Promotional Products Industry Terminology
Ad Specialty (Advertising Specialty)
Branded pens, apparel, drinkware, tech gadgets, and other tangible items used to promote a brand, event, or message; often called promotional products or promo.
We sourced an ad specialty item for their trade show; That tumbler is an ad specialty best-seller; The client shifted budget from print ads to ad specialties.
ASI (Advertising Specialty Institute)
A major industry organization and product database that connects suppliers and distributors; also known for member IDs, product search, and trade shows.
What’s the supplier’s ASI number; We found the product specs in ASI’s database; She’s exhibiting at the ASI Show Orlando.
Artwork Proof
A visual rendering showing decoration placement, size, colors, and product details for client approval prior to production; can be a digital soft proof or a hard proof.
Please approve the proof by noon to keep the schedule; The client requested a revised proof with a larger imprint; We need a signed proof before production.
Backorder
A situation where an item is sold but temporarily out of stock, to be fulfilled when inventory is replenished.
That color is on backorder until next month; We split the PO due to a backorder; Inform the client of backorder status and alternatives.
Catalog Program
A supplier’s standardized offering with published pricing, SKUs, and decoration options for a set period; typically in-stock goods with limited customization.
This supplier’s catalog program has EQP through year-end; The catalog program restricts custom PMS matches; We placed the order under the 2025 catalog program pricing.
CMYK (Four-Color Process)
A subtractive color model using cyan, magenta, yellow, and black to reproduce full-color images in process printing.
Convert the art to CMYK for digital print; The photo requires CMYK process, not spot; The CMYK proof shows a slight shift from Pantone.
COGS (Cost of Goods Sold)
Direct costs attributable to producing or purchasing the goods sold (product, decoration, freight into warehouse, packaging where applicable).
COGS on this kit is $18.40; We lowered COGS by consolidating freight; Higher quantities reduced unit COGS significantly.
Company Store (Merch Store)
A branded e-commerce site offering approved merchandise for employees, partners, or fans; supports budgeting, approvals, and reporting.
We launched a company store for employee swag; The store supports budget codes and approvals; Add on-demand items to the merch store.
Compliance Testing
Laboratory or documentation verification that products meet regulatory and safety standards (e.g., CPSIA, Prop 65, FDA, EN71).
Send to the lab for CPSIA testing; We need Prop 65 compliance documentation; This drinkware requires FDA food-contact compliance.
CPSIA (Consumer Product Safety Improvement Act)
US law governing safety standards for children’s products, including lead limits, phthalates, testing, and tracking labels.
These youth items must be CPSIA compliant; Provide the CPSIA tracking label; The client requested CPSIA certificates of conformity.
Dieline
A template outlining cut lines, folds, bleeds, and safe areas for packaging or labels; used to position artwork accurately.
Design the art to fit the box dieline; The dieline shows bleeds and fold lines; Request the dieline template from the supplier.
Direct-to-Garment (DTG)
A digital printing method that jets ink directly onto garments, ideal for small runs and complex, full-color designs.
DTG works well for short runs and full color; Use DTG for the photo-heavy tee art; DTG requires 100 percent cotton for best results.
Distributor
A company that sells promotional products to end-buyers, sourcing from suppliers and decorators; central to the industry’s supply chain.
We’re a distributor sourcing from multiple suppliers; The distributor manages the client relationship; Distributors often handle decoration and fulfillment.
Drop Ship
Shipping directly to multiple end recipients or locations rather than bulk shipping to one site.
We’ll drop ship kits to 800 addresses; There’s a drop ship fee per location; The client spreadsheet lists all drop ship locations.
EDI (Electronic Data Interchange)
Standardized electronic transmission of business documents like purchase orders, invoices, and advance ship notices between systems.
The client requires EDI invoicing; Set up EDI 850 POs and 856 ASNs; Our ERP now supports EDI with key vendors.
Embroidery
A decoration method stitching thread into fabric for a durable, upscale look; priced by stitch count and requires digitized files.
Embroidery requires digitizing and stitch count; Use 3D puff embroidery on caps; Metallic thread increases embroidery cost.
End-Buyer (End User)
The final customer who receives and uses the promotional product; distinct from intermediaries like agencies or distributors.
The end-buyer is the pharma client; Keep the end user’s brand guidelines in mind; The agency is not the end-buyer.
FOB Point (Free On Board)
The location where ownership and freight responsibility transfer from seller to buyer; determines freight cost and transit times.
FOB CA adds cross-country freight; Price is FOB NJ; We prefer FOB points near the client to cut transit time.
Fulfillment
Operational services that include receiving, storing, picking, packing, kitting, and shipping orders.
Our 3PL handles pick, pack, and ship; We offer gift wrapping as part of fulfillment; Peak Q4 fulfillment requires extra labor.
Gross Margin
Sales revenue minus COGS, expressed in dollars or percentage; a key profitability metric.
Aim for 40 percent gross margin on this project; Freight can erode margin; Margin improved after negotiating COGS down.
Heat Transfer
A decoration method applying printed or cut graphics to a substrate using heat and pressure; includes vinyl, DTF, and screen-printed transfers.
Use heat transfer for small runs with multi-color art; We chose DTF transfers for better washability; Heat transfers work well on polyester.
Imprint Area
The maximum printable or embroiderable region on a product, specified by dimensions and location.
The imprint area is 2 by 2 inches on the tumbler; Move the logo to fit the imprint area; The back imprint area allows personalization.
In-Hands Date
The date the client needs the finished goods physically in hand at the destination; drives scheduling and shipping choices.
The in-hands date is the conference start; Rush fees apply to meet the in-hands date; Build the timeline backward from the in-hands date.
Inventory Turn
A metric showing how often inventory is sold and replaced over a period; indicates inventory efficiency.
The store’s inventory turn is 4x annually; Improve turn by reducing SKUs; High turns reduce carrying costs.
Kitting
Assembling multiple items into a single bundled package, often with custom packaging and inserts.
We kitted a notebook, pen, and mug in one box; Kitting includes insert cards and tissue; Barcode each kit for fulfillment.
Lead Time
The elapsed time from order or proof approval to shipment or delivery; includes production and sometimes inbound transit.
Standard lead time is 7 to 10 business days after proof approval; Custom molds require longer lead times; Confirm lead time before quoting.
Licensing
Legal authorization to use protected intellectual property (logos, characters) on merchandise, often involving approvals and royalties.
We need a collegiate license for that logo; Licensed art incurs royalties; The supplier is an approved NFL licensee.
MAP (Minimum Advertised Price)
A policy setting the lowest price at which a product can be advertised, protecting brand value and channel fairness.
MAP for this jacket is 99 dollars; The vendor enforces MAP online; Stay above MAP in the company store.
Markup
The amount added to cost to set the selling price; distinct from margin, which is profit as a percentage of selling price.
We used a 50 percent markup on cost; Different markups apply by category; Markup versus margin often gets confused.
MOQ (Minimum Order Quantity)
The smallest quantity a supplier will produce or sell at a given price and setup, often tied to decoration or custom materials.
The MOQ is 250 pieces for custom color; We negotiated the MOQ down to 100; MOQs vary by imprint method.
Net Terms
Payment timing agreed between buyer and seller, commonly Net 30, Net 45, etc., indicating days after invoice due.
The client has Net 30 terms; We require prepay for first orders, then Net; Late payments beyond Net terms incur fees.
Overrun/Underrun
Acceptable production quantity variance versus the ordered amount, invoiced at actual shipped units.
This item allows a 5 percent over or under; Invoice will reflect actual shipped quantity; The client requires no overruns.
Pantone Matching System (PMS)
A standardized spot color system ensuring precise color matching across printers, materials, and processes.
Match the logo to PMS 186 C; A PMS match charge applies; Use coated PMS swatches for glossy substrates.
PPAI (Promotional Products Association International)
A leading industry association offering education, advocacy, safety standards, and the PPAI Expo trade show.
We’re attending PPAI Expo in Las Vegas; PPAI offers education and safety resources; Check the PPAI product responsibility guidelines.
Pre-Production Sample (PPS)
A decorated sample produced to verify materials, color, and decoration accuracy before full production; sometimes called pre-pro.
The client wants a PPS before mass production; PPS adds a week to the timeline; Approve the PPS for color and placement.
Print-On-Demand (POD)
Producing items only after orders are placed, enabling low or single-unit quantities and reduced inventory risk.
Use POD to avoid carrying inventory; The company store features POD apparel; POD supports personalization at scale.
Prop 65 (California Proposition 65)
California law requiring warnings if products expose users to listed chemicals above safe-harbor levels; impacts labeling and materials.
Add the Prop 65 warning label; Provide the Prop 65 compliance statement; The client’s legal team reviewed Prop 65 concerns.
Purchase Order (PO)
A buyer’s formal document authorizing a purchase with item details, quantities, prices, ship-to, and terms.
Issue the PO to lock pricing; The PO must match the quote; Include the PO number on all cartons and invoices.
QC (Quality Control)
Processes and inspections to ensure products meet specified quality standards before shipment.
QC caught misaligned embroidery; Implement AQL sampling; Document QC checks at each station.
Quote
A formal price proposal detailing items, quantities, decoration, setup, freight estimates, lead times, and terms.
Send a quote with freight estimate; The quote expires in 30 days; Update the quote to reflect PMS match charges.
RFP (Request for Proposal)
A client’s formal solicitation inviting vendors to propose solutions and pricing for defined needs and service expectations.
We’re responding to the client’s RFP; The RFP includes service-level KPIs; Build case studies for the RFP submission.
Rush Service
Expedited production and/or shipping to meet tight deadlines, often with additional fees and limited options.
Rush production is 3 days after proof; A rush fee applies to meet the in-hands date; Confirm rush capacity before accepting the order.
Sample Types (Random, Spec)
Random sample is an undecorated or vendor-logo item sent for quality review; spec sample is decorated with the buyer’s artwork to show the final look.
Ship a random sample for quality; The client approved a spec sample with their logo; Some items require paid spec samples.
Screen Printing
A decoration method pushing ink through a mesh stencil onto the substrate; ideal for spot colors and high opacity.
Use screen print for 1 color, 1 location; Screen charges apply per color; Halftones may require higher mesh counts.
Setup Charge
A fee covering the labor and materials to prepare equipment or files for decoration (screens, plates, dies, digitizing).
There’s a 50 dollars setup per color; Setup is waived at 1,000 units; A new setup applies for art changes.
SKU (Stock Keeping Unit)
A unique identifier for a specific product variant used for inventory management, pricing, and reporting.
Create separate SKUs by size and color; The store has 300 active SKUs; Link SKUs to inventory and images.
Sublimation
A decoration process where dye turns to gas under heat and bonds with polymer-coated surfaces or polyester fibers for vibrant, permanent prints.
Sublimate on light polyester for best color; All-over prints use cut-and-sew sublimation; Sublimation isn’t ideal for cotton tees.
Supplier
A manufacturer or importer that provides products and often decoration services to distributors in the promo supply chain.
The supplier stocks goods and handles decoration; We vetted the supplier’s compliance; The supplier confirmed FOB TX.
Third-Party Logistics (3PL)
An outsourced provider of warehousing, inventory, and fulfillment operations, often integrated with e-commerce platforms.
We outsourced warehousing to a 3PL; The 3PL integrates with our store; The 3PL scales staffing for Q4 peaks.
Vector Artwork
Artwork built from paths and points that scales cleanly to any size; preferred for most decoration methods.
Provide vector art in AI or EPS; Vector files scale without loss; We converted the logo from raster to vector for clean edges.
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