Promotional caps

	Acever offers these nontoxic plastic keychains, which come in a shoe design.

By reducing their MOQ, ensuring faster shipping and releasing more designs, makers aim to quell the effects of the economic crunch.

China suppliers of promotional items are taking proactive measures to offset the impact of the global economic crisis.

In an effort to attract more orders and give a boost to falling sales, many companies have lowered their MOQ.

Among suppliers interviewed for this report, Acever Gifts Industry (Shenzhen) Co. Ltd has decreased its minimum order requirement for keychains from 5,000 to 2,000 pieces. Top Umbrella Co. Ltd and Fuzhou Yunxiang Import & Export Co. Ltd have reduced the MOQ by 75 percent and 50 percent, respectively. These suppliers now accept orders as small as 500 umbrellas and hats.

Aside from reducing the MOQ, shipping time is being significantly shortened. Delivery at Acever, for instance, has been cut to 20 days from two months. The company keeps popular models in stock to expedite dispatch.

Similarly, Fukang Packing & Printing Co. Ltd and Best Ecobag Co. Ltd can ship promotional bags within 15 days.

Aiming to further stimulate buyer interest, suppliers are launching models at a faster pace. Innovations involve mainly the shape, color, packaging and logo application.

But while most companies are revamping the exterior, some large makers are emphasizing performance upgrades. For instance, Shenzhen Hongcai Umbrella Co. Ltd has released double-layer umbrellas, which boast greater wind resistance. Promotional bathroom scale suppliers are incorporating body fat analyzer features in upscale designs.

	Fuzhou Yunxiang’s GAO-049 model features 3-D embroidery. The cap is made of 108x58 cotton twill.

With more than 2,000 suppliers in the line, China is the world’s largest production base for promotional items.

Manufacturers dominate the industry, while trading companies and logo-application specialists account for 30 and 5 percent, respectively.

Manufacturing plants can range from small factories with about 200 workers to large ones that boast more than 500 employees. Most trading companies, on the other hand, have a staff of less than 50, with large suppliers employing about 100 people. Logo-printing facilities need a smaller workforce than manufacturers. Large companies of this kind usually have 300 workers.

Manufacturers enjoy better control on quality and lead time as they can carry out most processes, including logo-printing. The extent of in-house production, however, depends on the promotional item offered. Metal keychain makers usually have die casting, punching, polishing and electroplating capability. Suppliers of electronic devices such as USB flash drives only assemble outsourced components.

The main benefit of purchasing from trading companies is having a wider and diverse selection. Fuzhou Yunxiang, for instance, offers various types of bags, slippers and caps.

But because products are outsourced and logo application is often subcontracted, prices tend to be slightly higher than those from manufacturers. Some large trading companies, however, can offer prices lower than those quoted by manufacturers because they purchase in high volume from makers.

Not having the need to fabricate allows trading companies to focus on R&D. Many, in fact, offer design consultation as a value-added service.

Compared with other types of promotional item suppliers, logo- application specialists boast more-sophisticated facilities for placing buyers’ marks. But as these suppliers do not make the product, they have less control on quality and lead time. Further, with an increasing number of manufacturers setting up in-house logo-application facilities, companies such as these are losing their edge.

China produces an estimated $5 billion worth of promotional items each year. Of the many categories offered, wearables are the best-sellers. Makers can churn out 80,000 to 1 million pieces monthly.

The range includes caps, hats, visors, polo and T-shirts, jackets, windbreakers, rainwear, hoodies, pullovers, vests, neckties, gloves, scarves, aprons and slippers.

Most suppliers of promotional headwear have manufacturing capability. Companies that offer promotional T-shirts, on the other hand, outsource the garment and only apply logos. Embroidery, silk-screening and transfer printing are the major methods of placing buyers’ patterns.

Bags are likewise popular promotional items. Suppliers of such premiums manufacture the product, themselves. Releases come in various compositions and structures, of which shopping types made of paper and nonwoven fabric dominate. Different methods for applying buyers’ logos, corporate slogans and patterns are available. Among these, offset printing and silk-screening are commonly used.

Sixty percent of wearable and bag suppliers are midsize makers with 200 to 350 employees. Large manufacturers, which boast 400 full-time workers, account for 20 percent. The rest are small companies with fewer than 150 members.

Among China’s 1,000 umbrella and parts suppliers, 300 export promotional models. The majority are privately owned manufacturers.

Midsize companies, with 100 to 300 full-time workers, dominate the line. Small and large makers account for 30 and 10 percent, respectively.

The supplier base is forecast to remain stable in the next six months. Although the line presents a low-entry barrier, not many newcomers are expected to join due to the sluggish economic conditions. Existing umbrella component specialists, however, are regarded as potential competitors because they can readily set foot in the finished products category.

Most companies focus on handheld models, while some also offer street-side versions. Such releases employ similar manufacturing facilities and enjoy demand from the same buyer group.

Many suppliers have in-house logo application capability. One printing machine can cost from $100 to $3,000.

A few others subcontract design impression, which takes 10 to 15 percent of the total production outlay, to local specialists.

Makers usually boast fabric inspection booths at their factories, wherein materials are placed on clear tables with light underneath to view imperfections more clearly.

Visual inspections are executed inch by inch. Durability tests on finished promotional umbrellas include repetitive opening and closing of the product. Logo-printing errors on the panels are likewise checked before packaging.

On request, companies can subcontract third parties to conduct azo and cadmium content, and water resistance analyses.

China’s promotional umbrellas go mainly to the EU, North America, Japan and Hong Kong. The first two absorb at least one-third of output.

China has about 3,000 companies offering various types of writing instruments, of which 60 to 70 percent are promotional items. The industry is highly concentrated as suppliers rarely expand beyond product lines that require different manufacturing equipment.

When classified according to capability, about 40 percent of the companies are small, with fewer than 200 workers producing 500,000 pieces, or even less, monthly.

Midsize makers represent 50 percent of the supplier base. These companies have 200 to 800 personnel and output ranging from 1 million to 10 million pieces every month.

The remaining suppliers are large, some with substantial OBM capability.

Regardless of size, China companies continue to procure ink and tips from outside sources, primarily South Korea, Japan, Germany and Switzerland.

Small companies often subcontract production. At most, only barrel printing and final assembly are done in-house. Midsize makers commonly have plastic-injection and ink-refilling machines. They can render logos using different methods, including silk-screening, pad printing and hot stamping.

China’s promotional keychains come mostly in metal, plastic and leather. The majority of releases have basic constructions.

An increasing number of suppliers, however, are adding more functions, primarily to boost the product’s promotional effectiveness.

Zinc alloy models made specifically as bottle openers, rulers and photo frames highlight the latest metal designs. A number of companies have also launched promotional keychains with quartz analog clock attachments.

Keychain makers produce mostly basic designs. More-complex models such as those equipped with a torch or a USB flash drive usually come from flashlight and computer accessory manufacturers, which outsource the keychain component.

Suppliers either specialize in the line or offer related products. Makers usually focus on one material.

Cutting, soldering and polishing equipment are typical in metal keychain factories. Some companies also have die-casting and electroplating capability.

Suppliers of plastic models employ injection machines. Nontoxic PVC is the material of choice for environment-friendly designs. Acrylic and PP are likewise adopted. Makers apply logos and patterns via PVC injection, painting or printing. Of the last type, the heat- and water-transfer methods are commonly used.

Most leather keychains are stamped, electroplated, silk-screened or laser-engraved.

Genuine leather undergoes hot stamping. Softer synthetic versions, on the other hand, are silk-screened. Application of stickers is also done on low-end models.

China suppliers offer promotional computer accessories across all price points.

Low-end products include mouse pads and screen cleaners made of EVA, PVC and velvet. The basic structure of such premiums requires minimal manufacturing procedures and small factories. A midsize company only needs about 100 employees.

Promotional USB accessories are examples of upscale designs. Flash drives with 128MB and 8GB capacity continue to account for the majority of exports. Cup warmer, lighting and fan models are also offered. Patterns are engraved, laser-etched, silk-screened, hot-stamped, offset-printed or heat-transferred.

Suppliers of promotional USB accessories typically produce only the housing. ABS, soft PVC and steel are commonly employed. Some makers also use wood and stone. Because the electronic components are outsourced, companies are able to offer a wider selection while maintaining a small workforce.

Home to more than 700 suppliers in the line, Tonglu is China’s leading hub for promotional pens. This county in Zhejiang province offers more than 3,000 varieties of ballpoint, gel and water-ink models.

Expansive government support helps makers achieve competitive designs. Efforts by local authorities to promote higher product quality include financial incentives to companies that upgrade their facilities and QC systems. Multicolor plastic-injection machines, automated assembly lines and tip-making equipment are among the types covered. In addition, manufacturers that obtain ISO 9001, 14001 or 18000 certification are given monetary compensation.

The local government also organizes periodic training for essential software programs, intellectual property management and online engineering. Moreover, it has taken steps to ensure that staffing needs are matched with a steady supply of adequately trained workers. As part of this, measures to standardize manpower skill levels are currently being implemented. Further, the Tonglu Writing Instruments Association or TWIA established a department that provides human resource assistance.

The Fenshui Pen R&D Center offers construction and testing services for major parts and processes. It developed RE-based software in cooperation with Zhejiang University. The use of this program cuts time for mold design and creation from one month to 10 days, and also reduces wastage rates. In fact, Tonglu’s total output and export value are expected to increase by about $7 million and $2 million, respectively, with RE software.

The center has formulated gel ink that equals the performance of imported versions, which require tips from overseas specialists. Switching exclusively to the domestic material would result in a cost reduction of $2 million for Fenshui suppliers alone.