This is part 2 of the 2026 edition of ID Survey of Distributor Operations, covering the balance sheet, best practices, the value of the distributor and employment trends. Read part 1, which outlined current economic conditions, industry challenges, technology use and more, here.
The Balance Sheet
The balance sheet section is often the true tell of whether the most significant challenges outlined in this survey’s results are impacting the bottom line.
For most of our survey respondents, over the past 12 months, sales are increasing:
- Sales increased: 71%
- Sales decreased: 15%
- Sales remained approximately the same: 13%
This data is characteristic of the modulating cycle we’ve seen since the pandemic. For example, in 2022 and 2023, sales increases were cited by 83% and 72% respectively. In ‘24 and ‘25, that group declined to about half of respondents. This year’s bump suggests that, despite varying headwinds, distributors are faring reasonably well.
That said, with more than 1 in 4 attesting to sales stagnation or decline, the responses also indicate there are some winners and losers.
Profitability was similarly split: 69% of distributors said their profits had increased over the previous year, while 16% saw steady year-over-year profits and 14% saw declines.
Are these tariff-related? Perhaps. While distributors have taken various paths around the duty taxes, some have most certainly fared better than others. When asked how they’d best characterize the impact of tariffs on their businesses (and permitted to check all that apply), distributors said:
- Tariffs have increased our costs (57%)
- Tariffs have caused us to increase our prices (55%)
- Tariffs have caused us to reevaluate our supplier base (43%)
- Tariffs have resulted in uncertainty that impacts our business decisions (38%)
- Tariffs have caused our customers to pull back (35%)
- Tariffs have had no impact (4%)
Perhaps the most notable shift from last year’s results relates to uncertainty: while 38% is still a sizable group that cites the unpredictability of tariff decisions as a reason to hedge, last year, that group comprised 59% of respondents.
Despite all this, however, distributors, by and large, remain optimistic: 82% say they believe their sales will increase in the coming year, compared to 7% who expect similar sales volumes and 11% who predict declines.
Those expecting increased sales represent a notably larger group than last year, when 63% expected their sales to increase and 29% said they’d remain the same. Notably, our 2025 survey was issued just after the “Liberation Day” tariffs were unveiled in April of last year. It is likely we are seeing a stabilization of this sentiment as companies have adjusted their tariff strategies.
Meanwhile, they have many proactive strategies that will support growth in the future. Respondents told us they’d employ the following methods in their growth and development efforts:
- Advertising/marketing (62%)
- Sell more via web/e-commerce (56%)
- Improve/redesign website (47%)
- Drive traffic to website (46%)
- Hire technical employees (43%)
- Add product lines (41%)
- Do business overseas (30%)
- Hire more employees (28%)
- Set up new branches (26%)
Best Practices
When it comes to supplier relations, this section aims to take the pulse of the current dynamic: are distributors and their suppliers working well together? And who carries more weight on this year’s proverbial seesaw?
When we asked our survey pool about the criteria they currently favor when evaluating their suppliers, the top two remained the same as last year and, frankly, for many years prior: quality (77%) and on-time delivery (65%). And while last year’s group ranked service & support capabilities third, this year’s pool selected “price.”
It feels important to point out that price, reputation and service/support all netted very similar response rates, with price holding just a slight edge over the other two options. Still noteworthy, however, is the fact that price ranked as a clear 4th last year.
Distributors seem, generally, content with their supplier relationships in a bit of a shift from previous years, when more said their relationships had “gotten better” versus last year. Just over 10%, conversely, claim these relationships have gotten worse over the past year, compared to 14% who said the same last year.
This general satisfaction comes even as suppliers continue to raise prices, a scenario 89% of our survey respondents have experienced.
We asked those who are enduring these price increases whether their suppliers were doing anything to offset the strain. The most popular answers were reduced shipping fees or drop shipping, new product introductions, easier returns or extended terms. Suppliers trended toward logistical or product-based support to enhance overall value in place of overt price reductions.
When it comes to their own customer management, distributors also spoke to their payment terms. The majority of our respondents require payment terms somewhere in the 16 to 40 day ranges (64%), although a small segment (7%) offers 60-plus days.
Value of the Distributor
In our value section, we asked survey respondents to look in the mirror and evaluate their own offerings, including what they consider to be the key reasons customers do business with them. Here’s what they told us:
- Consistency of experience/trusted rep (24%)
- Quick turnaround/deliveries (15%)
- Convenience (13%)
But the most popular response, with nearly a third of respondents selecting it, was “all of the above,” a list that also included speed of ordering and accuracy.
Another key area showcasing the distributor competitive advantage is, of course, service offerings. Our survey respondents highlighted those for which they were most likely to charge a fee, and the top paid services included shipping (59%), setup/installation (45%), design/engineering consulting (41%) and tech/product support (36%). Fewer charged for inventory management, training or auditing as they, perhaps, wrap them into the value-added category.
As far as the percentage of a distributor’s overall revenue that’s derived from services, generally distributors net between 11-20% from services (32% of respondents) or 21-30% (25%). Very few (7%) say they derive more than half of revenue from service-related offerings, and even fewer (3%) don’t charge for anything.
Employment
This year’s temperature check on turnover reveals an industry where workforce woes may be picking up steam again after moderating slightly in our two previous reports. In August of 2025, the U.S. Mercer Turnover Survey noted that the logistics industry reported some of the greatest difficulty filling roles, and that warehouse workers had a monthly turnover rate of around 5%.
For the distributors who took our survey, a quarter noted warehouse workers were challenging for them to hire and retain, but this result was overshadowed by other categories. Notably, tech roles are considered difficult to fill by 43% of the response pool, as well as executives (31%) and sales (30%).
Despite these challenges, 47% of our survey respondents added sales positions in the past 12 months. Another 43% added warehouse positions and 40% added customer support.
As far as staffing activity, distributors told us they’ve experienced the following impacts:
- 40% have added staff in the last 12 months.
- 27% anticipate needing to add staff in the next 12 months.
- 22% anticipate needing to possibly reduce staff in the next 12 months.
- 11% have reduced staff in the last 12 months.
Those reductions were spread fairly evenly, according to our respondents, with tech roles the most insulated from these separations, and “administration” roles most exposed.
When it comes to retention, distributors use a variety of methods to keep employees happy. The top strategies cited included:
- Pay increases or pay for performance (62%)
- Improved benefits packages (61%)
- Training (42%)
- Flexible work environment (40%)
The majority of survey respondents believe that their company’s ability to recruit talent is “good” or “very good” — with few characterizing their company’s efforts as “excellent” or, likewise, “poor.” This suggests that the hiring process is active, though it doesn’t speak to the “revolving door” problem that’s been reflected in numbers from the U.S. Bureau of Labor Statistics over the past few years.
Read part 1 of the Survey of Distributor Operations here, and see the complete feature in the May/June issue of Industrial Distribution magazine.
