logo drop of the past decade— packaging, creative services, fulfillment, consulting. Yet we still have this outdated model where everything is priced against the market value of a product through a supplier's retail price. So I see in the next decade that the services we're providing, the burden of the cost of operations plus the tremendous value we're providing for our customer can, can no longer be sustained in this product-driven pricing model. It's It's both a challenge and an opportunity. Some distributors are already doing this, but a new era of learning about how to charge for these services, how to go to market, like Jamie, like you said, with the name distributor. Would you guys agree this is a big challenge for us in the next upcoming several years, decade? Jamie, I'll let you go first.

Okay. Yeah, I absolutely do. It's a problem now. It's been a problem for a decade, if not longer, and it's going to continue to be a problem until we decide that for the people who are involved in these types of projects, who have these types of clients that their model has to really reflect more of an agency approach. And so that's being able to charge for time and creative and consulting and insight. Because you can't, like you said, you can't hope on the come that you're going to sell enough merchandise to cover your investment in your creative time. And I think, you know, what we haven't done a great job is we haven't benchmarked ourselves against firms like PR agencies or marketing services agencies where clients are used to paying in that vein. So I think we really, for the people who really play in this space, they've got to really define who they are and how they charge for their service. And again, I think it all starts with, are you a distributor or are you an agency? And the answer to that would define, I think, how you go to market with your pricing strategy.

Right. And knowing the value of, of what it is that you're providing. And going back to the early years when Denise told me the insight for her came— Denise with Fareware said that she was providing all of this consultative advice to her clients on sustainability and the product and specs and everything, the factories and everything goes behind it. A customer of hers had actually contracted with an ad agency to do some very similar services, and they ended up charging them a ton of money for the very thing that Denise in her early mindset, you know, would, would give away for free or part of the value-add. Um, so we're all, I think many of us are facing this in different directions. We faced it in the company store space over the past decade in a big way and had to deal with it from that end. Mark, what's the—

Well, I wanted to ask a question of Jamie, um, you know, as a follow-up to what you said there, uh, around, uh, some of these pricing challenges. When you reflect back on your experience at SwervePoint and then more recently with BDA, did you learn anything around creative pricing strategies, uh, when you were working with some of your larger accounts, or did it or did you just come back to the straight old, I hope you buy a lot of product?

You know what, it really depended on the client, but I think that the areas where we were working on more complex initiatives that had a lot of different moving parts, you know, our team was really good to be able to explain to clients, you know, how we were gonna put together their pricing. And in many cases we would do à la carte pricing and we would explain this is, you know, what it's gonna cost to develop this design. This is, you know, what the cost of your merchandise will be. This is your packaging cost. And so we would, you know, we would kind of have this more prescriptive and formulaic approach, which was very transparent. And the biggest clients, you know, specifically the ones who've worked with other agencies and other categories, they were always really open to it. We found that the less sophisticated the client was, the more they would just kind of align themselves with, you know, how much is the doggie in the window. And so I think, you know, Bobby's point, really kind of knowing what the value is that you create, you have to be confident in that. And you also have to be aware of just what other pricing models there are outside of our industry that clients are familiar with. And I think starting from there, but yeah, Mark, we made a lot of mistakes in the beginning. And then finally we realized like these things are complex and there's no reason that that, you know, we can't be compensated for these, you know, kind of non-merchandise elements of a project.

Yeah. And there's two types of value we're talking about here.

We're talking about—

there's not just the value of your time. Talking about what ad agencies are really good at is the value of that for the client in terms of out there in the market and what they're building. We, we end up having— on the program side, we ended up having to create— it's kind of a lazy way to do it. I don't know if I ever sent this to you, Jamie, not that you needed it, but the minimum purchase agreements for something.

Yeah, you did. Yeah, it was interesting, right?

And, you know, that may be kind of a lazier way though. I mean, maybe we should have had more confidence in our services and fees, but we're fighting a market. This is the problem in the industry that we got to change. We were fighting a market who was giving away all those things for free.

Right. Oh, and you've got incredibly sophisticated procurement teams who know how to pull every single lever to try and get the lowest cost and the lowest total cost of ownership. And so, all these kinds of things are working against us and we're nervous because we want to make the sale, but then We sacrifice margin and obviously this is happening too in big ad agencies all over with third-party consultants who are driving costs out and the creatives are frustrated and it seems like there's this kind of have and have not and the procurement folks at this point are the haves and the agencies and creatives are the have-nots and that's not obviously a good formula for creating great marketing. So we got to kind of get back more to the middle here. And try and work together. But the mandate obviously in procurement is save the company money. And so that's a challenge.

I read a really interesting book just a couple of weeks ago called Subscribed. The title of the book is Subscribed: Why the Subscription Model Will Be Your Company's Future and What to Do About It. And it was written by the founder of a company called Zuora. I'm not sure if either of you are familiar with it. Are you?

Yeah, Zora is kind of the leader of the subscription economy, right? The creator of it almost.

Yeah, yeah. Or at least they've created a model around how to charge on a subscription basis. And the book had come across my radar. And of course, now that we're in the commonsquew SaaS model, the idea of subscription is just is just a regular part of doing business in terms of charging per user per month. But what's really interesting about the book is that he makes this argument around why this subscription model makes so much sense from a financial perspective, from a cash flow perspective, from just a reliability and just a different relationship with your customers. And then he goes on to talk about businesses that are not software companies because your first inclination when you read this is like, Yeah, I could understand why a company like Commskew would be subscription-based. Like that, that ship has sailed. People understand that. But then he starts to go into all of these offline businesses like at retail and so on and so forth and builds a case around how they can start to move from their traditional pricing models into a subscription model. It's a very worthwhile book to read if you're not in the software business. So if you're listening to this podcast, you're in the promo business, I'd encourage you to read it. It's a quick read, but very interesting in terms of getting you to think about how it is that you could possibly change your pricing relationship with your customers. And of course, we're in this product business, so at the end of the day, it's hard to put that into a subscription relationship, but maybe some of the services could be put, put into that, into that model, you know, a lot like a retainer, so to speak. But it's, it is interesting. And I can tell you, my final point here is that at Right Sleeve, while we had a really great business with really sticky customers, it was always really tough to start the year at January 1st at zero. Um, it was always this joke about like, gosh, you know, we don't sell anything, we're out of business. Whereas when you think about a business that's based on the subscription pricing model, you start January 1st not at zero, you started at whatever your renewals are, which hopefully is, is quite high. And it just got me thinking, like, if I was back as a distributor, is there a way that I would apply some of these pricing models to build a different relationship with my customer? Anyways, just food for thought. We'll link to it in the show notes, but a very, very interesting read.

Right. One other recommendation, my friend Paul Ratzer has an agency. Oh, yeah. And he wrote a book called The Marketing Agency Blueprint. It's a handbook for— and it has a different pricing model as well. That's one I'd highly recommend. As an aside, Mark, I need to have him on the SkewCast. I'm making a note of that right now.

I have his book sitting right beside me.

Jamie, you're just being a show-off.

What?

Get out of here. That's a beautiful book. And I'll tell you, this is interesting. I bought it in a used bookstore in Northampton, Massachusetts, and I'm like, this is an awesome book. Yeah. So yeah, I'm glancing to my right here, Bobby. And so you can let your friend Paul know that I'm a fan.

I'll let him know. That's awesome.

I love Paul.

He's a great guy. And he was actually a customer of ours too at one point.

Can I just jump back on that for a second, Bobby? So Mark, you had mentioned the word retainer. And as you were speaking, before you got to that word, I'm like, Subscription in the creative services world smells a lot like a retainer. And I think as some distributors have the ability to move more towards that agency model because they are creating value in many other ways than just kind of providing product on demand when client has a need, I absolutely think that we should all get smart about how to craft proper retainer agreements and how to understand the cost of someone's time and also being able to apply account management fees. Now granted, if you're gonna do these things, you actually know how, you have to deliver the value. And that's where I'm a little concerned where some distributors really are qualified to sell product and to get the logo and get a spec and a virtual and pre-production, blah, blah, blah. But then when it's like, hey, I'm gonna guide you and propose for you how to build this promotion, that's another can of worms. And so I think, you know, some people can play in the space and some people can't. And the ones that can, I absolutely think we should be starting to introduce new pricing models sooner than later because we are all feeling, I think, the kind of force of commoditization in this business and have for a long time.

I think I'll just share one example that I think everyone who's listening to this podcast will know, and it's Amazon Prime. I mean, Amazon is in the stuff business, but they created this service and this idea of a subscription model to drive more value to those people who are signed up in this special program. And that's interesting, right? You think about all the benefits you get with Prime, free shipping, better service, Prime Video, blah, blah, blah, blah, blah. That could serve as some inspiration to distributors that are thinking about how it is that they can marry product and service with some semblance of a subscription pricing strategy that provides loyalty.

Well, yeah, look at the Costco membership, right?

Stepping back a little bit, what do you guys think was the single most important advancement in the industry over the past 10 years that has boosted the trajectory of our success today? Mark, you want to go first?

Oh gosh, I thought this was Jamie's interview. I don't have a good answer for this.

All right.

Okay.

Let me— I've got—

all right.

Oh, so you, you, you came unprepared to the party.

Mark is a, he's a freewheeler.

He, he, He is a freeroller.

Jamie, here's what— Jamie, you and I are wired kind of very similarly. Um, and, uh, Mark will show up, glance at the questions, and deliver a damn good SkewCast interview. And it just— I've gotten over it, but it bothers the fuck out of me.

Yeah, I don't have that ability. I have to do my homework.

My answer was just so good, I didn't want to intimidate Jamie. So Jamie, you go ahead.

Jamie, you go ahead, Jamie.

I'll go first, and then Mark can go to school on my answer and then sound sound infinitely smarter than me. So I think obviously you want the distributor's perspective on what you think the single largest advancement in the industry, but I'm going to just step back because I listened to Dave Nicholson and to Jonathan Isaacson and the two of you the other day, and I kind of was joking and made fun of David in Pittsburgh and called him a buzzkill for his whole focus and analysis on our overreliance on China. And I completely agree with him, you know, from a supply side for sure. And then as far as Jonathan's response, he was like, hey, it's, it's never any one thing. It's, it's a whole confluence of things. And so I agree, agree with that as well. And I think on the distributor side, you know, things evolved and technology clearly is one of the biggest drivers of change in our industry. But I think what we did was we traded up from printed catalogs to e-commerce. Websites. And so when we moved away from print, we then added costs on as it related to things around programming and data security. And so I think what came along with the advancement of e-commerce was things like Mark said about Prime, was the expectation of service and speed and everything that comes along with it. And that ups the game of the third-party fulfillment providers and shipping. And so I think I think for me, it's e-commerce as the single largest advancement that is changing our industry. I don't know if it's boosting its trajectory or if it's just kind of realigning things that had been done in the past, but that's my thought, e-com.

I think, I mean, there's lots of things, as Jonathan said, speed, technology. I actually think that the influx of brands in the industry over the past decade has done so much to elevate the stature of swag and the respectability. Ability of it. I think it's probably not real obvious, but I think the industry itself got more creative in terms of building custom versions. I mean, you guys remember the day— go back, and we're— we are all old enough to say this— go back 15 or 18 years ago on the show floor and remember what a wasteland of CPS that this was versus this fashion-forward and exciting medium that we had. A lot of folks that are getting in the business now don't realize what a wasteland it was kind kind of back then, but it's more exciting, I think, today than it has ever been before. And I, I think the interjection of, of brands in the market have helped that, and it made all suppliers and everyone else up their game as well.

So yeah, I agree with that. We're a long ways away from when the robotic calculator was the number one product.

I remember that.

All right, I think I'm gonna, I'm gonna now come up with something that's gonna sound really smart. You guys ready for it?

Yeah.

Okay, light on us.

Okay, so bring I'm going to riff here a little bit. I'll try to be succinct about this, but I think the influx and availability of capital in this industry has been a pretty massive driver of change and growth in the business. So here's why I say that. You see a lot of outside investment firms that are coming in providing money. They're interested in this business from a consolidation perspective. They see it as an old school vertical that is able to consolidate and as a result— but they're also excited about the growth and the fact that it has been a reliable industry for growth. If you look at 2010, we all go back to that time, the number of suppliers that were not part— or sorry, that were not combined back in 2010 versus now, it's considerably different. And you think about what has happened with that influx of capital, it means that suppliers now can go and they can purchase more, they can bring in more inventory, they can improve their supply chains, they can improve their production capabilities, which then speeds up production, which then means it's easier to deal with a company like Gemline or Leeds and get those purchase orders in so that way they can ship more to the end customer quicker. And that in turn then drives more sales for the distributor. So I, I'm always someone who likes to look at the thing that starts these things, like what is the macroeconomic thing that puts this all in motion? And if I look at 2010 versus 2020 and look at the influx of outside capital and outside interest and outside professionals in the promotional products industry, I see it as night and day. So that's my answer for you.

What about the next 10 years?

What do you guys see as possibly the biggest disruptions for the industry?

Jamie, do you want to go first?

Not really, but I will. Mark just took the wind out of my sails.

Yeah, I know.

That.

I'm used to it. Yeah.

I don't see any disruption coming like that. And it probably is like a naive statement, but over the course of, I don't know, my 20 years in the industry, things just seem like they're the same except there's just advancements in different ways. But for the most part, it's kind of all the same. The big distributors are still the big distributors. There might be new ones, but there's big and there's midsize and there's small. And I think that's And that's why I don't think there's gonna be disruption is that our industry is really diverse, right? And it represents this incredibly wide swath of different businesses and there's so many niches. And while it's a big industry, it's an industry I think of industries. And so I feel like things that could have been a disruptor are merely interruptions. So for example, the tariffs I view as an interruption and we just kept on trucking. I think a recession, disruption is a real interruption that will affect most of us. I think there's a trend that we're seeing with some clients in certain sectors that are going swagless, and I think that's an interruption, but I don't think it's a disruption because I don't see anything ever crossing our industry at scale because it's so kind of micro industries. And I think a point I wanted to make too around this is that this is an industry, right, that's all mass customization at scale. And so the limiting factor is the brand or the imprint or the logo. And so there's limited audiences for those. There's no real kind of general at scale in terms of how the market behaves like the consumer products industry where someone could just come in and take a category like men's razors and say, we're going to do this thing differently and we're going to capture all this market share. It's just not doable in our industry. I think there's plenty people who've come in and said, oh, it's fragmented and we're going to roll it up. Well, it's fragmented for a reason. And at its very core, it's fragmented down to the individual customer level. So that's why I don't, I don't see disruption. I just see evolution and some interruptions along the way.

I love the interruption comparison. I think that's true too. I agree with you 100%. I have always gotten so tired of things like the selling direct conversation. I know that's a reality, but we have sort of our own echo chamber in our industry. You can pick up a 20-year-old PPB or Counselor magazine, and you'll find some of the same sentiments being written about then as they're written about now.

You know what, I, I think that Jamie's gonna win this one. Um, not that this is set up as a debate, but, uh, had I had the opportunity to go first, I think I would have said something lame like, you look at Halo's acquisition of these premier brands and, and look at the, the role they're on. Um, do we see a time when Halo and PCNA come together because they're both private equity controlled, and now you've got this like a mega direct selling kind of relationship. And this is fresh on my mind because we had the opportunity to do a Promo Kitchen podcast with Larry Cohen and Mark Simon, and that was a really interesting conversation. But maybe that day will happen at some point. It's out of David Nicholson and Mark Simon's hands because they— their bosses are private equity folks, and maybe they sit in a a wood-paneled boardroom at some point in 3 years and say, "We're bringing these 2 companies together with a couple billion dollars. Boom, let's go at it." And I'm thinking about the day if that press release hits our inboxes in a couple of years. And on one hand, I think there'd be a lot of people who would say, "You know what? I'm just packing up. I'm out of here." But to Jamie's point, this business and this industry is so fragmented. There's new and exciting people that are popping popping up all the time. It's like a game of whack-a-mole, so to speak, you know, in a good way, in terms of like all these new people that are popping up that you hadn't heard of before. We just gave the example of Jeremy Picker at Amber Creative. Where did this guy come from? He's, he's an absolute monster when it comes to creativity and potential in this business. And yet 4 months ago, we had never heard of this guy before. So I think that's a really interesting example of where sure, PCNA and Halo may be connected. I'm not making that prediction. So I don't want to start rumors, but that may happen in 5 given the corporate relationships between those two companies. Do I think it'll kill the Right Sleeves and the Farewears and the BDAs and the, those types of companies? No, I don't think so.

So there you go.

That's all I have.

One thing that the three of us had, I think, down fairly well was a unique value prop for each of our customers. And if you don't have that, if you're still in, you know, 1980s selling cheapest swag, you, you could have more of a challenge. I think that's where when we ask this question to maybe folks in the industry, maybe Paul or Tim's perspective, they're seeing a larger conglomerate, and we're sort of coming about it from our experience where clients valued the services and the products that we, that we sold. Uh, moving on, what do you guys see as the biggest opportunities in the industry?

All right, I want to go first because I— well, first of all, I love Mark's answer, and, and I would actually welcome what he described in the future because I may— how amazing would that be to see how that would actually work. And I know, you know, we're going to probably touch on this subject again in some way, shape, or form in this conversation. So I'm going to come back to the biggest opportunities because I think it's the exact opposite of what we were just talking about. And I think the biggest opportunities are for the boutique agencies and for the small maker brands. And I think that because I think catering to niche customers with, you know, a unique product or unique service offering or a unique purpose or story that really resonates with the consumer is really valuable. And I think that that part of the market's gonna grow faster than any other part of the market. Now, in relative terms, because everyone wants to weigh things based upon how big somebody is, which isn't an indicator of value or quality, I think the boutique agency and the small makers are gonna do some really cool stuff. That the idealistic younger generation of people who kind of arguably have said that they value experiences more than things, well, things can be experiences if they're done really, really well. So to me, I love that space and I think we're seeing it play out at retail, right? So like malls are getting crushed and chain stores are going bankrupt and then the biggest of the big, so Walmart, Amazon, Target, they're all doing well and they're doing well with their audiences that they cater to and and they have their USPs. But you've also got this, again, like our industry, consumers with all differing requirements. So some really care more about convenience and some are looking for luxury and others are just looking for something different. And for those who are looking for something different, up pops a billion-dollar platform company in Shopify supporting the growth of all of these cool digitally native brands that are bringing bringing really, really cool stuff to a market and capturing the interest and loyalty of a large population of consumers, mind you, all kind of in small niches. So I think that could play out in our space and then the big could continue to get big and that's fine. But if you look at, I always try and like kind of compare what's happening in our industry to what's happening in big advertising and the large holding companies, a couple of them are still doing okay. WPP as one is kind of rethinking their strategy at this point they're doing more divestitures than they're doing acquisitions. And then you see a big tech consultant like Accenture come in and buy an awesome creative shop like Droga. And then you see these small and mid-sized shops who you've never heard of before, kind of like what Mark was saying about playing whack-a-mole. They're coming in and winning huge assignments because they've got a unique perspective or they've got some new skill that they bring to the table. So for me, I like that dynamic. I like how it— I think it's going to play out in our industry. And I think if you're a niche specialist, you're in a great spot. If you're a generalist, you're probably coming into some rough weather.

I think that what you're saying, Jamie, is really illustrative of the long tail phenomenon that you see alive and well today, right? You mentioned Shopify, you mentioned Amazon, you mentioned these platforms. That have been able to really celebrate and unearth these quirky maker brands that are doing things that are really original and they're building a loyal following. And that's magical and that's what makes those platforms so successful. And if you think about Amazon and Shopify's platforms, the promotional products industry is also a platform. It's a platform that has got technology service providers, it's got suppliers who make things, it's got distributors who go and sell things, and then of course you've got end clients who hopefully demand those those things that we can supply. If you look at the promotional products industry like a tech product, you've got the— what do they call it? The short head. The short head are the big guys like the Halos and the Axises and the Sunrises and the Proformas and all those companies that are doing great work at scale, going into suppliers and getting great pricing and they go out to the big Fortune 500s and they deal with their purchasing departments and they can deliver deliver a global solution at scale, and we absolutely need those folks in the industry. But then you've got this long tail of folks that are doing some really interesting work that are really defining the success of this industry. I just don't see, just going back to this earlier point, I just don't see an industry that is filled with just a short head. I think it would be a really boring industry. I think that the demand would dry up because you'd have a bunch of people that are used to dealing with purchasing departments and there's no creativity there. And so you really need to have an interesting yin yin-yang. And I think that we've seen that dynamic has not really changed in terms of the short head, long tail of our industry over the last 10, 20 years.

I'll add one thing. It's kind of echoing Jamie a little bit, but it's this experiential marketing that's, that's now has this term. I've stated before that merchandise has actually always been, when it's done very well, when it's done right, is the original experience, is the original experiential marketing. And if we get our positioning and our value right, then we get our pricing model corrected, we're going to meet a pretty high demand for more and more intimate emotional experiences in the market. And that's a huge opportunity for distributors, whether you go to market as an agency or not. It's a huge opportunity because it's going to put a value on the product like we've never seen before.

Well, yeah. And I think, you know, ultimately this comes down to human behavior. And I think, I mean, we just had the Super Bowl, there were some really great television commercials and there were some that were not so great. And it's just like merchandise, there's some merchandise that's really, really great and there's some that's not so great. But what's different, I think, is how people interact with the mediums. And I go back to an experience I had a few years ago at CES in Vegas. And this was a time when GoPro was blowing up and everybody had to have a GoPro camera. So you got a hot brand and combined with kind of the fervor of the adventure kind of activity. And I walked by their booth and it's kind of like normal traffic. And then they make an announcement and they say, "At 3 o'clock, we're going to do a special promotion, a special giveaway." At 3 o'clock, that place was standing room— like you were shoulder to shoulder with people. They were out in the aisles and some guy just comes in with an air cannon and starts starts firing off GoPro shirts into the crowd and people, it was like a riot. And so it was a great shirt, a great product, a brand that was hot. I've never seen anyone ever behave that way over a television commercial. And I always believe that this merchandise is, like you said, Bobby, it's an experience. You do it really well, it makes people behave a certain way. And if it's done responsibly, then hey, all the more power to us. But I've been lately saying, and I go back to advertising specialty, Specialties, which was kind of the first name for the industry before promotional products. And I'm like, this advertising specialties are advertisements. And if we kind of think about advertisements as creating value and buyer demand and all these other things and awareness, as opposed to, you know, giveaways and swag and tchotchkes and the other stuff, then I think we're in a better place.

Yeah, that's a great point. Sustainability. How do you see sustainability and the efforts to become more sustainable impacting our industry in the next decade? Jamie, you made a comment so true on Twitter this time we stopped viewing seeing this as a trend. And in our podcast with Jim and Melissa from Numo, they had a great point about speaking to sustainability from a much broader perspective, meaning build meaningful products that people love, less shit, and we'll work toward sustainability. But what risk does this industry face with sustainability in the future? Thoughts on this, Jamie? Why don't you go first since I know you've got a strong opinion on this?

Yeah, I gotta keep my mouth shut.

No, bring it.

I tend to spout off. So, So, you know, we're a consumption economy, right? So we need to consume to be viable and healthy, you know, from an economic standpoint. So the machine's got to keep running. But the question I have is, can we make and consume in more sustainable ways? If we're not going to slow our consumption, can we do a better job? And so I believe the answer is, yeah, we certainly can. And I think there's a lot of innovation and there's a lot of the capital that's going into solving problems that we all see, like plastics and the pollution that comes with that. And not just environmental issues, but sustainability around living wages and traditional upcycling, recycling, things like that. And my tweet was more about challenging the definition of sustainability and broadening it. And then I had the question of, are we prepared to shrink our industry to we can maybe walk away from some of the ills of the past and start afresh. And so questions like, do we need as much as we have? Are we willing to upgrade to fewer, better things? Those questions remain to be seen for me. And I could be way off base because the end user customer and the end user brands, they are not aligned in their own sustainability strategies. And frankly, they're not even walking their their own CSR walk when their buyers are willing to sacrifice their own core values in the name of price and cost savings. So I think they need to get their act together too. And I wouldn't be surprised if you read in the Counselor, the COVID of the Counselor, you know, they have the person of the year and I think one year it was China, right? So maybe the person of the year is going to be sustainability because there's no hiding from this at all.

The way this is going to be played out in the trenches, what you just said, is today, right now, when that distributor gets that order for 20,000 stress balls, there's where the moment happens, right?

Can you imagine a time when someone says, no thanks, I'm not taking that order?

So I, I think that I have always viewed sustainability more through the lens of how effective the product is at actually just sticking around in the client's hands. So you could make an argument that, hey, I produced 10,000 bamboo straws, okay? And they've been produced in Toronto, they're made in Canada, the materials are all biodegradable, everyone feels really fantastic about them, yet the distributor then hands or produces them for an end client who distributes them to an audience that doesn't care about it at all. They hand them out at a trade show and then you see all these plastic straw or sorry, these bamboo straws thrown in the garbage 3 feet away. And we've seen that. So to me, is that sustainable? I view that as a travesty because you've got a mismatch in terms of the product and that end client, even though the product itself may be sustainable from an eco-friendly standpoint. If you contrast that with a product that has been designed with care, with designed to understand the marketing objectives in place, understanding why the end client is handing this out to their client and everything is completely aligned there. And then, so let's say it's a t-shirt that's being handed out or a hat or something. I mean, the GoPro t-shirts is a fantastic example. I can tell you that each and every one of those people that received one of those shirts is probably still wearing that damn shirt today. And to me, that's the ultimate definition of sustainability. Now, you could say, well, how was that shirt made? Was it made in a way that wasn't environmentally responsible? I do think that's a very important conversation to have in parallel. But at the end of the day, I see that as a net positive for sustainability. And I think that that's really where the industry has to go, is, is kind of really holding themselves accountable to whether there's a demonstrable ROI on these products that are being handed out? Like, how do we know that people are actually hanging onto them, that they care about them? Because that's really what sustainability is for me.

Yeah, it's interesting. And I think Paul and Tim brought it up to the two of you when you spoke to them is that, you know, there isn't any one definition of sustainability. I mean, if you ask an expert like Denise, you know, she has a very intelligent and broad definition of sustainability. And I think we probably need to get clear, more clear on that because when you talk about going deep into supply chain saying, that brings up a whole host of different topics. But I think, Marc, what you described to me with the bamboo example just now is, to me, it's like, is it good advertising or is it bad advertising? And was it sustainable? And so, I mean, a bad television commercial is not sustainable either. I mean, you fly a crew halfway across the continent and burn a bunch of jet fuel. And I mean, so we need to define it better, I think.

For sure. Onto another subject, diversity. So the lack of diversity in our industry is painfully obvious. We've talked about this now for a few years. Are you guys seeing positive changes in the industry when it comes to diversity? Now we're going to walk through the minefield.

See, this is the thing. I'm just answering from my own perspective, and the answer is no. It doesn't mean that it's not there. I just am not seeing, I'm not seeing change. There may be marketing communications that's addressing the topic, but I can't personally to say, you know, that I've seen any real change.

Yeah, so I, I was really fascinated by that conversation we had with Paul and Tim specifically about this, and I think it was Tim that had said something about how the frontline salespeople in this industry— there hasn't really been a lot of change in terms of diversity. You still see a lot of middle-aged, uh, white guys that are walking around the trade show floor as salespeople, but where you're really seeing a lot of the diversity improvements is either back office or marketing or social media or the folks that aren't in sales roles. And I thought that was just really interesting. So that was a good observation from Tim's perspective. I think that we do continue to have a problem around diversity in the industry. And what I wanted to, the point I wanted to raise, and I'd be interested in your feedback on this, is I think we have to be a lot more intentional about how it is that we solve this problem. The reason I say that is, as an employer, you could make the argument very quickly that you may claim, listen, I posted an ad, I'm not discriminating against anyone, but the only people who applied were white, middle-aged dudes. There were no people of color that applied for my job. So as a result, I can't be held accountable or responsible for this. And you know what? I sympathize with that and I can see that person's point. Listen, I'm an employer who posted tons and tons of job ads over the years, right sleeve and common skew, and I could also make that same argument. But I think that if we are more intentional around how we are going to go and beat the bushes and really create treat our companies and our industry as a place that's attractive to people of more diverse backgrounds. And I think that's on us. And so what does that look like? It could mean being more proactive in different communities in terms of talking about the power of promotional products or why it is that Common Skew or Right Sleeve or BDA or Robin are fantastic places to work in different environments. And so listen, I don't have the solutions whatsoever. I'm a white 45-year-old male that's making this comment. But what I, what I do think is that we need to shift our approach into being more proactive and more intentional and not relying on, well, I posted the job ad and I had no women apply. That's ridiculous. That's still on us, and it's something that I think we're continuing to figure out. And, but I'm very hopeful as we see younger people getting into the space that we're going to solve this problem.

Right, Mark, I think you bring up a really good point. And I'm— yes, I'm aware we're, we're 3 white privileged males having a conversation about diversity. It doesn't negate the fact that we can talk about this. We've all run businesses, we've all hired people. I see this too being on us in terms of changing how we look at who we hire. You know, it's interesting that over the past decade or So the term cultural fit arose as a major indicator for companies in the way they shaped their businesses. In some ways, we overcompensated with cultural fit, and often we ended up recruiting only types who think and look like us. And what I think the shift needs to happen in us is not so much thinking about the externals, but the intrinsic worth of a diverse opinion being brought into your business. I mean, innovation is born out of ideas shared from different perspectives. Period. And so when we think we are just hiring for that position, we need to think of the intrinsic value that someone from a completely different perspective than ours can bring to our business. And because we need it so much as we face our own market, you know, the, the more dissimilar we are as individuals, the greater our potential for success. So I, I think you're right, Mark. I think we need to proactively seek candidates who are culturally additive rather than those who fit in. And purposefully cultivate diversity of thought.

That's such a great point because I think, again, it comes down to how do people define diversity, right? And diversity of thought is far different than I think some people's definition of diversity of cultural background or what have you. And like you said, I think as business owners, everybody wants to build the best team that they can to take care of the customer in the best way that they can. And if they felt that the answer to that was getting a bunch of people who have broad backgrounds and different experiences and think about problems different ways, we would all be super happy about that. But I look at my own experience on the North Shore of Boston, which is not diverse and it's not considered an urban environment or city environment. I mean, we're far, not far removed, but we're removed from Boston. And so if you look at the demographic and you look at the geography you look at the candidates who are willing to commute to where we're located, it's a very limited audience. And I would describe it as not diverse. And so those are constraints that are real that for the most part, we don't have any control over. And so this is where I'm kind of miffed by this whole topic because if you look at our industry, which I think is incredibly collegial and I think it's incredibly inclusive, I think people are super supportive and nice and helpful, which are nice characteristics, but also we're across the entire country. I mean, our industry's in every market. And I just don't know why our industry isn't more of a reflection of society as a whole. And I think that's for people a lot smarter than me to contemplate and come up with answers. But I think everyone's open to what we're talking about.

I think one observation is that you still have a lot of hiring from within in this industry. I think a lot of traditional distributors will hire other salespeople at other distributors. Call that poaching, call it whatever you want. And I get it. If it's a traditional distributorship, you're looking to recruit another salesperson that might have a nice book of business, they can hit the ground running. Non-compete clauses maybe notwithstanding. But that happens a lot where you go to the expo, there's lots of salespeople that are speaking to each other trying to recruit one another. That's kind of the traditional distributor model. And if I reflect on my experience at Right Sleeve back in the day, we tried that route early on to try to hire another salesperson from another— that had industry experience. And it was okay. It didn't really work out all that fantastic. And I think what it taught us is that there was actually a lot more opportunity for us if we hired people from outside the industry. So not necessarily people of color, like we weren't intentional about it from that standpoint, but I'm just going back and just reflecting on the fact that we had this advantage around diversity of background and diversity of experience that was from outside the promotional industry. And we always remarked, you know, that that was a great move for us because yes, we had to invest a little bit more in getting them up to speed. Yes, there was a chance that they weren't going to work out, but for the ones that did, my goodness, just absolutely phenomenal in terms of results, in terms of sales and culture and just making the organization what it was. So I'm just sharing that as an experience that I think that's another route to diversity is not hiring people from within the industry just because they have industry experience and, and, you know, maybe thinking a little bit more about the benefits that come from people who are totally green and come from other backgrounds.

Looking ahead at the next decade, we already talked about suppliers going direct. Something we haven't discussed yet is distributors sourcing direct. And maybe we're falling prey here to another echo chamber conversation, but sourcing direct will likely become more and more— has become more and more demand. And I think it's a skill set that needs to be developed by distributors. Yes, I'm aware of that, the risk of pissing off suppliers, but please be patient with me as I try to vet this out. I'm at a crossroads where I want to know from suppliers when it makes sense. And maybe, you know, I have a feeling Jamie might answer this way. I don't put words in your mouth, but our, our, our job is to the customer and what it is that they want. You, Jamie, have had experience as both a Swerpoint and at BDA about what we would call sourcing going direct. Am I wrong in my assessment that more and more distributors are going to be faced with this challenge? Is this a matter of, or is the supplier market always going to be sufficient for that?

Well, I think your guess is as good as mine. And I think this is a topic that's, you know, it's over the course of many, many years, it always comes up and really hasn't changed. And I think for the distributors who don't really add anything of value beyond the item and they're just competing on price, then yeah, they should have some direct sourcing capability if that's all they really bring to the table. And I think, but there's so much more to the conversation, right, as being a distributor. And that's, you know, rather than, and my feeling is if you're going to invest time in learning something, I wouldn't invest my time learning in direct sourcing. I'd invest my time learning about marketing and all of the new things that are happening within marketing or invest my time in actually understanding what the meaning of branding is because it's not decoration. And so, I think there's some misperception too around specifically around BDA, which is where I was most recently. And I'm not going to speak to their strategy in particular or share the secret sauce, but there is a perception that they go direct. And it's actually wrong. They have a large team overseas and that team is entirely focused on quality and logistics and the money that they spend on product that's quote unquote coming direct overseas is actually coming through their supply chain partners. So they're incredibly respectful of the parameters within the supply chain, but they're also really, really good at managing their supplier relationships and negotiating that. I think people just assume that, you know, they're buying direct. And I'm not going to say one way or the other, but what I will say is BDA is incredibly respectful of the parameters and the constraints of the supply chain, and they rely on their supply partners, the rest of us.

That's a great point though about where you're going to invest your energy. You have a finite amount of time that you're going to invest in your expertise, and that's better left to others for sure. Mark, any thoughts on that?

I know there was an interesting discussion about this on Common Skew just a couple of days ago where there was that very debate of soliciting other distributors for their opinions about quote-unquote reputable direct factories offshore. And I don't think the post was done maliciously. I think it was just honestly like, hey, I'm just looking for a product category or a product quantity that the traditional supply chain can't accommodate. So I want to have another supplier who can do this for me. Me directly. I genuinely believe that that's where it was coming from. It inspired me to jump in with a comment to share some of the experiences I had at Right Sleeve over the last 20 years. And the whole view was that for us, it just was not worth the risk and the exposure to go outside of the traditional channel. And I always knew that if I had a really big opportunity where price was critical, that I knew I could share that condition or that maybe that challenge that I was trying to overcome in a collaborative way with the supply chain partner and say, listen, this customer is really grinding me on price. It's not going to make sense for me to do this order unless I can get this particular price. So there's no harm in negotiating hard. But what's amazing to me is that in every case, the supplier was always able to come back with a great solution that married great pricing, but also had all the other things that are really critical, like product safety, making sure that the sampling process was done in an efficient way. And I would say most importantly, making sure that damn order arrives on time. And all those things were absolute peace of mind for me. And I gave this example of we once did this like great order. It was hundreds of thousands of units. I think the order came out to be something like $600,000, which I know for a big shot like Jamie, that's like, he does that in a morning, but for a small fry like me, that was a big deal. And what was interesting is that when working through all that, it was with a big Canadian telecom. You'd think that they would've grinded us on price and we walked away making about a 41% gross margin. It was huge for everyone. And we worked with an industry supplier. And after that moment, I vowed that it would've been such a waste of time had I made another 6 points if I'd gone gone over to Shenzhen myself and found some supplier, I would have died of a heart attack, I can tell you.

Right, right. We can touch on this lightly unless you guys think you want to lean on it heavily. More and more distributors are being faced with clients who have an international footprint and need to either source overseas or align with overseas partners. And as businesses continue to expand globally, this is a new sourcing partnership challenge. Do you see this as potentially a problem for most in the next decade or still going to be just in the niches and the folks who are doing program business or working with the Fortune 100s or that type?

It's the niche, the biggest of the big probably who have the enterprise client that have the multi-geo locations around the world that either have to figure out what their service offering and their support model is going to be in those different parts of the world, whether they partner partner with a network or they start establishing their own outposts around the world. But I think for most people, this is a very limited challenge. And for the ones that do face this challenge, it's daunting because, yeah, it's so complex. But I do think it's a pretty limited group of people who are having to deal with it.

I will say over the past, probably in the last 5 years at Robinhood, I saw more and more of those requests come through that we were actually getting more program requests because they had a larger footprint and it was a challenge and it's going to be a challenge. It's still going to be a challenge. I think there's some progress being made. All right, let's move on to consolidation. I'm talking to two distributors who both had their businesses acquired. Will distributors see the kind of consolidation in the next 10 years that suppliers have seen? And are we in the middle of that currently? And in 5 years, we'll look back and realize that it was a fast-growing trend suddenly.

I think Mark should answer that first.

Mark?

Oh boy, I was just waiting to— I was just ready to surf behind you on your great comment there, Jamie, so I could, you know, I could, you know, try to look good. All right, so you're right, Right Sleeve was acquired a few months ago and great decision for us and we're really, really happy with how GenuMark, the acquiring company, has, you know, continued to grow and invest in Right Sleeve and it's a real source of pride for us. That said, I actually remember having a text conversation with Jamie Mayer after the Axis acquisition and I think we were having a conversation about, about, you know, the future of the top 40. Like, what's that going to look like in, in 5 years? And my, my prediction is that acquisitive companies like Halo and other folks that are like them that have got big balance sheets and, and some private equity behind them will continue to find these smaller distributorships that are run by folks that are looking for the next chapter in their lives. Um, there's a whole bunch of really successful distributors that are in their late 40s and 50s that have built these companies. They may be between $10 and $50 million right now, and they're quite honestly looking for chapter 2. And I think that you're going to see a fair amount of activity over the next 5 years just with entrepreneurs that are looking for a liquidity event in their business, and companies like Halo will have the money to buy them out. So I think we're going to see a lot more of them. I think in 5 years, the top 40 will look very, very different, even if that list even exists in 5 years. But what we said at the top of the program is that, well, I see companies like Axis and folks like that continuing to sell. I think that you're going to see this elevation of the smaller companies that are going to grow up and are going to find market share that's either new market share or maybe market share that they can take from some of these bigger companies that may now not be interested in the smaller accounts. There may be a mandate now to go only after global business, whereas before, you know, they were big regional players. Um, I think, Jamie, you may have had some experience with that as, as, uh, you moved over to BDA. And I think that that's a tremendous opportunity. But short answer to the question: yes, there will be lots more consolidation. This is not the last of it, that's for sure.

Mhm.

Yeah. And I think to Mark's point in the conversation we had last week was, you know, the, the ages and stages of founders looking to either have their second act or they know that they're done and this is their opportunity. There's liquidity event on the horizon. That's all driven by cycle, right? And so we're in this cycle now where there's plenty of capital and that capital has to be deployed because PE firms don't make money sitting on cash. They have to put it to use. And as long as they're getting the returns that their investors expect, and they have quality M&A targets that are going to produce the returns that they need, the capital will continue to be deployed. But the constraint will be, because there's more capital than I think there are good deals, the constraint's going to be at what point does the well dry up? And I think there's still a lot of really good companies that are going to be on the market, If you think of the Axis deal, that's a prototypical great deal where it's a great company, great brand, going to go into a business that has an amazing engine for M&A. And Larry was at the right time of his career and probably his strategic plan where it made a ton of sense. And I think there's more Larrys out there. And so to Mark's point, I agree. I think there's going to be more of it. I think the only thing that'll put a grinding halt to it is if we get that recession interruption, and then capital might get a little bit more cautious. But right now, I think it's full steam ahead.

We already touched on private equity. Jamie, did you want to add anything to that conversation? I know Mark mentioned something.

Yeah, I think the last point I want to make on it is, as private equity comes in and it targets deals that will meet their IRR requirements, those tend to be larger deals. And I think what happens is it tends to spin off a group of people who may have been within those acquisition target companies who really enjoyed the culture, they enjoyed being creative, and now all of a sudden they're in this organization that has a whole different set of metrics to evaluate performance. And I think what that ends up doing is the creatives and the free spirits will spin out and spin up new creative shops. And I think it's all energizing and I think it's exciting. And I think the more of it, the better our industry will be. So I have— some people are down on private equity. I'm a big fan of it.

Growth projections. You guys want to take a gamble and offer a prediction on how much the industry will grow by 2030? I think we're all bullish on this.

I'm boring. Bullish and boring. 2 to 4% 4%. I just think it's going to follow the general GDP and that's about it.

Yeah, I tend to agree. I don't know that the industry will grow dramatically, but what I will say is that from the experience that we've had within the common SKU subset of the industry is that there's a really exciting growth rate that we've seen over the last many years of the distributors within this subset that is growing considerably quicker than the industry. I don't say that as an advertisement. There's no question there's other pockets of the industry that are growing more rapidly as well. And generally those are the folks that are doing things in a more creative entrepreneurial way, maybe a little bit more deliberate about how it is that they go to market and position themselves as opposed to being the folks that are grinding it out with the mega global contracts where they're having to adhere to these cost-plus models that I think put a limit on growth, to be honest.

Yeah. Something we haven't talked about yet, we kind of talked a little bit in different aspects, but what does the customer of the future look like? What are, what are their, I mean, I think this is a critical conversation for us to have. What are their expectations regarding technology and speed and creativity and sourcing and solutions? Jamie, what do you think the customer, how is the customer going to change over the course of the next decade? What are their what do they look like?

You know, I think the customer of the future looks a lot and acts a lot like the customer today, but there's more technology, there's more flexibility around the technology. I see more app-based solutions that drive flexibility and customization for those customers. And I think they're gonna demand more things outside of just the product and the product information. I think they're really gonna demand commercial insight. I think they're going to justify their purchase decisions with information around trends. I think purchase data that's driven by the purpose of the purchase and information related to that, I think is really going to become more important to the future customer. I think they're going to look for ideas that wrap merchandise into other mediums and marries it with things like digital and direct that have the ability to provide real clear analytics because I think, you know, our medium, we've always struggled with really what is the ROI of a thing. But I think when we have a solution that kind of brings these other things to play, that to me is what the customer of the future is going to demand.

Jamie, absolutely bang on, fantastic answer. And I think the only thing that I'm going to contribute to this is I want to share the fact that I've been an end client for about 5 months now, exclusively an end client. So Common Skew, in, in the, in the way the industry operates, is very much an end client, just like Google or Shopify or, you know, anyone else that we would have sold promotional products to. That's really interesting. So I work with a really interesting team of creatives here at Common Skew who are also end clients. So I'll specifically mention people like Kate and alley, and they're young, intensely smart, creative, and motivated marketing professionals. It's so fascinating for me to sit down and talk about promotional products with them as it applies to our brand. So it may be around an event, it may be around a holiday gift we want to do, it may be about some kind of customer engagement opportunity. And it is fascinating for me to sit back with my distributor experience and see how these marketers who have never been in the promotional products industry as a supplier or distributor, they've only been in the promotional products industry because they happen to be marketers of promotional product software. And to hear how engaged they are and also to hear and witness their massive level of expectations around the medium in terms of what it needs to deliver and how they value it. It, in one hand, it's damn intimidating. And the other hand, it's damned exciting and inspiring. And I think to myself, pity the distributor that would have to deal with these two marketers, not because they're tyrants, but because their expectations are so high in terms of how they expect to be inspired around product and what it will do to help them deliver on their marketing objectives. And it has been so freaky for me to see it because I'm like, wow, this actually exists. I'm actually interacting in a really authentic way with end clients, whereas before I was the guy who'd show up and I'd be kind of the swag guy, but it's sort of cool. I'd be sort of invited into like the executive suite just for a little bit. I'd share my strategic ideas and be like, okay, you can move on. Now I'm actually front and center. And sorry for that long story, but it, it, it is to say that these two people that I work with are very much the customer of tomorrow, and they are incredible to to work with, but man, are their expectations high in terms of ROI. And I think that's really exciting as opposed to scary.

Yeah. And to that point, Mark, boutique sort of agency-minded distributors have been facing this for a long time, but more and more distributors are going to be faced with a changing customer that wants a boutique experience or a unique experience with their merchandise, which, which means that maybe they're not seeing the dollars in terms of the overall gross sale of the product or the overall price tag of the merchandise they're selling. And we have to really get back to service charges and creative charges because more and more young buyers want to create— they want a unique experience for them in their personal life. And they have a unique imprint that they're making on the world. And when they bring that behavior into the corporate market, they also are bringing that attitude with them that we want to create a unique experience. So I think more the customer of the future is going to require more and more unique identities to be created, which means, I think, a little more complex. I think Jonathan might have said this, that he's seen more and more complex projects than ever before.

Yeah. Yeah. And the fact that our medium is so tangible is something to get excited about, right? You see, you see the pride that these marketers have when the product comes in, has been designed correctly, and you can then see the impact it has on their customers, right? Because you see it all over social, you see it when you're interacting and giving it out to them and you're like, wow, this is actually delivering our marketing objective and makes that marketer feel like gold. And talk, talk about that as your deliverable for a distributor. And as they say, the stakes have, have risen, and I think they will continue to rise over the next decade. But I can tell you, I'd much prefer that than some, you know, uninvested end client who's like, you know what, just get me some stress toys, I've got a trade show next week, like, I just need to order some shit. Can you get it for me? And those orders were a little bit more prevalent 10 years ago.

Yeah. Well, and I bring this up too because I know more— you guys know too, I have more and more distributor friends that are right now facing this challenge. If somebody comes with basically a $20,000 budget, you know, you've got a 40% margin on this project and the amount of time and intense amount of creativity and sourcing, complex sourcing that's going to go into creating a unique identity collaboration project for them. That's where we got to get our service fees act right in order to face that. And then we'll face pay it happily. Once we, once we sort of understand that that's the new demand from the market and we put on our hats, you know, you guys, we've all done this before where we have clients who are demanding more and more, we raised our prices and then we were always shocked that they were happy to pay those. We've all had that moment. That's kind of the moment we're having as an industry with these complex projects too.

I have a point, and I'm sorry to interrupt and just jump in here, but what Mark was saying I think is so important and there's so much nuance to to it, but it's not nuanced to him because he's the marketer, he's the customer, and his team are the marketers and the customers. And you think of how they talk and what they talk about. They talk about, let's do something that's going to engage our customers and drive participation, or let's do something that's going to generate leads based upon this event that we're planning. I don't think the conversations are, wow, let's buy hats. Oh no, let's buy jackets. And that's to me is the whole broken telephone game from the supplier to the distributor to the customer. And I think the supplier is so far removed from what the purpose, you know, the marketing purposes are or the business purpose. They're so myopic around, you know, their mug being the best mug. And then the distributor comes along and they start parroting what the supplier has told them in the P case. Session, and they kind of spin it a little bit, and then they sit down with the marketers and they'll be like, so, you know, I have some new mugs. Can I show you the mugs? And then we'll back into how I think the mugs can help you with your lead gen program. And I just think the whole conversation is so busted. And when you think about like the mega deal, so like, and not to again, go back to like, well, we're not starting rumors here, but just think of that. The supplier, the mega supplier would need a mega distributor. Distributor to translate for the end user. And I think it just opens up a whole can of worms. But I think Mark's example is so important and poignant because he now, and he's always done this because he's been able to be on both sides of the fence, but now he sees it clearly because he's just a customer. What he thinks about and worries about as a customer and a marketer is still so far removed from how distributors are wired. And for those that really can be empathetic and really have been the customer, they're ones I think that are going to move forward and succeed faster than the rest who are just— they may have a creative way to, to sell their product, but I don't think it's going to connect the way Mark just described.

Right. For the final question, Mark, I want you to answer first and then let's let Jamie have the last word. But I always love irony. You've both sold successful distributorships to, respectfully, two of the largest distributors in the industry in the US in Canada. You both know something about building a successful business, positioning, profit, staffing, marketing, sales, technology. You know the ins and outs. You decide tomorrow to put this whole conversation in sharper focus. You decide tomorrow you're going to get back in the business. How would you do it differently?

Oh man, what a tough question.

And the answer may be you wouldn't.

You know, okay. I have the luxury luxury of being just down the hall from the business I started and recently sold. So Right Sleeve and Commonsku were in the same office building, separate offices, but I could just walk down the hall and I can go hang out with my former colleagues. And when I look at the work they're doing and the trajectory they're on since the company was sold, there's actually a part of me that's like, hey, do you guys need a new sales rep? Because I I'm obviously kidding because I love what I'm doing here at Commonsku, but I just see the ramped-up investment and commitment to a few things. So number 1, culture. Number 2, design. Number 3, how marketing is playing so much an even bigger role at the company now than it was under my leadership and Catherine's leadership. I'm so excited and proud of that. And it's the exact same team. It's not like Jenny Mark came in and fired a bunch of people. People and brought in their people. It's the exact same team. So if I were to get back into the business, I would want to be doing exactly what Right Sleeve is doing now. And I don't say that with bias because I'm not involved in it anymore. And in some respects, maybe us leaving the company has allowed them to flourish even more than they were under our leadership. But that combination of investment in culture, investment in marketing, and investment in design to power the distributorship to increase margins as well as increase growth and increase relevance within the advertising conversation with, with prominent end clients. To me, there is no greater sweet spot than that, and I hope that, that will continue, but all signs point towards it. And Right Sleeve is certainly not the only company that's doing that. There's plenty of incredible distributor brands that are absolutely kicking butt, and I'd want to join all them as well?

Yeah, I don't have as fun or creative an answer as Mark's. My answer is simply, how would you do it differently? Well, I think the first question was, would you get back in? And the answer is, yeah, I would totally get back in. I mean, I love this industry. It's a ton of fun and I've met amazing people like you guys and I have a lot of friends. And so I would totally get back in, but then I would just— the number one thing I would do, I would use somebody else's money. I would not bootstrap it. I would not put my house on the line and my family's future and safety. I would totally do it differently now. And I think again, that's an ages and stages thing. When I was 30 years old and the kids were, I think at that point, 3 and 1, and you're kind of like, ah, 30 years old, I can figure this out. And now I look back and I'm like, you're an idiot. I can't believe the amount of risk that you took on in and the debt that you took on to do it. I wouldn't do that again. But what I would do from a business model perspective is I would create a family of brands, all different niches but complementary to each other that if you actually tied them together, they could provide this really unique enterprise solution. But independently, they all focus on different aspects of not only the market, but different aspects of different personas within enterprise clients and I would just tailor their product and service offering to them, I would deliver a new model to, to the industry. And, you know, that might happen somewhere down the road here.

Yeah. Well, guys, the hallmark of a great conversation is that you don't realize that time flies. We've been talking for an hour and a half and it didn't feel like that at all. So thank you both for just considering this topic and for wrestling with these topics. I know it's an industry we all love, and I hope those that have listened are able to take some of this that we've shared and use it for their benefit in building their future.

Thank you. Thank you, guys. I always really enjoy spending time with you, and I always learn a lot and have a ton of fun.

Thanks so much, man. Thanks so much for tuning into this episode of SKU Cast. Be sure to keep up with our latest content by subscribing to SKU Cast on iTunes or to our blog at community.comandskew.com. Until next time, friends, thanks so much for listening.