In its most basic form, branded merchandise is a product or collection of products that are not manufactured by an organization, but that displays the branding of that organization. Branded merchandise is typically used to support marketing and promotional campaigns; it helps brands make connections with consumers, reinforces brand recall, and promotes a brand’s image.

Because these products are not manufactured directly by the organization using them, companies rely on compliance throughout the procurement supply chain to ensure these products meet legal, safety and ethical standards during production and distribution.

Unfortunately, branded merchandise compliance often goes overlooked by brands and the companies they use for procurement and distribution of these products. It can become a silent problem within organizations. Instead of letting this problem grow quietly, a brand and all parties in its supply chain must understand what branded merchandise compliance is and why it is important.

What Is Compliance?

Compliance in this regard refers to the process of vetting and verifying procurement aspects of a brand’s merchandise campaigns. Above all else, compliance aims to ensure the products being offered are safe for intended and unintended use.

Compliance includes adhering to state and country legal requirements, including considerations for procurement of raw materials, through ensuring manufacturing facilities treat employees in accordance with labor laws and provide safe working conditions.

Beyond following compliance to the letter of the law, there is a deeper level of social compliance that should not be overlooked. Just because suppliers are meeting all legal requirements on a state and country level, that does not mean they are adhering to higher ethical standards that clients expect for the production and distribution of products representing their organization.

All branded merchandise supply chain parties — from the distributor or procurer to the suppliers and manufacturers — must be sure that their processes follow any requirements set forth by the client brand.

Why Is Branded Merchandise Compliance Necessary?

To understand why compliance is essential, let’s look at the risks involved in being non-compliant.

Most important, non-compliance can be outright dangerous. Whether we’re looking at production, delivery or consumer usage of your products, all involved parties may be at risk of harm during any stage of the product lifecycle if compliance isn’t guaranteed. This just makes sense: If your product — or any part of your product — doesn’t live up to a certain standard, the potential for injury exists for whoever is in possession of it at any given time.

What’s more, non-compliance can lead to legal issues for the party at fault (and potentially for other entities within the supply chain). Whether intentional or not, non-compliance may be considered negligence from a legal standpoint — especially in cases where an individual faced actual bodily harm. The legal ramifications of non-compliance can be significant, including the costs of current and future medical expenses, rehabilitation expenses, and lost wages.

While maintaining compliance provides legal protection for your organization, it also protects your brand equity. Branded merchandise products that have proven to be faulty or dangerous are subject to recalls, which can be damaging to consumer trust and perceived value. The promotional products industry has experienced recalls for power banks, ceramic mugs, water bottles, and many more products.

Supply chain audits can also reveal brands that have acquired products from manufacturers that do not comply with child labor laws or ethical employment practices. It’s important that distributors of promotional products, like IMS, ensure our clients do not face negative legal or PR ramifications from hidden instances of non-compliance in their supply chain.

The key benefits of maintaining branded merchandise compliance should be clear. First and foremost, the safety of all parties along the supply chain, and of the end-user, is all but guaranteed.

How Does IMS Ensure Merchandising Compliance for Its Clients?

The key to ensuring merchandising compliance is having a solid workflow in place. At IMS, this process involves:

Documentation of compliance efforts. This ensures that all merchandise procurement processes adhere to legal, regulatory and ethical standards as necessary, and as expected by the client. As we said earlier, this also protects us and our clients in instances where a third party (i.e., a vendor) falls short in its efforts to remain compliant (or is downright negligible in this regard).

Creating alignment with client brands. From the start, we aim to fully understand our clients’ expectations and requirements — and keep our clients fully informed about the steps of our processes and workflows. This allows us and our clients to move forward with our merchandising initiatives in the most efficient and transparent way possible.

Creating alignment with our vendors. IMS works hard to vet the vendors we work with to ensure they’ll adhere to regulatory compliance and to any requirements our clients have set forth. We typically aim to create long-lasting relationships with the vendors that have earned our trust, which allows us to hit the ground running. We also only work with new vendors that meet certain criteria and standards as developed by our team.

Ongoing improvement of workflows and processes. Compliance is a moving target. Laws and regulations are constantly being updated, while brand and customer expectations are always in flux. It’s vital, then, that we keep our finger on the pulse of these changes and adjust to them as they arise. Across the board, we at IMS are always looking for ways to improve our ability to maintain compliance — and to help our partners do the same.

Additionally, IMS takes compliance a step further. Instead of simply informing our suppliers of our compliance expectations, we also have implemented a policy to “inspect what we expect.” This could involve multiple inspection points across the supply chain, including factory audits, product safety testing, spot inspections and more.

Need help when it comes to protecting your brand by ensuring branded merchandise compliance? IMS is here for you. Contact us today to learn more about what we do, and how we can help keep your branded merchandise campaigns on the right side of compliance.

Article Author: Emmy Gottschalk

Emmy is the VP of Production and Vendor Management at IMS. Emmy has spent over 20 years working with vendors and consumer products in a variety of industries including Apparel, Footwear, Home Goods, Sporting Goods, Tools, Lawn & Garden, Electronics, Appliances, Jewelry, Toys, and Branded Merchandise. She joined the IMS team 1 year ago as an operational leader to support product compliance policies and processes in the organization.