It was far from business as usual for the promo industry – and yet, amid economic uncertainty, tariff turmoil and shaken consumer confidence, North American promo distributors managed to generate a record $27.7 billion in industry sales for 2025, up 4.2% from 2024’s figure of $26.6 billion.

That’s according to the latest Distributor Quarterly Sales Survey from ASI Research, which also noted that the industry finished on a high note with 5.1% year-over-year growth in Q4. It was the strongest quarter of the year, nearly identical to the 5.0% growth in Q3 and a stark contrast to the two consecutive quarters of sales declines that kicked off the year.

However, the growth for both the quarter and the year comes with a caveat. Findings from the Quarterly Sales Survey show that nearly 90% of distributors raised their prices throughout the year due to added import expenses, particularly higher tariffs on common promo supply chain sources like China, India and others. The average increase among distributors who raised prices was 11%.

“2025 was a very scattered year,” says Nate Kucsma, ASI’s senior executive director of research. “Overall, a sales gain of over 4% is strong, but when coupled with the fact that most distributors raised their prices by more than this, the change in actual business activity remains a bit sobering.”

With inflation hovering around 2.7% for most of the second half of the year, the broader U.S. economy likely faced a similar phenomenon regarding growth versus pricing. The Bureau of Economic Analysis recently reported a particularly strong third quarter for the overall U.S. economy – much like promo’s Q3 bounce back – but overall 2025 economic growth was estimated at 1.9%, according to the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters.

In other words, while distributors increased their top-line sales, it’s possible it didn’t translate to added profit as they raised their prices to cover added costs. That’s not great news for over half of distributors whose sales were flat (18%) or declined (35%) in 2025.

Still, nearly half of distributors (47%) increased their sales in 2025, and half of distributors finished strong by growing sales in Q4 – the highest figure since Q2 2023. Those year-end positive results are stoking cautious optimism heading into 2026.

“I’ve been in business for six years,” says Jon Lessans, the owner of Charleston, SC-based creative agency Indigo Ink (asi/444019), “and it was the best quarter four we’ve ever had.”

The Second-Half Bounceback

Every distributor class except “large” distributors ($1M+ to $5M in revenue) experienced their best quarter of the year in Q4 – a sharp contrast from the prior year’s Q4, where promo companies grew 1.8%.

Extra-large distributors – with more than $5 million in sales – had an incredibly strong three months, notching 9.3% sales growth on average. The smallest distributors, with $250,000 or less in sales, were next highest at 3.6% for the quarter despite a particularly tough start to the year.

Lessans attributes the Q4 success of Indigo Ink, a medium-sized distributor, largely to new client acquisition, particularly in sectors he doesn’t anticipate being affected by wider economic or global fluctuations. He works primarily on custom apparel projects, especially in the food and beverage space – but it’s the diversification of his client base into verticals like security and events that have set him up well for a successful 2026, he says.

This was a common thread among distributors with significant sales success in 2025: clients spread out across a variety of markets. The more diversified base meant that companies were more insulated against drastic profit drops when particular sectors were hit by economic uncertainty or lower consumer spending.

Craig Nadel – president and CEO of Counselor Top 40 distributor Nadel (asi/279600) and a member of the Counselor Power 50 – says promo is uniquely adaptable because distributors are able to pivot their focus to new markets when needed – in a way that those selling more specialized goods can’t. Logos and design might change, and navigating complex RFP processes for new clients can be a bear, but it’s possible.

“It’s not like we’re selling oil rigs, and only oil companies are going to buy it,” he says. “It can be hard to get in with clients – it’s not instant – but you can.”

Nadel notes that the Counselor Top 40 distributor was nearly 20% up on the year, though the company did see decreases in business from verticals like mortgage companies – as the U.S. housing market faced a sales slump fueled by heightened home prices and interest rates.

Bill Feldberg, vice president of business development from Counselor Top 40 distributor Something Inked (asi/329822), says the sports- and entertainment-focused distributorship had its best November and December ever, but forecasted declines on the year thanks to a variety of music clients who didn’t tour.

At Virgo III (asi/352485), based in Yardley, PA, Vice President Traci Manuel helps procure food packaging for her clients in the consumer brands space. With many packaged food companies facing lower consumer interest in 2025 and clients dropping order quantities thanks to tariffs upping per-item pricing, it was a tough year for her business.

“I think their sales are down, and because of that nobody is going to be doing new packaging,” Virgo says. “They’re trying to use old product – that’s a big thing I’m seeing.”

On the other hand, Nadel’s finance clients, specifically private equity-connected firms, saw significant growth in 2025. Despite a trend toward Americans eating out less, Lessans knows his high-end steak house client will always be busy with wealthy patrons and business dinners. Together, these examples illustrate a phenomenon many economic experts say is unfolding now: a K-shaped economy, in which high-income Americans continue to accumulate wealth while lower-income individuals face increasing financial strain.

At Garden City, ID-based distributor Hoopla (asi/266578), the biggest win came from customers in the technology vertical. But, again, CEO Christina Maag attributes the company’s particularly robust Q4 with the wide variety of markets they cater to.

“We do have a really good mix of clients,” Maag says. “We don’t just focus on one industry, and I think that’s always helped us, because when there’s downturns in certain industries, we’re not as affected by it.”

In some cases, Q4 success was just a matter of clients waiting to order until the potential impacts of tariff announcements on their own operations became clearer. Although new rates and negotiations sporadically changed throughout the year, the situation with China was largely settled by the time the fourth quarter kicked off. On the promo-specific side, most suppliers who would implement price hikes or tariff surcharges had already done so.

The combination of industry adaptability and a new trade situation status quo were key reasons behind industry optimism ticking back up in the fourth quarter. After tanking in Q1, and remaining low for the first nine months of 2025, the Counselor Confidence Index – Counselor’s measure of distributor financial health and business optimism – popped back up to 92 in Q4, a seven-point increase from its midyear lows.

As more certainty factored into tariffs and clients traded caution for excitement for 2026, it likely jolted some enthusiasm into their Q4 promo spend, says Ann Vidro, co-owner and CFO of Creative Studio Promotions (asi/170976).

“Early on, some industries were uncertain on how changes in tariffs, regulations, etc. might affect their businesses,” Vidro says. “And once the dust settled, it either didn’t affect them as much as they anticipated – or they even improved their businesses financially.”

More, More, More

Even beyond tackling specific verticals, though, what set distributors apart and allowed them to win business amid the challenges of 2025 seemed to be a willingness to do more – more outreach, more hands-on knowledge and more services.

“Big clients now need a lot more than they used to need,” Nadel says. “And I think if you want to get those big clients, you have to keep having these really robust offerings.”

In 2025, one of the most significant challenges for distributors was managing things like shipping and inventory amid uncertainty about tariffs. With rates constantly changing and some suppliers pausing midyear inventory restocks among the chaos, it could be tough to navigate fulfillment of complex global orders or custom projects without a deep understanding of the current situation.

To help mitigate such challenges, Full Throttle Marketing Powered by Proforma (asi/491857) moved to a larger warehouse space earlier this year to keep inventory for company store programs and the like in stock for clients. It’s a proactive approach that owner Justin Washburn says has paid off – they’re about to outgrow the facility again.

“It gives us one more avenue for competing with that on-demand mentality that everybody has,” Washburn says.

Maag says she’s fortunate that her husband operates a shipping and fulfillment business in the same facility as Hoopla – and that leveraging such a service is what gives her clients more confidence that projects will get where they’re meant to go, on time and correct. One of her biggest Q4 undertakings, for example, was a global gifting campaign for a tech company that had her shipping out packages to employees based all over the world, from India to Mexico.

“We’re not afraid to take those orders,” Maag says. “And that also gets our foot in the door and gets the client loyal to us, because they know we can handle those difficult projects.”

Reliability remains key. A.J. Demichael, operating partner of New York-based distributor Promo Kings (asi/302095), says he’s learned to navigate the fourth-quarter deluge by leaning on a select group of suppliers he trusts with rush orders and accurate live inventory – and almost exclusively recommending orders from those suppliers when clients connect for last-minute projects.

“Early on in 2025, some industries were uncertain on how changes in tariffs and regulations might affect their businesses. And once the dust settled, it either didn’t affect them as much as they anticipated – or they even improved their businesses financially.” Ann Vidro, Creative Studio Promotions (asi/170976)

On the client front, Derrick Carpenter of Something To Talk About Marketing (asi/329893) attributes most of his 2025 sales success to relationships, specifically the ones he’s built within a networking group. His business with local clients was on the ups because of word-of-mouth referrals, and because those referrals trusted him to get the job done.

Mike Archambault at All World Promotions (asi/117246) feels the same. Based near Las Vegas, he works with many of the city’s large casinos on promo campaigns and giveaways that stretch across departments – meaning that there’s plenty of opportunity to ensure that they always have a connection with a client, even with turnover.

“There’s 4,000 or 5,000 people that work at a casino – there’s just people everywhere that work for the property,” Archambault says. “That’s our goal, to try to not just know one person, but know everybody that’s associated with the casino.”

Projections for 2026

The new year has already kicked off with a lot of energy, particularly for attendees of ASI Show Orlando. Carpenter fulfilled one of his first orders of the year on the Orlando show floor after getting a call from a client about name badges they needed the following week.

“Looking forward into 2026, I feel the industry may be poised for a strong year,” says ASI’s Kucsma. “But the run-up to the October midterms may have something to say about that.”

Which one word describes expectations for 2026?

Major events, including the 250th anniversary of the United States and the World Cup (hosted this summer by the U.S. as well as Canada and Mexico) could sustain growth in the first half of the year.

Again, projections of industry health based on the Consumer Confidence Index are up from midyear lows, but still hovering below the baseline of 100 that kick-started 2025. It means that even with increased optimism from earlier in 2025, there are still lingering concerns and hesitation from distributors like Manuel.

“The same things that happened December 31 are still here January 1,” she says.

David Glassman, who operates The David Erwin Group (asi/176156) – a combination small distributorship and supplier consulting operation – is a bit concerned about continued price increases coming from his contract decorators, who have already warned him to expect a 5% to 15% hike depending on decoration method. But he has his eye on the new clients he connected with in the fourth quarter, and also specifically on Made-in-USA merch – a trend that came up in almost all of his sales conversations over the course of 2025, and one he expects to continue.

John Grantham, owner of Promo Northwest (asi/235064) in Washington state, doesn’t know if he’ll be able to top his 2025 sales, thanks to several anniversary- and celebration-driven projects that kicked off Q1 strong and won’t be repeated this year. But after a steady 2025, he’s ready to keep plugging along.

“We’re just a two-person operation,” Grantham says. “So, for just the two of us to do over a million as an independent, that feels pretty good.”