What happens when uncertainty becomes the only thing you can rely on?

The branded merchandise industry spent much of 2025 battling factors it couldn’t control. According to PPAI Research’s bi-monthly survey, the industry ended the year in something of a holding pattern, growing by 1.9% in the final two months, compared to the same period in 2024.

Slowed growth was a common refrain last year, not due to any reported lack of demand within the industry but because factors like tariffs, supply chain, price changes and a general lack of clarity for the immediate future both cut into profit and held up decision making.

There isn’t a tremendous amount of evidence to suggest that the factors causing all that uncertainty are going to all of the sudden vanish in 2026, which means it’s worth a greater degree of examination.

  • PPAI Research surveyed PPAI 100 distributors and suppliers to get a better sense of what that uncertainty has looked like.
  • What has been the primary source of uncertainty? How is it affecting operations? How are they responding and creating value? And what new possibilities are unlocked if more predictability resurfaces?


Distributor Uncertainty

There are plenty of factors to go around, but the big one is no surprise: Tariffs are the leading source of uncertainty reported by PPAI 100 distributors with 76% reporting trade policy as a cause of unpredictability. That was followed up by client demand uncertainty, which highlights ongoing challenges around cost visibility and planning.

Following up that information, distributors are asked to describe operational adjustments that they are forced to make as a result of all this uncertainty. A majority (59%) say they are absorbing supplier or logistics cost increases in order to protect their client relationships. Half of distributors claim to be shifting supplier or sourcing strategies.

  • 41% of distributors reported increased re-quoting or program changes and just over one third (35%) say they are delaying hiring or sales expansion.
  • This all indicates that uncertainty is influencing both near-term execution and growth decisions.


How Uncertainty Is Affecting Distributor Operations:

The survey asked distributors where value had been created amidst these unpredictable circumstances. The responses were concentrated in U.S.-based services and operations including:

  • Sales, account management or client strategy (98%)
  • Warehousing, kitting or fulfillment (93%)
  • Program management and supplier coordination (91%)
  • Design, artwork or creative services (75%)
  • Compliance oversight or quality assurance (64%)
  • Corporate or administrative functions (64%)


“The results reinforce that distributors’ economic contribution is rooted less in manufacturing and more in domestic labor, coordination and client-facing execution, supporting a strong U.S. jobs and services footprint,” says Alok Bhat, market economist and PPAI’s research and public affairs lead.

An accompanying part of the unpredictability of the past year has been unexpected rises in costs. From a distributor’s perspective, supplier or logistic cost increases require not just adaptability but tough decisions. A large majority (83%) adjust client pricing, while more than half (53%) have absorbed costs internally.

How Distributors Respond To Cost Increases:

Making the best of uncertainty and moving forward doesn’t mean it isn’t hampering outcomes that might otherwise be possible in a more stable landscape. Distributors were asked what parts of their business predictability might unlock if given a stretch of being able to plan ahead.

“Greater business predictability would primarily unlock growth-oriented investments for PPAI 100 distributors,” says Bhat.

Supplier Uncertainty

If PPAI 100 distributors are citing tariffs and trade policy as a primary source of uncertainty, it stands to reason that PPAI 100 suppliers are more acutely feeling that particular strain resulting from unpredictable foreign policy. It is by far the most commonly cited source of uncertainty for suppliers, significantly ahead of regulatory and compliance requirements (45%) and client demand uncertainty (42%).

Primary Sources of Business Uncertainty (suppliers):

Any frustrated distributors that have been absorbing costs passed down to them by suppliers should know that suppliers are reportedly absorbing costs in order to protect customers at an even higher rate than distributors (77%). More than half of suppliers (55%) have changed sourcing or production plans and 41% delayed pricing updates, a sign of just how much flexibility is required to do business at this moment in time.

Operational Responses To Policy And Cost Uncertainty (suppliers):

Amid tariff frustrations that are having an undeniable impact on the industry’s supply chain, it’s worth noting that for PPAI 100 suppliers, the vast majority of their core business activities are performed in the United States. Over 90% of sales and customer support and warehousing and fulfillment are U.S.-based. Compliance, testing or quality control is 53% U.S.-based, which may be related to stronger regulations and frameworks for compliance in Europe.

Supplier Operations Based in the United States:

A common notion that you’ll hear from promo firms is that they are not actually giving customers less under these circumstances. In fact, they are regularly doing more with less. That is reflected by suppliers’ responses when asked where they would see opportunities for growth if conditions were to improve. The leading response was to increase hiring (24%) tied with expanding product or service offerings. Additionally, 22% claimed they would increase capital investment.

The factors causing uncertainty for distributors and suppliers aren’t realistically going away with the snap of a finger, but many of them are rooted in policy decisions, or at the very least, can be remedied through policy.

  • Earlier this month, executives from a dozen PPAI 100 firms took the industry’s concerns to leaders in the nation’s capital for the inaugural Executive Capitol Hill Outreach.