The branded merchandise industry operates within an understood supply chain. The pattern of operations has long been established to benefit all parties involved. And while that still rings true, the latest data from PPAI Research’s bi-monthly data indicates that the industry is experiencing imbalanced growth to start 2026.

  • PPAI 100 suppliers grew by only 1.3% in January and February (compared to the same months in 2025).
  • By comparison, PPAI 100 distributors grew by 2.5% in that time.

This lag between suppliers and distributors has been a point of note for more than a year, ever since tariffs were threatened and then enacted, a pressure that has seemed to have a more direct impact on suppliers, according to the data. But while one would hope that gap would close over time, it seems to have stubbornly grown ever so slowly.

Alok Bhat headshot
While overall activity remains stable, performance is not translating evenly across the value chain.”

Alok Bhat

Market Economist, Research & Public Affairs Lead, PPAI

“The data shows that suppliers and distributors are operating in the same market but not experiencing the same level of growth,” says Alok Bhat, market economist and PPAI’s research and public affairs lead. “While overall activity remains stable, performance is not translating evenly across the value chain.”

Both sides have dealt with fairly intense levels of uncertainty from external factors. Tariffs caused direct pain points (price jumps) and indirect frustration (lack of clarity over if the penalties would be applied and for how much).

For all external factors facing the branded merch industry, a serious point worth monitoring is whether it continues to hit suppliers harder than distributors. While there could be a number of reasons that this might be the case, logic would suggest based on the way the supply chain is set up that it is not a sustainable dynamic. What affects suppliers is likely to affect distributors at some point.

Distributor Outlook

Contributing to the distributors’ rosier growth numbers is the fact that, according to the data, there are just fewer distributors struggling under current conditions. Only 14% of PPAI 100 distributors are reporting a decline in sales (as we’ll get into below, the number for suppliers is more than double that). Meanwhile, 63% claim they are seeing an increase in sales.

PPAI 100 Distributors Sales Revenue (January/February):

Bhat warns that we are not seeing rapid expansion on the distributor side of things. The numbers are reassuring, but still likely fall in the realm of cautious optimism.

“Performance is being sustained through repeat business and pricing discipline, indicating a market that is maintaining momentum rather than accelerating,” Bhat says.

  • 57% of distributors are reporting elevated procurement costs.
  • 36% claim procurement costs are flat.
  • The most common response was that there is an uptick between 1%-5%, suggesting the challenges are reaching distributors, but they are mitigated with fairly straightforward solutions.


Distributors clearly manage to keep creating revenue, but what does the data say about their margins under current conditions? A promising 57% claim no impact on margins from inflation. However, almost a third (32%) say that they have seen margin declines due to inflation, though most classify that decline as “slightly.”

The global supply chain continues on, but not without its uncertainty, costs and general headaches caused by broad external volatility due to tariffs, conflicts or any number of pricing inconveniences. Still, two out of every three distributors are claiming that the supply chain is causing no serious issues to their business.

PPAI 100 Distributors Affected By The Global Supply Chain:

Supplier Outlook

A relatively similar number of PPAI 100 suppliers (58%) are reporting an increase in sales. However, the big difference shows in the data when suppliers are asked who is seeing a decline in sales. That number sits at 33%, which is more than double what was reported by distributors.

PPAI 100 Suppliers Sales Revenue (January/February)

Suppliers have been reporting a rise in procurement costs for over a year, ever since tariffs were introduced. Unfortunately, those costs seem to be stabilizing rather than decreasing. More than half (56%) of suppliers report an increase in procurement costs, with about 11% of them claiming they are “significant increases.” Meanwhile, 34.5% say that the costs are stable.

Across the board, the data is showing a tighter squeeze on suppliers being reported than their distributor counterparts. That’s adding up and proving out in margin pressure.

  • 51% of suppliers are reporting declines in profitability, a 20% jump from the distributor response.
  • While 42% report stable margins, only a single-digit percentage of suppliers are claiming even slight improvement in their profit margins.

Profit Margin Impact On PPAI 100 Suppliers (January/February):


“Profitability remains under pressure [for suppliers] as cost increases continue to outpace revenue gains,” Bhat says.

As tariff uncertainty began to stabilize following SCOTUS’s decision that many of President Trump’s global tariffs were unlawful, suppliers similarly reported stable global supply chain conditions, with 72% reporting no significant impact on costs or delivery timelines. Still, 24.5% continue to experience negative disruptions.

  • It’s worth noting that this data accounts for January and February. The initial attack by the U.S. on Iran occurred on the final day of February. This led to Iran blocking the Strait of Hormuz in retaliation, which eventually may lead to supply chain complications.


“While broad-based disruption has eased, risks remain uneven and continue to influence cost and delivery outcomes, particularly amid ongoing geopolitical and trade-related uncertainties,” Bhat says.