merchology co-founders
Merchology co-founders, from left to right: Dick Ward, Ally (Ward) Delgado, and Andrew Ward. — Merchology

Company swag has long had a bad reputation. Cheap, tacky and quickly discarded, most corporate promotional products were inexpensive giveaways that few customers actually wanted.

Or at least that’s the way things were before Dick Ward, CEO, and his children, Andrew Ward, Chief Revenue Officer, and Ally (Ward) Delgado, CMO, started Merchology in 2013. Their promotional product company, based in Minnetonka, Minn., has found success by addressing three major shortcomings in the advertising specialty industry (ASI): quality, speed and customer experience.

“B2B buyers were looking for higher quality brands and products,” said Dick Ward, who had spent decades working in the promotional products industry. “They were moving away from one dollar pens and four dollar coffee cups. They wanted real brands.” And so Merchology’s tagline was born: ‘Your Logo + Brands You Love.’

Merchology’s forward-thinking business model positions it as a welcome middle man between high-value brands, such as Carhartt, Patagonia, Under Armour, and water bottle maker S’well, and the many companies that want to embellish these products with their own corporate logo for employee uniforms, perks, promotional giveaways or events.

The challenge has been that very few big-name brands want to sell to the B2B market or navigate the complexities of small, customized orders. That’s where Merchology comes in.

By reinventing the way promotional products are sold, the Merchology team has built a thriving business: Starting with just $75,000 in seed money in 2013, Merchology is on track to sell more than $50 million in product this year. The company was also named number 282 on the 2018 Inc. 500 List of America's Fastest-Growing Companies.

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Merchology credits its success in reducing lead times for orders primarily to its efficient e-commerce setup for ordering. Read on for more tips on building an e-commerce business.

Our brand relationships are a big part of business. Our track record has been a big reason why they’ve partnered with us.

Andrew Ward, Chief Revenue Officer, Merchology

E-commerce is the new sales force

Merchology’s business is a case study in disrupting a staid industry that has been around since dairies and gas stations started handing out branded calendars 100-plus years ago.

Traditionally, promotional advertising products were marketed and sold by external salespeople that traveled door to door with catalogues of products that could be embroidered or customized for each client’s needs, Dick Ward explained. The industry, however, didn’t keep pace with the changing ways people shop.

“Our customers can do it all online,” Dick Ward told CO—. “That is the future of this industry.”

Merchology’s e-commerce platform allows its corporate customers to place orders efficiently, without the need to interact with an external sales force. Last year, Merchology also rolled out its new corporate stores feature. This allows its corporate customers to host an online store of branded products on Merchology’s site and send its employees to the site to purchase their gear. This is especially useful as it lifts the burden from employers – no need to collect sizes, style preferences or various requests. Its employees can order whatever they like from the pre-selected inventory in the company store. So far, 1,450 companies have opened stores on Merchology’s site. [Check out Merchology's best tips for building strong B2B relationships.]

Merchology’s innovative business model has allowed it to address another big problem in the corporate gear business: lead times. By using an e-commerce platform for ordering, lead times have been reduced from the industry standard of 30 days to as little as 5-10 days. That’s particularly important when dealing with customers who are on a tight deadline while ordering logo-adorned items for events.

In 2016, Merchology acquired an embroidery company, allowing it to do much of its embroidery work in-house – increasing quality and reducing lead times, Andrew Ward said. Earlier this year, the company opened another embellishment operation in Reno, Nev. It has plans to open a third in Louisville, Ky., next year.

Proximity of those locations to populations on the East and West Coasts, as well as to nearby UPS hubs, will help further improve shipping times and quality.

“We assumed subcontractors would have our level of quality and lead times,” Dick Ward said. “And we found they did not.”

 merchology products
Merchology's success is attributed in great part to its emphasis on trust and commitment to its customers and suppliers. — Merchology

Relationships matter

While technology and strategy are both strong drivers of Merchology’s success, Merchology’s biggest differentiator may be its commitment to building strong relationships with both its customers and its suppliers.

Before selling any brands’ products to its customers, Merchology must first gain the trust of each brand by ensuring they will be a good steward of their reputation.

Merchology does that by carefully vetting the companies that will ultimately put their logos on its vendors’ products and working closely with brands to ensure their requirements are being met.

“Our brand relationships are a big part of business,” Andrew Ward said. “Our track record has been a big reason why they’ve partnered with us.”

He explains that Merchology knows each of its partners’ requirements and works to protect those brands by ensuring they are comfortable with any Merchology customers who want to logo those products.

“Some brands have strict requirements,” Andrew Ward said. “We are a partner in a true sense in that we are truly helping them beyond selling their product.”

In fact, Merchology has developed such strong relationships that some vendors use them exclusively for corporate sales. Under Armour and Carhartt have chosen Merchology as their preferred B2B sales channel, pointing customers that visit their sites to Merchology’s site to purchase product.

“We really do partner with them,” Andrew Ward said, “more so than just selling their product.

We can be relied on to be an extension of their brand.”

Vendors and customer relationships aren’t the only things driving Merchology’s success. Working together as a family also makes their business stronger.

“We have very direct and honest communications,” Ally (Ward) Delgado said. “We say what we think. That’s how families communicate with one another. It makes us really efficient.”

Delgado also believes Merchology benefits because the team is all working toward the same goals.

“You know your family members have your best interests in mind. We’re either going to succeed together or fail together. We have each other’s backs.”

Check out our full interview with Merchology's founders in this video from our Small Business Series event in Minneaopolis in May 2019.

Merchology founders Dick Ward, Andrew Ward and Ally (Ward) Delgado interviewed in Minneapolis in May 2019.

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