Around the Horn In Wholesale Distribution - Episode #26

Sa. Sam. Hey, good morning, everybody. Glad to have you with us. Good morning, Tom.

Good morning.

Yep, Exciting.

Sounded. That sounded so official, having that.

Yeah.

Music there.

Well, we're, we're kind of stepping the game up a little bit, so it's kind of exciting today. We're, you know, coming into, I guess, well into the new year, but I guess it's. I think we're at episode 25 today on the traditional channel 26.

Don't short. Thank you.

Yep. I gotta keep up. But of the traditional channels that we've been doing this with, so we started this with, you know, our newsletters that, that go out every Friday morning. If you don't get those, which is the topics that we discuss each week, you'll see this popping up. If you don't get that, please let us know in the, in the chat or you can just send us a direct message. But, you know, we've been doing this now for a bit, 26 times on LinkedIn, Facebook Live and YouTube Live each. Each week. It's been growing, people have been enjoying it. And today is the first episode that we're also going to live across, but recorded across all of the podcast platforms. So kind of migrating now into. To both a live session and a podcast session. So today's our first opportunity for that. So the reason I'm sharing that you'll hear it again at the end of today is that if you're a podcast listener, whether it's on Google or Apple or Odyssey or Iheart or wherever it might be across all those platforms, jump right in, click that subscribe button, the like button, that'll share it with other friends and that'll help us get this out to more people. So we're pretty excited about that. And the last kind of piece I'll throw of our intro, as we do every week. I'm Kevin Brown, this is Tom Burton. We're bringing this information, we call it around the horn. We've tried to bring all of the data, I shouldn't say all of, but much of the key data going on in wholesale distribution around North America and truly around the world, and tie that in with what's happening with the economy, what's happening with technology, what's happening with supply chain. Talk about that. Probably the great thing that we can do today, the best thing we could do is invite you all to comment and give your thoughts. I see we've got our friend Andy Mitchell here from Mallory Safety. We're going to talk about a couple of things that might get Andy's the hair to stand up on the back of his neck. So stick around, Andy. There's a couple of good topics.

I'm starting to wonder if people are going to like the music better than the show. So, yeah, maybe we need to have. And yeah. Tom, good to see you here early today. That's great.

Yeah, no penalty.

Greg Schmidt, man, that's awesome.

Yep, yep. Good to see you, Craig. So let's get started. Tom, what are any other thoughts before we jump in and look at the news?

No, let's, let's jump to the news. Super.

Well, this, you know, first topic that we have today that we see here is an article from Brooke Sutherland from Bloomberg. Brooke was a, a keynote speaker and then afterwards did an interview at last spring's ISA event in Houston was phenomenal. Speaker Brooke covers. If you're not following her on LinkedIn or other platforms, it's great to do so. She covers wholesale distribution for Bloomberg. So, you know, as for those of you that might be new today that are joining us, we try and kind of keep things upbeat. I comment almost every week. You know, Tom, Tom always tells me, don't listen to the news. Don't listen to the news. Don't listen to the news while the news is on. I'm playing on, on the. I almost said the word the, the, the device or the speaker across from me that likes to pop up and remind me of things. So you can listen. I hear it pretty consistently on the news, but Tom says always not to do so. So the news will tell us everything we want to know about doom and gloom and we want to talk about positive things. So, you know, we saw some potentially. Tommy, your thought, like your thoughts on this, actually, some, some potentially good news out of the Fed. You know, maybe things are going to be easing up. They didn't make any promises, but, you know, people are talking good things about that. What are your thoughts on what we just, just heard?

Oh, that's, that's a pretty broad topic. But yeah, certainly there is, you know, I think there's optimism, right, that, that we're on the latter end of the inflation run and that maybe there is some, you know, we're starting to see things move in the right direction. It'll be interesting this morning as if you may have seen already that the. We had 500,000 new jobs in January, which was like three times, almost three times what was expected. I mean, that's a lot of jobs. That's the most we've had in, I don't know, a lot of, in a Lot of months. So I. Resilience. The economy being resilient may be an understatement. I don't know if that is going to really piss off the Feds in terms of what they're trying to accomplish. Don't know, we'll find out. But it's really, really, really interesting. And then, you know, if you look at the stock market and all of that.

Right.

There's still a tremendous amount of money on the sidelines that has been, you know, you hear a lot. Well, you know, you can get 5% on a Treasury people got used to making 20 a year and they're, they're not ready to give that up yet. And I still see a lot of money, maybe foolishly, maybe not flowing into the stock market right now. But yeah, a lot of certainly from an economic perspective there is, there's, there's certain. And then especially in this industry, there certainly seems to be no slowdown or very little slowdown and kind of full speed ahead.

Yep. No, I would, would fully agree with you on that. And then that's what we've really been trying to focus on as long as we've been doing these broadcasts is, you know, there is, there is some enthusiasm there that the news, it's not in the news's best interest to necessarily share that. So rather than commentating on that, let's kind of talk about what Brooke talked about there. There's just kind of a series of things that, that she referenced to the growth. She talks about Caterpillar and some other large manufacturers there. But improving supply chain conditions. Right. The ports are nowhere near as crowded as they were. Things are easing up there. Some people are getting huge amounts of inventory that are landing in for them pretty quickly and fill in warehouses up. She comments, you know, everybody's watching closely. The economy, everybody has different things probably whether you're a wholesale distributor or a manufacturer. You're probably looking at a few different variables there. But the core of that article was there's a balance between moderating demand easing supply chain and a still healthy industrial economy. It's tenuous. But if you're watching and balancing that, that these, most of these large organizations are pushing ahead and moving forward with things. So she said, I think she ended with it's not gangbusters looking for the year, but there's certainly no fall off and things are positive. Yep. So you know, if we jump ahead, we talk about that M A roundup. If you, if you don't subscribe to Tom Gale and his team's email from Modern distribution manager management. It's a, it's a great, great piece to get. They had an article this week about 20, 23 already. January kicked off with I think it was 48 new deals that were referenced and in the wholesale distribution channel. And I'm sure there were more. Those were the reference points and medium and large size deals. There's probably a whole lot more small deals that have gone out there that are getting ready to close. December was 34 M&A transactions in our arena that we talk about here. So nobody's afraid to go out and spend their war chest. Right. You were seeing it day in and day out of that continuing to happen.

And is that. I didn't read the article in depth. Is that predominantly private equity deals or is this just.

No, the bit. Yeah, it's kind of all of the above. I think the bigger picture that we see with that really is tied to organizations, you know, wholesale distributors, buying a competitor, you know, maybe finding a distressed asset out there and picking that up. But part of it is that and then part of it is private equity as well. But there's a big part of it is you're seeing these, you know, we have a lot of folks and even our, some of our customers, you know, with athletesmart is that they're long established, mature companies, sometimes family owned, sometimes have some private equity backing and they've been successful for many years. So they have war chests, you know, credit lines, whatever it might be that they can tap into fairly quickly to go when the right deal comes about. And sometimes there's folks that have just been friendly competitors for years and years and years and have some level of a relationship. And when it's time for a family or another group to get out of that business, they know who to turn to and to talk to. So there's a lot of different variables that go into that. I like talking about this just because it's encouraging to see that there is opportunity and growth and enthusiasm and momentum out there within the wholesale distribution chain within M and A. So it's encouraging to watch and encouraging to see. Okay, Yep. So I'm waiting for Andy to chime in here. Possibly he may be running around his office, but he's been on the, on the acquisition. Andy and the owner of his company at Mallory Safety, Tim Boyd, they've been doing quite a bit of acquisitions over the last few years and taking advantage of the opportunities as well.

Good.

Let's jump, jump ahead kind of to this. Next we kind of look at predictions. This was kind of interesting I like sometimes reading articles that I don't necessarily agree with all of it, but there was, there were some really good points that I took out of this, this research point that came in here from. Trying to remember who was that article from again? Tom, can you see that a little closer?

Yeah. Logistic viewpoints.

Yeah. Logistics viewpoints. And I try and read their stuff fairly regularly. We get, we get our sources coming in from all over the place. But, you know, I don't know what your thoughts were on this, but, you know, they talked about a rough start to the year with positive signs down the road. And my assumption is that this, at least portion of this got written in early January, even though it was published in late January, because January looked to be a really good month for most people.

Yeah, I thought the, I thought the predictions in there were, you know, I would tend to pretty much agree with them. Right. We talked about this on previous shows, is that a lot of the supply chain, you know, major, major issues that we had last year seem to be working themselves out. Right. You know, and I think now they were talking a bit about, well, how do we start optimizing now? Like, how do we, you know, first of all, how do we make sure we don't get in that situation again? But then secondly, how do we learn from that and how do we optimize, you know, what we're doing as we're going forward, whether that's taking advantage of technology or just whatever the case may be to facilitate, you know, even a smoother supply chain? Because I, I would think in the supply chain, disruption certainly have been in our world probably been more disruptive than anything that's happened at this point related to the economy. So getting that smoothed out is, I think, really going to, you know, open the door for further growth.

Yeah, I think so. I think what really caught my attention with this as well, though, was that they talked about proven technology solutions will gain ground as hype gets filtered out. And I think, you know, we talk. One of the things that we, one of the premises of us doing this show or broadcast each week is to also talk about technology. And, you know, what we're seeing is the types of customers that we work with on an ongoing basis is it people that are embracing technology. And it's really an interesting thing, right. It's not just buying software, Right. I mean, I talk to people about this all the time. Right. It's easy to buy software. It's hard to get outcomes out of software. Right. It's easy to spend lots of money with consultants that are going to help you with, you know, your technology acquisition. But to get the results from the dollars that you're spending so you get truly adoption and return on investment is difficult. So I think he, you know, he talks about proven technology solutions gaining ground throughout this year and obviously us being in the technology business, that's good to hear. I hope he's right with that. So it's kind of neat to see that because, you know, the folks that are embracing technology are the folks that are going to, going to drive things ahead. You know, going to drive things ahead.

Yeah, well, and I, and, and again, you know, related to technology. Right. And with all the, the AI hype that continues to get hypier every day, I believe. But, but, but if you really think about, you know, strip away AI. AI is just an enabler enabling technology. What we're, and we're seeing this certainly in our business is that people, you talk about outcomes, people are looking for technology that to help them accomplish something, you know, to move something down the road that they really couldn't do without technology. Right. You know, you, you can do certain things, you know, with either rudimentary technology or whatever, and you can say, well, I can make it better. But then there is a thing that really work. Technology enables you to do something in your business, whether it's in sales, supply chain marketing, whatever the case may be, that you realistically just cannot do without it. And I think that's where the AI hype is starting to, to build around, is that people see, my gosh, there's things I can do or that could be done with AI that realistically I could never do, you know, by hiring people or training people or whatever and do it a lot more efficiently. And again, this is across the board and all of those things. So I think that as we tend to, as we continue to explore technology this year, it's going to be looking at it through the lens of not just the outcome, but what outcomes can be achieved with technology that I really couldn't do without technology. And I think that's a really different lens to start looking through things with. And I know we're doing more and more of that and talking to people more and more from that perspective. But certainly I think that will play into supply chain and everything else we've, we've done here.

No, I think you're right with that. And you know, it's the two comments I make people all the time as we talk about technology. In fact, there's some people with today I've had this conversation with, right. Is when you look at technology solutions is plan your tech stack out right. So that you're buying solutions that will enhance your business and bring a return on the investment.

Right.

And then most importantly when you're talking to technology vendors and this is probably the most important thing I could ever share with somebody because we just see people get stuck in this setting all the time is ask what the software or the technology does, not what it can do. I ran into some folks recently who just spent six figures with a world renowned technology company because they thought they were buying what they saw on a demo and what they were buying was a stripped out off the shelf piece of software that now they were going to go hire somebody to spend another six figures or more to get it roughly to work in their business. So back to that outcome point, they're nine to 12 months out from any outcomes if they achieve that. Right. So it's a struggle that goes along with the whole piece there. So that's something for people to consider is outcomes and, and asking what the software does out of the box versus what can it do. So before we jump ahead. Oh, so you know what the other thing I wanted to do here though Tom, is it talked about human and AI collaboration picking up momentum. You know, it's, it's funny, we talked the last two weeks, we had a really good interchange last week with a number of people about AI and what AI can do and chat GPT and those types of things. And it's really interesting as we see that human AI collaboration picking up. You and I have talked about that a number of times, just even in the last week. And it's funny I think in our, you know, our internal company, Microsoft Teams, messaging, I don't know Tom, how many times this week have I sent you screenshots of stuff I looked at on chat GPT? Probably five, four or five times. You know, I'm starting to look at that as it's not replacing Google yet but boy it's, it's interesting you know, as the concept of saying I can ask some questions and I get an answer versus a here, go read these things that you get from a search engine.

Yeah. And I think, you know, again, chat GBT to me is a great example of what I was just talking about and if you apply it in the right way. I think one of the things you sent me was job descriptions or maybe questions you ask in an interview if I don't ever. Yeah, right.

Well there's a handful of different things right Right.

But if you, if again, look at this now, right? In the current state, without something like that, if you had to write a bunch of interview questions, you could sit there and go, God, I have a blank sheet of paper. What do I do? And you know, that starts to become a little bit of a project. Now you can type in and you can, you know, it's called blank blank sheet syndrome, right. You can immediately now accelerate or even complete what you would have had to do or not get done right quickly by doing that. So you're able to now get an outcome to do something that you wouldn't have, wouldn't have necessarily been able to do or do in an efficient manner by doing it yourself. And that's what ChatGPT is starting to cause people to recognize is, wow, there's more things that I can get done. Either I wouldn't have been able to get done because I wouldn't have known right, what to do, or it would have taken too much time or too much resources or whatever the case may be. And so now I'm able to get something done that I wouldn't, or some outcome that I wouldn't normally have done. So all of that, you know, is a good example of, of what you were, what you were sending.

Yeah, I think we're just, we're going to see this adoption. The reason I brought up my simplistic use of it, right, is, is my adoption grew in the last two weeks.

Right.

I've just seen. Right. But now we're looking at it in the company that you and I run, that we run together is where are these other applications, right? Can we use it in some. Generating some marketing materials? And this is where I really, where I really see this happening though, is this particular article, right, about supply chain predictions. Talked about human AI collaboration. And we're going to see that in probably in purchasing decisions, in technology use of IT within the business. You know, people planning all different types of things are going to come with this. You know, I'm looking at it more from a sales and marketing side that says, and this is where the human interaction comes in, right? I don't want it to write sales copy or marketing copy or ads or things for it. But you know what, one of you know, you love to write, you've written a book. I like to write late at night if I can get in a groove. But it's hard for me during the day because shiny objects passing by of other things in the business. But I love to take and edit things and expand upon them. So a great way of use for me is typing in something that says, hey, one of the topics I talked about just a moment ago, I could use it for provide in an empathetic tone, you know, 300 words on the importance of buying industry specific software. Now that is not going to come up with the exact message I want, but that is going to go. What was the number you used in a discussion we had the other day? How many billions of data points now?

And going up, there's about 167 billion parameters, so to speak, that's being used for that. But before the end of the quarter it's going to go to 167 trillion, truly. So it's going to, it's going to be get exponentially smarter. But I want to, I want to point out something on this because I think, and I know we don't have a lot of time to cover this, but I want, I think it's really important, right? The way you're using it. You said you started to adopt and use it a few times over the last two weeks, whereas you never, never have used something like that before, right?

It'll start, I knew about it, I was intrigued by it, but it didn't impact my life that way.

So it'll think about that. It starts to become part of your day to day, I won't call it a habit, but becomes part of your day to day life. Now think about that, right? Think about even going back to the Amazon syndrome and how that applies to E commerce and business, right? People start using something on an individual basis and they like the result that they're getting. They expect that then carry through into other parts of their life and in this case they're going to expect it to carry through into other parts of business, right? So whether that's a salesperson wanting to get some really good insights on what they're supposed to be doing, how they should be working, who they should be dealing with, all of those types of things, whatever it may be. That's where. And I do, I mean there's obviously maybe an overhype on this, but I think that the hype in some ways is understated of what the potential and what the impact will be going forward because of the utility of the, of the process there. So I know we don't want to spend a lot, a lot of time on that now.

I think it's valuable and I think what you just described is extremely impactful to wholesale distribution and the people that you know in our, typically in our audience Here because we're late adopters traditionally.

Right.

And now we see these things happening and I think the critical pointing, you know, you're a computer scientist by education, so I'm gonna. Well, that was. I'm gonna give you a compliment number two, I think already in February and you only get two. But you know, I'm really intrigued. You would know a lot more about this than I would and maybe some of our audience because of your background. But you know that that jump from 100 plus billion data points or parameters to x trillion, that's a crazy exponential jump over a very short window. What's the expectation of that over, let's say the end of the year?

I don't know. I don't know what the plans are, but what I do, I mean if you. The data, again just to chat gbt, a lot of the data is old. It's like through 2020. Right. So they're. So I assume that a lot of this will increase, you know, the more having more timely data. But just the number of parameters that are going into the AI calculation, if you will. Right. Is going to be. And, and yes, I believe you will very soon be able to go in and ask some very, very intricate questions even about business pricing or pricing of products or quality of. Or just things along those lines that because there's so many different parameters and it learns. Right. It continues to learn over time. So I don't know. All I do know is that it's going to get smarter, it's going to become more relevant and it's going to become more timely and then there's going to be. Now remember, this is all data that's basically pulled off the Internet. Right. But now you're going to want to incorporate that to data that you have in your own organization. You probably don't have 100 billion or 100 trillion parameters you can put around the data in your organization. But what's going to end up happening is morphine, where you have data within your organization, data outside of the organization. And how do those two things come together to provide even more insight? So, but yeah, it's going to be, it's. I think you're going to see in the next year, it's going to be major.

Yep, yep. So it's also learning from my queries to impact your queries too. Right?

Yeah, it learns. No. Yes. And yes, it does. And then it also learns for yourself as well.

Correct.

Which is, which is another. I would call it a challenge because if, if. And again, this is where business where the business impact, it's, it's looking at you individually, it'll look at your writing style, your tone, all of that. But then if I log into your account, so to speak, if I had a business account, we have multiple people sharing it, it can actually sort of start to confuse it because you have different. So there's just all kinds of different, I guess, aspects to this that are going to shake out over the next period of time. But yeah, there's almost like training that will have to go on in organizations on how to properly use AI, whether it's chat, CBT or whatever to get the mileage that you're looking to get out of it. So you have to kind of know how to navigate in this world to get the most out of it.

Yep, yep. Thank you for all of that. I think that becomes pretty important for all of us and it's, it's interesting that that tone and what I love about it is, you know, and I'm just, you know, scratching the surface of things is being able to help doing some writing, you know, and people are talking about, you know, writing business emails and, and sales email copy and that type of stuff. I look at it as, you know, give me some, being able to say, give me an empathetic or an enthusiastic tone with certain amount of words in this parameter of topic and then let me take it and put my feel to it on from there. So that's good. So we could spend all day probably talking about that. I just, I think it's important for people to be thinking about, you know, it's not that it's going to replace necessarily a lot of people in a wholesale distribution business, but the value that it's going to come. And we talk so much about siloed data within companies. Right. I've got my E commerce data, my ERP data, my CRM data, marketing automation data. It's all these places. Well, now we're going to have AI data that we've done from queries and stuff like that, that when we bring all of those things together, which is what we try and do with for our customers is bring all that together so you have a single point of truth. This is just one more area where you're going to have data that could get silent.

Yeah, I don't know that it's not so much that it's going to create data, it's using data. Right. So anyway, we should do a separate, probably maybe even a separate webinar or something on this topic related to data, AI and the use of the technology so you can start thinking with it because yes, your data strategy, for lack of a better word, there's never been a more important time to be thinking about a data strategy in your organization. And again, to get ready for this, that's here. But I want to, before we get, there's a couple great comments I want to make sure we touch on before we go. And this is from Andy talking about, you know, that they're closing a deal this or next Friday, number of discussions taking place. What I find interesting in his comment is he says challenging market is a lot of established smaller distributors are having a hard time playing in today's market. Many manufacturers are rationalizing their customers and cutting off the smaller guys. You need critical mass to support the buying and support staff to, to run an industrial distribution business. So what's your, what's your take on that? Right. This is not your area of expertise.

Yeah, well, I, I, I think he's right, you know, so, you know, first off, Andy's, Andy, if you're still listening, you know, I'm guessing Andy's done no less than 10m a deals in the last 36 months. So he would be the, the consummate resource on this. But yeah, you know what, it's, it is harder for the little guy right now because he's competing against, you know, now he's competing and we're going to talk about this in just a moment. Well, I want to shift to this fairly quick is he's competing against Amazon, he's competing against the Grangers, the Fastenals, the, you know, large national accounts or international companies who have lots of feet on the street and a huge E commerce presence. And then he's competing on the, you know, the, the mega regionals and, or the privately held nationals like Andy's company. And it's getting harder and harder for those folks out there. But there are also, you'll find, and I think, you know, Andy would probably agree with me here, you probably also find some very, very niche players. And, and maybe it's the guy that's the, you know, gas detection for a refinery specialist that he can be the source in some large operations. But if you're trying to be all things to all people and you're a small organization, it is obviously it's going to get harder and harder. Right. And, but that's, that's truly though where, you know, that small guy, if he were to play things right, we're going to talk about, you know, B2B sales here momentarily. That's where that guy could really, you know, the small, you can have a David and Goliath syndrome, right? There are some very small operations out there with their, you know, five people that are killing it in E commerce. So that's the deal. So that's, you know, Mark Crumb, great family friend of ours and business associate of mine as well, just commented on this. He said, you know, in his industry, distributors, small distributors are merging, right. Bringing small distributors together. So that's good news. Thanks for that, Mark.

Yeah, and I also want to touch quickly on, on Tom, Tom May's comment here. You know about the layoffs, right? So he's basically saying, you know, layoffs have affected the tech sector, but now it seems to be spreading more into the broader corporate America with 3M and other companies. You know, I think that right now, right, the whole layoff thing is, it's, it's. First of all, companies have known they needed to lean up, but now they're not going to be penalized for that, right. If you would have done that, you know, a while ago and you say you're laying off and your stock may drop a significant percentage now you're getting, and you're joining the crew. So it's, now is the right time if you're gonna, if you're gonna start to lean up and think about leaning up, now is the right time because you're not gonna get penalized for it, right?

What's that old, that old saying from old movie Animal House, Fat, dumb and happy is no, no way to go through life. You know, you have to, you have to find a way to maximize business in this setting. So that's good stuff. Thanks, Tom. Thanks. Thanks Andy, for that. Let's talk about this article there about manufacturers missing out on B2B direct sales. But it talks about $543 billion in 2021. And direct to the consumer sales from manufacturers has been growing 16% per year since 2016. So this is a, this is a pretty heated topic, right? You know, Craig, who just left us, works for a manufacturing company currently was working for a very large, well known manufacturing company before these companies rely on wholesale distribution, they always have. But now we're starting to see with These numbers growing 16% per year in direct to consumer sales for manufacturers growing and, and it's really being pushed by, you know, just a couple of simple things. But it's such a, such a difficult topic, right, because you've got this wholesale distribution network, your distributors and dealer networks that have supported you for so long. But if they're not doing a great job on E Commerce. Right. And providing an experience that is expected, you have to make sure that that's going to happen because it can be detrimental to the brand is what kind of a lot of people are talking about here.

Yeah, I mean, it's obviously a complicated. Right. Situation. Right. It's certainly not a simple situation. There's a lot of. And there's an emotional aspect to it as well.

Absolutely.

And, you know, there is potentially, you know, risk and so forth. So. But the fact is that this is going to continue to shake out. This may even come back to Andy's point, right. Is that the distributors need to, they need that critical mass in order to be able to do some of the things that they need to be able to do at the level that they need to do them.

Sure. Right.

So it's hard for a small distributor probably to invest in the level of E Commerce. Maybe that's going to be required to really, again, provide that experience and that omnichannel piece going forward. So I think there's definitely kind of a teeter totter, if you will, that's going to go on both sides of this. And I don't, it's, I don't think it's ever going to be a black and white situation. It is always going to be lots of gray. But yeah, it's certainly, it's certainly going to continue to shift and have a lot of, you know, back and forth as we go forward.

Well, I think the people that are getting it right is the people that are putting a strategy together as opposed to just dumping products online. Right. They've got a strategy that, you know, and we talked about this years ago before we founded Lead Smart, was working with a, you know, a foreign manufacturer coming to the US and we were talking about this strategy. It was 2017, right. So coming up on five years. But the same idea, right, is if you're going to go do something like this, right. Have a pricing strategy online as a manufacturer so that your distributor will always have the lowest price. The distributor will also have an on, you know, a online presence that's supported by you as well, that you're encouraging them. But, you know, the key takeaway from this thing is customers are looking for an Amazon like E Commerce experience and they're, they're going to find where to get that either from Amazon or from the manufacturer or some other platform or marketplace. And we've all got to be kind of catching up on this because, you know, they, one of the Comments they made, right. They say improved support, you know, and it's unreasonable to think that a distributor is going to have every one of your items in stock available for shipment like a manufacturer would have in their warehouse. And you have the other side of that, right. Is distributors typically pick and choose which key items they sell from a manufacturer. Right. You're not necessarily going to have that whole focus on saying, I'm carrying full line of every company that I represent. So yeah, manufacturer says, I want to support my distributors. Mark saying here, right. Need to protect the distributor. That's critical. But at the same time, if you're on the board of directors of a manufacturing company and you're saying, well, wait a minute, you know, we make all of these other smaller items that are great products, maybe we have good margin on it, but our core distributors aren't selling enough of them. You need to go get those sold. And they look at this solution that they get is your customer can get it directly from the manufacturer. They can typically get it quickly. Perhaps even the article reference more accurately. I would question that there's comment that there's distributors that are probably more accurate in their shipments than manufacturers. But there's a lot of things here kind of wrapping up towards this is it talks a lot in the article about partnership opportunities. And that would. That's my view of all of this. Is 30 years in wholesale distribution coming up closer to 35. Is this can happen if there's a communication and there's benefit to both parties. So when done right, it's a good opportunity.

Yep. And I think that's the key, right. Is.

Yeah.

You know, is there. Is there a way to, you know, all get along on all of this and end up with. Again, we. We talk going over and over. Right. The buyer is in control of their buyer's journey and decisions. So what can be done to best facilitate the buyer will win, you know, for both sides.

Sounds like something I read in a book recently called the Revenue Zone.

Yeah, yeah, there's. There's a great book on that topic. Yes.

Good. Well, let's kind of close out today. Just talking about some good things going on within wholesale distribution. I was on the phone earlier this week with one of the executives from Affiliated Distributors. You know, sales up 28% there in that setting for their. For their this. And by the way, this number is 74.9 billion is total sales. When they do aggregated across all of their members of what their member sales are, that's a. The smaller number than that that actually flows through the buying group. But big numbers, huge growth. Back to this topic about positive things really are happening in wholesale distribution. Right? 28 growth last year across the board for their cut, their members. And there's eight. I think it's 800. Between 800 and 850 wholesale distributors that are members of affiliated distributors. So good news for that. They're adding members as well, which is good. And we were on the phone and.

I think that ties into, you know, I've. I've spent the whole, whole week sort of working with different buying groups that we've had customers and so forth. And I see the buying group as a potential again, tool or strategy. And what you were just talking about, about manufacturers and distributors and everybody working together. Right. It opens up the door for that pricing potentially to be more aggressive for the distributor. It allows them to, you know, maybe have better, you know, you know, better, not necessarily better service, but better pricing, access to different things, better situations. So I think the role of the buying group, from what I'm learning, you know, and this is relatively new to me, I'm not 35 years into this, but as I'm working with.

Not quite right.

As I'm working with these companies, I'm. These buying groups, I'm really seeing that they have a real opportunity strategically to, to help this interaction between manufacturers, distributors and figuring out the right balance between them as it relates to the customer and how they add things to that over time.

Yep, I think that's, that's right on track. And you'd mentioned, you know, we, we did a call together this week with a buying group that we're a member of. I did another one with ad that we're partnered with. And then we have a. An entire buying group in the Janssen world that uses the lead smart platform to run their whole organization that I know you've been working closely with. So that's, that's great news. You know, as we just talk about this industry scuttlebutt, there was, as I kind of went through the news this week, there's probably 20 other pieces of good news we could have dropped right in here that we only typically do three a week. So good news. Congratulations to Turtle and Hughes Large national electrical distributor Kimberly Clark's professional segment, which is great. That's the Jansan world, industrial world kind of safety world tied together growth there. But there's, like I said, there's probably 20 others that we could have dropped in that that are really positive news and positive results. So it's encouraging to see good Things happening. Kind of the last thing I wanted to comment on related to this today, the Tom May just made a good comment.

Right.

Distributors and buying groups need to provide value add as opposed to the manufacturers direct. And I, I think what he means there is that, you know, there's things that they can do and they can really show the value that they bring that a manufacturer could.

Right.

And the simple example of that, you know, and Tom, chime in with this if you have Tom May, if you have a better example of what you're describing. But what makes me think about right is let's just say XYZ tool manufacturer that has, you know, two regional managers for the western United States and maybe even they have, you know, manufacturers reps as well that they might have, you know, 10 individuals in the Western US that are manufacturers reps. But if that end user has an issue at, you know, 7:00am on a Tuesday morning or even on a Saturday morning. Right. It is unlikely the factory person or that manufacturer's rep is going to get there. But that local distributor who supplied them for years and really is even more intimate with what's going on at their business, that's that value, a major piece of value add that's going to come that a manufacturer could not do. The manufacturers, you know, Stanley Black and Decker is not going to be able to get a person into a plant on a Saturday at 7 in the morning.

Right.

And not every distributor will, but many, many do. I think that becomes a good key to that. So thanks Tom, for Tom May for that comment. Tom, before we jump out of here, thanks again Tom, for that before we jump out that can we you pop up the newsletter again briefly. Thank you for that. I'm going to try and start looking and we'll do together with this time let's we'll continue to look for more articles to add to this kind of goodreads segment because you know, all of us that are, you know, participating in these sessions each week on around the Horn, we have usually 20 to 40 people Sign up that they're coming in another hundred plus people that, that watch things afterwards and that's growing each week. And then now on the podcast format as well, that'll continue to grow. But I think, you know, our audience are, you know, middle management, typically to executives in both manufacturing and wholesale distribution companies, which means we're dealing with employee issues, we're dealing with finance issues, we're dealing with our, our personal health. Right. Whatever it might be. So I think each week we'll probably at least Add one of these good reads. This one has something I read earlier in the week and enjoy, you know, the issue of dealing with difficult conversations to give some tips and some ideas. So that's the key. And then we've got some good events coming up as well. So we'll be at that AD event, the Bearings and Transmission meeting, will be exhibiting and participating in the ISA event. We're helping sponsor the 80 meeting and then that net plus. So I think the only ones we're missing on here, that MDM event and then, and that's a virtual event and then the FDIC event as well. So good time today. Thank you, my friend. Good stuff.

Good question. In next week, speaking of isa, we're having Brendan for next week here with us.

So thank you for that. We've got, I think we've got just right now, we've got, I think 16 or 18 guests lined up so far for the year. That'll probably turn into 25 or more is kind of the hope. But yeah, Brendan is joining us next week. He was going to be here today and had something come up, but we'll get him with us next week and we'll be talking about the ISA fall event and, and whatever happens in the news between now and then.

And yeah, please go. If, go check out the podcast. If you go to Apple, if you look for around the Horn and you put in wholesale distribution or whatever, it'll show up there. Otherwise, you're going to get a sports show. We can talk about sports. Maybe we can do that next week. AI and sports. So whatever. We got it, whatever we got to do to get our ratings up, we'll. We'll do. So anyway, yeah, have a good weekend, everybody, and we'll see you next week.

Appreciate you being with us.