Around the Horn in Wholesale Distribution - Episode #162

Are you there? Are you just dancing all over the room?

I was, I was actually up and dancing, trying to get, get the blood flowing. What's happening?

All right, not much.

Here we are.

Here we are. It's165.165, last day of October.

We out of our minds. What are we doing here? Yeah, Friday morning.

All right, well, everything's working this week, so that's good.

Nothing's broken yet behind the scenes, so, you know, that's, that's a plus. Microphone's working. And this. When you are not professional podcasters and live show people and you just get together 165 times to talk about the news over a few years, sometimes things do break down a little bit. But before we chat a little bit, why don't we talk a little bit about what we're going to do today? So I'm Kevin Brown, this is my good friend and lifelong friend and business partner, Tom Burton. We get together every Friday morning unless somebody's in the hospital, on an airplane or on a planned vacation. And we even do this from planned vacations sometimes. And we chat about the news of the week, things like the economy, the supply chain, tariffs, mergers, acquisitions, marketing, E commerce, sales, I guess I mentioned sales, AI technology, robotics, all different types of things and how they impact wholesale distribution and manufacturing. Sometimes when you can kind of apply the news back to the world we work in and what that impacts and how those things happen, it brings value to things. So we do this again every week. We've been doing it for three plus years now. And those of you who have joined us this morning live, we're appreciative of you being with us. We're going to look forward to comments that may come in. And as you join us today, we're looking forward to that. In fact, if you're here, maybe let us know that you're here, tell us where you're calling in from. I think that when I looked Just from LinkedIn, not from YouTube Live or Facebook Live, Tom, I think there was five or six countries representative people that were coming today. So we look forward to that. We usually the podcast on Apple and Spotify and so forth usually hits, well, at least 15 to 20 countries every week in Download. So we're appreciative of that. So we've been doing this for a while.

It's great.

We're grateful that you join us and we look forward to today's show as well. We've got some, also some great guests coming up soon. One of the things that we would appreciate though is if you like the show and what we talk about each week, we would greatly appreciate it if you would do one of two things. If you're on LinkedIn and listening live today, just go to the Lead Smart Technologies page and follow the page there and that'll get you all access to the show. You can also look the show up on LinkedIn as well and follow the show and the podcast there. If you would like to get the newsletter that we're going to be talking about and that newsletter as we mentioned, goes out every week to 10,000 plus people, we would be happy to get that newsletter to you. You can reach out to us at a couple simple ways. Helloadsmart tech.com that's helloadsmartech.com and or you can certainly just search the podcast on LinkedIn and follow us there and request the newsletter from LinkedIn. It comes out, it's published on LinkedIn as well as by email each week. And then we have a website for the podcast which is www.aroundthehornpod.com and you can sign up for the newsletter there and subscribe to the show. So if you don't get that newsletter, we'd love to get it out to you. As we mentioned, that's what we discuss each week is that newsletter that goes out. We couldn't do this and have the show if we didn't have the sponsorship of the company that Tom and I work for. Lead Smart Technolog At LeadSmart, we are a company that is focused on helping wholesale distributors and manufacturers gain deeper insights into their customers, their business and their overall teams as well. We do that by using our channel cloud product. ChannelCloud is an AI enabled customer intelligence and CRM platform. We take the silo data from around your business and bring that together in one place. The E commerce data, the ERP data, marketing automation, other data sources that are disparate from your organization. We bring those together in a single platform which is more important now than ever before because the great risk is that if we continue with siloed data in different parts of our organization, we have the risk of when we apply AI to that of now having siloed AI and not getting a full view of our whole organization. So we do that in our platform and we work solely with wholesale distributors and manufacturers and we're able to track that journey that your customer is taking, whether it's in person, at a branch or salesperson's interaction. Your ERP data, we put all those things together and we gain deep insights into what's happening. So if your company's digitally transferred, transforming, looking to expand your technology and gain deeper understandings into your customer and your business, we'd love to chat with you. So, Tom, what did I miss there? Anything? We ready to dive in?

Yeah. I have a question for you though. You know, I know you've been out on the road for the last three or four weeks for, with, with the ad events and all that. And again, let's just, I mean, quick, quick answer, right?

What is the quick answer for me?

Yeah, that's why I said quick answer. Right. Like, Yep, you know, 20 seconds or less, if at all possible. But what do you think is the, the, what would you say is the takeaway or the sentiment that you're hearing from talking to probably, I would suspect 100 or more manufacturers. Right. And all the other perceptions, what's the sentiment going into the year? What are people thinking about and, and so forth.

So I'm going to do the, the first, first part of it.

You're not starting off fast. That was leaning back and going, let me think about this is not quick, quick.

So do we deduct the four and a half seconds for your interaction?

Yes, that's fine. All right, go ahead and start the stopwatch again.

There are organizations who are clearly having some challenges this year in, in the economy and there are challenge companies that are way ahead and 15 plus percent ahead on the year and doing really, really well. Now I will have to say, right, I wouldn't want to put my sentiments from this into some publication because I have a little bit of a bias of what I was listening for. And one of the things that I was listening for was how are people using technology in their business and currently and how are they looking moving ahead.

To.

Use technology to expand their business? And one of the things that we, I really saw was the, you know, and again, a bias for me of what I was listening for and the people I was talking with at length. But you heard from a number of companies that are taking full advantage of technology in their business and are integrating it across their business. And those seem to be the companies that are doing well and ahead of the game. Secondly, though, I think there was much more of an A vibe this year and I saw it starting to shift last year. And again, what Tom was referencing is I was, I've been the last three weeks with Affiliated Distributors, the large multinational buying group, which was just phenomenal event. We did their industrial and safety event, their phcp, which is plumbing H vac and so forth, pipe Valve and fitting that group. And then this week was I got home yesterday afternoon from the electrical event that they had in Chicago for their electrical distributors. And there is definitely a broader discussion and openness from companies companies to talk about technology. I'm sure I'm running way over time. But I'll say one last thing to go with this, and I hope I'm answering your question is I continue to be astounded because you just don't see this in typically in other markets of the number of 100 million to three quarter of a billion dollar a year companies who are still running their sales organization off of occasional spreadsheets and and some ERP data that they have access to. The good news is that lots and lots of those are looking to expand in their use of technology in their business. So the, the other last closing pieces, although I heard from some people that their businesses were not at the growth place that they were hoping for them to be. And let's just say, you know, across the board sentiment was probably up slightly or flat with a lot of companies would be tied to the idea that. I did not hear anybody banging their fists about tariffs. I did not hear them banging their fists about the administration. It was just, we got work to do. Right. We got to get out there and get work done. There was not a blame pointing. No, I wasn't in every discussion there. But that's what my takeaway was.

Okay. Yeah. Philip says anxious would be kind of a sentiment that he, he believed. Did you think that's accurate? I mean, from what you're hearing is. And that an anxious cannot. Doesn't always have to be any negative. Right. It can be anxious about the possibility. It could be anxious about potentially the challenges or maybe a combination of both.

I think I can answer this two ways. What I'm reading out there and maybe in some listening here and there, I would agree with the anxious component. I didn't feel that at the specific events that you're describing, very positive note. I mean, lots and lots of discussions about opening new branches and expanding businesses still lots and lots of discussions about investing. And I would say this if anxious was the term, and I wouldn't argue that per se, but if anxious was the appropriate term, I would say there's a level of optimism is not the right term, but willingness to charge forward. I, I did not talk to anybody that was saying, I'll take that back. I did talk to a couple Latin American distributors that were concerned about the value of the peso and some of the business that they're doing in the US or with US manufacturers and even potentially with our company about the value of their currency. But in general there was no down emotions, there was no woe is me. There was certainly no sky is falling in the discussions I was in and I was across from our booth was last week or earlier this week was some of the biggest names in the electrical market. And right behind us was one on one meetings going on behind a curtain with another major tool company. And so yeah, anyways, lots, lots of opportunities still.

Good. Well it's good to hear, it's good to hear that people are charging ahead and it's kind of like we talked about. Right. Doing what you can do something about, so.

Exactly right. Focus on what you can control. Right, yeah. So yeah, I think.

All right, well speaking about what we can control, let's talk about the news and the, and the Fed.

Yeah. What happened this week while I was gone for week four out of five.

So as probably everybody knows by now, there was a quarter point cut. The, there was, of the 12 people, the Fed governors, 10 of them voted for a quarter point cut. One voted for a half a point cut. You could probably guess who that was. And one voted for no cut along the way. A lot of conversation though and I'll bring up the poly market here in just a minute.

Oh good, thank you.

A lot of conversation though about December. So Powell came out in his, his briefing afterwards and said that December is not a forgone conclusion. And he said in fact anything but that. That was his comment which then resulted in poly market here. So if you'll notice here, prior to on the 17th, there was an 89% chance of, I know it's hard to see, but an 89 chance percent chance of a quarter point cut in December that has now dropped to a 65% chance in the poly market world. So almost a 30 point drop and obviously a lot more now believing there could be no change. But still 65% of the poly market people are saying that there is still going to happen and take place next this month despite Powell's sort of, you know, hey, don't get ahead of yourself response.

What's your take on that? So I'm glad you showed the poly market there. What's your take?

I think there will still be a quarter point cut next month or I'm sorry, in December. I guess it's not next month, it's December.

Yep, correct.

You know, one of the things he said is we're driving in the fog because we don't get data. Yeah, from the government stuff and all that. But look, they have data. They have data other than things that are coming from the, from the government that's there. I don't think we're going to see much change in terms of the employment picture. If anything, it will probably get a little bit worse between now and the end of the year. I don't think we're going to see a whole lot of change in the inflation picture. It might blip up a little down or up. So I think you're going to get to the meeting and probably maybe not without a fight. There will still be a quarter point cut.

So we're at 3.75 to 4% now basically.

That's right. Yep.

So another quarter point takes that down to 375535 to 375-which starts putting us into some much, potentially much better lending scenarios and so forth. That could drive some economic change.

Yeah, I mean I think we've already got that mean we've already made headway on that. We've already.

The downside of it was more the mortgage rates went up that same day.

Yeah, right.

Because of the uncertainty that he was talking about. Which is just, I mean to me and you know, as we preface here all the time, right. We're, we're Friday morning economists. Not, that's not what we do typically. But to me looking at that, it's just that, that just is surprising to me from that standpoint of, you know, how that, how does that even, how does even that translate?

Right.

You've got those rate, those numbers are now available. Right. Borrow the money at those rates because that's what the banks are getting them at and that's what the so called supply chain of money is at today. Put it, put it to work.

Right.

So to bip, to bip up on the mortgage rates to me was kind of seemed kind of silly.

The bond market actually went up a little bit as well. Yeah. So you know, probably based around his comments related to inflation and, and so forth, I would guess.

But what, what I, what I struggled with on this is, and again for those of you that are listening in, we're reviewing if you're on LinkedIn or YouTube Live or Facebook Live with this morning, we're looking at the newsletter that we send out every week around, start that again every week called around the Horn and Wholesale Distribution and we publish these, these articles that we found interesting and discuss them back to as they relate back to manufacturing and wholesale distribution. But what I, what I thought was interesting with this, Tom, is that, you know, you, you brought that up as he commented about, you know, it's like driving in the fog, but it's like, I don't know. So you're missing some, you know, Labor Department data or some things like that from some people that aren't working. But there's so many other factors out there, which is what we've been talking about for so long now, is that maybe we should add a few more things into this. But what I, what I struggled with, but I certainly can see somebody being willing to use this as a crutch. What I struggled with this on is the ongoing comment about uncertainty from tariffs. You know, we have the last two or three weeks had articles and discussions about the fact that people are pretty much they've got things baked in right now, right. And, and we've been working on this. It's, we're at. What are we at? See, May, June, July, August, September, October. We're just coming up on the start of seven months, right, since we had Liberation Day. It was last April. And I'm looking forward to the, by the way, just we were talking about my travels and just, you know, got home yesterday from week four of five weeks of travel. And next week I'll be at the Industrial Supply Association's annual Fall Conference in Memphis. And I'm looking forward to that because we were at that event on Liberation Day. So I'm looking forward to the speakers and the comment. And frankly, Tom, as a side note to that is I will actually ask a lot more questions about from the distributors that are. There's a lot of mix of manufacturers and distributors. I've got multiple dinners scheduled with some kind of, I'll call them industry titans that have a good feel for this. So I'll ask a little bit deeper questions to bring back to next week's show on the sentiment of people. But the uncertainty with tariffs, I just kind of struggle. Is that really a major factor right now for the Fed because business is charging ahead. We've been dealing with this for six months. We're going to be dealing with it for a while longer. I think I sent you a chart earlier about the deals that are done and then the deals that are pending. But we're operating under those factors. And, you know, even though we've got, you know, the lawsuits that are tied to tariffs, the legality of how they started, believe we're still collecting money, right?

Oh, we're still collecting money. But the. Yeah, that. And that's a whole different thing, right? As the Supreme Court conversation. Yeah. As a whole should be this year. But yeah, I tend to agree. Look, I think what if anything what he's maybe saying is well you know, we raise the sheriffs. We you know, Trump reacts and raised the sheriffs on China to 135% and that sticks. And you know, we don't, you know, maybe that's just a jab that we don't know what, what's going to be the flavor of the day. Yeah. So but I think at a macro level I tend to agree with you is the tariff.

Let's just stop there. I agree with you. That's enough.

Yeah. It doesn't happen very often but go.

Ahead, finish what your thought was on that.

But anyway the but I think at a macro level it's true right. That I think we do have an idea of what's going on with the tariffs. I think we do know what the impact is and I think there I think it would be unfair to say there is no impact but I don't think it's fair to say that there has been a major impact and there's certainly other things that are factoring into the inflation conversation. So anyway this kind of comes to the second article here where he was hey, we still want to be data driven. I want to end my term very data driven looking at the data all that kind of stuff. I mean I think between if again kind of looking ahead and I haven't looked at if there is even a poly market for this but his term is up in May if I'm not mistaken. So I would suspect we'll get a cut in December. I doubt we will get a cut in the first part of the year before he takes off. Why I just think that it will end up if you again looking at from his his point of view and the way that he wants to look at things and I don't think he wants to leave office from a standpoint of saying I went overboard or capitulated to Trump. You know, we're capitulated. So you know again I would look 0 to 1 would be 0 most likely one rate cut possibly would be my that between going into the next year again without any sum without any major.

Let'S look at the poly market real quick.

I don't think there is a poly market. If there they'd have to search around for it. So I don't want you okay. Gotcha.

The but that'll be an interesting one to think. I I don't I would things think if things stay the Same. We'll see. You know, I think that the December cuts baked in.

Right.

That's reasonable to think right now. But the January meeting, I think what's, what's the poly market saying?

28. So very low or lowish. And then the March meeting, 42%. Interesting. A bit higher. So. Well, but that would line with what I just said. Below 50%.

Yeah.

In both places.

Yeah. The. To me, it would seem that I think if we can get, if they get back to that, you know, three and a quarter to three and a half range, I think that's probably worth. And, you know, I'm always the one that wants to see the cuts, but I think that that range is probably getting back down close to, you know, what was a reasonable number that we've had in years gone by. And if we could have, you know, 3% mortgage rates again, you know, there. That would be a big stimulus. And then you just start looking at the dollars and, you know, back to the audience that we talk about here. Consistently or with.

Consistently.

The people I've been visiting with are people that want to open new branches and they want to do Greenfield and move into new, new arenas and so forth. And I think that's extremely valuable to them right now. And you know, the one thing, and again, I'll ask more and more questions about this is that, look, the vast majority, and I. I had said early on as we started talking about that.

About.

Tariffs was that I believed that they would be partially absorbed, absorbed by reduced prices from a factory and that the distributor would absorb a portion of them and then there would be a portion of a price increase. What I'm learning is, and I think my. Our good friend and who I get to spend quite a bit of time with talking and really probably one of the highlights of this week's trip was get to spend some good time with good times. Talking with Paul Kennedy with DSG while we were in Chicago together. And Paul actually said on the show earlier in the year that he didn't think that there would be any of that absorbed by the distributor and the distributor would pass it on. And I see the far more of that in my discussions than what I was thinking that it would be a mix. I'm not. Not only did you say something you don't like to say earlier with me being right, but I have to say that I was wrong on something earlier as well. But it's going to be a. It's going to be an interesting next six months. I just. Listen, I. I was looking at some of my notes from some of these articles today and my comment about this particular article is I do think there's some face saving about who he is and what he looks like or Powell looks like through all of this, I think is coming out of this as well. But I, I also made a comment in the notes and, and I don't know if you saw it because it's in a word doc that we share but I wrote his book will be interesting and you know, because he has in, in his defense and I've beaten up on him plenty enough. And as I've said, I'm sure Jerome Powell is a, a very good human being and so forth. I just don't agree with a lot of stuff he's done in some of his positions. But the, I do think he's had a lot to deal with in his defense and that, you know, it's, I don't think you could find too many fed chairs that have gone through all of the things that he's dealing with. So.

Yeah, no, it's definitely been a, a tumultuous. Yeah. I would say.

Yep.

Good.

All right, well, let's, let's talk briefly about the shutdown. What do you say? Okay, you want to jump ahead to that?

The government is still shut down.

31St day.

Is it 31. Okay. Yeah. It's long. Is it the longest ever or close to the longest ever?

I think it is, yeah. That I didn't look at. I, you know I did just days.

Was the longest before. Yeah.

You know, it's interesting. I, I, I got home yesterday. I got, got off a plane, came home, dropped a bag off, kissed my wife, hugged my dog and went to the office. And when I got home last night that Darlene had the news on and she was that commenting it was about, you know, the, the snap benefits and so forth that are as of tomorrow nothing's done today. We'll, we'll go away and, and she had, I think she had CNN on and she's like what's Trump doing? And I said what? And then I saw what was going on and I said well let's take a step look closer look at this. They said what are both sides of the government doing? Not what is the president doing? This isn't this, this time it's not the president, you know, although he has an, obviously a large influence. But this is two groups of people that are willing to sacrifice, you know, some very difficult benefits. They're very important benefits that people that are in a difficult place need in a Lot of instances. And they're both digging in still, it appears.

Well, I mean, the vote has to be passed. A 60, 40 filibuster, as they call it in the Senate. Right. Which is not always the case. You know, some of the other bills that came, what came through did not require 60, 40. They were only required for 51 or 50, 50, plus the vice president, I guess, as the, as the tiebreaker. So, yeah, it's, it's going to require. And there's what, 52 or 53 Republican seats in the Senate. So that means at least seven or so Democrats would have to vote in this, in one direction or another.

To which you're not going to get.

Right. Well, that's the. Where we're, hence where we stand. Right.

People have to, it would have to be somebody that doesn't want, doesn't care.

About being reelected or follow the party line. Right.

I think that was my point is if you're, regardless what side to your point. Right. If it's seven Democrats that need to, you know, come to the other side of the aisle on this vote, it's pretty much saying I'm not, I'm not toeing the party line, which means I'm not going to get the support that I need in any upcoming elections. Which is why we sit where we sit because that's just how Washington works right now.

Yeah. But I do it is coming, I think, to a head where, you know, the, a lot of, you know, air traffic controllers, all of those people have been working more or less for free. I think they did get some little paycheck or whatever.

Didn't see that.

You know, you know, hey, we, it's like people will usually put up with stuff with that for a couple of weeks when it starts to be over a month and it gets much longer. Right. Their tolerance drops considerably. Yep. And so I think we're, we're starting to see that this is probably becoming a lot more fragile situation than what it's been. They said the Senate is meeting again on Monday. There's, as far as I can tell in the homework I did, there's not really any real clear movement. Right. There's not real clear movement. And yeah, I think the next week or so, certainly by the middle of the month at the latest, middle of November, I think there's going to be some serious things that are going to have to get resolved one way or the other.

Well, I think the first thing that's probably going to have to come out of this is that there's money in some additional budgets within I think it's the Department of Agriculture for these SNAP benefits that they've been saying that they're not legally allowed to release. But I think that's probably the first thing that happens is you know, I mean right now if you're, I mean at the end of the day, right, what we're, what we're talking about here ultimately is that the, the Democrats are looking at things from a, that you know, refute the basically they're refusing to support any type of short term funding bill or what they call a continuing resolution that doesn't extend all the subsidies that they want. And the Republicans are looking at this as, yeah, let's do you know, this continuing resolution and keep talking about this and keep the government open temporarily and.

Negotiate with this clean resolution or clean thing.

Yeah, it's a continuing resolution. CR Right. And so let's keep the conversation going. And Republicans blame Democrats. They call it the Schumer shutdown is the article that I looked at that added to this talking about holding the American people hostage. And what you have is two, two sides that are, you know, one of them, one of them is saying, look, our government, I mean I'm going to oversimplify this but one of them is saying that we're bloated and overweight and we have too many subsidies and too many this and that we have too many workers that aren't needed and we want to get rid of those. And the other side is saying no, we want all of everything from Obamacare and you're not changing any of those things. We're not going to allow it and we're not going to change any, allow you to change any of the subsidies that we have out there and it doesn't matter who it impacts while we get there. And we're just going to continue to blame each other and in the meantime the people that are in need of those things are in a difficult place. But it's interesting, after Darlene and I discussed a little bit further last night, it was like showed it again and we were talking pre show before this today about some of the biases you see in the news. And we're going to that in a moment to the next article but is like the first thing it was the network that she had on TV and while she was getting dinner organized for us and with that and it was if you're not weren't paying close enough attention and looking a little bit deeper, there would be one, one side or one person is at fault, you know.

Yeah. And overall, from what I have seen is that if you were to do a poll, I think that the American people, even Republicans are some Republican, you know, people are blaming the Republicans predominantly for the situation. Again, you know, who knows, right. There's blame is not usually a good way to handle something. It doesn't usually resolve cause things to get resolved. But I think what the, the reason that that's relevant is with the midterms coming up and other things coming up next year, if there is a perception that it is the Republican fault, then that's not going to help the political landscape coming into next year as well. Sure. So there's all those variables that have to get tied into the, to the whole thing as well. Yeah.

Well, you know, I think at the end of the day what you've got and it's interesting to your point and I, you might be following this closer than I am. I've been in a living in a blur for the last four weeks and not catching nearly as much news as I normally do. So right now you might be ahead of me on the news and you're not our news guy. I mean but the, the interesting thing is and again I, I'd have to, I'm going to make a comment here that may be somewhat uninformed but the one side of this is it seems like on the Democratic side of the aisle is there is a line in the sand, no ifs, ands or buts. And the Republicans are saying let's keep talking about this. We can get the government back open. We're just not going to give you all of the line in the sands you have right now. But let's keep talking now.

That this is the only leverage they have. Right.

Right.

So.

Well, I, when I would but And I think 100 agree with what you just said but your prior comment was maybe the sentiment out there is that it's more the Republicans fault. And if you were kind of looking at that, I think what the Republicans are trying to do, at least from an optic standpoint is saying hey, you know what, we're, we're here, we're, we'll keep negotiating. Let's open the government back up.

Right.

That's the whole CR thing.

Right.

And we can keep working on this but at the end of the day. Right. We've got, it was interesting. I didn't, I don't think I mentioned this to you because we, we haven't had as much chance to talk as we normally do throughout the week. And when I got, when my flight landed in Chicago on Sunday. You know, Chicago is a major hub, obviously for United. And so the, a good percentage of the people were getting onto another plane going somewhere further east, typically in that setting. I was staying in Chicago and I literally, as my flight landed, I got an alert from United and it was a reminder that there are air traffic control slowdowns because of this factor. Right. And one of the things that I did here on, I think it was on CNBC earlier in the week when the financial news was saying that there are air traffic controllers that are not showing up because they're working other jobs to make ends meet. So they're, they're working when they can as the, as, you know, traffic, air traffic controllers. But if they're, you know, Uber driving or their doordash driving or whatever it is gets in the way of it, that they got to feed the family.

Yep. Yeah.

You know, and it's, it's, I think it's an interesting argument from that standpoint about the government shutdowns because you have programs, right. Whether it's university subsidies or this, that or the other, that, that, that's one thing when you, when you kind of impact a program or something like that slows down, or you have workers that, you know, maybe for a couple of weeks, they don't get a paycheck, but they're going to get those retroactive. But then when you start taking away some subsidies and, or just people getting paid for the work that they are doing, I, I've got a feeling something's got to happen with this pretty quick. I'm hoping to see something quickly.

What was the poly market that it was going to be resolved? I don't have that.

Probably right there in the breaking one or trending. If you click on one of those.

When will the government shut down? So October 4th to the 7th, 21. But I mean, November 16th plus 45%, which is, you know, basically taking the field. So. Yeah, right.

But another, basically another half of a month that Nothing is over 21.

Right. Which means there's. It's too close to call. There's no way to call it at this point. And the 45 is, like I said, just taking the field. Like, well, you know, none of the above. Right, right, right.

So that's you, you would take that bet, right?

The field bet the 45 actually think it will get resolved between now and the 15th for the reasons we just went through?

I would not.

I don't know, but I would, I would probably take the under, other than the. Over here, which is what they've, they've got here. And the, and the under is what, 65. So overall, they're saying the under is, is the most common over the, you know, past November 16th.

Yeah. I hadn't looked at it that way about combining those. That's an interesting thought.

The.

I'm going to just jump out and say it would not shock me if we have that continuing resolution hit today so that they can keep these back. One of. I would not surprise me.

I don't think it's going to happen today.

I would say one of two things that would not. I'm not saying it will. I would say would not surprise me. One or two things happening today. One would be that they, what I say would let loose of some of this or free up some of the Department of Agriculture emergency budget to fund these snap benefits and, or two, that they start some level of negotiation that lets those benefits get taken care of. One of those two things would. I'm not saying it will, but one of those two things would not surprise me.

Yep.

And I'll be, I'll be silent on that next week if nothing happens. And if it does, I will be banging my chest. Okay.

All right, let's stop talking about shutdowns. Yep.

The Trump's latest China deal is anything but a win. And this article comes from msnbc, so let's preface where it came from as we start the discussion.

Yeah, there's a little bit of bias in there, but if reading between the lines, I mean, think every, well, people have heard there was a meeting with China this last week. Trump's comment, on a scale of 1 to 10, it was a 12. I saw that. Yeah. You know, what that means is, and I agree with this article from the perspective of there wasn't an agreement, but there has been basically a truce and that we're, as a result, we're going to, you know, kind of cease fire on all of these terror things back and forth and some of the issues with rare earth minerals and things along those lines while we continue to sort out the arrangement. I don't, I don't personally think that that's a, I think that's actually a decent win. I mean, I don't if anybody expects that these, you know, two people are going to sit down for a day or two and sort out everything that needs to be sorted out between the US And China and the trade relations and, and the politics, you know, it's not going to happen. Right. I do think that, you know, is it kicking the can down the road maybe to, to be seen. Will the, you know, will the Chinese or either side, both sides, honor what was agreed to for the truce to be determined? But I think it is a bit of a win to at least have the conversations occurring. And, you know, I mean, what else do you have to judge it against? Right. Is if we, if it hadn't happened and the conversations hadn't happened, we certainly would be no better off than had the conversations did happen and the truce come into play. But if anyone is expecting that everything's going to be ironed out in a day meeting, that's not realistic. Yeah.

So I was just looking at polymarket myself and it said that there is a. See what this one was. US tariff rate on China on November 12th. So it's talking about greater than 25%, 90% chance of that. Is the poly market on that and as of right now. So I think the reality of this is, and this goes back to something we were talking about earlier, Tom, is the reality, in my belief is that people are probably looking at this from a standpoint of, hey, you know what, there is going to be somewhere between a 25 and probably 40% increase moving forward on the cost of goods from China. And I need to be working on that right now. Whether it's, whether it's a little bit lower, that would be great. Or it's. There's some commodities that are changing with it. But, you know, again, one of the things that we started talking about even before Liberation Day was the idea of the fact that people were already working, being concerned about these types of things, were already working on moving items out of China where possible. Right. So now this is what the. I think what the president did that was, you know, or the administration did that was insightful on all of this, which is why. And it's the big reason behind when, you know, if you remember on, you know, April 1, of the president holding up that big, big, you know, picture of all of the different nations. And there, that's what shocked a lot of people. And I remember a good friend of mine who is in safety and industrial business. In fact, by the way, side note, Tom, we should be in Germany right now. Our favorite trade show starts tomorrow or Sunday. Yeah. So we should be in Dusseldorf right now. We had a lot of fun when we were there a few years ago. So the A plus A industrial safety show, which is, I tell you what, I've been to. I'll greatly digress from this topic for a second, but I've spent the last 35 years going to trade shows and conferences and probably the most grueling one, but also the most overall fun was the A plus A show in, in Dusseldorf, Germany. Because five full days, grueling. That was five full days.

Oh yeah, it was, it was great though.

Yeah, it was, it was good. But, but five days, full days in a booth talking every day, all day.

But if I remember by the third or by the fourth day it started to kind of wind down a little bit.

Well, yeah, so, but, but I, but anyways, and, and it turned into a great vacation for Darlene and I afterwards as a side note. So I would, I was just laughing the other day, I was like, yeah, there are some things happening in Europe for our company and probably next year there will be more European and international customers. And then some other rumblings in the industry right now about some things with some associations and groups in Europe that would probably have us needing to have a presence there. But I couldn't quite justify going to this event. But, but it would be fun. So, nor, nor in the middle of all that everything else going on right now. So. But it's good. So I, I think, you know, back to the, the, the tariff issue that we're describing here with all of this is that, you know, I, I think at the end of the day, you know what, what the President was doing in this setting was when he hit all of those other nations and the reason I brought up this particular gentleman was that he's at that, that show just left for that show in Germany was he was not anticipating the Vietnam, the Laos and all the other Southeast Asian countries because you know, this particular friend of mine was, has moved a lot of manufacturing that companies that he buys from there and then almost all of his private label business he had been trying to move out of China into other parts of Southeast Asia and was not expecting the hits to come on those other Southeast Asian countries. And the reason the President did that was behind, you know, behind many of those companies in Saigon or you know, wherever it might be are Chinese, ultimately Chinese owned companies that are now a front doing business there to avoid the Chinese issue. So I think it's going to be, it's going to be an interesting piece that happens out of this. It does. You know, you had commented earlier but in the side conversation or pre show conversation that, you know, this particular article from MSNBC was kind of touting this as a failure, but I think that was a little bit, you know, biased from a, from, from their side of the aisle, so to speak. So we'll see what we come up with next out of this. But it's, it's, I'm hoping that, you know, there's this Poly market that I just looked at a minute ago. And by the way, we, you know, I started recently referencing Poly Market more and more, and if you, if you're not familiar with polymarket, I think it's good for us to discuss that. Ultimately started as an online, online betting source, but it's really become a prediction market and if you haven't looked at it before, do a little research on it and not that you need to go there and certainly not encouraging anyone to go wager anything or gamble there, but I think what you will find is if you do some research, even off their site and find out their, their accuracy in predicting the sentiment of the, specifically the US Population related to economics. And I mean, you can find anything you want there from sports and other things, which is what it was all about. But the reality of it now, it predicted the presidential rate race far more accurate and far earlier than anybody else.

You know, it's prediction, Kent, being a prediction market is being found to be much, much more reliable, inaccurate than polls and other things that are there.

So I mean, what, what we're doing is we're, we're crowdsourcing it, right? At the end of the day is the simplest, simplest term is rather than, than, you know, Reuters or, you know, one of the, you know, whoever it might be, a news news group or, you know, a, what do they call those, the Harris Poll, I think is what I'm thinking about, or one of those where they're, they talked to, you know, 200 people that were leaving a mall. Right now you've got people, you know, one all over the world, but certainly in the US that can weigh in on these things and they've just proved hugely accurate, so.

Good.

All right. Well, as we kind of scroll into our manufacturing distribution segment, two articles, one from Fox Business and one from the electrical distributor magazine, our friend Scott Costa and his team over that run a great, great website and magazine that they do at TED there's, you know, both naw and the national association of Manufacturers, national association of Wholesalers and Distributors have both strongly, strongly pushed on the government and on Congress to reopen the government because of the impact. And you know, one of the things, Tom, that we didn't reference in that previous article as we were talking earlier about the shutdown was that the shutdown is it's, you know, I, I mentioned a few things about snap benefits and so forth. But the shutdown also blocks two and a half billion dollars in SBA loans which is costing small businesses $170 million a day. Right.

So I want to do it. We don't need. I wanted to unpack that and understand.

Yep.

That that seemed a little extreme and, and you know, I mean that's a lot of loans. Right. And yeah. Are they really going to be issuing whatever the $3 billion of loans and a two week period or whatever. So it.

No, but, but that said it's been a month. So the question, I mean you're to your point as the question is would they be putting out two and a half billion dollars of loans in a month?

SBA loans. Yeah. So anyways, if you were to unpack it there's about $2.85 million of application billion dollars of applications of SBA loans that are not moving that I. But who knows when they would have actually closed.

Right. Well at the end of the day what we are seeing is and, and you know back to what we do here is we talk about the news related wholesale distributors and manufacturers and both of their major trade associations in Long beach and Long beach in Washington have Long beach was in front of me here have gone to the, the government and Congress and said hey let's, let's sort this out for the good of the American people and you guys can banter about your other stuff later. And you know, more and more this kind of ties back to what, you know, what I was saying is that you know, as we're seeing, you know some of these benefits and some of these things air traffic controllers and you know all the thousands and thousands of furloughed workers.

Right.

That are impacting other business services that are out there. You know, you can't where Powell can. The Fed can't get the data that they want, so to speak. Right. So lots of things impacting. So hopefully we see something sooner rather than later. So let's kind of scroll in there. There's an interesting article though from Industry Today about AI adoption. We're going to, you know, we're in our manufacturing distribution segment but AI adoption this article talks about reduces burnout and builds trust. And a reason I dropped this and had Lilly put this into the distribution manufacturing segment because it was talking about frontline manufacturing employees. Do you get a look at that one?

I did. What wasn't clear to me is exactly how the AI is reducing the burnout. You know, talked about where I think scheduling. They mentioned scheduling so they can use AI for Scheduling workers better, maybe they have more flexibility, things like that, which I could see. Right. That could be helpful. But it wasn't clear to me, you know, 100% on how the. What AI was being adopted. Exactly. And how that was directly relating to some of the reduction.

What do you think?

You know, the only thing I again you would know better than I would certainly on this. But from the manufacturing perspective, if they're using AI to drive the assembly lines and the manufacturing process and maybe it takes some stress off of the workers in terms of delivery times and getting things out the door because things are happening faster. I could see, as I said before, maybe it's operationally as well, you know, scheduling and, and having people on the right shifts and all that stuff and not scheduling people for, you know, back to back shifts or whatever it was that could happen happen there. I could see that as well. But yeah, you'd probably have a much better insight into it than I would.

Yeah. So there's a whole lot that's done in facilities that is done the exact same way. This makes me just kind of makes me think I toured one of our great customers in Colorado when I was there last week toured. They have a manufacturing facility which is metal cutting and metal forming in for. Mostly for the H vac industry. And you know, literally, you know, 200,000 square foot warehouses of rolling steel out and so forth in there. And they're traditionally in manufacturing you have tons and tons of manual processes of checking and confirming. Is this gauge right? Is this working correctly? And you can start applying a lot of AI to those types of things to. To spot check things. So I think it's probably a mix to your point about scheduling and how are we getting our people scheduled. But more of it is likely tied to hey, we have some very specific that are manual tasks that if we use AI with this, with maybe hey we now we. We would normally go check a piece of machinery for a maintenance schedule or whatever it is. But if we can apply some AI to other data sources that come in from that, that would give us that answer I think is probably what we're seeing with that there's going to be more and more of that and you're going to see more and more AI tied in. And I was just. It just makes me think about touring this facility last. Last Monday, a week ago Monday and early in the morning and they have this big piece of equipment. They take 40,000 pound like 3 foot wide rolls of sheet metal. They run them through basically a flattener that it Takes out all of the highs and lows in that document. They had two, what are probably 40 inch TVs that were monitor side by side with two people watching those non stop. It was really interesting. Two, two gentlemen, these were union guys in there watching this from what is actually happening in the machinery and, and they would modify the pressure in different rollers in it based upon what they were seeing. You start now. I don't know that we're late enough in AI that AI could actually come in and monitor what was being seen and do that. But we're probably not far from that.

We're not far. I'm surprised that isn't happening already. Yeah, so. And I guess that could be a stressful job, right? I mean you don't, you know, if you miss something or whatever, you could end up costing the, you know, company a lot of money potentially. So see that being good example.

Well, the, the reason we're talking about this is, is that AI is being implemented across the board more and more and more places in what are traditionally very manual and very old school industries. You know, even there was, there was a point in time in my, the tour of this facility I was in last week. It was with one of our customers. It was great. There was other distributors from all over the country that were there and they were gracious enough to allow me to join them. Was there were parts of it where you felt like you were in 2025 getting ready to go into 2026 manufacturing facility and there was some machinery in there that you could have snapped a picture of it and said that it was 1992 and you would be hard to argue it just because of that's where manufacturing is still today, you know, from that standpoint. So good, let's dive into our E commerce and marketing segment. What do you think? Okay, want to talk about this? An article from Digital Commerce360 about PayPal pushes into agentic commerce with AI driven shopping services. And you know, we think about that right off the top of our heads and we sometimes the articles that we, we end up publishing here, you know, I, I worry about the people that read the article. Well, there's 10,000 people that get the newsletter. There's not 10,000 people that come to the show. And so sometimes, you know, I worry about that from a standpoint of this is so, you know, some of these are biased to the retail side of things or B2C but the reality of all of these things is they're sliding right into B2B if they're not already there, you know, because those lines are getting. The grayness is, is going away and there's just a line that there's no longer a line going to be a line between B2B and B2C.

Yeah. I mean take a step back, right. And just look at the concept of E commerce regardless of B to C or B2B. Right. Well, what does E commerce mean? Basically it means you're going to a website and you're basically making a self serve purchase. Right. You're doing your research and you're making a self serve purchase on a website, a transaction at that point. Yep. Whether consumer or that's a business, that's the simplicity of E commerce and basically that's the only way online purchases for the most part have taken place. Right. Other than, you know, Amazon, which you could argue has all the broadest set of purchase of products. If you're purchasing specially specialty products or whatever, you're going from one website to another to make E commerce purchases based in the B2B world in particular based on that company site that's there. So what agentic commerce changes or AI commerce, AI driven commerce changes is the ability to make purchases right within your AI conversation and making purchases from multiple, potentially multiple sources. Now it's not clear, right? Is let's say I'm having a conversation and I have, you know, 10 items or whatever that I'm looking at or having a conversation about. Could you actually then make some of those purchases from company A, some from company B come from some from company C? Could you have it then go look for the best price and then make the purchases accordingly based around maybe price or delivery time or whatever other criteria, credit limits, pricing. Right. If that doesn't exist now or that's not part of this, it certainly will be. Right. So now the experience of purchasing changes from going to a website, doing your homework, putting in your PO or your purchase order or whatever the case may be or your credit card and making a purchase to something where you're online at an agent conversation, an AI conversation and you're doing not only research but analysis and, and price, you know, competitive analysis and pricing analysis and all of that stuff and then being able to make that purchase. So what PayPal is introduces the ability for, you know, a lot of companies accept PayPal, right for their purchase is the ability to incorporate that into these E commerce or sorry, these AI based purchases that are there. To me it's just a foreshadowing of how the world of online commerce will be moving. It'll be moving from traditional in my opinion. E Commerce doesn't mean that E Commerce won't exist. I think there's a time and place for it but I think a large percentage will end up moving to AI based purchasing.

So let me ask you this based upon what you kind of described there and maybe that kind of distill this a little bit a future where a and I I'm going to use commodity purchases right? Wire, latex gloves, safety glasses, commodity purchases that a buyer could basically say here's my five approved vendors that I have for these items and here are some parameters that I've identified that are important to me. And basically when my ERP stock levels or warehouse stock levels get to a certain point predetermined by the way you could do all of this to figure out what those were by just having a simple agent built in chat GPT to help you define those things with some data that you input. Go out and look at these approved vendors by the way check what our accounts payable is to them ahead of time and find the best price and the best delivery from these vendors based upon what's on their website and and calculate the discount that we know that we already have from their published price on their website and then place the order accordingly. Okay so I mean is that kind of a little bit of what you're.

Describing to be you're talking multiple sites, an automated process. Right. Of that occurring and that I think that is a valid use case.

I think people are doing what I just described people are doing manually right now. Right. With E Commerce because it they don't need to see a sales guy, they don't need to pick up the phone, they don't need to send an email. It's just. But I just you know, click some buttons and go sure.

So I think yes. I mean from an automated perspective I think that's right. You could also though it could be and I think you'd have to you know once it went through and did all that you'd probably send it to somebody for a final approval or a review before the purchase was made.

But so then automate the automated prices is processes that this gets sent by Judy or John for one final review before they find they finalize purchase.

That's right. But then you could also have maybe on the other side of that is the entire a full on conversation rather than being automated. A full on conversation asking about you know, quality levels and even if it's more of a commodity product and then.

Having it give you specs for those.

Right.

There's ANSI approvals, there's osha, you know, all the different.

But it might give you recommendations for vendors that you're not currently working with that you don't even know about. Right.

And automate filling out a credit app and getting in their system.

That's right.

So, so the, the important part of this and why I asked the questions and I have opinions on this, but I want yours because you're, you're a computer scientist by education, been in the technology world your whole career. Watched things like fax machines come become, come around. Watch the Internet start, watch, you know your, you know, as, as, as would I say hate. I think the struggle getting these words out is it's a compliment. I don't like to do that too much. Is you're as versed on where I at is. Is anybody out there that you could go listen to, you know, outside of a, you know, somebody at OpenAI or something like that. So you know what's going on and you know what's coming because you're working out with your teams every day and you enjoy researching it too. And you've had now 10 years roughly of involvement with wholesale distribution. Where do you see the distributor? Let's just take the five branch distributor, maybe $7,500 million a year distributor that is still of the mindset that says my customers don't want E commerce. We tried it, it failed, or it's too expensive, we don't want to do it. These are just a series of the things that I hear from people regularly because every conversation that I have with distributors is because we talk about lead, smart channel, cloud, bringing in E commerce data. Right. Abandoned shopping cart data, what products people are looking at all the tools that are available from an optimizely or companies like that that we can bring that data in. So I hear these things often. What are your thoughts on where that person will be in five years in that business?

And what do you, what did you say you heard often or what are you hearing?

Well, what I hear often is what I just described. Our customers don't want to use that. We, we bought a system and try to use it to E commerce. Correct. All tied to E commerce in this discussion.

Right.

So that aren't in the distributor, that's not embracing E commerce and probably doesn't have any specific plans. Where's their business in five years?

You know, I think that you will. It's not a simple straightforward answer, but I think that it will be a. I think you could Argue that you will probably shrink by 20 to 25% minimally and potentially more. And the reason is it's really market share. Right. Because what's going to happen is, I mean, we see this now, right? We have our, you know, this integration with Mobiliko, the text messaging tool. Yeah. The amount of coming in that are written on a piece of paper or a piece of wood or a piece of drywall or whatever it is. And that's how they're, they're making those, those orders. But what's going to happen is, is those people are going to realize that while that may be convenient, that is costing them money and costing them results. And so what you're going to see, I believe, is by the customer, right? The customer is going to change their behavior of the distributor. And when the customer starts changing their behavior, the distributor has to be in a position to react and to adjust. So it is all comes down to customer behavior. Right. If the customer, what I'm hearing you say is the cut the distributor saying, our customers don't want to buy on E Commerce. Okay. Or they're, or they're struggling with that. I guess they want to send in a picture of a piece of drywall, but they don't want to buy on E Commerce. I think especially with a lot of the tools that are coming out there, if you look at the tools that are coming out to the customer, of the contracting tools and the service titans of the world and other things like that that are the technologies that are there, you're going to see the customer, the buyer changing. And as we've talked over and over, as the buyer changes, hence the seller must change along the way. So are we seeing that in large degree right now? No, probably not. But as the tools and the capabilities, and let's also be believed too, is that our consumer experience drives our expectation on our business experience. So if I'm a general contractor and I start buying off of ChatGPT or OpenAI or whatever on the way that we just described, I'm going to go like, well, why can't I do that in my business world? Right? And it's going to start carrying over. So. So to answer to your question, I think you're going to find yourself in a situation not because of what you didn't do, but because of what your customers are doing and what they expect.

And what your competitors have chosen to do.

What your competitors have chosen to do. Yes. Right.

I think that becomes a critical component of that and that we're, we're looking at from that, that standpoint I, I tie this back and I, I thank you for, you know, giving me your thoughts on that. I just tie this back to the same conversation we have about AI in, in distribution and manufacturing. Both is, you know, it's, it's literally ties to the same topic. And you could almost interchange I think AI&E commerce in this, you know, we, I, I reference this point all the time. You know, the CEO of Nvidia, the chip maker that's behind pretty much everything we do with A.I. you know, Jensen Huang has said this over and over again, is that AI isn't going to take your job. It's someone using AI is going to take your job. And I think you could say this in when you tie that into your.

Customer, you could take that same thing and replete your job and replace with.

Customer and or your E commerce is not going to take your business. Your competitor who is really good at E commerce is going to be servicing the customer who is changing. And we know that 70 plus percent of B2B buyers are millennials. And you may not feel this in your market in middle America, wherever it might be yet, but we are in a world right now where a guy could, with you know, a half acre behind his house could put up a quonset hut with a Starlink, you know, satellite interconnect Internet connection on a little post in his backyard and bring in a handful of items into inventory and work with a wholesaler that'll drop ship form and put up a killer E commerce platform. And next thing you know you've got a guy that's shipping to your customers when you're only running trucks. Now if you're running trucks, yeah, that guy can't help you with an E Commerce. Doesn't matter if, if 80% of your business is delivered, you know, on pallets, right? That's, you know, E Commerce is not going to necessarily take that but it how that customer orders that pallet could be right there. So I look at it kind of the same way as I talk about it with, with AI is you may choose if you're a distributor and, or a manufacturer, right? Because manufacturers are going to feel this because distributors are going to want to start buying and processing orders differently. But if you're a distributor, this I, I don't think it's going to put you out of business if you don't embrace E commerce and, and, or AI but it is going to change your business dramatically. You, you might be the 20 branch person that's down to five branches now while you're trying to catch up.

Right.

So you might not go out of business, but life as you know, it will be different. So, you know, and it just to tout this is not just being, you know, a personal thought is I think that it just resonates with me consistently. And Ian Heller from Distribution Strategy Group said this on our. In fact, it was he coming up on two years ago in January. It'll be two years. He said this when we do our, our yearly show with Ian and Mike Marks and Dirk Beveridge has joined us and we talk about the year in review and the year ahead of us. And Ian's comment was, you have to meet the buyer where the buyer is at. And the. But where the buyer is at is changing.

Right.

So if you want to do business.

I think that's the stable, the stable thing to build everything around, right? Yeah. If the buyer is still sending stuff on pieces of drywall in five years, then you're probably okay. But I don't think, I mean, I'm not saying it will not happen, but I think you're going to see much, much less of it and you're going to see alternatives that they're going to find that are again, more automated, that are much more effective and benefit to them. Right. If it benefits the buyer, they'll do.

It well, just like that same distributor in that same setting, right. Has a situation where he is looking at things from a standpoint of.

You.

Know, following up with what the buyer is doing. And that that buyer in that setting, that contractor say that's on the job site that's, you know, 55 years old, that is just being used to writing things down on a yellow pad and sending a photo of it to his, you know, through his, the Moblico app or whatever it might be is from that setting. Right. And placing his order that way he has a guy that's right behind him that's coming into that role that's like, why would you do that?

Right.

There's, there's these seven other ways we should be doing that. So the buyers that are adverse to these solutions are going to be retiring in the not too distant future. And the workers that are coming in and we talk to, you know, I have this discussion with people regularly that if you use that 70% of plus of B2B buyers and that's I think a Gartner stat or millennials, like, ah, that's not, you know, that's not in our market. It's like, okay, totally agree but does, but does you know Rhonda that has been placing orders with you and from purchasing at XYZ factory? Does she have an assistant or a protege? How old are they? Because Rhonda's 63 years old.

Right.

And that's what's, that's what's coming. So anyways, we could spend all day talking about that, but let's scroll ahead. Where do you want to stop next?

Well, we only have, we don't have that much time, so what would you like to think we should spend some time on?

Well, I think that, you know that there's an article here we have from HBS Dealer, you know, building material side of things and hardware, lumber and building supply dealer magazine. And they did. It ties right in with this. They do have an article about how AI is shifting online search. So this is a good article. If you're following what we're talking about today and want to read some more of these articles, it's in our newsletter. Again, if you don't get our newsletter, we're happy to send that to you. It's called around the Horn in Wholesale Distribution and Manufacturing. And we would be able to. Happy to get that out to you. Just reach out to us@helloadsmartech.com or you can easily search that on LinkedIn and sign up to get that delivered to you. So we'd be happy to share that. I think, Tom, just since we're in that area of E commerce and marketing. There was an interesting article there from marketingprofs.com about how AI is being used for workplace emails. And I thought that just kind of some of the statistics that went with that were kind of, kind of interesting. That said 3% of people said that they always use AI in drafting emails. 21% said that they often do it, which was daily. 32% said sometimes, a few times a week was 32% and then rarely was 24. And only 20% said never. So I think, you know, using AI is the way I look at it is when I am very sensitive to what my message needs to be and how my tone is crafted and so forth. It is absolutely a tool that I want to use.

Yeah, I agree. I think, I mean, I remember some emails you sent this week that were, you crafted a very specific way, had.

A tone that was needed and tone.

That was needed and, and you know, even sort of the grammar and the way the grammar was put together. I think, I mean, I think it's a great use of AI. It's a small use of AI. But it's a great use of AI. It's interesting, too, is that it's certainly not a challenging.

You're not challenging the AI to.

No, you're not. You're not putting it to its limits, that's for sure. But there's a company, Grammarly. I think you use Grammarly. They merged with an email platform called Superhuman, which I have, and they renamed the company, actually Superhuman. So Grammarly is no longer going to be called Grammarly anymore. But what they're really trying to do is kind of what we just talked about is how do you combine, you know, some of the stuff with the grammar AI, the emails, the communications. Right. All the communications that we make within an organization, whether or across organizations, whether it's email or teams messages or Slack messages or all of that stuff. How do you level up a bit on how you're doing? And I think it would be. I mean, I don't know about you, but I get some emails from people. It's like you on drugs. When you wrote this. Yeah.

Did you think at all about what you were doing?

About what you're. And so what does that do to me? It requires me now to have to figure out what that person's trying to say. Right. Maybe email them back. I mean, think about, you know, you think, well, it's no big deal, but you think about from a productivity perspective, clear communication, accurate communication, all of that stuff could really. Right. You know, like that butterfly effect. Right. It could end up really having a significant impact on our. On our productivity. Yep.

Yep. I think we still need to know how to write. Well. I think that, you know, how I look at those is, you know, that you were talking about one email I drafted earlier in the week in particular, and there was just a. It wasn't a significant issue, but it was. There was a legal ramification and it needed to be worded correctly. And clarifying some positions, how I looked at that, it was. It wasn't because, you know, I'd like to think I'm a decent writer, is it wasn't that I couldn't have got there, it was how fast I got there. Right. And it allowed me to move on to other very important things in my day. And it was written, you know, done quickly, and I proofed it and changed. I don't know, when I ran by you as my business partner was to see that was probably, well, let's see. I don't know how you'd calculate this because I wrote a very specific prompt that was, you know, a paragraph and A half of prompt, so of a. And the email itself was four paragraphs probably. And then I edited significantly. So I'm going to say it was probably 60% AI, but it was fast. Right. So for me to get to that level, I probably would have put a half hour or more into really making sure. And then does this, get this, this the what I say, the tone, does it cover everything that needs to be covered? So great tool. Anyways, we can kind of jump ahead. But yeah, it's interesting if you're not using it. And, and now if you're a Microsoft user, copilot's, you know, sitting right there waiting for you to help it if you have copilot access. So Tom, there is. As we move into technology, cybersecurity and AI segment of the newsletter, there's one thing that caught my eye here. I wanted to get your thoughts on it. It was from CFO Dive magazine. It said 72% of executives have ROI metric for generative AI. And this was from the Wharton Business School. That surprised me.

Yeah, I called, I called BS on that. Really in a big way.

It's a Wharton study.

Yeah. Well, I don't know who they studied. Right. That's the, the big question. I can, I can pardon.

What if it's 50%?

That still would be high. Right. Here's why I say that. And I spent this week, had kind of a couple eye opening moments this week with some with some customers that we were trying to identify how we were going to incorporate some AI and some of their business processes. Right. What I'm learning is there's really three things that you have to if you're going to use AI within your business to achieve roi, especially related to internal, internal uses and productivity. I'm not talking necessarily about what we just talked about with the E commerce and all that stuff, but just call it internal productivity. You have to clearly know the goal and objective that you're trying to accomplish.

Great.

So I'll give you an example. I was working with a customer this week and they're like, hey, we get all these emails. I'm not, sorry, not emails, web forms. We get all these people that fill out leads on our web form and we want to be able to handle those. And I said, and then we want to use AI and some of the stuff we do with Lead Smart to handle and process those and make sure they get to the right place. I said, okay, great. Well, what is your objective with us? What do you want to accomplish? What is the goal? I'm not joking. 45 minutes later, we're still discussing that.

Wow.

So how would you know, going back to this point of an ROI metric if you don't even know what you're trying to accomplish with it? There's no way you can measure a result if you don't know what it is that you're trying to accomplish. Right. So we finally figured out the goal and the goal was that they said, okay, we want to qualify this lead that comes in. We want to make sure it gets to the appropriate salesperson and we want to make sure it gets turned into an opportunity and into a sale. I said, okay, good, that's that we can like that and work that, right? Yep. Then I said to them, well, what's the process that we want to take that through? Like what's the roadmap or the blueprint of the workflow another 45 minutes? Okay. Well, it depends, you know. And so we couldn't even identify what. It took a while to get to the point to determine what was the. And yeah, there were some different, you know, conditional places along the way. Do that. Okay, good, we figured that out. Then I said, do we have the data? Right. Where is the data that's coming in from these form? Oh, they're going into a spreadsheet somewhere. Okay. So we don't even really have the data now. So we don't have goals and objectives, we don't have workflows and we don't have data. When I have those things, AI kicks ass. I don't have those things. AI doesn't.

Sure.

But going back to this point about ROI metrics, there's no way you could even come close to having a metric that you were measuring against when you can't even articulate, which most companies cannot, the goals that they're going to want to come up with. So that's what I saw. This is like I don't know who they're surveying and I don't know who these companies are. But 7% had clear ROI objectives. I would be surprised.

Well, let me ask you this question a little differently, right? Because you're, you just used a, you know, third or fourth generation. I think I know who you're talking about. You just used a third or fourth generation wholesale distributor. A build building materials. Let's just put it that level. What is your thinking on that percentage? If they had done a mix of technology companies, banks and or financial institutions.

I don't know, but I, I just. But companies.

You're saying is the number is completely out of whack into the market that we serve from this show.

Right. But even without going outside of our market, and I've worked in a lot of Fortune 500 companies in my career with some of the largest Fortune 500 companies in my career, and they're more. They couldn't answer those questions either. I have no doubt about it. Okay, so it's, you know, maybe they're dealing with some tech companies possibly, or something along those lines that possibly could have been that. Again, I don't know. But if I look at the general population, there's no way. Okay.

So now the more important question. Do you think it's important that people are working on figuring out ROI metrics for how they're using AI?

Generally, I think it's very important. Okay. But I think ROI metrics come out of what I just was talking about is being able to articulate goals, objectives and outcomes that I want to achieve. Right. And then therefore, they can be measured against an roi.

Right.

If it's a soft, subjective roi, like, well, I think it's working or it's not working, that's not a measurable ROI metric. Right.

Okay, well, let's, let's bump ahead. And there's just, there's a, another article in the segment about ransomware attacks. Jumped 28 in September. It's from CFO Dive. Good, good article there. I think that the takeaway is, you know, and we can, we, we should actually do something soon. We should find a. Somebody that is involved in the show that in some other. I've got a couple people off the top of my head that could probably help. We might even want to do an around the horn 2.0 show where we talk about a specific topic and talk about ransomware and cyber attacks. Because, you know, I had this, this is a discussion. Tom, you had asked me at the start of the show today about some of the sentimental conversations that I had with people this week. And a big piece of conversation we had was about the importance of security. And that comes up in discussion, you know, as we're talking about our product with, you know, we've got 20 plus years of the platform that we host. Our Data on is 20 plus years of 99.8, I think, percent uptime. And. But, you know, what's happening now with cyber attacks is it's not even necessarily cyber attacks. They're getting in with credentials and real, live, usable credentials is how they're getting into things because of the lack of security measures within companies. So conversation I had a number of times with people over the last few weeks, as we talked about the security of our platform was. Doesn't change the fact that our, our platform can be secure from a cyber attack. But if you as a company accidentally gives your credentials to get into our platform, it is not our attack, it is your invitation.

And that's why, you know, I know you don't like multi factor authentication or verification or all of that, but those are why those are being built in. Yeah, right. Because yes, there is always the risk of, you know, somebody giving a password or finding a password or whatever. And these are some of the tools to mitigate that through multi factor authentication and.

Right.

And verifications and IP based verifications and so forth. So unfortunately, and this is I think an area where I will help in the future to make this easier. But right now we're all kind of being a little bit inconvenienced in a lot of this stuff because of, because of those reasons.

Yep.

Good.

Well Tom, let's jump ahead and we'll kind of wind down for the day. The last thing I wanted just kind of wanted to mention, well two things real quick as we hit our the last piece is that MDM is our friends there. It's Mike Hockett and Team Mike's. I think Mike was going to be with us today. The they're hosting an upcoming M and a summit on December 3rd. It's a virtual M and A summit, something I'm looking to attend. So M and A does or MDM does some great work around M and A. So very good to follow that one then. Tom, the very last thing we have today is what came to my mind is there was really interesting article and it is titled, it's in our segment on great reads. It says understanding your productivity style why one system never works for everyone. And I enjoyed that. I'm going to actually save it and read it again this weekend to try and really kind of dig in on. I'm just constantly looking for productivity tools because I have a habit of getting sidetracked and I can have all the lists in the world and all of my alerts from our software and so forth about what I'm supposed to be working on. But seeing this and really understanding is great and I want to tie it in literally. I'm going to take the article. We were at a software executive summit, the two of us earlier in the month in Utah and did prior to going into that a personality survey and I made a little agent within ChatGPT that knows already enough about our company and I put Your style that came out of that survey you took in mine and put that in about how to work better together. I think I'm going to take that same conversation I had and load this article in there about productivity styles and have it look at my, read the article and then look at my personality type that came out of that and maybe give me some hacks back about how I can get better.

Interesting. I'll be interesting to see what it comes up with.

What are your thoughts? I mean, just about the process.

I think the process is great. Yeah, I think that, you know, I think productivity. Yes, of course. You know, we talked about AI and all that stuff with productivity and I do believe that. But I, I think it's. Productivity starts with the intention of the person, right. And you have to have an intention of, of, of being productive. Just like anything else you want to do well in, right. In life, you have to work at it. And there is no shortage of distractions and there's no shortage of, you know. And I also think that one of the things that I've really learned is, is looking at things from the standpoint of what, you know, can I get done versus looking at what I need to get done. And when I think when you look at that from a productivity perspective and you start to look at, okay, what do I need to get done versus what I can get done and I couldn't get it done, so I'll let it, I'll throw it over to the next day or the next week or whatever. That's where I think there's a. And I, I didn't, honestly, I didn't read this article, so I haven't dug into it.

Yeah. Well, I think that for me, right there's, there's two components that is intriguing to me, right. Is I have, you know, lists about my lists and those are automated lists and they're on my phone, they're popping up alerts to me. They're doing what they need to do. And I can still get to the end of the day and look and be have been crazy busy in that day. But there is often times where there are very important things that should have got done that day that were sacrificed for something that's less important. And those are the things I want to look at. And it's conversation have constantly with our customers. Right. Because within Lead Smart Channel Cloud, we're looking at all that ERP data and the marketing automation, e commerce and other data in the business. And we're sending smartphone alerts to salespeople about this is the right way to spend your time today, right? And then those are getting rolled up to a manager to do some coaching on and so forth, because all of us get sidetracked and delayed with things. And so I think it's important to look to do that. So time to wind down. We appreciate everybody that's been with us today. Tom, anything you want to add before we wrap it up?

No, let's wrap.

That's good. Well, we appreciate you being with us. Those of you that tuned in live, we're grateful for you being here. You were able to see the newsletter that we discuss each week. Those of you that are listening on the recorded podcast on Spotify or Apple or Odyssey or whatever it may be, you do not see that. If you would like that newsletter, we'd love to send it to you. You can just reach out to us@helloadsmartech.com or you can search for the around the Horn and wholesale distribution newsletter on LinkedIn, and that will pop up an opportunity for you to subscribe and get that delivered through LinkedIn every week as well. We're appreciative of you being with us. If you like what you hear, follow us on LinkedIn. Hit the subscribe button on YouTube, which is a great place. All of our podcasts and the shorts from all of them are are on YouTube. We'd love to have more subscribers there. And certainly if you're on Apple or Spotify or any of those platforms, please hit the subscribe button. And most importantly, if you have the opportunity, leave a review that pushes us up a little bit higher in those AI algorithms that we've just been talking about today. And we'll get this in front of more distribution and manufacturing pros around the world. We're grateful for that. We're grateful for the sponsorship that we have from the company that Tom and I work for. If your company's looking to digitally transform and grow your understanding of your customers, your team, and your business, we would love to talk to you. So that's it, Tom. Look forward to the Dodgers win tonight in Toronto.

Must win.

You know, we went an hour and 28 minutes and have not talked about sports.

Okay?

So go Dodgers.

All right. Yeah.

Go Dodgers. Yep. All right. We'll wish everybody a wonderful weekend. Be safe, be kind, and do good things.

Thanks, everyone.