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.” 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. 10-Year Industry Performance Year Industry Performance ($) 2016 21,304,931,457 2017 23,285,980,409 2018 24,746,578,839 2019 24,223,484,868 2020 19,617,112,147 2021 22,077,935,415 2022 25,522,419,472 2023 26,094,912,163 2024 26,780,831,357 2025 27,128,982,165 60% 59% 71% 55% 57% 46% 43% 43% 38% 52% 50% 52% 3% 1% 13% 80 60 40 20 0 (%) Tariffs/duties Freight/logistics costs Compliance costs Price competition Client budget cuts Factors Impacting Margins in 2025: ■ Total ■ Over $2.5M ■ Under $2.5M 36 • MARCH 2026 • PPAI Must Read | PPAI Sales Volume
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