(Editor’s Note: Since 1965, PPAI’s U.S. Distributor Sales Volume Estimate has been the most trusted, directionally accurate measure of the size of the U.S. promotional products market and trends in the industry. Selected charts displayed in this article are taken from the full report, available to professional members through PPAI’s Premium Research. Data was compiled with the help of independent research partner MyImaginity)
Promo channel sales reached $27.1 billion last year, according to PPAI’s just-released 2025 U.S. Distributor Sales Volume Estimate. By these metrics, it’s the first time the promotional products industry can account for north of $27 billion in sales, a number that has grown steadily in its recovery from the Covid-19 pandemic.
However, that landmark is more of a silver lining in a report that reveals mostly slowed growth in the promo market. The $27.1 billion number represents a growth of 1.3% over the previous year, which is a slower pace than the rate promo was growing in the years prior.
- Tariff volatility, rising costs of compliance and freight, as well as tighter client budgets and compressed margins all made 2025 a difficult year for sales, likely contributing to modest growth.
- Worryingly, the 1.3% growth rate lags significantly behind the 2025 inflation rate, according to the Consumer Price Index.
10-Year Industry Performance:
Alok Bhat, market economist and research and public affairs lead for PPAI, reiterates that the industry can’t rest on its laurels when it comes to reaching new heights, as the external circumstances many promo firms faced made it a difficult year for them.
“Revenue growth alone doesn’t tell the full story this year,” Bhat says. “Many distributors sold more but made less.”
Alok Bhat
Market Economist and Research & Public Affairs Lead, PPAI
To Bhat’s point, cost volatility absorbed much of the topline growth. Many distributors reported revenue growth without corresponding profit gains. Within that dynamic is a sort of eye-of-the-beholder perspective: When it comes to the state of the promotional products industry, demand was not a significant challenge, but protecting margins was. The chart below indicates that tariffs, freight/logistics costs and client budget cuts are all playing major roles in distributor margins.
Factors Impacting Margins In 2025:
Company Size Comparisons
Large U.S. distributors – classified as those with annual sales over $2.5 million – were responsible for 54% of the industry’s sales volume (See Figure below). These distributors generated $14.6 billion in 2025. Conversely, small distributors (under $2.5 million) accounted for 46% of the industry’s sales volumes, making just over $12.5 billion.
Market Share By Distributor Size, 2015-2025:
This split remained largely unchanged from prior years, indicating a stable industry structure. With increased mergers and a greater presence of private equity across many industries, it can be seen as a sign of an industry’s good health that smaller companies have not lost ground over the past few years. Margin pressures were reported among small and large companies.
Both small and large distributors saw modest increases in their sales volumes in 2025 with growth rates of 1.31% and 1.29% respectively.
Growth In Retail Branded Products
One of the most clear and apparent growth signals in the data is the move toward retail branded products, reflecting a shift toward higher-value items, even if it means sacrificing quantity. In fact, growth in this sector far outpaced industry growth overall, led mostly by large distributors whose retail-branded sales grew by 15.9% (compared to 10.3% among distributors under $2.5M).
In total, retail branded product sales reached an estimated $6 billion (see Figure below)
In reference to the figure above, Bhat considers it a demand shift as opposed to a short-term trend, as buyers prioritize value, quality and brand recognition.
“Buyers are choosing better products, not just cheaper ones,” Bhat says.
Online Sales Makes Up A Quarter Of Revenue
Just about any thriving distributor would agree that the days of online sales being considered a growth experiment are well in the past. They are now a core channel of the promo market, and the data backs that up.
- Online sales reached $7.1 billion in 2025, or 26.3% of total sales (see Figure below)
Nearly all large distributors and most small ones sell online. Distributors under $2.5 million reported an 11.4% online sales growth in 2025, suggesting that digital sales channels play a major role in the scale and reach of smaller firms.
Online Sales Contribution To Distributor Business, 2017-2025:
Online Sales As Percentage Of Total Sales Volume, 2017-2025:
Sustainability
Substantiable products have become a staple in promo, as evidenced by the $3.8 billion in estimated sales they represented in 2025, which made up 14% of total sales (see figures below). However, its growth slowed in 2025, while it continues to be something to watch going forward with compliance and regulation matters putting greater emphasis on it.
“Sustainability has shifted from a fast-growth category to a standard offering across distributor sizes,” Bhat says.
Sustainable Product Sales Contribution To Distributor Business, 2019-2025:
Non-Industry Suppliers
Non-industry suppliers (defined as suppliers not affiliated with recognized organizations such as PPAI, ASI or SAGE), continue to make up a sizeable portion of sales. In 2025, they accounted for approximately $4.4 billion, or 16.3% of total industry sales. However, this is only a slight increase over 2024, which had shown a big jump from 2023, suggesting that growth outside of the industry is potentially leveling off (see Figure below).
Sales Volume With Non-Industry Suppliers, 2017-2025:
The reasons for going outside of the industry varied. Thirty-seven percent claimed to use local manufacturers or artisans, 34% went with consumer retail brands, 25% cited the general marketplace, 20% went to direct-from-overseas platforms and 28% cited “other.”
Uneven AI Adoption
There’s no question that AI applications have found use in the promo industry, and they increased in 2025, but the adoption of such technologies remain uneven and concentrated mostly among larger distributers.
Company Has Integrated New Technologies (e.g., AI, AR, VR) Into The Marketing Or Selling Of Promotional Products In 2025:
It would be more accurate to say that technology investments in 2025 were practical and efficiency-focused for promo, as opposed to “transformational.” Where AI was adopted, it was primarily used for customer insights, CRM enhancement and operational automation.
2026 Outlook
Distributors weathered through a difficult 2025 to generate a still growing industry. Perhaps for that reason, they are optimistic for 2026. But that optimism is understandably measured. When it comes to sales, 60% of distributors expect higher sales this year, with much of that enthusiasm coming from large distributors.
Distributors’ 2026 Sales Predictions:
If you ask about profit, that optimism is tempered a bit more as the external pressures of 2025 are likely to continue into 2026. Only 53% of distributors expect profit in 2026, and only half of small distributors are feeling encouraged about profitability.
Distributors’ 2026 Profit Predictions:
*These selected charts and data were taken from a larger collection of information that can be accessed at PPAI’s Premium Research .
