Three Industry Legends Talk Transformation in Wholesale Distribution

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.

Good to see you gentlemen. Thanks for being here.

Happy New Year.

Happy New Year.

Yeah, thanks.

This is great. So everybody that's joining us, thanks for coming in today and coming in on the live show or if you're listening to this on the recorded podcast later, we appreciate you doing so. We, Tom and I get together every Friday morning on our show here the around the Horn in wholesale distribution and manufacturing. We talk about the news of the week and how it impacts wholesale distribution. We talk about things like mergers and acquisition and the economy and supply chain and shipping issues and port strikes and sales marketing, AI technology. And we bring all that together and new sections that we have within our newsletter about people and leadership. We bring all those things together and get together with some great guests. But usually when we have guests, it's, it's only one. And this week we're, we're very fortunate to have. I'm going to use the term that has been quoted a number of times on LinkedIn that we have some legends with us today.

This is me saying that Paul says they're icons.

Icons. Okay, there we go. So that's, There we go. Well, and you know what, Paul has been on this show with us a few times and he was called something similar. So Paul Kennedy's a good friend and a good friend of the show and so we appreciate that. But yes, hell of a person, a.

Hell of a leader. Paul Kennedy is.

Yeah. And we'll probably talk more about their organization as, as we go out throughout the day as a reference point probably because we'll spend some time during talking about people and, and organizations and leadership that we see in those groups. So but anyways, to get before we kind of get started, we'll do a little bit of housekeeping that we do each week and we'll going to go around and introduce everybody in just a moment. But again, I'm Kevin Brown. We've got Tom Burton, who's my lifelong friend and co founder of the company. We work for Lead Smart Technologies. We get together again as we mentioned every Friday and discuss the newsletter that we put out if you don't get that newsletter and you would like to, you can do that in three simple methods. To do that, you could go to LinkedIn if you use that regularly, and you can just search around the horn in wholesale distribution and up will pop up the newsletter and you can subscribe to that. You could send us an email@helloadsmartech.com and we'll get that out to you as well. Or we have a website for our live show podcast called www.aroundthehornpod.com. see past episodes there. If you happen to be listening to the recorded version on the podcast on Apple or Spotify or wherever your format is, you will be seeing these five handsome faces today. Or if you come in at a later time and we're doing our regular weekly newsletter review, you won't see that newsletter. So you would definitely want to go back and watch Today's episode on YouTube Live, LinkedIn Live, or Facebook Live where they're all recorded and available at the Lead Smart Technologies page there. So we'll kind of hit a little bit of our sponsorship info before we get jumping ahead. But we couldn't do this each week if we didn't have the sponsorship of the company that Tom and I work for. Lead Smart Technologies is a AI enabled smart CRM and customer intelligence solution. And when we say smart CRM, it's because what we do is so different than traditional CRM thinking. We kind of take a reverse look at that. We look at trying to empower salespeople, customer service, inside sales and other parts of the organization with large amounts of data to help them make informed decision to serve customers better. And we do that by connecting to ERP systems, marketing automation, e commerce systems, other parts of an organization. We bring that together. We run some models and tools against that to help people see how they can benefit their customers. White space, selling what quotes are open, things like that so they can really understand what the needs are of their customer. When we do it that way, we get people that love using the technology because it's not their traditional, as I call it, your father's Buick CRM. So we do things different. Could ever be of help to you, please reach out to us and we'd love to be of support to that. So what our plan is for today is we're going to introduce all of our guests momentarily. We did this show last year and I'm again so thankful for these three fine gentlemen to do this. I'm hoping I don't do anything wrong between now and this time next year. And we can. I'm not in a federal prison, that none of you are in federal prison. And that we can get this group back together because last year was so fun and insightful. Our plan today is that we're going to kind of take a look at some highlights and some lowlights of 2024. We're going to talk about some of the top things seen out there in the marketplace and around the world and as it relates to wholesale distribution and manufacturing. And then we're going to prognosticate, I'll say a little bit about the coming year. So before we dive into some of the thoughts on the year, Mike, would you introduce yourself and for those who have been in a cave for the last 70 years or 40, 50 years and tell us about your background and some of the travels that you've had over the years.

Well, I got 11 million frequent flyer miles. My name is Mike Marks. I'm old. I started a consulting business back in 87, focused on wholesale distribution and working with manufacturers that are in channel intensive markets. Before that I run an electronics semiconductor distributor and ended up doing a lot of M and A for an English company that acquired us. Although at the time I thought I was a legend in my own mind. But back in the 80s, this is the Michael Milken days. An untrained monkey could have made money in M and A, but. But it certainly was a good experience for me. We've, we've. Right now I'm the founding partner, not the managing partner. Mike Emerson is our managing partner. And, and I'm fading out. And I've sit on the boards of a couple distributors and one manufacturer and, and just do advisory work and playing around with stuff I want to play with. And I told the other partners to treat me like a lump in a toothpaste tube and squeeze my butt out of there as fast as they could. So that's it. Race sports cars have two granddaughters. My life's good. Other than the fact that I'm on drugs right now and just had rotator cuff surgery. And OxyContin is really good at getting rid of pain. I can verify that. First time ever.

And just to be clear, Ian and Dirk, you both have a mute button for Mike. We installed that today. Something happens and that we're in need of that. We all have the capability for that. So very, very, very good.

So after that monologue I could just sit back and listen to.

Right. You and me too. But that's what I'm thinking.

I have an option here that says ban from studio.

Don't do that because he'll come down at some point.

Let's call this the mic show. Let's go, Mike.

No, no, no.

See how this goes.

I'm supporting the conversation. I'm not leading the conversation today.

I don't know that there will be anybody leading the conversation because even though that's sometimes my role, I don't know if there's a possibility of that actually. So how about, Dirk, will you kind of share with us a little bit about the life and times of Mr. Beveridge?

Yeah, sure, sure, sure. So, hi everybody. Dirk Beveridge, founder of Unleash WD and the executive producer of We Supply America. After what, 30 years of strategy and sales and leadership work in distribution. Coming out of the pandemic, as most of we created a platform called We Supply America to go out and champion the noble calling of distribution. For the last four years, created 32 documentary films, an additional 32 CEO films that truly are MBAs in and of themselves. If you really study those films, 54,000 miles going across the country. And as I say, come with me guys, and don't walk in. You know, for 30 years I walked into the front of these distribution businesses, up to the boardrooms, sat down, talk strategy with the C suite and the like. For the last four years, my world's turned upside down and I've been pulling into the back of these amazing businesses, walking in to the receiving docks, the shipping docks, meeting, Quite frankly, the 80% of the employees who are often overlooked under invested in. And I've had the opportunity to meet these individuals. And so it's been an amazing, fantastic experience, champion this noble calling, distribution. I think we'll talk about that a little bit more. And going forward, we are absolutely committed to these independent, family owned, employee owned distribution businesses that are the backbone of this country. And what you're going to see in the very near future around March 1st, is you're going to see a recommitment out of us to lead a movement throughout this industry that truly empowers these 80% of individuals who are again often overlooked under invested in throughout distribution manufacturing to live fully alive and create a ripple effect throughout the world as a result of that. And we're going to challenge leadership in terms of the responsibility and opportunity they have to make all that happen.

That's great. Thanks, Dirk. I had an opportunity to watch quite a few of this year's. How many have you shown from this year's Travels?

Well, there's eight each year, so four years so 32.

Have all of them been published? Okay, I've only seen, I think three. I know I saw the Thomas A. Somerville one which was just fantastic. The Pace Supply one here in California were great, great, great teams at those companies and all of the other ones. So thank you one, thank you for what you do and then for being with us. Mike, you were going to say something.

Derek, if you're really trying to start a little more passion for the family owned businesses, give me a call after this. There's several people in Congress and a couple senators that are mounting a big effort to employee ESOPs and making it a lot easier. So I can connect you into that, that might help the process.

I love that. Michael, I will call. Thank you, that's awesome.

Great.

Well, last but not least, Mr. Heller, my good friend. Appreciate you being here. The probably the gentleman with the most experience behind a mic that's with us today. So we know you'll sound best. You started before we went live with a horrible dad joke, so let's, let's hear about your business.

Well, speaking about walking into the back of a distribution branch, that's where I started. I was a truck unloader at a Granger branch. It was a college job. Never thought, you know, 35 years later I'd still be doing it.

But I fell in love with the.

Industry the way that I think everybody on this call did. And I was a Granger for 15 years, left as the VP of marketing and then did jobs like that for three other publicly held distributors in different verticals. So I grew up, well, grew up in distribution. Today I co founded Distribution Strategy Group. It'll be five years in June. We do specialized educational content for distributors, I.e. discussion panels, research based specialty presentations. And we have started doing live conferences. This is our next one, applied AI for distributors. It's in Chicago, June 24 through 26. This is, I think, when you really shouldn't miss, somebody from your company should go. There's so much happening with AI and the focus of this event is what are the available applications of AI today that could help me run a better company? We've just announced our first speakers. So Trent Gillespie, who had a couple of really serious roles at Amazon. Noel Russell, who's the head of the AI Leadership Institute, has worked at Accenture, IBM, Amazon. And Don Sarno, who's the SVP of Digital enterprise for Sonepar, is doing a keynote as well. We had a bunch more great speaker announcements coming. Also, technology companies present to educate you about what they do and how they can help you. But the best of it all is the networking with other people who are struggling with the same challenges as you. And you can trade tips and stories and ideas about how to apply AI in your business, which is absolutely essential because the opportunities for improving customer service and productivity are extraordinary. And if you don't do it, you're going to fall behind competitors who are.

That's great, Ian. Appreciate that. You know, I was going to comment having been to this event, hoping to be there again here in June. Is this the. What would I say we all spend our careers going to events. You know, wall behind me. I've got, you know, all the lanyards from the last.

But do you really. That's cool.

Years and they just keep keep stacking up and. And it's what we all do and big part of our career. And I encourage people, if you don't get to a lot of events out there, certainly try and get out there more. But you know, the re. The reality of things is we get to some events that are. I don't want to say media, maybe mediocre is the right word, right. This event, I think the venue is right. It's not a small event, but it's not a large event. And it's such that the networking. Because every event says something great about networking, but when you got 1200, 1500 people, it's pretty hard to network. This event is a couple of days, a medium amount of people. I'll say. And I'm sure, Ian, you'd love it to be 1500 people and it'll probably be there one of these days. But I loved when I was there the networking opportunity that is available because the timing between events, the meals being shared, it just. It's a well done event and you guys have done a phenomenal job with it. And I think it's probably just going to get better here at the third one.

So thank you so much, Kevin.

I really appreciate that. It's a good. I don't think I did that. You know what? Before we dive into our topics for today, there's some. There's some swipes being taken and there's some compliments in our. Oh, no comments behind. Just said Ian, you're still unloading trucks. Jonathan has doing all the heavy lifting.

That's true.

Oh, that's putting the knife in and twisting it. That was. Yeah.

Now let's. But let's go to the positive stuff. There is that Tom. And maybe you could hit this. Our good friend Dan Judge is with us today and I think all of you gentlemen know Dan, the founder of Netplus alliance, and he made a comment about this being the Mount Rushmore of distribution. Marty McLaughlin, the former chief marketing officer of Affiliated Distributors and a great marketing consultant in the distribution world. Same thing. I would think if we were doing this as Mount Rushmore, we would need Dan, a judge, to probably be without question as well. Right.

Dan actually has more compromising photos than probably anyone in the industry.

Don't tell Jennifer.

It's all adult supervision. It's all good, you know.

Yeah. Jennifer Murphy might not like that about dad, but we appreciate him being with us. But we got Brian with us that works with Ian. Got a lot of great folks that are chiming in this morning with some good comments and we haven't even got started yet. So, Tom, before we dive in, anything to add? We've been kind of leaving you out so far and I don't mean to do that.

No, let's just get on with it. Let's get on.

All right, so let's dive into the topics of the day and what we did last year, it worked so well. Is I was going to ask each of you, the Marty says he'd love to see these guys on TikTok, but we've got to get. Got to hurry to do it before Monday.

The.

The Supreme Court upheld the TikTok ban this morning if you didn't catch that. So we'll see what happens on Sunday. But what we'd love to do is talk to each one of you and kind of take a look back. And we did this last year in 2024, looking at 2023. Mike, before the medication take any further effect, Mike, what were your highlights? We're going to start with low lights. What were your low lights that you saw of 202024 as we look back on that?

Well, and just in the context, I was talking to Tom Burton before the show started because I went back and listened to it last night and with very few changes, we could almost just replay it. I mean, I think probably one of the things that, that we all hope was going to get better and didn't is we. The B2B supply chain is still screwed up. No matter what anybody says. The B2C thing looks like it's coming back okay. But it's just, it's so hard for people to have a predictable inflow of inventory to meet their customer needs. And everybody's on the defensive and everybody's. And there's still force matures floating around out there, which shouldn't be. But, but there are. So that bothered me because it's, it's still sucks. That's a technical consulting term. The other thing is, and if I kind of look back, we talked a lot last time about it's talent really matters. You know, the old, you know, the Gen Z, they want to work, you know, we talked about last time. They just don't want to work for some curmudgeon that still thinks it's 1957. So, so the, the issue is actually getting people engaged. But I had several. I had two things from a technology point of view. I will not name names, but people were trying to put in a CRM and then a piece of order to cash software. And both were epic fails because they didn't get the. They were trying to do a cram down. You know where some executives in the star chamber said this is good. You know, it's like you go to the doctor, he says stop drinking, eat a lot of kale. And they did the same thing with these and put it down. And because they didn't have the right people, I mean not only didn't it not work, it created more damage than if they'd started. And it really comes back to people and people have to own what they're trying to do. You can't, you can't edict this and give orders or it's all going to turn to crap. And it just it. And I'm seeing more and more of that stuff that's kind of come out. The other thing that, that it's not major, it's. But it's personal opinion. I see a lot of people playing with AI and it'll be interesting. I want to talk more about the, the shift that Ian's making with this program he's got coming up. But I see a lot of people doing basically two things. They're sitting using ChatGPT, right. Just to find out things. Kids are using it for homework, although faculty doesn't believe it's true because they all lie and sorry, I just had a senior moment because of the oxycontin. It's gone. Sorry.

Well.

But no, I'm not going to be like President Biden and try to talk through it and recover. I just had a senior moment. So I'll stop now. Kevin. It'll come.

Good thing you're not running for office.

Oh, I couldn't get elected dog. I have too many ex wives.

Very good. So ivory tower decisions still happening. Is that a safe way to put it?

That is actually the right way to Put it. Here's the other thing that. Sorry, it came back, everybody. I'm on the board of University Florida Tech, and we just did an AI symposium and I ran the panel and several people came in from business and they were saying, our board's putting pressure on the executive management. We need to do something about AI. They have no idea what it is, but they're responding with this FOMO fear of missing out. The board's putting pressure on executive management and they don't know what to do. And so they're just doing empty activities rather than going through the actual process to figure out how to do it. The knowledge of how do you actually do it? Is crystal clear. There are people. Well on this way in. The gap between the early adopters and those that aren't is getting bigger. But. But there's so many people that are still wrapped up on this. I think there's just a lot of misspent energy and confusion that's out there as well. I'm sure Ian sees this all the.

Time in my question for you on that. Or maybe this also would go to Ian as well. You mentioned fomo, right? That you're seeing some FOMO around AI, which I don't. I think that may be one difference from a year ago is that that FOMO maybe wasn't at the same level. Are you seeing that on a broader level where it may not. They may not know what to do, but there's like, I got to do something or else. Is that happening more?

Well, what's happened. It all used to be talk. Everybody thought we got to do. It's the greatest thing. Remember everybody? Well, I'm never going to need a website for my customers, right? And, you know, denial is more than a river in Egypt. But what's happened and it. What's happened. And if you look. If you look at speakers, guys, this one coming up. That's why I'm excited about it. These are people that have actually done it. I did an AI conference at last year's NAW executive conference, and not only this was in force posted and we actually walked through the specifics of what somebody had done in Grossiflex, which is a $500 million distributor. And then the other thing is Indris International, the CEO, was there and said, look, I'm in the middle of doing three things right now. So what's happening, Tom, is there's enough things popping up now where people are doing things and getting results that it increases the fear, uncertainty and doubt. You know, they're just you know, oh gosh, maybe this is really something happening and they don't know what to do. And then the other thing is they get all confused and this is, this is like dumb. And dumber is they say, well, we're going to get AI and use the McDonald's thing and 20 minimum wage in LA and we're going to get terminals and people will order their own Big Macs. We won't need service people. And they're forgetting the whole point of AI is to empower your own people, not to replace their people. And they're going down these rabbit holes. So I mean, I can go on about AI stupidity because when you train these models wrong, you get artificial stupidity. I mean there's, there's some really bad training examples out there. But sorry, you got me excited.

And we're going to dive in a lot more to that discussion. We got an interesting slide to show that'll relate to something you just said. I like, I love that you just were talking there about Michael Knight and. And the folks at Enduries there Elite Smart Technologies customer and they're doing some pretty cool stuff with infor ERP system and then the data that we're bringing from that into our platform that's starting to enable their team, their great organization.

Be careful what you do because I'm working with somebody, a big AI project this year. But I'm forbidden to talk about the specifics. And between you and I, we don't want to get Michael mad at us because he's a lot bigger than I am. He kicked my butt.

What I just discussed, Mike, is stuff that Michael's posted on LinkedIn so it's all safer. We wouldn't have talked about any further, but they're doing some really cool stuff. And the reason I only. The main reason I mentioned it is to go back to. You had talked about FOMO which is I think really important people are seeing is there are executives like Michael in that setting and others and people that are going to Ian's events or people that are even talking about an Endurk's travels, I think about what they are doing to enable their people to support their customers better. And then the rest of the folks out there that are, you know, relate to the. They were late to the Internet, they were late to E Commerce, they were, you know, still haven't done CRM or marketing automation are. This stuff is all flowing around them and they're. That FOMO that you mentioned starts to build up in that setting. So that's very good. Good, let's pop on over. Ian, how about you? Low light of 24 rubbers that you saw.

I don't know if it's a low light as much as a threat, but I mean there are the importance of scale and distribution is growing rapidly and that's coming from a couple of directions. One, it's coming from consolidation, right. Secondly, it's coming from these people outside the, these entities from outside the industry coming in. I mean qxo, the Brad Jacobs entity that's trying to buy distributors and they're in a battle right now. And then, you know, Home Depot buying SRS Distribution, Amazon business has announced that they, that they're going to do vending in commercial industrial plants. So that looks very MRO distributor like. But I think the sort of the, the next phase of competition is actually moving offline. Okay. And what I mean by that is online availability is becoming commoditized. I can find anything anywhere. And as you get this marketplace effect and people pretty much add all their suppliers items to their websites and you've got a bunch of different marketplaces expanding or being created, it's not hard to find what you need. I mean, unless you're a Rockwell distributor or you have an exclusive line on something, you probably don't carry anything that differentiates you from a thousand other sources. I think what's happening is that these mega players know that and they're getting ahead of the curve. Which is why you're seeing Home Depot, Walmart, who now has Walmart for business by the way, and Amazon building hundreds of millions of square feet of distribution center space around major metropolitan areas. Because you know, spec to that book Proximity Mike, that you recommended to me, it's Proximity is the next phase of competition. And if you can order something and get it four hours later or you know, overnight, now seems crazy, it's quaint, right? And so if I put a 2 million square foot distribution center on the west side of Chicago, I can serve worst case scenario, next day from Milwaukee and Madison down to Indianapolis. Right. And that overperforms 120,000 square foot branches in every way. The availability, the number of SKUs, I can get that into a sufficient number, my working, overall working capital performance, I mean your, your service levels and your, your working capital utilization here just skyrocket simultaneously. And I think that's where the battle's going. And I, and I think there are some huge distributors that get, get it, but there aren't many distributors that are really positioned to compete in that coming world. So we're going to have to rethink how we do inventory and delivery and proximity in the future because those big players are coming and I think they're already figuring it out.

A question for Dirk on this. I know, quick, Kevin, we'll get to Dirk in a minute. But yeah, Dirk, you know, obviously you're focused on that independent distributor. How do they compete with that?

I wonder the same thing, Tom, listening to Ian there.

Right.

But you know, certainly they're going to have to look at scale, I think. Was it Mike or Ian mentioned that. Right, Ian?

Yeah.

How are they going to be able to scale their business? I think partnerships are going to be absolutely critical to look at non traditional partnerships going forward as well. But they're going to have to dig deep into the possibilities.

I'm going to add to that and throw out to everybody. As we talked about this. I'm glad you brought this topic up, Ian. It just kind of makes me think, I kind of call it the Amazon effect. We talk pretty regularly in the show is that I think right now we're in this gray space that is coming of B2C and B2B is we've got, you know, we're going to talk a lot more about people today. But you know, we've got, I think it's 70+% right now of it was 62, I think when we percent when we talked last year. It's 70ish percent now of B2B buyers or millennials. And those, those are the guys that, right. Are, you know, ordering doordash on their phones for lunch and they took their girlfriend to the movies the night before and they bought their tickets on their phone. And there, there's an expectation that I think is coming. And we, you know, this is a common theme on this, on this broadcast that we do is that we're probably also going to see salespeople that fit into that role as well. And we just have this change dynamic. And the expectation is why can't I get the connector or the wire or the safety equipment or whatever at the speed that I can get something that I order off my phone? I mean, I'll use our example. We, you know, we're empty nesters. Darlene and I are now it's, that's the two of us and our dog Cooper. And late middle of December, we got back from vacation and got horribly sick. Both of us spent three days in bed looking at each other about who was going to go feed the dog. And guess what?

Dog's good.

I heard him a minute ago. Yeah, I'M gonna tell him you said that, Mike. But the reason I share that is I went on at about 9 o' clock at night onto Amazon and I had Mucinex, nyquil and like four other things that were get delivered between 4 and 8am the next morning. So when I woke up, I got to the door to get the stuff that we needed. That mindset is starting to find its way into B2B buyers that have a very high expectation. So I think right now we're in this gray area that there's a blending of B2B and with B is B2C expectations coming into B2B. And in my mind that's, you know, a big threat that's out there right now that's got to be addressed at some level.

Can I throw a question out to the group? So what's going through my mind is, you know, great example, Kevin.

Right.

Of getting that your medicines between 4 and 8am but can a manufacturer truly operate their plant, their facility with that mindset? I'm not sure that they can. And this is a question to y', all, right? There needs to be integration, right, with their supply chain. There needs to be integration into the production schedules. There needs to be integration into their design process. There needs to be integration into what they're actually taking in and producing and shipping out of that manufacturing facility as an example. And if they're relying on everything to come because somebody gets on the phone like that. So I love the example, but is it reasonable? Yeah. Is it reasonable for what we're talking about here? And Mike, you raised your hand. I'd love your input.

Well, I give you an example that creates a fair amount of butt rash for me. And you've seen this with your independent distributors as well. When you have a good customer relationship and you've earned it by your actions and deeds and service and you're trusted, we do punch outs where they can actually enter the order on their system and it automatically shows up. I call it lights out order processing loop. It just prints. It goes through credit and prints out in the warehouse. So. And we make it seamless and easy for the customers. We're taking friction out of it for them. The technology is like 1500 bucks to buy one. You just do a one little piece of software. But what's been amazing and all the work we've been trying to do, manufacturers don't want to give that same transparency to their distributors. And so what happens, that's why all the stuff in their portals, their delivery times, all that stuff is frankly, garbage. And they don't want to share it with you because they're figuring out where the product's going to go. And so to me, we're doing an AI project for a big distributor. And one of the things we're doing is we want to find one of their strategic suppliers that is willing to actually share the data because all the salespeople, they're, they're just so tight, they don't want to share anything because it's all win lose kind of stuff. And so we're going CEO to CEO, trying to get somebody because it has to happen at the top because they don't want to share. Distributors, in terms of innovation and technology are way ahead of most of the manufacturers that they're buying from. And it just, it's frustrating. It's one of the constraints on distribution going fully digital.

One of my low lights is, is, is ties right into. And I gotta get back to Ian here in a moment for his second one, if he has one, and then on to Dirk, but is the fact that we are still here. We are. You know, and I started working for, you know, a national safety and first aid equipment distributor in 1989, and then in 2000, I'm sorry, in 1997.

I'm.

Sorry, 93, started my manufacturer's rep agency in the industrial, industrial safety segment. And the thinking at the distribution level is different, but it's not where it needs to be yet. About that data that you just talked about, Mike, and the reality of it is we still have salespeople that don't want to use CRM because they think that they're giving too much information about the customer. We have distributors who don't want to share information back to the manufacturer because they think the manufacturer is going to go direct. And we talked about this in last year's show. I'm seeing a little bit of a shift, but it's few and far between in that setting now. You know, on the technology side, I think when you enable a salesperson and this. Mike, I've heard you stand on a stage and say this and Ian said basically say the same thing is, and it's. The philosophy of our company is that when we provide and Mike, I think you used the term and the, the first time I heard you say it, we had lunch about an hour later and we talked about it doesn't matter if it's 60% or it's 80% of the data that's in the CRM is coming from the company to the salesperson. I'VE heard Ian say something very similar standing on a stage before, but when we enable our salespeople with the tools that they need, they'll embrace the little bit that they need to share. Tom spoke to one of our large customers when he was visiting with them a while back on the same topic. They said, you know, as we move and migrate into more and more AI, the data that the company's putting in that's going to be available to you to even ask questions of your data is so far greater than the little bit that you're asked to type. Go put a little bit of your information in there to feed that AI as well. But I think we're still living in a world where we have that segmentation between distribution, saying, I don't want to talk too much about what's happening at the customer to the manufacturer, because they might go direct and the salespeople are in that spot. But where we have to get to is this place. And it's back to Ian's lowlight in talking about, I think you call it more of a threat is these big players. If you want to fight the big players, it probably has to be a partnership between salespeople, leadership and the manufacturer and bridging that gap between there so that we're all on the same page of how we go to market.

Ray Del Vecchio just posted a comment that I thought goes really to the heart of this. And he was talking about there's a lot of different flavors for. For next day delivery. And. And the point that just jumps out at me when you look at his comment is that it's really about understanding what the customer needs. Because if I get it at 3 o', clock, Ray's saying I can't use the product that day. It's too late in the day. But finding out what people need and using the technology to speed the communication so I can give somebody exactly what they want. It's like Goldilocks and porridge. It's just right. So we need. If you talk about these alliances, the industry is never going to get there. But the innovators that figure out how to put these together, you know, let's get together in a group. We can be Crips. No, they took that name. Let's be Bloods. Oh, let's be Ad or let. Let's be Imco. Let's be it Go. Or let's be Afflecker. Let's Net plus Alliance. You see more innovation on this stuff coming out of the marketing groups with independent distributors than you do in the really big companies.

Well, and I think that's a great point that ties back to Paul Kennedy's comment earlier. He said independent distribution is the ultimate, ultimate proximity play. We are where the customers are. And I think that's in my mind. And you know, every day, all day, talking to wholesale distributors and manufacturers, but more so distributors is. And it taught Dirk, it ties into your travels. I think that you see as well is it's in. Ian, I'd like, I'd like you to throw some rocks at what I'm going to say if you, if you see something differently here because you might be well suited for this. But I think when you look at an Amazon business or you look at even a Granger at some level, or HD Supply or srs, as they get so big, it becomes more of a struggle for them to be nimble where just Paul made the comments. So I'll use code of Supply Group or dsg. In this setting is when you've got people that are at a DSG branch in Fargo, that grew up in Fargo, and perhaps the sales guy's uncle works at that plant that they're going into. There is a different relationship than an Amazon business could ever have in that setting. So I think it's. To Paul's point, it is. The proximity issue is great because they got trucks on the road and so forth, but the other side of it is there's a community component of it too, that you don't get from a company that sponsors a college football game or bowl games.

One of the things that I got listening to some of the stuff Dirk's done on his broadcast is when you, when you talk about, when you talk about the people in the back room and the salespeople and the drivers, they have a personal responsibility. They took. They take a look at that as their mission and what they're going to take. And when somebody owns that, and it's not just somebody else tells them, it's because they own it. They actually own it. And I, and I think that's part of the difference.

Guys, on this, if you don't mind, let me. I'm going back 2500 years when I'm listening to you, this, these relationships and the like.

Right? 500.

Because he just spent some time drinking beer in the agora.

Come on, Mike, you remember.

You'Re like you.

I'm going to relay a conversation you and I had.

All right?

No, you know, I, I go back to what Aristotle taught us about what you're talking about, Kevin and Aristotle 2500 years ago told us that there were three levels of relationships. The first was relationship based on fun.

Right?

Let's go golfing, let's go play poker together. But after that fun is done, the relationship is gone. The second is transactional.

Right.

It's based on money and it's based on transactions. And everything you just described about that Amazon relationship, Right. Is purely transactional.

Right.

And as soon as that, as soon as that product is delivered, that relationship is done until another transaction needs to happen. Right?

Right.

The third thing he taught us was 2500 years ago was that the third level of relationships is when we truly care, when we truly are close, uncle or not, uncle or not, but we truly care about that customer's business. Their ability to produce profits, their ability to reduce costs, their ability to improve productivity, increase their sales. And when we truly care about the individual and what they need to thrive personally and professionally. When you develop the relationships and I think the proximity that Paul Kennedy talked about that these independent, family owned, employee owned distribution businesses have, there's a competitive advantage when we commit to those types of relationships beyond transaction to what Aristotle called Eudaimonia, a good soul. We bring a good soul to the transaction to truly lift that organization and the people that we're interacting with.

That's great. I love that.

If I could just, if I just comment real quick. You asked me specifically, specifically for a low light, which is, I brought up that example. I'm not predicting that independent distributors are going out of business. Okay. I mean, I think my point is the nature of competition is changing and you have to keep up with it. Right. So, you know, Jason Hein put in the comments, there's plenty of room for services. You can't ship installation in a box. Right. So I think there are a whole bunch of ways that independent distributors can compete, but I think they're different than the way they used to compete in the, the past. And they need to make changes in their value propositions in order to retain share. I mean, bottom line is it's not good news when Amazon, Home Depot and Walmart move into your industry. It's just not. Right. Absolutely. They don't always win. Right. And I think it's time to be very thoughtful and strategic about how you adapt your company going forward. There is plenty of room for these independent distributors, but things are changing and it's time to, it's, it's important to continue to evolve.

Well, so there's, there's two things I want to hit with that really quick and I'm glad you said that. Mike, you made a comment when we were together last year and I'm going to ask you to plug in the second part of this. You were, we were talking about this. I think it was related to E commerce that we were talking about and it was. Mike, you said the first order is a sale, the second order is a transaction. I just, I think. Right. And I think that's where that differentiate comes is, is if you're looking at those, whether it's a Walmart plugging into this closer now into our industry that we talk about here, it's what Amazon business is doing or it's any of the, the mega players out there is you, you might see more of that purchase slash transition or transaction piece going to them that just says I'm going to get an auto ship on something. But you know, you're never going to find somebody that's going to come from an Amazon distribution center or a Walmart distribution center, probably even you know, at a higher level at HD Supply, even that can say, hey, you know what, that part that you're getting ready to use is in that piece of machinery at this particular plant. I call on Fred at the other plant down the road that does similar stuff and Fred does this with that and it works really well. You're just not going to get that. And that's what the family owned and locally owned distributions or companies are going to get. The second piece that I wanted to catch on this is and Tom, you may have some feedback on this as well and Ian talked about it in the past but the technology that's available to a two person, one location distribution company available today, whether it's with a Shopify store or it's a robust e commerce tool and whether it's what we do or not to help them, there's just never before have we lived in an age where a very small company, we do that with our company competing in the technology world, small lean team that's using every possible piece of technology to compete with multinational multi billion dollar companies. And so I think we're at a different place in life than we've ever been before. Right. So those are my quick.

I would, I would just say one thing on that is I agree with the proximity but I think the opportunity just from my perspective is that independent to provide. I'm going to call it super value.

Right?

And that super value, like looking at the value, you know and then looking at how do I 10x that value through the use of technology, through the use of intelligence play to the strength. Right. That you have. And I think that opportunity is definitely there. But, yeah.

To me, there's a big difference between B2B and B2C. And one of the things that happens, you can map out everything to sell perfume or whatever you want on Amazon, and that's great, but the. The reason. And. And I. Dirk, I don't remember the name, but he's talking about the relationship part that Aristotle. What was the third one called? It was Eudaimonia Eunomonia. That's too many syllables for me. I'm on drugs.

But.

But here's the thing. The consequences of system failure are significantly larger in a B2B environment because I can shut down a production line. We did work. We did work for an explosives distributor.

And.

And I said, why are your margins so high? And he says, when things go bad, they go really, really bad. And so. So you need to be able to have that trust in that relationship that you can call up and go, I'm in the middle of an installation. I know this is not the way it's supposed. I got this problem. What do I do? I need that level of trust. And that's. That, to me, is at the core of the difference between B2B and B2C. It's the consequences. System failure. How can I keep that company up? So they're in flow. They're not getting disrupted in the rest of it. And because there's so many things that they can't predict.

That's great. Good. Let's. We've got low lights we're doing. We need to get to highlights. So, Dirk, we've missed your low lights on the year. And then we'll get to Tom's.

Quick.

My. My low light, as I thought about this question, is I look at the marketplace, the job marketplace, if you will. And just some of the data that I just, you know, came across. Last year, big business. Big business retail closures were up 64% over 2023. In Illinois, my home state, close to 15,000 individuals, close to 15,000 human beings were let go like that. We're let go like that. And you guys know that I believe the future is human. And I think this the trend. I had lunch on Monday with a dear friend of mine who worked for a Fortune 500 company. And at 6am with me, no warning. This guy's a superstar. With no warning at 6am was let go. His world was. His world was shook, right?

And.

And I get, guys, I, you know, I'm a capitalist, right? I Get, I get it. But the future is human. And I think this is an opportunity that these distributors that we are Talking about in 2025 can truly lean into in a big, big way. I think about our stop out in San Jose. It was mentioned earlier at Pace Supply and the film that we created because I just pulled it up and listened to the mission of Pay Supply, which is the reason why we went out there with the film crew. The mission of Pay Supply is to create opportunity for the welfare and success of our employee owners. I want to say full stop right there, but if you go on to create opportunity for the welfare and success of our employee owners by being the highest performing partner for our customers, how they have poetically, I mean poetically merged, right? This commitment not only to the customers, but to the welfare and success of their employees. These are the organizations, this is the mindset, this is the leadership that I believe we in distribution have the opportunity to lean into in these local communities to truly be this force for good that we've been talking about. And quite frankly, a lot of the problems that we've been circling in this conversation today, we can go into it another time about lack of technology implementation, the problems of implementing crime. I just hear conversation about process. I just hear conversation about pushing down. I hear very little conversation about the human being at the center of it and creating an environment where they are self empowered not to do their job better, but first to live better, to be more whole themselves. And there's an opportunity when we do that. I believe that all, not all the things we've been talking about today, the implementation of technology, the relationships we want in the marketplace, that's when we left those things as well. So I think the low light that Dave shared with you, I turn it into an opportunity that we all have.

Dirk. Bob Brittain just put a comment in there, said companies expect loyalties from their employees, yet they do not return it. That buddy of yours that got let go at 6:00am yeah, that's that. They sent a message that they had no respect for him at all. And he was looked at as a fungible. I just stopped buying this product. I just don't need it anymore.

Yeah, well said. And I guys, we won't go into it, but there is a paradox. There is a paradox that we need to think deeply about throughout distribution and deeper. And the paradox is the we before me paradox. I mean, from the we before me paradox, from the time I was a young man on a hockey team, my, my hockey coach told me there is no, I In team, I'm told to put myself at the back, at the good, at the team. When I go to work for a sales organization, they say that the customer is always right, you're at the back, the customer is always right. And what we are told and what these cultures create and quite frankly what society has created as a false narrative is that the individual, the person is at the back of our priorities. And I believe there's tremendous opportunity, in fact the future for the organizations that are going to thrive in the future are those that put the you, the human being, the individual in front and create an environment where they are self empowered not to just do the job, thrive and grow as a human being. You do that, you strengthen the individual, you strengthen your organization. You help the individual develop breakthroughs. The organization gets breakthrough. We have to absolutely blow up this paradox or rethink this paradox. Is it we before me? Well, that's what we've been taught. My premise, my belief from what I've seen, we've got to turn that around and let's put me. Let's put the person before everything else and see what happens.

That's good. Thank you for that. We had some good comments that came along with that as well. So that's, that's powerful. Let's jump. We've got more we want to talk about. Dirk, I actually wanted to ask you a question I think you shared with us last year at the time in this. Everybody can chat on this. Again, what we're seeing in the marketplace through 2024 and probably don't have any good information yet on this on this year, but you had shared a statistic. I think it was three. There was 3 million more jobs than people looking for jobs available. What are we seeing out there right now, Mike? Ian, in any of your conversations, the rare time that I get to talk about something like this with a lot of our customers is I've heard that there is less pressure than we were seeing early last year on filling jobs because I think in 2023 when we saw the big challenges with that, a lot of it was tied to people still staying home and not caring about working because there was Covid money and some things like that still available. What are we seeing in the marketplace right now specifically at a distribution level as far as being able to get people hired and filling roles.

I'll let you guys.

Yeah.

I think there's people get lost looking at those macro numbers. I'm spending a lot of time with graduating students at the university and, and there are a lot of students that go to college because their parents told them they had to go and they didn't really want to go and they sat there and they majored in beer consumption, partying and that's basically what I did.

Stop talking about it.

I know, I'm very proud of it actually. I could. Well that's a separate discussion.

You had a PhD, didn't you?

Well, a PhD and yeah, let's not go there. You're going to make me lose my train of thought on it. But what happens, the students that have paid attention and they're curious and they want to learn, they have a long list of people that want to hire them. You know, because they built, because they had enough curiosity, they managed to take the extra time to get some neat internships and they have, they put in addition to classes, have resume worthy experiences. So there's all kinds of people that get out of college and they don't know what they want to do and they just figure somebody's going to give them a job and they're going to make 80 grand a year and they can't find a job, that's fine. Then they got to figure out how to pay their student loans. But if people want to work and learn, there's, there's always a shortage of talented people. That's part of the reason, if you go back, we went down a rabbit hole in this, all this DEI stuff. But fundamentally you wanted diversity because I wanted people with different backgrounds that would look at problems differently and help me innovate. That was the original idea. But, but what we're really trying to do is, is build a team. I've seen several distributors that are full of Gen Z and they're passionate and they would kill for this company because they see the opportunity. They're learning, they're being challenged, it's being relevant. They're not working for some idiot in the Fortune 500 company. They just let us start with six in the morning. I mean that to me defines incompetency in terms of talent management. It absolutely defines it. At the worst we could be. So when I, when I start looking at the market, I don't care so much about the aggregate numbers. I care what is your employment experience that you're offering for your employees. You bet I'm in there and you say I'm gonna, I, I know you're not gonna stay with me forever, but my job is to try to create opportunities that you want to. But what I will do, I promise you, I will teach you things, I will help I will challenge you, I'll mentor you so that you'll get, get new skills for the next job you get. You're going to remember this very fondly. It's the old thing. If you go back to the old days of GE before Jack Welch, it was a very flat Pyramid and more CEOs of Fortune 500 companies back in the day came out of GE because they'd hire at the bottom really well, but they'd all leave because there was no promotion because the organization was so flat. Structure wise. All those things are still true. And it's just, it's about talent and it's about the quality of the culture because all anybody that's good has a whole lot more employment choices than you have people to go hire players, hire A players but if you got a C player manager, they'll never hire an A or a B because they'll make them look bad. Sorry.

I think, I think what you're saying my ties ties well into a lot of the work that Dirk's done with his travels and visits. Right. Is it really speaks to. When you see whether it's a partially employee owned company or a fully employee owned company, you see people that. I think it was at Dirk, on your stop at Thomas A. Somerville, I think you were talking to one of the truck drivers that had been there like 50 years. Yeah. Right. I mean there are opportunities to Mike's point to make an environment that people want to come to work and want to stay. Some of that you see working really well in employee owned companies because there's also a financial motivation because they can see their future in that setting. So it's good stuff. So we want to just because we need to keep moving along today. Tom, low lights for you for the year. And then we're going to dive into a few other things and talk about hire.

We're what an hour in and we've covered the first half of one question.

Yeah. But the list that we've talked about we've again to Mike's point earlier. Right. We just are weaving this stuff in. But there are some when we get to our highlights and or our prognostications for the coming year, which we'll get to pretty soon is I think where things are going to get really fun. So Tom, your lowlights.

Yeah, my, I guess my, my frustration from the last year is we talked a lot last year on the show even about readiness and starting to put readiness into place to be ready for AI and technology. And obviously there's been a lot of Comments here, Dirk, I think you hit a button for sure when you were talking about people. What I'm seeing with AI and with our customers, where we're using it is when done right, it can put a superpower to a person. It can take somebody and make them a superpower in their job. And I've witnessed it a few times where a salesperson, an outside salesperson, or even an inside sales rep uses a technology to get an outcome that they could have never gotten before. And talk about pride and talk about loyalty and talk about everything that you know, how did you go home? And you're like, man, I pulled off something that I couldn't have dreamed of even pulling off because of using the technology. So all of that going back to the my, I guess my frustration over the last year is not enough emphasis putting on to the readiness that needs to go into an organization to be able to take advantage of that, the technological readiness I've seen a lot this year is we're going to move our ERP to the cloud. Well, I'm not saying that that's not important, but you're basically just moving a platform versus really thinking about technology to create those super power opportunities within the business. And I'm hoping we're going to see a lot more of that this year.

Tom, can I comment on that real quick? I love it. You just brought it back. So we all know in four and one of our, as a sponsor of ours all four years and then one of their customers that we featured, I think last year was Midwest Wheel. I went out, I went out to, in 4's Velocity conference this year and I saw, you know, the future. And then I saw Steve McEnany get up on stage and he talked about exactly what you just said. He talked about how we used AI at the point of sale with brand new recruits, brand new recruits sitting behind, standing behind the counter who used to take over a year or 18 months, right, to be able to be competent in that they've been able to, because of exactly what you've said, shrink that development process down to it, down by 80%.

Right?

So on day one, once they learn the system, they can have that expertise that the individual on the other side of the table is, is asking of them now. Fantastic. Process is amazing. Add on sales is amazing. Amazing, right? Productivity and efficiency is amazing. But you highlighted the word superpower. When I can give that individual human being that superpower, that confidence, that belief in themselves, right? To be able to perform at such a high level, I gotta tell you something. Man, you're lifting that individual, not just on the job, but, but as a human being. And I guarantee you, when they go home to their spouse, they're going to be happier, they're going to be a better spouse, they're going to be more engaged at home. And when they come in the next day, they're going to come in with another step, they're going to be ready to do the exact same thing over and over again. So I love the focus you put on there in terms of using technology, of course, for the productivity, efficiency, revenue generation, all of that, that's great. But the opportunity is, man, when we really go another step further and think even deeper about that human component, that's when we unleash the possibilities.

Yeah, if I could jump in, I agree with all that. I think it's, you know, it's very satisfying to be able to do your job better if you care about your job.

Right.

So when you give people better tools, they like their job more and they become more loyal. At the same time, when you improve a bunch of processes in your company by 80%, it's going to be very tempting to cut headcount. And I, I, that's, that's going to happen. And I think the, I don't think we're doing people the right service by reassuring them that AI is not going to take their jobs.

I agree 100%.

I'm not saying you guys were saying that, but I, I see this a lot. You know, AI is not going to take your job. A person using AI is going to take your job. Well, a person using AI is going to take 10 jobs or 20 jobs or 30 jobs. And I think it's really important that as individuals, people evaluate their skill sets, they invest in them, they go get education and training and acquire new skills. Because I do think, you know, ultimately technology tends to create more jobs than it destroys. That's been the history of technology. But there's a hell of a lot of dislocation along the way. And people have to change jobs. They need to get new skills. And so I think people need to have their eyes open that, you know, that this reassurance that you read on LinkedIn about, you know, AI not really, really being a threat to jobs, that's not true. It may wipe out your job. And so you need to have an opinion and a view and about how you're going to reskill, because we're going to start changing roles faster than ever in the future as a result of this new technology.

Well, I think you know what, Ian, you bring that up, right? It's that comment. There we go. So this is, I think, part of what you're referencing here. We just brought up on the screen this quote from Jensen Long at the CEO of Nvidia. He said, am won't take your job. The person who uses AI will take your job. Ian, you're suggesting maybe that that's maybe take quite a few jobs, is that right?

Yeah, it's going to take a lot of jobs. And I think this kind of, I mean Nvidia has a huge interest in promoting AI.

Right.

So for them to be very positive and upbeat about it and, and minimize the, the impact, the negative impacts is just human nature and capitalism.

Right.

But I think people need to have their eyes open.

Yeah. So this is. We're going to talk as we get in a few minutes to talking about what's coming ahead. And I think we're gonna have a big discussion about agents and the things that are available. I heard a quote, the same gentleman though quoted it did a keynote at Consumer Electronics show last week in Las Vegas and was saying that with agents and physical AI is now going to turn these agents using robotics and so forth as well. Is he said that. And plug your own numbers that come to your mind into this. But he said that agents in robotics or physical AI will never take the place, 100% take the place of a job, but it will take 50 up to 50% of 100% of the jobs. So it was an interesting thought and I'll say that again. Agents and or robotics will never take 100% of a job away because there's the creativity and the oversight that's needed in that setting. There's been people that have quoted that, you know, you could do a good CEO job with good AI. And the same gentleman said, no, no, no, no. You need the understanding and the insights that come from an individual as well in that setting. But it was, the idea behind it was 50% of every job could be used. Have agents do them. Moving forward, Mike, what were you going.

To add to that? We're in the middle with this client. We're actually building a, an AI application for a counter rep. And it's really interesting, but in terms of taking a picture of what's there, using Google to identify what it is raises up questions in terms of what they're doing. I actually, we went through it was kind of boring because the AI was all very businesslike and we said, this is for counter guy. You need to be much friendlier and informal. And all you had to do is that was one line in the large language model. And all of a sudden it's like, yo, dude, what do you want to do? But what the agents do, what we're doing, because this is an agent deployment through the company, it takes friction out. So the problem that you have in companies is you have all these silos and everybody passes something out and it goes to somebody else and they don't have the time to do it. So what you. What an agent does. If I'm a sales guy, I have, I can send something to, to my credit manager to, you know, I want to get something approved. But I, with an agent, I have the ability to set a priority where if it's really important, it shows up on his cell phone rather than in an email, you know. And so what happens is subject matter experts are the people in supply chain and personnel and everything else. But what by taking the friction out, you don't drop the baton. And so the customer experience is better. People feel much more professional. But when you go back to what Dirk and Ian were talking, I'm not going to need to have 30 people in customer service here if I take all the friction out of it. So what I'll end up doing is I'll keep the people that have those relationships and the trust and their values are aligned with the company and those that are just looking at it for money, they'll have to go find something else to do.

Well, it's your point earlier, Mike, is the a players will rise, you know.

Well, because they get excited. It goes back to what Dirk said. You, you put somebody in that situation and they come back and they say, you know, I just had a customer that was in a deep, blankety, blankety blank, and I was able to lift them up out of it. And I feel really good about it. And on top of that, some of those experiences are iconic. That customer. Remember that for 10 years. Well, so that's how you build the reputation.

Well, in the smart, the smart person in that setting, whether they're a counter guy, a customer service person, or even an operations person needs to get involved, is going to say, I used these pieces of technology to make me excel as well. Whether it was some of the AI tools built into their ERP or a product like ours or whoever else's it might be, they're going to take advantage and learn those things. The person. And I'll just throw this out and feel free to shoot back at me on this. I'm just going to suggest Right now it doesn't matter if you're a CEO and I'll just use distribution more than manufacturing. Even if you're a CEO down to a truck driver. If you're not looking at what the future holds from a technology standpoint, you need to worry about whether you and or your company will remain relevant. And you made a comment earlier about the big guys in this field. Not necessarily putting everybody out of business, but I'd suggest that you might have a 20 or 30 or 40 branch location company. And if you don't embrace the technology and the technology and supporting your people and learning how to use those things to make them and their jobs better and at the end of the day servicing the customer better. If you're not embracing those things, your 40 location business might be a six location business by 20, 28, 29.

What you forget and you're spot on because when I take the friction out, my SGNA expense level drops by 3 or 4 or 5%. So I can sell at a lower margin than you, my competitor and I still have a bottom line that's better than yours. You're going to have to compete with this. So either get involved or you don't. And it really comes. It's not the technology, it's not an IT project. It's about getting your employees engaged, where they're excited about what this does for them. And Dirk, I steal from you liberally, I do give you authors credit. But we're going to go past the me and go to the I or go go to the me instead of us. And I mean, that's really when people see what it can do and they get excited and you get a couple of these rabid people, they become evangelists in the company.

Yeah.

And that's, you know, when it all starts to spread.

Good.

All right, let's jump to highlights. Tom, you went last. Let's do one highlight each and then we're going to start talking about a few other topics and we're going to wrap up with talking about the coming years. So Tom, highlights from last year.

Oh, boy. You know, I think that besides working with me. Yeah, that was it. Boy.

That'S called leading with your chin in a bar fight. Kevin, he could have toasted you so. Well, he was being very nice.

He had the chance when he was talking about his low lights.

So, yeah, other than working with Kevin for the last year, which has just been wonderful. And again, I'm a technology guy. Right. So there's a lot of investment going on right now in the AI world, and it's happening much faster than we are doing, which is my low light. Right. That we're being ready for, and we're going to see some things come out this year. You know, I, I tell Kevin all the time, I think one of the reasons that companies haven't invested in readiness for quote, unquote, AI is they haven't seen the killer app yet. Right? They've seen some interesting apps, but they haven't seen the killer app yet. They haven't seen the thing that go, oh, my God, if I don't do something about this or do something with this in my company, I'm screwed. I think we're going to see the killer app, and I think the reason we're going to be able to see the killer app this year is the technological investments that are going on by the big companies, the big technology companies and everything related to AI are coming together. The ability to use agents is actually going to be commercially viable, I believe, as a result of what's happened over the last year. So I saw a lot. I was very pleased with the, with the speed of the technological innovations. It wasn't in match with what we saw within the organizational side of things, if that made sense.

Very good. All right, Ian, Highlights of the year 24.

I think that distributors are getting the message around digital. I think it's been a long time coming for a lot of them, and maybe it's just the distributors we interact with, but I think they're, they're, we're beginning to see them become more. There's sort of a sense of urgency around technology that has grown quite a bit, I think. But I want to throw out another one too, which I think the industry is becoming more proud of itself. And I think that a lot of that is around Dirk's work. I think, Dirk, you've had an enormous impact in helping distributors go. You know, these, these are special places to work. And so I think there's this recognition that, hey, we got to invest in technology and we're great places to work. I think those are two trends that are. That have some legs that are going to last for a while.

That's awesome. And I fully would subscribe and agree to that on a lot of the work that Dirk's doing. And I just have a large audience that's here today. They'll be seeing some new faces that aren't with us every week, and, and then our general audience and then all those who listen to this regular broadcast on the podcast, we hit. I don't know how many I've got to look soon. I know over the course of the last year we had the podcast downloaded in 26 different countries. So I say this out loud to people is two things. First one is if you are not following Ian Heller, Mike Marks and Dirk Beveridge on LinkedIn through their companies and you work in wholesale distribution or manufacturing. And I'm going to mix those two types of organizations together and you are doing yourself a disservice. And I'm not just saying that because you're here. I'm saying that because it's. The reason that you were invited to be here is because of your leadership in distribution. Amongst the three of you, I would then add to that if you're not watching the videos, if you're specifically in wholesale distribution that Dirk is putting out there through his We Supply America tour to see the best practices of not just people operations, but I'll say business operations as well. You are missing the boat in that setting. So follow those folks if you're, if you're listening or with us today. And then obviously we try and bring good data across the board as well each week. So thank you for that, Dirk and Ian, your thoughts? Ian, I have a question for you though, before we jump ahead, and I'm going to jump over to Dirk next about highlights of last year. We had lunch in your gracious talk about what a great human being. I was going to a technology CEO, a small network CEO, technology CEO conference at a little boutique hotel in Boulder in October. And Ian drove to the airport, picked me up, took me to lunch, paid, and then dropped me off at my hotel. How great is that?

Wow.

More than I would do. Was this Arby's?

No.

We went to this cool Indian restaurant. It was great. They knew what he liked. It was awesome. But the reason I share this is we were talking about lists and just how many distributors there are. And Ian's probably done more research, but I'm going to throw this out to you, Mike as well, because you might have some feedback. When I look at NAW's website as an example, some of their information is about there being, I think roughly 40,000 wholesale distributors in the US. There's another spot that says 200,000 plus. And then I've done some separate research that would suggest it's mid 200,000. Ian, where do you subscribe to that? I think you're at the high level, higher number in that, right?

Yeah, I think it's several hundred thousand. I think it's closer to a Million. And there are different definitions of what a wholesale distributor is. Right. So it's not that it's not entirely clear but it's in the hundreds of thousands of individual establishments. And this is one thing when people talk about, oh man, there's all this consolidation and, and these disruptors are going to put distributors out of business. The actual number of distributors is growing year over year over year. Right. So there are people starting new distribution companies. So this notion that the independents are doomed is not supported by the data.

So I'm going to jump out on a limb with this and love your get both. Any of your feedback on this? I'm going to guess there's probably 50,000 or so distributors, 30 to 50,000 that are probably of the 25 million dollar a year or more. Is that maybe a reasonable guess?

Actually it's going to be high. The data is. That is high. The data in MDM's pulling the stuff directly out of the department, Department of Commerce and going by just the NAICS codes and just. Let's just look at industrial distributors. Right Isaac.

Right?

Yeah, Brendan and all those guys.

Yep. And I think Brandon's with us somewhere today.

Well, well he probably couldn't get a word in edgewise. All the guys down here, you got a who's who on your panel or your comments. But 80% of the members or not his members, but 80% of the participants, industrial distribution have fewer than 20 employees. Right? 80%. And so the backbone of this and what other happens is that, you know, intergalactic company go buys another distributor and the VP of sales and VP of operations say this sucks, let's go start a distributor, they go pick up a line. And Ian's point, the distribution number of firms is actually rising. And the other thing that's really got people mixed up is what is a distributor? I mean one of the things that's happening, Rock Auto, we do work in the automotive aftermarket and Rock Auto is completely replacing the autopilot parts store. Right. Because what they'll do is they give you all the videos on how you change the brakes in your car. You can order the parts because you're going to do it on the weekend. They got all the videos. You're paying 30 to 40% less than you would in an auto parts store. And they've got all this support structure. They're creating a customer experience and eliminating the need for the store. And so all these things are happening. And in the automotive business a lot of the manufacturers are having a big fight because we don't want to call Rock Auto a distributor, but this is.

Part of the issue because, you know, is Rock Auto a distributor? Well, probably. Is Office Depot a distributor? Well, they sell 90% to businesses. Is Home Depot distributor? Well, there's 60% B2B. So it's really hard to define, but we think there's about 25,000 distributors who are 10 million and up.

Okay, that's 10 million and up.

I would tend to trust Ian's numbers on that.

Yeah.

There'S a lot of them.

Yeah.

Good. Okay, guys, here's. Here's my challenge. I'm a horrible moderator, and we're. We're running long, so I'm going to ask you, Ian. And I'm going to come to you, Ian, and we're going to just jump over to Dirk. Let's start with our discussion of what we see for the coming year. And if you see an opportunity to weave in a highlight that you saw of last year, let's weave that in as well. But, Ian, do you mind if I just. Since we are here with you, starting with you, what do you. One or two things that you see are big opportunities for the coming year, and if you want to mix risks into that as well, feel free.

I think there's an opportunity to do everything better with AI And I know that sounds like a platitude, but there are a lot of distributors out there that aren't great at marketing. Right. And there are new tools that can help you get better really fast with marketing. I think the. The look, this whole, like, probably five years from now, we won't have an Applied AI for Distributors conference, because AI is just going to be synonymous with technology.

It's like a fax machine. It's just going to be there.

It's just going to be there. And so I think it's important that, you know, there's this new technology wave. It's important for you to catch up. But here's the thing. Anybody can. These tools are so well done and so easy to use, and there's so many of them. There's just this proliferation of them. They're out there now. It's a huge, exciting opportunity to raise a level of performance in your business. So I think, you know, they talk about the Gardner hype cycle. I don't think we're going to see AI in a trough because it's too broad. It's all technology. You'd have to say, if the whole technology sector goes into. Into the zone of disillusion, what do they call it, Tom?

The Gartner.

Trough of disillusionment.

Yeah, yeah, the trough of disillusionment. I just don't think it's going to happen because it's, it's too broad. So I think it's an incredibly exciting time and I think it's exciting for people as well as, as, as establishments and I think, you know, people should jump on it. That sounds self serving because we're doing this conference, but I swear to God, I'd say to you even if we.

Weren'T.

I think you're doing the conference because you see the possibility and the urgency of it.

Yeah, totally would agree with that. And I think what you're doing is you're illuminating where the opportunities are and I think what distribution strategy group is doing a great job of in this setting as a whole. And I think part of this ties into having a, a business partner that has a PhD in AI. Right?

Yeah.

I get to say a lot of smart things myself because Tom's pretty darn smart. So there's, there's Tom's compliment for January. He gets one a month. Said doesn't go beyond that, Dirk. I might need some counseling on how I deal with people. But he only gets one a month because we've been friends for so long. But you know, I think what you guys are doing, Ian, in that setting and across the board is you're illuminating where the opportunities are. I see this, and I'll kind of say this as a highlight look for last year and a low light is there's a lot of wholesale distributors who are finally, and this is to point Tom made earlier that was extremely valid was that there's a lot more that are at least starting to scratch the surface of wholesale distributors. But there's a fraction of the number of. And to Ian, if let's just. I'm going to feel very comfortable with your number saying 25,000 of them that are doing $10 million or more. Right. Which says that there's hundreds of thousands below 10 million that could accelerate the growth of their company to be in that 25, to make that 25,000, 50,000 by embracing and using these tools. We still don't have enough of the people jumping in and wanting to do that. And that's I think, an opportunity for the coming years to help people. And you guys are doing a great job of that. So thank you. Yep. Dirk, what, what do you see for the coming year? And if you see any highlights from last year, you want to weave into that, let's get that too.

Thanks a Quick highlight from last year. I'm going to point out James Rogers, the CEO of ISG Independent Suppliers Group and then Ashley Hunt, his marketing director. What they taught me was the importance of narrative, right, the importance of narrative. They are an organization that serves the office products market dealers. And you know, if you listen to the noise out there, if you look at, you know, to Mike's point earlier, if you look at the data about what's happening to the office supply market, you could begin to spiral, if you will, in a black cloud. And quite frankly, that's what was happening. And what James decided to do was to take a hold of the narrative throughout that entire industry and to turn the mindset of the industry and his dealers and the like. And so the importance of narrative and we were proud to be part of that. We worked together and we had three different dealers that we stopped at on the We Supply America tour. We got to understand the possibilities in that industry through that way. And then in September we joined him at their industry conference to lead off the conference as a keynote speaker to help set that narrative about the possibilities and the opportunities that we need to be circle on. So I'll go to James and the importance of leaders to own the narrative and to actually craft that narrative. I don't think we think about it quite enough, but he taught me a lot there.

So that's good, keep going.

That's the highlight, I think, going to 2025. Can you guess where my focus is for 2025, you guys? My focus is absolutely the opportunity that we have throughout distribution to focus on the remarkable individuals in this industry. The remarkable individuals. Six million individuals decide that wholesale distribution is where they are going to bet on to lead a fulfilling life right through their career. I think there's tremendous opportunity for us to do this. But we live in a world where most people feel stuck, they feel overwhelmed, they feel disconnected. And again, if you just think about that and you think about the struggles you have as a leader getting traction or engagement in your organization, I think there's real opportunity to focus again on the individuals. And I think 2025 is going to be an opportunity where leaders have, where they lean into the responsibility and opportunities in helping individuals become truly self empowered. Not just to do the job better, but to live to be truly authentic, to truly take control when the outside world is trying to tell them to be somebody that they're not. To help these individuals drive momentum towards their personal growth and becoming the individual, the infinite potential within them to help their employees create the energy and to have the zest, just like that Midwest wheel counter individual that I talked about, to truly have clarity about what's important in their life and to find joy.

That's great.

When was the last time we talked about finding joy in work? And there's tremendous opportunities to do that. And I think there's the opportunity for 20, 25.

So that's a great one for us. Hopefully we can. We're all a lot still alive and functioning well this time next year and we'll. We'll all get back together.

You're not prococing.

Where did that come from?

I started our discussion, I think before we went live today that I said I am now at a place in my life where I can get hurt sleeping.

So let me jump in. I gotta jump in.

Kevin.

So you're saying the inspirational dirt beverage just caused you to think about us not living the next 365 days?

Probably. I probably should trend real shot, man.

Wow.

My point was now you got me on a. Now you got me in a corner Dirt. My point was when we come back together next year is getting to a place where we look back.

I think you said if we come back next year.

Guys, I would like to give you my highlight for 25 because I'm about to have a bladder endurance event because of my medicine. But to me, the thing that's happening, all this change we're going through. Distributors are reflection of changes in their customers and how they want to buy. The industrial market, the MRO market. And a lot of these things has matured a lot. And a lot of folks in the construction business, whether it's Waterworks, plumbing, H Vac, whatever, the contractors haven't been that sophisticated. But now I've been seeing this last year in 2024, the contractors there, there's all kind. If you go to any of the contractor conventions, what they're doing is they're talking about how do you manage your business from your truck. That this technology thing's taking over very fast. And I'm seeing those distributors that actually embrace and support their contractor customers are going to gain a lot of share from those people that just think it's all still on fax machines. So that's great. That's basically I got bail.

Mute. Go on and turn back. Come on back. But we're going to wind down here pretty quick. But I wanted to. Mike, do your thing. I wanted to just throw this out. I think Mike just made a really great point about the customers are getting smarter and using technology more. When you look at the service titans and some of the other technology tools that are out there now for contractors that are using those things, their game is rising. There's AI tools and are using on job sites and so forth. And we all need to be able to go in that route. So Tom, let's hit your highlights. I'll hit my highlights, we'll kind of recap and we'll get Mike back for his one kind of last thing. By the way, I just wanted to mention too, Dirk before we go is Sebastian that runs the marketing side of things that Net plus Alliance said, find your joy, find your purpose. Great words to live by. So there are people out there listening and Sebastian can bring that message across to their membership. So Tom, what do you see for the coming year?

Well, I mentioned earlier the killer app. I think we are going to see the killer app for this year in AI and technology. I think that killer app, Dirk, will be an app that empowers people to really get that superpower. You know, one of the things I tell our, the customers I'm working with, with AI and agents is like don't think about just trying to replicate things you're doing right currently. Think about how do you 10x something you never would have in the wildest dreams thought of. Right? And let's, let's, let's raise the bar in our process and our outcomes that we're trying to do. I'm hoping that we and I deliver that killer app.

So that's another.

I'm taking this recording time and we're going to play this over again in your dev team meetings.

But I do believe it's going to come and I think it's going to be a wake up call and I think we're going to see, I don't know, Ian, the trough of disillusionment and then it comes out of whatever the next, the next stage is there. I think we're going to see some real mainstream urgency is the word. I'm going to use mainstream urgency on this. Not just in distribution too, by the way, but certainly the distribution world. And whether that comes next month, whether that comes this summer, whether that comes in the fall, I'm not 100% sure, but it's going to come this year.

So that's great.

Good.

Ian, did we get yours?

Yes.

Okay. Yep.

Thank you. I thought you did. One of these days I'm going to listen to more of your shows, Ian, and I'm a professional moderator. You're doing great, you're doing great, but I'm going to give you mine. And they're, they're in a couple of places. One, the first, I'm going to start with a hope and, and my hope is that we can make great improvements and great strides with channel collaboration, that we can move quickly out of the place. I say quickly, but we can continue to migrate out of the place that says salespeople don't want to collaborate with management and management and ownership doesn't want to collaborate with manufacturers. I think we have an opportunity in front of us that we've never had before because of technology for tradesmen, businesses in general to use their technology to communicate directly with manufacturers and, or distributors and distributors with manufacturers. And we've never had the opportunities that we have before. And I hope we can see more of that, that coming down the pipe. I'm going to talk about this on this, on our show last week with Tom and I, I think that where we're at now in the world of AI, we'll see the adoption that we'll continue to see that in wholesale distribution. I think one of the exciting things that we're going to be seeing very soon. And I queued Tom up with a video that we won't have a chance to look at today because of time. But I think we're coming into a world that we're going to see in distribution and manufacturing and I really hope the distribution embraces this of what we would describe as physical AI. And if you get a chance, go listen to the keynote address from this year's Consumer Electronics Association. It was again by the same gentleman we talked about earlier, Jensen Huang from Nvidia. And of course he powers all of that. But the world, world of that we're living in now and it's available today with physical AI and it's just going to get better. And I'll, I'll use an example from a robotic standpoint. I told my wife last week that I believe in 18 to 24 months that for $8,000 or less we'll have a housekeeper and gardener that is available to us that lives in our home. That is an AI driven robot that learns from its activity. It will learn how to clean the house better each time it does it. And it communicate with other robots that are solving the same problem. If you take that into distribution, imagine a robot that walks around a pipe valve and fitting facility through its vision can be looking at every stack and check inventory. It can be having sensors in it that are monitoring for gas leaks or fire. It can be checking perimeter fences. That stuff is out there today. There's ag tech companies that I just listened to on a podcast recently that they bought about. Well, they bought it from Unitree, which is a Chinese company making these robots. They've got robots out in test farming settings that they have where they're testing their own technology. They have robots out doing soil samples, checking perimeter fencing and so forth. So I think we're in a world where physical AI is going to tie into the things that we've been talking about today. And again, not necessarily trying to replace jobs, but augmenting the people that we have to do some really cool stuff. So that's my prognostication is that this year we're going to start seeing more physical AI, not just the AI that we talk about coming into play. And I think it's a huge opportunity. Right, Dirk, back to our 50 year truck driver at Thomas A. Somerville. What if he has somebody with him that is in that vehicle? Somebody I say, as a robot that can help him unload that truck and let him go communicate and be an ambassador for his company while the truck is being unloaded by a robot that knows everything about that customer as well and is learning while they go. So that's my thought for the, for the coming years that we're going to see a lot more about.

By the way, one of the things in the first reforming your business best practices that we did with. Naw, having driver salesman go to the sale, having your drivers go to the sales meeting is critical because they see things salespeople doing.

To your point with that Mike, as we talk to our customers at Leachmark Technologies, all the time. Is that because we'll get people say, well our counter guys don't need access to your smart CRM. And I'll just ask them this question. I said, how often do your counter guys learn from the driver that's coming to pick something up about the big new stadium that they're bidding on or this job or the other that the salesman doesn't even know because the salesman's calling on a buyer. Yeah, right. So the counter guys are so important in that say so anyways, those are my thoughts on the year as we kind of wind down. Gentlemen, any final takes on, on what's coming, what's behind us? Dirk, I'm going to give you 30 seconds to, to recap your thoughts and where you're headed and where your business is going this here.

Thanks. The future is human. There's, there's a lot of conversation about the things we've been talking about. Here, but I drew this out, guys. There's. There's a warehouse here, there's an end user here. And there's different steps in the process there.

Right.

And we're focused on the processes.

Cool.

We need to.

Don't get me wrong. But in between there is the individual. And quite frankly, at the end, if is an individual, it's that human being that all of this, all of this.

That's great.

Is designed for.

Oh, sorry, Dirk, you were.

That's what it's designed for. And we forget that and we have to double down on the individual and ensuring that we are contributing to this individual. Living fully and living fully live. That's the opportunity. That's the responsibility that I think we have in business.

That's great, Mike.

Main thing we have to do is if you want to be successful in 25, you have to be curious. These, these owners of businesses have to be curious. They have to read all the information that Kevin, you and Tom were talking about. I mean, all this information is out there. How do you do it? It's all, it's all out there. But people have been too lazy to go look. They want somebody to serve it up. They're like high school girls at a prom. They're all whispering to each other, waiting to see what their other distributor buddies are doing. And they're all clueless. They have to be curious. That's one. Right. And then they have to be light on their feet because we're going to have a lot of uncertainty. We're getting used to uncertainty. Remember, we all thought when the election was done everything would settle down. Gee, that wasn't the case. So, so, you know, just stay light in your feet. It's going to be chaotic for a long time. Be curious, be learning, be actively engaged in all this transition process. Don't just react to it. Become a participant.

Very good. I'm just going, I'm going around the horn here. So, Tom, on my screen, you're next.

You know, I think we've talked about everything that I, that I, you know, I can think of. I think we've hit on it. It'll be an interesting. Like I said, will there be something great cruise this year? I think so. And I think we're gonna see next year when we, when we're all here next year for sure.

Yes.

Thank you. You know, I know I, I have. Kevin's the pessimist, I'm the optimist.

But stop, stop, stop. Let's hold off to see if the lightning hits.

So anyway, I think we're going to see some breakthrough moments this year and I. We'll be talking next year at this time about how those break. You know, that's going to be a springboard to a lot of, I think, again, change and urgency. So. And hey, before we want to go, I wanted to thank all the people that commented and jumped in here. It's like, I want to go back and reread all the comments and look at them here. We didn't get the kitten anywhere near as many of them as we would have liked to, but some really, really great input and feedback along the way from the. From the audience. I don't think for that.

Ian, did you give us your. We missed Ian. Let's not close the show out yet.

30 seconds. I think there's lots of room for independent distributors to thrive in the future. I think there's lots of room for employees to thrive in the future. But I think in both cases to take a lot of new skills, a lot of new training and a lot of hard work. If you do that, the future can be very, very bright. And if you don't, you're going to get left behind quicker than you ever have.

All said opportunity.

I'm in violent agreement with Ian.

Yeah, well said.

Yeah, good. This has been fantastic. You know, Dirk, I wanted to just a quick listening to the things you were talking about today is you called us out last year on not doing enough with our newsletter and our broadcast about people and leadership and so forth. And we're really trying to tune in on that from the people side of it. So thank you for that. If I didn't say that before. Appreciative of that. And you know, as we wind down today, I'll kind of close things out for us is that the future is actually probably as brighter. Brighter than it's ever been in wholesale distribution and manufacturing both. There's nothing but opportunity by taking advantage of. And I think we've covered this is the beauty of this. This group that's here. To rephrase that, I don't know if I should use the term beauty as associated with this group, but the power, the power of this group.

Challenged.

Yes. Is that we. The power of this group is that we represent a lot of different areas. And you know, Dirk, you. I think it would be simple for us if you weren't here talking about the people is that we would talk about nothing but distribution and technology. So we have a nice balance of the group that's been here with us today. And I think if we continue to have positive attitudes moving forward of what we can do to help people and our businesses. There's an opportunity for great greatness and the ability to thrive. So good stuff, Ian, looking forward to your big event coming up in June. Plus the great content you put out register day in and day out. You know, I, I, there is, there's other MDM does great stuff, puts out a lot of content. It just seems like there is no every day it seems like there's an event that Distribution Strategy Group is doing. So it just, and that's a compliment, the amount that you're able to do that, right? Mike, your wisdom. Regardless what Marilyn says, we believe it's wisdom and we're, we're grateful that you came to us and joined us today, even after a recent surgery. You did a great job. And Dirk, you're, you're always insightful and grateful. And Tom, I'm grateful for you. So in closing, guys, any last comments?

I appreciate y'.

All.

Yep.

Yeah.

Until this time next year, hopefully. I say hopefully is because that schedule's allowed from that setting. Right. And Tom's point, thanks for everybody for your comments and, and so forth. And, and we'll see you again next time. Tune in next Friday if you can. Again, we do this with two or three of us every single Friday morning, 9 o' clock Pacific. As always, we end the show by thanking the company that Tom and I work for, Lead Smart Technologies, and the sponsorship because we got an editor and another person working behind the scenes. It takes time. So thank you everybody. Wish you all well and thanks.

I enjoyed talking.

Have a great weekend.

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