It has been an unsteady year so far. At the very least, it’s been a volatile and unpredictable one due to global tariffs, trade uncertainty and supply chain questions.
Promo has felt the effect of these factors, reporting lower year-over-year growth in both January/February and March/April than in all of 2024. Interestingly, distributors have not quite felt the brunt of that slowdown.
- As shown in PPAI’s bi-monthly survey, 81% of distributors reported revenue growth in March and April compared to the same months in 2024. Conversely, only about half (51%) of suppliers reported the same.
It’s worth questioning how long this dynamic is sustainable before supplier struggles trickle down to distributors. Kara Keister, MAS, owner of Ohio-based distributor Social Good Promotions and Regional Relations Delegate to the PPAI Board of Directors, admits to skepticism over the numbers despite them being reflected by her own company.
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“As a small distributor, we are experiencing that same small surge in sales early in Q2,” Keister says. “My concern is that it’s not true growth, but the result of our sales team’s effort to encourage clients to purchase early, given the uncertainty of potential price increases and product availability.
“Our team is looking more toward July sales (a typically slow month for us) for a truer representation of our growth measure.”
Keister’s theory, however, reflects a larger point: Distributors are witnessing evolving client needs and being put in positions to navigate fulfillment pressure and policy priorities. PPAI Research surveyed PPAI 100 distributors in March and April to get further insights into these matters.
Below are findings on distributors’ observations and strategies concerning recent global developments.
How Distributors Are Mitigating Disruptions On The Supplier Side
The numbers show that suppliers are feeling the pressure of tariffs and global trade uncertainty. A potentially worrying 37% of PPAI 100 suppliers reported declining year-over-year revenue in March and April.
Distributors are surely aware of what’s going on with their supplier partners and are reacting with a handful of key approaches.
- 65% of PPAI 100 distributors claim to be expanding or diversifying their supplier base in order to manage risk.
- 60% report they are responding by collaborating more closely with their supplier partners when it comes to demand forecasting.
The two dynamics above show the push and pull of distributor strategies, suggesting that distributors are both trying to make things work with their typical supplier partners while understanding that new supplier partners may be necessary under current circumstances. A number of distributors are taking both strategies at once.
- About a third (32%) spent the first quarter of 2025 pre-ordering or building inventory buffers.
- Only 16% say they entered stronger service level agreements with suppliers.
- There were also a number of suppliers who noted that a shift toward U.S.-made products when possible was becoming necessary.
Tara Milburn, founder and CEO of Cape Breton, Nova Scotia-based distributor Ethical Swag, says that a structured ability to source domestically has been a significant advantage during this time of tumultuous global trade. Milburn says Ethical Swag is, in essence, an American firm south of the border and a Canadian company north of the border.
Tara Milburn
Founder/CEO, Ethical Swag
“When I was setting up the company, it was important for me to source products as closely as possible to my consumers,” Milburn told PPAI Media. “We deal in U.S. dollars with U.S. suppliers with our U.S. clients and make it easy and transparent to find those products. We do the same on the Canadian side. As a company, we don’t deal with cross-border duties and taxes. We rely on our partners.”
What Are Distributors’ Clients Expecting?
Of course, it’s more than just distributors and suppliers who are affected by shifting tariffs, global trade and other external factors. Promo clients have their own situations to navigate. PPAI Research asked distributors about evolving client expectations in 2025.
- The most common shift reported by distributors (56%) is an ask for more personalized or niche product solutions, a trend that has steadily increased in recent years, according to many distributors.
- A significant portion (44%) of distributors report clients are asking for faster turnaround times and real-time order visibility, a request that can prove difficult to provide for some distributors but is being pursued.
“We definitely hear the client sentiment that they want faster turnaround time and order visibility,” Keister says. “Quite frankly, we want the same. Our team speaks regularly about reducing friction and meeting our clients where they are. We are actively developing new sales channels to allow for everything from transactional sales to white glove service.”
Kara Keister
Owner, Social Good Promotion
- More than a third (36%) of distributors say their clients are requesting detailed product origin or sourcing transparency.
This seems to be an expectation that is still somewhat dependent on the markets that firms are serving, but the number of people who want to know where products are coming from has grown and keeps growing.
“As a small distributor servicing mostly similarly sized B2B clients, non-profits and team sports, we haven’t yet had the client push for understanding the country of origin or sourcing information,” Keister says. “It hasn’t reached their radar yet.
“Rather, I have tasked our team with being as informed as possible, asking our suppliers the right questions and pausing before we purchase to ensure that our clients and their brands are protected. It’s our job to be the expert in these matters.”
- Similarly, 31% of distributors report a growing interest from clients in ESG, sustainability and ethical sourcing.
What Distributors Prioritize in Supplier Partnerships
To assist in productive and thoughtful collaborations, PPAI Research asked distributors what they most valued in a supplier partnership. The results were broken into five key attributes:
“Speed and reliability of fulfillment ranked as the top priority for PPAI 100 distributors, a
clear signal that operational execution is more critical than ever, especially as buyer expectations for turnaround tighten,” says Alok Bhat, market economist and research and public affairs lead for PPAI.
Alok Bhat
Market Economist, Research & Public Affairs Lead, PPAI
As is often the case in most industries, distributors tend to be happy to work with their existing partners, prioritizing transparent and proactive communications amid high-risk, high-cost environments.
- Other priorities seem to line up with client requests and suppliers’ abilities to help meet them.
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