Economic Signals for Distributors: GDP, Fed Cuts, and Tariffs

All right, Good to see your dance is back.

Chair dance.

Chair dance is back.

Yes, it's was gone for a week or two there. It didn't quite have it in me, but here we are. Here we are 160.

There we are, 40 more to 200.

We got to do something big.

Okay.

Like broadcast from over the Water Bungalow in the South Pacific.

So that's about a year from now, I guess maybe next August or somewhere around there. Except July or August. So. All right, let's start planning.

Okay, let's. Maybe we should have a. Do a listener poll of what we should do for the 200th. Right.

I think they'll say just do business as usual.

No, no, no.

Or bring on some good guests so that we don't have to listen to us for two hours or for an hour and a half.

He's not gonna say, is not going to say business as usual. They'll come up with some wild, wild ideas and wild stuff to think about with that. I'm very confident of that. Yeah. But we should do something fun with that. Maybe. Maybe South Pacific over the Water Bungalows is a little over the top. We don't have a big budget, but we should figure out something fun. Certainly a live event of some sort. So that's a milestone. I was actually talking to John Taylor, our editor producer, earlier this week about the show, and he was sharing some fun metrics, in fact, before we dive in. And we're going to have some great conversation today about like normal M and A, the economy, supply chain, things like that. Some interesting things happening this week. So we're going to dive into that in just a minute. But I did notice this morning, you know, we're. We're live each week on LinkedIn Live, YouTube Live, and Facebook Live at 9 O' Clock Pacific. We do this every Friday morning as long as Tom and I aren't on an airplane, on a vacation or in the hospital, I think is how we laid it out. But I noticed this morning because, you know, we send out some LinkedIn invites to our networks and so forth and, you know, there's a varying amount of people there. But this morning I noticed that there were people coming to the live show from Sweden, a handful of people from Germany, handful of people from the UK and a couple from Latin America, one from Brazil, I think. Anyways, it just. And then obviously we always have a nice audience from, from Canada. So I think five or six countries just on the live show today. And then the podcast results usually show us again the show later in the day will Our editor and producer John will take everything and get it out on the. The recorded podcast network of Apple and Spotify and Odyssey and all of those. And that usually gives us five to seven countries every week. So it's kind of fun. Welcome.

Come and say hi if you're on because.

Yeah, absolutely. If we have that Friday night and in the EU somewhere is probably cocktail time with Tom and Kevin. Maybe that's what we should rename the show.

Yeah, maybe.

Maybe national version. Yeah, cocktails. And we'll cocktail.

Well, that could be a national version too. It's Friday. It's, you know, five o' clock somewhere, so.

That's exactly right. Very good. All right, well, so buttoning up. I shared a little bit about what we do each week. Again, I'm Kevin Brown, this is Tom Burton. Although I saw something in our. An email this morning that called you Tom Brown. So. Yeah, sorry about that. Yeah, you should be so lucky.

The hybrid. Yeah.

You know, if my dad was still around, he'd probably. He likes. He'd like you a lot. So he'd probably say you'd be welcome to have our last name. I wouldn't say that, but my dad would have.

Well, he was a smart man.

He was. He was. I miss him. But. We get together every week and we chat about the news of the world and the supply chain, the economy, mergers and acquisitions, manufacturing, distribution, sales, marketing, e commerce, people, leadership. All different topics. But what we do is we take that news, we pull it together, we talk about how that impacts our audience, which is full of wholesale distributors and manufacturers and people in related spaces to that. So we enjoy doing this. As we mentioned, this is episode 160, so we've been doing this for a number of years now. We look forward to having you with us each week. If you are listening though, on the recorded version, you will not be seeing the newsletter that we will be showing momentarily. That newsletter is called around the Horn and wholesale distribution and manufacturing goes out to over 10,000 people each week. We would love to get that to you if you would like to get a copy of that. Three simple ways to do that. You can send an email to helloadsmartech.com and we'll get that you added to that list right away. You could, if you're active on LinkedIn, you could certainly look up the podcast and the newsletter on LinkedIn. Or just go to Lead Smart Technologies page and hit a follow there and we'll get you signed up from. You'll see the newsletter link there as well. Or we also have a website for the podcast, which is www.aroundthehornpod.com and you can subscribe there as well as subscribe to the newsletter. You can subscribe to the podcast. We'd love to have you. The more the merrier. The more we get this out, the better for all we do always ask for our listeners and folks that are joining us each week. If you like you hear, you can do us a big favor, and that is just simply if you're listening on Spotify, Apple, wherever it might be, not only hit the subscribe button, but leave a review on all the podcast formats. If there's a review that goes with that, it's not just about subscribers, it's about the reviews. And that would be a great help to us and that'll get the message out to a lot of other people. If you're listening in on YouTube, which is a growing audience for each week, just hit that subscribe button. You can also hit the bell there and you'll get notified when we go live each week and you'll get those notifications and updates. And then if you're with us on LinkedIn, just pop back to the Lead Smart technologies page, hit the follow button as well as the Follow button for the show and we'll be in good shape and that'll give us the opportunity to get out in front of a larger audience. We couldn't do this each week if we didn't have the sponsorship of the company that Tom and I work for. Most podcasts are out there looking for lots and lots of sponsors and so forth, but we just do this as a, as a, basically a service and something that we enjoy of bringing the show to the audience that we have, but a lot of costs that go with that. There's, besides Tom and I and the guests that we have, there's two other people that are working hard behind the scenes, so we have to pay those bills. So Lead Smart, the company that Tom and I work for, sponsors the show each week. At Lead Smart, we've developed a product called Channel Cloud. And Channel Cloud is an AI enabled, what we call Smart CRM customer intelligence platform that's solely developed for wholesale distributors and manufacturers. There's a version for each one with some other tools that go with that. And what we do is we provide really deep insights both into customers, what's happening with your teams within your business, and then insights from across your entire business that are very valuable. We do that by taking data from around your business, not just some ERP data or Notes that are in a secret marketing automation, other data sources, we bring those into a single unified platform that gives us the ability to gain insights that companies have never seen before. And then we use some AI tools to uncover opportunity, potential risks to the business and send smart alerts out right to your smartphone of your team as well as your manager to help coach your team and guide your team on ways to grow and support customers better. We do this in a way that brings quick ROI to our customers as well. So if your company is digitally transforming, looking to gain more understanding of what's happening with both your business, your team, and your customers, we would love to talk to you. So that's our plug for the morning for the sponsor, Tom. Should we dive into the news? Did I miss anything?

Yeah, you're kind of going in and out on your microphone. I don't know if there's any weird settings or.

Well, you could have told me that before. I just did that long diatribe.

Well, we just started during that long.

Diatribe, so how about now?

You seem. Okay. Maybe just stay close to the. To the mic or something.

Close to the microphone.

There we go.

70S radio personality.

Whatever you got to do. Whatever, do it. Just do it. Yeah, it's fine.

Yeah, right.

Maybe it was just. Maybe just tired of your diet drive and wanting you to, you know, move on. Maybe that's what it was doing. I don't know.

Could be my wife messing with it just because she's tired of listening.

That could be. Yes.

It's happened before. Hey, let's talk about the economy and supply chain. What's happening this week?

Well, we had a update or another update to the second quarter. GDP update moving. Yeah, I looked into that. You know, I don't know if. So there's actually every time the GDP is released, they do what they call three rounds of data. So they do a preliminary round which is based really on nothing more than kind of speculation. Then they do a second round which starts to have some data. And, you know, and I don't know if you realize this, but a lot of the data from the GDP or the GDP data is coming from surveys. So it's not like they're just looking at purchasing information or whatever. And then they do a third round after they get more of this.

All kinds of stuff. Right?

Pardon?

Pci, pmi, a handful of different things. Right?

Yeah. But they also do surveys of consumer. Right. To find out, you know, what are you buying, what are you. What are you doing, what are you traveling, that kind of stuff. Which to me is suspect. But nonetheless it's how it's been done and I get it. It would be hard to do that. So then the third round actually takes into account more of that data that comes back from the server, from the, from the surveys. One thing they said was it's very difficult to get the service information, consumer services information in a timely manner because there's just not a lot of information around it. So what are consumers spending on travel and services and you know, movies and all that kind of stuff? That all comes from these subjective surveys that, that actually go out. So anyway, this is maybe more than you ever wanted to know about how the GDP was calculated.

But I think it says, I think it's really valuable. I'm glad you, you did that because you know what comes to my mind with that, Tom, is that it's, I think you use the term suspect. Right. Or suspect. It's, it really kind of makes you wonder what of that is subjective and opinion based versus true. Deep, deep facts.

Yeah, I, I've never seen one of these surveys. It'd be probably interesting to see one of the surveys. I don't know who gets the surveys. I don't know. You know, there's a lot, when you start to unpack this. Right. There's a lot of questions that start to get answered.

Yeah.

But aside from that, this latest third round, the increase, the predominant increase they said was from increased consumer spending that they didn't have the data on. It wasn't from a continuing decrease in imports which was part of the, you know, increase from before. So, you know, they're the, the.

I.

Guess the final or the bottom line out of all of this is that as it says here, right. There's been a, there's. The economy is growing fast, predominantly powered by the, by the consumer.

Well, there was a component of that that they talked about, about some resilience, they say, underscored by the data showing strong demand by, for business equipment in August, which they say is driven by artificial intelligence spending. So that could be lots and lots of hardware and some robotics and things. Things that are being purchased.

Yeah. Or it could be these data centers. Right.

Yeah, sure.

That are, I mean there's obviously a lot that's going on there as well.

Yep.

So I don't know if this tells us anything. I mean it's data that is going to be used and factored into all these decisions and things that are, that are taking place. But the economy seems to be doing overall better than expected again per the GDP data.

Yeah. So we've got a handful of kind of articles that, you know, kind of tie together to the bigger picture from an economic standpoint. I think the next one is a Reuters article about US Business activity cools further, but no widespread price increases. So it talks about manufacturing services activity slowing in December. And there's. We have a couple articles talking about what's going on with. From. We've talked so much in the last few months obviously because it's what's on everybody's mind every day about tariffs. By the way, I assume you can hear me okay now.

You're doing okay. Yeah.

Okay, good.

Yep.

Let's see if I can last. But as this talked about some activity slowing with firms complaining about tariffs increasing costs, but they were not raising prices for their goods. So we had a couple articles that seems like what we're starting to see here is a lot of the tariffs numbers are being absorbed by manufacturers. Now this would be great if we had a guest that's in the distribution side of things with us today because it would be great to see what they're starting to see being passed through on the tariff side from that from manufacturers. But a couple of articles that we're looking at is saying that there's a lot basically that just that's kind of being absorbed at this point as well as it's not having an impact on the economy yet. So it's kind of.

Yeah. So I'm wondering if that if in fact that's true. Right. The manufacturers are absorbing the majority of them. I'm wondering if that's because logistically it's difficult for them to even pass the prices along. Is it more of a goodwill gesture to, you know, for their customers and to, you know, say, hey, we'll bear the brunt of this for a period of time and we'll see how it goes. Maybe all of the above. It would be interesting to know kind of the rationale for that.

I would, I would suggest it's d. All of the above.

Okay.

It's, it's, you know, you've got. And I think want to be what I describe this. My assumption would be in a, in a big component of this is, you know, if we're looking at things coming from China, it would be great to see some of this data. If you took China and moved China aside and then brought the rest of the world and the rest of the tariffs in line with that. My assumption is there's a very large component of this from Chinese side where those are being absorbed on the other end because we don't have any idea what's going on and what those factories are being told by the Chinese government. Right. Because that could all be being backstopped with other incentives and so forth. Right. So if you start thinking about electronics or some hard goods or, or textiles or things like that that are coming, we, we don't know what is being backstopped already by the Chinese government, that setting. And I would assume there's something going on with incentives that says, hey, make sure you keep shipping. Right. Keep these people employed. And one of the things in, you know, astounded me. I'll tell you a quick funny story. Early in my career I was talking to a gentleman that, that owned a, the core part of his business was string knit gloves and cut resistant gloves. So think string net gloves, something like a, you know, an athletic sock, the way it's kind of woven but with heavier materials. And that the plant that he had, that he had in, he had plants in China and then in other parts of Southeast Asia. And we were talking at a trade show one time and he was talking about the machinery and he said, you know, it's kind of hard to imagine, but he said that no matter there, there are times in the cycles that he needs to sell things at a loss if he needs to just keep the machinery running, the people there, right there just so much cost to the, any downtime of equipment and machinery that it just, in people that it just needs to keep going no matter what. And I thought it was kind of interesting to think about. So if you, if you look at that from that component is to say if a plant says, and by the way, as you know, as a side note, and we don't, we're not going to have this for three, five months, but we'll have Chinese New Year again. And what Chinese New Year brings in that setting is people get on trains and leave and might do two day train rides to get back to where they're from for Chinese New Year. And if they see their cousin and their cousin says that two provinces over he has a job that makes seven cents an hour more, they're not coming back to that other job. Right. So there's all kinds of incentives that need to be behind this to keep that, that whole component of the Chinese economy moving. So I would assume there are some incentives going on whether it's tax breaks or things that are propping things.

So you're suggesting that the Chinese, if there is a Chinese supplier, they may be either reducing prices or incentives or rebates to the manufacturer that are purchasing.

From them, absorbing tariffs.

Right. Through cost cuts or price cuts. Right, right.

And I mean that is pontificating at its highest level. I don't have any statistics to back that. I just have 30 years of selling products and manufacturing products in, in through that system. And we just don't know. Right. What we do know though is what the EU might do would be far more transparent than what we would see. What we may happen in Vietnam would be far more transparent than what might happen in China.

Sure.

What the takeaway of this right now and a couple of articles that we're talking about with this time is that we're not seeing any major impacts yet on the economy from tariffs. And I, I'm hesitant to jump ahead. But what we're going to start seeing very quickly and we'll talk about tariffs maybe as we move ahead. I'll, I'll hold this point about how I think tariffs are tying to this till we kind of get to those articles. But I think there's, we're almost at a tipping point now in my view, at least with interest rates and our, the hesitancy to cut. Might as well talk maybe if we want to, about that upcoming article about Powell's thoughts this week. Do you want to jump to that?

Well, I think we should get this jobless claim first. Right.

Because I'll come back and pontificate further.

Yeah. So the next article was fewer Americans filed for jobless benefits this week and jobless, jobless claim applications fell to their lowest level in two months. So this roller coaster job situation continues. Right. What is the flavor of the house to say flavor of the week. But sometimes it seems like the flavor of the day or are we, are we cutting? And even Powell said, and that's, I know this will be talking about the next article saying, well, one of the reasons we cut rates is we, we believe that the unemployment rate was going up and that the job market was softening. Now this data, again, this is just one little piece of data, but this data now is suggesting, well maybe is it really that soft and is there really unemployment increasing and you know, again, that talk about suspect. Right. The job data is like, seems to me one of the most unreliable data sources that we, that we, that we have.

Right.

But anyway, so yet another sort of again, roller coaster on this whole job data situation. Certainly nothing that, I mean, we'll see what happens what in a week, I guess it'll be a week from today. We will have the job report for September. So it'll be interesting to see where that comes. But then that comes to the next article about, you know, Powell and the interest rate cuts. And I guess from what I understand in his speech this week, he was a bit, he was a bit hawkish and conservative on how he was like, well, yeah, we cut, but you know, we're going to be very, very cautious and, and we're going to keep looking at the data as far as further rate cuts. Yet there are a lot of other, well, not lots, several other people in the governors that would be like, you know, all right, just shut up and start cutting. Right, cut.

I'm starting to move that direction. Not just the most recent.

Right, right. There's several of them that are starting to move towards, towards that thing. It's like, all right, let's get on with it. So again, I don't know, the next meeting is next month or is it in October?

No.

Or is it November and December? Okay, so they're going to have two more months of. Two more months of, of two more months of data. Right. And job data anyway before they get to that point again. Well, in other words, just tells us absolutely nothing.

Thank you. In a nutshell, nothing new. Yeah, right.

Yeah.

The, the. I'm gonna ask you a question that's probably not a fair question. I'm asking anyways. What component or portion of this do you see is potentially politically driven on Palace Park? Like, look, you embarrassed me over this building budgets that we have for remodeling and I'm not going to be controlled by you. Do you think there's a component of that?

I think so. I think there's a, I think there's a little bit like, hey, you know, we've cut rates, but, you know, that doesn't mean that I've just capitulated. And I'm going to do everything that, you know, you want us to do. Right. So. And I don't know if he's trying to tell the markets or it's more of a political statement that is, you know, hold on tight. Right. No guarantees on anything at this point yet.

I think, you know, and if you.

Look at the bond market, too, the bond market, by the way, is going the other direction. So they're expecting higher inflation. So they're kind of in a way proving his skepticism. Right. A little bit. At least the bond market is by saying, hey, hold on, maybe not so fast.

Yeah. So I just, I look at this and yeah, they were late. They were late to raise by far. Right. In what year was that?

Doesn't matter.

But yeah, 21, 20, 22, way late to raise, probably. Well, a lot of thinking, late to cut. And now it seems like there's a component of this that is what does my legacy look like and how do I preserve. I think there might be two components of it. And this actually leads to a broader discussion. Is one, there's the individual about, you know, how he looks and how he feels and what legacy he leaves because, I mean, this is Federal Reserve chairman's big deal, right? You know, if you're, if you're an economist and, or on that side of the, of things that, you know, there's probably no bigger role that you would want to look to this than to achieve something like that. The other part of it is it just, this is just personal opinion and gut feeling is he seems to be very entrenched in the. What I'll just call. I was going to say legacy, but I guess it is the legacy metrics. And I just, you know, you know, my belief on this, I say it over and over again. I'm a believer that we need some new metrics or enhanced views of the current metrics. And I say that, you know, with all due respect for the people involved. And I'm just, you know, one guy that has a little podcast here that talks every week and. But, you know, the other side of that is you and I both spend our days, every day, all day, running a company, hiring people, paying taxes, and talking to everything from $25 million to $2 billion a year, $25 million a year to $2 billion a year, larger companies about what's going on there, and we can see and feel what's going on in the economy. So from that standpoint, it just, it seems like there's a little bit of gamesmanship here I'm feeling at some level. And then when I look at the data and you made a really good comment that really hit me yesterday as I was looking at some of these articles. And today you can comment on the flavor of the week I think was your term or day. Even at, you know, if we had a team of researchers here, I would working with us, I would go back and have them look at all of the job reports of the last, you know, say last year, all of the other cpi, PMI updates that have come and watch this just. It's almost like a heart rhythm, right? Up, down, up, down, up, down, up, down, up, down. There's no real basis to anchor on anything because by the time and I, and I'm going to throw this out. And I just interested in your thought. Let's look at it this way. So they cut a couple weeks ago. Great. You know, quarter point. A lot of people think it should have been more. I certainly do. We don't have a meeting in October, so now we go into a November, if we stopped and looked. And so we'll have a handful, a couple of new job reports by then. If we look at what happens from today until the October meeting, I think it's middle of October, like 17th or something like that. How many more blips are we going to see? Up and down, up and down, up and down that you could have cut, you shouldn't cut, you could have cut, you shouldn't cut. That's where I, I'll just forget frustration.

So, so you're correct. As you look at these macroeconomic indicators, right, the ones that we talk about here on the show, somebody brought this up in the press conference on the last, on the press conference. And what Powell's response was is that we get data from a lot of sources all the time. That was his comment. So we don't necessarily know what that data is. We don't know where it comes from. We don't. But it's certainly not the macroeconomic data that we hear about. Cpi, ppi, you know, obviously jobless information. Right. What do we, what do we hear about is like what, five, six pieces of macro level economic data. And his point was, is, hey, we're not making our decisions entirely on that, on that macro level data. I think also it might have been. There was an interview with one of the Fed governors that I heard and it was a she and I think she brought this up as well. So that now whether what this is and how valid it is or whatever, I don't know. But their statement was, is no, we're just not sitting here with six pieces of data like you and me and trying to make decisions off of that. That's there. That all said, I do think that the data even at the micro level probably isn't telling a clear story. So at the end of the day you have to. And I think even the quarter point cut to a degree was sort of, well, it was, I think acquiescing to a degree. But I, so I don't think it was really based on looking at things from an instinctive perspective. But I think what you're suggesting, and I don't disagree, is that there has to be a subjective element to the decision making that looks at just the overall bigger picture Right. And looks at the intelligence of that group there and saying, what's the right thing to do for the, for the country? Which is, you know, the administrative argument is a. What's the right thing to be doing for the country? I think that he is. Powell is what, leaving in May as his term is up of next year. Yeah, right. I think he would much rather leave saying that, hey, I was more conservative than I got and I got ahead of my skis and then we had to raise or whatever. He won't get, you know, he won't get punished too badly for being more conservative. He would be punished worse or ridiculed worse for being too aggressive. And so I think he's going to take a, he's going to limp out with a very conservative thing and we'll see what happens next.

Let's hope, let's hope you're wrong with that. Right. Because. But I don't think you are. I think what you might be describing there is a guy that's just saying, well, if I just vacillate, you know, for another nine months or eight months or whatever it is, if I just vacillate that long, then I can slide right out of here and write my book.

Yeah. No harm, no foul. Right. I didn't, you know, I made some cuts, but I didn't get ahead of my skis. I didn't do something here. I was conservative. Right. You know, he won't get beat up. I mean, he might get beat up by being. But it won't be as bad as in his mind, if he starts cutting in. No crap. Then inflation kicks in in the first part of the year and they have to raise rates again. Right. And I don't see why it's, I mean, look, yes. I can see there's other ramifications of raising rates and having a roller coaster of that, but I think that there's room to be a bit more aggressive. I think they've said what their aggressive nature would be, which is two more quarter point cuts potentially this year. I think it's two more quarter putt. God. Easy for me to say quarter point cuts before he leaves in May. Right. And the next ones will happen after he leaves.

So wait, wait, you said two more quarter point cuts and that's it until he's gone in May.

Yeah, well, they only said one in 2026 anyway. Yeah. Okay. So. So I think that'll be in the second half of the year.

Let's look at this, let's look at this from another take on this for a minute. Maybe we're cut. Cut by a half a point. Cut by three quarters of a point before the end of the year. Maybe that's aggressive. But they're already, you know, kind of. We're talking about potentially two more. Correct. So let's just say we got. Say we got a ha. Another two bips going. You know, two, two quarter point drops. And then they did in February a half a point. What does that do it and dive in here? If I'm missing something in the economic evolutionary chain. Bed rate drops, money's cheaper for banks. Interest rates that a wholesale distributor can borrow to go build a new facility is lower. And we get that for three or four months. Get a little stimulus into. And let's just talk about our audience of manufacturers and wholesale distributors.

Right.

Maybe inventories go up because I use some of a line of credit because the rate on that came down. Maybe I bought a piece of land and started construction on a building. But I've got my loan in place. No one loses in that setting. Because even if we have to come back and let's just say in April and raised by a quarter point because there's a little pressure on inflation, we just did a great stimulus to the economy. Wholesale distributors, manufacturers. Manufacturers are buying more machinery. The banks don't lose because the bank's got that money at a lower rate right through the Fed at that point in time. And I'm just literally I'm throwing this out and saying I might be missing something here. If I'm missing something and maybe it's. I'm making this too simplistic. But I did. That's my view of this is right. Let's see if we can stimulate the economy and let's not worry so much about Am I wrong about inflation because we have a meeting, right. We're only. I guess I should bring up the meeting schedule. But they never go more than a month, I don't think without a meeting. So I don't know what are your thoughts on my.

Well, I so personally I would agree with that. I would agree to be way more aggressive for a lot of reasons. Right. But if that were to occur. Right, let's say that we do that or you do that you were aggressive. I think you were proposing a point and a quarter. If you took about three quarters of a point this year and another half a point next year. In the first half of the year. Okay, I'd say in the first quarter. Okay, fine. So, so, so let's say that that's what it is. Right. And let that say, because of all that economic stimulus, plus tariffs, all of a sudden inflation kicks up to 4 or 5%. Okay. And here I'm Jerome Powell leaving here in May of 2026. And let's just say, yes, I have to raise rates, but I'm leaving with inflation at 4 or 5%. Okay. What does that do to me and my legacy? Not very much. It puts me in it. Right, right.

Is it about him or is it about the economy?

No, I think it's. I think it's a lot about him. Right. That's what it is. So anyway, look, we. I, I don't know what to say other than the fact that I don't. I agree with you. If it were up to me, if somebody said, tom, it's your choice, what would you do? I would be more aggressive. No one's asked me for that advice yet, and I did. Okay, well, you know, hopefully they're listening and they're going to take our advice and, and go from there. But I, I just don't think in reality that's going to occur. You're dealing with people, you're dealing with people in politics and careers and all of that stuff, and there's just a lot of, a lot of ego and everything else mixed into it.

I just, to me, I shared that line of thinking, wondering, am I missing something here? I don't think I am.

Right.

Because, you know, if there was a risk to the bank, the banks. Right. To go lend and then they couldn't. You know, there's no, there's no losers in that scenario that I was describing. Right. It's just, we're just stimulating the economy. And I think that's this administration's point and a lot of business leaders. And I think, you know, and then if you tie that. Tom. Together is, and I know we need to move on here, but if you tie that together, Tom, to what the stock market's been doing. The stock market doesn't, has clearly shown over the last few years it does not care about what the Fed's doing. Right.

Well, I don't think that's.

It makes stuff. Let me rephrase that. It is rising, rising, rising, rising, doing its thing. It's baking this stuff in along the way of its expectations. But we're seeing blips. Not like, oh, my gosh, there's a trepidation. The stock market's been flat for all this time because of what the Fed is doing. The economy is moving ahead with the market from the market standpoint at a significant level all along. So do they pay attention? Of course. Do we see these ups and downs around the meetings and what they're saying? But things just bounce right back.

Right. Well, and the stock market at the end of the day is a reflection of the of the companies that are in the market. Right. And their growth and their profitability and their earnings and every. And what they're expected more their forward learning things are.

So let Tom, let's roll into a little bit of a discussion about tariffs before we wind out of this economy and supply chain segment. You know, there's an article here from Reuters about US Opens tariff probes into medical equipment, robotics and a lot of other product categories. And I think these things tie right together. Right. Because so much of what the Fed is talking about is, you know, the uncertainty and so forth in the market and all of the things going along with that. Well, the reality of it is and we disagreed in a spirited fashion a few weeks ago on all of this, but this is what we're seeing, right. We've got November 5th. The Supreme Court's going to decide whether the tariffs that were the.

Oh, no, that won't be November 5th. That's the end of the year.

I thought the Supreme Court was hearing.

Some of the hearings will start, but the decision will not be till the ending.

Good point. Okay. The. So the hearings start. Right. We'll probably get a feel out of that fairly quickly, I would hope at least. But we talked about all of the other options, right. The other tools that can be used. And this article talks about the U.S. commerce Department said Wednesday that opened new national security investigations into the import of personal protective equipment, medical items, robotics and industrial machinery. Right. So this is that section 232, I think it was 301 was the other one that would likely be used. And to me, I anticipated right off the bat that they were already if they already weren't doing some of this as a backstop to make sure that we're going to have tariffs to bypass. If the Supreme Court ruling was, you know, invalidated, what's happened so forth were in place here. I just thought this one was kind of interesting. This article that talks about, you know, and this impacts a whole lot of people that listen to this show. Right. Talked about tariffs could also. So the probe is asking companies to detail projected demand for robotics, industrial machinery and the extent at which domestic production of robotics and industrial machinery, their parts, components, et cetera, can meet domestic demand as well as the role of foreign supply chains in meeting US Demand. So they're starting to look at using these other tools about what's necessary and so forth. But this is impacting things like N95 respirators, other safety equipment. We have a lot of people in the safety industry and distribution world, the manufacturing world, that tune into this show. So I think we're going to see part of this happening. And to me, the tie into our earlier discussion about the economy and the Fed's role in interest rates and so forth is tariffs are here.

Right.

We've had articles for weeks now about that, are showing that people are now building that into their business and they're understanding that this is a part of the near future. Right. And so I think it's, it's going to use the term disingenuous, I don't know of a better term for the Fed to be. We may not be there today, but I think very shortly it will be disingenuous for the Fed to rely on the, the uncertainty of tariffs.

Well, I don't know that they're saying the uncertainty of tariffs. I think they're saying the uncertainty of what tariffs will do to prices and the economy and inflation.

So how many months do you think we need of data that says it's not changing anything? Tariffs are in place.

Yeah, no, I agree. I agree. And I agree that however the flavor of them will be, there will be a form of tariff regardless that occurs for the next several years.

Minimally is all. What statute they use to impose them. It's not about whether they'll be here or not.

Well, and what things. And you know, the different statutes have different things, have different characteristics to them.

Correct.

But yes, there will be forms of tariffs and there will be different ways that they're going about it. So bottom line, right, there is going to be a charge. Let's just look at it this way. Right? There is going to be an extra cost for goods that are imported from overseas, period.

Yep.

I think that's a certainty for a period of time. I agree with you. What, again, what we don't. I think, though, you can judge a little bit about what we've seen so far, which is just like we talked about before, maybe manufacturers taking things. Maybe you're right. There could be some subsidies coming from the countries that are doing that. There's a lot of things now, you know, inflation was up this month a bit. We didn't even cover that a bit. But it tends to, again, roller coaster around a little bit up or a little bit down. But yes, I agree. I think you're going to, to say whether we're going to have tariffs or not. I agree. Is not. There's certainty on that. There's certainty that there's going to be extra costs from importing overseas, right? I don't know that I'm willing to say that there's not going to be any impact. I think it's too early to tell still. Maybe next year at this time or maybe next by middle of next year at this time we could be more definitive on that. But because I still think there's just too many things getting sorted out and too many strategies and how companies are dealing with them and how they're dealing with the stuff coming in and there's still a lot of stuff that's still being sorted out, but I don't think it will have a major impact when everything gets sorted out. But again, I, I agree that we're probably a little too, in my opinion, a little too early to drop anchor on that. On that statement.

Yeah, I think, I think we're in alignment on that. I think the. Look, if you're, if you're a wholesale distributor or I mean let's take manufacturer first, right. If you're a manufacturer, it's. I'm getting these already. They're at different rates from different countries. Right. I've now been in at this for. Where are we at April, May, June, July, August, September. We're in our fifth month, right. Since Liberation Day. We're halfway through our, or more than halfway through our. Like we're coming up to the end of our fifth month of this. I either have one been figuring out how I'm going to absorb these costs if I'm a manufacturer or pass them along or I have been reworking my supply chain to reduce the components of what I manufacture that are coming from high tariff countries. So five, five plus months into this now, it's going to get more clear for me every day. The good news is the likelihood is this is all going to get sorted out pretty soon. Where I have much more surety on the number and the numbers are likely to drop at this point, Right. They're going to be sorted out, negotiated. And what we've learned, if we haven't learned anything else from this administration, is they start anything from the absolute most bombastic, exorbitant side of things from a negotiation and work back towards, towards what's reasonable and what they're looking for. Just what we're seeing, right. It's what we saw this president when he was in the business world and it's what we're going to get moving forward. So I think it's, we're, we're coming into a place where I think things are becoming clear enough that says we understand that a number from China is probably going to be somewhere around 20%. I don't know what that number is. I'm just throwing that out. Right. The numbers in the EU are probably going to be much lower and there are going to be things like automotive components and cars and things and other things that aren't going to be impacted at the same level or at all. So we're getting, I think, a better picture fairly quickly. And we're enough months into this now where if, now I'm going to shift to being a distributor. If I'm a distributor, I have a reasonable feel of what my manufacturers or vendors are doing or are going to do and how they're going to handle things. And to go with that, I'm also learning which one of my vendors, if I'm listening to the around the Horn in Wholesale Distribution podcast, I know that there will be people that will be out there that will try and lever prices up because they think they can, because we've talked about this, even with guests that have seen this, people that will try and lever things up without real justification, that I'm learning more about what my vendor behavior is. And if I'm a contractor that buys water cooler water heaters from an H VAC distributor or switch boxes from an electrical distributors or drywall from a building material distributor, in that setting, I'm learning now as a contractor, what is happening with the distributors. What are they absorbing, if they are any. If they're not, I'm going to take it all. And then we as homeowners are going to see the same thing. We're getting, we're getting a feel for all that. So I think that the, what would I say the, the speculation is, is becoming less because we're going to start seeing more and more of it filtering out.

I do agree we are getting a feel, especially from a distribution perspective, as you said, getting a feel of how your vendors operate, how they're dealing with it, how you're getting a lay of the land for sure by this point. And you know, having plans, I'm sorry, go ahead. And having plans and approaches for how you're dealing with those as we go forward. So I do think you're right on that front for sure, is that we are, are understanding how we navigate the waters. And unless the water, the seas get a Lot, lot choppier then, you know, with a big storm then, you know, maybe we have learned a little bit about how to navigate and I think, you know, maybe I agree, I tend to agree that the seas aren't going to get a whole lot more choppier one way or the other. I don't think you're going to see 140% tariffs on Chinese goods. Let's just put that, put it that way. Right.

So you might hear it threatened again.

But yeah, you might hear it threatened again.

Anyway, let me just add 1, 1 put a little bow on that a little bit. You know, I pontificated or you know, proposed a lot of thoughts there that are my take on things. I guess we get to do that because we've done this for 160 times. So we put the work into to put our thoughts out there. But you know, we're coming into big show and event season. So I have two events in the next 60 days that I'll be actually really next 45 days to two major events that I'll be at with industrial distributors and industrial safety distributors involved in both of those as well. And then a major event for the pipe, valve and fitting, plumbing and H Vac market and then another major event for the electrical market that I'll be at in the next 45 days with those, those in fact next 30 days for most of them. So I'm going to get a little much more of a better feel. I'm going to ask a lot of questions of people. I'm going to be at, you know, lunches and cocktail receptions and dinners and we'll have it, we'll have a exhibit booth for Lead Smart and our channel cloud software product there. So I'm going to ask a lot of questions related to this component of the tariffs piece and the interest rates because I've already got meetings schedule with some, some major industry leaders and you know, C level executives at some of the major distribution companies in those channels whether it's lunches scheduled or early morning breakfasts or cocktails and stuff scheduled. So I'll be able to come back I think into our October and November shows a little more insight on that. So why don't we Tom, kind of shoot through the manufacturing distribution segment just based upon time you want to dive into some of the articles related to E commerce and marketing a little bit. There's a couple I know you like there.

Yeah. So first one here on E commerce and marketing business leader perspective on AI for Legion and there's a let me See if I can bring it up here. There's an infographic here.

Yeah, I like that.

And, but really what they're talking about here, when I first saw it, I was like, AI for Legion. What are you talking about? What they're really talking about is companies and consumers using AI chatbots for search. Yes, Right. Versus going to Google and doing Google searches and so forth. They said here in the infographic, 34% of business leaders reported receiving direct leads or inquiries from AI generated recommendations. 85% of those came from ChatGPT, 22% from Gemini, which is Google's piece. So this is a problem for Google. Google is moving quickly to incorporate.

Potentially catastrophic, not a problem.

Well, I don't know that'll be catastrophic. Google is a big company in there.

They're figuring if they didn't have a good response.

Yeah, but the challenge they've got right now is they've are introducing and I think, I believe, I don't know if it's this week or next week, the Google searches, they're now going to offer entirely an AI search. An AI Google search. Yep. The problem is, is that from an AI perspective, Chat GPT from a brand recognition is way ahead of where Gemini is from a brand recognition perspective. So people have already moved from. I don't know when the last time you did a Google search, but I could, I've reduced my Google searches by 90%. And the other I'm using chat GPT for, I use perplexity, but I'm using.

Can I answer that? Yeah, let's, let's unpack that a little bit. Just because, you know, we're one, in the business of this and, and two, we talk about this stuff on the show. I know, I want to hear your shift, but I think people would probably value understand just getting perspective on what different people are doing. And my side of things is when I. And I'll give you, this is a perfect example. I was looked at Facebook early this morning and a buddy of mine got, he was surfing and he got stung by a Stingray. And I think there was something in the water or something where he stepped and he got septic. And so he's been in the hospital for a few days. He was transferred to a hospital that not far from here, but I thought it had closed. So I knew exactly what I wanted and I used Google, I used Chrome, I was looking on my phone. Right. Because I knew exactly the name of the hospital and I just needed to look it up and know where it was. So on things that I know of and it's like I need the address or what time does something close because I just, just series kind of worthless for me. So I'll just, if I'll use Google for quickly but when I want to research something or understand something quickly, I use Perplexity. I have the Perplexity widget installed on my computer in my, my toolbar and I have it on my homepage, on my phone. And then when I want to research deeper I go to ChatGPT. Okay, so for me it's, I know what I want, I gotta find it. Then I want a, I want to research something briefly to get a quick answer with good data that's looking across the, the, the web and giving me great feedback or I want to interact further and ask more questions. I go three different levels. What about you?

Well, I, I look in my opinion Chat GPT does just a good a job as Perplexity for web searches. So you know, you, and you could argue, you know, you know, tomatoes or tomatoes, but I think they're more or less the same sort of, sort of thing. So I will use very similar. I just use Chat GPT for everything that I'm not using Google for. And the only thing I use Google for is like you said, looking up a restaurant or directions or something closing or whatever the case may be. It's very tactical, very, you know, defined set of information I'm looking for. If I'm trying to research or, and research is, it's a big word, right? It's, it's like if I'm trying to understand something deeper, find out information or whatever. And even as we showed last week, if you remember, we had the example that I came with the safety goggles where somebody was researching safety goggles and it was actually producing products and links to products and all of that stuff. So the value that you, because think about it, when you try and research on Google, traditional old school, you know, SEO, right. You get all these links and then your job is to start sorting through those links and making heads or tails.

I don't want to do the work anymore.

I don't want to do that work. Right, right. Whereas Perplexity or Chat GPT will sort through all those, you know, come up, find what the most relevant 10 or 12 pieces of data are that are on the web, aggregate it, bring it together and summarize it for you. Which is what you would have to do is if you were going through all these links that were exactly right. So it's like a no brainer.

Well it ties right in, Tom, to what you know, the vast majority of people are using AI for right now is to streamline and refine and save time. Right. That, that's good. I just actually, as you were describing that, I realized why I do the flow the way I described it. I find that maybe I'm going to share this because maybe other people have the same challenge that are listening in and you might have a solution. You're my solution guy and I think is because of the depth of research and the, what we call helper agents that I've built within ChatGPT is I do a lot of work there and I need, I want to go back through my previous search history and if I'm just asking it random quick questions, then I've got that clutter. Okay, that's maybe there's, maybe there's a way around that that I don't know yet. There's not a good way to have folders or things like that. Really.

Clutter. Clutter is a problem. Clutter is a problem with chat GPT and that's the reason I try and clean them out. But yeah, I can see that's a legitimate reason to separate them out. That's a good, good point.

Yeah. So that I think that's the subconscious reason that I do the way I do it because I don't ever. And while your search history is available to you in perplexity, I don't ever think about going back to that. I just ask the question. Question.

Okay, okay, okay.

Anyways, let's keep going here.

But, but I think the bottom line here, and this is what this article is pointing out.

Yeah.

Right. When you're getting a much more comprehensive result right. From the, from the AI search or from the AI research. Right. Then what you're seeing is. And if your company is mentioned or your product is mentioned in that comprehensive result, now you have a more educated buyer that is not trying to just sort through links and figure out which way is up. Right. They can have back and forth conversation continuing it. The quality of the leads that are coming from AI driven search versus traditional search is a lot better.

Yes.

Right. So then the question obviously becomes as a business and, or even as a product level, how do I get myself embedded in and be the, you know, the, the products or company of choice that is being presented and discussed at this, at this level, which I think.

You know, I think we're in. This is a topic that we're going to be talking a lot more about in future episodes. Right. We historically Everybody has thought about SEO, right. Search engine optimization, optimization. And now we need to be thinking about AI engine optimization as well. That goes with that. So I think it'll be something we'll be talking about a lot more is how do we get our brand. I think that was your point. Right. How do we get our brand in the right position to be seen in this? I probably get. I don't know about you. I probably get at least three to five emails a week from, from firms wanting to help us with that. And I probably get pitch slapped by people on LinkedIn three to five times a week as well.

Yeah. Wanting to help with AI AEO or.

In the world at it. And we're gonna, we're gonna go out of business if we're not popping up correctly. And it's. No, it's, it's just, it's. It's this, you know, this year's SEO.

Yeah, yeah.

And I think SEO is still important too. I don't know. Is there a term you would know more about this. Is there a term yet for this type of placement?

AEO is what they're calling it. Okay. Yeah.

Yeah. Very good.

AI engine optimization.

Gotcha. So let's kind of bump ahead. That's a good article. I'm glad you recapped it the way you did it. A nice job. There's an article from MDM here about that. It's related to E commerce and it's talking about B2C consumers, but higher priority on free shipping but less on speed, which I thought was really interesting. And the reason we. I think they're probably the same reason, you know, Modern distribution management posted this as the same reason I did was the idea of what we're. There's this. I talked about it. Excuse me, Tom. I talked about this in a. In a talk I gave at Hardee's. The H Vac Refrigeration A distributors international group. Three weeks ago. Two weeks ago. Two weeks ago in New Orleans, we were talking about what is currently a gray line between consumer behavior and. And B2B behavior. And that gray line is very soon going to be just gone. It is going to be. There will be an expectation that I have similar service levels and expectations of response times that tie to my B2C experience. And I think what we're seeing here is we're looking at. We're going to talk about. We have another article about digital twins in a minute. We're going to talk about some B2C but translates right over to the B2B world. It's interesting to watch this behavioral change. So I just, I thought I'd throw that out before we discuss.

So let me ask you a question related to that because this article, what it talks about is consumers by far say that free shipping is more important than speed of delivery. So, hey, if you give me my shipping for free, I'm happy to wait four to seven days, right, for it. And they said very few consumers are willing to pay for expedited shipping. Do you think that is true in the B2B world, whereas speed of delivery or free shipping trumps speed of delivery?

I think there's. Ask me the question again. I'm sorry, I got ahead of. I started answering the question in my head when you were 2/3 of the way through, which I hate when I do that.

Okay. No. And so if the consumer is saying, right, I prioritize free shipping over speed of delivery in the B2B world, is that the same case? Would they prioritize free shipping, a contractor or, you know, a business that's, you know, buying from a distributor? Would they prioritize free shipping or free delivery over the speed of which it's done, or is it going to be more evenly matched like speed versus cost and so forth? Because I would think that speed, right. Is more important in a lot of cases in the B2B world than it is in the B2C world when I'm buying toilet paper from Amazon.

Yeah, great. Great thought. Great question. I think it. So I'm going to give you a. The, the worst answer in the world is it depends. So if you stop and think about this and you say I'm ordering janitorial supplies or office products and I'm not out of anything. Right. I'm good with free shipping is in.

Of course, because it's not time sensitive. It's not time sensitive. Yeah.

If I'm buying Sheetrock or drywall or metal studs or wood studs from a building material distributor and the job is expected to start tomorrow, timeliness of delivery is okay. And I already expect free shipping because I'm ordering large quantities and it already happens. I, I might. So there's my kind of non answer as far as it depends. I think what we'll, what we're going to see here is these two things are going to converge. Now this article says that, you know, this updated research, right. And this was from a writer that did this E commerce study and it talks about ship shoppers expectations for fast shipping speed have relaxed somewhat. Now, this is B2B that really surprises me because you know we you had mentioned last week we've just got a new office opening. It's kind of our placeholder office while we're looking for some Realtor for some bigger space right now for our team our growing team I should say. You know the amount of shopping that I've done much to your your chagrin for on and it's really Amazon for things that we need for this new location. I want it I in fact I looked at stuff as can it be here this evening. So I have a lot had a lot of it. You know some monitors and connectors and cords and just different stuff. I wanted it that I looked and prioritized a lot of things for what could be here today. So when I got home at night it was ready for me to bring back to the office the next day. Right. So I think we're just going to see my view would be in the B2B world we're going to see these two things converge where free and next day is going to be or or short time frame is going to be the expectation across the board.

So they expect all the above or with the consumer maybe they're not buying such time sensitive things. You know I think we all like to get stuff quickly and we'd like to be you know the the instant gratification aspect of it. But yeah what it says again through this article is like hey if it's going to take a little bit longer I'm okay. Just don't charge me. Just don't charge me.

Yep the correct the other there's two two other things I wanted to add for me I'll just use myself as in that experience that would be to be buying earlier in the week was I want this off my plate so get it to me quickly so I don't have to deal with this any further.

Good point.

Okay I want it I want it behind me. Let's trigger on one other quick thing related to this. What this isn't looking at is the drone component versus my stuff's coming on a truck now there I think is this is this will be an interesting piece to see as that becomes more and more available because you know when you start looking at it when we talk about the free delivery you start looking at something where you you've got a contractor that's got a valve that broke on a on a trench that's open with gas lines and a valve broke unexpectedly that was not anticipated eating replacement. They need to fill that dirt. Let's just think about the municipal water district in front in your house that tears up your street and something breaks that they weren't anticipating and they don't have. They would pay dearly for a drone to drop off that valve because the Ferguson location down the street doesn't have it. Right. So if that needed to come from 20 miles away, it would be interesting to see what they would be willing to pay for that. I think where we're going to evolve to over a series of, you know, it's probably three to five years out would be my guess is that I want to be able to get anything I want same day at a discounted price. And I'm only willing to pay for deliveries if, you know, in emergency situations, at which time I'll probably shift to the vendor that will say, you know what, I'll get you that valve by drone and I won't charge you anything extra because you're a valued customer.

Sure, sure.

I think we're heading that way.

I think we want our cake and eat it too.

Yeah, perfect. Yeah.

All right, let's move ahead.

You pick.

Well, I want to talk about this one here, about digital payments. Right. So this is from Digital Commerce360.

Our friend and listener and lead smart supporter Mark Rohan wrote this. I'm going to visit with Mark in a few weeks in Chicago.

So AI digital currencies are real time payments, drive payments shake up. I, you know, if you look at, right, the payment process of how we, how we send money around, whether that's between companies, whether that's through credit cards, whether that's through overseas transactions, it's really broken, right. The process of how we send money and how long it takes. Now granted, I'm sure there's a lot of people making money along the way of this inefficient system, but our system of money transfer is very inefficient and costly for that matter as well. I do believe that 2026, here's a prediction, I think it's going to be 2026 and 2027 is going to be the year that payment processing really gets a big upheaval. And that's what this article is about, right. It's talking about what are the things that are reshaping the payment process. And they listed five things here. They said there are five structural forces reshaping payments agentic AI digital currencies, which I think will be huge if with a lot of the legislation that's been passed with stable coins and there's more legislation on the table related to digital Currencies, digital currencies will be a much, much, much more effective and efficient way of payment and safer financial technology disruption, real time transfers and cost transformation. I don't know exactly what they mean by cost transformation.

I was just about to ask you if you had a, if you had a thought on that.

I don't, but maybe we can ask Mark. But the bottom line here, there's, you know, there is a lot of different factors that are going into and I think there's obviously a lot of money to be made from businesses. There's a lot of companies that are going to be disrupted.

Yes.

As a result of this and banks being one of them, which are probably why it's moving as slow as it.

Financial institutions, the way we know them today, we're going to be changing quickly.

Right. But there's absolutely no reason it should take five days to ach something from one person to another in this day and age. It just, it doesn't, it's, it's absurd. Right. And if you look at then the speed of the payments and the speed of, I mean think about this just from a business perspective. If you start to have real time or much, much faster money transacting back and forth, there's could be a real business impact on that, on. So I think next year we're going to see some really radical, significant disruption in this area. It's one of the last areas to fall from a technological perspective. But I think all the ingredients are there.

You know, we haven't done a around the horn 2.0 episode in a while. We've been too busy with so many other things. But this might be a good topic. I don't, I don't right now, off the top of my head, I can't figure out who the right guest is, but maybe it's a panel of a couple of guests. It would be really interesting to go completely unpack this whole thing about the digital currency side of things and the impact on wholesale distribution and manufacturing. Right. Because you look at the dollar transfer and I mean even think about some of the, you know, the buying groups out there, right. Where they're processing transactions on behalf of a distributor to get the discount from the manufacturer and there's rebates going back and this, you know, now that I think about it, got a couple ideas maybe for at least one guest that could go with us on that, but I think that would be good. You have a pretty good understanding of stable coins and digital currencies and, and crypto and, and blockchain and so forth. I'm probably the neophyte in that discussion but I think that might be something good for us to consider doing. Tom is doing that.

Yeah, I agree. I mean, I mean Stripe, you know some of the big payment processors, Stripe I is launching their own stable coin I believe and are going to start moving, trying. I mean it's good for them right to you know, right now they're hold beholden to the visas and the mastercards of the world and the fees and everything that goes with that and the money transfer. So if you can remove the middleman. I mean think about that. If you're a striper or a company that's processing large amounts of payment on the front end, right. If I can bypass that and can, you know and offer a much better service to them. I mean anyway, there's some pretty. Yes, I agree we should have a. I think the conversation should be twofold. It should be about sort of the digital currency and some of these points in here. But what is that really going to do to the payment world and what is that going to impact the. Or how could that impact the industry that we're in?

So we had a great guest on recently. I'm going to call Mark, he's become a friend, Mark Gillum from Enable. In fact we bypassed Tom earlier a couple of article an article in particular that John Gunderson, our good friend, he's been on the show wrote related to ISA and Mark is with Enable and Enable manages rebate and financial structures within the wholesale distribution world work. They're the engine behind some of the buying groups and so forth out there as well. I just noticed, I just looked up Enable a little bit. They asked interestingly on their website. I don't know how this works. I'm just going to say it out loud. If you go to enable.com they have a tariff calculator there. I'm going to go play with that a little bit.

Okay.

But Mark, Mark was a really good guest of ours. Mark was the listened regularly from the UK before he moved to North Carolina recently. Was a great guest for us recently. I think Mark would be really good in that because he has a background in banking as well and I know he is big on, on this whole thing. So let's think about that with Mark. We'll, we'll work on that. I think he was coming today's show. So Mark, if you're listening or listening to the recording later, get buckle up we're going to get you involved with this. So I think it's Good be a good, good add on discussion. Tom, before we go off that particular article though and leave the topic, that article is From Digital Commerce 360 and I mentioned our friend Mark Broham. What I wanted to share though really quick is, you know, it's probably you don't hear people necessarily talk about other podcasts on their podcast, but I wanted to plug this one Mark and interestingly enough, his sister Liz Brohan. They have a podcast called B2B no Bull and I've listened to a couple of them and and you know, if you want to I don't think Tom, you've had a chance to meet Mark face to face, but I had lunch with him a while back and he's doing some going to be doing some work with us soon. And Mark is as Mark is as no bull as they come. It's a spade is a spade and Mark's sister Liz has a strong background in in marketing. So a lot of this is driven towards marketing. But I've listened to the show a handful of times and got some good insights from it. So good, good. Additional podcast if you after you've listened to the around the Horn and Wholesale distribution manufacturing podcast, B2B no Bull is a good one to look to as well.

Sounds good.

Good. All right, let's hit real quick as we kind of we need to move along today. There was an article that we did post though in the newsletter again and if you if you don't get our newsletter on an ongoing basis again, it's called around the Horn in Wholesale Distribution and Manufacturing. You can just reach out to us with a simple email to helloeadsmartech.com and we'll get that newsletter out to you. But tying back to the earlier conversations about the graying line between B2B and B2C, modernretail.com put an article out. It's called How Retailers like Walmart and Lowe's use Digital twins of physical stores. And there's just a really good image with this and I think it's a good example. But I'm going to translate in this the idea of store to branch front the front of the shop at a branch and or distribution centers and warehouses. The tools that we have to digitally replicate and model what what things would look like now that it's becoming available with the digital twin idea is just phenomenal. And the example was that that Walmart's developing digital replicas of its stores that are using it across multiple sides of their business. They're using 3D models to mirror everything from floor plans, parking lots, shelving infrastructure, refrigeration, H VAC and electrical across the board. They're doing that to really say, okay, if we did this configuration of shelving, what would it do to traffic? If we opened a branch in this location with these other parameters, what would our H Vac and electrical needs be? And when you do that, then you can quickly model what if I changed brands or sizes of a compressor on something the value is. And we've been talking now for probably what, Tom? Probably since we started talking about agenc AI two years ago. Two years ago, about. Right?

Probably. Yeah, probably. Yeah.

We've been talking about digital twins regularly. Well, now we're really starting to see them at work. So my takeaway I shared with you, what are your thoughts on that one?

Yeah, I think there's going to be all kind. I think, well, the bottom line is going to be easier to do. Right, Right. You look at this and you're like, oh my God, this, you know, is only available for the rich and famous to be able to do something like this. But I think it'll be easier and easier to do over time and it certainly will. It's again, just how do you make things more effective and efficient once you know, and model it out before you actually build it and find out, wait a minute, this isn't, this isn't what you're expecting, right?

Agreed, Tom. Let's just. We did what we always do or I always do. I talk too much about the economy and supply chain. Let's kind of jump down to our friend Susan Merlo's article in posted this from LinkedIn. It's David versus Goliath, how independent distributors compete successfully against industry giants. And you know, some of the thoughts out of this, I like to regularly. And by the way, Susan, if you're not following her on LinkedIn, she does a nice job there. She's got, it's called the digital distributor and she publishes quite a bit there and does a nice job. She's regularly listening in on the show as well. But you know, sometimes we read things that maybe seem, I don't say rudimentary, but maybe. Oh, I already knew that. But I think we need that in our lives more and more because we get inundated with so much information that sometimes going back to first principle thinking or, you know, general strategic stuff is good. But she's talking about, you know, the ability for regional local distributors having the ability to compete against the higher, higher level, larger companies out there. Any thoughts or takeaways I mean, she had some key points in here, but what were your thoughts in general?

Well, we've talked a lot about this, I think over the 160 episodes. Right. Is play to your strength and play to your local capabilities or your expertise or your service levels, depending upon what you're selling and what you're doing. I agree. It's kind of. Sometimes you just need to kind of review the basics again. And I think we've talked about this over and over. I think the opportunity to amplify that even is more than it's ever been through the use of technology. You know, we skipped this article, which I maybe we want to put back for next week about, you know, having. How do you actually implement sales technology? And this concept of a cso. I'm sorry. Of a sales technology leader within an organization. It's. It's the use of technology, as we've discussed on a number of different fronts, can really amplify that David aspect of the David of Goliath and really, you know, take what she's saying and take it to another level. So, yeah, I thought it was a good, a good review. Good reminder.

Susan, if you're listening today, you think you did a nice job on that. The. It really breaks it down. I kind of joked about this, but, you know, you could have a, a Quonset hut in the middle of a, middle of a field in the, you know, 30 miles from a town. And as long as there's a UPS or a FedEx driver that still comes by every day, you could throw up a Starlink satellite out back and put some shelving up and develop a relationship with one of the wholesalers and ORs, NASCO or somebody like that. And next thing you know, you're in business and you, if you understand E commerce well and online buying, you could be out there competing with the big guys the next day. Right. Because it doesn't take the margin when you're working from a quonset hut or from your garage or whatever it is, which is why you see so many people jumping in the business. Good stuff. Want to stop one at one or two other places along the way or do you want to slide through Anything else caught your attention for the day?

Let's just go ahead and slide through and I think wrap up good.

Let's just go back downtown to a few. If you're. Again, if you're watching us with us today, you're seeing where we're at. Let's slide down to our scuttlebutt. We have Each week we call Industry Scuttlebutt. Our friends Netplus alliance, wonderful buying group that our friend Dan Judge, who's been with us on the show a number of times and started many, many years ago. And Jennifer Murphy, Dan's daughter, is running now. NetPlus actually has their national meeting starting over the weekend and they're in national harbor in the D.C. area but for their event this year. But they publish regularly, their members report and so that's available. You can get that from NetPlus, but if you don't have access to that, certainly from our newsletter. And then our good friend Pierre Barbeau and his team over at Moblico launched This week their ProAssist AI tool to go along with their mobile messaging platform and their mobile tools to help distributors communicate better in more refined communications and marketing on a mobile level to contractors and customers. They did a launch their ProAssist AI tool to help convert conversations into workflow. So if you. Mobilico is a integration partner with us at Lead Smart, good folks over there. So if you haven't checked that out, that's a good thing to do as well. So last thing I was going to hit today, Tom, if you want to maybe scroll all the way to the bottom is every week in the newsletter we I don't think we've talked about it but our good friends Ian Heller and Jonathan Byne over at Distribution Strategy Group, they public publish their public distributors stock recap. So it's an index. It's a great piece. You have it up here on the, on the web, on the show. Now if you want to know what's going on with dozens of publicly traded distributors, we one click quick little link. You can find that on DSG's homepage, but you can also always find it in our newsletter. I don't think we've ever really spent any time and talked about it on the show.

You know, is there an ETF you can buy for this index here?

No.

There should be. Maybe we should, maybe we should create an etf. Yeah.

In our spare time.

Yeah, it's easier and easier to do that all the time. Now I don't know how much which regulation you have, but create an ETF based around the public distributor index.

Let's build a couple LLMs and an ETF.

Yeah, that's a good idea.

Okay. Yeah, I'll meet you tomorrow at the office. We can get. We knock it out in a day.

Okay. I mean there's actually a lot of.

Public companies and actually, you know, there this gets so much coverage Right. From the analysts that actually having, you know, an ETF would make. There's got to be one. I, I don't know if it's exactly this. There's probably something in the sector be interesting to look up.

Yeah, but you make an ETF of exactly the companies that are in this list. You could wait it. I mean, anyway, there's a lot of ways to, to actually do it here, but anyway, can you get on that?

Well, this is, this is the, the, the conversation. My, my, My wife laughs at me with saying, I'm going to retire one day, you know, and, and she just laughs and she goes, you mean you and Tom are going to start another business? I said, no, I don't want to. If we ever retire from Lean Smart, I don't ever want to talk to Tom again. And she goes, until you guys start another business. So we're going to be 90, right? Figuring out what else we should do.

Yeah. Retf business.

That's right. Very good. All right, my friend. Good show today. Thank you everybody that tuned in and listened to. We appreciate you being with us every week. I swear we're going to go shorter and we don't. But good, good conversation today, Tom. Thank you.

Okay, thanks, everyone.

Last little plug. If you like what you hear, click the subscribe, click the like. If you're listening on the podcast formats Apple Spotify, please leave us a review. It'd be greatly helpful to us as we work to grow our audience and we'll wish everybody a fantastic weekend. Be kind, be safe, do good things.

Thanks, everyone.