Cary Heller certainly isn’t panicking, but he does see potential cause for concern.

The vice president/partner of All USA Clothing Inc. (asi/30171) says, at this time of year, it’s common for large-volume orders to be pouring into his company – jobs that center on producing private-label branded apparel ultimately sold in gift shops of national parks.

But where there’s normally an order deluge in the year’s opening months, Heller has seen hardly a trickle. He suspects the dearth of national parks-related orders for the Michigan-based distributor/supplier this year could be at least partially a result of a much-documented national topic: federal personnel and spending reductions instituted by the Trump administration’s Department of Government Efficiency (DOGE). The cuts have affected the National Park Service and other federal agencies and departments (see sidebar).

To be clear, Heller hasn’t heard definitively that there’ll be a rollback on branded merchandise spending due to DOGE cuts. But he does think anxiety and uncertainty among parks personnel may be stifling swag spend.

$1-$2 Trillion
How much spending DOGE wants to cut from the federal budget by 2026.(Elon Musk)

“With the cuts happening at the federal level,” Heller tells ASI Media, “they’re maybe concerned that they’ll be on the chopping block and not really thinking about buying apparel right now. We’re hoping for the best going forward, but there’s uncertainty.”

All USA Clothing’s situation highlights a new challenge facing distributors amid DOGE’s stated mission of slashing $1 trillion in federal spending by the end of September. Namely, they’re dealing with a more complicated business cycle with federal government clients that carries at least the threat of a decline in orders and sales. There’s concern that potentially reduced budgets as well as shrunken federal workforces could lead to reduced merch spending by government clients.

3 Million
The number of people who worked for the federal government as of late 2024. The number was coming down amid staff cuts.(Pew Research)

TK Promotions (asi/341067), a Counselor Best Place to Work, has seen some early-year hiccups with federal clients. “Some of our contacts in that space are no longer in that space,” says Wayne Vaughn, TK Promotions’ vice president of sales and marketing. “We’re getting email bounce-backs because they’ve been let go.”

So far in 2025, Vaughn shares that the Virginia-based distributor’s sales with federal clients are roughly flat with last year’s performance. In some instances, approvals are taking longer. Still, the lion’s share of the distributorship’s business with federal clients typically occurs in the latter half of the year, pertaining to gift and award initiatives.

10,000 Positions
Decline in federal employment in February 2025.(U.S. Bureau of Labor Statistics)

Could such orders be axed or reduced amid DOGE cuts? Vaughn says it’s too soon to say but the firm is keeping an eye on developments. “We’re not anxious folks but we’re monitoring the situation,” Vaughn says. “One concern could be that an order is placed, but then funding is frozen.”

TK Promotions has strategically diversified its client roster and federal customers’ spending makes up less than 10% of the distributorship’s business. That hasn’t stopped the firm from being proactive about potential headwinds from federal end-buyers, though.

“There’s going to be ups and downs in every vertical. If you differentiate yourself and provide clients with a great experience, a downturn in one market can always be made up somewhere else.” Wayne Vaughn, TK Promotions (asi/341067)

Vaughn says TK Promotions is looking at what may be emerging opportunities in the federal space – perhaps with the U.S. Department of the Army, for example – while also identifying heightened sales potential with clients in other markets.

“There’s going to be ups and downs in every vertical,” Vaughn states. “If you differentiate yourself and provide clients with a great experience, a downturn in one market can always be made up somewhere else.”

4.2%
Percentage of industrywide promo sales that distributors generated with government clients in 2023. That’s inclusive of federal, state, county and local government.(Counselor State of the Industry Report)

Other distributors with whom ASI Media spoke also say their business with federal clients has held roughly steady to date in 2025, but the outlook is pocked with uncertainty. Beside the ongoing potential issues presented by DOGE cuts, there are nearer-term threats that crop up too, like a potential federal government shutdown as soon as Friday.

Rose Sarro, ASI Media’s 2024 Distributor Salesperson of the Year, conducts business with federal end-buyers, including those with ties to veterans’ organizations. The vice president of sales of Nevada-based Promo Direct (asi/300477) says that business with such clients has remained consistent in 2025. She says her clients are closely following developments in Washington, D.C., but asserts that, for now, “it’s business as usual.”

“As we all know in sales, things can shift quickly, and it’s hard to predict what might happen in the next few months,” says Sarro. “However, at this point, I haven’t felt significant impacts.”

Like Vaughn, Sarro says it will be important for distributors who serve federal promotional products clients to stay informed and nimble. She states: “We continue to maintain strong relationships with these organizations, ensuring that we meet their expectations and adapt to any changes in their requirements.”