Around the Horn in Wholesale Distribution, Episode128

Sam, good morning.

Last week it was drums, today it's piano.

You're a multifaceted, talented individual.

Well, you know what? Just a quick note to our editor and producer of our show, John Taylor. We need no other clips from today's show other than what Tom just said.

That's right, Social media. That'll be all over Social.

Been a great show. Nice to see everybody. And we'll see you next week.

Right.

Good morning to Bob. It's nice to have you with us, Bob. And we'll see some other folks jumping in, hopefully momentarily. So, Tom, how are you today? Been raining a bunch. And there we go. Paul Kennedy, air piano. Yeah, that's exactly where my musical talents lie.

You never knew Kevin was so multi. Multifaceted and talented. But now, you know.

So my, my musical talent started in the 70s where I could push the button in dad's car to go to the next radio station.

Okay.

And now I've. I've accelerated that and expanded that to I can actually, you know, manage Pandora on my phone and push it out to the Sonos speaker. So there's my music.

You're really dating yourself when you're talking about pushing the button. And the little thing would move. Yeah. Like across the thing. Right.

But that's easy because we've been friends since kindergarten. But you, you're now a year older than I am because you just had a birthday a couple weeks ago, so you're you. I've got 11 plus months where you're older.

Nothing but air. I like that.

What's Paul referencing? Me in general or.

I think he's talking about your. Your jumping skills, your vertical leap. Right.

That's a credit card. That's a credit card leap. Right.

Arlene is questioning some of the musical talent.

So that's my lovely wife. That's good. Well, hey, she's here.

You know. That's the morning to Ron as well.

Yeah. Very, very good.

Yeah, we had his article last week on. Yeah, we did. That was a really good article. Really was.

That was a great. A great article with that and good. You know, so we're way digressing before we even start, but it's great to have these guests with us. What I was going to mention was Bob Britten wrote a really cool LinkedIn post. I haven't read all of it yet on earlier in the week about kind of tying to. Which we're going to talk about in a couple moments here about tariffs and so forth. But it was the part that I read, Bob was insightful and I saved it and I'm going to get to the rest of it. But kind of looking at what we see going on with the style of how things are getting done in Washington right now. And we're going to talk about that in a few minutes and Bob will probably have some comments. But Tom, we digressed a little bit. We should probably do a little bit of our housekeeping and say who we are and what we do and why we're here and so forth. For the people that are listening. I think last week we were when I looked at some of the statistics, I think last week it was six countries. We had people listening in on and across all the different platforms between Facebook Live, LinkedIn Live, YouTube Live and then Spotify and so forth. So that is the key as we get more and more followers each week and people listening and we'll describe things a little bit more. So I'm Kevin Brown, this is my lifelong friend and business partner Tom Burton. We get together every Friday morning as we say, unless someone's on an airplane on a planned vacation or in the hospital. And we look at the news of the week and we kind of look at things from a standpoint of what's gone on in the economy and supply chain, mergers and acquisitions, technology, AI, human resources or people and leadership. We, we look at a series of different topics and we try and kind of as we say in the bumper music, if you're listening on the on the recorded podcast and the bumper music you'll in intro you'll see we say we use the term peel back the onion. What we really try and do is look at the news of the week and talk about how it impacts wholesale distribution and manufacturing. Neither Tom nor I are economists but we love to have a chat about what's going on in the news. We again are live on LinkedIn live, YouTube live and Facebook live Friday mornings at 9 o' clock Pacific. And we get great guests like we have today people joining us and then regularly we also have great guests. In fact next week we have David Gordon. And David is a very much a thought leader in the electrical and H Vac distribution world. We're looking forward to having him with us. And then the following week is a pretty exciting guest. We have my friend Sean Dubervack. Sean is a global thought leader in both retail and wholesale markets. Keynote speaker, PhD in Economics and just a good all around guy. And so we're looking forward to having Sean with us as well. So lots of good guests coming. But what we do is we review each week the Newsletter that we publish. And it's important that we share that because if you're listening on the podcast, the recorded podcast, you won't see the two handsome faces that are here or the beautiful folks that are responding in with comments. You'll just be listening in. But what we have is a copy of the newsletter that we produce every week. It goes out middle of the night on Friday mornings at, as I like to say, oh, dark 30 goes out to 10,000 plus people. And that newsletter is called around the Horn and Wholesale Distribution and Manufacturing. Just like our show. If you don't get that, and you would like to three simple ways to get that. You can simply send an email to helloadsmartech.com or you can very easily go to the LinkedIn page for the around the Horn and Wholesale Distribution podcast. You can sign up for it there. Or we have a website for the podcast which is www.aroundthehornpod.com and all of our past episodes and so forth are available there. So our ask of you is if you like what you see and you hear, share with your friends, comment with us. And if you're listening on the podcast on Apple, Spotify or other platforms, please give a subscription and a review ideally, and that gets that out to other people. So the last thing we'll talk about quickly, we'll talk about it more at the end of the day. But we couldn't do the show each week if the company that Tom and I work for didn't sponsor the show. We've got multiple people on the backside of this preparing things for us and all the costs of production. Tom and I work for a company called Lead Smart Technologies and LeadSmart has developed a AI enabled CRM and customer intelligence platform. It really works like no other platform of its type, very different than historic CRM tools that you might have seen in the past. And with that, we are able to help wholesale distributors and manufacturers bring siloed data from across their organization into a single platform using AI tools. Then to help them make decisions about what we should be selling to who and when we should do it, and what quotes are open and what are we missing that's going on there. So probably of all the software tools within a company's organization, the Lead Smart Technologies Channel Cloud is the name of the product and the Channel Cloud product is probably the fastest return on investment that people would have on any software investment ever. So if you're looking to accelerate growth within your company, we would love to talk to you and we hope you can reach out to US with that as well. So, Tom, you want to kind of dive into the news here?

That's what we're here for. Yep. Let's do it.

Very good. Get started. So China challenges Trump tariffs at the World Trade Organization. What are your thoughts to get started on the weekend? Tariffs?

Well, I think there's two. This, this article starting off on the. On the tariff conversation has two points. One is obviously the. The Canada and the Mexico one was put on hold for a bit, but China was not. But I. What I found was more interesting here is the. Is the. What. What they called it. What was the word they used? The exempt packages, basically. But they had a word for that. Y de minimis. De minimis. De minimis. Easy for me to say.

Exception, Small and important.

Right. So there are packages that are supposedly low value, less than $800, I believe, worth of stuff. But if you start to peel the onion on that, there were. I'll get you the exact number here. I think there were like over 1.2 billion packages that were 1.36 billion shipments that qualified for this quote, unquote, dimin de minimis exception in 2024.

Just use small.

Small. Yeah, small. Exempt. Right. These big words kill me.

So, Tom, we're not able to hear you.

Can you hear me now?

Yeah.

Okay. Anyway, what was. What was I saying? That was. So anyway, the whole point being is these packages are. Which come out to be about several million a day. Right. Are being. Were basically being halted as well, which created a bit of chaos on the way. I guess the post office has come back and said we will continue to handle them. But, man, as you really start to under. I never knew about this. I don't know if you knew about this. It certainly seems to me like this was a way to get around a lot of the custom requirements. It may be the way a lot of the fentanyl is getting into the country. It may be where knockoffs are getting into the country because they're just basically sliding through without any sort of oversight. So I think there's something there, but I think there's more to it than just the tariff piece.

Well there. So we kind of jumped ahead on that. But yeah, I think that's. You're right with that. You know, a big part of that in your. Couldn't agree with you more that there is the absolute potential that that could be where some of these things are coming in. A big player in those are the temu, the Shines and the Amazon even. Well, Amazon even as well. With Amazon orders coming in from dropshippers in that setting. You're absolutely right. But the other side of that is you've got a bunch of startups that are trying to compete with Amazon, specifically Shine and Temu that are super low cost items that they're just shipping direct. And, and that's a big component of what you're describing there I think is as well with that. So it is, it is kind of interesting with that. I was looking at a little bit different bend on this and you know, thinking about when you look at the. In fact, Tom, could you bring up that graphic about the US where really all the great graphic that we ran across about top importers of every state and I thought what was pretty unique about that is we look at that a little deeper is, you know, there's a handful of states that, you know, the, the dramatic part of it is coming from China, but we've got a lot of other states that are seeing, you know, the largest part of their imports are coming from Canada. We've got, you know, the southern states so much are coming from Mexico. I got a kick out of it when I was looking at this map a little closer. And for those of you that are listening in and not seeing what we're sharing here, it's a map of the US and it's got a icon of the flag of each of the countries where the majority of their imports come from. I thought the funny one for me as a side note was in Indiana. Did you see where that one's from?

I can't see it, but it looks Ireland or Ireland.

Yes, Ireland. So it's just, it's just Irish kids coming to go to Notre Dame, I.

Think or lots of beer or something. I don't know.

Yeah, it's Irish kids going to Notre Dame. But interesting to look at where this is and obviously, you know, the big number is 20 plus percent in California and Nevada coming from China. But I think as we starting to look at this in the current administration's views and I think this is a bigger picture scenario to look at with this. I think what we're seeing here specifically with Canada and Mexico is you've got a clear threat that China is saying, hey, we want to surpass the U.S. right? We want to surpass the U.S. in, in from an economic standpoint and you know, world dominance, so to speak. Okay. So if that's the stated goal of where they're at in the US is where they're at and we're so reliant on China and we have issues with China right now regarding fentanyl and lots of other things. Right. We've got the steel that's coming in from Mexico and other things like that. So I think when we start looking at this is like, okay, well, we're going to do play the geopolitical game of the negotiations with tariffs back and forth with China. But I think one of the ways to really look at this Canadian and Mexico thing is, you know, those are little brother countries. You know, in theory, when you look at economic production and GDP and so forth, with a lot of leverage that the US has over them. I think when we, when we look back on this in history, what we may find in this, Tom, is that this whole scenario with the tariffs on Canada and Mexico and Mexico is a little bit of an outlier, but on Canada and Mexico is basically saying, hey, fellas, fall in line. Because what we need to do is the two top priorities are immigration and drugs or fentanyl. And if Canada and Mexico are in lockstep with the US on that, and the US can leverage and pressure them, like which is being done right now, then tightening up their borders will tighten up our borders to immigration and the drugs and the fentanyl. So I think there's a broader picture than just say we're going to slap some import, some tariffs on Canadian maple syrup.

I'm not sure I'm following. So what you're saying. Let me see if I understand what you're saying. By getting Canada and Mexico on board, you're saying that that's going to then squeeze China or.

Well, look, we'll look exactly what happened in Mexico. Right? What, what if, if the, if the border and, and fentanyl are the big issues. Right. That this administration has said. Just look at what happened in Mexico before they even took place. The day before president of Mexico sent 10,000 permanent soldiers right to the border. Right.

Sure.

To stop drugs and to stop immigration. Canada, the expectation of Canada is tighten up your borders for the things that we don't want coming into our country and the leverage to get them to do that. Because, you know, while, while Trudeau, who's, you know, I was texting earlier this week and talking to some, some customers and some prospects and some friends in Canada. You know, we're a little bit embarrassed with some of the strong stance that some people in their country have taken against the US as well as some of the things that Trudeau have said. Because Trudeau is on his way out, right? No, nobody really looks at him as. I think they probably looked Better at, you know, the former US President when he was a lame duck there for a period of time, but he tried to push back on this, but now they're caving in on things. So the idea would be North America is lockstep. And the way that this administration is getting them to do that is putting the pressure on them from a tariff standpoint to say, get in lockstep with us and then if you're in lockstep with us, then we can achieve our goals of immigration and, and the reduction of drugs. Plus, to your point earlier. Right. With these small packages, China has been getting around like steel tariffs and so forth for, for a long, many years by bring, getting stuff coming in through Mexico. And so let's put the squeeze on them with tariffs or whatever other things that we have, whether it be aid or whatever it might be to achieve those overall goals. So I think it's kind of like we were talking about before the show even started. A Tom is like, I think you made a comment. Is like you don't, don't judge anything. The current president is saying for 48 to 72 hours to see what comes of it and really what's behind it.

So again, I think what I'm maybe hearing you say is that the chess game, Right. If you play the chess game. Right. With the, with our neighbors, with Canada and Mexico, then therefore that's going to potentially give leverage and influence on what we're trying to accomplish with China. Is that, is that kind of what you're. Yeah. Connect the dots between Canada, China and Canada, Mexico and China.

I'll say it one more time. North America needs to be in alignment with three countries there.

Okay.

Right. To stop what China's, what the US Government is saying they're trying to do. Got leverage over all both those other two countries. Leverage has been put in place. They're abiding by what they want to, what they want to get done to get accomplished.

Right. Yep.

So it's bigger. I think that my point is, and I'm sorry if I'm not articulating this. Well, fortunately, no one else is commenting on it but you. But the, the idea behind it is there's a big picture. The guy that's pulling the strings on this today. And the U.S. administration wrote a book called the Art of the Deal. And everything is about a deal. Right.

Yeah.

And there will be lots of things that look odd along the way while we're getting to the deal.

So I think I just would summarize. I think that's what I was understanding you to say so I just wanted to.

Very good. I did have a chance though. It was interesting, you know, as we talk about the tariffs before we leave from that because it's, you know, potentially a big impact on wholesale distributors and manufacturers. But I had a lengthy conversation earlier this week with a friend that runs a national distribution company. He's senior operations and purchasing person and you know, they've been. He was talking about this, you know, he said at the end of the game it boils down to end of the day it boils down to how good of a supply chain game you've been playing all along because in the commodities that his organization sells a lot of they've been moving things out of China for a number of years because they found other countries where they even get better margin on those products. Their inventory is managed very well in these things and there's a big play for the people that have done a great job with supply chain to actually start taking some market share. 2, 2 key points though that he brought up that I thought were really interesting is that one is that nobody has been speaking about this is we're just either we're in right now, we're just getting ready to go into Chinese New Year where everything shuts down for pretty much a couple of months anyways. So if you don't have stuff pre purchased that's on the water already, we'll probably be have this whole tariff thing with China roughly sorted out by the time things are gearing back up again. Anyways, super insightful thought. I hadn't. I wish I had thought of that myself. It makes a lot of sense. The other thing that's probably really valuable to this audience is this gentleman that I was talking to has said he has already been from the business that he does have in China because they have a lot of private label products that they get directly from China is. And in his particular case they've done a good job of hedging and protecting against these types of risks. But he said two factors. One, he's been getting price reductions already from some Chinese companies, right. Which that's a big deal. And again, this is something I hadn't thought of at all. But stop and think about this, right? Is you know, when we've looked at even with, you know, inflation with food prices and things like that going up, things go up dramatically and then they come back down a little bit. They typically don't come back down to where they were. So now if you think about the potential leverage that a manufacturer or distributor here in the US has with their Chinese vendors, if they're putting a squeeze on them, if they have enough volume to do so, that they're getting reductions in prices from those Chinese manufacturers in this setting that says, hey, you need to help me offset these tariffs as well. Cause at the end of the day it impacts the manufacturer, distributor, an end user in that setting is you've got a lot of leverage going back when they want to try and raise those prices again. So there's a lot of dynamics. It's why we do what we do here in the show is to have some of these discussions. So I thought it was very interesting, this particular feedback and comment I got from this large distributor.

Yeah, that's a good point. And I think the thing about the lunar New Year, whatever I, you know, even said in this article, right. I don't think Trump has talked to the Chinese president yet or had any discussions yet, but there's time, I guess, to sort this out before it really becomes an issue.

Well, and again, it's this, as you all often like to say, right. It's a story behind the story. So we, we see what the news wants to share with us and then when we unpack it a little bit more, we kind of see a little bit more what's really going on out there. So good, good. Let's jump ahead. We spent quite a bit of time there, but a couple of other articles. Again, if you're listening in on the podcast and not watching us today, we're reviewing the around the Horn and Wholesale Distribution newsletter. You can subscribe to that on LinkedIn or at the www.aroundthehornpod.com website. Manufacturing orders and shipments and inventories were rising a little bit in December. So a little balancing act going on with that. But you know, the, on the manufacturing side, it's good in the US I think part of that's probably tying back to some folks looking to bolster their supply chain and, and protect some inventories in the setting of what of the risk of coming from tariffs. So, so good, good piece to have there. Tom. What do you say if we jump ahead a couple articles? There's a quick article from Industrial Supply about year over year, spending in construction was rising by 4.3%. That's good news. But that ties into the next article which how California Wildfires are affecting supply chain. I, I kind of enjoyed kind of seeing that. While it's saying that, you know, it's not there's no impact on that today because what we lost was thousands and thousands of homes as people that are listening in or watching us today. You know, know, if you've been with us in the past, those, those particular fires that you saw, the devastation in the last few weeks here in Southern California, where Tom and I are taught they were happening about an hour south of Tom and about an hour north of me, roughly. Tom, where Tom lives. Tom was a, a block away from evacuations from a major fire in the Ventura county area. About a block away was. Was evacuations for you, right?

Yeah, back in November.

Yeah, yeah, back in November. And then in September where, where I live, we had a 23, 000 acre fire. But we, I say we only lost 150 homes. 150 homes is devastating, but when you compare it to thousands and thousands of homes, it's a whole different story. But it's interesting, this article, Again, it's from constructiondive.com it talks about while, you know, we didn't see warehouses or lumber yards or pallet yards or whatever burned down in that setting, what we have is this massive rebuilding initiative that needs to take place. So I think behind the scenes right now, what we're seeing is this major adjustment for all types of wholesale distribution. Everything from building materials to H vac to electrical to plumbing to safety equipment even. We've got this big boost of now getting, preparing the supply chain to support that rebuilding effort. The balancing, though, and the struggle is right. The article talks about potential shortages of drywall, cabinetry, plumbing and roofing supplies could impact this. And then back to our original discussion today was tariffs. If tariffs start having some impact on these things, it will be interesting to watch the supply chain resilience and maintaining that resilience for this rebuilding.

Yeah. And it does say, though, that the rebuilding process minimally will take two to three years before you're starting to break ground with this.

I think that's what the article said, but I think if you. And I agree with you on that is. But I think what we're seeing now is in this is more of a probably local news, but what we have is a gentleman in Los Angeles who had run for mayor, a billionaire, very successful real estate investor, and he had run for mayor lost. And he is coming back with saying, basically what the president was saying when the president visited is, hey, this red tape that you have, you need to push through these things. So I think what we may see in this setting, I don't want to spend too much time on this because it's more of a local issue here, but it can impact and we've got similar things going on in North Carolina after the hurricanes and so forth. But what you've got now is this business group that's being put together that will probably have the support of the federal administration just based upon party lines and support and so forth that's really going to want to push through this. And one of the things that they're doing right now in the specifically in the Palisades fire because it just happens to be the socioeconomic issues that go with the people living in the Palisades fire. There's people there that are ready to say I'm going to pay the myself, I'll pay the environmental contractor, I'll pay the disposal people, I'll get just let me have access to my property. And that's a little bit I think what we're going to see. So I don't think that two to three year thing is going to be reasonable to in some instances broad scope. I think that's a reasonable number.

Yeah, there's a whole lot to it's and we can talk about this separately maybe another day. But I have a good friend here in town who's the Ventura fire chief lives next door to him and like the guy, the head of the entire Ventura chief. Yeah, the chief and he shared some of the stuff about just the percentage of homes that were uninsured in the, in the Palisades area and that they're obviously not going to be able to be reinsured as going forward. So there's a lot of conversation about whole neighborhoods potentially being rezoned to multifamily because people can't rebuild in those areas. And the conspiracy theory is that and I think there's a lot of builders and other people that are going to try and swoop in, buy the land for cheap and then rezone it and then do multifamily or other types of properties other than single residential here.

And so that's great, great discussion. So we're having dinner on Monday night in Mississippi. So maybe that can be a broader discussion on our car ride from the airport there because I'd like to hear more about that. But that's, that is interesting. But what is intriguing with that and I'm digressing so we'll move on here quickly. But is here in Orange county where I live is been seeing on the local news and, and news feeds is that there's a huge influx, influx of people from the Palisades that are coming down trying to rent and buy the inventory that's available specifically in Newport beach, some in Irvine and Laguna Beach. So it's kind of interesting with that because I think what a lot of those people probably seeing is what you are, is the Palisades is no longer going to be what the Palisades was.

No, no.

The important though thing to not forget is, and I hate to see this is we see so much of this where the news seems to be as much or more on the Palisade sometimes versus the, the socioeconomic issues are very different in the Altadena fire. And you know, I'd like to hopefully we see a balance of aid going to those two places.

So.

Good. Well, let's jump into our manufacturing distribution segment here. There's an article there from Reuters. A lot of wholesale distributors that tune into our show regularly and get the newsletter have business relationships with Honeywell. And Honeywell has been under major activist investor pressure. In fact, just one of the divested is talking about a divestiture or a split I should say, versus the divestiture. But one of these even divisions is a $15 billion division. So you know, we're talking about all three of these divisions probably being 50, 60 billion is going to be my assumption or guess with those if you combine them. But when you've got an activist investor that takes a 5 billion dollar stake in that, you're going to listen pretty closely with them. So we had in December, I think it was, or early January, they completely sold off their safety and industrial division that is equipment based and hardware based to pip which is a protective industrial products. They I believe bought the Honeywell brand and then now we've got them splitting off their materials division, their automation division and their aerospace division. I think the automation division is what really has a big, big play into the, into the distribution world. So they've got exclusive distribution out there as well in a lot of areas. So this is going to be a good one to watch to kind of see what happens as they, they put split these off into different companies.

Do you see any impact from that or is it going to be pretty much business as usual? Assuming that I'd love it if we.

Have, I'd love it if we have any listeners that maybe work with them or have experience working with them. I don't think there will be a lot of it. You know, I think that the pressure, you know, comes on, on how I haven't even, didn't even read deep enough into what that means from a shareholder standpoint. But I would assume, you know, these divisions are all already pretty, running pretty autonomous I think, Tom, it's probably good. My assumption would be, and time will tell about this, my assumption would be in this setting, Tom, is that the likelihood of what we'll see is people won't feel too much of it. Much like, you know, do you, do you realize that, you know, ge, the MRI that you go into in the hospital or the doctor's office, it says GE is no longer part of the refrigerator group. Right.

Right.

It's just, it's just still a great brand that's out there. I'm sure they're doing nothing with the brand. They're going to leave the brand intact and operate a separate company. I think what this does is you move those into three separate companies. And I'm sure that's what the activist investor is thinking about is we drive shareholder value in three divisions because those numbers are going up because there's more of a focus. So good article here from Ted the Electrical Distributor magazine about Sonapar. Sonopar, I believe now is the largest wholesale electrical distributor in the world. I've been buying up quite a few brands over the last period of time, but in their Midwest region, they've bought up Echo Electric, Springfield Electric, Richards, Pepco, a few others, and now they're aligning those under a brand. And usually what we've seen for a big part of thing is you'll see a Springfield Electric, a Sona park company as their title. And now they're starting to put some of these brands together, which is going to be interesting. You know, there's power in brands. Right. So having a major brand, I think like that may be a benefit to them.

Yeah, I think there's, I mean, I don't know a ton about their company or their market, but it would seem like what they're looking at here is a centralized brand can have some leverage and some broader appeal rather than maybe some of these more regional brands that they're. That they're under. Yeah.

And they're doing this particular one is in a broader region. So rather we've got, I'd say maybe a better term might be localized brands. And they're driving this into a large regional brand. So it'll be a good one to watch. We'll pay attention to it as well. But, you know, it's over. It's 1.2 billion in sales of those combined branches. So it's good. So Industrial Supply published this, but it was ad. Affiliated Distributors put it out as well. They're the owner. Members of Affiliated Distributors beat some records with a 6% increase for 2024, which is, you know, good. Congratulations to them. 83.3 billion of combined sales with this particular buying group. Great news. But you had an interesting take when we were chatting about this earlier. What were your thoughts on this?

Well, I mean, 6% is, you know, great. Look, there's nothing wrong with 6%. What I find interesting is in the conversations that I think both of us are having, right, with prospects and customers, we are hearing more often than not they have growth goals of doubling in five years. Right.

Well, if you take that and if I can interrupt you for a second, we have some customers at Lead Smart Technologies that are AD members that have these goals, right?

Oh, a lot of them are AD members, right. So yeah, I would say the, probably the majority of them are AD members. So there's aggressive growth goals. Well, if you take doubling in five years, that's 15% annual compounded growth, right. Which is significantly higher than 6% growth. So the, the question that would be interesting to understand is it on. And granted, I understand that's an average, right? That's the 6% average growth among their members. But, and so maybe some of them are growing 15% and some of them are not. But that's still pretty a big variant between what we're hearing as the goal in a lot of cases and what reality is. And you know, I, I, we've talked a lot about this, right. I think the real opportunity is we talk to our customers, customers and prospects about is how do you get a lot of that organically, right. So rather than going out and buying more branches and, and, you know, potentially, you know, acquiring companies and things like that, can you do it organically using, you know, some of the technology and some of just optimizing what you're, what you're doing. I just found it interesting when I saw 6% here. And we hear a lot this double in five years as a strategic goal that's been coming down from ownership or their board or whatever.

I think you're kind of spot on with that. I, you know, I think there are aggressive goals with some, and there's some that are trying to keep, I don't want to say keep their head above water, but, you know, this, this ties into discussions that we've had many times in the past as well, is that, you know, there are people that are, are, have growth goals, but they're maybe a little bit comfortable, maybe not working on transforming digitally, maybe not having the same level of the, maybe the focus on, on, on rapid growth, accelerated growth. And we have companies that we work with, you know, within Lead Smart that are looking to, like you said, double in size, right? Which takes roughly 15 over five years, right. You got some aggressive work to do. And you know, we think about investing in a rule of sevens, right? It should take seven years to double your money, but if you're trying to do it in five, we got to bump those numbers up significantly because of the lack of compounding. And I think there's two mindsets, right? There's mindsets within distribution that says we're going to block and tackle, so to speak, like we've always done, right? We're going to acquire a couple of companies because we've got a great line of credit, we've got a branch growth strategy and then there's others that are saying, well, we want to use historic methods, but we're going to use technology and digitization, so to speak, to really accelerate that. And I think when you put those traditional strategies together with a strong digital strategy, and not just a digital strategy that says I'm going to buy more software, but a digital strategy that says I'm going to buy more technology, whether it's software, it's AI tools or whatever it might be that says these are a major capacity or major component, I should say, of my overall growth. And I think those are the people that are probably going to win that race of doubling in a certain number of years. Right?

Yeah. Ron popped in a question here. Do you see a more insight in segments or certain areas growing more than others acquisition? No, I don't have any specific data of segments or, or areas that are growing more than others. Is more anecdotal data that we're getting from our prospects and customers. But I agree with what you're saying, Kevin, is that a lot of them are thinking that growth is going to come either through acquisition or opening of new branches or inorganic growth. Right, right. Whereas I think the low hanging fruit as we see over and over is at least handling a lot of that through organic growth, through optimization and, and of what they are already doing.

Right?

Right. And there's plenty of room as we see every day, that are, that are, whatever. And I agree with Bob's comment here, right. The problem with growing through acquisition is, is long story short, it's hard, right? And it's risky as he's saying here, because the core competencies of your acquire aren't really the same. You may not have the same. There's, there's a lot of work that goes on, right. And trying to merge Those together, get those working properly, all of that kind of stuff. So it can be risky and, and the other thing that, boy, we're really going off topic. But the other thing that you really got to think about is growth is great, but what does that do to profits?

Right?

There's risk in growth in a sense that if it doesn't work quite the way you want to and you're investing in it, it can erode profits and your net income pretty quickly. So, so I'm not saying that or inorganic growth is bad. I'm saying I think there's a balance of organic and inorganic that can potentially achieve that.

Well, I would, I would love to. Bob's comment I agree with in what you're saying. I would love to see some research, although I don't think it could really could ever. You could get research that would tell the accurate story because I'm not, I'm not convinced people would tell the accurate story is what percentage of acquisitions, whether private companies acquiring private companies or public companies acquiring public or private companies, irrelevant to that is what percentage of them ever yielded the growth and revenues that were anticipated. I would, I would have to guess. And there's a whole lot of people on here, a whole lot smarter than I am that have, you know, I'm just, as I'm looking at the side of my screen with the comments I see, see my friend Paul Kennedy there with Dakota Supply Group or dsg. Paul has insight into a lot of this. If he feels like commenting, that's, that's great. If not, I'll, I'll corner him next time I see him face to face over a beer and ask this question again. But you know, I think it's a str. And I'm not trying to throw rocks at anybody in this setting, but I just think at the end of the day, to Bob Britton's point here, is that digestion, I'll call it integration is hard. And to, to think that I think you would really, you might get the revenue growth, the top line revenue growth that you want to get to talk back to our original point was about, you know, whether it's an ad company or somebody else, you know, 6% growth is wonderful. But if you're trying to double in a certain inflate as an example to your point, in five years you need a lot more than that. And the question is, even if you got to the top line doubling that you wanted to in that five years, where is your organization at? From a cultural standpoint, what does your balance sheet look like? What does your debt look like? All of those things that go with that. Interesting time. So, yeah.

What's the profits look like? Have your net profits actually increased or, you know, what's your cash flow? I mean, there's a lot of variables. And I think culture and all that stuff is valuable too. Right. To take into account. So anyway.

Well, it's probably the hardest pro. The culture side of it in the people side of it is probably one of the biggest challenges. You know, I would think you could talk to, you know, some veterans out there that have done lots and lots of acquisitions and, you know, the, the stuff that the numbers you can make work and the numbers are probably going to stay pretty close in that setting. Well, there we go. Paul, Paul just jumped in to help us here. Says integration is the key. Preserving the core competencies while also getting synergies is a fine balance. So art and science, I think, is what he's kind of saying here. Right, That's.

And it's not easy, right? It's.

It's.

No, it's not. Add water and stir, that's for sure.

No, that's. That's exactly right. Well, good. Well, thanks for that.

Completely off the rails with this article.

So that's so unlike us.

Yeah, no, I like it.

It's like a general conversation with me.

Call instead of around the horn. We should call this off the rails. I think that should be. Or maybe that's a whole new show. I don't know.

Interesting. Anyway, I like that. I like that.

Good.

Let's dive into our E commerce and marketing segment that we talk about each week. The article from Digital Commerce360, our friend Mark Brohan, who was on the show with us a while back, and we're going to get him on again this year. It's an insightful guy. He penned an article here about digital transformation. Tom, you want to take a stab at that first and I'll follow up.

Well, his point being, right. Pretty simply was millennial buyers, if you look at the kind of the, I guess the bookends of millennial buyers. Now, the oldest ones were 14 years old when Amazon launched, and the youngest were in the year that the iPhone was introduced in 2007. So, long story short, they lived in a world of technology and. Yep, E commerce and all of that. Their whole life, they don't know anything other than different. They weren't pushing radio buttons and having the thing move across the radio dial. So, yeah, his point is that's all they know. Right. And so the transformation and so forth of, of you know this is all stuff that we've talked about over and over and over again. And you know I think he has some good statistics and went over some statistics that we've covered in the past about buyers and their mentality and so forth.

Well, I think that this is, there's some great graphics that are in this particular article. We need to start kind of showing some of these to our audience. But this is again this is digital commerce360 January 30th was, was when Mark wrote this but I think he updated it as well because some of it is coming from a Santa Commerce survey that they did actually this year of 750 B2B buyers and they talk about their, what they're targeting is the advantage of e commerce is 25% reliability, 25% efficiencies and then the other 50% is speed is 23% and then accessibility and ease. So you know, now they're saying, you know, 72% of B2B buyers now prefer to buy online. And the point being and this really ties into even the next article that we have here about which is also from Digital Commerce360 and if you don't, you know one, if you're not connected with Mark Rohan on LinkedIn, great guy to follow. And then also you know regularly taking a Look at Digital Commerce360. Great newsletter that they put out each week. Certainly you can get the tops of their articles here on Friday mornings with us but they do some good stuff. But the second article that we have featured here is about grain drying growth through data technology and AI and all these things just merge together. Right. And what we see is you know, this article was about what a B2B buyer wants but we see this convergence now of the ability to it's the things that are becoming available, right are influencing what the buyer wants and now things are becoming that much more available and easy for use of wholesale distributors to give people what they want. Right. And we talk about it all the time. Maybe this is the next book that you write Tom is about the, the gray area between consumer experience and wholesale experience or B2B experiences. You know they're, they're getting so intertwined with expectations of the buyers. So I think this is good. Grangers just basically if you were to just even read the headline from this article about what Granger's plan is is their commitment to investing heavily in E commerce data and digital technologies to outpace competitors. Well guess what we, you know, you're never going to Outpace Granger spending ability. But the beauty of technology is, you know, a small local guy. We talked about this two weeks ago, I think is that, you know, a guy in a Quonset hut, you know, down the dirt road that has a Starlink connection by satellite Internet could get a shopify shop up and be selling to Granger customers five states away and be doing that through relationships with wholesalers like ors, nasco. If you're in the industrial space or others in other areas, you can be doing that in weeks.

Right?

Yep. So it's great point RP talks about this is, you know, a call to action to all distributors to get going on AI and other tools. Right.

Call to action. I like that.

Yeah. So good stuff. All right. Any other thoughts on that, Tom, before we jump?

Oh, let's, let's move ahead.

Good. So Tech Brew had a kind of an interesting article about, you know, we're talking a little bit about marketing E commerce, but I dropped this even though it says AI dropped it into our marketing segment specifically because we've been talking a lot about. And I heard a great comment on another podcast the other day because they were talking about. We're going to talk about Deep Seek, the AI tool in just a moment. But you know, they were talking about. The likelihood is, is that Deep Seek, a lot of its Learning came from ChatGPT. Well then ChatGPT got caught red handed training its model off of copyrighted things from the New York Times. Right. In that case, it's pretty, pretty powerful. So now the copyright office is says pure AI need to not apply. So if you think you can go write articles and get them copyrighted and. Or write a book and get it copyrighted by just having AI spit things out, you've got another thing coming now.

Yeah, it will not. And this is not. This is old news. Right. They've basically maintained it that they will not allow anything to be Copyrighted that is 100% generated from AI. But if you have some. If you can prove that there's some human creative contribution, then you can, you know, I guess argue or fight that point.

So, yeah, so this is. He's just trying to find that article again and bring that up. Where'd that go? Here we go. Yeah, this was just from some updates that they did. This is not necessarily old news. This is updates from earlier in the week that the copyright trademark is actually last week a new report about. So they've enhanced what you were mentioning dramatically and it says the conclusion they interpreted interpretation of existing copyright law. They did two years of review and thousands of public comments. So this was published in these updates last week about I think putting some. It says right here, it says it didn't deviate from its original stance that wholly machine made art is ineligible copyright. But they also determined in their report that law, there's laws already on the books that covered enough to answer these questions without new legislation. So questions of copyright ability and AI can be resolved pursuant to existing law without the need for legislative change. So it looks like this is something that they're just going to continue to stay on top of.

Yep.

Good. What's next? What do you want to hit?

Oh boy. You know this was a good next article. What's changing in B2B marketing in 2025? I've been very impressed with these marketing profs articles. They're very well thought out, very well put together. We could probably spend.

I don't.

I went off time a whole bunch on it. Yeah on that that's there. But it's one of the things I found really intriguing. I think it was number nine or whatever on their list. It's like a top 10 list of things that are changing and they're pretty innovative things is the synthetic influencer. So basically creating a virtual AI driven influencer that has an identity in your organization, training that synthetic individual to be super knowledgeable about whatever it is that you do. Right. So and then make that synthetic individual available basically 24 by 7 to engage with and have conversations about whatever it is that you're. You're doing. I just find it intriguing. I hadn't thought about that angle of it but I think that there it, it could, you know, it's obviously like saying well I have a GPT or I have something that talks about I've.

Got a marketing agent.

Right. But I'm having somebody that I'm that's you know, verbally having conversations, all of that kind of stuff. It often then crosses a line. Well, it's like that a customer service agent, you know you can see it going in a lot of different directions. But I just found it as an interesting concept that they brought up.

Well, I mean I, I think, you know, I think I shared this with you in our audience a couple weeks ago I was doing some work with preparing some things for our marketing team and I was, I had developed a fairly simplistic agent using the paid version of course of ChatGPT with a lot of marketing data and information about what we do at Lead Smart Technologies with our channel cloud products and market information. Some General marketing stuff and then a lot about our particular product. And, you know, I had a conversation with that agent for 25 minutes while driving without ever looking at my phone. Full conversation back and forth about specific marketing topics. I was working on, really identifying and doing more work on our ideal customer profile and the Personas of buyers within that. And so I think we're going to be to that stage very, very quickly where this, just as to your point of what this article is describing is that's just an everyday occurrence is, you know, I use co. I don't think it's been adopted by you or any of the other team. But, you know, you're working on a project right now that I call code, you know, code word ralph. Right. And I was talking to somebody about this the other day and they said, well, ralph. And I said, well, every company has a Ralph. And it might be Rhonda, but they've been there for 25 years in the company. Right. They can tell you every initiative that's happened in the company, what worked, what didn't, what. What kind of hires worked, what didn't work when the marketing department had these great new ideas and they fell on their face or they did great. They can even tell you in the warehouse that's 20 miles away in the back, underneath the pallet rack on the north side of the building is a moving blanket that's covering a file cabin. They can tell you about a file and that's in there and, and what it's about and why it's relevant to what you're talking about today. And that's where we're headed, is that we'll have the RALPH or the Rhonda that every company already has. Everybody has access to them 24 7. And they also have access to all of the other large language models that are behind that as well.

So, you know, I'm not very good with large words, so. But I'll let you try and pronounce that, but. Right, right is not healthy. And I mean, that's, I think, a very good example of what this is, is migrating into a very different sort of type of relationship. I did want to hit Kelly's comment too, before we move on here. And I think her point is, you know, she's saying Google, when they first started digitized every book they mapped Library of Congress, right? Then all of that went into LLMs. LMS are based on those sources and so forth. Is this whole copyright thing that we're talking about and plagiarizing, is it even practically able to be does it even have any practical relevance?

Great point, Kelly.

Yeah, is the question and I don't know, it may not because I don't know that everything won't become a copy or a derivative of something else here before too long.

Well, you know, it's kind of funny. I'll make this quick comparison. I was just talking to somebody the other day about non compete clauses. Right. And the was a good point. I'm going to interrupt myself once you hit Bob's comment. Great, great thought. Right. But, but what, what Bob's saying is here is Ralph and Rhonda have the discernment and sensibility to know when not to say something. Some Ralph's and Rhonda's too. But, but I think conceptually I couldn't agree with you more but. And the reason that you hear a little excitement in my voice right now is because I think what Bob is just saying is so spot on because this goes back to the idea because based upon this discussion that we've had and I was just talking about agents and all the things that we can be doing is, you know, that goes back quickly and easily to the well, oh my God, my job's going to get replaced. But I think what, what Bob's commenting is is what Jensen Wong with Nvidia said a while back that you know, people were saying, well like why would you need a CEO when you just have all of this data? And it was exactly Bob's point was that discernment and sensibility and the ability to take all of that data and not just have a data driven response, but have a sensibility driven response by somebody that really understands the organization. So great comment Bob. Love that.

And they also, I guess you could take the flip side of that still the challenge we're dealing with with AI right now is it will try and say something even if it doesn't know and it tries to act like it knows and it's very good at it being it coming across like it knows. Right. It's very convincing that of what it knows.

Well and that's I've been doing some things lately with some of the tools that I've been using, whether it's cloud or perplexity or Chat GPT and, and literally telling it I don't believe it.

Yeah.

And, and forcing it to come back with defending what it said.

Yeah.

And I think it's back to Bob's point about discernment is, is really great. So and Tom, by the end of the show you're going to be Able to say that word. Okay, that and De minimis.

De minimis. I got the diminimus. Anthropomorph.

Oh, no, you didn't.

I didn't.

There you got it. There you go.

An anthropomorph. Oh, well, forget it. Let's go two in a row.

Very good. So. But I did. Before we go, Tom and I really want to dive into this and we probably will have some things we don't get covered today, but going back to the that particular article from this is marketingprofs.com and started pulling data from them a few months ago. There's two points they talk about predictive personalization and hyper individualism in marketing. It just makes me think about the call I, I joined you and your team were on yesterday with one of our. One of our call flagship customers. And when I say flagship customers, it's not because of who they are, it's because of what they're doing. And, and this is a company, without going too far into it, is they're using data from their ERP system. I should actually have you describe this, Tom. What? You know what I'm talking about here, right?

Yeah, but go ahead. I'm interested to see how you. How you.

Yeah. So I mean, at the end of the day, right, they're taking ERP data, right? About what customers have historically purchased. They're making that available through our platform Lead Smart Channel Cloud to their marketing team to slice and dice and dissect all of that data and tie that into promotions that the marketing department is doing either related to specific products or partnerships that they're doing with vendors that they have so that their sales team now knows who to go talk to about special promotions that are being marketed. There might be cost savings or discounts for a period of time, but this is that that time in life where we're talking about siloed data from across an organization, which is what our specialty is at Lead Smart with our Channel Cloud product is where we take that ERP data, marketing data, e commerce data, other siloed data. We bring that into one place and we make decisions about how we can accelerate growth in our business from what historically has been siloed data. So now what would have taken days and weeks and months if they ever did it for this particular customer is they're saying, I've got a promotion and something that I really want to specifically do. Let me take financial data or ERP data in this case. Look at the people that would be one benefit from this or are most likely to buy, in this case and drive that data across to the person that needs to go influence it, which is a salesperson, which I can now use AI tools to remind them what they need to go talk to people about.

Yeah, they're flanking the mult. The marketing process, and they're personalizing the marketing process. So as you said here. Right. They're personalizing it by sending the right promotions to the right people or where they believe are the most. And then they're flanking that and making that more visible and more relevant by having the salespeople kind of arm in arm following up with those. Those key customers. So it's. It's a great way of getting the synergy between sales and marketing improving as well. But yes, it's a good example of personalization as we're talking about here, or starting to move in that direction.

But, but these are the two things of what this company is doing is the two things that are talked about here. Predictive personalization and hyper individualism. Right. So it's very. Because people can say forever. Well, I ran a report from the ERP system or maybe a data analyst did send it to the marketing department and said, these guys have bought this before, and then we're going to send them this email about the sale.

This is.

This is totally different. This is saying, I've got data from across my organization and behavioral data and then likelihood to purchase. And now I'm arming my salesperson and setting it as even potentially part of their goals and objectives. So we're in a great place. All right.

Great way to get organic growth.

Yeah. So technology, cybersecurity and AI. We're diving into this section of our newsletter again as a reminder. If you're listening on the recorded podcast and you're not watching us live, you're not seeing the newsletter we have up or any of the charts or graphs that we put up. So if you would like to get this newsletter again, hello atLead smart tech.com, the around the horn and Wholesale Distribution newsletter. You can just search that around the Horn and Wholesale Distribution or Around the Horn and Wholesale distribution podcast on LinkedIn. And that'll take you right to the ability to sign up for the newsletter or the website for the show. Aroundthehornpod.com and we'll get that newsletter out to you. It grows every week and we're getting more countries coming in every week. So, Tom, this is from CFO dive.com deep seq surge hits companies posing security risks. You want to take the first stab at that?

Yeah. I won't go. We talked a lot about what Deep SEQ is a week ago, last week. But, you know, long story short, right, it's the new, relatively new Chinese model that came out with a bang a week or so ago now, or two.

Weeks, maybe almost two weeks. Yeah.

But anyway, the, there's kind of multiple different versions of this. There is a hosted version that Deep SEQ offers that you can use pretty much for free. They also have APIs that you can tie into to their environment. And then you can also. It's open source, so you can take the whole thing and run it on your own computers. Right. So you can run it on your own thing. So there's lots of different permutations of how a deep seat could be utilized. The question that comes up a lot, is it safe? And the answer is it depends if you're using it on their hosted version. I wouldn't use it for business, honestly. And I certainly wouldn't put anything in there that was personal or personal, you know, relevant.

If I wanted on my phone, I wouldn't even download it to my phone.

I wouldn't put on my phone either for reasons. Because when you have so many different apps on your phone, a lot of times those apps can kind of hack into each other.

My banking app is there.

Yeah.

My financial data is there. My Schwab account app is there.

Right, Right. So I, I agree with you completely. I would certainly not put it on my phone for any purpose. And if I'm using it on a desktop, on browser, I would not do. I could ask it how you make pancakes, but I wouldn't do anything that has any real personal information. It's very clear.

Document for review or anything like that.

Right. There's very clear in their terms of service that anything you put in there, they have the right to use and utilize and gets basically back into the big Chinese data warehouse. Now, on the open source side, if you take it and put it on your. Bob says bless you.

Thank you. For anybody that didn't notice, I kind of half cough, half sneeze there. So thanks, Bob.

The, on the, on the open source side right now, it's not connected into the Chinese world. It's running on your own private server. Microsoft created a version. Perplexity, Perplexity did. I think Amazon did as well. So you're not running into those same security concerns. Maybe, maybe. Well, I don't believe, I think that, that. I think that you're pretty safe as far as the data getting to China. I think the challenge question then becomes with that is well should you be using it? Is it biased Is it biased in the data that it's using? Is it other things like that? Well all models are biased in one one way or another so it's hard to say on that. I guess my question would be is why you would use it right. If you have other alternatives that are reasonably in the same but there's I.

Don'T think you might have deeper insight into this but I don't think there's anything unique or that makes it better than the tools that we have that we right now at least believe you are all running on US servers. I mean I use Perplexity a lot I kind of go back and forth right for me right now AI tools are are probably because of we do a lot of with our within our company with OpenAI is so I do a lot with ChatGPT is probably 65% but I move to I'm probably now doing 20% of what I would nor historically do with Google. I'm using Perplexity and I'm really pleased with that. Although Gemini is Gemini being behind Google Chrome searches is is great now as well But I'm kind of a little bit Claude a little bit more Perplexity and then mostly Chat GPT but those tools right now I'm feeling comfortable and oh my word that's a great comment.

Says it will not tell you it.

Will it'll basically speak about Tiananmen Square and anything well what what we've already seen with Deep Seek and this was just a comment that came in was ask it about Tiananmen Square and and what we've already seen with that is it may answer it but it'll be gone within seconds so that it won't answer it.

It won't answer it.

I know I know what happened the first week it was up that there was answers that you saw changed because of the negative influence view it would give of of the Chinese government. I've looked at it that oh Will says that that's perplexing Kevin so that's quite quite good Kevin is perplexing.

Well yeah I will give you that the.

I wouldn't argue that either the I look at it being a Perplexity user is I I want to watch for a while before I'm willing to use that component within Perplexity because you don't it's just not automatically used so my view of it But Kelly made the good comment and I'm laughing about this she said that and then there's TikTok, right? I kind of laugh because each week our team behind us that manages the show for us, they make take out little snippets from the show and one of them that they published on social media and it's, it's there on, on LinkedIn if you, if you get, want to get a look at it was, I guess I was a little passionate because they made a snippet about my comment about TikTok. Because as I look at Deep Six is we've just spent what a year plus with worrying about TikTok and no one loads spreadsheets from their company into TikTok. Right? Nobody loads contracts in to get them analyzed and suggestions made into TikTok. We're watching TikTok with the Chinese. So you know, and thinking, depending on who's thinking you subscribe to, is that, you know, they just like to dumb our society down a little bit if you go with that line of thinking. But the risk is there is and Tom, I'm really appreciative because you know we look to you as our so called science guy here, technology guy with your background in education, being a computer scientist by education as you brought that up about the apps because I don't think most of us are very careful of what we put on our phone. And you know, I think about it is the data that just, just literally our CRM data that's within the lead smart app on my phone, the my Schwab account, my, our businesses banking app, my personal banking app, which is different. And the risk that we have is pretty great. Now there's plenty of bad actors behind China in the world but, but when we start thinking about these things, what we're putting on our phone, I heard somebody, the comment made in this goes with Kelly's comment is, you know about TikTok is they relate and this was a cyber security expert that was talking about this. He was on MSNBC and he said the, the comparison of, of TikTok and Deep Sick, Deep Seek is basically, how did he put it? TikTok's risk was sesame street like in comparison to the magnitude of what the risk is here.

Anyway, long story short on this, on this article, a lot of companies are blocking it. I would recommend blocking the hosted version if you're a larger company. I would not allow anything to go on to that at this point. And I would question why we would want to use it and how. And I mean there's some logical reasons to, there's some potentially cost saving reasons to use some of their API related stuff. But anyway, it's, it's, it's certainly not something you want to have as a free for all in the organization.

So no, I think in that case we're actually meeting, have a meeting next week with a large wholesale distributor. And that's one of the issues that they're working on right now is what do my people have access to, what could they subscribe to and so forth and trying to put some guardrails about around all of that. And you know, RP just made this comment here, you know, about how our phones are listening. I, I, I've had this happen twice probably in the last 18 months where it's not my phone, it's Alexa, where I'm literally get, this happened twice. And it's been on, it's interesting, it's been on the, the device in our, in our bedroom where my wife and I have been just getting ready in the morning and talking about something and it answers something within the conversation, but we never said its name, but all of a sudden it chimes in with something. And Alexa like has an answer to something.

Yeah.

Something, you know, and, and I'm not at all a, I look at that stuff mostly as, hey, if you want to listen to what we're talking about, you're pretty bored.

Yeah. So I mean, I wouldn't, I wouldn't on my phone. I will not trade crypto or anything like that where there's an opportunity for something like that to be hacked in a way that would be catastrophic. Right. And there is some opportunity for those types of things when you're, and I don't have a lot of apps on my phone, I don't think compared to a lot of younger people that might have sure. Hundreds of running apps on their phone at any given, any given moment. So anyway, we'll move ahead.

Yep, good. All right. Which one of these you want to hit next?

Oh boy.

So there's an article here I'll just kind of hit. There's an article here from Industry Today. Can AI Investments Pay Off Now? And it just kind of talks about, you know, economic uncertainty, geopolitical influences, sustainability, goal, all the other things that are going on in the business and gives some kind of hints and ideas about trying to get them to pay, you know, get an roi and it kind of ties in. I'll be a little self serving for a minute. It's funny, Tom, I say this, we, we historically have not spent a lot of time talking about the product that we've developed at Lead Smart with our channel cloud and our AI tools related to CRM and customer intelligence. And I've got some, you know, regular listeners who are like you guys need to talk about what you do more and you know, and so forth. But, but this is, and I'm not even just going to say about us, but you know, as we think about AI investments is most manufacturers and wholesale distributors are just really trying to get their head around what all of this means and from that standpoint. And there's easy ways to start and I think they're easy ways to start or certainly as we hear people saying all the time that we want to go get a let our people use ChatGPT, maybe we get a company version of ChatGPT and we allow people to, you know, try and get dip their toes in the water. But there's really great places to start, right? If we start thinking about, you know, well it, it's, we're starting to see a little bit of some of the more forward thinking ERP providers that have some AI tools being built in. But you know, when we start to stop to think about it is you've got, you know, the vast majority of our customers at Lead Smart, whether you're a 25 person company or a 700 person company are making their first leaps into CRM and they, I mean it's astounding to me the companies that have never taking a leap into that and one of the great ways to start is not just with CRM but with AI enabled tools from your CRM that bring all that silo data together. Now there's AI companies out there that are focused on inside sales and maybe what products to recommend. But thinking about what, you know, whether there's companies that do what we do or not, or just what we're, we're at is looking at it from a standpoint is what, what are the ways that I could dip my toes in the water using technology that is going to be help me accelerate my growth just by having that technology. And you know, I've said for quite some time now, there will be a time very soon where right now our source of truth in our business is our ERP system. Everybody's is right, it's our single source of truth. But the reality of it is it's not and it never has been. It's just been the single source of truth that's tied to your financial data. But now when we think about all the silo data that we have across an organization and we bring that silo data together in a Single platform that includes the financial data. That's where we need to move to be our single source of truth.

Right, well, look, ERPs are a single source of truth as it relates to financial transactions in the organization. It is not the single source of truth around the customer and the customer relationship and the customer actions that are taking place and so forth. It's not designed for that per se. So I think it's important to have a single source of truth for your financial piece. But what we're obviously talking about is how do you use AI to really drive growth? And growth comes from customers. There's no magic. It doesn't come from transactions. It comes from customers who make transactions. So that's really the focus there.

It's looking across the business versus at a transaction. Right.

Hey Mark, going back to your Alexa thing, he says you can log in and see why it responded. So you should check that. I don't have Alexa, so you should check that out and see okay what it is. Thanks, Mark.

Great having Mark with us. He's been with us a few times recently. I met him briefly at an ISA event a while back. He's with Enable and a great resource as well in Enable and happy to have him from the uk. So he's spending his Friday evening with us. I hope that there's a gin and tonic mark in your hand assuming you're in the UK right now. So if, if by this time of the evening there should be a gin and tonic in your hand, if not a Guinness.

All right, so let's our last few minutes here.

Well, let's just jump into our sales and M A segment. There's just one piece I wanted to catch there. ORS Nasco this week, which is the large national wholesaler and reseller. They just recently this week announced their acquisition of R3. R3 is historically been safety Jansan and some even some packaging things was owned by Bunzl. The large starting in food service but now Bunzl's as a distributor. But Bunzl's been buying quite a few manufacturers in the industrial safety space over the years. So that was their redistribution arm. And so congratulations to the folks at ORS Nasco. Probably less being done with if you're an electrical and H Vac certainly outside of the industrial segment a little bit less with ORS Nasco but and we have, we have listeners that are in the office product space, the food service space, lots of different spaces but great acquisition there. It does reduce the number of wholesalers that you can turn to. But that was the example I used earlier. Right. You could be the guy that's, you know, a mile down the dirt road with a Starlink account and a Quonset Hut and an account with ORS Nasco and you can be selling online quickly. So kind of. Let's just kind of jump ahead then, Tom, a little bit past that.

I really liked actually this digital sales room.

Oh, good.

Okay, let's just take a second and talk about that because love it.

From sales and marketing management dot com.

Yeah. So basically the idea here is that having a platform where you can invite customers in to get. Or prospects in to get much more detail about it. Well, I don't know if we talked about on this show or, or we talked about it, whatever, but one of the things that we're. That are. That is popping up is how much information do you put on your website going forward? Because as you know, historically especially like as a tech company or. But certainly as a distributor, right. You. You put a lot of information on your website and what's happening is AI can come and potentially especially in the tech space, replicate or copy as we've talked about before, whole applications based around information that's on your website. So more and more companies are moving, or at least thinking about moving away from their website as being their primary place to share information with customers in these digital sales rooms now become. Because it's firewalled. Right. Or it's. It's behind a gate. It's gated. And yeah, as Bob says, they've been around for a long time and they've been micro sites. I think we're going to see a much bigger. That's. I think what this article is saying is that there is much more broader adoption starting to happen and the capabilities of the digital sales rooms are I think, becoming more robust. Right. With the video and all the things that we're. And it's something I think we should be thinking about, honestly, is really building a robust digital sales room, putting less investment on your website. Your website maybe is. And then really where customers want to go deeper and they're legitimate prospects, you have them in a good digital sales room.

Well, we were talking about this a couple of weeks ago and I hadn't thought about this and you brought it up and said, you know, we're getting to a place where technology companies, including ours, will probably start putting a whole lot less about all the depth of what it can do. Because I think what you were describing is the potential that literally you could, an AI tool could scrape that and say Now I can go write, I know how to write the code to go do these things. Right. It's going to need a lot of prompts along the way. But you know you could, something else could pop up in that setting. But I think you know, to Bob's point too about some of these have been around for a while but I think now and you think about.

Oh.

It'S you know, sales loft and there's another one one of their executives comes to the show once in a while even. But there's quite a few of these tools that have been around for salespeople to use where you can quickly touch a few things on an iPad while you're touring with a customer, show them something and then send them off to him quickly. But I think what we're probably going to do now is see more of this where there's to your point, there's even talking about what our customer buyers that's kind of micro targeting their customers right now imagining that that digital sales room where I can quickly and easily and maybe even an AI agent helps me build one is I have one that's like I think you were alluding to this is that's very customer specific based upon the issues that are important to you. So let me illuminate that you want to focus on. I want to close 10 more, 10% more of my quotes this year. Well let's feature a lead smart channel cloud, you know, micro site for you so to speak as, as, as Bob was describing where it's. Yeah, all of the things we do are in this gated, you know, or, or closed environment. But for your organization we could even drop in. Here's what we know about your company and then you've looked, been looking at these things on our website. So we're going to set this up for you. And now this is your microsite for.

You post the back to personalization.

Yeah, great point.

But I do think it goes back to personalization. It goes back to security what we're talking about. I think we all have to be more aware of things that we put out there can be used for purposes that we never would have thought of five years ago. Right. So all right, let's, let's move ahead.

You know, I just thought of something. I'm just going back to that Alexa comment I made and I was just looking on here on the comment that Mark made about logging. I think what Alexa was doing was just jumping in to help give my wife somebody interesting to talk to too.

That may be too. Yeah, maybe True. He's trying to help you out. Or Alexa trying to help you out.

Darlene out. Trying to help Darlene.

Oh, both of you.

Right, Very good. All right, Tom, let's kind of jump ahead. Just, we're, we're running short on time. Some good articles in our People in Leadership segment about employee engagement surveys. This was interesting. One from HRDI. Both of these were from HRDive.com this week said half of US workers say they've used AI to complete workplace training. So I think, I think what that when I dove into a little bit further, it's like asking its own questions. You know, you're taking some online training and then I know I'm going to need to take a test. So. Well, let's just use ChatGPT.

My neighbor just got a new job at a large company and he was doing all of his HR tests and that was the first thing I asked him, do you go to Chat GPT? And he's like, I had chat GPT on my phone. I was just going through and answering it all the way through. So I think that is probably more the exception than the rule right now.

Well, hopefully your, hopefully your neighbor's new employer is not with us here. So we added a new section a while back called Channel Leaders on the Move. There's a couple of good sections in here about some people in distribution both in the electrical plumbing and, and low voltage electrical space. So there moves. But Tom, the one thing in our industry Scuttlebutt section that we have every week we've got some good topics that go with that. But the one I did want to mention just as we run short on time today is our friends in, in Canada at EB Horseman. They've just opened a new branch in Campbell River. So great, great article there. Some pictures of their new branch and they're good friends of ours there. So we wanted to promote that one.

Innovative and some, some pretty cool stuff I think.

Well they're, they're what I love about what, what Steve and the Amy and the IT side and Steven, the CRO they're trying to work on is really do some innovative stuff. Much of what we were talking about earlier where we blend, you know, technology AI and I guess we'll say they have their, their Ralph and their Rhonda and they're blending that with their AI and their, and their technology tools to accelerate the growth in their business. Congratulations to them. The last thing is we each week we have a second look section as well. There's an article there Called AI in distribution and from skepticism, Strategic advantage in that. And so our good friend Brian Hopkins from Distribution Strategy Group and he used to work for one of our customers, he wrote that article and I thought it was nice. He kind of breaks down how, you know, people are moving from the skepticism to strategic advantages with that. So very good with that. Anyways, anything else for that, Tom, or want to hit the road?

I think we should wrap it up.

Very good. So again, I'm Kevin Brown. Tom Burton. We get together every week, we chat with great folks. So I could comments we had today. We're very appreciative of people, literally we had multiple countries commenting today and people from all over the US And North America. We greatly appreciate that. Again, as we mentioned earlier as we started today, if you like what you hear each week here, please hit the subscribe button. Forward the invitation you might get from us to your friends. If you're listening on Spotify or Apple Podcasts or wherever it might be, please subscribe and then leave a review. And when you're leaving a review on things like that, that just means their algorithm pushes us out to more people. So we're, we're greatly appreciative of that. Again, we can't do this each week if we didn't have the support of the company that Tom and I work for Lead Smart Technologies. We've developed an AI enabled CRM and customer intelligence tool that brings deep data and deep insights into your data that helps you support your customers better, learn more about and support your teams and get great insights into your entire business all on a single platform that can actually be used across your entire organization. We do that as we bring together siloed data from across your company. We give you actionable insights to help you grow. So if that's something that you want to look at in your organization, is thinking about trying to accelerate growth. We were talking earlier today about companies that want to, you know, double in size over five years. You need 15% growth per year. That's what our technology tries to help you do. Right. So very good. Aloha, Bob. Thank you for that, Tom. Anything exciting for the weekend ahead?

No, just got to, we got to get out of here bright and early Monday morning.

So yeah, we're on an early flight. I'll meet you for dinner in Mississippi on Monday and then Tuesday night's dinner in Birmingham and home for, well, not a late dinner home quite late. I think dinner is going to be at the airport changing planes, trying to get back on Wednesday. But I like looking forward to traveling with you. We don't get to do it together that often, but that'll be good. Evidently, there's like a football game or something Sunday.

Yeah. I don't know anything about it.

Yeah, no. Come on. So who's your pick?

Well, I. I certainly want Philly to win, so. Okay, I. I think everybody in the country, unless you live in Kansas City, wants Philly to win, so this is.

One of those games like that to me this year. Football in general at the end has been disappointing because when I watched Ohio State, you know, play against Notre Dame, I'm like, could just both of them lose.

So, anyways, I really wanted Detroit versus Buffalo. Didn't get that. But I thought would have been a much more. In my much more interesting game.

I would have been much more interested in that game. I'm gonna throw. Throw some ribs on the smoker and enjoy some ribs during the Super Bowl. So I'm going to be more interested in the. In the Bordeaux and the ribs probably than the game. We'll see what happens. We'll talk about it next week, everybody. Hey, thanks for being with us again.

Kevin, Brown, Tom, Brad, and have a good weekend.

Yeah, exactly. Right. Thanks. Be safe, be kind, and do good things.