Cascade of Markups: Why companies overpay for wholesale drinkware and promotional products
Here is goes ...
Buyer A from Company XYZ has been tasked with picking up some logo'd tumblers for an upcoming special event. Generally said buyer would do a search for cups with logos and soon after find themselves on a random website littered with promotional products, crazy slash through pricing (Only good for 72 hours of course) and aggressive pop ups. The problem with sites like this is it is often not the best deal and almost never a very high quality product. Here is why:
Middlemen: The process involves a convoluted supply chain, which can lead to inflated costs for buyers. This system, while seemingly straightforward, is rife with inefficiencies that contribute to higher expenses and compromised quality. Primarily, the issue stems from the middlemen within the procurement process. Most buyers are unwittingly exposed to multiple intermediaries.
Any Ol' Custom Shop, as we will call it, doesn't directly deal with the factories that are manufacturing the products. Instead, they procure these items from a USA-based supplier, which middles the products from overseas factories. As each entity along this supply chain seeks to make a profit, the cost of the drinkware significantly increases at each step.
These intermediary companies might lack specialized expertise in drinkware manufacturing. Consequently, they might offer only limited and standard designs with subpar quality, as their primary focus lies more in the customization aspect rather than the inherent quality of the product.
In order to mitigate these issues and prevent overpayment, buyers may seek out direct relationships with drinkware companies. By eliminating unnecessary intermediaries, buyers can ensure better quality control, more competitive pricing, and a smoother, more efficient procurement process for their customized drinkware needs.
As hinted at above, you'll also notice the spammy nature of these companies to almost try and trick you into purchasing through misleading discounts and bait and switch shipping prices.
Discounting: Almost every company uses discounts as a tool to gain customers, but many promotional products companies run several discounts at the same time, all with different prices on the same product. We confirmed this by using Meta's Ad Library, which shows all ads a company is currently running on Facebook or Instagram. You can see here, one popular promotional products company has 3 different prices depending on which ad you clicked on.
Shipping and Setup Fees: Promotional products companies also use a bait and switch pricing technique where they quote you one price, only to have your total explode when you get to the final stage of the transaction. It's annoying because you never really know what your bill will be until after you've gone through the exhausting process of entering in your information. This is standard practice by almost all promo products, quote them low and then rip them off on shipping. You will also often get nailed by setup fees which of course are not advertised until you're checking out. Watch out for these as they like to sneak them in!
Engraving Up-charge: Another technique they use is they have one price for screen printing and one price for engraving. They will always quote you the screen printing cost and then try and upsell you on engraving. No one wants cups that are peeling off before the event is even over so many unwitting buyers will just accept the up-charge.
Here comes the pitch ...
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