The data backs up what much of the branded merch world is likely feeling. The industry is operating somewhere far ahead of panic but only just on the edges of what could be comfortably considered stability as of late. Recent months have produced positive (if modestly so) overall growth for the industry at large, but that growth has been generally uneven.
- According to PPAI Research’s bi-monthly study, PPAI 100 suppliers grew by 1.1% in March and April compared to the same months in 2025.
- On the other hand, PPAI 100 distributors grew by 2% in the same months, continuing a trend of outperforming suppliers that now dates back about a year.
Don’t Miss A Thing: SUBSCRIBE To PPAI Newslink
Collectively, while positive growth is encouraging, it is still being comfortably outpaced by the current U.S. rate of inflation of 3.8% for the 12 months ending in April. Far from making profitable business prohibitive, it’s an additional strain on employees and a potential pressure on margins.
The latest revenue data isn’t cultivated from the same methodology as the annual U.S. Distributor Sales Volume Estimate, which polls U.S. distributors of all sizes. Rather, the current assessment stems from the aggregated results of PPAI 100 distributors and suppliers responding to a flash survey.
According to Alok Bhat, market economist and PPAI’s research and public affairs lead, firms are largely maintaining growth through strategic decision making as opposed to big swings.
Alok Bhat
Market Economist, Research & Public Affairs Lead, PPAI
“Performance continues to differ across suppliers and distributors under the same market conditions, reinforcing that execution and pricing are driving results more than broad demand expansion,” Bhat says.
Suppliers Facing Incremental Growth
As stated above, PPAI 100 suppliers are growing at a slower rate than PPAI 100 distributors. With a collective growth rate of only 1.1%, it stands to reason that the growth isn’t shared by the entire supplier community.
- About 65% of suppliers reported revenue growth in March and April.
- Only 12% claimed significant growth.
More specifically, revenue growth was concentrated among small and midsize suppliers (see graph above), likely due to pricing actions and inflation-pressured environments.
“Larger suppliers skew flatter, reflecting stability but limited upside as tariff uncertainty and unclear refund timing continue to constrain expansion decisions,” Bhat says. “Smaller firms show greater volatility, capturing both growth opportunities and declines as they respond more quickly to changing costs and demand.”
It’s more difficult to pin down consistent trends when it comes to unit sales. About 57% of suppliers reported higher volumes of sales in March and April, but 25% reported declines.
Meanwhile, 70% of suppliers are reporting higher procurement costs in March and April, likely a source of why they are lagging behind their distributor partners. Elevated costs are pressuring small and midsize suppliers more, reflecting scale and sourcing leverage by larger suppliers.
- Nearly half (47%) of suppliers claim they experienced margin decline due to inflation.
- 55% are at least evaluating tariff refunds, but they see them as a potential offset.
Distributors More Resilient But Constrained By Confidence
The growth rate for PPAI 100 distributors doubled that of suppliers (2% compared to 1.1%) in March and April, so it comes as no surprise that they outperform their supplier partners in many regards.
- 74% of distributors reported revenue growth in March and April.
More than 70% of distributors reported increased unit sales, indicating that there is a healthy downstream demand within the industry.
Distributor Unit Sales
In regard to unit sales, smaller companies experience the greatest amount of volatility (see chart above). Midsize distributors drive the largest share of unit growth, while larger distributors show steady performance with limited downside, reinforcing overall stability.
Overall revenue is being driven by midsize distributors, which are accounting for the largest share of growth (see chart below). Along all segments, however, the growth is mostly due to moderate gains by firms as opposed to outsized increases.
Revenue Trends
“Overall, results point to a resilient but uneven distributor environment, where momentum is holding despite continued cost and pricing pressures,” Bhat says.
Basically the same percentage of distributors (71%) report higher procurement costs. However, 52% report no material margin impact from inflation, and only 29% reported margin declines.
Bhat characterized distributors as “holding momentum better than their upstream partners” but are currently supported by demand and pricing discipline.
