Everyone likes free stuff. Smart entrepreneurs discovered this many years ago. Giving out things to your customers and suppliers is one way of showing your appreciation for them in a small way that nevertheless means a lot since nobody else ever does anything at all for them. It makes them feel happy and human.
On a more cynical level, it also gives you a chance to get other people to carry around items that have your advertising all over it. You can turn them into walking billboards and they will thank you for the opportunity.
It is important, however, that you pass out quality merchandise with a unique design on it. Custom trucker hats are one of the most popular ways of accomplishing this among the people who actually build stuff. Many a man cave is lined with shelving high up on the walls to display the owner’s vast collection of such working class bling. It is an artform all its own.