The sales environment for Canadian distributors is challenging.

New data from ASI Research indicates that average gross profit margin continued to tick down in 2025, to 35%. It stood at 38% in 2023 and 36% in 2024. Meanwhile, the average number of days it took for distributors to get paid by clients ticked up to 32 days in 2025. That’s down from 38 days, where it stood in 2022, but slightly up from the 31 days reported in 2023 and 2024.

“For the downtick in average profit margin, I’d attribute that to two factors,” said Jen Beldam, founder and president of Northern Branding Studio. “One is the tariffs and countertariffs we started facing in 2025. We’ve tried to absorb some of that pressure to remain competitive, and we’re not the only ones. The other is the rise in end-buyer demand for retail-quality and household brands. Those often come with lower MSRP to start with, and we can’t deviate too far from that to remain competitive.”

Beldam said the increase in time it took for end-buyers to pay in 2025 is a direct result of the state of the economy. “Many of our clients are small businesses themselves,” she said, “and things are tight in every vertical. Costs are up across the board, and that’s affecting cash flow.”

More than half of distributors (53%) also said it’s taking longer to complete projects than in previous years – Beldam cited complex client requests, which require more time spent ideating, designing and sourcing. And the percentage of distributors who sell outside North America surged from 9% in 2023 to 26% in 2025.

“It’s become easier to operate internationally,” said Beldam. “Many suppliers are setting up factories and fulfillment centres beyond our borders, so we can reach customers where they are.”

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