Layoff, Tech Stacks & Millennials, Oh My!

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Welcome to around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by LeadSmart Technologies. Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents, and the global wholesale supply chain. Whether It's M&A SaaS and cloud computing, B2B, E commerce, or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most.

Hey, Kevin, welcome. Welcome back.

It's great to be back. You know, it's interesting. I was kind of sorting through the news yesterday, looking through all that's gone on in the, what is it, three weeks since we've been here? In fact, it's approaching a month, I think, actually.

Three weeks. Yeah. Yeah. Okay.

So lots to. Lots to. To call through and look through. Lots been happening. But yeah, it's good to be back. Good to be starting the new year. Certainly good to be here with you. Kind of missed some of this. It's been nice to have some Friday mornings that Warren is. Is tied up, but yeah, it's great to be back.

All right, well, let's, let's get into it. Yeah.

Hey, before, before we jump into that, though. So let's kind of recap. I think I looked. You know, it's interesting, as we always talk about, you know, we mostly promote this through LinkedIn. And so we get a handful of people that click that they're coming, and then we get probably five times that of the amount of people that are. Actually, I call them dropping in without accepting the invite, which is awesome. But this is something we do every week. We'll just kind of recap this because I saw some new folks that had said they were coming. So what we do is we pull together kind of the news going on through wholesale distribution, a lot of its industrial construction supply, maybe building materials and so forth. Kind of pull that data together and tie that in with other things happening in the news that are related to technology, as it relates to. In the economy, as it relates to wholesale distribution. So this is all about wholesale distribution. What's going on? What's happening? What are kind of the trends? What we welcome you if you're here. One, reach out and say hello, tell us where you're from if you'd like in the chat. Or two, just chime in as part of the discussion because this is about the people that are attending. This is live this morning on LinkedIn Live, YouTube Live, and Facebook Live. And then, Tom, I'm pretty excited to mention that the first week of February, this is going to turn into a podcast as well. So what we do on Fridays, we'll set a Friday afternoon post up to, you know, Spotify, Apple Podcasts and all the top podcast sites that you can, wherever you want to listen to. So if you don't catch it here, it's always also recorded on those platforms and then it'll be part of a podcast as well. So I wanted to kind of recap why we do this each week and the idea is to kind of share what's going on.

Looks like Mitch is here, Mr. LinkedIn user.

That's right.

That's right.

Our buddy in Alpharetta, Georgia. Cool. All right, let's. Okay, Thomas, your buddy Tom May is here and on time. So. Good, good. All right, let's dive into some news, chat a little bit about what's going on out there.

All right, super.

So I think this, you know, first one's kind of interesting as we talk about, you know, by the way, if I neglected to mention we send this little newsletter that Tom's scrolling through here out, you know, oh, dark 30 every Friday morning goes out to a few thousand people. If you're not getting this and you'd like to get it, just put a note. You can direct message us through LinkedIn. You could put a note here that you'd like to get it or email address to use as hello lead smart tech.com and we'll make sure you get added to this list. So yeah, this Amazon piece, I think you and I have talked about what them getting ready to do this for a while. Some friends of ours in the, in the e commerce world, Rohan Thrombohali and at Upstart Works and, and, and Brian Beck with in Seba have talked about this a little bit. This was their like big skunk works type project called Santos for quite some time, right? Yep. And this is, they're now adding this. So let's talk about this a little bit. What are your thoughts on, on this expansion for them, Tom?

Well, I think before we, you know, let's explain a little bit more for. So what this means is, is if I have my own e commerce site, I can essentially do fulfilled by Amazon and get all the prime benefits or provide all the prime benefits to my customers. So they're not buying on Amazon, they're buying on my, you know, our, our business e commerce site. But then there the products are being fulfilled from Amazon using Prime and the prime benefits by being a Prime member. So what is interesting about this, you Know, again, this, as you said, Kevin, this has been in conversation almost, I think well over a year, maybe a year and a half now. And this is, and even in the article they're talking about that it's still in a bit of a beta program, so they're rolling it out, you know, kind of piece by piece. But what's interesting about this is, is, you know, Amazon's profitable areas tend to be their ad platform and their fulfillment. And so what this does is obviously enables them to leverage the fulfillment. But what, and this isn't in the article, this is just sort of a thought that I'm, you know, I believe will occur is that they'll expand their ad platform, you know, and think about if you've ever been to Amazon and search, you have stuff that comes up that's sponsored, that people are paying to have to show up on the top of the search. Now think about Amazon expanding that ad platform to include external websites, external e commerce sites that are part of this program. So now if, now Amazon is in a place where they can really almost start competing with Google, if you will, for product search that isn't just entirely on the Amazon platform in terms of the purchase process. And so I think this will really open up their ad platform capabilities as well as open up the fulfillment. And the plus side to the company who's running the e commerce side is now they can maintain control of the customer, which is not easy to do when you're buying off of Amazon.

Yeah. So I think you're right on track and that's a big step ahead for them in doing that.

Right.

That opening up that, you know, hey, it might be your product, but it's our customer still. Right. And they've made that difficult. And I know some experience I've had in the past of working through their Fulfilled by Amazon program is, you know, you can, depending on how you're using them. And it's been a couple of years, but, you know, you could see sometimes an address that it shipped to, but you weren't going to find out who it was, who it was going to. So it's interesting. But you know, Tom May made a comment here about, you know, cutting 8,000, 18,000 jobs at Amazon, which is interesting. And part of that article mentions, right, they're under pressure to find new revenue streams because their cloud computing business or, you know, Amazon Web Services, they've not maintained their expansion. It's not that they're not growing, it's not that they're not profitable, but that's a Big struggle for them. And there's increasing pressure from the Shopify's of The World and BigCommerce and some of those other marketplace platforms to really put things into a little bit of a competitive nature, putting some pressure on Amazon. So yeah, Tom, you're right on track. About 18,000 jobs. I think a big part of that is, you know, when you're, when you're so focused on online sales right in that business and you are looking at a softening of an economy, if not a recession. They're assuming, I would guess that sales are going to go down and dip as discretionary spending declines or pulls back and so probably are looking ahead at headcount of what they think they'll need. Just like they scaled up dramatically. Right. And we've seen this in a few places just with the, you know, with the layoffs at other technology companies and you know, salesforce.com just, you know, in the process of whacking about 10% of their, of their workforce. But they scaled up so huge during the pandemic. Things have flattened out now and then we have this, you know, pressure on the economy right now. People are kind of scaling back in the setting. What I think is though, you know, before we move ahead is kind of intriguing though about you know, what's going on here with Amazon is we've talked about this many times. We've had Brian, you know, our kind of our, I'm going to call him our in house friend of around the horn, you know, wholesale distribution e commerce expert Brian Beckwith and Siva's very well known keynote speaker and panelist in this arena. We've talked a lot about, you know, the struggle that wholesale distribution has of getting the higher quality online purchasing solutions in place with their offering. And at the end of the day, you know, it's a difficult place to be because Amazon has set the bar right. I mean we all want something, you know, the next day. I mean I was just buying a couple of things the other day on Amazon and it's not something that I needed the next day. It was something I needed this week. It was something I wanted. But I was looking at can I have it tomorrow, Can I have it tomorrow or is it two days? And that bar has just been put up there in a mindset I think for consumers and their personal life and they're bringing those expectations into their business life of how they buy online. And we're going to talk about this in this next article about, you know, what those trends are and as that expands right that expectation of those buyers are going to be. I want an Amazon experience but I wanted an XYZ industrial supplier, ABC Janitorial. And this gives people.

Right, that's what it's doing.

Exactly right.

It allows any company, you know, who's small, that doesn't have the fulfillment capabilities and the infrastructure and potentially even the cost, you know, leverage to do this. So they're rolling it out obviously very slowly and, and testing it. But anyway, something to definitely keep an eye on.

Yeah, that's good, good article. Let's jump ahead. So I thought this was pretty good about these, you know, talking about core, core industries. This is from Digital Commerce360. You know I was just going to mention if you, if you're tracking and watching specifically in wholesale distribution, building materials, industrial supplies, food service equipment, whatever it might be watching these digital trends at Digital Commerce 360 their newsletters are great. Tons and tons of research that they bring together in there. But this is really a good one you know too talking about, you know, the B2B buyers, you know, what they're looking for and then the growth of it. Right. They said 88% of the wholesalers from five industries that they talk about, electrical, general contracting, heating, ventilation, air conditioning, janitorial, sanitation and plumbing, you know, are, have deployed an online e commerce ordering option. So you know I, I think that number is going to be 97% in the next probably 18 to 24 months. But it's interesting to see some of the statistics here.

Well in the, you know we had a conversation with a, with a customer a few days ago that about their E commerce and the importance of not siloing E commerce. Right, right. And if you look at some of these, you know, what digital features buyer wants most, you can you start to see that experience is maybe even more important than anything else. What experience do I have? You know it's, it's, that's maybe even better than as it shows here, assortment, availability, obviously price and all of that. But and again this will vary probably on the business. So these could definitely move around based on your business. But if you look at a lot of these, these are all related to experience. And it's very difficult to provide a really good digital e commerce experience when you're siloed and it's not tied into the other part of the organization and your field sales people understand what people are buying online and how that all works and vice versa. And we were talking about it, this customer is looking at this more holistically. So I think the Next chapter, if you will. E Commerce. Obviously there's still a lot of companies that are still getting on board, but the next chapter with companies that are getting that already have E Commerce in place will be how to increase and improve that experience. Which then ties back to what we were just talking about with Amazon, right. The shipping. And that is all part of that experience. So I think that's where we're going to see a lot of this year is the emphasis moving from, okay, I have E Commerce to do. I have an E Commerce experience. Experience and an Omni Channel experience that makes sense for the. Yeah.

And I, it's, it's interesting. I'm glad you talked about that because, you know, it's really interesting to me is that, you know, down at the lower level or maybe right in the middle of that is product availability. And you know, we think about so often, you know, I, especially if you look in the MRO arena, right, is I need a ball bearing for a conveyor line that's down right. People need that today. But I think what's really happened with, specifically with E Commerce is, and we've experienced this talking with a number of our customers who are again trying to get rid of that siloed data that they have of data all over their organization. ERP data, E commerce data, bringing that together in a, in a unified customer intelligence platform, which is what we make and, but what we're, we're learning from so many people. And it's kind of interesting, I think about Mitch that's with us today. You know, he comes from the, the building materials arena of windows and doors and that type of arena. What we're really seeing across the board right now is it's less. So much of the E commerce purchasing is less about. I want to buy today, you know, X, Y and Z items that I need you to ship today. A lot of these E commerce transactions are that customers are wanting to place an order that might be delivered or it might be picked up the next day or two days and they want to use that online platform as their ordering tool.

Right.

So I want to kind of throw that out there. It might be common knowledge to a lot of people, but it's something I had to get my head around a while back. Learning from some customers is so much of what we see in this E Commerce side in wholesale distribution is I'm building my order from you on your website. And even though I'm sending a truck tomorrow, you know, it's not, it's not just getting shipped right there's.

Really three potential layers, if you will. You have the shopping aspect of it, right? Research, shopping, looking for all of that. Then I want to potentially build an order, whether that's a cart that I'm going to check out with right now or, or send to a company for a PO or whatever. And then there's the fulfillment, right? Which is how does it actually end up to me, does it get shipped or does it get delivered or whatever it is. And then maybe there's a fourth piece of that equation which is how does that all tie in after the fact, you know, in terms of returns or issues or, you know, we had another conversation this week with a, with a customer about re. And again, I think this is going to be really a big theme in 2023 is they're really focusing on the quality, right? So knowing like, okay, did it get shipped to the right place? Did they get the right piece? How do we continue to improve that quality and continue to make that sort of continuous improvement? Because, you know, the risk of, of that again, of that experience being poor is people will go somewhere else, right? Customers will go somewhere else.

So, well, that ties in kind of. We talk about that a lot of times that customer360 view, right? So now when you get that, that says we were talking about siloed data and a salesperson, customer support. Anybody that's customer facing in an organization can say, hey, you know what? These are the items that the customer has on backorder. These are something that we short shipped them on. This was a quality issue along with what they've bought, what their trends are, what, what newsletters they're opening. All of that comes back together in one single place for them, which becomes powerful. But I think this is really interesting just to watch these core industries, right? And you know, as we talk about, you know, we think about that with electrical, you know, general contracting, H vac, janitorial, plumbing being the top of these lists. Pretty impressive. You know, how that really all plays out to what we're going to be seeing soon. And you know, again, I think this is, this goes back to that, you know, the type of buyer, right, with, you know, well over half of B2B buyers being millennials now. You know, they could sit, literally take, you know, look at a spreadsheet from their home while they're, you know, on a, you know, Thursday night while they're waiting for UberEats to drink, bring dinner to them from that they ordered from their phone, go on to a wholesale distributor's website and click on the things that they need somebody to pick up the next day or Monday morning or whatever it might be. And this is where we're headed.

Right.

It's, it's interesting. So.

Yep. Well, and I think on a future episode we should talk a lot more about this whole thing that I'm talking about as experience because I really do believe 2023 is the year of the experience and experience, you know, the quality and what we mean by experience is certainly much, much more, not just appreciated, but required with a younger buyer. Right. The younger buyer is not tolerant of a poor experience. So. Yeah. Anyway, we can talk more about that as we go along.

I think that would be great. We can. You know, we've got a list of, I think about 15 guests lined up already for this year that I hope to, you know, double or triple that, you know, as things as the year moves on. But that might be an interesting thing to maybe grab grab Brian and Rohan, you know, who's working with, on the. Rohan's company works with major, major household brands on their entire e commerce strategy, including warehousing and managing the whole programs. Might be interesting to get Rohan and, and Brian together. Maybe we just do a separate podcast one day and, and share that as well. So that's good. Good. Well, let's kind of jump to the last piece here in the news about. I just, this is, we don't need to spend a lot of time on this, but I just looking at John, the John Deere CEO, being in at CES and really talking about some cool stuff. You know, I, I, in reading that article, I thought what was interesting to me is we'll have to come back to that NAM article because I forgot about that. But we'll talk about John Deere for a minute. But he just talked about, you know, both how they leverage technology and manufacturing and then also the drive that technology is having in their, the equipment that they're building. Right. Autonomous tractors and so forth. And you know, who would have thought 25 years ago or 20 years ago that, you know, you might see a, a tractor going through a, you know, a corn field or a wheat field that has no driver in it, that's operating on alternative fuels, that has a little white mushroom thing on it, that's taking information from a satellite, telling it where to turn, when to cut, when to scoop, whatever it is. It's pretty, pretty powerful change in, in from a technology standpoint, we use a phrase oftentimes in talking with our customers about the importance of having a tech stack.

Right.

Understanding all the Technology you have in your organization and how they interact and so forth. And he was talking about that, he said leveraging a vast tech stack. The company has given its machines and its organization superhuman capabilities. Go ahead.

Well, and again, another theme that we can talk a lot about I think this year is interoperability. It's great to have a tech stack and things again are siloed. But clearly in this example, if all of these pieces of technology are not working together to accomplish the outcome that they're trying to accomplish, then they end up with a mess. Interoperability, meaning how does technology, how does my technology stack work together? How do we. Again, I think that's going to become a big theme for this year and I think this is a great example of an obvious example of where interoperability is critical, but it's critical in any company. It's just more obvious in this example.

So I just caught us. So I'm going to mention this before somebody else does. We have a typo in our newsletter today and that John Deere CEO ces okay, I'm fired. Yeah, so I can't come back next week. You're have to do it on your own. I got a week out, so.

So our, our technology stack is clearly not working well to pick up all the things Grammarly.

Didn't catch that in the marketing automation software. Hey, just real quick before we go on that national association of Manufacturers survey, it just, you know, talks about optimism dropping and, and it's interesting. We don't need to spend a lot of time on that. But I did think it was kind of interesting that it's another one of these scenarios where some of the statistics are way up, some are down balancing of it all. I think what we're really seeing is people are, and I think you used the term probably middle of last year as we got started doing these around the horn sessions is, you know, that self fulfilling prophecy.

Right.

If you listen to the news enough and you watch the pundits enough, we're probably going to end up in some type of a recession because it's been forced down our throat. I think it was blackrock and Bain on their private equity side of those companies have both said recently, look, this doesn't need to happen. Right. Things are, things are improving, you know, rates, home loans dropped again as well. I just saw Tom, Tom May's comment. I think the FAA needs to work on their tech stack as well. Yeah, I think you're right. But Southwest also. Yeah, Southwest, but. And then the FAA earlier this week, one Bad file.

Yeah, right.

I think is what it said. One bad, one bad software file through the, through the whole nation off. But anyways, I, I think, you know, we've talked a lot about this potential of a self fulfilling prophecy with the economy here and I think we're going to feel that. I heard last night on the news that while I was driving that.

Home.

Loan interest rates dropped again this week. You know, now dropped, you know, from 6.3 or whatever it was to 6.1 or something like that. But, you know, still crazy, but it's just going to be an interesting time to watch. But I think what we're seeing across the board, you know, is this, it's not even necessarily belt tightening. It's almost like preparation that I think we see going.

And we've talked about this before, right? I think that I am, I had a complete agreement that we are, it is, we are creating the, the economic situation right through our. But at the same time, I do think there's been a lot of bloat, right. The pandemic and all the money that was out. And so I think it's a healthy process to go through the process of optimization and becoming more efficient and capital efficiency, and efficiency in general in business is not a bad thing at all. So I think that's the positive that's going to come out of this. I think we got a bit bloated, let's just put it that way, over the last few years. And of course there were some external things like the pandemic or whatever that accelerated certain industries obviously much faster and you know, it came as a result of that. So yeah, we'll see what happens. But you know, there's certainly going to be a lot of, I think, roller coaster over the course of the year.

No, I think you're right. My, my hope is that, you know, middle, the latter part of the year things start to stabilize because there's, there's signs that it could unless people try and, you know, shove this difficulty down. So anyways, let's jump ahead. We'll end on time today and this kind of interesting information here from the American Supply association, but that was good. You know, they've, you know, they're, they're talking mostly in their surveys, if you were to look at the article with plumbing or pipe valve and fitting distributors within their group, but you know, some solid results, some updates and stuff that go with that and year over year increases across the board, a couple of, you know, areas where again, and I think we're going to Continue to see this is that we're gonna, what we're gonna find is that we're gonna see some reports coming out that maybe if they look on the surface, if we were to just read the headline negative, but then if we look a little closer, what we're going to see is there's growth, but the growth isn't as much as had been expected or the growth isn't as much as the previous year. Doesn't mean they're not growing. Right. And I mean for me, I look at things as, you know, to try and stay positive about it is, you know, we made a forecast at 23% growth, but if we hit 19% in challenging economic times, hallelujah. Right. But we're going to see these. You know, I think digging into the, the report themselves and looking at the data a little bit closer is key. So anyways, jumping ahead and kind of.

Want, I don't know if Kevin's frozen for me or just everybody.

Nope, that's, I just did a little spin cycle there as well, so.

Okay. No, I just wanted to say one thing about this and you may know better than I do, but the C.H. briggs thing, to me, this, this, there's got to be more to this. I, I, it's, it's mind boggling to me with all the M A that we see every week and all the private equity money that is in this industry, how somebody would just shut down.

Yeah, there is, there is a, there's a deep story to it. I was going to get to this one. I haven't, I actually put a couple feelers out to people that I know that know the depth of it, but it's tied to some issues with some primary manufacturers. And again, I want to be cautious to not say what I don't fully know. My assumption is a little bit, that I do know. My assumption is tied to very focused, is a very focused organization in a narrow, kind of a narrower niche, likely a very large percentage of their business tied to a few key suppliers. And there were some issues with those suppliers or one of them, I think in particular. So, you know, you're right. You know, there are in fact, you know, you know, I have a close personal friend that's in the industrial world and his company is out searching for distressed businesses. And there's quite a few, not even PE firms and so forth, but other distributors who are looking for distressed companies. So this was in the news, so I decided to share it today. Sad. But what, in reading a little bit about the announcements, the, the Leadership of the company is doing some really cool stuff for their people, which is great to see.

Okay.

So yeah, this article, this last thing about this, Goodreads, I really encourage folks to take a look at that. It talks about them moving from, you know, we talked about, I don't know, it's probably in 15, 20 years now, people have talked about, you know, just in time, inventories. And as that old book from Friedman talks about with the world being flat, you know, every day, you know, we see more and more. We talked about it earlier today with what Amazon's offering now and what distributors are doing and wholesale distributors are doing in E commerce.

Right.

That whole concept of just in time can kind of get you in trouble. But this just in case article talks about some options varying away from just in time and finding a balance because we've got so much data available to us. Right there is that mindset shift that says I don't need to be overly concerned because I have about how I'm ordering or having an influx because I have so much data about my needs. And now this talks about a balancing act of maybe keeping a little bit of extra inventory because just in case supply chain issues, whatever it might be. As an example right now, I wish I had, you know, bought eggs, you know, a month ago versus this. Have you bought eggs recently, Tom?

Yeah. Is there an egg shortage down there in Orange County?

No, it's globe. It's not global, say globally, but it's in the US you know, dozen eggs is $7.

So there's a whole yesterday and they were like $4. So I don't know. We must not have it up here.

Now. I was on the national news. Tom, come on, it's you. But well, look in the package, there's only four of them.

Okay, four bucks. Okay.

So anyways. But it's just an interesting thing with that anyways. Updated. Updated. Some of the events coming up. World of Concrete is next week. I was going to that and backed out of that because I'm going to be meeting with you on some growth initiatives in our company. This executive summit that's coming up in, in Washington, D.C. looks like a great event. I've gotten a couple of invitations to it. I think that's a 2024 event for us. But this ad event we're going to be at this national meeting in San Diego in March and ISA's big event in April we'll be at will certainly be at the other ones here, the AD events and NetPlus events that we partner with both of those organizations. So off we go. Good year ahead.

Yep. All right. Well, yeah, we're pretty much on time. This is great. So let's. Let's do it then. Thanks for everybody that attended. We do have some great guests coming up over the course of the next few weeks. So.

Yeah, just look, before we go, I'm just looking. Lee Richards with the Brooks Group, who works closely with wholesale distribution and manufacturing on channel relationships. In fact, Lee led the track at ISA's most recent event. Was it in early December in Orlando or late November in Orlando? The sales works track on helping manufacturers, manufacturers reps work together. Lee led that whole track. We helped sponsor that. So Lee's going to join us next Friday and that'll be a great session. And then we've got a whole list of folks coming. And then again, I'm pretty excited. Tom, you. You're involved in some other podcasts currently? I've appeared on some, but I'm looking forward to turning this into a podcast and, and helping folks get better access to it than just LinkedIn and the other platforms. So good stuff. Thanks for being with us, everybody.

Yep. Have a good weekend.

Right, push the button for the bumper music, Tom.

There you go.

We hope you enjoyed today's episode and our guests. Each week we try our best to dig into the topics that are impacting your business. So please reach out to us and let us know how you think we can make the show better or topics you'd like for us to tackle or talk about more often. And even guests you'd like to see join us. We're looking forward to bringing you next week's session and hope that until then, you stay safe, stay focused, and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation. And finally, please check out our sponsor, LeadSmart Technologies, and their manufacturing and wholesale distribution industry CRM, customer intelligence and channel collaboration platform. That's Lead smart technologies@leadsmarttech.com.