Off to a heck of a start

Jul 01, 1998 9:30 PM  By

Continuing to ride the wave of economic good fortune, most business-to-business and computer mailers posted solid gains during the first quarter. Of the 13 business mailers tracked by Catalog Age, 92% recorded revenue increases over the first quarter of 1997. Computer mailers also enjoyed strong numbers, as a whopping 88% reported sales increases in the first quarter.

Nick Holland, an analyst with Boston-based Ulin & Holland, says, “As a group, the b-to-b mailers, with few exceptions, are showing double-digit growth and improvement in earnings. They realize the value of selling direct because there is a lot less saturation in the b-to-b market as opposed to consumer arena.”

B-to-b mailers also understand how to make the most of selling channels. Moorestown, NJ-based Wilmar Industries, a b-to-b distributor of repair and maintenance products for the apartment market, reported a 31.1% revenue increase, a company record for the first quarter. The marketer attributes the gain to the increased sales of national accounts and boosting its field sales force from 152 to 193.

“Many of these companies use the three channels available to them,” says Holland. “For a smaller customer, they might send a catalog. For a proven catalog customer, they’ll do outbound telemarketing. The third channel [for more valuable customers] is the field sales force-all of these tie in directly to the catalog.”

Acquisitions can make a big difference as well. Groton, MA-based computer forms mailer New England Business Services’ (NEBS) revenue growth can be attributed to two 1997 acquisitions: packaging and shipping supplier Chiswick, and business forms and products cataloger Rapidforms. After years of stagnant sales, NEBS posted $98,002,000 in sales, a 52% increase from $64,127,000 for the same quarter a year earlier.

New Britain, CT-based Moore Medical was the lone b-to-b mailer posting a sales decline. The medical supplies mailer suffered a 62% sales drop this quarter to $30,939,000 compared to $81,042,000 in the first quarter of 1997. Company officials blame the drop on the firm’s departure from the wholesale drug distribution business. Moore Medical will focus on selling medical and surgical supplies to healthcare practitioners.

Computer mailers follow suit Like their b-to-b brethren, computer mailers have discovered the power of mixing selling channels. For instance, increased telemarketing activity helped Tempe, AZ-based Insight Corp. record a 58.1% increase in revenue, which translated to an almost identical 57.8% increase on the income side of the ledger. “We’re funneling the money back into the company, such as increasing our number of telemarketing account execs and focusing on information services,” says Valerie Paxton, vice president of corporate communications. “We’re focused on top line and bottom line growth.”

Unfortunately, computer cataloger Programmer’s Paradise of Shrewsbury, NJ, suffered a 14% earnings decline in the first quarter. According to company chairman Roger Paradis, a lack of new product was the culprit. “One of the key drivers for our business is new product introductions. Similar to the fourth quarter of 1997, this past quarter was relatively void of any new products,” Paradis says. “Looking forward, we are encouraged by the schedule of planned product upgrades and releases for the third quarter and beyond.’