Strategic Uncertainty, M&A Shakeups, and the Role of Data in a Changing Industry

Foreign welcome to around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by Lead Smart 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.

You guys doing all right this morning? It's great to see you both.

Yeah, great.

Tom Burton here, my lifelong friend and business partner and newer friend, but industry expert and great guy, John Gunderson. And so we're going to dive into the topic in the news today, but before we do that, we'll kind of hit an overview of some of the stuff we're going to talk about. Big, big M and a deal this week that's been, I guess, acrimonious might be an understatement, that we'll unpack a little bit more. We're going to talk a little bit, as we always do, about what happened this week with the economy with tariffs, interest rates and so forth, which are always kind of impacting wholesale distribution and manufacturing as well. Got some cool marketing stuff, a little bit of cool AI things to talk about as well as we do each week. But before we dive into the news and talk to John a little bit further, we'll do a little bit of housekeeping. Again. I'm Kevin. Get together here every week with Tom and we unpack the news of the week and things related to M and A, the economy, technology, sales, marketing. We take the news of the week and we pull all that together in our own newsletter that we put out each week. It's called around the Horn and Wholesale Distribution and Manufacturing that goes out to 10,000 plus people each week. If you don't get that newsletter and you would like to, we would love to get that out to you. Three simple ways to do that. You can send us an email@helloadsmartech.com and we'll get that out to you. If you're listening through LinkedIn today on the live show and you don't get the newsletter, just search around the Horn and wholesale distribution on LinkedIn. The newsletter will pop up. You can subscribe to it right there and it'll come to your inbox and and to your LinkedIn feed every week. Or we also have a website for the podcast. It's called aroundthehornpod.com and you can get past episodes and Everything that you would like right there. So we would love to have you join us. The reason I really explain all of that too is we're live on this morning. It's 9 o' clock Pacific on Friday, March 21st, and we get together, like we said, every Friday, unless someone's on an airplane, in the hospital or on planned vacation. And once in a while, even on planned vacations, we do the show. But if you're listening later on the recorded version on Apple Podcasts, Spotify, Odyssey, wherever it might be, you won't be seeing the newsletter nor these three handsome faces this morning. So if you're not seeing us, what we'll be referring to is the articles that are in that newsletter. So if you download that newsletter, you can follow along. We love it that you're with us. If you like what you hear, please click the follow button. If you're listening on the podcast, leave a review so other friends in the industry will get access to this. Forward the newsletter on to others if you get it as well and get them involved. The bigger this community becomes, the bigger the comments are, the better and the deeper that we hear from people in this. So it's a positive. Last thing before we dive in. We'll talk about this more later. We couldn't do this show every week if we didn't have the sponsorship of the company that Tom and I work for, which is Lead Smart Technologies. Lead Smart has developed an AI enabled CRM and customer intelligence platform solely for wholesale distributors and manufacturers. And what we do with that is we work with large distributors and large manufacturers where we pull all of the data they have siloed across their business. Marketing, automation, E commerce, ERP data, data warehouses. We bring all that together. We use some unique and innovative AI tools where we can gain great insights that have never before been seen within your organization from that siloed data to make better business decisions to accelerate growth and serve your customers better. So if you're digitally transforming, looking to either migrate to a more advanced CRM or jump into the CRM and customer intelligence came for the first time. We'd love to talk with you. So Tom, we got some hellos and good mornings from some.

Yeah, I want to say good morning, Bob. Aloha and Will, David Gordon. You know, David was asking about a synchronized spin and as I was, you know, I was reading that, I was like, now I know why. I know why your microphone spin around and you kick all the cords out and everything.

It could be, yeah, well, you know what? David's providing great Insights. And he's not even a guest today.

That's right.

Welcome to my world. He loves to make comments.

And then, yeah, also good morning to Paul and Dan Judge, John from Denver. So this is great, John. We've got quite a crowd lining up here.

Well, what's funny, you know, about David's comment about the synchronized chair spin that I did earlier is the next two comments. Below his are Paul Kennedy and Dan Judge and they're all scheduled guests coming up. So that's great. That's good. Paul, get your, get your chair lubed up and ready for a chair spin with me.

What are you trying to do? Get the guests to back out? Let's, let's.

Yeah, I don't think, I don't think that'll happen. But hey, before we dive into the news, Tom, let's, let's introduce John a little bit further. And John, for those who have been living in a cave for last 20 years or so and, and haven't run across your work or, or sat across the table negotiating a deal with you, why don't you tell us a little bit about your work and what you're working on currently and a little bit about your past and that'll give some insights to the listeners into some of the things you have to say today.

Yeah, thanks for having me, Kevin and Tom, it's fun to be on your show. You put together a great show. My background is really I'm the distributor lifer up until recently. I work with my good friend and colleague David Gordon today with Channel Marketing Group and we'll get a little bit into the publications that we produce. So I started in the electrical business with Crescent Electric Supply. They're the biggest family held left in that channel. Then I went to Whitecap Construction Supply which was part of the HD companies, so you know, family to private equity that then went public and then went back on the, went over to the electrical side of HD Supply on the power solutions and went back into that business. I was running category management, pricing, sales, marketing, lots of different roles and then sold that to Annexster which is now Wesco. So I was on the team that sold that business. And man, has Wesco gotten big over the years. Yeah, and Behemoth. Behemoth. And then my last stop was with Genuine Parts. I was part of EIS Inc. Which is now sold off. But at that time we were part of Motion Industries, so that was a good experience. And then, you know, had friends Ian and Tom and joined MDM and joined Modern Distribution Management and that's When I got into a writing career, Kevin, don't know quite how that happened, but it just sort of serendipitously happened.

That was a lot, lot harder before.

Generative AI too, I guess it was, yeah. And, and still do a lot of work with mdm. Right. A lot of series out there. Fastenal, Wesco, Watsco. Right. If you follow mdm, you'll see them. And so we'll have a couple more coming up and then, you know, partner with David and work for David on Channel Marketing Group Trends. And we've got three publications there. David's been doing electrical trends since when I first got in the business. I was leader first before we became friends.

I was in middle school when he started that.

He'll appreciate that. So I used to disagree a lot with what he wrote when I was in the channel, so it's interesting to get to meet him. That's a joke, of course. And then David started H. VACR Trends, which serves that channel. And recently we've started Industrial Supply Trends, which has taken off like a rocket.

We've got a spot where we're going to talk about that a lot more.

Later in today's show, which we do in collaboration with the Industrial Supply Association. So that's been very awesome. So great to be here. Let's dive into the news.

Yeah, no, I'm happy to have you. And you're going to have some great insights and, you know, it's interesting. I think the harder we worked when we were young, the more people are interested in our opinions as we're older.

Yeah, no kidding.

I think that's where we sit. So, Tom, you want to take us into the news? We're going to start each week like we do with the first segment of the newsletter, which is economy and the supply chain. The Fed holds interest rates steady. Tom, what does the second part of that say? I'm wondering, before you even read that, any thoughts on maybe one or what? Want to bet another stake this year on whether we get one or two cuts?

No, we already have a bet. We have a taco or whatever dinner bet on when the, when the next rate cut is going to be.

I just thought since they're saying two cuts, you may want to, you know. Let me get ahead of you again.

Contradictory. The contradictory person on that. No, I'm, I'm, I'm not. I'm actually thinking there could be more than two cuts this year. I think they're going to come later rather than earlier. I don't think they're going to Come in in June, which I think is when other people are talking about. But going back to the Fed meeting and what this article is about and John, interested in your take? I watched a little bit of the, the press conference or whatever afterwards. Seems like they were as confused and uncertain about what's happening as everybody else. There wasn't a whole lot of clarity, but a lot of, you know, I don't know, a lot of word salads, I guess you would say, as they went through there. And you know, there's like concern, but there's, I don't know, maybe current concern may be too strong a word. There's awareness that maybe we could have additional inflation. There's an awareness that maybe there could be a slowdown, but then they're not sure and not 100% sure and maybe not and could be. And so anyway, I'm not sure there's a lot of tangible things to hang your hat on there.

Yeah, I've got a little bit of a take on it. But John, any thoughts on what we saw this week from that standpoint? We're going to talk about tariffs next, but just kind of on the interest rates and so forth.

No, I think you guys covered it really well. It's just right now, everybody, it's kind of like being in the waiting room waiting for the doctor's appointment. That's the way I would, the analogy I would use. You're not quite sure what you're going to find out when you get in there. So I think there's a lot of speculation and a lot of waiting. And I think, you know, as everybody in the channel, I think when everybody else is in the waiting room unsure of what to do, that's the opportunity. Maybe you can make some moves and take share. So I think actually uncertainty creates opportunity in the channel and I think a.

Lot of the brave.

Yeah, I think a lot of people are afraid of that. Yeah.

Yep. I think, you know, part of what we saw this, this week in, in it was in one of the articles we protected. Actually I think I even mentioned in this article is, you know, we've got the tariff issue. Right. And so, so we've had uncertainty for a couple of years now because of interest rates. So you get, you know, some of the good people that have joined us on this show that are both manufacturers and distributors are. That's been hard enough to make big decisions related unless you're sitting on a pile of cash, but it's been a little bit harder to make decisions on. Banking is a little bit different than it might have been in the past. But now we've got this other factor of tariffs that play in. So now our pricing might be a little bit questionable. And we're trying to manage that component. I know. Well, Paul, that's with US dsg. Paul, an announcement out. I saw it online this week, kind of outlining the uncertainty for their customer base. And border states has kind of done the same. And I know a lot of other people are working on their positioning right now. Related that. But the other side of it is you've got an administration with. We have got those things going on. We've got an administration that's also saying, hey, you know what? We're looking at a lot of deregulation and we're looking at tax breaks. So you've got these things that say, pump the brakes maybe a little bit. And then you've got these other things that say, whoa, there could be some really great things happening right now. And I think, you know, this might be a really key moment of the show of today, of what you said a few minutes ago. Right. Is that there is opportunity here. And maybe for the brave is not the right term that I use. Maybe it's for the shrewd.

Yeah, that's good. That's a good point, Kevin. I think, you know, I'll just give you an example. You know, when I was leading pricing for a couple of big distributors, right. When commodity prices were going up, steel, copper. Right. When they were climbing, that actually created a lot of opportunity. If you're really smart about it. When to buy, what's your cost basis? You know, if you can get a cost basis advantage. Right. By buying smartly and not selling from replacement costs, but from your average inventory costs.

Oh, yeah.

You go out and just take share.

Sure.

Never give it back.

Yeah.

So it creates a lot of opportunity. I actually am like a 25% tariff. I know it sounds maybe counterintuitive. If you're smart about it, you can really use that to your advantage if you make the right decisions as a channel leader.

So let me unpack that a little bit. If I'm following you correctly. No one would ever call me a math whiz. But if you are sitting on good inventory positions to start with.

Yep.

You have a strong balance sheet and some wise purchasing or some just purchasing acumen, you can work off blended costs for sure. Right in that setting. And if you're sitting on a strong cash position or strong balance position, could probably go do some larger purchases with some of those vendors who are Cautious about what might be happening to them as a vendor standpoint through all this. There's a lot, there is opportunity here.

Yeah, yeah. And Kevin, I'll just give you, take it a little further. Let's say you're in the contracting business and your number one player, who's the most loyal to you, you can protect inventory, you can give that cost advantage strategically to that person to, to help them win more projects, to help you drive more relationships. So I think, yeah, the more cost basis changes, smart distributors are going to take advantage of that.

Yep. That's great to hear. You know, it makes me, kind of makes me think as you describe that kind of, I guess, lack of a better term. I'll use that, the term allocation kind of model. Right. In that setting it just makes me think, you know, my original background in distribution was working for a large national safety and industrial distributor. And, and then when I was manufacturers rep for 10 years, my agency was probably 70% safety related products. And every time we see a pandemic. Right. It's respiratory protection, protective clothing and you know, nitrile or latex gloves. Right. Is you just can't get your hands on enough of them. So the people that are in a, a good inventory position to start with, strong balance sheets, strong vendor relationships can get their hands on that. The manufacturers are allocating, they're doing what you described to their distributor partners and then the smart distributor isn't just taking orders, they're taking orders from the right people for the right price.

Yes, for sure. I'm very well said.

That's, that's great. Well, good. I think it's, I think the unique thing for me and take away about the economy right now is, and this is what I think the Fed was kind of putting out on the radar is some of our uncertainty isn't tied to just tariffs and interest rates. And what we're doing. It's this. There's a positive component out there. Forgetting about the numbers in the economy. There's a positive component of tax breaks and deregulation in some areas that could really do some stimulating which is to. Tom, let's, I want to jump to you because John and I went down a rabbit hole there for a moment, but did I hear you say, Tom, that you were thinking it could be more than two this year?

I wouldn't rule it out. I wouldn't rule it out. I certainly, I mean there's just. Anyway, I wouldn't rule it out. There's. It would be interesting to see what they would base that decision on and, and how that decision would come together. But I do think that there is going to be, there's just a whole bunch of things here, right. I'm going to be back up for a second. This whole thing with tariffs, and you mentioned it and I mentioned it last week as well, there's a bigger strategy at play here. There is a big bet that the administration and everybody is making here that we are going to be able to shift what has historically been GDP growth over the last few years, driven by government spending and a lot of government bloat, right. Into an efficient government and resending that spending and even the employment and so forth to the private markets. Right. So the deregulation, the tax breaks, all of those things are designed to give a tailwind to the private markets. Meanwhile, we have, we're trying to bring more activity here back into the US Again. We're trying to do all of these things together to again put things more in the private sector versus the government sector. If it works, it could be huge, right? It could be a huge result. It's a big strategic bet. And along the way, right. And this is where I think the challenge is right now is people aren't seeing the fruits of the labor at this point. They're only feeling the, the effects of the chaos at the moment. And I think, John, to your point, opportunity, I think there's opportunity right now with what you talked about with, with the pricing and everything. But I think there's also even longer term opportunity. If you look ahead and say, okay, let's say that this does, does play out a little bit. How can we strategically align to that and take advantage of that and maybe be a couple steps ahead of the, the curve? So.

Well, there's a few, a few things with that, Tom, that you, you said there. So it's interesting. John, I'll throw this out to you momentarily, but I've been on the phone over the last two or three weeks with quite a number of, of both customers, prospects and industry friends in Canada. And there is a complete cross section of, I mean, there's people that. I was wondering if, after listening to them for a while, I was wondering why they took my call. Because there's such a, an anxiousness or, or frustration there and there's others that are like, hey, I got work to do, right? This is gonna, this is gonna go. And one of them was a very large distributor in the electrical space. I was on the phone with, I guess it was last Friday, a week ago. We had a wonderful conversation. He's like, hey, I'm not crazy about what's going on, but at the same time it's what, it's what is. And we're just going to work through this. And he was smiling the whole way through, which is, you know, very different views.

Yeah.

Very different views. Are you kind of hearing the same thing, John, in your discussions?

Yeah. You know, Kevin, I grew up in northern Wisconsin, not very far, southern, southern Canada.

Yeah.

We, we used to joke as kids that Canada was the 51st state.

Right.

Just because we had a lot of Canadian friends. But, you know, I think there's a lot of noise there and I think it'll work itself out. We're two great partners and I think the economies are so interconnected in so many ways that I think it will work itself out. And I just think there's a lot of saber rattling going on. And no matter what happens, you can make business decisions from whatever happens.

That's right. Well, it's, it's so there's, there's a couple of components to this that I think it's important. We'll probably spend a little more time here than we had planned. But I think what's interesting, intriguing for me right now is there's a lot of puzzle pieces that I think are starting to come together that for the first where we at to barely two months into the administration have been unclear. There's a little, I don't want to say clarity but but maybe some more understanding behind what's going on. So we've talked about on the show previously is as we look at tariffs is this view of tariffs right now is really the idea behind diplomacy where previous administrations might like to spend a lot of time on the idea of what would I call it, the boardroom diplomacy and the big meeting diplomacy and the conference diplomacy versus we're going to pound and get things done. The other side of it and Tom alluded to this last week as well, which I think is really important to this discussion is and I just looked it up because I couldn't remember what the timeframe was. But prior to 1913, which was the 16th Amendment and some other things that went on with this, this country was funded by tariffs. It was. I mean, so what's going on now? We could be at an inflection point right now with how this administration is trying to do this shift of balancing of tariffs and using it as both diplomatic fashion but also an economic fashion, we could potentially be at an inflection point that says we're looking back to how this country was funded through its founding. Right. For the first hundred plus years was this country ran based on tariffs. And then if you look at the other side of that, if these tariffs do start forcing job manufacturing in the US and read an article earlier in the week about all of the countries. In fact, there was an article I saw yesterday about a Canadian furniture manufacturer who's expanding their North Carolina facility and closing their Canadian facility to just do all of their manufacturing in the US if we start seeing Southeast Asia and China wanting to do more manufacturing here. Looking at the example of, you know, getting your, your BMW, your, you know, your Volvo and many other Toyotas are being built in the U.S. now, this could be a real interesting point if these things do come together the way I think this administration is looking for them to do.

So. All right.

Yeah, no comments on that. Just leave it hanging out there.

No, I think, I think you covered it really well, Kevin.

Okay. Tom wants to move faster and I'm like, I think actually this is. We're in a really unique time in history potentially right now. Both potentially extremely positive or at risk.

I think to summarize, right. What we've talked about, you can't look at any one thing. You can't just look at tariffs in a vacuum. You can't look at. Have to look at the overall strategic, like I said, BET strategic plan that is taking place and how those are interrelated to those things that are there. And you know, do your best to work out your strategy based around not just one thing. Right. Because I think that the one. If you look at everything independently, that creates more chaos and confusion than looking at the bigger picture A bit more just to.

Right. So we had two articles here, one from Yahoo Finance about EU delaying implementing retaliatory tariffs, including whiskey is what it talks about. But that's a huge impact right on. On some of our distilleries in the, in the southeast there. But then also lumber and appliance tariffs are driving up housing and remodeling costs. So which is a little challenging for me getting ready to put a new roof on my house. But.

But should have bought your inventory earlier.

Should have had my inventory in place. Well, what's interesting is, you know, from that is my wife and I were talking about this the other day and I hadn't been thinking about this from the lumber side of things yet, but the quote we have is from about 12 or 14 months ago when lumber prices were through the roof and they've come down. Well, now they're shooting back up So I don't think she's going to allow, allow me to use tariffs as a delay for the project. But let's shoot ahead and let's look at this Border States supply chain update that they shared. And you know, John, I don't want to put you on the spot here, but you come from this market that, you know, Border States wrote a lot of this about. Will you take, would you mind taking the lead on this one? We can't hear you, John.

Sorry.

We got you now.

Yep. One, I would say it's an excellent article. Border States is, you know, a really strong player in the electrical market, especially with utilities. Right. It's them and Wesco who are the 1, 2 in utilities in the U.S. i was really impressed. I, I would just encourage you to read it from your newsletter because they really dive deep. What I really liked about it is I wrote down the name of the offers authors Rochelle Bischoff and Tony Serati. I thought they really gave a lot of really good tactical actions in it. That is unusual. So now we could talk about it for 10 minutes but I would just encourage you to read it. It's really well done.

What I like about this is there. It's not. It's just solid and in depth and let's take just kind of take a step back. We have people listening to the show that are in food service, distribution, office products and so forth that are, you know, lead smart customers and, and people and connections that we have. So Border States is North Dakota based, is that right?

Yeah, I'm not exactly sure. I believe it's North Dakota.

Is the byline on the article Fargo? Yeah. So multi state, not I think probably almost half the country now, if not more that they cover with electrical related products. Certainly one of the market leaders in that place. Are they, they still independently owned or are they PE owned?

Yeah, I don't know Kevin.

I'm going to look it up while we're chatting. But the point behind this article is they did this wonderful job of this very large, you know, distributor of really diving into where they're at, what they're seeing, how they're positioning themselves, what it means for them and their customers. So they did a. Basically it was almost informative to their customer base of hey we're. It's almost like they have their own newsletter here. Right. Because they're talking about this came out March 6th, but as of March 6th, this is Canada and Mexico tariffs, this is China tariffs, this is retaliatory issues. These are reciprocal tariffs. They just really Did a nice breakdown of that. And then what they started talking about was what does that mean to lead times? Right. And so they talked about, and just give you an example, key areas we're observing construction and industrial distribution equipment, circuit breakers, load centers, panels and switches, fuses, metering sockets. So they're literally talking about what they're needing to pay close attention to related to specific commodities. And they did it by market channel as well. Then they went into a whole segment about talking about logistics and freight. Right. This is what we're seeing. Right. Freight rates were down. We don't know what they're going to be. What's going on in the trucking market. Really thoughtful piece talking about commodities. And I think. Didn't David write a piece earlier this week about copper and commodity prices?

The audience for this, is it border states customers or what is the audience?

I think it's a broad audience. It's them showing the industry where they're at. But it's a really big piece for their, for their customer base to see. And I, I look at this as a, if I were, if I were an end user, it was like, okay, my, my vendors, they're on top of this. They're not just, you know, I'm not going to get if maybe it be when I get my price increase. I have some confidence that they're thinking through everything.

Yeah, yeah.

Do you think that's where they're, what they're, part of what they're doing is.

Yeah, I mean, I think, I think they do it and I think one of the points you make is the commodities they're really talking about are copper. Right. Copper is such a big thing. Whatever your commodity is wood. Right. If you're in building supplies and get something out of this article, I just think it was really well done and it, yeah, it, it's not seven high level tips. It actually is a tactical approach which I really thought was great. Yeah.

Wow. David just commented, and David Gordon just commented about this discussion of aluminum prices maybe already increasing 40%. Yeah, you know, major commodity issue. But I just, I, like I said I think this is, it's a nice piece to see if to your point. You know folks, if regardless of the industry that you're in one, it's nice to see some thought leadership from that standpoint which is really what this is because most people come to people like, you know, the writing that you do or David does or I, you know, their trade associations or I mean this is, maybe this is how I would describe this piece is this is trade association level stuff.

Yeah, for sure.

So shout out to those folks. I know we get some border states folks in listening to the show fairly regularly. So good for them in doing that. So let's dive into our manufacturing distribution segment of, of the newsletter we've got the first article which was from Industry Week, talks a little bit about what can the US learn from China's manufacturing growth. Tom, any takeaways from that one?

What I would hit me on this, which I hadn't honestly thought a lot about. It's, you know, real easy right to say we're going to move manufacturing back to the U.S. but what this article spotlighted is that China has developed a whole infrastructure for supporting that manufacturing and if there's more to it than right than the manufacturing plant, basically there's all the logistics and everything else and they continue and have invested in building out the whole infrastructure infrastructure to support manufacturing. Is that something, you know, and that's a question, right? Or is that something. But here in the US we're going to see more of is that it's not just moving manufacturing back onshore, but are we also going to invest in all the infrastructure and sort of the international ecosystem that's required to make this a long term, a long term objective. And I thought this would brought up some really good, some good points on that.

Any takes on that? John, you want me to dive in? No.

Dive in, please.

The I think there's, there's a component Tom, before I fully give you some thoughts on that is great, great question. Is the big challenge that we have here is this, this government or our government here in the United States can certainly do things with some subsidies and some policies, but they can't manipulate the currency to support these things.

No.

And that is one of the factors that goes behind that is the willingness and we talked about that two, three weeks ago as we first or maybe a month and plus ago when we first started talking about tariffs is the offset of that in China where it may not hurt as much as the currency can be manipulated to support that. I think one of the things that we probably in this country need to look at is look at the country's history of what we've been able to do from a manufacturing powerhouse before until we went, I think it was 70s, late 70s or into the early 80s is when the big push went offshore to China, the US Was the manufacturing powerhouse. Right. Globally before that. So it's not that it hasn't been done here before. I think it's just there's Going to be needing to be some of the infrastructure issues, which is where the administration now is talking about. Not necessarily subsidies, but the tax breaks and the deregulation of some things that make it, you know, I mean, think about what does it take to get a building permit? That's one of the biggest concerns going on right now in, in, in, you know, but, but John, where Tom and I live, we, we live where the fires were in LA that you saw in January on the news. That's about dead center between where Tom and I live. But the distance between us. The, one of the single biggest issues right now out there is building permits is it's just so difficult to get anything done. So I think what the administration is saying is we're going to remove a lot of that and we're going to manage these tariffs so that we can build this, you know, targeted subsidies and incentives. This talks about, I think energy.

Right. Energy is a key part of this as well. Right. When we talk about infrastructure, there's a lot of things that go into that term infrastructure.

Yep. So we, we also have a labor, labor skills gap and a shortage in some instance that they really don't have. But you know, the other thing that, it's kind of interesting, this is a whole nother discussion. But John, you've probably experienced this in your career and I, I know I have it multiple different times throughout my careers. The one thing we don't have in this country is Chinese New Year.

Right.

We don't have a month where the world stops. Right.

Or maybe I personally think that's a mistake.

Yeah, I think that's something we should include in the transformation.

Yeah, maybe we do. But you know what, some of the interesting things that I did, some of the dealings that I've done with Chinese manufacturers over the years and both on the, in the industrial world and then I did some work. Some. Probably the most extensive work I've done in my career was working in the low voltage electrical field for a bit on a long term interim executive project was working, you know, with China was, you know, day in and day out. One of the dilemmas that comes with the factories there with that is that when people get on a train, because, you know, very different than we've done here in the US at least in modern times, is next to the large wire factory or the sock sewing factory or whatever it is, is a dormitory. So people leave work and they go to where they live because they live a 10 hour train ride or away is where they come from. One of the big challenges they have in China in that setting is that after Chinese New Year, you know, John goes home to his village that's a 10 hour bus ride or train ride away and he's talking to his cousin that says there's 7 cents more an hour at the factory that he works at and there's jobs there and the guy gets on a different train to go back to work. And so these factories, I've watched this happen throughout my career. A lot of these factories are in a position where the first couple of months back from Chinese New Year they have a depleted workforce while they're building that back up so people don't come back to work. So. Interesting. Anyways, I think, I think there are some things that can be learned from this. It's like we said, it's an interesting time right now to watch what happens with manufacturing in the US I'm going to say not just the term of this administration but, but if things start working and I think that's a big part of why this administration is working so fast. And because four years goes very quickly and more importantly than that, two years goes even faster. When you have midterm elections, they got.

A two year window. That's all they have.

That's exactly right. It's probably 18 months to two years to get that stuff figured out because there's no guarantees on what the Congress and the Senate look like after that. But if we can see some momentum of things happening and there's value to it, the next administration is not going to have a choice but to continue. Right. So good questions on that, Tom. So okay, why don't we jump into E commerce and marketing? You guys all right with that? Yeah, sure, go for it, Tom. Which one of those appealed you more? So we've got an article on E commerce trends about agency commerce means for online sales. Any thoughts on that? Here are a resident AI guy.

Yeah, so boy there's a lot here and I'm, and I'm trying to figure out the best way those thoughts together.

I'll mention it's from Digital Commerce360. It's our friend from the, that's been on the show with us, Mark Brohan there. I don't know John, if you know Mark, but great, great guy. So talking about agenic AI supporting E commerce.

So yeah, so I mean what are they basically talking about? Right. How do we do E commerce today? We go to a website, we search for products, we look at reviews, we then go to the next one, we put it in our card or our Wish list. We go to the next thing. Right. How do we. What is the experience that we go through with E commerce today? What they're basically saying is, is that you start to incorporate AI agents into this and just sort of an AI driven philosophy that user experience can start to become very different. I think I told you, Kevin, we had that home, the Home Depot article last week. Yeah, yeah, their website. They added this little chat bot, I guess to their website.

Right.

Which I wouldn't checked out. It was awful. It was. I was really disappointed. I was expecting it to be on their app and to be able to. But it wasn't quite what I was hoping for. But nonetheless, as they're trying to, rather than going and saying, okay, I'm going to go buy, you know, garden a rake and a shovel and some fertilizer to and some lawn seed, go in there and start having a conversation. Hey, I want to springtime, I want to green up my lawn. What do I need? And start taking that experience rather than from a transactional to a conversation. And that's what they're talking about in this article in the B2B space. I think it's, I think it will be inevitable. I think we will in the next year or two. It will be a much more hybrid experience where you'll have conversation and you will sort of, you know, there'll be a time and a place to go look for something, of course. But I think that we'll be way more hybrid and way more conversational using some of those AI agents that are there.

You know, it makes me think Tom right now is along these lines is, you know, I don't want to say the word the woman's name because the digital assistant's next to me on the desk. But, you know, the digital assistant from Amazon already alerts me on a regular basis of what I should be thinking about buying. Right. So I think this whole buying journey and process.

I thought you were going to say Darlene is the one who alerts you on what you should be buying.

No, I think her alerts would be buy less so she can buy more.

Okay, but she should be buying that.

Okay, she should be buying. Yes. Tom knows my wife well, John, so yes, that, that is the case. And, and the good news is she knows how to make money too. It's not just spend it. There you go. That's a big plus. But I have to be careful. She oftentimes tunes into the show, so there's danger in those waters. But, but I, I do think, I think you Know this to me, quick takeaway, and I think you described it well, Tom, in this article is that no matter where we turn, our buying experiences are going to be different, tied to the agency tools in particular that are going to be coming available and our life is just going to be changing. Right. Whether it's how we book travel or how, you know, I mean, I, I was thinking about this, you know, earlier, John and I were going to be together at the Industrial Supply association meeting in about 10 days or so. And you know, wouldn't it be great. We were talking about trying to figure out schedules if, you know, if my calendaring agent just got with John's calendaring agent, came to some conclusion and then sent us both what kind of beers they have on tap at the Gaylord in Nashville. Right. I mean, that's where we're going with these things, you know. So I think our, our E Commerce experience is going to go down that same path that it's. Our agents are going to know what our needs are and can probably just confirm to us what do we want, you know, and it's, it's interesting. I remember being over 10 years, 10 years plus ago at the Consumer Electronics Show. I was working on a project and needed to be there for three or four years in a row. And back that far seeing refrigerators that had a spot that you were supposed to put the milk because if you put the milk there, there was a sensor that knew what that milk jug was supposed to weigh. Right. And now, you know, if you think of what the, what, what the progress on with sensors in general have become, you know, I don't know, John, where you live, but where we're at here in California, I'm sure it's nationally with this is so many of the convenience stores, you just literally can put stuff on a little counter space that they have and there's a 360 view of those barcodes that knowing what's going on, having that type of technology in our home that just knows, hey, you know what? The fertilizer bag in the garage isn't full. Right. Are you still planning. It's on your calendar. You're doing that yard project this weekend. So I think that where we're at is we're just scratching the surface of what's next. Good. So let's kind of jump ahead and I'm going to. Tom, is there anything on that Three Priorities article? We're here in our marketing segment in E Commerce. Anything in that you want to talk about? I wanted to kind of start Jumping into the whole QXO thing for a moment.

We can go into the qxo.

So we have an article in our E commerce and marketing segment about qxo. And then I'd like to, if you guys don't mind, in our M and a segment later, we have a whole thing about the QXO acquisition that was just announced with Beacon. Maybe we could combine these two because it's really interesting. And John, I don't know. I should have asked you this before, but you've been around for a while. So do you have much background with Brad Jacobs and the folks that developed QXO earlier on?

Yeah, David and I got a fair amount of background. We've been following it very closely.

Could you take the lead on just maybe given some. So just to start with, I think we're probably close to a year ago QXO was announced. Brad Jacobs, who is the founder of United Rentals and a couple of other very large organizations that ended up going public, understands distribution in the space that we're in, basically raised a huge fund. They already had a, I think a logistics and trucking organization and one or two other organizations related to technology. And so if I. Correct me if I'm wrong on this, but John, if you have different understanding. But basically they're kind of pulling all of these things together to maximize their effort under this QXO logo. Publicly traded right out of the box, raised a ton of money and now they're ready to go out and, and not just do some acquisitions. But they've kind of, how would I say this? Said they're not afraid of a street fight.

Yeah.

Is that a fair statement? Yeah, yeah.

It's been. Been a lot of interesting moves in the channel. In that channel like SRS being bought by Home Depot.

Exactly. Right. Yeah.

There's. It's been some big moves. I, I think it's intriguing what they're doing. Obviously it's a proven company. You mentioned United Rentals and Yep, they're bringing a lot of tech stack solutions into a industry that's not, I would just say construction distribution is not as tech savvy. Yeah, a polite way of saying that. I think it, I have no doubt to be successful. But so much of that business today is spec bid buy. So a big project.

Right.

Has to be designed, specified by an architect with a big bid to distributors and then a buy. So it's a, it's hundreds and hundreds of SKUs. It's a plan spend that's going to be, you know, I don't think you can digitize that today. Right. You still have human beings because you've got reps. You were a rep, Kevin. You know how that whole thing works that, that I don't think there's a magic easy button for. I predict I'll be in the ground by the time that happens.

Right.

There's still people needed for that.

Okay. Yep.

But the rest of the business that spot by business, I think they're going to bring a lot of solutions. I think a good example is maybe what Watsco's doing, Watsco's app and how they provide software solutions for their end contractors, Watsco Ventures. I think that's a good corollary that you may see Q QXO follow because Watsco not only provides H vac equipment, they also provide software solutions. That's potentially where they may go so well.

And I think interestingly enough with that there is a technology arm. Interesting enough. I just was researching this a little bit a couple weeks ago. There's lack of a better term, I'll call them a VAR of technology or value added reseller of technology and a whole technology solutions group associated with that side of things. So I think that's kind of an interesting piece that of them lumping these things together. To your point though, interesting enough about, about Watsco is could they be a potential target as well?

I. Who knows, right?

Who knows who's the next target? Right.

I think you've got someone who's aggressive, who's a proven winner, who has publicly stated they want to grow.

Right?

Yeah, I would say more news is probable to happen.

And I've got a feeling that this is going to move maybe not right away, but in the not too distant future the qxos appetite will probably move out of, you know, just kind of the building material space. I think, you know, it's going to probably, maybe I should say out of roofing and those types of things into H vac, electrical and some other areas as well. I think we'll probably see pretty quickly.

Can I ask a question just so I hope you both. I heard you both say that qxo, in addition to building materials, is actually selling software and technology to their end user to their customer. Is that what you were saying?

Yeah. They have an arm within that that they already. They already are doing some of that with. Yep.

Tom. Tom, I don't know if they are or they aren't. I would just say it.

But. But it's interesting, right? Because and take this in the context of what you were talking earlier about John. With, with tariffs or even pricing. Right. Software generally has higher margin than a piece of lumber or a building material. So if I am a distributor like that and I can offset some of my margins with higher, much higher margin offerings like software and technology, then I can use that to offset potentially some of those price increases on the tariff and still maintain my margins and my, my growth rate. So it's a really. You talk about a strat. I, I just didn't know if that's a direction that we're seeing or a trend that we're seeing. Is a lot of these companies potentially offering technology or higher margin products, quote, unquote, whether they're technology products into the. And, and is that, is that, is their customer prepared to buy that type of stuff from them and are they prepared to support that with the people that they're trying to buy? I mean, it's interesting thing.

Yeah. So I think before they raised the fund fully for the acquisitions, Tom, it just, I just did a quick little search and it says technology solutions, including consulting, professional service and proprietary software to companies. The manufacturing, distribution, service sector. So a lot more than just, you know, than just leveraging PE type stuff. Right. They're offering a whole level of services outside of that.

Yeah. Yeah. Tom, I would, I would just add there's, you know, I, I follow closely Watsco Ventures, which is sort of their incubator software in I believe Wesco's got a fund. There's lots of big public companies that are kind of moving into this what I call value added software space.

Right.

I, I think it's a trend. I think it will continue. It's going to be fascinating to see who does what.

Yeah. Wind Supply, I think just invested in one of their AI vendors. Yeah.

You have that in the newsletter. Yep.

The, it's kind of an interesting, interesting time out there as we, you know, we see these historic brick and mortar and in old school businesses kind of embracing different levels of the technology world out there right now. So it's a good time to, good time to be alive as they say. But you know, it was just, it was interesting to watch. You know, this was, how would I put this? This was, I guess this was Wall street meets Main street in this deal. You know, it was. Or Wall street meets, you know, big warehouse. It's just, it was not now, you know, Beacon publicly traded as well and large organization and huge infrastructure. You know, I mean I, I just, I, I listen pretty regularly or, and, or watch cnbc and early on in this was the, on Jim Kramer show was the Beacon CEO. Right. Like, hey, we're not saying no, we're just saying not that number. Right. And then going through all. I mean, and, and if you unpeeled that or, you know, peeled back the onion slightly on that, and you look at it is he was just prepping his people and his organization and investors to his positioning. Right. He was using a, you know, a public format for that. And then there was CEO of, of, of QXO on. And, and then I thought where we knew we were getting a lot closer was with. Two things happened. One was, was Beacon delayed their, their board meeting. Sorry, not to board me, but their investor update day. And then, and then QXO extended two, two or three times the, the cutoff date. And then all of a sudden, I think it was either. I think it was last Saturday that Brad Jacobs wrote an open letter to beacon employees on LinkedIn about what their intentions were and their growth plans and the technology and making things better and it being a better place to work. And you kind of saw the pieces of the puzzle start to come together. That was good, good timing. We'll continue to watch this. And then what I'm intrigued by is what's next? Right. Who's QXO go after next. And, and maybe when we're together, John, in Nashville, we can pontificate when no one else is around who we think.

Yeah.

As opposed to. In this public format.

Yeah. And a public format, we can't pontificate.

That's right. So, Tom, let's roll into our technology and cybersecurity segment. First article kind of ties into what we were. We've been talking about in general with this, though, is it talks about Graybar when their digital transformation focus. And we're just seeing more and more of this. And it's interesting, though, to watch is there are literally. And John, I'm interested in your thoughts on this, but there's really two sides of the street right now. There maybe not. Maybe there's three, three levels. There are people that are making big announcements about their digital transformation and doing some pretty big things to the point of your commenting about, you know, Watsco and having an investment arm and some of these companies doing that. Right. The other side of that is you have some people who are, what would I say this? They're going to a lot of conferences and they're listening to a lot of speakers about digital transformation and transformation and AI, but they're just taking some kind of baby steps or they don't have a great plan. And then there's people that we talk to and you know, in the work that Tom and I do in our, in our day job at Lead Smart is we're, we're talking day in and day out, we're talking a half a billion plus dollar companies who have never had any type of CRM in their business. Right. So you have kind of these three different levels and it doesn't mean that they're small companies that haven't done anything and it doesn't mean they're small companies that are dipping their toes in the water. They're similar sized companies to some of these, that are really taking these big steps. So it's kind of interesting to watch this migration of people through, through transformation.

Yeah.

You know, the one thing that jumps out on this Gray bar article is the emphasis that they're doing with data. Right. We've talked about the importance of data and the value of the data for a couple years now. And that's a big part of what they were focusing on here, is how they're aggregating and consolidating data from multiple sources to then be able to use that for intelligence and to drive, not just intelligence like traditional business intelligence, but how are they going to use that to drive the customer experience and so forth down the line and.

Right.

I still think that we see, we see an under. Even for people that are quote, unquote transforming, if you want to call that, or investing in technology, we're seeing still an overemphasis on capabilities and functionality of technology and an under emphasis on how they leverage their data. And it sounds to me like Graybar has taken a little bit of a data first approach to things and clearly seeming to have some results from that.

Yeah, yeah.

John, what's your take on, you know, your day in and day out conversations with people about, you know, data in general?

Well, I'm, I, I would. One, I think your article here is great. I really enjoyed reading it. The one from whoever writes for digital commerce. 360. I got to meet that person because that's very good, very good article. I think you're seeing like Graybar. You know, I used to work 343 miles up the river, as we used to say, go to Clayton, Missouri and then drive to Crescent Electric. That's what we used to tell our suppliers. Great operator. But I think the article also talks about how they're trying to do direct connects. So not just they're doing direct connects with their end customer. So for example, if just making up something rose it in electric One of the biggest and electrical, you know, contractors in the U.S. whatever they're on, whatever they're doing, they're bidding on McCormick, Ariba, Koopa, you name it, right. Trying to do a direct connect so that when they hit order it goes directly to Graybar and it goes into their system. I think smart companies are doing stuff like that for complex orders. Many companies, that's what they do, motion, you name it, they make it easy to make that transaction happen. It's seamless, it's touchless, it's 100% accurate. People like Graybar, they're going to be successful. And I think when you view that, what's your integrated plan? I think a lot of times on digital, especially in distribution, people get caught up in the B2C experience and I don't mean that in a negative way, but the B to C, you need the B2B direct connect experience to be the best you can because that's a real barrier to exit. I hook my ARP up with your ERP so to speak. I'm going to really have to screw up for you to fire me, Kevin. You're going to give me a lot of chances to make it right. Yep.

It's interesting as you describe that that way is. I got the survey earlier this week from, from ISA about some questions for their end user panel that they're having and we're going to talk about, talk about ISA shortly. And I said I'm not sure anybody's going to like this question, specifically the distributors and manufacturers in the world but you know, I think we are really getting to that place in time where distributor, end user, distributor and manufacturer are going to be very much more interconnected than they've ever remotely been before. And historically we've had that rub between or that collision between manufacturer and distributor of distributor. Not wanting to tell you where my customer is or what I'm doing or whatever. If you can figure it outside of my POS reports, so be it. But I'm not going to share this with you because you might go direct.

Right.

And it's that mindset. Right. I was just, just on the phone with this yesterday with a longtime sales executive in the industrial segment and we were laughing about that as like you know it the, even the whole idea of non compete contracts, it's like you know, so many of those are tied to well, you know, trade secrets of our customer list. Well, this is 2025. You can find out who's inside any building you want by looking at the name and going to zoom Info. Right. There's not much proprietary anymore as it comes to locations and so forth. So I think we're getting to that place where you're going to get end users. And this is a question I threw out is like as to the end user panel was are you willing to share more about your business with manufacturers and partnering with your distributor on that to get a better experience?

Yeah, Kevin, I think that what you talk about, that's a good segue into your session at isa. You have two other really good. Yeah, I call Direct Connect companies that are in the panel. You know, I'm gonna have to watch a recording because I'm doing the same session at the same time as you.

Are, which makes me concerned that anybody's even gonna come to our panel.

I'm dying to come to your session, so I'm gonna ask for the recording. But I think you're talking a lot of what I call really good tactical stuff in there. Yep. That I think is going to be fascinating for, for the association audience.

Is that just because you're our guest today?

No, I, I, I, I think what you're doing at Lead Smart, you're, you're really in the Direct Connect business and, and what you're trying to do, I think you're gonna, you're also there with you know, Verus and Connexion.

Great and great, not just great companies, but great thought leaders. I mean I've been trying to get Paul to join us. Paul Noble, the founder of Verusion and so forth. And they, what they do is they really cool machine learning and AI tools that really manage supply chain well. And I mean some of their investors are some of their biggest customers that are, you know, world renowned automakers as an example and the insights that they can give to supply chain is really cool. And to your point, John, what we do at Lead Smart is we're on the other side of that house on the front end of how we're working on the revenue side of things with customers and when you start blending the technology of what we do on our end and we're the platform frankly that could connect end user, distributor and manufacturer together, sure really share great data. But the stuff that Connexium is doing and Paul's doing Chris's, I don't, I've not met Chris in person before but I'm looking forward to being on that panel. So we're, we're have a panel. It's a, what is it a week from Tuesday and I didn't realize that you've got your session going on at the same time because I'll watch that recording because I always try and be there when you're presenting. But it's going to be a great event. We'll talk as we wind down today a little bit more about the event. But yeah, we're in this place right now where, you know, it's the stuff that Tom and his team are building of sharing data and connecting and getting siloed data together and, and moving our businesses forward. So, Tom, what's next for us? Wanted to touch briefly. We had an article there from Inc. Magazine, an employee sabotaging company's AI strategy.

Yeah, I think we can hit, I can, we can hit both of these articles together. I think they're.

So the other one was about AI project failure.

Yeah, you know, I read that, I saw that sabotaging, basically, it's not like, hey, they're trying to make their AI projects not work, but they're. What they were really saying in there is they are basically, you know, a lot of rogue AI use right. Within the organization. So, you know, I'm sure there are people going on to deep seek and all these different platforms and putting company information in there. And I mean, you can, you can guarantee all of that's happening. So, you know, I don't, again, I wouldn't call it purposely sabotaging. It just may be kind of not really knowing in some cases. I don't think people are purposely. I'm sure there is some of that, but doesn't mean that's all of it.

I do think there's a component to that, though, Tom, that's interesting to me in the fact that the, you could, could see people that are very concerned about their jobs being replaced.

That's what I thought they were going to go with it. Right. And that wasn't what it would have said in the article.

It wasn't at the end, but it could be very much so.

I, I, when I saw that, I was like, oh, is this about people trying to stop AI use or make it, you know, look like, oh, we got to stop this because I want to protect my job. And maybe there is some of that for sure, I'm sure.

And that's just the other side of the coin of what we still see regularly in our company of the guys that don't want customer intelligence and CRM in their business because they like having the Rolodex of business cards still or, you know, being the one that's controlling that information or they don't want to type a few notes in here and there. Right. So it's just a broader version of that.

Yeah, I think you're right. I think you're right. So. And then the failure article, you know, they're saying a lot of projects, quote unquote, are failing. I don't know if we could define failing because I'm not sure the projects are well defined to even determine what's failing. But I do think that the biggest thing that we have to be cognizant of in business and if you go back to the. Right. The Internet. You know, when it came out in the 90s, what was the first thing that people did with a website? They threw a brochure up. Yeah. And in their mind, oh my God, we're using the Internet. I put my brochure up on the Internet. Right. And. And that was kind of the end all be all. And we're, we're in that phase with AI right now. It's like, oh, I can write an email, I can write an article. All they're using it for is to try and do stuff that they're already doing.

Yeah.

And the real opportunity is to take a step back and look at this and say what are things that we never thought we could do or would like to do and maybe we could take advantage of with AI? So I think that. And we saw this. Right. I mean if you look at obviously the, the Internet was way more than throwing a brochure up on a website.

Yeah.

So I, I think a lot of this quote unquote failure is to me, it's just all part of the process of what we're going through. And I know, look, I know in talking to the companies that we're working with, and these are not small companies is AI is more of a concept at this point than it is a project. So how could you even measure whether it was failing or succeeding at this point?

Great points, Tom. That good. Let's kind of dive ahead a little bit further there as we talked a lot in the last handful of episodes. We've even showed some great videos about. About humanoid robots. And John, I don't know if you were had listened in on any of. I've been talking to my wife about, about cleaning the house and weeding the garden and the sensors and so forth. But good article that we've got that we're showing here related to Mercedes Benz going to the next level. This is from. So article from what's called interesting engineering, but it's talking about Mercedes testing humanoid robots to Speed up car production. And this is, you know, we think that, you know, the Jetsons, back to the, you know, for maybe all of our generation, thinking that the Jetsons in the 70s or whatever cartoon about having the, the automated factories. That was it. Spacely Sprockets, I think, is what it was, right?

Yes, it was.

Yep. And so that's, that's a. Talk about digging deep. But, you know, Rosie the House Cleaner and space these brackets with the robots running around. We are, we are right at the edge of that. And I think we're. We're right. We're right there. And so I think it's, it's an encouraging time. I've been watching this pretty closely just because I'm so intrigued, because we, you know, we've been seeing for, I'd say four or five years now the, you know, humanoid robots from, I think a lot of them were done at Boston Research, I think is the company where, you know, that you could see them, you know, climbing and stuff, but you never saw something with manual dexterity. And I think where we're at right now with we're in this place is sensors being able to say, well, that's. We showed a video a few weeks ago that's unpacking groceries. That's a piece of fruit. It goes in the bowl. That's produce. It goes in this drawer in the refrigerator. Take that to your warehouse that says, I know how to pick orders, but when there's no orders to pick, I also know how to sweep the floor and walk the facility. And my camera can look at that stack of pipe and count it and make sure it matches inventory. And nothing's been stolen. Right? I mean, we're in the cusp of all of those things right now. Exciting time for me.

You'll have your robot by the end of the year.

I don't know that we'll have it because I'm not sure I can afford it. But I think there was. I didn't. I don't think I used the article. But Jensen Huang from Nvidia, he's talking about these things in the near. In a couple of years, not five, seven, ten years out. And Nvidia is making a big push for the chips that are going to manage all of the data that's coming out of that and also some of the internal chips. So it's an interesting time. So, Tom, let's dive into our sales and M and a segment. We're going to kind of move, move through our show today. And, you know, we talked about the QXO thing at length already but interesting article here about from cfodive.com and this talks about the M and A market may spike this year but some weighty challenges loom. John, you follow M and A pretty closely in most of the building material markets, right?

Yes. Yeah.

So you want to give us maybe some of your thoughts and not even necessarily just from the article, but in general, what's your feel on M and A in general right now?

Well, there's, David writes about a lot. There's been certain channels. There's been so much consolidation in electrical, you name it. Just in general I would say the bigger are going to get bigger and although there's really good buying groups out there. 80 iMark. Right. Independent distributor consolidation and distributors getting bigger. I think the pace of consolidation is going to remain red hot for the foreseeable future.

So I think there's two components. I think when we think about M and A and I'm certainly not an expert at it from that standpoint but the way I kind of view it is there is the M and A of, of the large regional guy swallowing up the medium sized local guy and then you have the things that could be impacted by antitrust and the government getting in the way and there's two kind of components of that. My assumption is that especially as we see some additional interest rate cuts, we get any type of clarity in the, in the economic factors that we started talking about today, which is, you know, interest rates, tariffs, taxes, deregulation. If we start getting some clarity on some of those, I think at that mid range, I just kind of think about, you know, less about the Sonopar acquiring but the, the, you know, the, the company that covers five states picking up the two branch company. I think we're going to see a lot more of that happening.

Yeah, yeah. And I, I think Kevin, demographically I think the driver is still there. Most people who own and run distribution companies look like the three of us on the call.

Yeah.

And they're all getting close to if you're privately held there's a lot of them saying well I don't know if my son, daughter is going to take over this business.

Huge piece of that.

So I think that's, that's a big driver that nobody talks about. It's the demographics of ownership.

No, I think that's great. You know, I think about that, you know, out to dinner, meet somebody or at the airport talking to somebody about what I do in the markets that we serve and you know, I joke sometimes and say you know, our, our average customer could live in a two million dollar home, but when he leaves in the morning, he may be in his, when he walks out to his garage, he puts on a pair of boots and, and probably drives a pickup. But he might be worse. 20 or $30 million. Yeah, but he doesn't care that you know about that or doesn't need a flashy watch or whatever to show that he's just a good guy that you know, if he's not going by a job site that day still, I mean we talk to people all the time that are running 20, 30 branch companies that are still CEOs are still going to job sites. Right. Because they've got these deep long relationships. So it's a, I think it's going to be one, it's a great industry to be involved with. I pulled Tom into it about 10 years ago kicking and screaming and now he knows it and likes it. No matter what he says, he likes it. So Tom, you want to jump ahead a little bit and kind of wind our day down with a firing off on a few of these. We talked already about wind supplies acquisition. That's from Supply ht. There's an article here, we won't spend too much time on it, but it's from sales and marketing Management and it just talks about all leaders need to or should not all leaders need to or should manage others. So either of you have any takeaways on that one?

Well, I think that's been an age old issue all the way along. Right. Just because you're a great individual contributor doesn't mean that you're going to be a great leader or a great manager along the way.

So the old adage of just because you sold a lot last year doesn't mean you should be the sales manager.

Right.

Right. I think, I think that's, that's the. We've all witnessed that many times over and, and over again is like how did that guy get here? Oh, he sold a lot, so that must make him.

Right.

So. But good. Nice article. Kind of unpacking that a little bit further. People in leadership segment. We'll move this pretty quickly. But good article there about cultivating leaders and transforming leaders. And then from Industry Today we have a nice article in the newsletter about upskilling for competitive workforce. Reminds me I always try and do this halfway or three quarters of the way through the show and I didn't do it at all today. Reminding those who might be listening on the podcast they're not seeing the newsletter. We have Here we talked about our newsletter. It's on the screen where these articles come from. If you don't get the newsletter, send us an email@helloadsmartech.com and Lily will get you added to that list right away. If you're on active on LinkedIn, just search around the horn in wholesale distribution and manufacturing. You'll see the newsletter and you can subscribe to it there as well. So Tom, we let's kind of just hit our briefly our, our segment on our scuttlebutt segment and oh by the way, before we do that in our people on the Move segment, we gone included in little tidbit about yours, the upcoming Shift conference. Do you want to talk about that real quick?

You know mdm, naw Shift Conference, you know, great event and I love participating every year that organization sent a lot for me. So I just think it's an interesting. I like what naw and then MDM does because they kind of bring in leaders from all sorts of segments.

Yep.

And I think it's a good event. Plus I also like the graphic. They kind of put some nice shadows behind me. They took years off.

Yeah, you're looking, you're looking pretty, pretty sharp there.

Whoever is doing their Photoshop work is pretty good, huh?

It's Generative AI.

Generative AI. I love it. But you know, I, I think what they do and then below, you know, I think there's an article on your session which I think is really good.

And before we jump into that, I was going to ask you that you have groupies and which pin do you use to sign autographs?

Yeah, no kidding. Miss, Ms. Tracy, my wife of 36 years would appreciate that joke.

Okay. Very, very good. She might have differing thoughts on.

She would have differing thoughts.

The reason, the reason we wear these things on our fingers is because we have. At least in my world I have someone that keeps me grounded.

That's it.

She is more than happy to tell me I'm not nearly as smart as I think I am.

Yeah, always out kick your coverage. Kevin.

If you, when you meet my wife, you would know that I was playing above the rim.

So.

Absolutely. So I've got an opportunity at the big ISA event coming up in Nashville. It's the 30th through the second, their ISA 25 event. If you're anywhere even remotely touching the industrial segment. And I was, I was talking to some folks in the electrical business that do some industrial work as well recently and said listen, you need to get involved with isa. If this is, if this is Going to be a serious part of your business at any point in time. And it might be the electrical, you know, company that's selling some safety and maybe, you know, some tools and things is get involved with isa. Brendan's doing a great job running the organization. He took over as CEO a few years ago. Great job of that. Speakers that they have, the panels that they have, the Women in Industry program that they have, the Emerging Leaders program that they have. They just launched the veterans program. They're doing some really cool stuff. I'm like, we. John, I appreciate you bringing this up. You know, I have an opportunity to speak with two other great technology veterans on AI and, and digital transformation. It's going to be pretty powerful if you're a ISA member, I believe you'll be able to see those sessions a week or so later by logging in. And so, you know, that's how I'm going to catch your session because I'll be missing that. So that's great. Two things from our scuttlebutt section before we wind down today. Paul was with us earlier. I don't know if he's still with us, but congratulations to the folks at dsg. We have a large segment of their management team that joins us on the show here on a regular basis. Become good friends with a lot of those folks at dsg.

Can I just say one thing about this? I just moved back to Des Moines from all those years in Atlanta because I started here in Iowa with a distributor.

Yeah.

Gonna see if I can convince Paul to let me in the facility now that I don't compete with him anymore. But really good operator. Right. I'm. I struggle not to call him. Dakota Supply Group. I know.

Yeah, me too.

So great operator. Kind of looks like a cool building. Looks like they can get some really high racking in there, doesn't it?

It does, yep. Paul just says building futures. Paul is, Paul is the example, as are his team. You know, that his executive leadership team behind him, they're just, they're just good people, which, you know, I, I, John, you probably not heard me say this, but I have to tip my toes into the technology world regularly as a CEO of a technology company. So I'm at conferences and so forth. And it's not that there's not good people there, but when I'm at those events, you know, people are like, where are we going? What are we eating? What craft cocktail am I having? I sit down at an ad event with Paul and we drink Miller Light, you know, and just talk. Right? And so good people. And, and he says exactly what I would expected from somebody like Paul is. And in fact I was going to comment on this, John is if Paul doesn't welcome you in, you did something other than compete with him. Right. You shot his dog or something. So there's your invite in the comments there. Our friends at Tipco in the mid Atlantic states have just kind of done a partnership and I don't know if this one is partnership meaning acquisition and we're calling it partnership first. But the good folks there, Rob and his team at Tipco have done another, another project to move them, expand them out a little bit in the hose and fittings world as well.

So again, they've got a great reputation in the business. Never worked with them, but highly respected.

Yep. Another group that has brought two companies together. They're functioning really well. I need to get Rob on the show. It's one of the few organizations I've ever met that seems to be successfully operating with dual CEOs. It's not common at all. So anyways, that's. Let's wind this down for the day. We've got our second look segment there and, and our great reads and listens. We've got a piece in there about, about leadership as well. So if you're watching reading the newsletter, make sure not to miss those. I John, I can't tell you enough how much I appreciate you being with us and making the time. I have one favor to ask you. Should you come back again down the road.

Yeah, I would, I would love it. And I wanted to give Tom a shout out because I always try and get one thing out of every one of these and when he was talking about conversational AI, I was just writing my hands off. So I'm hoping you'll can talk about more AI. Right. It's fascinating the reporting you're doing on it and I think learn something every time. So I appreciate that, Tom.

Oh, good. Yeah, we can, I mean there's a lot, a lot of things starting to come together technologically that are making it more commercial ready. Right. I think a lot of these features and things have been more, I mean for developers or in kind of a, I won't say gimmicky, but they certainly weren't ready for prime time and they're starting to come together for prime time. So we'll definitely dig more into that as we move along. But thank you.

Just to kind of add to that, it's. There's no better person right now, I think to be listening to on this front is than. Than somebody like Tom, because we work with wholesale distributors and manufacturers every day. Tom leads the team that does all the implementations. So he's in on a lot of those calls. It's not just him, but he's in on a lot of those calls and hearing and listening to what's going on. But then he's on the cutting edge of what the technology can do. And one of the things that we're seeing right now is we've got a lot of events that are about specifically AI and you got a lot of vendors there. And what we're starting to see is it in the distribution world is people starting to buy some shiny objects without a plan. And what Tom is working on with his team through our technology is a true platform for visualizing data across your organization using AI, which is different than buying a quick shiny object that says, this might help me with something supply chain, but I don't have a plan for it. So I appreciate the, the compliment those.

Those failure article that we were on.

So, yeah, very good. So, and you know, I, I compliment Tom once a month. So now that, now that you've done it, John, I don't need.

You're good. You're good all the way into mid April.

Yeah, very good.

Spring.

So, you know, it is. Yeah. So that's worthwhile. Very good. Well, hey, thanks for everybody that joined us today. If you're with us, live wonderfully. If you're listening again on the podcast, thank you for that. Please share with your friends what we do each week. The show grows each week. If you find value to this, share it with your friends. Hit the subscribe. If you're on YouTube, hit Subscribe. If you're on LinkedIn, follow both lead Smart technologies and the show. If you are listening on the podcast on any of the platforms, the best thing you could do for us to support what we're trying to do is not just subscribe, but leave a review. And we go back and forth between number one and number two globally. Podcasts in wholesale distribution, manufacturing. We'd love to stay number one, but number one. And number two would be. Is just fine. But get this out to your friends if you can help us with that. And then the last thing is we can't end this show without acknowledging that we couldn't do this without the company that, that Tom and I work for, Lead Smart, that sponsors the show, because there's quite a bit of costs that go with that. So if your company is looking to digitally transform, let's have a conversation. We won't push you to buy anything. Let's just have a conversation about how you're looking to digitally transform and talk about your data use and so forth and help you on the right track. So John, thanks again. We'll wish everybody a wonderful weekend. Be kind, be safe and do good things.

Thanks. Hopefully your brackets are doing well. Everybody.

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