Promo hit a record $27.7 billion and made less money doing it

On paper, 2025 was the best year the promotional products industry has ever had. ASI's count put North American distributor sales at a record $27.7 billion, up 4.2%, the strongest growth since 2022 and comfortably ahead of the U.S. economy's 1.9%.

Read one layer down and the story changes. 88–90% of distributors raised prices in 2025, by an average of about 11%, mostly to pass through tariff costs. Much of the record was price, not units. PPAI's economist Alok Bhat put it plainly: "Many distributors sold more but made less."

The margin squeeze, itemised

The pressure shows up in every survey the industry ran this year:

• 49% of suppliers and 30% of distributors reported margin declines over the past year
• The top margin threats named: tariffs and duties (56.8%), rising freight (54.3%), reduced client budgets (50.6%)
• Only 47% of distributors actually grew sales in 2025; 35% declined
• 22% of distributors named profitability their single biggest challenge in Counselor's 2026 State of the Industry, up for the second straight year
• Scale is pulling away: extra-large distributors grew 9.3% in Q4 while the smallest grew 3.6%

And the work itself is getting more granular. When budgets tighten, 60% of buyers cut quantity first; only 11% cut customization. Suppliers report smaller average orders (58.2%) and more rush, event-driven programs (35.7%). More orders, smaller orders, faster orders, and each one carries the same fixed cost of entry, tracking, proofing, invoicing and follow-up.

Revenue per order is falling while admin per order isn't. That arithmetic is the real story of 2025, and the real agenda for 2026.

Efficiency is the strategy now

PPAI's 2026 outlook says the quiet part in one line: margins stay tight, and "efficiency will become a firm's most important advantage." Among tariff-hit firms, 100% raised prices, but 64% also made internal adjustments, cutting expenses or optimizing workflow, because pricing alone couldn't carry it.

There's also a competitor that doesn't share the industry's cost structure at all: non-industry sellers like Amazon and Canva captured $4.4 billion, 16.3% of industry sales, in 2025. They win on self-service and turnaround. Matching them on service means matching them on operational speed, with a fraction of their engineering.

What out-operating looks like

A typical distributor runs 34–40% gross margins, which makes back-office labor one of the few levers big enough to matter. The hours are hiding in plain sight: POs re-keyed from email into the ERP, supplier portals checked one by one for order status, invoices matched by hand, quotes built from scratch against portal pricing.

This is the work AltOps automates. Agents learn the workflows your team already runs from screen recordings, then run them around the clock on their own computers, and nobody has to switch systems. The distributors that grew profitably in 2025 didn't find easier customers. They made each order cheaper to handle. In a year where the top line is priced up and the bottom line is squeezed, that's the advantage that compounds.