Around the Horn in Wholesale Distribution - Episode #165

Sam. Hope I better put you on full screen. Okay. There we go.

All right.

Good.

All right.

How you holding up down there in the cold? I keep thinking of you. It's so cold. It's like you must be dressed up in your, you know, arctic winter gear.

I was out last night. Darlene and I go to a Bible study on Thursday nights and I usually dress quite nice for that. So I had a suit on with a sweater vest over that. And the. And over that was. It was raining pretty hard when we left and so had a raincoat. Overcoat for. Over that. And I walked in and I felt like I was a Midwesterner or an Easterner the way I was dressed, because most of us in California just don't, you know, because of. Because of my work travel, you know, I have. I guess I would say I have more of a business and. Or dressy, cold weather wardrobe than most Southern Californians have. So I was prepared. But yeah, you're right, because I was the wimp all week at the office about being cold. So I think that's. I think your reference is that point. Right?

Yeah, I just. It's just been cold here and I just, you know, it's like. Okay, he must be really got his, his winter down gear on, is. That's right.

That's right. Exactly. The.

The.

The. The wimp. The wimp that wants to have a second home in the mountains.

Right.

That's funny. The. I did pop into one of our offices yesterday down the hall for me, and there was somebody in there with, With. Well, one person was wearing a down jacket and the other person had a jacket on and a blanket on their lap. So probably need to check on the temperature at the office.

The heating H Vac does not work in that room. So. Yeah, it's either. It's whatever is going on outside. It has nothing to do with the air conditioning or the heating. But anyway, that's another discussion.

This is an interesting topic for a live show, huh? Who cares?

We need a distributor that can come in and really do a good job of putting in some good H Vac stuff there.

Well, and you know what's funny? I. I saw last night a good great friend of mine who is a. I don't know Daniel's exact title, but he's a senior leader on a national level with carrier and the H Vac products, and his son, Who's I think 20 now, just got all of his certifications to be an H Vac tech and went to work for one of the local contractors here. So maybe we need to get those, get those guys to come out and check things out for the offices. So it's good to see our friend Scott with Elith with us this morning. Got a call with Scott later today. Looking forward to that. Appreciate him being with us. So Tom, we're going to talk about all kinds of stuff today, right? We're going to talk about the economy, the supply chain. You're going to actually share some things with us about how cryptocurrency is impacting some of the craziness going on in the markets right now, which I'm looking forward to. But we're going to talk about some HR issues, we're going to talk about some M and A. We're going to talk about the looking to the future of all kinds of things related to sales, marketing, AI technology, robotics. I'm trying to figure out Tom, as a side note, there's so much happening in robotics. I don't know if we need a second, you know, humanoid robotics and manufacturing robotics and just couple of videos I saw this week about, you know, humanoid robots being able to one, one in particular being able that all they're doing is building it out with its technology and its functionality is for use in the home. It's not about, you know, multifunction. It's about, you know, the stuff I've been talking about. I don't know, we either want to, I want to either want to start sharing more articles or maybe we even just do a separate around the horn 2.0 show about what's happening in robotics. I've been saving a lot of the video clips and so forth because it's just, I think this is, I don't want to say I'm going to be right about my 18 to 24 month prediction about being able to have a good functioning humanoid robot in your home. It might be a touch longer, but it's astounding to me how fast things are moving.

So I have a prediction market for you. Okay, okay. What will we become, what will we see more mainstream? Will we see robots in our house or self driving cars? What will be, what will become more mainstream? First and main And I mainstream may be too strong but yeah, sort of more, more commonly seen and, and yeah, utilized.

So I love that you asked that question. If you would have asked me this three weeks or a month ago, I would have said no ifs, ands or buts, self driving cars. Now I think there is a whole lot less. I mean, how would you legislate a me having a Robot in my home to help clean it. Can't. I mean, let me rephrase that. There's no reasonable thing that I could think of of why anybody would want to legislate that other than safety factors. But we already have safety factors for electronics and machinery, you know, for, for our home ul and all of the things that go with that. So I do, I think in the self driving car, right. It's from what, as I understand it, most Teslas or the newer Teslas are just ready for them to flip a switch on the software for them to be ready to do that as well. Exactly right. You've got waymos. Right. And so I, I think the technology is already there. It's, I think your question was about adoption or what we'll see more mainstream. I think your word was mainstream.

Yeah, adoption is correct.

Yeah, I think this is a good thing for us to check in on like once a month going forward. I'm going to say they're going to happen at the same time. And if I, as of today, I would say it's a reasonable likelihood that we could have easily available to us a robot in our home before self driving cars are mainstream.

Okay, so would you put that at 60 probability? 70 probability.

I'm gonna say 55 robot. I'm gonna say 51 robot. 49. How's that for vacillating?

Yeah. All right, no bet. It's called coin flip. It's called a coin flip. All right, fair enough.

The reason I say that is, and it's, I think the important factor of this Tom is and it's an intriguing question is like I just said, I'm almost saying if you would ask me two weeks ago I would have had very straightforward self driving car. My, my caution about self driving cars is I think there, the value of self driving cars is that when all cars have the capabilities and collision avoidance and all of that stuff. Right. You so because right now you could go buy a Tesla and I could drive my SUV that has no, I mean my car has. What is it? Collision avoidance or self correcting stuff for you know, lane changing or whatever. Seat vibrates and steering wheel vibrates and lights come on. But until every car has the same capabilities, when I describe that best for collision avoidance, I think you've got risks that. Go, go with that.

Well, no, you have risks but even today the safety records of self driving cars are miles better, no pun intended than the, than you know, obviously passenger driven car or person driven cars. But the, it's so out of the box. For people still. Right. To be sitting there. I mean, you know that the Tesla Robo taxis or whatever, they have no steering wheel, they have no brake. You basically get in the front seat and you sit in the front seat just like you'd be in the back seat. Right. That's really, I think hard for people to accept that change and that lack of control over things. Right. So yeah, I mean could you, would.

You, how would you feel right now if on San Francisco Avenue in Ventura, California if a driverless car pulled up in front of your house that has no steering wheel, no brakes and wants to drive you to our office in Orange County? How do you feel about that?

I would do it.

Yeah.

I would have probably some trepidation, but I would do it. I would be. Because I think it would make might go a little slow. It might be conservative or anything. In fact, if anything I'd be more thinking it would be more conservative in its driving capabilities, but I would do it.

You know what I think I've driven.

The Tesla with it with the self driving mode and in the rain, it was pouring rain and it worked really, really well. A little conservative of times, but really well.

So yeah, I don't know.

So.

Okay, now we're 11 minutes in, we haven't even started our show, but that's pretty funny.

But all right, so the prediction market.

No, let's stay on this for a second because what's your take on, on your question to me, mainstream humanoid robots.

I think cars will be, I think self driving cars will become more prevalent faster than robots, than home robots just because I think they're a little bit ahead of production and so forth and, and things and. But I do agree it's kind of a coin flip. I certainly wouldn't put a lot of weight one way or the other. Yeah. The interested if people are listening. Hey, good morning to Dan and Bob. But yeah, interesting what other people's thoughts are. Will we see self driving cars more mainstream or home robots more mainstream? First let me ask you the question.

Differently real quick because mainstream is a key component of what you said. So mainstream would suggest day to day most people do it. It's just part of life set.

Yeah, not, not quite there but I think, I think you know, prevalent. Let's just call it that way. Right. You know, it's beyond sort of the. Maybe it's still in the early adopter phase, but it's prevalent. Yeah. And you know I would love some self driving cars even here in town that you could just get in. Hey, I Want to go downtown, go have dinner, get in a car and you know, jump in the thing and come back and not have to drive or do any of those kinds of things. That would be great. And I would, and I would think twice about when I would use my car. I wouldn't always use my car for every transportation.

And I think the interesting component of what you're saying with that, Tom, is key that I like to drive. I enjoy driving.

Yeah.

I don't enjoy driving in traffic and things like that. I think what's interesting is Bob made a comment here. He says scarier will be when flying cars become a thing. Too many people can't drive as is. Can you imagine them trying to fly? Yeah, but I, I think what that, what that triggered for me was, I think, and it's just, you know, one guy's thoughts here is I think in that setting I would probably be more comfortable getting, you know, going down to the, the empty lot at the parking lot at the grocery store that's been segmented for a flying, you know, whatever it is, an electric helicopter that can take me somewhere. I think I would have less concern about that than I would about getting in a box that has no steering wheel and going to your house. Because you know what? I get on 450 mile an hour, you know, aluminum or metal tubes consistently, where I put my life in someone that I've never met, hands that might have been at the bar till 3am and got on my plane to fly it with me and 300 other people or whatever. I do that monthly. If, you know, if not more so. The idea of getting in a flying device that is out of my control, I already do that all the time.

Sure. My concern with the flying device is you look how hard it is, the air traffic control systems and how, how do you air traffic control those flying devices?

Right.

Whereas planes, at least you have, you have a lot of people, a lot of attention on the plane right through the air traffic control system as well as well as the, the pilots and so forth here. I don't know, that's a whole different thing. But I won't.

So I, I do, I do agree with you. And Bob made an interesting comment. He says, I miss manual transmissions. I was driving home the other night and I saw Pro, probably like a 1980 BMW 3.0 CSI, which is kind of the longer nose touring car that they made. It's always a car that I've loved. And I was like, you know what? If we ever live in a house that has a Garage that I'm allowed to choose what goes in it which I don't live in that house right now. I could see myself having something like that or you know, a 70s Porsche with a manual transmission.

So why I think there's. Look, there's always going to be a time and a place for driving. Yeah, right?

Maybe, but maybe not.

Well, but if you want to drive, you should drive. It's no different than somebody getting in a race car doing something because they want to drive of the. Of the thing.

But the thinking is, is that the ideal scenario is that all cars are that are on the road are self correcting anti collision. I would be cautioned to think that we could be heading to a place where you can't drive your 1972 Volkswagen bus anymore on the roads or maybe.

Not on the freeways or there's certain roads where you can and where you can't. Yeah, right.

Yep.

I could totally see being like a highway that is designated for, you know, it's just like a ski area. Right. You can put snowboards in some places and some places you can't. You know, designated for self driving or.

So you can only drive your car at Deer Valley.

At Deer Valley. Yeah. That's right.

That's funny. What's interesting, Scott says he has a client that has Tesla coming out to spec robots into their operation next week. So I'm gonna. I've got a call later today with Scott. I'm going to ask him a little bit more about that. So see, look at Dan.

He's all ready to go with a self driving car.

Dan has a brand new BMW.

He says his wife would never ride with me.

The. But Dan has a brand new BMW. I heard. So we're not self driving. I don't think so.

Okay.

I guarantee you it's a nice car though because one of one of his guys at Net plus told me about that. So. Okay, that's out of the bag, Zach. So. But you know what? If whatever Dan Judge says, I'm probably going to go with that because. All right, he's not going to steer you wrong. We're going to talk about their newsletter later. So. Hey, you know what?

Funny. Steer you wrong. That's pretty good.

Yeah. Pun intended.

So you wanted, you wanted to kind of move things along faster this morning. Well, here we are.

Why don't we just talk for three more minutes about robots and self driving cars and then we'll start our show 20 minutes into it.

Okay.

All right. We'll do the quick one. I. I'm guessing I'm gonna know who.

We are by now. We don't need to go into that.

Yeah, I think. Well, I think John Taylor, our editor and producer of the show that when he gets his hands on this later, I'm guessing I'm going to hear from him so really quickly for those of you who may be tuning in for the first time, I'm Kevin Brown, this is my lifelong friend and business partner Tom Burton. We get together on Friday mornings and we talk about the news of the week with the economy, supply chain I obviously robotics and self driving cars. We do this on a consistent basis every Friday we're joined by guests off and on. We've got in fact I was doing some messaging on LinkedIn, starting to do some preparation for our January show. That would be our third, third show of doing that with Ian Heller from the Distribution Strategy Group and Mike Marks from Indian River Consulting and Dirk Beveridge who probably doesn't even need to be told who he is. Dirk is doing some wonderful work about within most of wholesale distribution manufacturing related to not forgetting the human component of our workplaces which I think we can tend to do with all the technology that around us. So we're going to try and get that band back together for our third event of looking back at the prior year and looking forward and maybe create some of our. Tom, have you built the Poly Market, the Tom Burton version of polymarket yet? You're going to vibe code that I would like to. Yeah, I think that would be really fun for, for that upcoming show that we'll, we'll do in January but we're looking forward to doing that. And so we have some great guests as I just mentioned, some thought leaders and industry leaders there and we do this again every week. We discuss a newsletter that we're going to show in just a moment here. But if you're listening in on the the podcast version where you're not seeing these two handsome faces this morning, then you are missing out on seeing that newsletter. But that's what we'll be discussing moving forward today. That's called around the Horn in Wholesale Distribution and Manufacturing. If you don't newsletter and would like to join the 10,000 or so people that get that each week, we would love to add you to that list. You can just do one of three simple things. You can send us an email@helloadsmartech.com you could go to the LinkedIn page for the podcast and that is around the Horn in Wholesale Distribution. You could also get access to that on the lead Smart Technologies LinkedIn page. And then finally simply the easy way to do it as well is we have a website for the podcast. It's called around the. Sorry. Aroundthehornpod.com www.aroundthehornpod.com and you can sign up for the newsletter there. You can see past episodes and you could also reference us on Twitter or x@athpod. I guess not.com just ath pod and we'd be happy to get the newsletter out to you. So we're appreciative of you being with us. We couldn't do this show if we weren't sponsored by the company that Tom and I work for, which is Lead Smart Technologies. We've developed a product called Channel Cloud and Channel Cloud is an AI enabled CRM and customer intelligence platform where we bring siloed data from around your business, from your erp, your marketing automation, e commerce and other data sources that you have. It might be other AI tools and other things. We bring all that together in one single platform and we use artificial intelligence and other tools against that data to bring insights into your business to help accelerate growth and get deeper insights into your customers, your teams and your overall business. So if your company's digitally transforming, trying to figure out with what you're going to do as next steps to start using AI in your business and so forth, we'd love to chat with you and you can reach out to us anytime through our website or as well as on LinkedIn or wherever else you might want to find us at. So Tom, why don't you take it away and get us started?

Well, we have economy and supply chain. Which of the articles do you want to go with?

Well, you know, first of all, we talk regularly about tariffs and so forth and there's no huge news about tariffs. Although I was going to share something from a meeting I was in earlier this week I forgot to tell you about, but we've had some lifting of tariffs on select goods from four Latin American countries, El Salvador, Guatemala, Ecuador and Argentina. And that is really tied to that kind of relief, I guess I'll say from some of the tariffs is tied to food prices in this country and the administration's goal to reduce the those tariffs so that we can get some some prices down. So I guess that's some good news on that front.

Was that predominantly for produce or what was it that they.

Coffee? It was. Let me just look at the articles here and so forth. In fact, the picture in the article is coffee beans, but there was quite a few different things. Mostly related to food sources. Yeah. So the, you know, you can't do anything in Washington without the two sides arguing with each other on that. Right. So they talk about a number of items that they just seem. But it's mostly in the setting related to food, so easing the pressure in the groceries. So coffee beans, bananas and other fruits to drive down into the article here.

Apple comes from down there.

Yeah. Administration talks about to drive down the cost of living for Americans. It said Secretary of State Marco Rubio and Brazil's foreign minister discussed a framework for US Brazil trade relationship as well in those meetings. So it says Brazil is the world's largest coffee producer and exporter, but it exports. The US face a crushing 50% duty imposed by US President Donald Trump and the administration. So that's where they're balancing out for that.

So.

Okay, you know, go ahead. I'm sorry, Tom.

No, it's okay. Just was saying okay.

No, I think the issue that, you know, my mind to think about that goes with that is really tied to the, you know, and this is, I guess I just look at it as it's an important factor to remember of this administration. Love it, hate it. On the fence between. It doesn't matter. This, this administration has said, you know, they want to make America better, not the world better. And most administrations have a balancing act of the great things they want to do for the world. So I think this is an interesting thing, Right. If the tariffs are based to get equitable commerce right. And equitable trading with countries around the world, then the shift is very reasonable to say, well, you know what the balancing act for us is we want access to bananas and pineapples and coffee and our people are paying too much. So we'll adjust some of the tariffs with that and balance it out a little bit. So.

But are those countries taking any more exports from us?

Doesn't say @ this point. I think this was.

Is it, you know, just cutting cost or is it actually balancing.

Well, the article says, as I mentioned multiple times, this was about the cost of things in the store.

Understand.

So, you know, it's funny. I. It was just I certainly I not something I do a comparison of. But we have. I can't drive home from our new office without going by Whole Foods. And that's also now and I probably need to stop doing that. Is that's also the spot where it's easy to do an Amazon return and I probably need to go back to doing Amazon returns. Probably the best thing to do would be stop buying from Amazon or so much but from Amazon returns, there's a UPS store just the other direction from our house. But I've been popping into Whole Foods here and there to, you know, just, oh, I'll just pick this up. Well, then that turns into, oh, we could use some more of this. And next thing I know, my shopping list, if I made a comparison, my guess is 10 or 15% higher than if I went to the, you know, Albertsons or, you know, that's Kroger for other parts.

Proving that Whole Foods are. The acquisition of Whole Foods by Amazon is paying off, right?

Yeah. And they're crazy efficient. It's just we walk in the door, take a left turn, there's three people there. The line. If even if there can be 10 people in line and you're still done in three minutes, it's fantastic. But anyways, on the tariff friend, it's, it's interesting. One of the things I was going to share with you though was I was in a meeting earlier this week and there was a gentleman, a Chinese gentleman in the meeting. We were talking about some, they're representing a large manufacturing company that we were meeting with and we actually were talking about they make some industrial equipment and we were talking about their distribution model and so forth and how much product they're bringing into the US and where their warehousing is and so forth. And we started talking about tariffs a little bit. And this was a younger gentleman representing a company that his family is invested in and they're invested in multiple robotics companies as well as industrial equipment manufacturing as well. So he's pretty tied into what's going on in the manufacturing side of things there. We started talking about tariffs and I had asked him if they had been looking into using any of the free trade zone warehouses and he said that they did a little bit, but the prices were so outrageous for the lower amount of quantities that they need right now is that they've bypassed that. So I asked him what his thoughts were on tariffs and what he thought might come out of it and I was astounded. His response, his response was not necessarily across China, but in the business circles that he and his family work in, in the manufacturing space in China is they have a belief that there is a hand, handshake or verbal deal already, that it's just going to settle at 50% for at least a year.

5, 050. That's higher than you would think.

It doesn't shock me, you know, I mean, if you think about that and you know, if the, this Goes back to how you balance your, your pricing on things. Right. If you're, if you're a manufacturer in the U.S. you know, and you're taking this company's OEM components to help you build something and they make things that go into large manufacturing equipment. They make stuff that goes into 3D printers and so forth. If you think about that, if in that setting is if, if they ate 15, 20% of that at the factory in China's level. Right. And you know what I didn't get into, because I didn't. It wasn't appropriate for the meeting I was in because it would have put them in a bad spot. But if you start seeing if that were the case, and let's say for Chinese manufacturing companies, the government backstops them with some unique credits or whatever, they might get that maybe on their end that takes it down to 30%. They tend to manufacture. The OEM partner in the US eats 10% and the. There's only 10% passed on to distribution and end users. You know, so there's a lot of ways to look at that.

Yeah.

But 50%, you know, is an interesting number and it certainly does become more manageable.

Well, but that's quite a bit higher than I think the 30% or 35%.

That is the threats are. The threats are at 100 and 150.

Right.

So there's some stuff that. That's what's in place.

So anyways, do you have an idea of when that would be kind of solidified?

Didn't go that far. Was the. My question was probably inappropriate for the meeting I was in. The certainly wasn't something that we were going to continue on because it had really no relevance to what the meeting was about. This was about. Can I get some insight for the. The show?

Okay, good. Nice job.

Yeah. So anyway, so jobless claims fell this week. Right.

November 15th, jobless came. So. But there was actually a employment report that came out yesterday. I wanted to share some of that because it's, it wasn't, you know, it wasn't the usual Friday. So everybody didn't know when it was going to come out. Yep. Share some data from that. So the September employment report came out yesterday. We will never have an October report per them.

That's what they said. Yep.

In the December report, which is supposed to come out like the. Normally on the 5th or something of December will only be out on the 16th, which of course will be after the Fed meeting. So this is the last job report that the Feds will have prior to their meeting on December 10th. Connect all those dots. Yep. So anyway, the. There were 100, 119,000 jobs supposedly created in September, which was higher than the 50,000 jobs that were expected from that report. So that beat expectations. However, the job growth were revised is not shocking for previous months.

They adjusted it. They revised it.

They did.

No way.

They revised Reside, you know, by quite a bit, actually. See if I can find the numbers here. And the. But unemployment rates went up. Unemployment went up from 4.3% in August, which is the last report we had, to 4.4% in September, which is the highest unemployment rate we've had in four years. In about four years, which certainly is still very high. But it's higher than what it. What it was there.

Right.

So there were jobs added, you know, across the board and. Well, not across the board, certainly in certain industries that more jobs are added than others, predominantly in healthcare and food service, where the largest areas. The biggest loss of jobs were in transportation and warehousing and federal government, again, per the report that was here, which is part.

Which is part of the administration's goal of trimming some of the fat in Washington. Right?

Yep. They said there was about. Federal government is down about 97,000 jobs from its peak in January. So I mean, it's. Which is really probably nothing in the scope of things, but still a lot of people. Right. It's 97,000 people. Is still 97,000 people. So anyway, the market was on, by the way, so August revision, just the August revision was reduced from 22,000 jobs to minus 4,000. And the July revision was from 79,000 to 72,000. So it was 33,000 lower than expected or lower than they had previously reported along the way there. So the market was supposedly spooked a bit by the increase in jobs compared to 50 to 119,000 compared to what they were expecting. But the. They were quote, unquote, pleased, if you want to call it that, with a 4.4% unemployment rate, because maybe this will still not cause the, you know, be enough of a job boost for. To avoid cutting rates in December. Yeah. So this isn't too much of a red flag to stay on longer. One thing they said is, you know, if you look at all of the data here, it appears to be kind of fitting this narrative that we're hearing, which is no hire, no fire. Right. So we're not necessarily getting rid of people, but we're not hiring people. Things are just kind of sluggish overall. That was kind of the bottom line.

Takeaway well, and you see that. Right. And then we have another article there about. That's the Associated Builders and Contractors analysis said that in September construction added 19,000 jobs. So we just got this. I think that ties to your point, right, of no hire, no fire.

Yeah.

Right. It's. There's some stability there.

There's industries that are adding jobs, there's industries that are not, and there's industries that are reducing jobs.

Well, I think this would be a great, a great data point of this if somebody did all the work on this, which I'm certainly not willing to do, but would be if you removed just the federal job cuts that have come. Right. Because we know that the administration that was part of the shutdown. Right. Is wanting to make some adjustments and shifts. There is. We have a bloated federal government and, you know, we should move our company to Washington, D.C. because there's some really great office space there with some beautiful views of the Potomac and all of the city and so forth. That would probably be very inexpensive because of the government jobs that are. That are there or not there anymore. So it's funny to digress for a second, I was in Washington D.C. for, I guess, three times in the last year, and it's pretty funny talking to Uber drivers is that there are specific days of the week where people are required to be in the office and in D.C. and government jobs, and then the other days they're not. So it's kind of like our company. Right. Fridays, work, work from home, work from vacation, work from wherever you're at, work in the office if you want. But you've got options on Fridays is the streets are just literally from one day to the next when you're right in the heart of it all in the letter or the Alphabet streets. I guess they say in D.C. it's like one day you can move freely and there's no issues, and the next day it's gridlock. So it's something. But yeah, obviously with a. With fewer government jobs, there's going to be plenty of space there.

I think there was a, an edict to get everybody back in the office, too.

There has been. Yeah. Yep. So I'll, I'm going to be back in D.C. at the end of December for the NAW's executive summit. So that, that will be. I'll tell you what, those, which, which days that are and what it looks like because I'll be there for, I think, four days in, in late December. So look forward to that. So anyways, let's move it. Move Ahead here a little bit. Factory orders rebounded as expected. There's a good article from, from Reuters about that. New orders for U.S. factory goods rose 1.4% in August after a July drop. Funny how these, you know, it takes forever to get some of these reports out and then I don't think on the factory orders and things like that that's, you know, those are pretty specific in how those are managed and run. So the, you don't see those being adjusted like you do jobs and so forth. So I think that's a, that's a plus on that standpoint. Next article is again from Reuters. Talks about US Trade deficit narrows sharply in August in a boost to third quarter gdp. Any thoughts on that one?

No. I mean, it says imports tumbled. Right. So there were a lot fewer tariffs, which means we took in more than we. But I guess that's not surprising. We've talked about that before with some of the tariffs and so forth that things had reduced. So I don't know that that, you know, tells us anything in particular other than just a sign of the times.

Well, they said this was an economist that says the good news about good news for trade in the US Economy is that tariffs, he says, are working. The bad news for US Trade and the US Economy is the tariffs are working markets and Federal Reserve officials will scramble to find out which is true. But maybe both are. He said that talks about trade gaps and so forth. He said the trade gap contracted 23.8% to 59.6 billion according to the Commerce Department's analysis and the Census Bureau. But economists polled by Reuters had a forecast, had forecast the trade deficit would ease to 61 billion. So there's just this variance up and down. There's a good chart in here about this. So I think there's a lot to be seen about what's going to come out of the tariff component.

Yeah, I think you'll see this level out, though, more and more. I think it's a roller coaster of imports and.

Yeah, well, well, there is a, you know, the, the interesting thing is when we get data on, you know, obviously, you know, here we are, it's Friday, November 21st. You know, Christmas items are in the stores now. Holiday items are in the stores. It'll be interesting to see when we get the data on the impact that the tariffs had on, you know, the boost in shipments that we have coming in that we had a few months ago for holiday items at Costco.

The holiday items were in like right after 4th of July practically. It's just about.

Yeah, you're right, you're right.

Barbecues move away and here come the Christmas trees.

Let's cut them some slack and say end of August.

Okay, all right. For Labor Day. Yeah. Halloween stuff that was starting to show up at 4th of July.

I was in, in T shirts and shorts and flip flops when there was skeletons at, at, at Costco. Yeah, you're right about that. You know Tom, we, one of the things we bypassed as we were starting to talk about tariffs a little bit was and it kind of ties into what's going on with the, the Fed meeting that's coming up in December. So we've got another meeting coming up. There was an article that was out this morning on cnbc. It talks about one Fed official may have saved market from another route. So we've had some pretty hiccup days the last this week in the stock market. I was just looking right now. Nasdaq's up, Bitcoin's up, NYSE is up S&P 500 is up this morning. So things are looking positive there. But we've had had kind of a down week. You had some thoughts on some of this and kind of how some of these things are triggered. And I had made a comment in our pre show discussion about you know, rate, interest rate in December maybe being baked in. And you pushed back on that and said well wait a minute, there's some, some challenges that go with that. So you want to unpack that a little bit because you had some interesting thoughts and feedback on some of the impact of cryptocurrency on that as well that I, I was kind of before.

We get into that, if you look at the poly market for this Fed decision.

Yep.

Right. Today it went up 32 points from 30%, 30% probability of a reduction in December to a 30. A 61% probability.

Right.

Mainly because the was it John Williams, the Fed governor came out today and said yeah, I think it's still very appropriate to be cutting. Right. So which again, the market yesterday had a, well at least what the narrative is. The market had a bit of a temper tantrum because of the job report and the fact that oh maybe we're not going to get a rate cut. So we had a big drop yesterday and then a big recovery today. I still believe we will be getting a rate cut. We talked about this last week. I think we will be getting a rate cut. Remember, we only have to have seven of the 12 governors vote for it.

Simple, simple majority for the FOMC or.

Maybe even more than a couple that are against it. But I still think it will come through.

Yeah. You know, simple majority is what's important with that in that setting. No filibuster, right? No filibuster on that. So I think that's important. You know, and the article talks about that. I'd pulled up an article, I was listening about that this morning, and it said Williams intervention came after several other Fed speakers indicated reservations about December, but drew back from categorical statements, perhaps indicated they recognized the December struggle was turning into a crisis of governance at the Fed and they need to give Powell space to make the call. So it looks like maybe somebody got their hand slapped for speaking out a little bit too much. But, you know, again, back to this just takes, you know, seven of the 12 to get a simple majority for that. I think, you know, part of what I think about that ties for me with this is that there is, we don't know the impact enough on tariffs yet. But we don't. We. What we do know so far is that we're, you know, what would be May, June, July, August, September, October. We're almost seven months into tariffs and there's no crisis going on related to it. You know, the comment I made earlier of quoting that economist was, you know, the good news is tariffs are working. The bad news is tariffs are working. So we don't know what that impact is. And now we've got. That's so you don't have anything to blame things on. And then all the traditional statistics that the Fed is really looking at are kind of vacillating a little bit. Right. As well. They're, you know, they're like a heart that's in ventricular fibrillation that's fluttering and there's nothing there. So it's like, well, why wouldn't we drop? Because the risk is we can keep slow things down. If we drop another quarter, quarter point, we can put some stimulus into the economy. You know, I would love to see interest rates drop. You know, the really unique thing is it's something I haven't had a chance to, to, to do any type of research on is the fact that we've, we're seeing, you know, multiple drops and we're going to see another one, which would be the third one this year, correct? Yep.

Yes, I guess so.

Yeah. So December would be third. Is that there's not really a significant impact on, on mortgage rates and that, you know, typically, you know, it's almost, you know, you, in theory, you should be seeing a Very narrow margin on the. Because right now what's the fed rate at? 4 and a quarter to 4 and a half what it is. And mortgage rates are still at 6 plus percent. I mean that, I don't think if we went back and looked when rates were really low that there was that much of a spread between the Fed rate and if you look at when.

It was the 0% area. Right. Mortgage rates were still 3%. Three and a half.

Yeah. Two twos to three.

So they're still about the same.

Yeah, so it's probably about the same. SP I think you're right.

You know, Bob mentioned here that somebody from Fox yesterday was saying that the Fed is not going to change the rates this year, but the um, be on the hook for a half point drop next year. I don't know why they would do that. That would be, I would agree. But I think they would be better served doing a quarter in December and then another quarter point in the first quarter. But you know, hey.

So I, I think that's probably what's tied to this is what, what Bob's talking about is that, that, that Fed governor saying that, is that good response this morning could be them getting together and going, whoa, whoa, whoa, whoa, whoa. Let's, let's cool your jets. Let's get in and really talk about what this means.

Right.

I think that could really be a component of that. So anyways, let's, let's go over to.

The stock market for a minute because it's been a rough month for the stock market.

Yep.

And you know, the chatter has been, oh well, there's been the AI bubble. People got nervous about the AI bubble, quote unquote. And you know, valuations were way too high and so people ran for cover and took money off the table. And then of course the, again what we just been talking about the. Is there going to be a rate cut in December and, and things like that.

Yeah.

And it's been, you know, it was kind of, I mean as you remember in a previous life. Right. I was a partner in a hedge fund and I, and we built, you know, computer training programs for a, for a investment fund. And I don't know, I've gotten to kind of, you can kind of look at the charts and you can look at things and things don't seem to make sense. So I was trying to do a little homework. I saw some stuff on cnbc and you know, the market today is controlled by the large institutional computer trading. The algorithms.

Yes, right.

So the algorithm and the algorithms of the market are based on momentum. So when you have momentum in a direction, up direction obviously tends to go up. And if there's momentum and the algorithms look for changes in momentum, and so they try and time that momentum so they know when they should be going long or where they should be going short based on the moment. And this is overly simplistic of what I'm explaining here, but that's basically the premise. And what there seems to be is crypto. The drop in bitcoin started actually a little bit at the end of, at the middle of October, and there's been progressively a larger and larger drop in bitcoin and some other crypto, mainly because some big, big holders, big whales that have held these cryptocurrencies have sold well. As it turns out, a lot of these algorithms that are controlling, you know, large sums of funds use. Bitcoin and crypto is kind of the canary in the coal mine. So they look to see is the momentum of bitcoin and crypto positive, and they use that as a gauge to drive the momentum of where they think the market is going to go. Mainly because bitcoin and crypto are considered to be sort of the higher risk assets. You know, like the, if you ever been to a vineyard and they plant roses around the vineyard and the reason.

I've been, I've been to vineyards.

Yeah, you've been to vineyards, yeah. But you probably didn't see the roses or smell them.

I'm very. Yeah, go ahead, tell the story about.

Roses and roses right around the vineyards. Because if there's any sort of bugs or parasites or whatever, they'll eat the roses first before they, they'll see, they'll.

They'll see it come to that first.

Right. And so kind of that concept here with bitcoin is a lot of these algorithms are saying, well, if we're seeing momentum shifts in crypto and bitcoin, then that must mean the risk appetite of the market is changing, the momentum is changing, therefore our algorithms are changing. So if you went, and this was an interesting article on cnbc, they went and looked at the correlation of the drops over the last month, the drops and the, and the velocity of the drops that have there has been almost directly correlated to the movement of bitcoin.

Right.

Up or down. So even this morning, right, I think the market's up. But if you look at, if you were to look at the correlation, you would see that there was a bit of an up move on bitcoin, which has then resulted in a bit of an up upcoin up tick in the general market.

So you look at the chart on bitcoin, man, if I just look for the last year to date we were as high as we were 125 in.

October, 125, 722 and.

It'S at 87, 000 today. So how much are you buying?

You know, there's still some consolidation I believe taking place in the crypto area. I don't, I don't think we're at a bottom yet.

Where's the bottom for bitcoin?

Yeah, I think around 75.

Wow.

Yeah, but that's, but that's still, I mean that's still. If you compare it to what it was even a year ago, I think that's basically where it was a year ago, roughly 52 weeks ago somewhere.

Let's see last December, its December high was, tell you December high was 102, 103. Okay, that was, its December high.

Though on it is somewhere around 74 for the last, in the last 52 weeks.

April, in April, it was beginning of April 78.

Okay. Anyway. Yeah, so it, it did drop but nonetheless I don't, I don't think we're going to see a gigantic drop from where we are, but could easily get another 10%. 10 to 15%. But anyway, my point on all of this is, you know, just take a look at it right as you start to see these market moves. And if you look at yesterday, the market was up 500 points in the first couple of hours and then it had a pretty, I think a 500 point drop in the next. And if you look at that and you look at the correlation, you will see Bitcoin was up and then it started to drop and then that triggered, and that triggered the, the other piece there.

I'm with Bob, I'm with Bob on his comment. You want to show Bob's comment?

Yeah, I agree with him too. He says the advent of ProBAC programmatic trading has taken all the fun out of the market. But then, you know, the journalists and stuff have to have a reason for this. Right. The reason is the AI bubble. And you know, you had Nvidia come out yesterday and go, there's no way I bubble. We're just, we're just getting started, you know, our Wednesday or whatever it was.

What else would they say?

Well, but it's true, right? Their numbers backed it up. Yeah, right. Their earnings number. Back to that.

I, so I, I think back to this and with this we were talking about this, you know, 51 minutes ago, from what I can see on the clock here, was that what we were talking about was this is the. What is a Gartner hype cycle. It's the trough of. What is it? Yeah, Traffic disillusionment. I think we're gonna.

You.

You can tie it to that. You can tie it to the Internet bubble and so forth. I think where we're at is a place where people are needing and it's companies like us that need to help them with this is instead of just showing me chat GPT and I can ask chat GPT questions and get some amazing answers. What is the. What is the quantifiable value that really comes into my business without being disruptive or being risky? And so I think we, you know, whether. Whether you call it a bubble, whether you call it a dip, whatever it is, I think we're going to be at this place where we're going to have to see some. And I just think about the market. Right. That we're talking about. Yeah, there's some great people that are, you know, whether it's. You're looking at some of our customers who have testimonials about how some of our tools like Genius Feed are helping them get insights into their business, or somebody else might be helping them use AI to, you know, read a sheet of drywall that has order requirements on it. Those are great. I think what people are really seeing is we need something though, that's broader across our place, you know, life. I mean, even the ideas of agents. Right. How many. How many people out there really, truly have agents working autonomously.

Right.

That are doing things for them in their life. Listen, I'm the CEO of a company that uses AI and I'm partnered with, you know, one of my dearest friends who is building these types of things. And I still don't have any true autonomous agents doing major things. I have agents or helper agents that we talk about that are saving me boatloads of times and helping me make bigger decisions. But I think that's what people are kind of looking for is where is this big shift going to happen?

Well, I don't want to get. Look, we could go down a whole rabbit hole on that. But I just look at.

Well, it's not like we don't do that all the time, right?

Yeah, I guess. So. Just another day at the office.

Just another. Just another around the horn and wholesale distribution show. We go down rabbit holes.

But I look at the. Just. I'll just take it for Myself. Right. The things that I am able to do with the help of AI are literally superhuman compared to what I could have done a year ago. Oh. And so let's say I wanted to attempt to do some of the things that I'm doing now. I would have had to hire two to three people, probably.

Yes.

To support me on that. Okay. So look at the productivity that is coming out of a single person. Right. And the, and the things that wouldn't even have been done because I wouldn't have hired the people. Right.

You wouldn't have undertaken the project.

Right. I wouldn't even attempted to try and do some of these superhuman.

That's a big shift for me, is I'm doing things I wouldn't have ever got to.

So I, I agree with you that the agents and the autonomous agents and all of that are still getting sorted out for sure. But some of the ways that we're just using the most fundamental, you know, and you talk about coding and all of that stuff.

Sure.

Is massively, massively different. Yeah. In the last year, I mean, you look at even some of the stuff that you do with the, with, you know, and so for. You'd have to hire a consultant or you would have had to hire an accountant, 100. Hire a lawyer or whatever to look.

At the helper agent I built last night and sent. Sent to you and, and Stephanie. Client success.

Right.

You know, just the magnitude of the things that we're able to do.

So I, I think that there's. Anyway, if you. And the whole. And maybe I'll do some homework on this, but to me, comparing what is happening now versus 2000 and the Internet thing is like, just stupid. It's like it's apples and oranges. Yes. There was a bubble in 2000 and. Yes. But, you know, you had pets dot com. I mean, look at all the companies that were public or were going public that basically had no revenue and no profits and all of that. We don't have that situation right now.

Oh, we do too.

Not going public.

Not going public. Oh, yeah. Okay, good point. Yeah. But I mean, I just, you know, I saw an announcement this morning about, you know, another company that's got large Silicon Valley funding that is coming into the. The. I mean, we, we should probably go.

Out the venture capital bubble. But that's not.

Right.

That's not the public markets. Right.

Correct.

Correct.

Yeah. No, I, I think if you differentiated that a little bit. Yeah, No, I just was going to say is we've got, you know, lots and it just makes Me laugh. It's like maybe we should have sponsors on this show because there's just a flood of, of Silicon Valley money coming. And I said, you know, two announcements this week of, of new Silicon Valley funded startups that want to do things in the wholesale distribution market and they're flooding that into advertising right now and oh, maybe we should rethink that. Take some of those dollars.

Yeah, maybe we can get a 10 million dollar contract for around the Horn.

Yeah. And get some good hosts.

That's right. Yeah. Then we could level up a bit.

Yeah. All right. Manufacturing, distribution predictions for manufacturers in 2026. Quick look at that. Some good stuff that came out of that. This is from industry today.com they said as manufacturers approach 2026, they'll need to balance agility with precision to overcome the many challenges including tariffs and legal issues that lie ahead. So they talk about agility related to tariffs, which we pretty much anytime we talk about tariffs and how manufacturers and distributors are managing those is agility is really key, is understanding the impact. It talks about customer expectations demand a new approach. It talks about the rapid development AI comes changes customer expectations. Man. It's almost like we've talked about this on the show too. Right. Talks about manufacturers risk appearing outdated if they cannot live up to expected increased speed and quality of getting correctly configured in price quotations. Customers prospects and customers expect the ability to interact with natural language through chatter, voice interfaces. It's coming. Right. It ties back to what we were just talking about. Compliance will become thornier. Regulation is highly fraught topic in this industry and organizations doing business across different geographies. Our industries are finding themselves grappling with compliance requirements. For instance, the European Union, they're working on packaging waste regulations next year and there's many others in different marketplaces. And they talk about the differentiation for people is digitalization. Digital transformation says digital transformation day driven large, larger by AI shows no signs of slowing. Organizations can't afford to stay rooted in slow legacy operations and overly complex manual processes. Just makes me think about all the people that we talk to that are running not just their sales organization, but their company on spreadsheets and email. Right.

So I mean to me this flies right in the face of what we just talked about.

Yes, exactly. Right.

Yeah. Look at where the money is going right now in the quote AI world. It's going to the build out of the infrastructure.

But the question, I think the question about the bubble Tom, that we, the component of that that we didn't talk about is probably more tied to the Fact of you know, is, and this is, this goes back to even the like the big data center discussions we've been having so much, many discussions about. Right. And the build out of those is if we don't, it doesn't mean that there's this, anything in this article is wrong. It doesn't mean that AI isn't going to do the things that we do. But if it doesn't do it and doesn't have the wide adoption at the level that they're anticipating and expecting is then we have issues with what the spendings that's been done on the chips that have been bought and all of the things that go into that. Right. So we don't, it's the, I guess the bigger component of let's not call it a bubble just of an impact on the speed of where we could be and is if we don't get the adoption right. And look at the market that we, you know, work in and the people we talk to every day. I was talking to a candidate yesterday for a marketing role that we have open and they were asking about our, our you know, deal cycle and size and I just kind of laughed and I said, you know, we're as an enterprise software company, we have deals that take a few months and we have people that we talk to for a few months and they don't pull the trigger for a year. Right. Because it's, they're not moving quick, quickly as they can and should on this technology. So if we see that across many industries then you could see that the need for the amount of data centers, the need for the chips could slow.

Right? No, so the argument is right the we build out too fast, right. And even the depreciation on the chips and so forth, you know, they never really get used and all that kind of stuff. That all said the Google CEO yesterday who was also ranting about a bubble a week ago said told the Google team that we have to double our capacity every two years to keep up with demand. Capacity capacity of, of their infrastructure for their AI infrastructure to keep up with demand. Right. So a lot of. And look, obviously every indus there'll be different industries that are, are going to have, you know, different. The demand cycle will be different with, with different industries and so forth. But you know, the demand certainly is continuing to grow. We've really barely. Does your point touch the surface of agents and even some of the things that they're talking about here in this article.

Right. Hey, so can I, can I digress for a second? Just because it's what I do. I was reading an article this morning and I actually downloaded the app because I didn't even know it was available for Google. You were talking about Google for. And the reason I say this is, as you're talking about Google and capacity, the quick thing that came to my mind is Gemini's use in Chrome. And I think Chrome is probably the most adopted. Adopted browser. Yeah, yeah, right. So now it doesn't matter really if you're. And I bet I would love to see, based upon this discussion, the. How would I put that, the amount of capacity that, that Sundar was talking about in that setting, see of. Of Google, of the doubling of capacity every two years. I would love to see what component of that is. Is Gemini working in the background of Google Chrome? So people are going into Chrome, they're asking a question. It doesn't matter what browser you're using a Google search in, but you're doing a search and now you get agentic response along with your traditional search. And I would, I just. This is just a gut feeling. I would guess that there's tons of people like our friend Bob Brittain here who doesn't like AI, Right. That when they do a traditional Google search, they're still scrolling through, you know, the first page of hyperlinks to websites versus looking at the top and really using that AI piece. And I, I'm going to guess that there is a strong, strong percentage of that Gemini AI search that rolls into the top of your Google search is not even being used. But yet Google's paying for the power.

Sure. Well, and there's. Now if you look at the corner of your browser on Chrome, up in the upper right hand corner now, it says Gemini. That's right, you've downloaded the latest one.

I don't know if you saw my eyes move, but I just looked at it.

Yeah. So if you click that, you could actually ask it what's going on on this web page. What's happening? Here they go. Oh, God.

But right now.

Okay, ask it. What is the sentiment of what you're seeing on this on the web page, which is really what we're seeing when we're running the, running the show here. Does it say.

Here we go, if you can hear me typing. Just a second. No, no, here it is. It says, I wish you had done it. You could share it. The webpage you are viewing is a live stream of the around the Horn and Wholesale distribution podcast, episode one, number 168, hosted by Tom Burton and Kevin Brown of Lead Smart Technologies. Here's a breakdown of the sentiment and value based of the content of the stream. The show provides expert analysis and actionable insights. This is just like all of my AI searches. I am so smart.

Yeah, you never know.

What when we didn't have this in.

School when we were back in school.

Yeah, this helps my ego because when my wife pokes my ego bubble once in a while or you bring me down to earth, I just need to go talk to my agents or Gemini the show provides expert analysis and actionable insights for the wholesale distribution industry. Primary Focus the hosts who are co founders of Lead Smart Technologies, discuss major topics impacting manufacturers, wholesale distributors and global supply chain, often with a focus on digital transformation and AI adoption. Specific Topics the on screen article and sentiments predictions for manufacturers in 2026 addressing overcoming pricing pressures and uncertainty. It's literally just read the articles that are in front of us there and then it says Lead Smart Technology provides an AI enabled smart CRM and customer intelligence platform with a hyperlink to our website for Channel Cloud built specifically for manufacturers. The sentiment, the overall sentiment of the content and the host's commentary appears to be thoughtful. Expert in practice, you'd almost think we had this scripted that we were going to do this.

Oh brother. You asked it to like give it an honest evaluation.

I did. As industry veterans and thought leaders who trans translate complex economic and technological trends into practical advice using a mix of insight and humor. According to search results, viewer sentiment and comments the comments show high level of engagement positive interaction. In summary, the page offers high value specialized industry content delivered by respected hosts, fostering an engaged and positive community around complex wholesale distribution topics. Would you like me to find the full Net Alliance Outlook report you mentioned on the screen? Let's see what it says about that. Yes. Tell me about the Net plus.

Your head's looking getting bigger a line, is it? Yeah.

This will be interesting to see what it grabs for this I wish I was here on my screen this great. It says the article you're asking about is part of the Net+Alliance industry outlook, which is where we're going to get ready to talk about a friend Dan Judge was with us. A quarterly report that tracks business results and trends in the industrial and contractor markets. Based upon the latest reports of the article, key findings from the latest industry outlook Sales growth increases so it went and looked at it went and read it.

Yeah. So what's interesting about what you did? Right? It not only took data from our web screen, it went and did a whole bunch of other research about the podcast. Because all that data was not on our screen.

No, no, no, absolutely it. So it. With. With the secondary question I just wrote. It says the most recent report. So it went and looked at the. The Net alliance and you can see this on the NetPlus alliance website. And Dan Judge, the founder of NetPlus and our good friend here on the show does this quarterly and the. It went and actually looked at it. So this is the cool thing with Gemini and it brought. And we'll just. I'm going to keep this up because when we talk about this, this in particular will go from there. So the.

Good night, Bob. We'll see you next week.

Or maybe we're putting people to sleep here. But with that. But anyways, the power of that. So I just go back to the. The. The computing power is what we were talking about and great example. I should have had you do this so you could do it and share your screen. Sure.

But the amount of inference that that required to do what you just did was significant. Right.

Why don't you. Why don't you explain what you just said?

Well, the inference is what they is the computing power that's required to do all of that analysis that you just read off y. Right. Is now that was free. We didn't have to pay for that. So the. So Google paid for that and that's on the corner. And that just showed up this week, by the way.

Yeah, yeah, no, I know. I saw you using it on your.

Desk the other day and it's actually very good. I mean you can take it to analyze, like take a Google spreadsheet or a Google Doc and tell it to analyze it. It'll do a great job.

Interesting. So that's the. The answer to Copilot. But it's working in a browser. Yes, I guess a Microsoft system. What I was starting to reference earlier that I downloaded this morning and I want to really use and I was going to ask you or any of our listeners if they've had any. Done it or had any experience is with Google's Notebook LM product. There's now a mobile app that you can just start loading things into. And I'm hoping that that might be. One of my challenges is I have so much stuff thrown at me consistently that I need to read and review and so forth. And where that would really work well for me is just putting a bunch of stuff together like that and listening to it in the car.

Right.

So have you played with that or seen that Notebook?

I've done a lot with Notebook. Lmi.

Yeah, check. Check it out because I know you'll do a better analysis of it than I would. So. But back to the show. Right. Man, this is a weird show today, isn't it? It's all over the place.

Good. We were talking about the Net plus article, so.

So I'm just going to use the recap that's right here. Even without going to notes, Gemini tells me that our friend Dan Judge who writes this and again, if you do not can, if you're, if you're in wholesale distribution and or manufacturing and you have anything to do with the building trades and industrial segments, construction segments or anything even remotely close to that, get connected with dan judge on LinkedIn, kind of follow what he writes and then whether it's a value to your business or not being part of the Net plus alliance buying group, Dan posts this. It's very, very good data and he's just an industry icon and fine gentleman, but so the recap says sales growth, members purchases from net plus suppliers were up 10% in 2Q25, up 7% for the year. Now it's interesting to see that because having just been to another buying group's event with some very, very large distributors, I was talking to one who's actually one of our customers that's up 20% on the year. And some of that is attributed to the use of our technology, in fact, and a lot of folks are sub double digits on that. So this is kind of in alignment with what we're seeing second quarter, 10% but 7% on the year. So I think, you know, this is kind of saying with some of the anecdotal data that I've gotten from some other conversations that if you can hit double digits this year in wholesale distribution, you're probably doing well in that setting. So the optimism of their members was 67% about forecasting sales growth of 3 to 8% or more for the full year. Mixed Market, 51% of members reported increased in sales during 1H25 compared to the previous half. So good, good piece of here. It says growth drivers were disciplined strategies, process improvement, innovative sales promotions and a commitment to US made products. So discipline, strategy, process improvement and innovation.

There we go.

Sounds like they should be lead smart customers to do.

Sounds like it. Yep. Good.

All right, let's roll on down a little bit to our E commerce and marketing segment. Tom, you want to talk briefly about this. How to build an organic Reddit strategy that drives SEO impact. So we talked last week about AEO and SEO a little bit. And this is interesting and the reason that I found this article interesting and this was from search engine land.com the idea behind the amount of what were Tom, we had an image and a report that we put up and, and it was showing where the vast majority of AI searches are going to. And it was things like Reddit and Yelp and what were some of the other ones that it was?

Wikipedia.

Wikipedia, yeah. So I wonder if it's going to start looking at Gropedia.

I. I'm sure it will. Well, certainly the X AI will. Yeah, for sure.

Yeah.

Okay. But, but I don't know if everybody knows what Reddit is. So Reddit is basically an online form, if you want to call it that, that have different topics and what they call subreddits or sub communities around different topics. So if I'm interested in football or NFL football, I could go into a Reddit community and there'll be other people in there and talking about football or your favorite team or whatever the case may be. Yep. One of the reasons that a lot of the models are trained on that is because it gets different points of view and discussions in there. So they find that to be good training data. I think we had a conversation about this in one of the previous shows that Reddit's one of the top sources of training data for the AI models for the reasons that I just said. And so what it's talking about here is, you know, incorporating Reddit into your marketing strategy either as a participant or potentially having your own community or subreddit in there.

Right.

That you can have your customers or your prospects or whoever engaging and doing things in there because then that gives you a more higher probability to be displayed on some of the AI search capabilities, which I find interesting. The only challenge with Reddit is it's a very. Can be kind of a shark pit if you're not careful. People can be very critical, they can be very mean. In some cases, if they don't like the way you present something, they can tear it apart or they will tear it apart. So it's not, I think for you have to go in with your eyes wide open and you have to go in with a strategy and you have to go in with intelligence approach. But that all said, it could be a very good priority for building out the organic strategy of Magentic search.

Well, I think what's happening with this is that we're also seeing Reddit I think is becoming much more mainstream. And I think my, my guess is.

Self driving Cars.

And, and humanoid robots cleaning my.

Yeah.

Rubbing my bathtub. I'm telling you, I, it's going to be great. You're going to be over here when you're in town. We're going to be sitting by the fire drinking a glass of wine and we're going to see like three little lights that, that are on the slope of hillside behind our or in our backyard and we're going to be able to see that with the fireplace going, looking out the window and it's going to be up there pulling weeds.

Yeah. And your dog will be going crazy.

No, Cooper is going to become friend. You know, if Cooper will sit by you, he'll be fine with a humanoid robot that feeds him. You know, just make, make it.

Red is populated with torch and Pitchfork. Yeah.

So I, I mean so that's, that's where I was headed with this. Right. Is before you digressed again with mainstream and robots and self driving cars. I think. So here's my, here's my pontification, pontification on this. I think Reddit has been that place. It's great, great thing. Torch and Pitchfork gangs. Right. I, I think it's been that because it has not been mainstream, most specifically in business. I think it is, it is becoming a place and it, it's. I, I mean I, my comment to you is, you know, we've got a senior marketing person that we're interviewing coming down the wire on picking up a new person to help us with that in our company is Reddit is becoming more mainstream in business. I'm getting emails about the business side of it from consultants that help and from Reddit itself on a consistent basis. And when I use it, it sees me, I guess as a business person somehow. I think we could see this back to your mainstream term earlier becoming more mainstream in the business world as a source. And I gotta, my gut tells me that it would then self police itself to push those people that you referenced and Bob referenced in his comment, push them aside. Because it's not a place where you can be just show up and be a bully anymore. You quickly look like an idiot and where there's other people here to do business.

Yeah, it'll be. I, I think that could be true. Yes. I think you could end up overshadowing some of that.

Right.

With more professional usage.

Yep.

But I think we're in the very early days of that for sure.

No, I think, I think there's a trend. There's the likely it's either going to become extremely relevant with less of a concern of what you described and was mentioned there in our comment or it's just going to flutter away and not be. Have any relevance. But there is, I think a potential and it's, I mean, we talked about it right. Earlier as I, I could see having, you know, some moderated user groups or something like that for our, our products there and, or our company there as well. It's just something I think that should, people should be paying attention to because I think it could shift from a, you know, you know, dungeon and dragon user groups. What's that?

It's Too bad that LinkedIn could never have gotten their group act together. Right. Because that would have been a great place from a business perspective.

Absolutely. Yeah. No, I mean, I mean, there are people, I think, that use it, but I mean, I don't know. How many groups do you think you're subscribed to in LinkedIn?

Probably a lot more than I.

How many do you look at?

0.

Yeah. You made one at one point.

Yeah, I made several.

Yeah. So I think you're right. But that's okay. Ready for the next half hour rant about why, why lead?

Why up here?

Why Microsoft should sell LinkedIn.

Yeah, yeah, please, let's, let's do that. Yeah.

Sell it to somebody that cares about it and would do something for it. LinkedIn is so, it's so great, but.

It could be so much in the rough. It is a diamond in the rough. Yes. Yeah.

All right. What do you want to talk about? Because I've got more to talk about that Gemini gave me about this show.

Oh, yeah. I think we got time for one more. What would you like to hit on?

Let me talk about that. Salesforce unveiling the agent commerce and AI purchasing surges because you've got some really good insights on what's going on with. But really just Agent Force in general at Salesforce, which is kind of a big deal. Yeah.

I mean, if so, probably most people have heard about Agent Force. They've probably heard about Salesforce. It's Salesforce's know, foray into the world of agents. Right.

And they're, they're pivot and betting their life on it, right?

Yeah, yeah. They're betting their company on the future of this, you know, that we just talked about.

No AI bubbles. No AI bubbles.

Yeah. No AI bubbles. Agentic Commerce is, you know, interesting though, about Bubbles. I mean, Salesforce stock is down considerably. Right. So it's not like they've been over. Overbought by any stretch of the imagination related to this.

I think It, I think it's a buy right now.

Yeah, I think their multiple is low and compared to other AI companies that are in the public market, they're, they're, they're actually on the low side. But anyway, the chart.

Sorry, the year to date chart, I'm just looking at. Yeah, I wish I had my. Actually I need the ability to share my screen too. Can, can I have that?

I think you can do that. There should be a thing that says presenter invite at the bottom, I think with my.

I don't know.

Well, we'll sort that out another day. But anyway, this Agent Force commerce, we've talked about Agentic commerce and buying and so forth. This is a new tool that Salesforce is incorporating into Agent Force. I've been working with Agent Force now for a couple of weeks pretty heavily.

So let's explain why you would be doing that. So explain who we are and why.

That our software is built on the Salesforce platform and their cloud platform and they have selected us to also be able to build on their Agent Force platform and their data cloud platform.

So any other. If you're a wholesale distributor or manufacturer, any software that you would purchase in the marketplace is built on a development platform and they're using someone's cloud and someone's security layer to help with that. At Lead Smart, we've partnered with Salesforce. We're one of about 5, 4 to 500 companies globally that they call global strategic OEM partners, which are companies that they allowed to build software on their cloud on their platform and sell it directly to consumers under their own brand. Our company is called Lead Smart, our product is called Channel Cloud and we only work with wholesale distributors and manufacturers. So we're their partner in this vertical where we build our industry specific solutions. We use their platform development platform, their security layer, which is what should be forefront of the mind from a wholesale distributor manufacturer right now. And we use their cloud solution. So to Tom's point is they have allowed a very specific level of partners to be like leadsmart, to be able to use Agent Force to build vertical solutions. And that's what Tom's been working on. So Tom, sorry, I just needed to put a little plug in and some clarity.

Back to the regular show now.

Back to the regular show.

But anyway, we, we've been, you know, doing our due diligence on this and understanding architecturally how it's put together and.

The one people, we have people staying up at night basically doing this digging.

But the one thing that has really struck me as a big Positive is how much investment has gone into really security and privacy and access. Right. Because the last thing you want on any situation where you have AI accessing your data is it accessing the wrong data at the wrong time and giving it to the wrong person. Right. And that can happen very easily, especially. Well, anyway, I won't get into it, but it can happen very easily. And you could easily have an AI agent that isn't properly programmed showing everybody's salaries to everybody else. Right. As an example. So one of the things I've really been impressed with is the ability to configure and properly incorporate AI into a framework of access, security and privacy. And they're taking care of a lot of that so that, you know, the, the, our time and effort can be spilt on building the productivity of what it actually does versus worrying about all the under the hood infrastructure. And so I think they're doing the same thing here with this agentic commerce is really being able to put in an infrastructure in place that incorporates a lot of those things. I just talked about the security and the privacy and the access and so forth into the system, but then allow you to get some of the value so that you can accelerate. Right. One of the reasons you said earlier why we're not seeing the adoption of autonomous agents and so forth is all of this underlying infrastructure, all this plumbing that you've got to deal with if you're going to put something like that into production. And that's not cheap or easy or expensive to put together or it is expensive to put together.

Oh, it's crazy. Yeah.

So anyway, that's.

What kind of stuff are you looking at? Are you looking at that the agent force will help us with? Agents for wholesale distributors?

Of course. Yeah.

I mean, no, I mean what kind of stuff are you thinking about or are you testing and looking to get to?

I mean, literally all over the place from, and I just from a sales perspective, looking at customers, looking at quotes, invoice trends, product category, white space, purchasing, coaching for, you know, situations, Arkansas credit limits. I mean the list just goes on and on and on. Things that a salesperson they would say should quote, unquote, be looking at. But in reality that's not really something that most of us have time or the inclination to start poking around and doing so and even automating things, automating tasks, taking phone calls, turning, I mean, just, just, it's just the, the number. I think we've come up with 25 use cases that we believe are, are, you know, very meaningful. Use cases around this that could be built. But without all that infrastructure of security, privacy and, and access control, you know, you're opening the door for potential issues.

Okay, that's awesome. Yeah, it's exciting. And you'll have these all launched January 1st.

Yeah. Next week. We have a couple days.

A lot of work to be done on this, but the future is extremely bright. And you know the beauty of this and just a little plug for what we do at Lead Smart further is what Tom's talking about is you know, you have to pick your software and technologies partners that can do broad things for you and that it just, I mean, you know, the company that lots and lots of wholesale distributors work with earlier this year was, you know, they were. Had a cyber attack. They were down for three months. You know, billion dollar distributors were wondering one would they ever have access to their software? But more importantly was who else had all their ERP data? Now, right. Is that in Russian hackers hands? What. What else do they know about my company? So it's important who you're, who you partner with in these settings I guess is the key.

Right, right. That's just one aspect of it.

That is one specific aspect. That's. Yep, that's exactly right.

All right, where do you want, anything you want to hit before we wrap up?

Yeah, let's just, in fact let's just go down to our scuttlebutt section this week which we don't usually talk about but there's important people talked about there. Our friends at friends and partners at Famous supply just opened a 20 their H vac and plumbing and a little bit of electrical space as well and do a lot with Hydronics. They just opened a 25,000 square foot education facility for hands on training for their customers. They're going to open it up to do other stuff. We were back visiting with them a few months ago. And the Blauschild family that owns Famous and their team, Chris Murphy, our good buddy and some of the other folks there, they're going to actually even do some community events and open it up for others. But congratulations there just opens a couple new branches as well. So great growth going on there. Affiliated distributors, our partners in many of these categories, we work with both Netplus alliance and that we were talking about earlier today as a buying group, as a partner in AD as well as a great partner of ours. And they just opened an entire new division. So what I'm going to be interested to see is does that mean another.

Show next year or is that a Merging of some of the existing divisions?

No, it's.

They're.

They're really kind of pulling this together because they have so many distributors members that do a lot within public use and underground water solutions and so forth. So they've got a new division, a new leader of it. My assumption is it just ties into the PHCP division which already has plumbing and H Vac and so forth and part of that is tied to the group from the Commonwealth group that is coming over but as well and then our friends and partner customer at American Pipe and Supply, our good friend Monty Mann and John Howe and that great team, they've just opened two new branches so congratulations to them. So try and keep up with stuff like this but anytime we can feature customers and partners and this is great. Last thing is I'll hit here before we go is in our second look segment of the newsletter we talked a lot early last year with that big bridge collapse in Baltimore where the tanker hit the bridge. In our second look segment is where we put articles about things we've talked about a lot in the past. One little wire. It's how it's not housing but it's wrapping had a secondary wrapping required on it or a secondary coating on was faulty which caused it not to connect correctly which it did in the article. Doesn't say in the report, doesn't say what it caused but it apparently caused their navigation system and some of their lighting systems to go out which caused the crash. How the NNTSB confined that one single little connector. Right. That's a fraction of the size of a. Of a pencil. That that was the cause is astounding me. But they do it all the time.

So it doesn't happen in your self driving car.

Yeah. Or that that that cylinder that you're flying through the airing. Right. Like just you know that that UPS plane crash they found that as it takeoff that crashed a couple weeks ago that the engine literally fell off on takeoff.

Yeah yeah.

So before, before we end today Tom I asked back to this Gemini thing we were talking about earlier that was looking at the show. I says, I said is this show even popular and why it says the around the horn in wholesale distribution is highly popular and well regarded within the specific niche of wholesale distribution distribution, manufacturing and industrial supply. Here's a breakout down of why shows popular high level expertise and relevant content. The host Kevin Brown and Tom Burton are co founders of Lead Smart technology bring decades of experience. Blah blah blah blah blah. Strong multi format present multi platform present. The show is not just a standard Podcast. It started as a popular LinkedIn and Facebook Live show before also launching as a weekly podcast in February of 2023. I didn't know it was February 2023. The multi channel approach allows them to reach professionals where they already are, leading to high engagement. As seen in the comments on your screen. Positive and engaging format. A mix of macroeconomics, B2B, industrial distribution trends and technology for dummies. Delivered with a twist of humor. This makes complex topics accessible and enjoyable, encouraging both listening and live participation.

So I think we can just skip that whole indoc session in the beginning now and just tell people to go to Gemini and ask about.

Right, right.

There's no reason we need to tell them. Just go get it at Gemini.

Gemini will tell you. Okay. My ego is sufficiently.

Your head is about ready to explode.

This is funny.

Yeah. So, all right.

Congratulations to us and our guests and contributors.

So no show next week? Thanksgiving. We won't be here Friday.

You should do a show on what?

Thanksgiving.

Let's try one. Let's try one with you doing one on your own.

That'd be great. I've done it. I can do it.

I'm gonna sleep.

But it won't be happening next Friday. How's that?

What happened? Once my flight was. I think my flight was delayed. And you. You start. Yeah, that's right. You did like the first 10 minutes of the show while I was trying to get to the a place at the airport when I was flying home to John Wayne Airport. And. Yeah, I had to go find a spot that I could log into. And you did like the first 10 minutes. Probably the highest rated show ever.

I think it was. Yeah, probably the one that Gemini is looking at. So good.

All right, my friend, I gotta get into the office and do another call with you shortly, so we'll miss you folks. Next week. We're kind of same boat with Christmas and New Year's holiday. Both of those fall on a Thursday. So we won't be doing a show on Friday. So we'll miss three shows between now and the first.

I think we're gonna do one on the second, though. No, we decided on January the day after New Year's.

I'm not.

Oh, really? We. That's what we talked about yesterday.

So who's we?

Well, in the. In the. In the chat, we talked about it and you said. Yeah, I agree with that.

I was with Lily. Oh, I. You know what far I should have looked at that.

Clothes.

Let's talk about that. Anyways, regardless, we'll have content some shows.

There may or may not be shows.

We'll come to that conclusion. I missed part of that. Anyways, I'm gonna go talk to Gemini a little bit more. Get excited and next time I'm feeling down or blue, I think I'll just put a recording of the show up and then ask Gemini some questions. So this was fun. I don't know if anybody cares about us today, but I had fun today. So again, I'm Kevin Brown, this is Tom Burton. We get together every week as we, as we discuss the topics of the news and the economy and supply, supply chain and self driving cars and robotics and the stock market and. But we really always try and bring that back to how that impacts wholesale distribution and manufacturing, which is the markets that we serve with our company lead, Smart Technologies. If you don't get the newsletter that we put out each week, we'd love you to get that. It is a simple way for you to get that would be to just reach out to us@helloadsmartech.com we'll get that out to you right away. Certainly go to the podcast for the website which is aroundthehornpod.com or follow us on LinkedIn. The last thing we would ask you as a favor is if you like what you hear, hit the subscribe button, leave a review if you're on Apple or Spotify. That helps us get move up a little bit in the algorithms and get people looking at us a little bit closer. So we would love to do that. We'll wish you all a wonderful afternoon and weekend. Be safe, be kind and do good things.

Have a good weekend.