Promo is a resilient industry, and the demand for branded merch remains. That’s the good news, and you can see it in the data, as industry revenue has risen slightly. The bad news is that such a rise still does not come close to making up for the current rate of inflation, and both suppliers and distributors are battling external tariff issues that have nagged at them all year.

  • PPAI Research’s most recent bi-monthly survey has confirmed that the industry grew by 1.45% in September and October compared to the same two-month period in 2024. This is an uptick from the 0.7% it was up in July and August.
  • Still, that growth is not even half the rate of inflation, which currently stands at 3%, and tariff complications continue to create hurdles for firms on all sides of the supply chain.
  • 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, the external conditions surrounding promo’s growth are too burdensome for many firms to feel comfortable with their margins.

“With inflation still at 3% and tariff-driven cost volatility persisting, these modest gains are being eaten away by higher procurement costs and upstream pricing shifts, leaving little room for net margin recovery,” Bhat says.

Alok Bhat headshot
With inflation still at 3% and tariff-driven cost volatility persisting, these modest gains are being eaten away by higher procurement costs and upstream pricing shifts, leaving little room for net margin recovery.”

Alok Bhat

Market Economist and Research & Public Affairs Lead, PPAI

  • Indeed, a significant majority of both suppliers and distributors reported higher procurement costs in September and October.


Tariffs have been the story across just about every industry in 2025, and promo has been no exception, with factors seemingly culminating this year as the holiday rush is stifled by logistical nightmares from untenable price increases to back-and-forth uncertainty on the state of tariffs.

A significant majority of both suppliers and distributors reported higher procurement costs in September and October.”

Supplier Findings

Revenue growth for suppliers in September and October has been concentrated to what still amounts to a majority but a seemingly shrinking one. Somewhat worryingly, one fifth of suppliers reported declining revenue.

  • 65% of PPAI 100 suppliers reported revenue gains over the two-month period.
  • 14.8% claimed their revenue was flat.
  • 20.4% of suppliers saw a decline in revenue.


“Demand is steady but growth is modest as tariffs, inflation and economic uncertainty shape how buyers commit to spend,” Bhat says.

A primary issue facing suppliers is procurement trends, and the price increases driven by tariffs and freight volatility are upstream issues that suppliers are now feeling the brunt of.

  • Nearly three quarters (73%) of suppliers report higher procurement costs.
  • 25% say that procurement costs remained flat through September and October.


While external forces seem to be keeping margins modest for many promo suppliers, the data suggests that demand is still stable, especially when you look at year-to-date revenue trends.

  • 46% of suppliers report higher year-to-date revenue compared to 2024.
  • 31.5% claim their performance was similar to last year.
  • More than one fifth (22.2%) experienced a decline in year-to-date revenue, driven largely by pricing sensitivity, tighter budgets and margin pressures.


Distributor Findings

Procurement costs are a big part of the conversation in September and October’s bi-monthly study, and according to the data, distributors are not immune to the pressure. They are likely facing a trickle-down effect from supplier price adjustments, themselves facing tariff-linked increases and continued inflation across core product categories.

  • 60.5% of distributors report higher procurement costs than they had previously dealt with. This is less than the 73% of suppliers who made the same claim but together paints a picture of the environment promo firms are contending with.
  • Just 4.7% of distributors claim that those higher procurement increases were sharp or drastic jumps upwards, primarily tied to categories most sensitive to global freight or tariff changes.
  • 39.5% say procurement costs have been flat and mostly predictable over September and October.

Similarly, distributors are on the front lines to witness where the external factors meet the status of client orders, and where that leaves your average promo firm. According to data, inflation is cutting into those relatively thin margins for nearly one third of distributors.

  • 30.4% of PPAI 100 distributors reported slightly lower margins in September and October.
  • 58.7% of distributors did not see margins change.
  • Only 10.9% were in the unique position of seeing margins improving over the same period of time.


“Distributor margins remain tight as inflation and supplier price increases outpace what clients are willing to absorb,” Bhat says.

Distributor margins remain tight as inflation and supplier price increases outpace what clients are willing to absorb.”

Asked if supply chain logistics have had a significant impact on their project timelines or client expectations in September and October, more than one third of distributors reported affirmatively, suggesting that port fees and tariff uncertainty have created circumstances that are unavoidable and require addressing.

^Did supply chain logistics have a significant impact on your project timelines or client expectations in September or October? Source: PPAI Distributors

One trend that has continued throughout the year, however, is that distributors continue to be more shielded from the effects of tariffs and other global pressures than suppliers, who are directly facing many of the supply chain issues. This is temporary, of course. Most pains felt by suppliers will eventually trickle down to distributors rather than be absorbed by the supplier side of things.

Still, you’ll recall from above that less than half of suppliers (46%) reported higher year-to-date revenue compared to 2024. That number is significantly higher for distributors, which, if nothing else, seems to suggest steady client activity and consistent project flow for promo.

  • 74.5% of distributors reported higher year-to-date revenue compared to 2024.
  • 10.6% classified their year-to-date revenue as unchaged.
  • 14.9% of distributors saw their year-to-date revenue decline, which could be a sign of the margin pressure from higher supplier costs.