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FINANCIAL ANALYSTS: RockTenn announces a $50/ton containerboard price hike
NEW YORK, Feb. 25, 2013 (Viewpoint) - excerpt from Deutsche Bank

Trade contacts report that RKT has announced a $50/ton price hike for containerboard. Implementation dates vary, but most contacts suggest an April 1st implementation date. G-P (11% share) announced a $50/ton price hike last week (effective March 21st) and a box price hike effective April 1st.

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Promotional Product Logistics

Doesn't every company want the right item and the right price delivered to the right place at the right time?  That's Logistics.

 

We continually provide the logistics of managing multiple vendors producing multiple products that need to come together for successful brand promotion.  Although there are a lot of moving parts, it is a fairly straight forward process: specify, pre qualify, quote, compare, purchase, approve, sample, deliver, QC, inventory, kit, pack, label, ship, and track.  See?  Simple.

 

But what happens when there is a logistics hiccup?  How well we respond makes a huge difference in our customer's success.  We recently had a complex fulfillment project that was behind schedule because our customer's other supplier was late with the delivery of their product to our facility.  We were able to have the "missing product" couriered to our facility where it arrived after hours on Thursday night.  Our dedicated fulfillment team was eager to go to work that night to kit and assemble 800+ sets of 7 different kit configurations.  The reulst was that all 800+ shipments were shipped via UPS, DHL, or USPS the following morning.

 

It's this level of dedication that makes me most proud of the people I work with.  They are great at keeping projects on track and more importantly finding their way back on track when "stuff" happens.  

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Promotional Products Fulfillment & Distribution

 

Promotional products have almost become a commodity item.  Google "logo mug" and you'll see 51,800,000 results - and just as many suppliers that are ready to send you boxes and boxes full of them.  The reality is that very few vendors can offer in house capabilities to distribute them to each office, customer location, or event over the course of days, weeks, months, or years.

 

PakCom offers promotional products fulfillment & distribution.  We've weeded out the 40,000,000 unreliable manufacturers logo mugs to offer a more reasonable selection of only 11,800,000 options.  We can even provide custom packaging to protect, serve, and advertise your brand.

 

Just send us a spreadsheet with size, color, name, etc. and we'll fulfill & distribute your most complex projects.  Wait, it gets even better - we'll provide an online order form where your audience can "self select" a size that fits or a color that matches so they feel even more special.

 

Isn't that what promotional product fulfillment & distribution should be all about?

 

 

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south sydney primary logoThe South Sydney Rabbitohs are an Australian professional rugby league football team with a fluffy bunny rabbit logo.  To the casual spectator, the logo might seem "incongruent" for a rugby club.  Given the rugby players I know, a keg of beer or a dental implant would be more appropriate.  But with a little digging, it appears that "the real moniker of the club is "Rabbitohs" — the men who peddled rabbits from barrows around the streets of South Sydney. Souths were originally referred to as the Rabbitohs by opposition fans as a mark of disrespect along the lines of Western Suburbs being tagged "the Fibros". The people of South Sydney took it on board and the rest is history."

 

When "outsider" Paul Everest, founder and creative director of street wear brand Unit, said the fluffy white bunny logo was defective and needed to be replaced, fans went nuts.  I think Rupert Price summed it up best: "Anyone who knows marketing knows the value of an enduring brand with authenticity and genuine credentials wins out over a brand contrived in some marketing department every time."

 

When you think about your products and your brand, remember the role that history and authenticity play in the consumer's mind.  Just ask Chief Illiniwek about New Coke.

 

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The unspoken part of this statement is "you guys suck" and I absolutely feel your pain.  This is one on the most frustrating things we encounter in our industry and I feel that I owe it to you to explain why this happens.

 

The promotional products industry can be divided into two broad groups: the manufacturers and the distributors.  There is some cross-over, but that's not the topic of this post.  There are thousands of manufacturers and tens of thousands of distributors in the US.  That's a lot!

 

The manufacturers produce (or import) a ton of a particular item and put it in inventory to be decorated in smaller batches when they are ordered.  They rely on distributors to sell/retail their products and their inventory levels are continually changing.

 

Here's where the trouble starts.  Distributors put thousands of different products in their on-line catalog or website.  When a manufacturer's product is out of stock or back ordered, it is unlikely that the distributor will know about it and more importantly, act upon it and take the product off the website.  So there are thousands of distributor websites where you can order products that might not even be available.  You'll place the order, give them your credit card, and then two days later get an email with an apology about the product being "out of stock" and offering a comparable product at a great discount.

 

Mistakes happen - but here is the rub.  Distributors have an incentive to keep out-of-stock or discontinued products "live" and available on their websites: more product selection helps increase the SEO value; by getting people to place the order, they have the opportunity to keep you as a customer through offering a comparable product (Are you really going to start over?); it costs time and money to continually track and update out-of-stock products; and everybody else is doing it.

 

When we quote a project, we check inventory levels to make sure the items are available.  It takes extra effort on our part, but preventing a last minute scramble due to a stock-out ensures you'll get what you expect before your in hands date.

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8% Corrugated Price Increase Drivers

Have you noticed that your boxes have been the same price for almost 3 years?  The party is over.  North American container board mills implemented a $50 per ton price increase in liner board effective in September.  That translates to an 8% increase in the price you'll pay for your corrugate boxes, displays, and liners.

 

Export and domestic demand are on the rise, which has caused container board inventory levels to dwindle hitting a 33 year low in August.  Unfortunately, increasing production is not easy since the industry is running at 97.5% capacity after a lot of consolidation (has anyone noticed that Weyerhaeuser, Smurfit-Stone, and Temple-Inland are MIA?).  The bottom line is that demand is greater than supply which results in higher prices.

 

 

It might be a good time to revisit your packaging and supply chain to see if you can squeeze some efficiencies out.  Perhaps switching from 200# to 32ECT, redesigning your product packaging to use less, or implementing a more efficient JIT warehouse program could offset the increase.

 

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What is a Company Store?

A Company Store provides an easy, efficient way to put your brand in the hands of the people that promote it. Digital output, hard goods, wearables—literally any materials chosen by your company can be made to order, printed on demand or carried as warehouse inventory. Though typically promotional in nature, more and more companies are building stores to enable easy access to training kits, tradeshow displays, business cards and even employee uniforms. A Company Store can satisfy real-time demands while ensuring a consistent, cohesive presentation of your brand across platforms, places and people.

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I just learned that USB memory pricing is on the rise. Apparently, our favorite consumer products company – Apple - has committed to purchase about 70% of the market of chips available for an upcoming product launch. While this directly impacts 8GB and higher capacities, it substantially increases the 1GB, 2GB and 4GB as well.

In the past, the increase in pricing for USB's lasts only a few months. We also observed that during the weeks before the official product launch, there is virtually no availability for shipping air cargo out of China and if you are lucky enough to find a carrier, the pricing is outrageous. It seems that Apple books every available cubic foot of cargo space.  Last year, we had air cargo sit in line for 15 days waiting for space on a cargo aircraft because of the iPad shipments taking priority.

If you need USB drives, either buy them now to wait a few months.  If you need product out of China in a hurry, then prepare to reset your expectations.

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Do you have a supply closet full of XS and 3XL golf shirts when all you need is a single XL for the new sales guy that is manning your trade show booth next week?  Your promotional product vendor probably needs a minimum order quantity of 12 or 24 pieces, but you aren't sure what sizes you'll use before the corporate branding changes again.

It's a common problem.  We've got a solution.

Meet the on-line Company Store.  If we've embroidered your logo before, we have the capability to embroider it again in quantities of just ONE.  You can pick any size, color, or style from one of our preferred suppliers and we'll embroider just one.  No Less than minimum charges, no setup charges, no price gouging.  What's more, we can even set-up an online store and give you the link to share across your organization so everyone will have access to your corporate branded apparel with no minimum quantity orders.  Free.

How's that fit?

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One of the biggest advantages of operating a Company Store is the ability to add business cards to the product lineup.  We have a customer with a national footprint.  The HR Manager and Marketing Manager were frustrated with managing the continual stream of business card requests for title changes and new hires.  The process to typeset the cards was very manual, keeping track of the proofs and approvals was almost impossile, and the turn time was unacceptable.  They were finding that a lot of local employees were "creating their own" business cards and printing them at a local print shop.  You can imagine the challenges with maintaining brand compliance.

This past spring we added a Business Card to their on-line Company Store.  The employees are able to login and create their own business cards by entering their own information.  A proof is generated in real time where the employee "approves" it at the time they place the order.  To prevent any entreprenurial employees from gaining a promotion to CEO, we set up an approval process where anyone in the HR department can "verify or decline" the order.  Since the employees know that there are checks and balances, they know better than to claim a better title.

The workflow is streamlined so HR's only task is to click a link to "approve or decline" the business card request.  The new business cards are typically shipped within 2-3 days and are delivered via FedEx ground.

If you want to learn more, drop us an email or give us a call.

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PakCom Incorporated
24 Crescent Street, Suite 401
Waltham, MA 02453

Phone: 781-890-3888
Fax: 781-890-3886

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