Grow Your Business

Who hasn’t used an umbrella with a bank’s name on it, or a mug emblazoned with the logo of an insurance company, or a pen marked with the name of some vitamins? Practically no one. That is the power of corporate giveaways, part of what is known as below-the-line advertising. (At the other end of the spectrum is above-the-line advertising, which uses print, radio, TV, and outdoor media to reach out to its target market and help keep the brand top of mind.)

Stanley Kuy got into the business of corporate giveaways in 2005 because he saw that companies of all shapes and sizes are “trying to create or retain consumer-brand partnership recall for further business opportunities” through below-the-line advertising.

Crunchie Cervantes of The Crunch Workshop, a staunch below-the-line marketing and events management practitioner, says “We noticed that more corporations are diverting ad funds into promotions and non-traditional efforts like events and sales promotions. I saw great potential in the corporate giveaways business.”

The amount of investment depends on the depth of involvement in production. An option is to outsource everything and pass on the items to the clients at a markup. Depending on the volume, initial capital may be as little as P10,000 for small items such as pens or acrylic paperweights, although the downside to this is the small markup and the difficulty in customizing giveaways to the clients’ exact requirements.

Cervantes spent P40,000 on a silkscreen device, initial samples, and business permits. With the silkscreen device, he was able to paint the clients’ required designs on almost any surface, with mugs, garments, bags, and pens being the most popular ones. Ethel Antazo of Country Primemark already had sewing machines available, so she spent about P80,000 to produce 2,000 pieces of tote bags and cell phone pouches. A computer, printer, scanner, and a fax machine, all which would cost at least P20,000, are also needed for the business to be more efficient.

It is also helpful to invest in good quality digital camera so you can come up with good product shots to use for your own brochure. “A brochure and a list of products and services are very important,” says Kuy. “Remember to make your brochure presentable and creative. Photos should be clear as they reflect the quality of your products. Your list should be extensive; you don’t want to miss anything and find out that they ordered from your competitor.”

GETTING STARTED 

If you decide to make your own products, you will need either some experience or training. Antazo had worked in garment production, while Cervantes took a silkscreen course at Argon Trading for P30,000, inclusive of a silkscreen device, initial printing kit, and hands-on trainings in production, marketing, and costing of all kinds of corporate giveaways.

Also, tailor-fit the products you offer to your client’s image. Do a little research on the companies you intend to approach so you can pitch the perfect product.

Reliable suppliers are essential. Antazo, Cervantes, and Kuy all source their basic products from China, Korea, Taiwan, and Hong Kong. “But some of the best suppliers are here in the Philippines,” says Kuy. Locally, the best bargains can be found in Divisoria, and Quiapo in Manila, and Caloocan City.

“Trade fairs are good places for looking for suppliers,” says Cervantes. “We look for direct manufacturers and suppliers who can customize a product for us. Of course quality is a must and the price should be competitive and affordable.”

Know your production capabilities. Depending on your equipment and suppliers, silk-screened items like pens and mugs can take about two weeks to produce. The made-to-order stuffed toys and mascots that Kuy produces take about three to four weeks. Make the client aware of your lead-time and deliver on your agreed-upon schedule.

“As long as businesses are running, the prospect for giveaways stays,” says Kuy. Build a clientele from acquaintances. “We started selling our products to our friends and our clients from our events and below-the-line company,” says Cervantes. “We also conducted cold calls to companies that have requirements for giveaways, like the pharmaceutical groups and telecommunications companies, and submit samples to them.”

MARKETING YOUR PRODUCTS 

Word-of-mouth is one of the best ways to market your products. Kuy says the market itself is very influential. When word gets around that you give satisfactory service, referrals just pour in. Again, get useful information about the company you are pitching to. “I customize and conform to their company’s requirements,” says Kuy. “I also give options and suggestions to help them know the right product to give away to their clients. Finding the appropriate product for the company’s image is very critical; not all purchasers make the common mistake of not being aware of it.”

Antazo says depending on the item, your markup can be from five percent up to 100 percent. The highest markups will be on products that you can produce yourself, or source cheaply from others. Ceramic mugs can range from P65 to P75; aluminum mugs, P90 to P120; white t-shirts at P110; button pins, P6 to P9; bags from P60 to P200; and stuffed toys from P50 to P80.

Profit is anywhere from P10,000 to as much as P500,000 monthly, depending on your aggressiveness, production capabilities, and marketing strategies. Capital may be recovered in one transaction, or if you heavily invest in your own manufacturing and production equipment, in two to three years.

Success in the corporate giveaways business boils down to the quality you offer and the relationships you form. “Build a good relationship not just with your clients, but with your suppliers and your production staff too,” says Cervantes.

What to remember when you’re in the business of supplying corporate mementos:

Money matters. “Financial mismanagement is one cause of failure,” says Crunchie Cervantes of The Crunch Workshop. “Be aware of billing and payment cycles; some companies will pay you after 30 days or longer.” Some clients are also hard to collect from, warns Ethel Antazo of Country Primemark, so be prepared for unexpected glitches in your cash flow.

Keep updated. Always be ahead with trends so you can pitch products to your clients before anyone else can. This will not only be good for your business, but it will also reflect well on the client. Go to trade fairs, read trade publications, and research online. Antazo also goes around malls and tiangges to keep abreast of what’s new.

Minimize errors. Errors in production means lost income. Keep check and countercheck measures in place. Train your staff well. Keep communication channels clear and open at all times.

Deliver on your promise. This is the crux of the business –your ability to deliver what the client expects, when the client wants it. “Be clear on what you are producing to defer any grounds that they might have to delay payments,” advises Kuy. “Do not deceive your clients by producing low quality products. Always meet your deadlines; your client has a timetable and as a supplier, that should be important.” Make it a goal to give more than what is expected.

Ethel Antazo
Country Primemark
Telephone: (02) 652.8326
Mobile phone: 0915.434.7693
E-mail: ethel_antazo@yahoo.com

Crunchie Cervantes
The Crunch Workshop
Telephone: (02) 251.5618
Mobile phone: 0919.613.0173
E-mail: crunchiecervantes@yahoo.com

 

Stanley Kuy
Mobile phone: 0917.856.0529
E-mail: stantheman_ph@yahoo.com