Sales and Marketing are evolving at a pace unsurpassed by most other business functions. But, as digital and TV continues to reign supreme, the Path to Purchase Institute predicts that Point of Purchase spending will continue to keep pace (2016 P-O-P Trends Survey).The procurement of physical marketing materials is all about doing more with less. Even in fast growing organizations with a seemingly limitless marketing budget, a consistent goal of the marketing procurement function is to get more product impressions out of each dollar spent.
So here’s the hook: instead of continuing to try to get blood from a stone by pressuring your P-O-P vendors to lower their product costs, there is a hidden beast that may be significantly driving your overall costs: marketing logistics.
Logistics costs of physical goods used to market products can be up to 40% of the total cost of the good.
So what are some typical physical products used by marketing functions:
- Product displays in a company’s retail store
- 2D and 3D prints
- Product packaging
- Demo tables
What makes up the costs of these materials?
Like any product, it starts with your up-front design cost. Whether you are outsourcing the design work or have an internal team, you have to figure out what you want your goods to look like before anything else. Then there is the actual manufacturing of your goods. Printers, display manufacturers, paper mills, etc. are all purchasing raw materials, buying new equipment or tweaking existing equipment, and paying labor costs involved with production. And finally you need to get the goods to their distribution point and final location.
In every portion of this cycle, you have experts managing their piece of the puzzle. Except for the last leg!
In many cases, the display manufacturers or the printers are the people responsible for the finished products getting to their final destination. By outsourcing the transportation of marketing products to a logistics management service, you can reduce your logistics costs by 20-70%!
Sure, but how do I handle this as a non-logistics expert?
The good thing is that the marketing logistics process is easier than you think. First, you should establish a relationship with a logistics management service. This logistics company should have agreements with several freight forwarders to source the lowest rates and manage the process from end-2-end. Be wary of any easy fixes, and even using software that promises to get quotes: when not handled effectively you will end up managing the process and in the long run you’ll pay more for less.
Once you have your logistics company in place the process becomes easier: you simply place an order for your product, instruct your manufacturer to use your logistics provider (with whom you have a relationship with and pay directly), and your service provider sources the work to several transportation companies ensuring you get the lowest quote.
The key benefit is you get alignment. You have your logistics experts spending their time on the transportation of your goods and you have your printers and display manufacturers spending their time providing you with the best possible product. In all outcomes, the service you receive will be better and you’ll ensure you’re executing your marketing logistics at the lowest possible price point!