Around the Horn in Wholesale Distribution - Episode 144

Sam sat. One more. All right. Good.

Around the room.

Good. And dizzy.

Yeah, it's true. Very good.

How are you doing? Okay. How are you?

I'm fantastic. Starting to tell you a little bit earlier. Busy night around the Brown household last night. Youngest son and his wife are expecting their first child this morning. In fact, my wife popped her head in a few minutes ago and said within a half hour to an hour, we should have a baby granddaughter.

So by the time we're done with the show.

Yeah. Yeah. We could start calling me old, old person names.

That's right.

First. First experience for this in our house with. With three boys and the youngest did it first. Got married last June and they wanted kids right away, so could be a good experience. Could be fun.

Congratulations.

Thank you. Well, yep. And you'll. You'll be here, you'll be visiting with Darlene and I on Monday. So I'm looking forward to having you down here and you'll get to see my wife and congratulate her in. In person. So be good. Good.

Give her a gift certificate so that you have plenty of money to spend.

Yeah. Why don't you just bring her down like the boy or girl?

Little girl.

Mercy May got to be her name. So had dinner with Austin and his lovely wife Marie in Colorado Springs a couple weeks ago. When I was there, they just moved. And I think that's the dilemma for. For my lovely wife Darlene, is that finally we got a grandchild coming along and they moved out of state. So. So United Airlines is going to love me for quite some time for those Orange County Denver flights. So it'll be good. So, hey, let's, let's dive in and start enjoying the, Enjoying the day together. It's good to see quite a. Quite a few folks coming in. And thanks to Paul Kennedy for the congratulations and Bob and a few others there. Bob Britain says. Why am I congratulating you? You didn't do any of the work.

So it's funny, I'm not seeing any of these. Are these comments coming through on your end?

Yeah. Yep. Not sure. So, you know, I think, Tom, what happens once in a while is that.

Oh, wait, I refreshed it and. Yeah, okay. It all came back. Yeah.

So, you know, you are the chief technology officer at Lead Smart Technologies, and why I'm having to coach you through these tech things, it's. It's a dilemma.

Yeah.

Okay. Very good. Hey, so happy to be here with everybody today. My name is Kevin Brown. This is my lifelong friend and. And business partner and co host Tom Burton we get together every Friday morning, occasionally a little bit of time in between like I we did this week with our around the horn 2.0 episode. But on our main show on Friday mornings we get together at 9 o' clock Pacific Time and we talk about the news of the week related to the economy, supply chain, E commerce, M and A, AI, marketing, sales, all kinds of different things. But what we try and do is talk through the newsletter that we put out every week and that newsletter is called around the Horn and wholesale distribution and manufacturing goes out to about 10,000 plus people each week. If you don't get that email newsletter and you would like to, we would love to send that to you, you can just send us an email@helloadsmartech.com or if you're active on LinkedIn, just pop into the LinkedIn tech, excuse me, the Lead Smart Technology LinkedIn page. Man, I'm struggling with that LinkedIn and Lead Smart thing this morning. And you can send us a request through there or actually just search around the Horn and wholesale distribution on LinkedIn. Last way is the website for the podcast which is www.aroundthehornpod.com. we'll get that to you today. We're going to be talking a little bit about tariffs, but we're going to try and push through the economy stuff a little bit quicker and move into some of the other arenas that we have to talk about. But obviously a lot of moving parts related to the economy that we'll chat about today. But again, we are happy to have you with us. We do this both live on LinkedIn, Facebook and YouTube every week. And then later in the day our editor and producer John takes all that data and puts that into the traditional podcast format on the platforms like Amazon and Spotify and Apple podcasts and so forth. So if you are listening in on the recorded podcast and not able to see our handsome faces this morning, what we'll be showing on the screen as well is the newsletter that we published. We'd love to get that to you if you don't have it. Last and not least is two little pieces to finish up on. One is we would love it if you would hit the subscribe button or the follow button wherever you're listening and if possible leave a review and that'll get this out in front of more people if you like what you're seeing. We couldn't do our show each week because we've got a front end person, Lily, who handles everything for the show and a backend person, John, who takes care of things. And we are able to do this because of the sponsorship of the company that Tom and I work for, Lead Smart Technologies. We've developed a solution and a product called Channel Cloud, which is an AI enabled CRM and customer intelligence tool that's solely been developed for wholesale distributors and manufacturers. We have a version for each one and what we try and do with that is we use the term here in this slide corral or bring together silo data from across an organization that those spreadsheets that are hidden in a million places, the ERP data, the marketing automation, the e commerce data and other data sources, we bring those into a central platform where we can use artificial intelligence and other tools to help gain business insights that companies have never been able to see before. By using all of their data on a single platform. We uncover risks, we uncover opportunities. By doing that, we do that in a cost effective way that gets people up and running quickly on a new platform to visualize their customers, their teams and their businesses better and provide great roi. So if you're digitally transforming in your organization, we would love to have a conversation with you. So, Tom News had a little excitement yesterday afternoon with.

Yeah, I like Bob's comment. Right. Tariffs are on. Wait, they're not. Okay, hold on. What time is it? Yeah, no, exactly. I think our article here is already out of date.

Yeah. So you. Very much so. So, you know, we put the newsletter together usually midday Thursday and so sometimes some things are getting excited and getting going pretty quick and next thing you know there's been a change the next morning. So we, we, we have that pretty regularly. But so yesterday there was a US Trade court, which we don't hear too much about. Trade courts decided that they wanted to get in the mix on this and found that the Trump administration had overstepped their authority. And then very, very quickly, within hours, a few short hours, the appeals court said, no, no, no, hold on, we've got till late next week. Let's get together and have a broader conversation.

Yep. So the question is, what is this really going to mean? It's interesting the market has not reacted violently one way or the other with this little movement down, but not a big deal. I don't know what your thought is. My 2 cents is I don't think these are, I don't think the tariff strategy to the level that obviously the administration had wanted to do is going to hold. I think it will very, very possibly lose in court. I think there's other loopholes as well that they can use. But I don't think it's going to end up being anywhere near what was originally put together on all of this. I won't say it won't be a complete non issue, but it could end up being a complete non issue.

The tariffs in general.

Yeah, tariffs in general. Because if the court rules it down right, then there's really, I guess there's a couple of other loopholes, legal loopholes.

Those aren't, I don't, I don't think those are legal loopholes, Tom. I think what they are is government statutes that are similar to the one that was already used that could be.

Used again, but only on a temporary basis. Only on a temporary basis and with limits on what they can be so very not anywhere near as widespread or wide as what, you know, was done before. Right.

So if you are a manufacturer, would you bet on that?

Would I bet on the fact that.

You think tariffs are going to go away based upon this?

I don't think that they're going to go away. I just don't think it is going to be the impact and the volume and the size, you know, even this 10% blanket tariff that's there that I don't believe that will stick longer term. So of course I could be wrong. I've been wrong once or twice before, I think on the show today. Only once I can remember on the show. But. And that was really. Yeah, but it's, which I think is the, we're going to talk more about this. But what is the consequence of that? Right. Because a lot of the strategy of the revenue strategy and you know, getting more dollars in to offset some of the tax cuts and all of that, what does that do if in fact the tariff strategy doesn't quite have any sort of meaningful impact? Don't know.

Well, that's interesting point. So I would, would completely. What does our friend Mike Marks say? I'm violently in agreement with you. I would say I'm, I'm almost violently disagreement with you on this.

Okay, good.

Yeah. And it's, let me rephrase that because maybe I'm, it's not full disagreement because of the kind of some of the caveats that you put into that. But listen, I, here's how, here's my just take on this, right. Is this probably ends up in the Supreme Court and we end up with some very significant tariffs, but nowhere near the numbers that have been proposed. That would be my take on this. I don't think there is.

So you think the Supreme Court would overrule what the trade court and, well.

The trade court's already been kind of slapped. Right.

It's about that. I think they just said, let's get on hold and let's, you know, get our, get our act together here. They called it an administrative stay. So.

Yeah, well, I, I would say that that's a, that's the, maybe it's a raising the arm for the slap. But okay, it's if, if there wasn't, if there wasn't support for all of this at some level, at some level in the government, regardless what the numbers are, why, why bother.

Right.

Why bother putting a stay or whatever you want to refer to it as.

Right.

I and the White House came out very quickly yesterday and said, happy to go to the Supreme Court next week on this.

Sure. Right.

And if you look at the judges and how they've been weighing on things, probably a good chance that there's some supporters. Here's what I believe in all of this. And then I, I could change this. Very varying degrees of strength behind what I'm going to say. What I, what I believe is we have a, you could call it bombastic, over excitable or whatever it might be. President of the US Right now, his focus is on getting deals done and throughout his entire career, written books on it, so on and so forth about getting deals done. I would not go so far as to say he and his administration necessarily saw this coming, but I think we're prepared for it. And I've not thought for one minute. And again, I go back to the Neither one of us are politicians or economists. We're just two guys with opinions that pay attention to things and try and relate them back to the market that we work in, in wholesale distribution, manufacturing. But I don't think for one moment that the president ever was anticipating ending up with 100% tariffs on China or 40, 50% here and there. We talked about a statistic, and I wish I had it Handy right now three, four weeks ago that said if 10% across the board, tariffs would support the tax breaks for the middle class.

Right.

And so whether that number is 10% across the board and 40% on China or 30% on China, I think we're going to end up with something very similar to, you know, dramatically lower numbers. But they will be in place. And I don't think there's any way around it in this, especially if they can get this through and moving it in, in place prior to the midterm elections, which there's a reasonable likelihood of that happening. So that's my Take on it.

Okay, that's fair. I, I don't, I, I don't agree. All right. Agree is not the right word because I, it's not that I don't agree with. I don't believe that is what's going to end up playing out. I think you're going to have way fewer countries with, with any, with a lot of countries with no tariffs at all. And I do think they're going to lose in court. I do believe they would lose even in the Supreme Court if they got to that point or they're going to have a significant impact to it. Again, you're right. I'm not a, I'm not a legal expert. So it's really just what's the basis.

That they would lose on. Right.

Because the same basis that the trade court ruled. Right. Is that he overstepped the bounds of.

By the amount. Not by doing tariffs. Right.

No, by doing the appearance. He used the Emergency Powers act as a way to implement the tariff program.

Right. And there's four other similar ones that they can be using for this. There's a big thing on CNBC about this yesterday that the path that they'll go down to mine, mine is my thinking is based upon not these articles but a lot of what I read and listened to yesterday, broader scope. But anyways, we'll, we'll see what, what plays out of it. But I don't think there's any way around. Well, look, let me ask you a question to go with that. If you're correct, how do you lower taxes? How do you get things reshored and how do you cut the deficit?

Well, that's the big, that's my point. That's what I said earlier about the.

There's no other way to do that.

Well, there is only, only whether, only one, easy for me to say. Only one other way to do it, which is productivity and growth. Right. That's the only other way to do it.

You have to grow your trying that forever.

Right. But that's, you know, then you come back to well, can AI and all the other things lead us out of this or lead us down the road of productivity?

Not before the country goes bankrupt.

Well, it depends. Right. So I agree with you though. I think that is a big, big.

Problem is that's why I, that's my, my position that I'm, you know, trying to propose here is we, we have to have a trade balance and we, or have a, an imbalance in trade right now. And again, I'm not suggesting for one Second, I think that, you know, I.

Think Kelly just said here, right. They can go to Congress. Right. He can go to Congress if they went that route. But that's a whole different animal all the way around. Yeah.

So. Well, and that's what Paul just made the most important comment. And it's kind of where I was headed with this. Right. Is at the end of the day, right. It. We still have this uncertainty, which is frustrating. Which, to Paul's point, it's exactly why I asked you the question, you know, would you, if you were a manufacturer or wholesale distributor, would you bet on your opinion?

I would not. And I agree. And I even just listen to us talk, right. We, yeah, it's like, I mean, the uncertainty and probably any of the things that both of us have said could have. Could occur. Right. In anything between. So, yeah, I completely agree. And know that the uncertainty is not in. Is not going away.

Well, we don't have. We have some tacos writing on something, or hamburger writing on something this year. I can't even remember what it was.

It was another rate cut before September, which certainly doesn't seem likely.

Yeah, well, it's good. Good thing. It's. Was it tacos or a burger?

It was tacos. Yeah. Yeah.

I'm happy to buy you tacos. The interesting component of that. I'll throw this out there. Maybe, maybe it's just, you know, we're only coming into to June here. There we go. Violent uncertainty, Paul says. And that is. That could not be more correct. Here we are. We, we. I don't think Mike Marks is even with us today. He's with us off and on, but we're honoring some of his slogans that he uses. But.

Let'S see.

We don't. We don't have any. We don't have a stake writing on anything. So maybe. What could that be, Tom? But by the end of the year that your. Your position is we won't have tariffs, and my mind is that we do have tariffs, but just at a lower rate.

No, I don't think I'd make a blanket thing like that. I just, I don't think that the court ruling. I think the court is going to overrule Trump's ability to use the Emergency Powers Act. What happens after that? To be determined. So I don't know.

But anyway, very good.

No, not ready to make any wagers yet.

Well, you had a pretty strong position earlier. That's why I thought you might want to get behind it.

When I get a little bit more certainty, then I'll we'll do that.

All right. Well, guess what? Nobody has certainty out there right now.

That's right.

I, you know, what's the interesting thing is in, you know, Darlene brought this up, my wife brought this up as we were looking at the news last night related to some of this. And, you know, she kind of restated the, the statement that I've been making, but in her own words is this, this white, current White House or current administration has the opportunity to likely be the most hero or zero administration in modern history. You know, this is, this could be really good. And listen, I, I'm just, my position is tied to what I think is reasonable and good. And the most important thing that I want is let's get to the place. Right. That we have. I don't even know if certainty is the right word, but some understanding and some level of clarity. Right. I don't know that we're going to get to certainty anytime soon on what is going on. But even if we could come back and have the just, let's just use the example of either Congress or the Supreme Court coming back and saying tariffs are reasonable under these circumstances and at these levels.

Right.

Because I just don't think that productivity and budget cuts are going to get us to the place that this country needs to be at. And it's the most powerful economy in the world, even with all the goofiness going on to it. And the rest of the world relies on this economy to get to a place where we can have even remotely close to managing the deficit. We've got to do something.

Right.

With this.

We absolutely have to do something. Yes.

And these proposals are, you know, and again, even if we, I almost, I would love to look at the math and maybe I'll try and do some research before next week. Is, you know, what would a 10% tariff across the board be? And especially in these countries where we have these major deficits. And then looking at the China side of it, let's just say it was 25%.

Right.

Those are all manageable numbers for people to, to build their businesses around. Right. What would that mean to our deficit? Cutting taxes, reshoring. We've got some articles about reshoring coming up we're going to talk about. So I think there's this, I believe this is until somebody comes up with something better other than productivity, you know, is. And things that we've already tried and haven't worked well. And I don't think AI is happening fast enough to be that solution. You know, we can see that, you.

Know, we don't, we don't have the power, infrastructure to accomplish what's required from the AI perspective as fast as it needs to.

Yeah.

But anyway, we haven't even talked about the whole big bill, Right. That passed a week ago or whatever and is now in the Senate, which actually adds a lot to the, potentially.

That'S right now we'll, we'll see if some of that gets cleaned up a little bit as it, as it moves, moves through the, the, the from the House through the Senate and so forth. But there's going to be, that's going to be an interesting thing too. And you saw, we're really digressing here, so I want to move forward in a moment here, but, you know, we just saw that that part of that was probably the catalyst for, you know, Elon Musk stepping aside, you know, stepping back.

Right.

How do you come in? And, you know, I mean, I think that probably one of the most long term embarrassing things for him will be that video clip of him with the chainsaw. Right. Because here we are, you know, five months into this and, and they've done some good things with Doge and I think there's some good opportunities to do a lot more. But, you know, I think he and Trump are, the love affair is, has, has cooled off substantially right now. And I think, you know, what it, what did Musk say the other day? You can have, I think you can have a big bill, a beautiful bill, but I don't think you're gonna have a big beautiful bill was, I think what his quote was based upon. You know, there was some spending increases in there.

And I think he's concerned, very concerned about what should be.

Yeah, right, right. If you have, you know, if, if you just undid all of that work and look at the, you know, from his standpoint, right. Look at, look at the, the impact it's had on his wealth and his businesses.

Right.

So Darlene and I were at the, at the movies Monday night and we went and saw Mission Impossible. And as we were walking out to the car, the Tesla park next to it and next to us had, it was really, it wasn't even like, it was just a sticker. I wouldn't even call it a bumper sticker. It was a nice square and his black background with white letters and it says, I bought this before I knew he was an idiot. So there's some strong, you know, people are putting stickers on their Teslas. So anyways, what does, what does Bob have to say Here constitutionally, through the separation of powers and three branches cannot override each other because they have no enforcement capabilities. They must cooperate. So we need to stop speaking in terms of one branch dictating the other. Yeah, interesting thought. What that my view of that comment, and I'm not suggesting Bob's wrong with that, is that that just mires all of this and kicks the can down the street a little bit longer to try and get stuff done.

That's why he used the Emergency Power act to do all the executive orders.

Right.

Was to say I don't have time.

To wait, so sort this out later.

Right, right. And, and now I think maybe we are seeing that and maybe that is going to be the answer to this is that we are going to see the decisions that are made on this are based around the importance or the requirement of the cooperation between those three branches, which again will slow things down.

Well, but you're going to get a lot more done a lot faster. Prior to the midterms, and I think I mentioned this a few weeks ago, I saw a statistic. I think it was like it was over. You know what. In fact, I think Alex, our guest from the Bundy Group a while back commented on this. I think it was 70 plus percent of the time when you, when a, a president has or an administration has control over the Senate of the House, they lose it at the midterms.

Yeah.

Right. So they're going to lose one of them. So we'll have to have to see how this plays out. But let's jump ahead. There's a good article from CNBC from yesterday about consumer confidence for May was much stronger than expected and I just thought that was intriguing. Right. And it's tied to. Which is funny. Right. It's almost the waffling of consumers and businesses now based upon which way the wind is blowing today, which is so struggle, so troubling because you know, this talks about the consumer sentiment appears highly sensitive to trade policy shifts and this.

Well, it also is highly sensitive to their 401k. Right. I mean what a. In a month ago or six weeks ago, the 401k looked very different than it does today. Right, right.

So.

And obviously you can say it's a direct correlation to this situation that's here in this place. But yeah, I think people were in really concerned when they had lost 15, 20 or more percent on their, you know, not just 401k but investments. Yeah.

As opposed to the 40 or 50% increases they've had over the last three years.

Yeah. Well that's, you know, it doesn't matter. Right. They're already spending the money that they.

Yeah, well, hopefully they're not in the 401k. They're thinking about spending it. But I thought the interesting point of this article was the, you know, the conference board basically what we're, they're trying to look at through the conference board's consumer confidence index was being over a hundred Wall street and it says the Dow Jones consensus estimate was 86 for May and it came in at 98.

Yep.

So big, you know, big 12 point jump there. Getting close to that high level of confidence of being at 100 or over that they're looking for in that setting. So I, you know, this could be, if we took another poll today, it could be at 86 again. Right. So it's interesting to watch but let's kind of bump ahead. Tom, to U. S importers awaiting that this is a D.C. velocity. Oh, I'm sorry. Businesses are finding a workaround for tariffs and it's entirely legal. Yeah, that's a great one. I almost skipped that. I'm sorry, regarding, from cnbc, what were your thoughts on that?

Well, I think it plays into what we just talked about. Right. So let's explain it. I think is there is a rule again a law or within the customs law that the tariffs that you are paying for something that you're importing, the first, first sale rule, which is based around the original manufacturer, the sale from the original manufacturer. So if I'm a manufacturer and I sell it to you as a distributor for $5 and you as a distributor or a broker or whatever the case may be, charged me $10, it should be. Again, the first sale rule would say that the tariffs would be based on that $5 which is the original cost of what it is. What I found interesting in here is we've talked about this a lot about transparency a lot. How do you, how do you, as things change hands and move through different intermediaries, how do you have the transparency of knowing what that original first sale was from the ability to then track those, those tariffs that are there and then what if you're putting machines together or putting things together that have parts and things from multiple different sources and all of that. But if that's a big, I mean that could save, that could literally cut the whole tariffs amount by I don't know, 50, 60, potentially 70% if you went all the way back to the, to the first sale. You have no, you're on mute. So you're still on mute.

That's where you like me, I needed to cough and so I went on mute there and then I had something to say. So there's two components to this as you just, you described it well, right. There are markets where manufacturers and, and their distribution partners work with full transparency because they're passing on to end users. And these are oftentimes, you know, huge capital expenditure type things and, and then other, you know, niche markets, excuse me, and where there's full transparency of that pricing. But in the traditional distribution network that we talk about and typically here with our audience is, you know, they've got some rough ideas. Right. But in this setting, to implement or use this particular, you know, this first sale rule as it's in place is you would need to be able to prove what that first sale. Right. That in this. In case the example you use right. If you think about it is, you know, and they in the article talked about it, a T shirt that you know is made in China goes through a broker or a vendor in, in Hong Kong and then ends up at a US Retailer for you know, for they just talk about, you know, original price, $5 and then $10 retail price on that that you can use a $5 price. You have to be able to document and prove that you have access to that. So it becomes really, really difficult in that, in that setting to kind of think through that. The other side of it though, and the bigger challenge with this before you.

Before you go off for that, doesn't that incentivize though that manufacturer who to somehow find a way to make that amount transparent so that it open again it alleviates potentially the impact of the ultimate tariff.

Yeah. So correct. I think it does incentivize for that. But you know, you kind of think about. And we've had many, many distribution experts as guests on the show who we've talked about this with as you know, the. And in fact we've commented from a couple of people have even made the comment related to our current tariff situation is that there are manufacturer that are using this to implement major price increases without documenting or partnering or easing them in or doing anything. They it's I can so I will versus I even need to. So and the challenge with that is is once you know it's pretty rare to get price increases, you know, and then have them ever go back to what you originally paid? You know, maybe it's they go down a portion, but if you're paying $5 from somebody, if you're a wholesale distributor, you're buying from a manufacturer day and you're paying $100 for an item now and that item goes up to $145, you're probably never getting back to that hundred dollars. Even if the markets and the pricing and everything would suggest you would. So I think there's an imbalance there that happens with that. And in the, you know, in the, there are specific markets where that transparency is fully available and it's there. But I don't think this is going to be a huge opportunity across the board. The other part of it though is that, you know, while you can do this and you can legally do this and there's other strategies of using bonded warehouses where things are sitting and you don't have to pay tariffs because you haven't taken them yet. And there's a lot of workarounds that people are using. But the challenge, right, is what is the tariff trying to accomplish? Right? They're, they're trying to, you know, incentivize domestic manufacturing production and they're trying to increase revenues into the treasury to offset the deficit of the, of the US Budget. Right. So if all of a sudden we're finding all the workarounds for these things and too many people are doing that, it's going to, you know, impact the revenues that are going to come in from this that are supposed to be helping us. You know, I mean, I think, I think there's, you know, I, I harp on this over and over and over again. I was at a, had a handful of people over for dinner last Sunday and we were check, a couple of us were chatting about this and you know, I think the, the big picture is, and I'm not gonna, I'm not making this comment to try and sway anybody's opinion about what they think about tariffs or the administration or the economy or anything. But, but I think it's important when you're looking at the current administration and the current situation of the US economy is look at what the administration is trying to accomplish. Big picture, not one component. Because if we look at tariffs or we look at fentanyl or we look at any of those things, what we need to tie those two is what the focus is of all of this is. And again, the slogan of the administration is to make America great, not to make the global economy great. So I'm not saying whether that's right, wrong or indifferent. What I'm saying is understand the goal of this administration and that this is a multi pronged approach and where they're trying to get is a balanced Trade deals, borders that are controlled, reduced amounts of drugs coming to the US dramatically or eliminating taxes for lower income, not lower, but middle class families. Right. And onshoring production and manufacturing to create more jobs and a better economy. So there's five, six, seven different things and if you look at any one of them specifically with tariffs, with a blind eye to what that's hoping to help with, then you're kind of missing the point on all of this. And again, that's not to say that this administration is right or doing it correctly or not obnoxious sometimes. It's, I think you really have to look at the full scope of what's wanting to be accomplished.

Yeah. And I agree and we've talked, I think we've talked a lot about that as we go forward here. But you know, again, back to this article here. Right. Whether you look at the scope or whatever, people are going to do things in their best interest.

Absolutely.

And they're going to do things that make sense for them and for their business to reduce their costs and increase their profits. Right. Yep. And so again, this looks like another, another way that we, you know, potentially all of that could be impacted.

Yeah, absolutely. Good. Well, let's jump ahead to the article that I had gone to that importers, US importers await expiration, the 90 day tariff pause. You know, we're looking at middle of July for the broader group and China is, What is it, July 9 for the broad group of tariffs that are paused and then August 14 for the China piece. So I think there's going to happen, there's a lot that's got to happen between now and July 9th. The interesting conversation. I'm interested in your opinion on, on what I have kind of, I can devil an angel on my shoulders right now. I can argue both sides of this. But you know, in looking at if you're, if you're Germany. Right. Or if you're the U.K. right. And the U.K. has a tentative deal in place. If you're Germany or other parts of the EU that are really wanting to pull some things together. How are you viewing this right now with what happened yesterday with the courts? Are you saying, okay, I don't need to worry about this or are you scrambling to try and get something done while there is a likelihood you might be able to get a better deal done right now?

Yeah, I don't know. That's a really good question. I, I, I would probably wait until June 5th and see what happens on June 5th, which is when the, the, the stay was done from the thing here, see what happens there. So I probably, you know, which is what, a week? So it's not, not a long time to, to buy a week.

Right.

I do think though that I would continue to be shipping in right now where I need to, to make sure that if I need to get more products in or start getting more products in, I'm doing that over the next 30 days or whatever, which is what this article is talking about.

Yeah.

And then, and I think we, we talk, we've talked about this, I think even with Paul last week. Right. It's like a day by day, it's a day by day decisions and strategy that, that goes through. So. But yeah, I would certainly, you know, probably make way to make any big decisions until after the 5th. Yep.

I'm guessing that's, that's what's going on. Excuse me. The other side of it though is I think there's probably a whole lot of additional back channel discussions going on today. Not today, but just in general. So, you know, and then this morning, you know, Trump accused China violating the preliminary trade deal that they already have by moving too slow and not doing some of the things that they were supposed to be doing already. Secretary Besant, Treasury Secretary Besant said things are a bit stalled with that agreement already. So it's, it's going to be, going to be an interesting time ahead. And it just keep going back to the idea that the challenge. Right. Is the uncertainty. Right. Is people, people are wanting to make.

Decisions all during why we were on the show because I think the market dropped like 2 or 300 points since we've been on the show.

So I don't know. Well, I looked at that as those comments were from this morning, but very early this morning.

Okay.

So yeah, 8:17 Eastern Time. So you might have been awake, but I wasn't.

Okay.

That was when Besson's bessence comments came out. But looks like the, just looking over here, Dow is down a half a point at 42,000nyse is down two tenths of a point at 197 and the S P 500 is down almost a point at 58. 57.

Yeah. I'm just saying when we started the Dow was in the green and now it's down.

So maybe it's. I, you know, Tom, what I really think this is, I think it was the markets listening to this show and your original comments about no tariffs.

I think you're right. I think you're right. They're like, man, there's a lot of uncertainty Here. Well these guys can't figure it out then.

Yeah.

What the hell, right?

Yeah, yeah. No, I think they're saying, you know, Tom Burton says that he thinks this is all going to get blocked but doesn't know what might come out of that. That's providing more uncertainty. And if Tom speaks. Right. What was that? E.F. hutton. Tom speaks.

People.

Listen, I'm just looking at this. I've got screen to my left here is you know, is the, the markets in particular stocks that I follow. You know who's up this morning. Funny enough, I don't X Twitter up by almost up 1%. So kind of a unique time there. So good. All right, all right, let's kind of jump to that last start. Why don't we jump to that last article. Fed shows some concern over difficult trade offs if tariffs reignite inflation. I, I just, I just wouldn't want to be Jerome Powell.

He's just in the same place that we all are. Right. Uncertainty.

Yeah.

Don't want to make a decision that comes back to where you get blamed or bit in the ass for it. So it's, you know, I mean he's just in the same boat or they're in the same boat though the rest of us are.

Yep. Well the, the it's.

And you're going to be criticized less for doing nothing than doing something right.

And, and I don't know that the numbers play or speak to this unique time that we're in the way that they normally would do these numbers. I mean I wasn't, wasn't one of Bessants 3, 3 and 3 thing tied to 3% inflation versus 2 if I think that was part of it. But this article talks about the Fed's dilemma. Responding to persistent inflation could require higher rates but doing so in a slowing economy undermines growth and jobs. So I thought it was interesting there it said that Fed officials worried tariffs could worsen inflation and force tough choice on interest rates. If inflation persists while growth and employment slow, they could be forced into challenging trade offs and challenging trade offs is difficult for them in this whole setting. I think that is that they're, they're looking at parameters and using parameters that they've always used. And we're in a different world in a different place with what's going on right now. And I think he's stuck because he's of course, you know, anybody that's working on the Fed, you know, whether it's a regional Fed or the US Fed, they're used to just, I've Got economic numbers that we've historically used. And when I see this, I do that and we see these three things, we do that and we see these conditions, we start talking about that the world's different. What's the grin on your face for?

Well, I think I was looking at Bob's comment here. Pal is more risk averse than Trump. Yeah, you think? I think so, yeah. Just a little bit.

That's like Tom and Kevin looking at their business, at their balance sheet of lead smart technology.

That's like saying Kevin talks more than Tom.

No, that's not that case. Right? No, no, no. That's like us looking at the balance sheet and me saying, of course we can hire nine people next month.

Right.

And Tom wants to see the money in the bank. So it's good. I like that. All right. Manufacturing and distribution segment. Right. There's an article there from Imp O Mag about nearshores outlook for Mexico. Any takeaways from you on that?

Well, it's. What do you, what do you say week after week, look out for Mexico. Right. Or watch out for Mexico? Yeah.

It's not from a negative. It's just, it's not just a sleepy neighbor.

But I think it was, well, the article was well put together. I think it put together in more detail exactly what's going on in Mexico and the growth that's going on in, in Mexico that's there. And, and I don't know, in fact, I was going to do some homework on this before the show. I didn't get a chance. I don't know what the status is of the agreement, quote unquote, between the US And Mexico on the whole tariff thing. Have you, have you looked into that?

I think everything's just on pause, just like everything else is right now with that.

Okay, but, but you don't hear much about them. You don't hear much about progress or any. And I think they're just, they just, they're under the 10% umbrella at the moment, I believe.

For now.

Yeah. Yes.

I'll try and work on. If you think about Tom, remind me or John when you're editing this, make a clip about it or something. But I'll try and get another chart together for next week or find a good chart about where everything sits and we can go through that. We should be doing that every week.

Yeah. Well, you could take a lot of the data in this article and put a good chart together. It's. Yeah.

I just thought this, you know, this is talking about near shoring in Mexico. They said in 2024, Mexico attracted $36 billion in foreign direct investment, with more than half coming from manufacturing. So the, you know, and the focus of that, right, it says, underscoring the importance as a near shoring destination and pretty straightforward. It says automotive, electronics, medical devices and semiconductor industries are leading this growth. Now, you know, I don't want to say most, a large percentage of every car that's manufactured in the US has components that are coming from a stamping plant or a seat manufacturer or a vendor that's crossing the border from Mexico, you know, and then, you know, Tom, I don't think you necessarily would have experienced this in your career, but I've had the opportunity to do quite a bit of work across the border in the maquilador regions, which are, you know, those whole regions from the Pacific coast all the way across the mainland of Mexico and into Texas and so forth. And where we see these major manufacturing corridors that are there of people, you know, I did some work, some interim executive work for a protective clothing company a number of years ago who had a Louisiana plant and a Eagle Pass, not an Eagle Pass, but a, just across the border from Eagle Pass, Texas, manufacture two manufacturing plants there and people crossing the border every day dealing with that. But anyways, we're going to see more and more of this and you know, we want it. The Trump administration, I would say, or most Americans, what they say we want on shoring. But we're seeing tons of near shoring here. So this cited a Bank of Mexico Survey said that 27% of companies in Mexico are already expanding capacity and 30.7 have signed new contracts for increased production due to near shoring. So it said they have the workers.

That are willing to do a lot of the manufacturing work that we're not willing to do here at a, at a lower price.

So it's not a China price, but it's, it's a higher quality product that's coming out of there. And I think that's what in a lot of instances what, you know, you're seeing people looking at is the fact that the, that the what Mexico and not even Mexico, I'll just say Mexico and other parts of Latin America that this is growing in as well is you've got a far higher quality output of product at a not too distant price in some instances because as China has established a middle class over the last 10 plus years, wages have gone up there substantially too. Now there's still a big gap between China and Mexico prices. But when you start looking at the stability Issues and wanting to move things out of China. It's a whole lot cheaper than coming straight to the U.S. yep. So talked about this near shoring could create 1.1 million new jobs in Mexico and add 3% to Mexico's GDP. So substantial. So some, some wise gentleman that I know has been saying for about a year now, watch Mexico.

So keep watching, keep watching them, keep watching them. Yeah.

So all right, what's next there, my friend?

Which one do you want to go? Do you want to go to this next one?

Yeah, let's talk about that. Why don't you reference that? That's an MDM article about 9 and 10. 9 and 10 distributors say their business strategy won't hold up. You want to hit, hit the beginning of that.

So I guess this is going to be a four part series which I'm looking to. Forward to part one. Yep. But they did a survey of distributors and again most of them believe that their current strategy for how they go to market, how they operate, how they use data was a big one. Right. How they're using data to drive their business, how they're using technology to drive their business is not going to hold up.

Yep.

Now I don't know what they mean exactly by holding up. Right. It's, you know, you always are saying, well they're not going to go out of business but you know, they might have some downturn or they might have some.

Are they going to dramatic changes to the business but it might not be gone.

Right. And I think certainly that's going to be a, you know, you can't put a blanket statement out there. I do think there will be definitely people that go out of business or get acquired at a fire sale where then they can, you know, then incorporate some of these. But I was really surprised at that number. I would have, if you would have asked me what I would have, what I would have said 5 and 10 would have been the response I would have expected. I'm really surprised. I don't know what's your thought or take on it.

Well, I think just goes back to the uncertainty. What is I, as I was reading this, I was thinking I want to reach out to Tom Gale or Mike Hockett and I don't know if Mike's with us today. Mike's oftentimes with us on the show, but I'd like to know a little bit about sample size and then when the survey exactly was done and so forth. But you know, it's forward, forward thinking distributors are working on these things. Right. They Talked about needing to focus more on scenario planning, using data and analytics, better thinking about multiple possible futures, multiple scenarios. It kind of goes back. We were, we talked about this last week and we've talked about it as much as you know, long before tariffs. I remember we had a chat with Mike Mortensen from ARG and you know they were talking about weekly talking to their manufacturers versus you know, in days gone by. Right. As we have our pricing with XYZ manufacturer, we've got their regional guy that comes in four times a year. I see their executives a handful of times at conferences and events and maybe you do another strategy session along the way. Well, that doesn't hold up anymore. But that's kind of some of the mindset that I think this is talking to. So I think the number being so high would suggest to me maybe it's a small sample size but I don't know that for sure. But it's the key, the takeaways for me is thinking about, you know, this talks about sustainability issues, technology innovation and agility. And I don't know that traditionally and I'll, I'll welcome anyone that's in this, in this market and broad scope has access to the, the data here or just their experience. But I don't know that the traditional wholesale distributor in, in the U.S. i'll just say North America has historically been agile and I think they're being forced into a place of agility matters and you know, and reviewing what is our, what is our strategy, what is our strategy with technology and analytics and you know what, how are we managing our supply chain on a daily basis and are we using AI and other technologies to help us with that I think is becoming the key out of this.

Well, and I do think that you know we've been saying this right and is as I said from the beginning or I've said for a while is these are very data rich organizations and the amount of which they use data and the, and the data to drive analytics and to drive just, you know, intelligent decision making is very, very small compared to the amount of data that's available and the amount of potential insights and analytics that can be generated from that data. Yeah, right, that's there. I think we are seeing certainly a scratching of the surface of the, of the recognition, recognition that this data is valuable. But I think we just scratched the surface of what's possible with that data and I do think that you end up with a most distributors again from the ones that I work with and see if they really use the data, the amount of decisions that could be at least made easier or more with more clarity or with less or with more certainty would be way, way, way increased. And they talked a lot about making, predicting future scenarios or coming up with future thinking. Right. A lot of times. And this is where AI can come into play is they can say they can look at the historical data, but then they can help it. The AI can help you understand what are potentially the future outcomes or the future situations or opportunities that come from that data. So anyway, I think there's just. If I was going to focus on one area of that, the data part of it is to me a very untapped set of power within these distribution organizations that hasn't been taken advantage of.

I think that's great. I think that's a great recap. And you know, the scenario planning becomes pretty powerful as well. And that's going to be. I don't think we're there yet in these organizations, but the idea of digital twins within using AI to plan, do scenario planning is going to be a phenomenal place to be. So good. Why don't we jump ahead into our E commerce and marketing segment? Let's kind of jump down to that. Maybe that second article from Digital Commerce360 about Big B2B distributors prioritize digital and AI core capabilities. It kind of is a nice segue from that previous article.

Well, it's obviously, it's saying that the big guys, right, are already moving in this direction or are already there. The one thing that jumped out with me in this article we talk a lot about this is the importance of when they interviewed the Grangers and Fastenal and MSC and, and Watsco and so forth, one of the common themes was they said platformization, basically saying, okay, rather than having all these different point products within the organization and all these different silos, how do we look at things from more of a platform perspective?

Let's unpack that a little bit. In fact, by the way, this is a side note. We have a, at Lead Smart, we have a whole white paper that describes the difference between platforms and point software products or individual software products and the value of that. If anybody's interested in reading that white paper, we'd be happy to get that out to us. Just let us know. But why don't we unpack a little bit of platforms and point products? Because those are, you know, point products is not a commonly heard term in this arena. So why don't we unpack both of those a little bit?

Much like Mike by The way from MDM is here. Oh, great. And it would be great, Mike, if you have any, any more insights on sort of the sample size and stuff of that previous article. I know there's more. I know there's multiple parts coming, but that would be great to know.

Yeah. We got to get Mike back on the show. I saw Mike three weeks ago in Denver and I haven't got him scheduled yet. But Mike's always a good guest to have with us.

Kelly says we better start a training program and the upskilling is mandatory. Yeah, she's not that far off. Yeah.

We were talking about my spending. I was getting ready to go send you the final quote I got on the automated training tool that, that I was getting ready to buy this week. That's pretty funny.

I have to run it by pal, see what he thinks.

No way. I don't. I almost signed it without even telling you. So anyways, let's jump ahead into platforms and point software products.

Yeah. So I guess the simple way, right, it's if you end up looking at, you have a product for CRM, you have your ERP product, you have a product for marketing, you have a product for supply chain, you have a product for inventory management, you have products for lots of different products, even for expense reporting and all of that. I mean, I think a great example, right, is even in small business, you a lot of times have an accounting like QuickBooks or whatever for accounting, and then you have something else for expenses, then you have something else for payroll, and you have something. Which we do. Right. We've. And we're. And we're trying to move more towards having things that are running through a common platform, that these products and these technologies or these capabilities, I guess is a better word, can interact together and talk together and again, utilize and leverage a lot of the same data and share some of the same data. So again, think of stitching everything together into a sort of integrated framework versus everything running in its own world that are there. And even in small business, we're trying to do that, right? We're trying to look at, you know, we're changing some of our accounting and all of that to be more platform specific and, and to be able to leverage things together in a, in a better way. Well, take that at a much bigger business level. And that's what a lot of these companies are doing. And then they're using that data and that to drive their digital commerce and their AI strategy.

Yep, that's. I think that's. Plus Mike just got back to us and just said 100 plus distributor respondents. But he's going to get a little more. Hey Mike, if you think about it, send me a few Fridays in, in July and August that you're available and we'll get you back on the show. We can unpack this even more. I think it'd be fun.

I would love to have a deep dive on that conversation because I think there's so much there. Right.

We could do it around the horn 2.0 and just do a short show and get Mike on and, and just unpack that and get it recorded and get it out. So Mike, let's chat maybe beginning of the week. It'd be great.

So it's just leading up to an MDM webinar on June 25th.

There we go.

Go ahead and cancel that mic and do it with us on a round horn.

Mike and I had a great, great conversation about the the at the MDM Shift conference and it's always good. I, I get to see Mike four or five times a year at the different conferences and events we're at, which is great. And so we're having kind of a, you know, MDM does obviously the business they're in is content development and research and so forth and as part of a national association of wholesalers and distributors now and you know we do a very different plat use term platform. Right. Our platform for this show is very different than stuff that MDM does. So we get Mike on. Right. Even though Mike has organization, has a podcast and we can support them as well. So they, the, the marketplace is in wholesale distribution in the US and North America in general is a better place because of the work that MDM and NAW does. So looking forward to having Mike on again. But I think Tom, back to the portals and point software products. I was on, on the phone yesterday with a large H vac and plumbing and electrical distributor, you know, 3040 branch operation which is, you know we have a lot of those customers at Lead Smart. I was talking with their team and one of their, one of their executives, you know, asked about some things related to pricing and managing pricing solutions and that led us exactly to the idea of talking about the platform scenario. Right. And you know we think about the typical user of our product Elite Smart is of our channel cloud solution is we laugh about it and say the carpet side of the business or we oftentimes say customer facing people. But what we have a lot of customers doing now, and this is the beauty of technology that's built on a platform is the gentleman's comment or question about that yesterday is we have a lot of companies now that are using the operations people, some of the supply chain people that we're working with them and building out advancements on the platform that lead Smart Channel Cloud has built where we're adding different operations across an organization because we have this unified set of data that comes from across the organization. So when you buy an expense management piece of software or a commission tracking piece of software, not only do you provide a risk of login fatigue and struggling or click fatigue, as I often call it, for people, but when you can bring that disparate data from across your organization onto a single platform, you can start doing different things with a platform across an organization.

Yeah, and I think Kelly brought up a great comment here. Right. She's been the human portal between 15 different. She says platforms. I think she means products.

Right.

And having to bounce around them. And you know, yeah, if you have a big IT organization, that's what you tend to do. Right. Is the IT organization acts as the glue between all of those different products. Or maybe they don't. But yeah, there's a lot. I think, again, these are the common denominator between these projects that they said here was this concept of thinking through things from a platform perspective and how to get the most mileage out of that.

So I'm reading my recap notes that Lily does for us by using AI to recap the articles that we're looking at each week. Tom and I are. Neither one of us are nearly as smart as we'd like to make ourselves look Here we have some cheat cheat tools other than also reading the articles. But you use the term platformization, integrates E commerce with logistics and erp, embedding distribution into customer operations. Right. So it goes back to one of the first things we talked about at the beginning of the show today. As I was describing, what we do at LeadSmart is taking siloed data from across an organization, very soon to be including unstructured data, I.e. your PDFs and spec sheets and things like that into a single platform where you can get a visualization across your organization, across your company. The interesting thing that they said here is that there was a quote that said there's a gap between digital ambition and operational integration, which we see that constantly now because I'm at events almost nonstop, it seems like in the rest of the year, as I think I have 12 or 14 more events to do this year, is we have and talk to lots and lots of people who are going to a lot of AI and technology conferences and have an ambition for what they want to do. But getting there is. Is a little slower for most, of course.

Right. All right.

Let'S jump ahead into. Well, is there any other segments of the E commerce and marketing that you wanted to hit before we jump?

Nothing. Nothing earth shattering.

Nothing earth shattering. Good. Just. Just reference. There's three more articles in this week's My Newsletter. AI adoption requires a marketing mind shift. If your B2B content is failing, it's time to get real. That's from Martech and there was another one there from. Well, that was the one we just discussed. So a couple more good articles there. So if we jump ahead to our technology, cyber security and AI. First article there is about manufacturers and wholesale distributors facing greater cyber risk. Any takeaways from you on that?

No, nothing. You know, I mean, obviously it's becoming, and I think we talked about this, right. Is when you start to get. Again, you're starting to send data and you're starting to move data from one thing to another. The opportunity for potentially that cyber attacks becomes higher. Right. There's, there's different, you know, holes along the way that are there. But I think this ties into some of the things that we've seen before. I do think that there's going to.

Be more and more.

And if you get it, if you. There's a whole conversation and I've kind of looked into this a little bit. But as you start to send data from devices, right. Peer to peer, from one peer device to another, I think there's going to be a lot more.

What's a peer to peer device discussion?

Well, typically, right. If you have a. A lot of times, right. Devices are attached to a centralized location, right. So let's say you have a central server or a central location. And let's say you have. Well, your Apple Watch is a good example, right? Your Apple Watch goes back to your phone, it ties back to your phone, it ties to your computer. But let's say you wanted to send data from your Apple Watch to my Apple Watch without. I know that, but just in theory, right, in theory, hypothetically, you'd want to send me, you know, the, the money you owe me or something from my phone to you without going through a centralized source. That would be peer to peer.

Okay, good.

And that's where some of the cybersecurity pieces can, can break down.

So Zelle Venmo, those sources, as we might think of those, those are centralized transaction hubs. If we were Trying to do that individually on our own without using that centralized hub like a Venmo, we would provide much greater risk.

Potentially. Potentially.

I wonder if that's going to impact, you know, companies looking at things from a standpoint of we've always the kind of always thought there's, you know, most people are that, what do they call it? Byod? Bring your own device. I wonder if some, you know, companies will start leaning as we see more of these risks to that peer to peer discussion that you just mentioned. If we see more companies looking to try and bring, have people use company issued devices so they can control security a little bit better. I mean a lot of big organizations require that. But you know, I run across, you know, let's just say sub a billion dollar companies that, you know, pretty much everybody there is byod.

Yeah, yeah, no, agreed. So, and I think, I think absolutely there'll be more of a. Because you're not going to start putting security software and tracking software stuff on people's personal devices.

How can you do that with their, their personal device? Good, good. All right, well let's kind of move ahead. We're an hour in today. Marketers. This is an article from martech.com marketers have lots of AI but not enough direction. And I, the reason I, when I was looking at this, it for me it was it's not just marketers, right? It's organizations. We've got so much going on, so much. You know, everybody's got AI in their name now and we've got a lot of tools that are popping up but no plans, no roadmaps, no goals, no expectations per se. I won't say none. But very few organizations that we're talking with have truly an AI strategy at this point.

Well, I think marketing, marketing organizations and I'm seeing this not just within distribution, but I know other, you know, I used to have a marketing agency. I know people, a lot of people in marketing. I know people that work for marketing and have marketing roles. I think they've hit a little bit of that glass ceiling as it relates to AI in a sense that a lot of the marketing use of AI was write me the blog post, help me write the email content, right? And they've kind of reached that, that wall from the, from just the traditional using the chat GPT or, or you know, a Gemini or, or one of the traditional foundational models. And now I think that the opportunity is really to get through that glass ceiling is. Okay, well what is it that, how can we really start. We talked, we Were talking about some of this yesterday. Right. On some of the, the agents that were designing.

Right. That was a great, great, great conversation. Yeah.

It's like, okay, how do you really now start using the intelligence and the again going back to the ability to access data and have at least a consistent place to grab data. How can you start doing that? That starts automating and doing a lot of things of your market research and the things that you're doing to support the customer journey and just a lot of things above and beyond content generation or email generation and things along those lines. And so I think that's going to be the next chapter. Unfortunately, technically it's a little bit more challenging, but I do think there's going to be more and more products available that'll make it less challenging.

Well, as we close out on this article, one of the things that came to my mind was there was a quote in there and as we talked specifically about marketing, it says that maintaining brand integrity and quality at scale is a pressure as AI use expands. And I think that's interesting to look at that comment from this article related to marketers but it's also across the board and I just, I like the word. I mean here they used brand integrity, but I'll call it business integrity. If you look at it across an organization. Right. There's, they're using AI tools and you know, and sometimes you know, you know, people will, you know, buy, you know, they've got a big Microsoft subscription so they'll, they'll, you know, add in co pilot.

Right.

Well what are, or buy for, you know, the organization will buy, you know, subscriptions to chat GPT. Well, what are the expectations of what's being done with that?

Right.

Because it can impact our, the organization as a whole. So anyways, good, good stuff to have some guard rails put onto all of that.

So yeah, just don't, don't generate all this content with a thousand emojis in it and then throw it on your LinkedIn post or whatever.

That's a quick thing that will tell you what's been developed.

Right. That's an AI radar right there.

That's right. It's quite interesting. I've seen multiple different television news articles and then online articles as well about AI avatars that just look like real people replacing television reporters.

And doesn't that tie into our next article about Z here's marrying an AI?

Yeah, why don't you, why don't you take the lead on that and then I'll throw the rest of this in There, Go ahead.

Well, no, the next article is a majority of Gen Z would marry an AI Survey says they said, hey, I'm.

Just scared to even open this can of worms.

Yeah. 80, 83 said they would consider marrying an AI partner and they could have a deep emotional bond with an AI partner.

Well, there's a movie about that, right? What was that called? I saw it. Oh. Anyways, it was an AI, I think you're an AI researcher and developed a human humanoid robot and so forth. So. But yeah, there are so many things here but it, that does, that does get a little bit scary. Right. When we think about our digital twins and then humanoid robots and all of the things that are going to come with that. So the, the quote here was Gen Z is marrying, marrying AI reflecting deep integration of technology into data, day to day life. And you know, makes me think about something that I typically do on Fridays is I get a, you know, you know, I like to race sailboats and I get a sailing publication and the Wine Spectator in a print format. And there are a few nights in, during the week and a little bit on Friday afternoons or evenings that I like to just hold something in my hand to disconnect from the digital. It's getting harder and harder to do that. Yep, good. Let's, let's kind of jump, jump ahead to the next article there on AI robotics, the future of workplace safety. So kind of a cool article. This is from impo.com and we've talked a lot about robotics and now we're seeing more and more of wearable sensors and predictive analytics that can come from that within the safety arena. You know, more and more. Even plumbing, H vac, electrical and other distributors are also distributing safety equipment now for their workers versus just traditionally of a safety distributor. But now we're getting into that age where, you know, and it's interesting, I laugh about thinking back as probably five years or so, maybe more that Mark Cuban was talking about on Shark Tank about sensors are the future. And sensors was a big, big part of his investment strategy and you know, certainly outside of the Shark Tank fund that he has, but you know, whether that's sensors in a grocery store that, you know, the shopper stopped in front of a particular display or on the shelf that knows the shelf needs to be restocked because of the weight of the shelf. And I think we're seeing this now mixed in with robotics and humanoid robotics. And you know, I look at this as we're very near a place where you'll have, you know, A humanoid robot that is monitoring the perimeter of your, of your distribution facility and outside stacks of things and doing live counts of things while they've got sensors that are, you know, is the air air dangerous? Is there a risk of fire? But that same robot can go back inside because we've got an abundance of orders that day and help pack boxes.

Right, well. And what you just described is a great example of the peer to peer problem that we just described.

Yeah.

Right. So think if you have multiple robots, multiple sensors, if you start sending all of that data through a centralized source, there's going to be a latency, a much higher latency. So in order to get everything to operate at a speed that you're going to want it to, all of that is going to end up sending data from one device to another.

But that could then be, that could route through a safe system as well though.

Right, okay, but that's what I mean, that increases latency. Right. It takes time for that to happen. Yeah. So. And you think about the number of different amount of data that's going through that could really slow things down. But anyway, I thought it was just. That's a good example of what we were talking about here to here. So back to the article.

Yeah, back to, back to. Back to robotics solving some ergonomic issues because then robots doing that, that manual work now or that difficult work and then you know, integrating sensors, wearables and so forth and predictive analytics.

Right.

I mean we're real different now than the days of my early days in the safety business of the sign up in the plant that says it's been 172 days since we've had a workday loss. Right. Accident. The future is going to look very bright using some of these tools. So kind of cool.

So welding show we went to back.

Yeah.

Back in the early days.

Atlanta 2017 or 18.

AB Tech, I think it was called.

Exactly right.

And there was all these different things about welding and well, to me the, the robot, you know, the ability to crawl in a location or crawl into a tight location or an area where there's not a lot of ventilation. Right. To be able to do the welding and the, you know, things that they were talking about. Seems like a very low hanging fruit use case for a lot of this stuff.

Yeah, very good, very good. Let's jump ahead to our sales and M and A segment. Let's just. There's a good article that there from our friend David Gordon at Electrical Trends about acquisition activity picking up in May. Good. Congratulations to folks At Pip, the big we were just talking about safety. They've just completed the acquisition of all of Honeywell's PPE business which are some major, major brands that go with that that Honeywell had acquired. You know, major brands that Honeywell acquired over the last 20 years. Probably they wanted to divest that out of the made the mass Honeywell portfolio and Pip bought all of that. So remember when Pip just made gloves and now they're acquiring those major brands. So quick, good article there. And then we had mentioned about David Gordon from Electrical Trends and his article about M and A. There's another article here from CNBC about deal making starting to rebound as hopefully to be rebounding because of this pause that we have on tariffs but that with it continuing it could could put a little squash on on M and A activity. So I think when you have uncertainty, I was on the phone with some private equity folks yesterday that was doing a little bit of advising with on some strategy that they have with within wholesale distribution. And you know, the uncertainty is a struggle for them. Right. You've got are they holding on deals?

Were they holding.

No, this was a newer firm that's very, very bullish right now on, on getting some deals done. But you know, I talk to these guys pretty regularly and I've got another call with another larger PE group next week that owns some, some brands that, that folks would recognize and I'm going to ask kind of that question about that group that's a little bit more mature. I think there's probably, you know, there's been so much as they call it in the investment world, dry powder on the sidelines that I think we've just got into a place where there's still a lot of deals that will be done. But the uncertainty that's going on right now and it's just the term that we use over and over, the caution is probably much higher.

Yep. And how do you even if you want to do a deal, how do you value the deal? How do you set the valuation? There's a lot of yeah, the what ifs.

The what ifs are so much greater than historically. Right. Good. So. Well let's Tom, just because of time, let's kind of roll through our people and leadership segment here. This is kind of an interesting article though about because back to uncertainty. Right. 42% had said this from HRDive.com you know that if you do a lot of reading online, just share with you that hrdive.com cfodive.com and I think they've got cyberdive.com as well are really good resources that we use for articles for the show. Great newsletters that they put out. But this talked about 42% of Gen Z workers say they're turning to blue collar rolls because of security. Worrying about the, the risk of AI.

Trying to be replaced by robots. Right?

Well, yeah, but the other side of it, right, is the risk of being replaced by AI.

Sure.

You know, so there was an article yesterday, I think it was at Salesforce. I think they've had 500 people that have been moved out of customer service, you know, or support, I should say, into other segments of the company. Nice to hear that. It wasn't particularly layoffs but they've been reskilled, lack of a better term I guess because of AI taking over so much of the support component. But I just thought that was interesting this article about, you know, a big group of people looking for blue collar work and so forth, you know, and, and while you know you can get, you'll be able to get a robot to go do some, some types of welds and some things like that on a job site. There are things that are always going to take people and the people to manage those robots as well.

So anyways guys, I think, I mean I have a friend who has a fairly decent sized electrical contracting company. He's not using robots. Everything is done with people but he's having a hard time. He's finding people that are interested in doing the work. But how do you get them trained? Especially if they're, if they don't have a background or experience as an electrician. Right. So there's a willingness but there's now the ability issue of okay, well how do you start to train those people? And you know, if I went to college, I probably didn't study electrical, you know, electrician actions. I might have studied electrical engineering. I didn't study, study how to wire a board or something like that in the house. So I think that's going to be an issue is how do you train some of these people that are moving into the blue collar world?

Yeah, good point, good point. All right. Any other stops along the way here?

No more uncertainty. I think everyone knows about that.

So yeah, there's an article there about recruiting. I will change recruiting in the next six months. That was just, that was a small survey. But I think one of the challenges that people are having is twofold.

Right.

And there's some legislation tied to this in some states about not using AI to vet resumes in standard Format the. And then the other side of it is the amount of AI driven resumes that are going to come out of this. So there's going to be a balancing act with that. I think with the hiring that we've got coming is in, in the coming months is. Will be interesting to watch the resumes that are coming in and maybe we'll build an agent to filter. Filter that to see which ones are using AI.

Yeah, I have another bet for you. I was just looking at Bob's comment here. He says he's going to change jobs and install alarms for ADT for a living. When do you think we'll miss him?

We'll miss Bob.

Yeah, we'll miss Bob. Well, you can listen while he's installing alarms, that's fine. But when do you think, what year do you think you will see the first robot worker, like house worker, electrician, plumber, whatever, show up at your house instead of a actual worker?

Well, I've been saying that I want to buy.

Not your own home, not your own, not your own own.

But the, the worker shows up.

Contractor. Yeah. Contract.

Ah, man. Do you have an idea? Did you think about that before you asked it or.

I'm thinking 2028 is my guess, is my bet. Under, over.

So that would be a fully autonomous vehicle.

Fully autonomous vehicle, yeah.

Right. And then it's sharing its location and its data and it's going to roll up. I'm gonna, I'm gonna give two answers to that. I, I wouldn't argue that. 2020. And I think it might be a little longer, but not, it's not past 2030, but I think we're under or the.

Over.

Oh, I don't even know. Let me, let me preface, not preface. I think the, the key to this would be, you know, when you see the, the utility company guy that comes out and you know, needs, wants to scan the meter, the water meter out front or whatever, and you see the guy walking down the street with his stick to pull the meter up and now he's got a, you know, he's got a RFID reader or scanner that he's using of some sort. I think that's where we'll see things first. Okay, right. Because it's not interacting with the public.

2030. Okay.

I mean, I think it's hard to. I think you'd need to preface what it is that they're doing from that standpoint. But I, I think there's a cultural shift that's got to take place and it might take longer than three to five years to get the average Joe public. Right. Because, because what you and I are prepared to allow to come into our house and to do some, some work might be very different than what, you know, somebody that's in their 70s or living in a more rural area that isn't exposed to autonomous vehicles. You know, I mean we don't have Waymo where, where I, where I live, but I was up visiting a customer in Culver City a couple months ago and I was just surrounded. So you know, that, that, that piece. But yeah, I think, I think broad adoption probably is 20, 30 or greater. I think some short term things where we might see them being used. In that case, it's good, it's a good discussion point that you brought up. Could be 28, but, but I don't think broad adoption will be till five years or more.

But even if it's 28 or, or, or whatever, or 29 or that's just around the corner.

No, it is.

And that's a radical right. I mean in self driving cars, I think you'll have them before we do, but I think you'll have them the next year. I mean the Waymos and the, in the, and the Tesla.

Well, I saw an article, an interview with Elon Musk about that last week and about the number of cars that they had with in Austin, Texas where he was at for this. And it was, I can't remember the term but it's commonly used term with scaling of technology. It was, it's. We're going incrementally and then there's a hockey stick.

Yeah, yeah, right.

And I think that's where we're at with autonomous cars is they're, they're going slow, getting the kinks out and then there's going to be this spot where we, the kinks are gone and we get this mass shift to it. So I'm, I'm ready to go. In fact, next time we're traveling together, if we're in a city, let's go, let's go, let's, let's do this. Let's just, let's fly up to San Francisco for, for a powwow up there sometime soon and take a, I'll meet you in the city and we'll both take an autonomous car.

All right. And we'll, and we'll go live from there and we'll talk.

We'll go. Yeah, yeah. I don't, I don't think we should be in the same autonomous car. I think we should be in separate one. If One of us. If one of us dies, the other can keep the show going, right?

Good.

All right, let's roll in as we wind down to our pastor. We have this segment every week. Channel leaders on the move. Four or five significant moves this week across electrical and fastener distribution and a number of others arenas. But Tom, let's kind of scroll down to our next spot. Is our industry scuttlebutt just two things there. Our friends at Sphere One, which is the construction supply cooperative, just celebrated a big anniversary. They're located about 15 minutes up the road. They're literally across the freeway where I'm looking at some new office space for us where Sphere One is headquartered. So congratulations to them. In industrial supply trends, John Gunderson published some Q1 earnings recap for Granger, Stanley, Black and Decker and Wesco in the industrial and construction segments. So he did a nice recap John did about some of those Q1 earnings reports. So I think that's good for our scuttlebutt section. And let's kind of call it a day with where we're at, huh?

Yeah. Oh, okay. I wonder what's changed since we came on. Are you kind of want.

It makes me kind of want to jump on Reuters or cnbc. In fact, I have Reuters up right here. Let's. Let's stand by for one second.

Are you a grandfather yet?

I have not. That's. I been waiting for this text to come through. That's a thank you for asking. Let's see. Latest update, Supreme Court decision on Trump deportation push granted. Let's see. That's exclusive. This is interesting though, and that's too much outside of our purview. Interesting stuff happening in the news still this morning.

Well, thanks everybody. Great comments, great interaction.

Great interaction today.

Really appreciate it.

Good. So we'll wish everybody a great weekend again. We do this every week, every Friday morning. If you enjoy what you hear. We would love it if you would share with your peers in your industry, folks, whether it's subscribing to our YouTube channel, leaving a review on the podcast and subscribing to the podcast if you're on Spotify or Apple or any of those platforms. If you're with us on LinkedIn, please follow and subscribe to the newsletter. You can just search around the horn and wholesale distribution. And these live recordings, the recordings of the live show, I guess there's no such thing as a live recording. The recordings of the live show are all available on YouTube and on our Lead Smart Technologies LinkedIn page as well. You can find those. So we'd love it if you do that again. We're sponsored by the company. Tom and I work for Lead Smart Technologies. If your company is looking to digitally transform, have a roadmap for digital expansion and bringing siloed revenue from or siloed data from across your organization to expand and enhance revenues, we would love to talk to you and see how we might support you. Like we do with many other companies, both in manufacturing, wholesale distribution, we're helping them gain deep insights that they've never seen before into their data and using AI tools to provide alerts to help salespeople find what's most important to do with their time that substantially grow revenues and quick return on investment from technology investment. So that's it, Tom. Great weekend. I'm sure by the time I I'm going to see you Monday, I'm gonna see you two weeks in a row. So I'll see you Monday here in Orange county, and by then I will be in opa.

Okay, sounds good.

All right. All right. Wish everybody a great weekend. Be kind, be safe, and do good things.

Thanks, everyone.