Branded merchandise sales hit record $27.7 billion, driven by prices not orders

By Conor Smart · Published July 22, 2026, 8:20 a.m. ET

Branded merchandise sales reached a record $27.7 billion in North America last year, but nearly all of that growth came from higher prices rather than more orders.

The figure, released by the Advertising Specialty Institute, marks a 4.2% increase over 2024 and outpaced U.S. real GDP growth of 1.9%. Fourth-quarter sales rose 5.1% over the same period a year earlier, closing a year that started under heavy tariff pressure.

The record hides a harder story underneath. Nearly 90% of distributors raised prices in 2025, by an average of 11%, to cover higher import costs on goods coming from China and India. Over half reported that their actual order volume was flat or falling. The dollars went up because each piece cost more, not because businesses bought more of them.

"Last year was far from business as usual," said Timothy M. Andrews, president and chief executive of ASI. "Distributors faced persistent challenges but adapted by diversifying client bases, expanding services and leaning into their role as trusted partners."

For the small businesses that buy branded polos, caps and jackets, the takeaway is direct. The same order costs more than it did two years ago, and the pressure is not letting up. A restaurant outfitting its floor staff or a clinic ordering embroidered fleece for the front desk is paying a tariff-driven premium on every unit.

Arklavo, a custom apparel company that fills no-minimum orders for businesses across the country, sees buyers responding to that math in real time. Orders are getting smaller and more precise. Where a company once bought a case of shirts to hit a supplier minimum and cover a discount, many now order the exact count they need and reorder when they hire.

"When prices climb, the last thing a 12-person business wants is to buy 50 of something to get a break on 12," said Conor Smart, founder of Arklavo. "They want 12, done well, with the option to reorder six next month. Removing the minimum takes the guesswork out of it."

The tariff picture is the reason the numbers look the way they do. ASI reported that extra-large distributors with more than $5 million in revenue grew fourth-quarter sales 9.3%, while smaller firms lagged. Larger buyers can absorb price increases and negotiate. Smaller ones feel each one. That divide is pushing small businesses toward suppliers that let them buy in the quantities they actually use.

Andrews and other industry analysts have pointed to diversification as the survival strategy for 2025. Distributors that served several industries held up better than those tied to one, a sign that demand did not vanish so much as scatter across more careful buyers.

None of that changes the underlying demand for a logo on a shirt. Businesses still want their teams to look consistent, and a well-made embroidered polo still does more for a brand than a stack of business cards. What has changed is how businesses buy it. They order in smaller runs, closer to when they need it, with a sharper eye on the per-piece cost. Companies comparing branded options can review styles and decoration in the Arklavo custom polo collection before their next order.