Around the Horn in Wholesale Distribution - Episode #161

Sam. Sad. But anyway.

No, no dancing today, okay? Tired. It's too much. I can't do it. Yeah, I can't handle it. I'm too old for five weeks of traveling.

Level up, level up, level up.

Okay. I'm old, dude. You know, I'm almost as old as you, Tom, and way and way older than my friend Brendan Breen here. Way older. So.

I don't know. I don't know. I'm feeling my age these days, Kevin.

Well, it's because you have, because you have three, three little kids at home.

They're, they're killing me, man.

Yeah, well, I am now. I am now a grandfather. I don't think I told you that. So.

Congratulations. That's awesome.

Yeah, four and a half months and so I'm looking forward to keeping up with her soon.

So.

But she's in Colorado and we're here in California, so let's, let's introduce everybody and kind of dive into the show and get, get chatting a little bit. Kevin Brown here. I'm here with a lifelong friend and co founder of my company, Lead Smart Technologies, with Tom Burton and our good friend Brendan Breen from the Industrial Supply Association. We're here every week. Had a little bit of a hiccup this morning, but looking forward to have our, an audience with us still today as well. We had a scheduling snafu with our LinkedIn portion, but the good news of that, our bigger audience is YouTube and the recorded podcast. So we'll still get this out today as well. But Brendan, it's great to have you with us. Appreciate you being here.

Thanks for having me, guys.

Of course. So we're going to dive in and talk a little bit about you and about ISA and the upcoming of fall event. So I, I know every fall and every spring it's ISA time, so looking forward to that. But we're going to dive into that at length today, but to do a little bit of an intro again, Kevin Brown here and Tom Burton and I, we get together every Friday, come rain or shine, as we kind of typically say, unless there's a, an airplane, a hospital or a planned vacation involved, we're gonna, we're gonna have a show and so we get together and chat about the news of the week and we look at what's going on in, in the economy, in the supply chain and manufacturing and distribution, sales, marketing, e commerce, mergers and acquisitions, leadership and HR issues. And we bring all that together from the news of the week and we consolidate all of that into a newsletter that we publish every Week. It's called around the Horn and Wholesale Distribution and Manufacturing. We use this show in this format to discuss those topics. But the most important component of that is that we try and relate those articles back to what's important to our audience, which is wholesale distributors and manufacturers and channel partners like manufacturers reps and brokers and agents and so forth. So we do this again every week where this is 164 that we are doing, number 164, which is astounding. Tom, what was it a while back? We read something that said like 97 or something like that of podcasts and live shows. Don't get past 10 events, something like that. It's crazy. So here we are, you know, killing ourselves three and a half years later. But we love doing this. As I mentioned, we have the newsletter. If you don't get the newsletter and you would like to, we'd love nothing more than to send that to you. Three simple ways that you can get that. You can send us an email@helloadsmart tech.com we'll get that right out to you. Hello atLead smart tech.com you can certainly, if you're active on LinkedIn, just go on LinkedIn and search around the horn and wholesale distribution. Or even faster and easier is the Lead Smart Technologies page. You can follow Lead Smart there as well as the show and request the newsletter. The newsletter is also published on LinkedIn besides going out by email. And then finally, we have a website for the podcast. It is www.aroundthehornpod.com and you can subscribe at Spotify, Apple, wherever you get your podcasts, they're all listed there and you can ask for the newsletter there as well. And final part of this is we couldn't do this each week if we didn't have the sponsorship of the company that Tom and I work for, Lead Smart Technologies. Lead Smart has developed our product called Channel Cloud. And Channel Cloud is what we describe as an AI enabled smart CRM and customer intelligence platform. It's been solely developed for wholesale distributors and manufacturers. As we enter an age of AI and distributors and manufacturers every day are looking for ways to better understand their customers and their teams and their business. We have silo data across our companies and that silo data is in places like our e commerce system, our marketing automation system, certainly our ERP system, and other data across the business. And as we start to look to apply artificial intelligence to that, we end up in a place where we have siloed AI if we're not cautious with that. So at Lead Smart with channel cloud. We bring all that siloed data into one place. We use artificial intelligence and other smart technology to gain deep insights into what's happening at the customer to understand what quotes are open and need to be closed with push alerts that come with things like that. What customers not buying specific products, what products should they be buying and how we can better serve our customers and grow our business and accelerate our growth. So if you're digitally transforming and you would like to look into technology that can help you with that further, we'd love to talk to you. So enough of all of that. Six minutes into the show. Let us dive in a little bit and before we hit the news, let's just chat a little bit about with Mr. Breen here. Brendan, can you kind of. You've been on the show. This is at least the third time, not fourth, right?

Maybe four. I'm not sure.

I think it's four. We work hard at special prize for.

Being on here several times. I mean I do have a lead smart vest. I'm not wearing it today, but.

Well, you bet you're wearing your ISA vest. If you weren't wearing your ISA vest without your, you know, with, without your colors on for us, then we'd probably be bummed. But anyways, I'm glad you have a little lead smart swag. Yeah. You get, you know what you get a week from Monday, you get a hug. So I would, I would hide from me. There we go.

Oh yeah, that's. That's gonna say. That's, that's the key, key element there.

Who. Yeah.

Gonna have to give more context around that, Kevin, because they don't know what you're talking about. We're just having a meeting where we hug, I think is what, what you're saying.

Yeah, you. We will be meeting at. We're going to go in and talk about exactly where in just a few minutes at your event.

No, I'll.

Next time we. I've due to get some more cool swag. So we got to get some a little bit cooler swag for four time guests. That's what we'll work on. All right.

Love it.

Good, good. So, hey, maybe just a couple of things. One, why don't you first give us maybe a little bit of an overview for. We have a really broad audience of distribution. We have everybody here from office products and medical equipment. Big, big audience in your segment in the industrial, industrial safety market. Lots of customers in your segment as well, but lots of people here with electrical H vac and other Markets that might not be familiar with isa. So let's hit ISA first, then let's hit you, and then let's talk about the upcoming event.

Sure. All right. Well, thank you again for having me. For those of you who don't know, the Industrial Sales or Industrial Supply association is a trade association in the industrial MRLP space. We have as equal stakeholders manufacturers, distributors and IMRs, all with the emphasis of leading our channel forward. Kevin talked about that. We're entering into an age of AI. I would argue that we are there, my friend, and so good example of something that we're trying to wrap our hands around and get our members comfortable with and to better understand. But it's not just that. It's supply chain resilience, it's navigating the tariff environment. It is. It is anything and everything. The talent wars, training, development, networking, you name it. When it comes to these channel partners and connecting our channel, ISA wants to be right there. So, yeah, that's the overview for isa. What was next on that list?

Me.

You?

Let's hear about you.

Oh, my God. All right, well, long walks on the beach, you know, getting lost in the rain.

Pina coladas.

Yeah.

Jimmy Buffett record. No. My name is Brendan Breen. I'm president and CEO of isa. I've been in this role. Geez, it's been almost four years now. I've been with ISA for about seven. That went by real fast. But I'm having a ton of fun working with a great team at isa.

Growing team, too, right?

Growing team. We are adding a few new roles this year, which just is trying to keep up with the demand from.

From our.

From our members and our customers. We just, It's. There's so much good things that we want to do and we just need more people to do it. So. Yeah, my background I'm in. I'm not from wholesale distribution manufacturing. My background is in association management. But seven years ago I came to ISA and really, I don't want to say this because it's a little trite, but fell in love with the industry. It's got great members, it's got a FANT board, clear vision, and a good differentiated space in terms of, you know, representing a channel as opposed to just being a distributor organization or manufacturing organization. I think we. We sit in a nice space where we can have different types of conversations at ISA that are in service of the overall channel. So, yeah, loving what I'm doing. I'm in my dream job and, you know, you called me young, but I don't know. I'm not feeling so young. I am a father of three, under the age of seven. So maybe if you see some extra bags, that's. That's making me look like I'm 50. Not quite there yet. And I live in. Just outside of Princeton, New Jersey, in a town called Lawrenceville. So happy to be here. We're excited.

Your middle daughter, I think, how old is she?

Hazel is about to turn four, so.

I think she was almost a newborn when I first met you. So you had been at ISA for a little bit. I think I met you middle of the pandemic because we participated in a couple digital events. You. What did you. What role did you come to ISA in?

So, originally I was our director of operations, and then I transitioned into our vice president of strategic initiatives, which is fancy role for sales leader or fancy name for sales leader. So it was a good opportunity for me because I got to really get to know our members in a different way. I got to understand their goals and their missions and really help tailor our initiatives to what it is that they're looking for. So. Yeah. And then you mentioned Hazel being born. That was right around the same time I took over. So I always know how long I've been in this job because.

I remember sitting with you in Princeton at a hotel. Classic. I mean, first time I had ever been to Princeton, New Jersey, actually, interestingly enough. And you were interviewing for your role, and the reason I bring any of that up and asked you about that and the timing with Hazel and so forth is really tied to. So often you see executives that join an organization with a clear path to leadership or heir apparent, and that necessarily, if I'm not mistaken, that wasn't you. You. You took a good job. Right. And then earned your way into that CEO role.

Yeah. And the departure of my predecessor and mentor, Ed Gerber, was not necessarily planned. I think he got a opportunity.

It was a sudden thing, right?

Yeah, very sudden. And so the board really was. Was faced with a decision to, you know, to. To look at all available options. And they did their due diligence and. And, you know, put me through the ringer. But they also, you know, looked outside for. Which is what they should be doing. And so, yeah, it was a good opportunity for me, but it was also, I think we're now four years later, and I think the association has really grown in a good way. So I hope that that means that I'm doing an okay job.

Clearly, you are. Your. The people that are on your board that I know are Big fans. We have some customers that are extremely actively involved with ISA as well in that setting, some which we just saw a couple weeks ago when we were both in Denver at the Affiliated Distributors event. It's really great to see you guys there with your event with your booth and stuff too, which is kind of new. You know, I think is first time with the booth or second time.

I mean I think it's. It's a second time with an expanded team this year we really in a much more, much more structured approach. I think that it. What it speaks to is that we are building out a. An engagement engine which means we want to spend more time where our members are, regardless of where they are. And so this is a good opportunity for us to see not just a lot of our board members, but a lot of our members and talk to them about some of the initiatives we have coming up.

So, yeah, perspective members there too. Right. And it's interesting. So. So you hit on a couple of things and that I want to kind of resonate with for just a minute because there's people that listen to this show regularly that aren't members that should be members. So maybe expand a little bit about. If I'm a, if I'm a wholesale distributor or a manufacturer in the space. Manufacturers rep any channel partner that. That goes through that industrial channel. So we're thinking about cutting tools, industrial supplies, probably even some bearing power transmission, things like that, safety equipment, so forth. Probably some crossover with some people that do industrial and construction even likely the case. And you know, you've probably seen I have a habit of wandering through airports and making random videos about supporting trade associations and buying groups. And it's pretty funny when you know, you looked at the LinkedIn. I look at the LinkedIn impressions of those. I don't know why I feel like I'm babbling. But they're always some of the highest impressions that you know or comments about that. But there's a, you know, I would assume if we looked at the number of distributors in the industrial space and the number of manufacturers in the industrial space and match that up with your membership list, it's probably, probably a fraction of the people that should and could be involved to support the industry. I have my whole take on why that's important. I, you know, speak from a mountaintop about that all the time. But why don't you maybe re restate or expand and maybe we get even some of Tom's thoughts on this about the value proposition of supporting your industry. It's not because it's not about writing a check and being a member of something and putting that low ISA logo that's behind your head there on, on your website. There's so much more, but there's a, there's a big value proposition. Why don't you dive into that a little bit?

Yeah, I mean, I think it's, it's pretty simple. Is, is that the world is, is rapidly evolving and the pace of change has just accelerated so much. And your connections with the people that you are employing or the people that you work with outside of your company channel partners and things like that, or technology providers, those connections are challenged by some of these advancements and some of the speed. You can't connect with people the same way. You can't invest in people, you can't talk to people the same way. And I think ISA is a good reminder and trade associations in general is a good reminder of how important it is to stay connected with your community. And who I define as our community is those people who are, who are engaged in making our overall industry better. There are some industries that are, you know, related or even not related that have really suffered due to there not being a strong association at its heart. You know, somebody that is mission focused and focuses in on the entire channel, not just, you know, the independents or the small or the large. It's everybody and everybody has a role. And so what you said about the dollar writing a check and putting a logo, that's not really what we're looking for. That might have been the case at some point.

Sure.

What we're looking for is the right minds around the table. We're looking for the right people who want to engage and make our industry better. Because ultimately it's a rising tide thing. If we can all boats together, we're all going to be better and our industry will thrive as a result of.

It, I would think. I don't know, I mean, I just look at our customers and the people I work with, I think it would be near impossible to try and go solo in this world right now. Right. And not be connected to peers and other people that are trying to sort out the same problems on the same challenges. And I mean, it's a, that would be a very, very tough load, I would think, going solo.

Yeah, I mean, I think it's the wrong move. I think. I know a lot of, I know a lot of really smart people that, you know, maybe their internal thing is to say, I am the smartest person in the room. And look, I know we, we all know Some alphas that like to think that way. I'm not pointing.

We talk about it all the time.

But I think it takes that humbleness to go and reach out to a competitor or reach out to a channel partner and have an honest conversation about a challenge that you know can only be solved by collaboration. And so I think what better venue than a place that isn't going to tie it to your transactions, that's not going to cloud of the conversation because of a back and forth over a financial arrangement. This is really in service of something larger. So. Yeah, I completely agree, Tom.

Yep, the. That's great. I appreciate that the tie in then let's talk briefly before we get to the news today about a little bit about the show. And I do want to hit one last thing with what you said though. And this is, I think this is really important and valuable to our audience is I just kind of think, you know, we saw each other two weeks ago at the Affiliated Distributors event. One of many, many great buying groups out there. Right. What I look at is the people that are in in. So I was just last week at, at two weeks ago I was with you at AD's Industrial and Safety event last week, this past week. Got home wins Thursday yesterday. Got home yesterday, man was with their PHCP division which is pipe valve and fitting industrial and so forth. And I'm sorry, pipe, valve and fitting, H VAC and plumbing. Those folks are their typical trade association for them is either HARDY or asa, right. But two great groups that are doing similar stuff to what, what ISA is doing. And then, you know, Sunday I leave for the electrical event with AD in Chicago, which they are NAED and so forth. And what I see is some power behind and I just, I look at a handful of folks, I'll just use one, one company as an example just because it's just a great example. Let's take our friend Paul Kennedy that's with us regularly. I saw Paul a couple of days ago. We spent some time we're going to spend some time this coming week. Paul is the president CEO of what used to be Dakota Supply Group, now dsg, regularly with us here on the show and be a guest again soon. Paul's the president of naed, the association. He's on the board of directors of the main board of directors, the oversight board of directors of Affiliated Distributors. And he's running a 66, I think it is now. I think 66 branch organization with thousands of employee owners. I mean talk about somebody that's diving in. But you see My point is, and I have friends and no industry people who are, oh, we get enough of this just from the, our buying group. Right. But then you look at somebody like that and you have members like that, you know that are, whether it's Jeff Bigelow at Hubbard or Mr. Ruggles or some of those folks that are actively involved in your organization and their buying group. And I think when you tie those things together you just get the best of both worlds and you have the, the network groups of people that are like minded companies that, from across the country. So important. But let's, before we jump to the news, Tom, will you just kind of throw up the banner for the, for the event and then Brendan, maybe give us just a one or two minute overview of the event. What's going to be going on. Some of the speakers, some of the panels. I noticed this time you're missing somebody that was, spoke last time that was just standing room only at the panel he was on. There's people sitting.

We have to, we have, we have to hold back some of the good stuff. We can't just give it to them all the time or else they'll never, they'll just be beating down our doors.

Oh, you're talking very good.

So I don't need, I don't need to oversell this, this one, you know, we're, we're coming up next week, but record attendance this year, you know, by, by a lot. So the demand is out. This is, this is a leadership development event. So this is not a trade show format. We don't have exhibit halls, we don't have anything like that. It is all and high level networking for the benefit of the attendance. And the purpose of this event is to get everybody in your organization, from emerging leaders all the way up to senior executives to level themselves up to take some time to learn from subject matter experts. So for your executives out there, we have a state of the channel given by Gunderson who's been on your show a couple times. We have a change management discussion between senior executives at Wesco and 3M. We have, you know, Valens, VP of Integrated Supply coming on to talk about data driven sales, data driven decision making and then on the other side, our women in industry and emerging leaders track. That gets back to the comment I said before. Developing strong communities. What ISA needs to be and is doing a great job is of not just connecting senior decision makers and making sure that they have a good Rolodex of people that they can reach out to when they're stuck or need to collaborate. But what about the next gen? What about other pockets of your, your companies? They need an industry to connect to as well. They need to feel proud of their job. So I mean this is one of those events that you really don't feel it until you're there. And when once you're there, I believe that you're hooked. There's an energy there, there is a vibe that just I haven't seen anywhere else. So. 325 people this year. Kevin, you were at the first one four years ago and we had 150. So this event is just exploding. I think it's got the, the potential to eclipse in size our annual convention just because of the demand for this type of engagement that I don't think exists anywhere else. So if you're in, I know it's a little late notice for a lot of you out there.

Yeah, it's plenty of time.

People are still registering as of today. I had people come in and register that are traveling from across the country. So you know, that's, I registered three.

Days ago, I think.

There you go. I do want to give a little shout out to, to Lead Smart. They are a supporting sponsor. So thank you very much for supporting the event. But if you're, if you're still considering this is a great event, reach out to me personally. I'd love to talk to you about coming. If you're in the Memphis area or in Tennessee or driving distance, this is a no brainer. Bring your team and level up. You'll enjoy it. I promise. You're going to walk away feeling energized and pumped and full of value. So I can't cool and at a cool hotel, I mean cool city. I know that Memphis gets a little bit of heat being in the news lately with the National Guard and whatnot. But where we are, the Peabody Hotel. It's so cool. This is where Elvis signed his first RCA contract. It's a historic hotel. It's beautiful, right in downtown and it's walking distance, maybe a 30 second walk to Beale street where we're renting out. We're buying out a whole Beale Street. A Blue City Cafe for one of our parties. So this is gonna be.

Tom, I won't, I won't be at the party. Don't worry, I'll be in my room working. Although I do need to get with destiny and beg and plead because I couldn't get into the hotel. So.

Yeah, I mean that's the problem with, with success.

That's on me.

Yeah, that's the problem with success, is, is demand, is, is out there. But I think we have some backup hotels for you.

It's not. I, I have a reservation. I just, I, I, it wouldn't be an ISA event if I wasn't begging destiny for something, so. But that's the key. Yeah, good. Let's. So good ties right into this. I'm gonna, we're gonna dive into our news and here's why I want to tie in from that. There is extremely high expectations for this event starting a week from Monday because tell our audience what happened and how the influence that you have over the current administration of this country. Along with the folks at naw, what happened on the closing day of the fall event?

Who, me?

I'm sorry, the spring event? Not the fall event.

The spring event.

What happened on closing day with your influence over this administration?

Yeah, that's right. We had a conversation with Brian Wild from NAW where he got feedback from our audience that he picked up the phone, called up his buddy Don and said, don, you got to make something happen. And later that day was Liberation Day. So like two hours later, we got the pipeline guys. We. That's the kind of access that you get with isa.

That's right. That's right. I don't remember if you remember, Tom, if you remember me telling you that I sit in the audience, I sit up front and talk to Brian for about 10 or 15 minutes after was just actually just with him chatting in Washington D.C. a few weeks ago. We're trying to get him booked on the show just schedule wise, coming with us. But there's Naw's, I can't remember his exact title, but head of legislative, whatever, Right. Senior, senior bigwig on Capitol Hill almost every day. And he's sitting on stage with, with Brendan talking about what could be coming. And there was that channeling to the universe and President Trump, couple hours later, there's Liberation Day is right there holding that banner we see on the screen here. So anyways, Tom, why don't we dive into the news here. That first article is from Reuters about quarterly earnings reveal businesses are adapting to the tariffs. Any initial thoughts on that?

I think we should probably kind of merge a few of these articles.

Yeah, that's fine. Let's mention them and merge them.

Yeah. So there's this first article that talks about, you know, some of the basically quarterly earnings are revealing that companies, at least from an earning perspective, don't seem to be impacted too terribly by the tariffs. That's what it's saying. Here that, you know, a lot of these are being the tariffs may be handled by somebody other than the end consumer. We also don't have an article today, but the CPI report came out whatever, a month late or whatever. Today inflation is at your 3% mark, Kevin, that you like to advocate so much, but it was less than expected. They were expecting it to be, I believe, 3.1, 3.1% and some costs were lower than expected. So the inflation.

Go ahead, Tom. I'm sorry to finish. I've got, I got something to throw into that when you're done. I apologize for interrupting. Go.

You know, so the inflation part was anyway not what was expected. And so now the. Mark, I haven't seen the market in the last hour, but it was up considerably because the. Now it's a foregone conclusion that they'll cut rates this next week and 28th.

Is the next meeting, right?

Yeah, it's this week coming up.

Yeah. 28, 29.

Yeah, yep.

So I think Fortune, Fortune magazine this morning called Inflation is the Dog that Didn't Bark.

Okay.

Was that interesting? Well, I mean it's, it's. We've got, you know, and this is, I think tied to that first article, right. Is that, you know, earnings reports are stronger than expected. Right. We've got this vacillating kind of inflation number and everybody's been, say everybody. But so many people have been cautious right. From the standpoint of what should be happening with, with inflation. And I just thought it was interesting. I didn't say that. They said that it's the dog that didn't bark. And now it doesn't mean that something else couldn't happen. But Brendan, Tom's point was that I've been saying for probably a year and a half or more that we need to. My belief is we need to make some adjustments to the economic metrics that are used in this country, not get rid of them. But maybe I have a belief that 2% inflation is not a reasonable number. And, and it was a random number that was just picked and is used around the world and there's so many, you know, we have, we have a AI driven 24 hour news feed now these days and we have much more data that can be brought into these things than a monthly Fed meeting. So one guy's opinion on that. But that was what Tom was referencing.

We, when you were on the show last, I think it was right before your event and we were. And I remember you saying that your phone was ringing off the hook from distributors and manufacturers and members that were asking you what the hell is going on with the tariffs and what should we be doing about them. I think if I almost remember correctly, there was almost a little bit of a panic and maybe there was a little bit of that going on at your event. What have you seen between then and now? Are you seeing that the sort of, the initial sort of I guess impact and like, oh my God moment is passed and it's more of an adjustment or you know, how do you think the mindset is going into the this fall event?

So my phone is not ringing off the hook with people talking about tariffs. I think people are really tired talking about tariffs, frankly. I think that they want to get back to their jobs, they want to get back to selling and focusing in on strategy as opposed to, you know, trying to wrap their heads around what's going to come. I think that the uncertainty is still there. You know, we're still getting, you know, our, our guidance by tweet or X, whatever you want to call it. But like it's, it's not something that I think is, has gone away as far as confusion or uncertainty. But I think that it's not a topic that people feel like they need to be as educated on because it might change. And so what I have seen is a couple things. One, I think people are, have, have just instituted more cost control measures of trying to control what they can so that there is some, some available dry powder if you know one thing does actually end up happening versus get taken back, you know. So I think that there's some cost control which really elevates that CFO's perspective saying okay, let me get in the driver's seat for a second. The other is that just, you know, the, the costs from what I've heard and what I've read is it is getting passed on to the end user. Distributors are not swallowing the increase. They can't, I mean tightest margins and even tighter now given some of the constraints on inputs, but they can't absorb these costs. And so it is getting passed through. So you know what that means to inflation. Kevin? I, you know, I think that it was lower than what they thought it was going to be. But I mean I think still people are still feeling it and the, the, the revenue coming in isn't necessarily offsetting it to the level that they want. It wasn't, you know, it wasn't the end of the year that they were hoping for in April. You know, they thought that the back half of the year was really going to Come back and save a lot of people. I think it, it still showed some growth, but not as much as people wanted to. And now as we look out, I think I got the first look at what Cleveland research's outlook for 26 is, and it's 4%. So it's, they're not looking at 20, 26 being a banner year either. So I think that that just means it's kind of let's control what we can. Let's be realistic and know that we can't control everything else.

Brendan, expand a little bit, if you would. About your first look, I think you said your first look at Cleveland Research, that they're a partner of yours at isa, right?

So I do, you know, I get to get in the, in the podcast game a little bit. Not as heavy as you guys, and I wouldn't call it a podcast, but.

We just called you heavy. Tom.

Fits.

We do a monthly call with Evan Willman from Cleveland Research Company, who's very active in our space, who does a survey of industrial distributors once a month to ask them about, you know, how things are going, what are the impacts of, you know, X factors, and then gives us kind of an outlook on the performance of plan of the month. But also now starting this past month, they start asking questions about next year. And so his survey that came back, which is pretty much one of the best surveys in our space, is showing 4% from industrial distributors.

Okay, 4% annual for the growth.

Growth, 4% growth.

So, Kevin, we hear people all the time, our customers talking about doubling in the next five years, which means, yeah, they're going to be making, needing to make 15% or more growth in a year. So if you're going to be above that average, you're going to have to do some things very differently if you're going to try and achieve that level of growth. Otherwise, if you just stay to the middle as you said, you know, probably that 4ish is what you can expect if you just kind of stay maybe in the, in the middle of what you're doing.

I talked to, talk to a distributor. I'll just say protect the innocent here. In the last one of the last two shows I've been at or events I've been at, their intention is to double. They double every five years. They've done it from, I think they started at about 10 million and they've done that up to now being hundreds of millions. So they've achieved it every time. They mentioned to me that they've talked to some of their peers at the event I was at, who are down double digits this year, this particular company is up almost 15% on the year. And I will put a little plug in for the company Tom and I work for. The teams that are using our software are up over 20%. So you know, I think there is, there's different markets and there's different people that are doing different things. But that swing for me was astounding to hear that from him. That said, he has his peers that are down double digits and then they're up double digits and you know, Brendan's talking here about some, an average something, you know, right in between that. Right. But does show some opportunity for the people that are, you know, taking a step ahead. And I, I'll say it this way, I'll, I'll plug everybody here. The people that are involved in the trade associations and the buying groups and you know, networking and finding best practices and sharing best practices. And the people that are adopting technology are the, probably the people that are leading their markets.

Yeah, I would just say, I would just say the, the old playbook doesn't work. You know, great, great if you want to be, if you want to be at 4% or 3%, use the old playbook, but your, the ones that are going to beat you.

That's your own risk or it could be worse.

I say this all the time to go with what you're describing there, Brandon, is that, you know, the whole, even the discussion about AI. Right. You know, it's, I love that what Jensen Wong from Nvidia says about that.

Right.

It's not AI is not going to take your job. Somebody using AI is going to take your job. And it's not that AI or technology is necessarily going to, not adopting is going to put you out of business. But I would, I tell people this all the time. I said, you know, you, you'll be in business, but you may go from 10 branches down to three branches because you're not keeping up with a guy down the street that popped up and is buying from a, you know, wholesaler like an ors, Nasco or whatever with a, you know, I mean we live in a world and I say this all the time where you could have a Quonset hut on a piece of property with a Starlink plug, you know, on a satellite Internet connection on a post out in the field and be working with some of the wholesalers out there and put a world class website up and go out and start taking share from the guy down the street. That's just brick and mortar.

Yeah, right. Maybe I'll say this a different way. The old playbook isn't. It's not wrong. It just isn't enough. You know, I think you've gotta. If you want to take share and that's the, that's the right comment to say. It's, it's about taking share. It's. It's about doing something faster, smarter or something different than somebody else is doing. And so don't throw out the baby with the bathwater, but know that that's just table stakes now.

Well, and I think you guys do a nice job of this between speakers and panels and so forth that your event is events is trying to get people exposed to things. And I, I just go back, I was looking at some pictures the other day from the different events that I've been on panels or spoken at this year and we, you had a great group of guys that I got to join. Mike Hockett from MDM led that, led the panel. And we literally, it wasn't a monster, you know, ballroom per se, but we were in a good sized room. We had people, probably close to 30 people standing and about 15 people sitting on the floor. It wasn't about me, this was about the panel about digitally transforming and AI and just a deep conversation. And so people are taking note about the need for this change because if you don't embrace some of these things. I think your point about Playbooks is good. I think that old adage about what got you here won't get you there is the key. Right. You know, with that. So we, so we got a lot going on in the economy, the tariff things. Right. Just that's. I, my hope was that this gets sorted. Supposedly there's discussions today, I think with the administration in China yesterday there was a offense taken by the president of something that was said in Canada. And so now those are all on pause for the moment as we get through those things. You know, it'll be interesting. There will be a handful of Canadians at your event next week. There's quite a few at the events.

I'm sorry, more and more every year.

Yeah, exactly. And I, I ran across a distributor from Canada at one of the events I was just at and I've read some of his LinkedIn posts over the past six months that are pretty, pretty flaming towards, towards the administration here. So I, this is the one, the one thing that, you know, there's going to be a lot of instability, but I hope we can get around this tariff thing. Just they're going to Be there. Let's just figure out what the numbers are and get them going.

That's right.

You know, Tom, any further thoughts on the tariff component? No.

I mean there's three or four articles here that are, you know, somewhat in alignment, somewhat contradictory, but yeah, I guess that's the right answer. Right.

The tariff side, I think you can, there are plenty of arguments of the benefits and the negatives of it. You know, I, I don't know. I say this all the time, but you know, if you take a step back and I think more importantly than ever, the administration that we have in this country currently and here in the US Is that you need to listen and then think what's behind what's being said and then wait a few days because things can change to start with. But there is an agenda that is very clear and the, the, you know, historically that most administrations in this country would wear a hat that says make the world great. And that is not what this president's hat says. And it is about America's strength in this economy. Strength and onshoring manufacturing and tax cuts and balance trade and so forth. And so if you look at what the agenda is, that is not hidden. Right. Of what the agenda points are, then look at these things and know where the focus is going to be and then make those adjustments accordingly. And to whether it's the industrial side of the business or electrical or plumbing. From a distribution standpoint, there could be nothing better than to start building more factories and factories other than, than data centers. Right. But if we can start on shoring more and more and more of this and we have an article here in just a moment about onshoring. The more we can do with that, if we could get, if we get some balance trade tax cuts and start on shoring more manufacturing, you know, those numbers of low, low growth that you were mentioning earlier, Brendan, is those things should change.

They should. You know, I think that we have to wait and see how this plays out. It is a long game. It's not a, it's not an immediate is, is much as we use immediate tactics in order to get people to the table. It is a longer, longer term goal that, you know, we still have to wait and see. You know, we did as a nation try tariffs at one point in our history and it didn't work out so well. So we have to see what's different about this time. Yep. And, and let's see. Let's hope it works out for the benefit of, of our sector.

I, I would as I say all the time is we have economists as guests, but our co hosts are not economists. We just have strong opinions. But I would think if we could get to a place and if you think about, you know, the, the at least the stated intention of the administration is balanced trade. Right. And so, and I'm, I'll say stated, there may be more that I don't understand. But if we just got these numbers in place, right. And we look at, you know, Thailand and Japan and some of those that have been, you know, are, and some of them are signed and firm and some of them are just discussed. But if we look at that and say, well, let's just get this done regardless of what the number is. And I think China is probably the most important one, although I think that might be a long term moving target. But if we get the Mexico and Canada thing fully sorted out, we get some of the major trading partners business is going to. These articles are already starting to talk about this, Right. And you know, you said the most important thing, more important than any of our articles is your members aren't barking about tariffs anymore, if I understood you correctly.

Right. They're just, it's not that they're not talking about them, they just, you know, wish that they were talking about them less.

Yeah, okay, that's great. But if we could get to a place where just we know what the numbers are, then I think the economy and trade will balance out. It will be an understanding of what's going on and then we just move ahead.

You got it.

Tom, where do you want to go next?

I think we should keep moving because unless there's something else you really want to talk about.

No, we can dive ahead. I'm throwing things in your lap to take us to the next spot. What you want to talk about this.

Is the manufacturing distribution section and this first article, we just mentioned it. Right. Is manufacturing making a comeback in the US and long story short, not really yet. They said, in fact, the number of manufacturing growth in the US has been about average this year. What I. And this goes back to you, Brendan, again as well. What I think is interesting about this though, that maybe is different than what it was a year or two ago is that people are talking about it, they're looking at it, they're evaluating, they're just not assuming, right, that I'm going to do all my manufacturing offshore or I'm going to get stuff from China or whatever. They're thinking through and looking at options, even though they may not have pulled the trigger yet. Right. And it might Take a little bit longer to, to pull the trigger. Do you, does that seem like an accurate observation or.

Yeah, I mean, if I look back at the, you know, when, when we first started talking about some of this, these challenges, the topic of onshoring or reshoring was, was certainly something that was discussed. But everyone at the time was like, well, it takes a long time for you to actually feel that. And I think we're still seeing that. But I agree, I think that people are really looking for alternatives that are more certain. And again, I use that term certain as the most important factor here. You can build a business model around certainty, you can't around the uncertainty. It's very difficult to do. So I think that yes, more people are looking at their sourcing alternatives or they should be. I mean that's a good caretaking opportunity. If you can source in a more certain way or even a more cost effective way, that's a way that you can help your margins and reinvest in other types of things. So yeah, I do think that more people are talking about that. But I agree it's not happening as fast as everyone would like it to, but I think it's still in line with what they said at the beginning is.

But there's a lot more conversation about it now and possibly planning, due diligence, things like that, that wouldn't even have been discussed a year or two.

Correct. But I mean, to stand up a new factory in, in the United States is going to take you five, 10 years. So I think that it does take time to, to have all this happen. There isn't just existing factories and that need to get spun up, especially with advanced manufacturing and the use of robotics and automation. You know, it's a big capital investment to get done. And then you have to talk about labor, which is, which is obviously the other big factor here, the elephant in the room. Great point, but I think that, sure, absolutely. People are talking about it, but I haven't heard anyone be like, oh yeah, I got silver bullet and I'm set, I'm set. Now unless there's a manufacturing company that is like I was already manufacturing in the United States and our supply chain is, is clear. But you know, there's a lot of exposure, raw materials, everything. So.

Well, I, I think the reality of this has to be to get this to happen. Right. If you're talking about on shoring versus near shoring. Right. Near shoring is making more and more sense all the time. Right. That, that Latin America, Mexico in particular, you know, with you Know, we could put something on a truck versus a boat. It makes a lot more sense. But I think what needs to happen for this to really jump in is we need, and this article talks about, right, we need the clarity, right, of what, what does the tariff component really mean to us? Then after that is the tax cuts that are supposed to be coming from all of this balancing act. And then there will be some incentives there. Because right now I think if you can give some clarity, I mean, I just think if I was, if I was a manufacturer right now and I understood what the number was going to be like from the companies that are the countries that I'm importing raw materials from or components from or whatever that I'm going to manufacture, because even if you onshore, your manufacturer, you're still going to have components of things coming from other countries. So I have clarity on that. Right. And I know where that sits. I know what those numbers look like. Then I can even look to a deeper level that says, okay, now if we've got some interest rate cuts coming, money becomes a little bit more available, obviously it's looking stronger and stronger now every day that we'll for sure have the two cuts this year. We have two cuts this year and even one next year, and then some tariffs get balanced, it becomes a lot easier to say, okay, I'm willing to maybe expand a current factory that I have here, put more capacity in the US and then start planning for something. But if taxes are the way they are today and then interest rates stay high and I have instability of tariffs, why would I, Right. Yeah.

I mean, I think you got two legs of that stool potentially, that I would, I would bet you're going to have good clarity on. You'll, you'll get a clear indication from the Fed and you, you know, you know, what the tax rates are going to be for the next. But the uncertainty around the tariffs, I mean, again, he was offended and all of a sudden there's a new conversation the next day and that could go back, it could stay. But how do you near shore and build a business model around that? So I think that that's the, still, the remaining uncertainty is what are your import costs?

Right. Well, I think it's, I think another factor as well that we're going to talk about. We have data centers, I think, is this discussion here as well. But this whole electoral power situation and you know, there's been a couple of data center projects that have been canceled or, or at least because like, I think it's Indianapolis or was one in Indianapolis and another one because the people living there, they were told their power rates were going to go up significantly because all these new factories were coming in and data centers that were going to be eating up power, so there's going to be a shortage. And they said, you know, hell no, I'm not going to agree. You know, and so there was a lot of protests on that as well. So I think there's. And you, you know, you pointed out, Right, labor is obvious a point and whatever, but I think this whole power thing, even if it's just a factory, is going to have to be sorted out more and a lot more attention being put into where we get the energy to drive all of this stuff. Plus all the data centers that are, you know, being spent literally trillions of dollars to. To put in place.

Yeah. I mean, data centers are obviously an area where a lot of our members are looking at as an opportunity, and we're going to dig into that at our ISA 26 convention. I just got a call. Yeah, we're going to have a nice kind of full 360 view of the data center. Raw inputs, some of the things that feed those chips, the powering of them, and also the construction of them. So I think that the reality is. I was listening to somebody today on a different podcast.

You listen to others.

I know, sorry, but they were talking about how the, the compute need might be way overstated. And, and if you, if you're looking at some of the conversations around just the investment in AI in general, a lot of it is based not really on a whole lot of reality, or at least they're not being transparent into what the reality is. Do I think AI is very important? Absolutely. Do I think it's transformative? Absolutely. But how do they know that they need 300 gigawatts of. Of power? How do they know that, you know, 250 is. What, is it what Sam Altman said they needed in the future?

Yeah. Right.

I mean, that's, that's just way beyond. And so I think way beyond where we are today. Right. And so the scale of how they do that, you can look at it two ways. One, we need to innovate power. How can we get more out of, out of a smaller space or a smaller footprint or, you know, how do we get America to swallow that pill? I mean, that number, when you said that they were going up the, the rates for, for the individuals, it's not just a little. I heard the number was 3x, 3x for their power. So taxpayers aren't going to stomach that. They're going to see it, right? And so I think that word's going to spread that can push back on this, but I don't think it slows the pace of AI usage. I think same person that says, I don't want that in my backyard is going to be using, you know, chat GPT Atlas to do research for their upcoming, you know, convention trip. You know, so I think that robots.

At their house mowing their lawn before.

So I think that it's hard, it's hard to figure this out. But, you know, getting ahead of the markets, if we want to bring this back to our audience, is they're trying to, they're trying to get to put themselves in the right place of this curve, you know, and so that if there is a need for the products that we sell through wholesale distribution or we make in our factories, we want them to be in the right place at the right time and at the right price so that we can take advantage of that opportunity. What that means for the world and the average taxpayer, too early to tell. But I'm fascinated with the, the amount of money flowing towards AI right now and where it's coming from, because the math doesn't math for me. It just, I, I don't, I agree.

With you on the math, if you look at it entirely from the math. But, and you look at, you know, you had the same situation with fiber back in the Internet days, right?

They just, back in the Internet days.

Whatever, you know, dot, dot com, period, right? When we're there and was, oh, we're never going to use this much fiber, there's no way in hell this will be used. And, you know, it's all being used and then some. I, I think that if, and I try and look, this is not. If you really look at visualizing maybe 5, 10, 15 years out and you look at kind of where AI is today and what AI will be or the application of AI, I should say, into 10 to 15 years. I don't think it's massively different than where we sit today. And it's hard to see because you don't know what it is, right? It's sort of this nebulous concept, but I think a lot of these people with big balance sheets and big dollars behind them are like, hey, we don't necessarily know where it's going to go, but it's going to be very, you use the word transformative, but way beyond what we can even think about. And so we don't get Ahead of this now somebody else will and we'll be, you know, left behind.

So again, I just, I, I think that, you know, the dot com bubble burst, but it didn't mean the Internet went away. Right. Or the relevance of the Internet or the power of the Internet. I think that the power of AI is gonna, is gonna be massive. I just, again, the, the numbers are staggering. I can't, I think it's just, it's, it's so that companies can put their stake in the ground around it. They want to be involved in it and so they have to throw out big numbers. But now we're facing, you know, real decisions on those numbers and sometimes those are just, you know, they're almost like, you know, a dog fight, making sure that somebody can get in the ring. And so they're paying big money to get in there. But I think it's, it's interesting to see what's, what's not in dispute is data centers are being built and they need to get powered. And so in the near term we're.

Going to need power no matter what. We've got to figure out our problem.

In the near term it will grow, but to the, to the numbers that they're saying, we'll see.

Well, it's an interesting discussion, right, because as you brought that up, that you were both commenting about the, the people that are impacted by it. Right. And I mean, I, I just think about it. What's that old term? Nimby? Not, not in my backyard. Right. So it's easy for us to talk about all of this, but if there's a potential negative impact of that data center on you, I mean, I just think about where I live right now. I, well, side note, do either of you have fiber coming to your neighborhood or house yet? I don't.

Right.

And we're kind of talking, we were just referencing almost like fiber. You know, getting fiber was a thing of years ago, but my, my brother in law has a construction company and that's what they do. They bore under the ground to bring fiber to neighborhoods and they go through these huge swings of more work than they can handle and then none because getting just all of the deals, whether it's Google or whoever, their Verizon or whoever they're contracted with, which a bunch of different companies, it's crazy to watch and I'd love nothing more than to have fiber at my house, but fiber's not even here yet. Right. And so then we look at that next layer and I think as we start thinking about the you know, and Brendan, you so insightfully, just a moment about drop that, you know, OpenAI Atlas or Chat GPT Atlas, and you know, all of these new. We all of a sudden we're going to have, we have multiple new browsers available to us and our reliance on, on data and the, the Internet as we, we know it today is just going to keep expanding. But I look at it as I'm living right now in that NIMBY scenario. It's not a, it's not a data center, but literally right, right over there by an eighth of a mile at the bottom of the hill from our house, they're wanting to put a battery storage facility in. And, and it's literally everything in between other than the five houses between my house and the, the hilltop that we live on. And that's at the bottom of that hill is all wildland interface. That's. We had a fire there in 2016. That was a pitching wedge from our house. And, and we're concerned, can we be, can we have it still? Will we still be able to get insurance for our house? What will that do to our home? Home value? Right. So you start thinking about, you know, that's, that's just a battery storage facility, but if you think about, you know, a whole data center and the power that needs to go into that and Tom's point earlier about, you know, and Brendan, you magnified it about how big that that cost was going to be, all of a sudden there's a lot of factors that go into this. When we think about the impact that it's easy for us to pontificate about it, but then when it impacts you directly, it's a different story.

I mean, they're going to get built. Whether they're built in your backyard or somewhere else, they'll be built somewhere because there's demand for it.

Put them all in New Jersey.

We got no room. We got houses on top of houses. But what I would say is, you know, for the benefit of our members, I mean, if you're looking for sector diversification, this is a great opportunity.

Oh, yeah, for sure.

Heavy into automotive or aerospace or oil and gas or some of these others that maybe have struggled to be consistently, you know, in the, in the green. This one is going to be in the green for a little while. So how big, how long it stays in the green, that can be up for debate, but it will be in the green. So it's like the next thing that everybody in this space should try to get some piece of.

I feel like no, absolutely. And what's interesting is there's the, we think about the electrification side of it, but you every trade, every industry that are core to, you know, our customer base and a big chunk of it, your members are going to have a wonderful impact from this. Now you know, the electrical guys are going to have some ongoing, you know, value to it, but every other trade is going to be involved in it and yeah, ongoing. And then you got the MROP side of it. Right. With the maintenance and repair and operating products in that setting. Right where you've got, that's going to be ongoing. So there's a value there.

Good. Yep.

Let's, let's kind of jump ahead to our. Tom, you want to talk about that manufacturers lose revenue to manual quoting article?

Yeah, I mean this is I thought an interesting article basically from Digital Commerce 360 doing a survey on the fact of, you know, that a lot of manufacturers believe or they look that they're losing a lot of revenue to ad hoc sort of manual quoting that's going on with no, you know, no workflows, no common systems and processes and so forth. And that's fine. I think there's some good, good things. It was just interesting when I was reading that is. And, and again Brendan, interested in your take on this with our customers now? I am spending more time than ever working with them on process and workflow and really getting that nailed down and even understanding what process and workflow they should be thinking about. Right. And I'm doing this predominantly in the sales and marketing arena for things but most of our customers and most people have not really had process for quoting or how do you deal with, you know, opportunities, you know, because some things don't quote right away and they're, they're longer term projects and how do you track those and how do you keep things from falling through the cracks and, and you know, just how do you handle leads and all these things. Right. Have workflows and processes associated with them that most companies have not really thought about. But I'm spending a lot of time on it now and one of the reasons being is if you're going to be thinking about AI or agents and so forth in the future, a lot of that is driven off of your workflows. Right. Your workflows provide the context and the framework for how some of these things are going to work. If you don't know what your workflow or process is, you're certainly not going to get an agent to automate it from that, from, from that Perspective. So I thought this was an interesting article just around quoting, but that's a form of a workflow as they were talking in there. But the, just the amount of in, in coming into customers and going, well, we just sell. Okay, well let's kind of unpack that. What does that really mean? And, and understanding the processes and workflows, are you seeing more of a attention being put on that? It's just, I've seen a lot more of it. Maybe because we're pushing it. I don't know, it could be our own self fulfilling prophecy on what we're doing. But are you seeing that more with some of your members?

I mean, I think that again, it's about the having the conversation versus it being a distraction. I think that for, for many companies, large and small, they want to be selling organizations and maybe they have processes in place, maybe they don't. Maybe their processes are old and outdated, maybe they are cutting edge process and they're really good. But the idea that somebody needs to stop and have a conversation internally to do that, to address it, I think is challenging for some people. And so, you know, especially given they are, like I said, distracted. If they already are short on time because they're getting pressures from their private equity firm or they're getting pressures from, you know, higher up or their customers are getting more demanding, all of these things are like, well, you want me to stop what I'm doing and readdress my processes that maybe aren't not working. And you're telling me theoretically that they are going to work better once we discuss this. But how long is it going to take for me to have that conversation and then get adoption on a new process and then layer in the technology to support, support it? And I think yes, it's the right conversation to have. But I think Tom, what you're doing is probably the, the, you're, you're providing a service and the software, right? You know, like, so you're coming in.

And having, we're coming in with a.

Whole host saying yeah, we have tools. They're not going to do it by themselves. You're going to get Tom on the front end that's going to make you slow down and talk about some of these things and he's going to be consultative with that. Some companies just, you know, they, I face it on a very different type of scale of saying, hey, I can't come to your event this year because that means I'm taking two salespeople out of the field for two days and that's that's money out of my pocket and our margins are so thin. And my argument is, what if they come back and they're better at their job as a result of that? And they're like, well, how long is that going to take? Because I got pressure. And so I think it's, it's the conversation of that nobody is disputing that better workflows and better technology and better automation is going to lead to better outcomes. It's just do you have the headspace or the time or the relief from pressure to address it? And I think you guys would both agree as technology providers don't just think that the software is going to solve the problem for you. Right. And that's built into your model is that it's not. You can't just buy lead smart and then never talk to somebody and it's all of a sudden going to lead to better outcomes comes. So I think that that's what's driving this is that is that, you know, it's time more than anything else is, is do I have the time to focus on this and what is that going to cost me?

Well, and I'm seeing it. You talk about pressure, right? Is I'm seeing pressure coming down from boards and from even owners. What are we going to do with AI? Right. They're not necessarily doing it, but they want to know what they're going to do and when they start unpacking that they realize that other than having maybe a copilot or something. But if you're really going to be looking at AI longer term and holistically within the organization, a lot of that is driven by process and workflow, which doesn't exist. So yeah, we're coming in for sure. We have a whole set of best practices now and I have a list of like the top 20 workflows and processes that we need to be thinking about in the organization and, you know, getting some. Obviously each company is a little bit different, so you have to kind of tailor those a bit. But it's a lot more, I guess, yes. With the time that they are investing in the technology, the workflow and the process piece is becoming more of a important part of that and they're understanding why it's an important part of it.

But it's, it's, it's that relief from the pressure that they're looking for. It's not just the time to focus on it is that you have to be okay with us breaking the model a little bit before we spin up something new, which Might mean lower profits for a little bit, which might mean less performance for a little bit. Now people can promise, you know, you'll be up and running by this and that whatnot, but you want to be able to do it the right way. You know, you want to be able to get that right. So it's, it's obviously key. Stakeholder buy in is key. Someone that not just is going to manage the technology or manage the process, it is the person that's applying the pressure has to say okay, you can focus on this instead of this and then it will get its proper day.

Good point.

I think that's well said. As I look at all of this, there's two components that hit me. The first is as we look at this article in general, it talks about, as we talk about manual quoting causing lost deals. Well, I think there's, that's the quoting component of it and part of this is done by Epicor, the technology provider and we talked a lot through this so that as you two are going back and forth about the process side of it and what I see so much out there and I think it's what we see with our customers so much, it's they may have a great way of getting their quotes done right. They may be doing, they might even be using some AI tools from their, their ERP provider and, and you've got some, the INFOR folks are going to be at your event and they just launched. In fact I've got my standing, I call it my date. I have my standing date with Steve Levy from, from infor that every one of your events now we've been getting together for, for the closing night dinner.

You trade that steak for a ribs at Central or Rendezvous and you're.

I think we're going to Rendezvous actually. Yeah. So last time it was Old Hickory before the tornado. So in, in Nashville. But that's a whole nother story. But the anyways long and the short of that is you may be doing some great things of getting your quoting done with technology but what we see the people that are even doing a good job of getting quotes done just using quotes as a single example is they don't do anything with them after they do them. Right. And so now you've put out, you know, when we've got customers that you know, are they, you know, they're nine figure companies that 70% of their business is done through quotes. But there's no post quote process and workflow to how do we manage and follow up with that. And then you put that together with, from what we're having to do as a technology companies educate people about how you can actually put that workflow in. But to go back to what you were saying before Brendan about that is that, you know, people buy, tend to buy. And Tom, Tom made this, I hate it when I compliment him. Tom made this statement. I, I want to say it was like 2017, 2018 when we were first starting to work on Lead Smart. Tom said buying software is easy, getting outcomes is hard and people would prefer to buy outcomes. Well, so many people are stuck from all of these years of buying software but not getting outcomes that they now need a trusted partner. And if you just are a technology company and you want to, and this is, it's, it's interesting and I'll be careful about this because you, I don't know who all the sponsors are, your event, you might have some of these people here. But you know Lindsay Young, great writer and an industry leader, thought leader on things. She just posted a great LinkedIn article the other day about all of these companies that are coming into the market. And my comment was it is that Silicon Valley is minting new software companies that want to come into distribution, but they're using the Silicon Valley B2B SaaS sales model, we call it B2B SaaS to B2B SaaS. And that's if you're going to try and use this, that sales model in selling to distributors and manufacturers, there's a trust game that is very different for them that they, and they want to know, and they've been burned before, they want to know how you're going to really help them. So if your software model is I sell you, I get you basic implementation or throw you off to a third party partner and then I come back to you in 11 months wanting to you to renew your contract. That's not a partnership.

Right.

And that's, we try and really differentiate from that, from that standpoint. But it's really interesting watching all of the companies that have Silicon Valley backing coming into our market that are using Silicon Valley sales and Lindsay really kind of nailed it in her post earlier this week. And I watch those folks and it'll be interesting to see how long they're around or if they get the growth that those investors want from this. But there's so much behind what you know and Tom really does a great job of this with his team and our customers is putting, helping. We've never had a customer tell us that their, their processes and systems isn't better. Aren't better after going through an implementation because if you're implementing with the right partner, they're uncovering things that you can do better. Not just what the software might do, but what you can do better in your business. So good.

Look at the next article here.

Yep.

Right. That is a lead smart customer that 2025 supply house of the year.

So Thomas Somerville. I was with some of their team earlier in the week and, and great company in the H VAC and plumbing space. You know what I love about this, when we get to share things like this. And Natalie Forster from, from Supply House Times. They just do a great job over there. And Brendan, this is not, you might not even be familiar with this, this, this magazine or, or site, website, but they do a really nice job spotlighting some of their members and in this field. But as a side note, what I want things I love about Somerville and they're a great customer, a great partner, good people. Get this. Brendan, I'm going to just ask you because there's both in the industrial segment and all the other channels of, I'll call it supporting the trades. Some really old customers or early old companies, I should say. Any idea who was president when Thomas Somerville company was started? Brendan, Just Bob, throw, throw a guess up.

I don't know. Hoover.

Lincoln.

Lincoln. How about that?

They were founded when Abraham Lynn. This article goes in and talks about, you know, some of their early dates and you know, they're, they're right outside of Washington D.C. and discuss support the Mid Atlantic states. But yeah, great example, Tom. Companies that are bringing technology in to help them with their processes. I was just talking with one of their, their executives at the show I was at earlier this week. Nick and I were talking and you know, one of the things that they're doing, it's really unique and I'll throw this out there. I just think it's so cool. And it came up in a meeting that we had with them because we were on site with them for a meeting. They're tracking, using our software, accounts receivable and credit limits. Okay, that doesn't sound really exciting, right? You might think initially that, okay, yeah, you know, we get AR reports, everybody gets AR reports, credit limit reports. But they're using that as a view of business growth, not business risk. Because the first thing when this came up was thinking about, oh yeah, well of course we want to track and send alerts about the risks that go with that. The risks is that somebody might not grow because they have lots and lots of customers that have a credit Limit that could be higher, but it's not higher because it's just the volume of the business. But if that customer got a large job or they quoted them on a very large job and they were reaching or nearing their credit limit, antiquated systems would say, you can't have that. You have to pay your next bill before you can have the product that you need for the big job for the quote that you want. So now with our system, we're tracking the quotes that they're running. Right. And managing and where these customers are at with their credit limits. So that rather than somebody showing up with a truck to get something for a quote, big job that they won and getting turned away, now they're able to quickly look at that and say, we need to raise our credit limit if they're worthy of that. So now we're proactively. Proactively. Right. So it's really cool the thing.

Rather than reacting to the problem when it occurs.

Good. Yep. Let's roll ahead with the time we have. We just got a little bit of time left. Let's kind of jump ahead. Tom, what do you see as. As something that you want to take a quick look at?

Well, I mean, there's a whole bunch of stuff here about, you know, AI. I guess this was. This is an interesting one here, the McKinsey.

Yeah.

Article here.

It's from our friend Mark Brohan. We'll see Mark. See Mark early this week. He is.

McKinsey forecasts up to $5 trillion in agentic commerce sales by 2030. And what they mean by agentic commerce is AI agents right. Out looking, shopping, negotiating and transacting on the behalf of humans. And you know, I wonder. And I, and Kevin, you might even certainly Brendan, you would have a better. But what does this start to do with like the IMRs of the world and stuff like that? If you're. If a distributor is using agents and things like that to even shop or work with their manufacturers or, or fine man or fine products and whatever. Right. I mean, what does that do to the. Or does that create even a greater opportunity for the IMRs and the people in the middle to even provide a better service to facilitate that? But anyway, there's just. And you know, McKenzie, of course.

Do you have an hour? Because I, I'm ready.

I mean, mackenzie has usually some really well thought out, well, good articles on this stuff here. But yet. And I just wanted to hit on one other thing. This. I mean, we. No one really talks much about this now, but those agents are not Trivial agents. Those are going to require a lot of horsepower. A lot of, you know, the things we've been talking about in the data center. I mean the use cases of things that we haven't even thought of or even, you know, visualized. Sure. You just, you know, this is just a tiny, tiny example of that.

So yeah, you go first.

All right, so a couple things, you know, looking at my space where we are in industrial, especially in the metal working side, highly technical product. And so do I think that that's the first one to go? No. Do I think that some of the more commoditized products or the, some of the things, you know, the supplies meaning like, you know, the MRO stuff. Yeah, that could, that could start to be shopped in that way. The other thing is a lot of that data is really looking at B2C stuff which has a different stakeholder, kind of different stakeholder decision making tree. You know, B2B transactions typically have a lot more stakeholders involved in the decision to buy. And so I think that that's going to make adoption not exactly oppos to apples as it relates to our audience. And then the last thing is I think that this, you brought up the IMRs. I was thinking about this the other day and I'm sure that it already exists. I just haven't really been, been into it is we focus so much on search engine optimization and all these things now. You know, how are companies positioning themselves to be found and interact with agents, not just interact with LLMs agents. Yeah, you know, how are they, how are they, you know, set up to better negotiate with an agent? I think that no companies that I know of are really, you know, at least publicly saying that's a, a big investment that they're making right now. But if these numbers are correct and again they're across all spending, not just B2B or B2C but correct. And agents are going to be negotiating with your ERP system or your CRM or whatever it is. Are you optimized for that and are you ready to absorb that kind of interaction? And are you going to lose share to a company that is, I mean.

Do you have processes and workflows that can support that?

Yeah, I mean there's, there's a lot of this stuff that is, is just wild, wild west at this point. I mean we're on the frontier, like you said, of not even imagining how these, how these negotiations will take place. We just know that they will. And so I think that it's an interesting topic to watch again I would, I would venture to guess, and this is just my guess, if I went to an ISA event that 95 to 98% of people have never built their own agent. Oh, you know, it's not hard to do. Right. I think that Kevin was showing me a few of the things that he's created for himself, you know, how to buy better wine or organize this church group or whatever those things are. But my point is, is it's not difficult to build, but it's very impactful. And so I think the adoption to some of these things on the user side is going to be, is going to be still, we're still on the early stages of that, the agentic stuff. My question, actually, I want to flip this back to you guys. Some of these agents are portending to take the place of software, you know, of saying, hey, you can build using tools like replit or other things, your own piece of software. What do you think this does to the future of software? I mean, is this something that, that you guys are looking at and you know, that's very purpose built for, for our audience, like your product? I mean, how are you guys positioning yourselves?

Well, I'll start with that and I'll get back to Tom's question and I was going to flip the table on you with another question, Brendan. So I'll answer your, your most recent question first is we are coming into a place and it's actually interesting enough. It's, it's a conversation Tom and I are having with our team a ton from a positioning standpoint and some of the tools that we're building right. That there's, there's two types of software in the world and I just literally I was having dinner. Is it Wednesday night, Tuesday night with Nick Pericle from Profit Optics and you, you know Nick, don't you, Brendan?

Yeah.

So we were having dinner and really good conversation and we were in Denver and we were talking about this. Right. Exact thing. So there's two components. That's the answer to your question. Right. The vast majority, I mean, and I, I spend my entire life talking to wholesale distributors and manufacturers. The vast majority are way behind on technology in general. I'm going to say 60 to 70%. It's something I should start tracking. 60 to 70% of our customers have never had any CRM in their business. I mean a good example, we just talked about one of our great customers, 130 or whatever it is users just a couple minutes ago. Net first, first foray into. They have great infor Erp system in place. Never used CRM before. So there's that component of answer to your question is to think that a company that has a 15 plus year old ERP system and never a CRM dabbling in E commerce and maybe use as mailchimp five times a year, which is that is a very common customer from from anywhere from a ten million dollar distributor to half a billion dollar distributor. The idea that they are going to quickly go hire some people in the next 36 months that are going to come in and start using some of those tools to build that across their organization, probably not likely. But more importantly is could they? Yes, but this is where the huge differentiator of where we sit versus Tom uses a term which is a very common term specifically in the technology world of point software products. A piece of software that is built for a very specific use case. I track this, I do that, rebates, truck usage, whatever, those are software products. And then there's platforms. Platforms are no ifs, ands or buts. The future, as the types of things you described start happening. We happen to be a platform where you can build tools on top of it, you can bring silo data as I talked about at the beginning of the show today. That's not to say we're the only platform in the world, right? We think we're the best and built on the best platform, the best cloud solution. But the idea of those just tools to manage this singular component, those will be the first ones in in my deep, deep, deep, deep down belief that Nick and I just had this discussion the other night and we were aligned on this is there will be fallout from those types of companies where somebody can literally go in and say, you know, somebody understood that, understands it's knowledgeable enough, can go in and say build me this tool to track and manage this.

Right. Well, what I'll go one step further. The, the point products in my opinion will not only I think become obsolete, but become a liability for companies trying to move to AI, right, as a holistic strategy organization because of the reasons we've talked about and the silos and trying to get all of these things to work. So you're much better served with a handful of platforms maybe that have a much broader set of application, have the right security, have the right framework for being able to communicate with agents and so forth. Right? You don't those all require certain protocols and frameworks and so forth in doing that. So you're much better served thinking more broadly horizontally versus trying to go after a whole bunch of point products. And you know, you're not going to go build an enterprise platform with a vibe coding tool or a, you know, a replit or one of the things that you talked about or. Yeah, and that's one of the things actually that is the conversation of these vibe coding tools have taken off like crazy and made, you know, tons of money for the company. But the question that's coming up is are the software that they're creating really going to be viable software?

Applications.

Applications in business in, in several years. Right.

And the one thing that no one's talking about with all of this, I say no one. How secure are they?

Well, and that's, and that's all part of the platform. Right, Right, the platform, the security, the, not just the security can it be hacked, but the privacy, the access, the. Think about the agent. We're working on something right now. It's taken us a lot of work actually, that, so that the AI and AI agent only grabs data that that particular user has access to. Right. So Brendan, if you're a salesperson in one region and Kevin's a salesperson in the other region, in a lot of cases you don't want them going after you have your accounts and he has his accounts. Right, that are there. Well, if you don't do it the AI agents and the APIs correctly, you end up potentially getting data that doesn't belong to you. I mean there's all kinds of things that have to be built into that platform infrastructure to be able to support that. So anyway, I think I got way too geeky there, but no, it's good.

You guys probably never invite me back, but you know, it's a great conversation.

It's a great, I mean we could do a whole show on, on that topic. But, but it is interesting and, and look, you made a great question and I think, I think if I unpeeled that question enough was are you, will you guys still be in business in five years because of what people might be able to go do? And it's a 110 valid question. Right. And what, what, what the. The belief is. And I would welcome anybody that's listening to this later and on the podcast, send me, and send me a note, reach out. I'd love it if they disagreed with this and just understanding the thinking, but the reality of it is, and, and it's easy for Tom or I to say this because we're built on one of the most secure and stable and, and, and, and advanced cloud platforms in the world, but you know, What I'll just give you a simplest exam. Simple example in this is, you know, if you just think about and I can, I could rattle off 25 of your members right now and I could that just come to mind and I could think about maybe five to 10 of them that might be thinking yeah, maybe down the road we could kind of start building some of our own stuff. Right. Which is great. So now they go bring in the, the intern that says he really is great with you know, hugging face or lovable or replit or whatever and can build some cool stuff. Who, who in that organization really understands security and stability and all of the things and those systems are not tied to making sure that that's not going to cause hiccups or damage or other issues with your ERP that you run your business with or the security. There is a company that we see regularly at events and so forth that that makes a what they call a CRM solution for wholesale distribution. And earlier this year and they went almost three months with their customers having no access to their data, no responses going out to their distributors answer their, their customers answering any questions who were mostly wholesale distributors. Those cut those companies had no idea when they would get access to the software they had paid for. Again would they have all of their data available to them? And then who else in the world now has their data which was ERP data and other data from their, their company because they had gone undergone a cyber attack. And they literally were almost three months that they were down right now. That's telling us right now. And then you know, I was just reading this the other day. Over 70% of companies that have undergone a cyber attack are likely to undergo another one because vulnerabilities were uncovered that probably the company doesn't even understand. The platform that we're built on has had 90, almost 99 uptime for over 20 years. So you know those things matter when we're, when we're picking solutions. So do I think that some of these tools to Brendan, to your comment, do I think that they matter that the thing, the cool stuff that we can go do? Yes. We're going to make some announcements over the next three to five months in our company, some pretty major announcements of third party software companies that want to use our platform to visualize what they do because a company that is using our software to manage their business, whether it's operations people getting access to the data that sales people are using and the, the silo data that we're bringing into our platform, they're, they don't want to be a silo. So they're saying we'll just let people visualize what we do in your platform as well. So I think we're in a great point in time. I do think to your point, people will start building some software internally. I'm going to wrap up because we're running out of time. I'm going to though quickly. Tom, answer your question from 15 minutes ago.

What is for another day?

Well, I'll just tell you. What does this mean to manufacturers reps? I think what this means to manufacturers reps is you need to reinvent, right. Brendan, you made a great comment about, you know, the, the technical nature. But if you're a manufacturer's rep that is solely tied to commodity items, you've got to find something else. You get some new product lines that are a little more technical. Because what we just talked about earlier is there will be agents and this is why distributors have got to catch up with this and manufacturers will have to follow. But distributors first is I talked to two or three people about this week, this, this week that said you need to be prepared for these things because you're going to have customers that are going to come back to you and say, if I am going to do business with you, here's the agents that I use. No different than EDI 15 years ago, 20 years ago, right? Companies were coming to their, their, their vendors and saying, we use edi now. If you can't transact with us by edi, we, we have to do our business with other companies. So I think we're going to get to that place where these agents are going to come into sticks in my mind. So clearly though, people that are on top of this. I think it was Brendan, one of your great members. I can't remember the gentleman's name that either owns or runs the company. It's Fullerton Tool. I think it is the very first ISA event I went to. They were taught during COVID they were talking about their salespeople, probably not manufacturers, but their salespeople that were getting VR goggles out to their customers because the sale is so technical and is different every day that they were, because they couldn't go on site, they were sending VR goggles that could send data back about what was happening. So I think it's pretty powerful with that. And I think it's Tom's comment about manufacturers reps is just need to evolve, right. And show the value that you can bring at the end user on a more technical sale.

You can't just be a good salesperson. I think it's the. Well, and some of those tactics are just going away.

So.

Very quick anecdote I know you want to wrap up, but remember, Kevin, I was telling you that I was having H VAC problems.

Yes, yes, yes, yes, yes.

So anyways, you got a bunch of companies to come out and give me quotes. Some slick sales people showed up in my. At my. At my door, and while it wasn't an agent, as they're talking to me, I'm. I'm have Chat GPT open on my. On my laptop right in front of them, and they're saying, you know, we have the best customer feedback of all. And I said, all right, let me just ask. And it showed him. And then, boom, debunked. Then he said, well, our input costs are more. I was like, all right, well, let me take these two quotes and just load them right into Chat GPT and they'll compare and debunked immediately. So, I mean, it took a. It took a sales right down to the truth. I mean, the truth is available information. But my point is, is. And I think it ties back to your imr. Thing is, it's about great relationships with your. With your principals and your distributors and your customers, and it's about being valuable in the supply chain, you know, So I think if you. If you are great at representing your products as an imr, if you. If you believe in them and you trust them and you know that they're the best for the application because it's a technical one and you are able to service at that high level, you'll be fine. But if you're just coming in as a really good salesperson, I think that, unfortunately, that skill is not enough.

That's right. Yep. Very good. Well, guys, this has been fantastic. It's time for us to wind down. This particular topic I could talk for another half hour on. I spent 10 years as a manufacturer's rep, and I remember the transition that we were going through. You know, I sold that agency in 2003, and there was pressure already to do better at that point in time. So we're coming up on the. Oh, what happened? That shrunk. But we've got. Brendan, I really appreciate you being with us today. There we go. We've got the fall summit for Industrial Supply association leveling up leadership for you and your team. I'm looking forward to being there, looking forward to seeing you. And you just. You guys do a really good job at this event. The bummer is, I Want to talk to you. Like the friendship that we have and you're trying to run this big show. When I get. There's like, wait, wait. Just. No, you don't have time to talk.

Sorry. I always have time for you, Kevin. Well, we got you.

No, it's good. It's. It's a great event. If you're not involved in the industrial segment and this isn't the right show for you, just please get engaged with trade associations, buying groups in the markets that you serve. So as we wrap up, looking forward to this great event. Great show. Brendan, this is really, really enjoyed your feedback and some, some fastballs you threw out there today, which was great. Loved it. I love it.

Love.

I mean, that's. You know, Tom and I talk about this all the time. It's like conflict is okay. It's not even conflict, but disagreement, questions. That's why people listen. You know, it's, it's, it's funny when we had an episode a while back where it's probably one of the most common comments we've ever had, where Tom and I were just in. What does Mike Mark say? Violent agreement is one of Mike Marxist terms. We were not in violent disagreement, but we're opposite pages completely and people loved it. So it's, it's. The dialogue's good. It's always good. So anyways, folks, thanks for being with us today. If you're in the industrial segment, hope to see you at the ISA event in the coming weeks. I'm leaving on Sunday morning for week four of five weeks straight, but I get to wind down at your event. When I say wind down is I don't have a booth. I'm just going to learn and enjoy and network and see good people and eat some ribs at Rendezvous and, you know, enjoy some time there. So we appreciate everybody that joins us here. We love being here with you. We're here every Friday morning. Again, I'm Kevin Brown. This is Tom Burton. For our good friend Brendan Breen and the appreciation that we have for our sponsor, Elite Smart Technologies, we thank you for coming with us today. If you like what you hear, please share this with your LinkedIn network. If you're listening on Spotify or Apple or any other format, please hit the subscribe button. And the best thing you can do is leave us a review on that that gets this out. Most weeks, we're in five to seven different countries. We have people tuning into. The podcast is usually downloaded in two or three times that number of countries that we see the downloads in the show's growing on an ongoing basis. If you have ideas or suggestions about guests or topics, please let us know. And then finally, if you'd like the newsletter that we were discussing today and you don't get it, please just reach out to us@helloadsmartech.com so we'll wish everybody a great weekend. Be safe, be kind, and do good things. And thanks again, Brendan.

Thanks for having me, guys.

And go Dodgers.

Go Dodgers.