The Challenges of Thought Leadership in AI, Marketing & Manufacturing

[00:00:00] Welcome to Around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton.

[00:00:10] Sponsored each week by Lead Smart Technologies, Tom, Kevin and their guests review the news

[00:00:15] of the week and dive deep into the topics impacting manufacturers, wholesale distribution,

[00:00:20] independent sales agents, and the global wholesale supply chain.

[00:00:25] Whether it's M&A, SaaS and cloud computing, B2B e-commerce or supply chain issues, we

[00:00:31] peel back the onion with our guests into the topics that impact your business the most.

[00:00:36] How are you this morning my friend?

[00:00:39] Okay, okay.

[00:00:41] Cold and misty here but otherwise okay.

[00:00:43] What do you think?

[00:00:44] Well you know what?

[00:00:45] 59 degrees and misting so.

[00:00:46] How much?

[00:00:47] What's the temperature?

[00:00:48] 59.

[00:00:49] Oh 59.

[00:00:50] Okay I thought you said 49 at first.

[00:00:52] I changed a lot since I was in Santa Barbara earlier in the week.

[00:00:55] It's pretty similar to that down here in Orange County.

[00:00:57] It's not drizzly but supposed to be a nice Mother's Day on Sunday so I'll look forward

[00:01:04] to that.

[00:01:05] It would be nice to get out in the sun a little bit and enjoy the day.

[00:01:08] So anyways let's dive into our day.

[00:01:12] I'm Kevin Brown.

[00:01:13] This is my lifelong friend, business partner and co-founder of Lead Smart Technologies,

[00:01:20] Tom Burton.

[00:01:21] We get together every Friday morning.

[00:01:23] Well nearly every Friday morning if we're not stuck on airplanes or heaven forbid we

[00:01:29] get a day off here and there but we get together each week and we discuss the news

[00:01:34] going on in the US, North America, the Americas and the world and kind of take

[00:01:42] that and look at that how it impacts wholesale distribution and manufacturing.

[00:01:47] So in reviewing that we're reviewing a newsletter that we put out every week.

[00:01:52] Every Friday morning we get out to about 10,000 plus people a newsletter it's called

[00:01:56] Around the Horn and Wholesale Distribution of Manufacturing and we take news clippings

[00:02:01] from all over and we consolidate those into things that are important to distributors

[00:02:05] and manufacturers.

[00:02:07] If you don't get that newsletter and you would like to a couple of simple

[00:02:09] ways to do that you can certainly send us a note here on the broadcast and by

[00:02:15] the way if you're with us live this morning on LinkedIn or YouTube or Facebook

[00:02:20] send us a note let us know where you're from and hopefully we can see that.

[00:02:24] We'd love to get a hello and know who's with us but we get that newsletter out

[00:02:28] and then we go live on Friday mornings and we review the topics.

[00:02:31] Tom and I get some feedback.

[00:02:33] We regularly have guests.

[00:02:34] We have some great guests coming in the next few weeks and we try and decipher

[00:02:38] that and what does that mean to wholesale distribution manufacturing?

[00:02:41] So those ways you can get it.

[00:02:43] Send us a note here.

[00:02:45] Send us an email to hello at leadsmarttech.com or go to the website for the podcast

[00:02:51] which is www.aroundthehornpod.com and we will get you that newsletter.

[00:02:58] That list is growing every week.

[00:03:00] Tom and I both work for a company called Leadsmart Technologies.

[00:03:03] We couldn't do that this show every week without their support who sponsors

[00:03:07] the editors and the producers and the people behind the scenes that make this

[00:03:11] all come together for us.

[00:03:13] So Leadsmart is an AI enabled customer intelligence and CRM platform that allows

[00:03:19] wholesale distribution or distributors and manufacturers to gain deep insights

[00:03:23] into their customers, their teams and their overall organization to help drive

[00:03:29] better decisions and drive revenues and growth forward at a faster rate than

[00:03:33] they've ever seen.

[00:03:34] So if you'd like more information on that you can certainly reach out to the

[00:03:36] team at Leadsmart.

[00:03:37] So Tom what did I miss?

[00:03:39] Did I cover all that?

[00:03:40] Let's say good morning to Tyler from Southwest Virginia.

[00:03:44] Thanks Tyler for checking in.

[00:03:46] Yeah, I'd definitely like to hear from you if you're out and about.

[00:03:49] And it seemed like the comments came through a little bit better last week

[00:03:53] but then I went back and looked after the fact and not all of them came

[00:03:57] through so the LinkedIn dilemma continues to move on.

[00:04:02] But anyway.

[00:04:04] Well, very good.

[00:04:06] Let's kind of dive into our newsletter that we cover each week here.

[00:04:10] And this week's episode we kind of start to...

[00:04:14] We break this newsletter down into a bunch of different categories but we

[00:04:17] start each week with our information about manufacturing and economy and

[00:04:25] supply chain.

[00:04:26] Tom what's our first article there for this week?

[00:04:29] You know, you had another one of these wholesale...

[00:04:34] Wholesalers down 1.3% month to month, up 1.4% year over year.

[00:04:40] Another one of those confusing statistics that don't really tell us a whole lot.

[00:04:45] I've come up with a new conclusion of what we can call all these things,

[00:04:49] whether we're looking at consumer pricing or the purchasing managers

[00:04:58] index, whichever one we're looking at.

[00:05:00] They're the roller coaster in a kiddie ride roller coaster, right?

[00:05:04] They've got small ups and downs.

[00:05:06] There's no big bikes up through downs, right?

[00:05:09] Yeah.

[00:05:09] Kiddie park roller coaster.

[00:05:11] That's my new thing.

[00:05:13] So this did talk about though the fact that wholesaler sales were down 1.3%

[00:05:21] month to date but up year over year.

[00:05:24] So what does that mean?

[00:05:27] Maybe it means some simmering.

[00:05:28] Maybe it means maybe a little more caution.

[00:05:32] We've talked in the last few weeks about a little bit more cautious.

[00:05:35] I have to tell you, none of these things, I think, impacts enough on our bet about

[00:05:40] interest rates this year.

[00:05:42] And just for those of you who are with us regularly, you have heard us bantering

[00:05:47] about Tom's view of only one interest rate cut this year and I'm at two or more.

[00:05:54] The bet is for a stake at Chuck's Steakhouse in Santa Barbara.

[00:05:58] So Tom and I got together earlier in this week to do some business planning in

[00:06:01] Santa Barbara and we ate at Chuck's and the company bought the steaks that night.

[00:06:05] Just preparing, just preparing.

[00:06:09] We're just getting our palettes ready for who's buying who what when it comes

[00:06:14] time.

[00:06:14] But we did have a little bit of that discussion.

[00:06:17] But you know, it does.

[00:06:18] It's interesting in these reports as they do come through that they give us

[00:06:23] some good view of kind of where the ups and downs are, right?

[00:06:26] So the growth during this period was in automotive category is the one that that

[00:06:31] grew the most and the decline was in metals and furniture.

[00:06:36] So then in places we pay the most attention to, typically with a lot of

[00:06:42] both Leeds Smart customers and our audience here, there was they describe

[00:06:45] it as mixed performance among durable goods, electrical professional

[00:06:50] equipment.

[00:06:51] Those all displayed some moderate growth.

[00:06:53] So it's interesting as we look at all of that, we'll just have to kind of keep

[00:06:58] our nose and ears to the grindstone about what's going on out there and

[00:07:04] what's happening next.

[00:07:05] Yep.

[00:07:06] So again, nothing really earth shattering one way or the other.

[00:07:10] No, we've got to be paying attention to these things.

[00:07:12] And then so we kind of go to the next article that was from Reuters and

[00:07:16] it talks about US wholesale inventories dropped by 4% in March.

[00:07:21] You know, that's an interesting thing too.

[00:07:23] In looking at that article, I think there's a little bit of a misnomer

[00:07:30] in part of that as we see this and basically what they're talking about

[00:07:33] is, you know, a 0.4% inventory decline in March over the increase

[00:07:40] that they had in February.

[00:07:42] But, you know, super minor impact on GDP.

[00:07:45] The article talks about the declines again, in inventories tied to

[00:07:50] motor vehicles, metals, hardware, papers, some other similar items like that

[00:07:56] in the arena of a lot of the folks that deal with our regular commenters

[00:08:02] and viewers here is petroleum lumber, machinery and even computer

[00:08:07] equipment increase.

[00:08:08] But I think the balancing act here for me, Tom, as I look at this,

[00:08:14] the focus here is there's also some right sizing still that's going on.

[00:08:21] As we talk to some of our customers and the distributor wholesale distributors

[00:08:27] that we work with is they went through that pandemic level, many of them,

[00:08:31] especially when you get into the safety and some of the industrial segments

[00:08:34] that they were just getting their hands on everything that they could.

[00:08:37] Then they got stuck with some inventory based upon supply chain issues

[00:08:41] and now inventories, I think, are doing some right sizing.

[00:08:44] So I think a little bit of this is part of it is right sizing

[00:08:48] versus headwinds in the economy.

[00:08:51] I don't know.

[00:08:52] I mean, you may be right on that.

[00:08:54] I think a lot of the right sizing though has been behind us.

[00:08:57] But what I found interesting about the article, and you may have known

[00:09:01] this already, but what an impact inventories have on GDP.

[00:09:06] And so a little change in inventory,

[00:09:10] an inventories can have a major impact or significant impact on GDP.

[00:09:15] And GDP is obviously a key indicator that we look at from an economic growth

[00:09:20] and an economic situation.

[00:09:22] So in some ways I think that's a statistic that we should keep an eye on

[00:09:28] a bit more as we move forward.

[00:09:30] Because I think it can tell a bit more of a story than maybe I understood

[00:09:35] this article really helped me to understand is some of this inventory data,

[00:09:39] while it may not be a large drop or a large change, could have a significant

[00:09:43] drag as they say on the economic growth.

[00:09:46] Yep.

[00:09:46] Well, and this one talked about it, the economy growing at an annualized rate

[00:09:51] of 1.6% in the first quarter, the slowest in nearly two years.

[00:09:55] So that could tie into Tyler's comment here about who's going to win the stake.

[00:10:02] Yeah, so he thought I had it in the bag, but now he's thinking maybe that

[00:10:07] you might squeeze something out, but

[00:10:11] you've seen industrial MRO market is flattening.

[00:10:16] So yeah, interesting.

[00:10:18] Yep, Tyler when that second rate raise or

[00:10:22] second rate reduction comes in this year,

[00:10:26] I'll raise a glass to you on this as Tom's buying the wine and the steak.

[00:10:31] So very good.

[00:10:33] All right, what's next my friend?

[00:10:36] Planning fatigue.

[00:10:38] I thought this was a very interesting article.

[00:10:42] Yeah.

[00:10:43] So let me back up.

[00:10:44] So basically the gist of the article is that companies are planning more,

[00:10:51] they're spending more time planning.

[00:10:53] They're looking for and trying to plan for some of these, they call them

[00:10:57] black swan events and situations like bridges collapsing and things like that.

[00:11:03] What is interesting in reading that is that it's basically saying that

[00:11:08] a lot of companies are kind of getting in that analysis paralysis.

[00:11:12] And I don't know if over planning is the word, but

[00:11:15] because they don't really know how to plan, it kind of goes around in circles.

[00:11:20] And we've seen this not so much in these executive things, but

[00:11:25] we see this frequently as a lot of over planning.

[00:11:30] And I think it's the first time I've heard of that or

[00:11:33] heard that of that situation, but

[00:11:35] I found it quite intriguing as I went through that article.

[00:11:38] Yeah, well there are some good resource data in here and

[00:11:42] it talks about from this was a survey that had been done.

[00:11:46] In fact, this was board internationalists who did this survey for

[00:11:51] 2024 global planning said 73% of senior supply chain professionals

[00:11:57] are emphasizing scenario planning due to heightened global risks like

[00:12:00] the Ukraine war, cost of living crisis, ongoing supply chain disruptions, etc.

[00:12:07] So they're talking about the things additionally deeper dive into this as

[00:12:12] far as threats were cyber attacks, labor shortage, fluctuating oil prices.

[00:12:18] And then again, disruptions and blockages in the supply chain.

[00:12:22] But to your point right is we, and

[00:12:23] I remember we had one of our guests that was on a while back,

[00:12:27] Mike Mortenson was talking about from Mike's with ARG industrial in the

[00:12:31] Pacific Northwest and Alaska.

[00:12:33] And he was talking about sometimes monthly and

[00:12:36] weekly review of supply chains versus the quarterly or

[00:12:40] maybe a couple times a year.

[00:12:42] There was a really interesting point though that really caught my eye in

[00:12:45] this article.

[00:12:46] And it says many organizations, 77% was the number,

[00:12:52] are relying on assumptions instead of data driven scenarios.

[00:12:56] Leading them to focus only on likely risks and

[00:13:00] not extreme events or as you said earlier, black swan events.

[00:13:03] So they're relying on assumptions versus their own data,

[00:13:07] which just means that's something that they need to be thinking about is

[00:13:11] do they even have the data?

[00:13:13] And if they don't have the data, what should they be doing?

[00:13:15] What should they be thinking about?

[00:13:17] Well, and that's where the planning fatigue and

[00:13:19] the analysis paralysis comes from.

[00:13:21] Right, at least if you have some data, you have some objective way of going

[00:13:26] about planning versus subjectively putting in opinions or even,

[00:13:31] unfortunately, right, even experience may not be a very valuable commodity here

[00:13:35] because it's a very different situation.

[00:13:38] That's a great point Tom.

[00:13:39] You know, as you think about that right is what you think you know is

[00:13:43] a very different world and probably that could if you took someone that has been

[00:13:49] in and around the business for a long, long time, we've got executives on

[00:13:54] the purchasing and supply chain side, well all sides of the business.

[00:13:57] But it's not uncommon to see people, old guys like us that have

[00:14:01] been around in a company for 30, 40 years.

[00:14:04] Well, the world is different, right?

[00:14:05] And some of these people went through us,

[00:14:09] focused on manufacturing in the US and watched that migration to China and

[00:14:14] Southeast Asia and now we're starting to watch it come back at the latter

[00:14:17] parts of their career, but how things work is different.

[00:14:21] You know, I mean, I don't remember it.

[00:14:23] Go ahead.

[00:14:25] No, it's interesting about the data part and I don't want to take this

[00:14:28] down an AI rabbit hole, but I've been doing a lot of homework.

[00:14:32] But you will.

[00:14:33] But I will.

[00:14:35] A short, a small rabbit hole, maybe a gopher hole.

[00:14:39] I've been doing quite a bit of homework on the upcoming open AI GPT-5.

[00:14:45] So we're on GPT-4.

[00:14:47] One of the things that, and supposedly from what I can tell,

[00:14:51] it's literally orders of magnitude improvement over what is GPT-4.

[00:14:56] But one of the things that they're talking a lot about is that the GPT-5

[00:15:00] capabilities will be able to analyze a lot of data and do a lot of

[00:15:04] planning and strategy type of activities.

[00:15:08] So I think, you know, their point there, right, having that data as these

[00:15:13] types of capabilities come out, it then opens the door to taking advantage

[00:15:18] of some of these more robust AI capabilities in the future to really

[00:15:23] do some real, real intelligent planning as it goes forward.

[00:15:27] Because that's a lot of where this is heading.

[00:15:30] Yep.

[00:15:30] I think that is absolutely the case.

[00:15:33] The reality of what we face today is we've got geopolitical conflicts,

[00:15:39] major geopolitical conflicts.

[00:15:41] You've got port issues, but certainly on the East Coast right now,

[00:15:46] you've got, we've talked about a month or so ago, the potential of a strike

[00:15:50] in the Gulf Coast and the East Coast in the ports, right?

[00:15:53] We have a tenuous, continuing tenuous labor situation on the West Coast.

[00:15:58] There are no big threats right now.

[00:16:00] But then you've got China, Taiwan.

[00:16:02] You've got all of these things going on, right?

[00:16:05] And paying attention to exactly what's happening in your supply chain is critical.

[00:16:10] Tom, we skipped an article that was kind of a lead into this particular

[00:16:13] article about that, right?

[00:16:15] Which is the article about US trade tops 200 billion in the first

[00:16:21] quarter of 2024 with Mexico.

[00:16:23] So big, big trading partner there always has been.

[00:16:28] And we need to be paying close attention to that.

[00:16:33] And the realities of this is we're seeing that growth go more and

[00:16:38] more and more into that arena.

[00:16:41] And so we need to kind of be paying attention to that.

[00:16:43] And there's a couple of great takeaways from this article.

[00:16:46] And this article spent some time talking about which are the different

[00:16:50] ports of entry are the strongest and so forth, and talking about Laredo and

[00:16:55] and Ote Mesa, just not an hour and 15 minutes south of me, Eagle Pass.

[00:17:01] And Eagle Pass is Texas is where a whole lot of the in the McEleodora region there.

[00:17:08] There's a whole lot of clothing manufacturing going on down there.

[00:17:12] And that's where that's a lot of that's coming across.

[00:17:14] But as these numbers are rising, and we talked about last week in article as

[00:17:17] well about imports more and more coming in from moving from China,

[00:17:23] manufacturing moving from China to Mexico.

[00:17:26] Couple of things I think that my takeaways from this article in the last few weeks

[00:17:30] are two things.

[00:17:31] One is when we talked about the geopolitical issues of the pressure

[00:17:36] that I guess it would be tied to far from an expert on this stuff,

[00:17:41] but the pressure tied from China and

[00:17:44] Taiwan that the US is having some involvement in and

[00:17:49] more and more pressure of US China.

[00:17:52] If China starts doing more and more in Mexico, and

[00:17:56] Mexico warms up to them, US has got to pay attention to that because

[00:18:00] there's a big issue with that as we talked about on last week's broadcast.

[00:18:04] Excuse me, about trying to get around steel tariffs.

[00:18:07] That's an issue.

[00:18:08] But there's another issue that this article talks about that we don't talk

[00:18:11] about as much.

[00:18:13] And this has been something that's been paid attention to probably as long

[00:18:16] as NAFTA has been around is the ports of entry, right?

[00:18:22] So if you've got border challenges, which if you've crossed the border into any

[00:18:27] of these locations and I'm down in Baja California three,

[00:18:31] four times a year typically, it can take you three,

[00:18:34] four hours to get across the border at some points.

[00:18:37] So I think there's and it's not just the border crossings,

[00:18:40] but as we're watching this,

[00:18:42] it sounds really great that we're nearshoring all of this manufacturing

[00:18:46] into Mexico and or Latin America.

[00:18:50] But is the infrastructure there to really get it across?

[00:18:52] And I think what we'll probably be talking about in the coming months is

[00:18:57] investments into the infrastructure there.

[00:18:59] Yeah, no, it'll get figured out.

[00:19:01] I agree that probably right now we're not ready for it or we're not as

[00:19:05] ready for it as we should be.

[00:19:06] But that's one of the things that will get sorted out,

[00:19:08] I think pretty quickly.

[00:19:09] Yeah, good.

[00:19:11] All right. Well, something to be paying attention to as we're continuing

[00:19:14] to watch reshoring and nearshoring.

[00:19:17] So good stuff.

[00:19:18] So we're jumping into our manufacturing distribution segment that we do every

[00:19:22] week within our newsletter here.

[00:19:25] Kind of an interesting article about this gigantic 3D printer.

[00:19:30] It's an article from Fast Company that says could reinvent manufacturing.

[00:19:35] I thought it was pretty cool to kind of watch that and some of its

[00:19:38] capabilities. Any initial takeaways before I dive in a little bit

[00:19:42] further on this?

[00:19:42] Well, let's talk a little bit about what it is.

[00:19:45] Yeah.

[00:19:45] So it's a printer, I'm not even sure is the right word for it.

[00:19:51] But basically it's a big tool that can manufacture.

[00:19:56] What was the sizes?

[00:19:57] I don't have them in front of me, but like 96 feet long.

[00:20:01] Yeah, 32 feet wide and 18 feet high.

[00:20:04] And I think if I can dive in for just a second before you continue,

[00:20:08] I think most of us think we've seen a 3D printer in a YouTube video or

[00:20:12] maybe we've even seen one of friends.

[00:20:13] I have a couple of friends that have them and their boxes that are 24 by

[00:20:18] 24 by 30 inches high with a little reel of plastic on the side

[00:20:24] that's getting melted and form something.

[00:20:26] Right?

[00:20:27] This is very different.

[00:20:28] 96 feet long, 32 feet wide, 18 feet high.

[00:20:33] So go ahead and continue.

[00:20:35] No.

[00:20:35] And so I think it said it could create a 600 foot house in four days

[00:20:39] basically by going through that.

[00:20:41] So this to me is, I don't know, printer doesn't seem like the right word.

[00:20:45] Yeah.

[00:20:45] But it seems like a very interesting tool.

[00:20:48] And what I found interesting and we were talking a little bit about this

[00:20:51] before, this isn't just about building prototypes.

[00:20:54] Right.

[00:20:54] This is actually manufacturing could be parts.

[00:20:58] It could be really anything.

[00:21:02] I don't know what it costs.

[00:21:03] It wasn't clear in there exactly how much this type of thing costs,

[00:21:06] but you got to figure maybe expensive now and it will come down in price

[00:21:10] over time.

[00:21:11] But this seems like a very different and new way of manufacturing.

[00:21:15] Yeah.

[00:21:16] I think you're spot on.

[00:21:18] For me, in looking at that what I was thinking about is, OK,

[00:21:21] well do you need a 96 foot long one to do all of these jobs?

[00:21:26] I think what's interesting for me is how big this is.

[00:21:29] But now once that's proven, and most importantly,

[00:21:33] is it's not just the reels of different colored.

[00:21:38] And just think about that.

[00:21:39] We're working closely with one of our large newer customers

[00:21:43] and the project manager.

[00:21:44] She has one of these in her home office, one of the smaller ones

[00:21:47] and prints all kinds of stuff.

[00:21:49] But we're not just talking about reels on the side

[00:21:51] of different colored plastics to make things.

[00:21:53] There is all different types.

[00:21:55] And I think then talking about the house,

[00:21:57] the house is using concrete to pour out of this.

[00:22:02] But they're talking about reducing carbon footprints

[00:22:05] with different bio-based materials that are going through it

[00:22:08] Without spending half our show on this today,

[00:22:11] I think for me what the interesting implications are

[00:22:14] is that really it talks about an integrated approach

[00:22:17] where you can think about wiring and plumbing systems

[00:22:22] rather than just a specific structure or product.

[00:22:29] What does that mean?

[00:22:31] You've got back to our article earlier

[00:22:33] about all the manufacturing in Mexico.

[00:22:36] I used to do some work, some interim executive work

[00:22:39] with an electronics manufacturing company in San Diego

[00:22:42] that had a big presence in Mexico.

[00:22:45] They had a plant in Mexico as well as the US

[00:22:47] where they built wiring harnesses, all they did.

[00:22:50] And it's the stuff that the cable

[00:22:52] and the satellite companies use.

[00:22:54] Well, if you look at all of them auto manufacturing in Mexico,

[00:22:57] such a big part of that is wiring harnesses

[00:23:00] going through your car.

[00:23:02] Think about, we've probably all seen pictures of a Boeing plant

[00:23:07] and behind what we see in an airliner as a plastic housing

[00:23:13] between that plastic that you see in the fuselage

[00:23:17] and the main structure of the airline

[00:23:19] is nothing but wiring harnesses.

[00:23:21] And you know what?

[00:23:23] Machines, especially machines

[00:23:24] that have quality assurance components

[00:23:27] that are AI driven in them

[00:23:29] are going to make far fewer mistakes.

[00:23:31] And when you look at a plane

[00:23:33] that probably has miles of wiring in it,

[00:23:36] those harnesses could now be potentially built

[00:23:38] by a machine of this type.

[00:23:40] So I think that back to your comment earlier about AI

[00:23:43] can drop in almost all of our conversations today

[00:23:47] is now you're starting to see quicker, more efficient,

[00:23:52] AI is helping the quality on all of that.

[00:23:55] Pretty cool stuff.

[00:23:56] Yeah, and so I have a question for you.

[00:23:58] Does this, as it relates to wholesale distribution,

[00:24:02] does this open the door for distributors

[00:24:05] to kind of move into this world of manufacturing

[00:24:08] and build private label products or things like that?

[00:24:12] I mean, what does this do?

[00:24:13] It certainly seems to remove some of the barriers

[00:24:16] that would traditionally exist

[00:24:17] with manufacturing complex equipment.

[00:24:21] Insightful question.

[00:24:23] So one guy's opinion,

[00:24:25] but I've been in this market for 30 plus years.

[00:24:27] Here's what I think you could see

[00:24:31] and I think what you should see

[00:24:33] is how I'll answer your question.

[00:24:35] I think what you could see is a lot of distributors

[00:24:37] that start saying,

[00:24:38] hey, you know what, for a half a million dollars

[00:24:41] or $1.25 million,

[00:24:43] I can start making this component that we sell so much of,

[00:24:46] I can lease the building next door

[00:24:48] and start doing that myself

[00:24:50] and I can see somebody going down a path of that

[00:24:54] of trying to do more and more of that

[00:24:56] and then losing sight of what their role

[00:24:58] in the supply chain and the marketplace is.

[00:25:01] What I think people should be doing in that setting though

[00:25:04] is much more likely tied to,

[00:25:07] and we had a distributor I referenced earlier,

[00:25:11] Mike Mortenson was on,

[00:25:13] a lot of folks both in the low voltage electrical world,

[00:25:17] high voltage electrical world

[00:25:19] from a distribution standpoint

[00:25:21] and then when you talk about

[00:25:22] hose and fitting distributors and so forth,

[00:25:25] they typically will take,

[00:25:27] this manufacturer, A manufacturer, B manufacturer, Cs products,

[00:25:31] configure them together into bundles or packages.

[00:25:35] I can see some of that happening where maybe

[00:25:38] it's like the only thing I buy from this manufacturer

[00:25:42] is this component to go into a bundle.

[00:25:45] Boy, I could eliminate the,

[00:25:47] and it's something that we do day in and day out,

[00:25:49] but why not eliminate a vendor if I could?

[00:25:51] Right?

[00:25:52] Yeah.

[00:25:54] But getting too wrapped up in it,

[00:25:56] I can see people chasing a shiny object.

[00:25:58] Sure.

[00:25:59] And it's not good.

[00:26:00] Obviously it's early, right?

[00:26:01] And I'm sure there's flaws in it

[00:26:03] and it doesn't work exactly the way,

[00:26:05] I think they even said it's a 1.0 version,

[00:26:07] but obviously it's just gonna keep getting better.

[00:26:10] That's exactly right.

[00:26:11] And I think this might be a great use case

[00:26:13] in that setting.

[00:26:14] So before we leave this segment,

[00:26:16] we have another article here in,

[00:26:18] by the way, this might be a good time to interject.

[00:26:21] I'll do it a few minutes earlier

[00:26:22] than last week I did it quite late

[00:26:25] is if you're listening to the podcast on Apple Podcast,

[00:26:28] Spotify, whatever your favorite format is,

[00:26:31] what you're not seeing is that Tom and I are live.

[00:26:35] And when we record this,

[00:26:37] it's 9.27 Pacific time on May 10th, 2024.

[00:26:46] We have an editor and we have a producer

[00:26:48] that takes all of the data that we've put together today

[00:26:51] to put this onto the podcast.

[00:26:53] And what we're doing though,

[00:26:54] is we're reviewing live up on our screen

[00:26:57] is a newsletter that we publish every week.

[00:26:59] It's called Around the Hornet

[00:27:00] Wholesale Distribution of Manufacturing.

[00:27:02] We consolidate a lot of the news from around the world

[00:27:05] about the economy and M&A and sales and marketing

[00:27:07] and AI and technology and 3D printers

[00:27:11] and people and leadership.

[00:27:13] And we talk about that in this format each week.

[00:27:16] So if you don't get that newsletter

[00:27:17] and you'd like to send us an email at hello

[00:27:20] at leadsmarttech.com,

[00:27:22] you can go on to the website for our show,

[00:27:24] which is aroundthehornpod.com,

[00:27:27] www.aroundthehornpod.com

[00:27:30] and you can sign up for the newsletter there

[00:27:32] and we'd love to have you

[00:27:34] with the thousands of others that get that newsletter.

[00:27:36] So diving into this kind of our last topic here

[00:27:39] before we get into e-commerce and marketing.

[00:27:43] And this ties into our supply chain issues,

[00:27:45] manufacturing and quite a few things here is

[00:27:47] talks about Milwaukee Tool,

[00:27:50] had some work gloves seized by the government

[00:27:53] and they were doing that because it was tied to

[00:27:56] forced labor from prisoners in a Chinese jail

[00:28:01] that were making their gloves, it turned out.

[00:28:04] So did we publish this to slam on Milwaukee?

[00:28:07] Nope, cause that could say DeWalt,

[00:28:10] it could say Diamond Dam,

[00:28:11] it could say Tom and Kevin's gloves,

[00:28:13] it could say anything that people go out on private label.

[00:28:18] You've got these types of risks that go with that.

[00:28:22] Yep, so it's just another form of again,

[00:28:27] potential disruption and understanding your suppliers

[00:28:30] and understanding the supply chain.

[00:28:31] I don't know how you would,

[00:28:32] I don't know necessarily how they would know all of this

[00:28:36] until after the fact,

[00:28:37] but I guess if they had some idea of,

[00:28:40] how they were operating possibly, but not sure.

[00:28:44] Yeah, well, it's interesting,

[00:28:46] and I won't name them, but you've got organizations,

[00:28:51] some of the publicly traded folks

[00:28:53] in the industrial distribution world.

[00:28:55] They've got hundreds of people that are in offices

[00:28:58] in China that are working on and trying to manage.

[00:29:01] And these are distributors,

[00:29:03] they're private label relationships there.

[00:29:07] And I think one of the challenges comes in,

[00:29:08] I'll just use this,

[00:29:09] the article talks about the company involved with this

[00:29:14] is called Shanghai Select Safety Products Company.

[00:29:17] Okay, so you and I want to get in the private label

[00:29:21] glove business in this case.

[00:29:23] So we go to check with a handful of other people

[00:29:27] that we know maybe through one of our buying groups

[00:29:29] or trade association,

[00:29:30] we know other people that are private labeling gloves

[00:29:34] or safety glasses or boots or whatever it might be.

[00:29:39] And so yeah, Shanghai Select Safety Products Company

[00:29:42] limited, we've worked with them.

[00:29:44] And you go over and you meet with them

[00:29:45] and you tour the factory and so forth,

[00:29:48] common thing.

[00:29:50] But here's what the caveat is.

[00:29:53] It says the name of the company in the article

[00:29:56] and it said, and two of its subsidiaries.

[00:30:00] And what you don't know about

[00:30:01] when you go visit with that supplier is

[00:30:05] his cousin has these two factories

[00:30:07] and they do business for the last 20 years

[00:30:10] with these other factories.

[00:30:12] You might not even know about them

[00:30:14] unless you do a deep dive.

[00:30:15] And we were talking about that earlier,

[00:30:17] about that article about fatigue

[00:30:18] and managing supply chain

[00:30:20] is you've got to dig deep on these things, right?

[00:30:23] And that's the case when we especially

[00:30:26] we start talking about issues with human rights

[00:30:28] and so forth.

[00:30:29] It's one thing is, did they falsify their certification

[00:30:34] from a government organization here in the US

[00:30:39] that they say they have?

[00:30:42] There's all kinds of implications

[00:30:43] that can come with this,

[00:30:44] especially when you start dealing with safety issues.

[00:30:47] Sure.

[00:30:48] If it could be something that could cause a plane

[00:30:50] to fall out of the sky or something

[00:30:52] and not protect somebody's eyes properly

[00:30:54] or whatever it is.

[00:30:55] So supply chain management,

[00:30:58] maybe that's a great career for young ones

[00:30:59] to get into because I understand

[00:31:01] and this is a big deal.

[00:31:03] AI will take care of it.

[00:31:04] All right, let's move on.

[00:31:08] AI, the answer to everything.

[00:31:10] What do you want for lunch?

[00:31:11] I don't know, let me ask you at GPT.

[00:31:14] You know, it's funny you say that.

[00:31:16] One of the biggest use cases right now

[00:31:19] with chat GPT and chat GPT-4 is to brainstorm.

[00:31:23] People are using it to brainstorm

[00:31:25] is innocuous things as what should I have for dinner

[00:31:28] or have for lunch or what should I do with my job

[00:31:32] or what should I do with a relationship?

[00:31:34] It's one of the biggest use cases,

[00:31:36] which I've anyway, I find very interesting.

[00:31:39] All right, let's move on.

[00:31:41] I'm gonna digress.

[00:31:43] Well, you're gonna get to talk about AI more

[00:31:45] in the next upcoming articles.

[00:31:46] We're gonna move into our e-commerce

[00:31:47] and marketing segment.

[00:31:50] Interesting article here from Yahoo Finance.

[00:31:52] 76% of marketers expect budget growth in 2024.

[00:31:58] What are they gonna do with the budgets, Tom?

[00:32:01] Well, they're not expecting large budget growth.

[00:32:03] So it's, you know,

[00:32:05] I think marketing budgets got cut a lot

[00:32:08] in the last couple of years.

[00:32:09] That's obviously, unfortunately,

[00:32:10] one of the places that tends to get cut first,

[00:32:13] but they're definitely looking at investing more,

[00:32:16] guess what, in data and getting more data

[00:32:20] and using data more in the marketing front,

[00:32:26] which I think is good and bad.

[00:32:30] In the marketing world

[00:32:31] and having owned a marketing agency,

[00:32:33] it's very easy to skew data to what you want it to be.

[00:32:38] So the key in the marketing world,

[00:32:40] and I'm sure this is true in other areas,

[00:32:42] but it is true in other areas.

[00:32:43] But in the marketing area,

[00:32:45] really making sure that you're looking

[00:32:47] at the relevant data and the data

[00:32:51] that you're not using it just to make yourself look good

[00:32:55] based around a vanity metric

[00:32:57] that you wanna share from a marketing perspective.

[00:33:00] But anyway, that's not really the point of this article.

[00:33:03] The point of this article is budgets are increasing

[00:33:06] and more emphasis is going on data,

[00:33:08] which is great.

[00:33:09] Now it's just a matter of the quality of the data

[00:33:12] and how that data is actually used

[00:33:13] to actually drive sales and drive growth

[00:33:16] versus proving, hey, look at me, I'm a great marketer.

[00:33:20] Yep.

[00:33:21] So top priorities and challenges

[00:33:24] that they talked about,

[00:33:25] 66% of marketers identified improving data quality

[00:33:29] as the primary focus,

[00:33:31] with 60% of those responded saying

[00:33:34] it's their biggest challenge.

[00:33:37] They looked at balancing authenticity and using AI.

[00:33:41] And we're gonna talk about that a little bit further

[00:33:43] in the next article as well,

[00:33:44] but it says balancing AI usage

[00:33:47] with brand authenticity is crucial.

[00:33:51] The print and design and marketing was

[00:33:55] that allows me to continue to live in our home

[00:33:59] for the last 20 years, my lovely, wonderful wife.

[00:34:04] We were just talking about this the other day

[00:34:05] about all of the content you're starting to see.

[00:34:08] And I think this is just the cycle

[00:34:10] that we're gonna be going through,

[00:34:11] but the content that we're starting to see

[00:34:16] on LinkedIn and other formats

[00:34:17] that is just so clearly all AI driven.

[00:34:21] And I'm the big proponent of consistently

[00:34:25] about using AI as that help get rid of writer's block

[00:34:29] and we're struggling to get something started,

[00:34:34] but me and you've seen just this cut and paste stuff

[00:34:37] continuously that, and it's,

[00:34:39] I think what it's done is made people

[00:34:40] write much longer content as well.

[00:34:43] And we're gonna, the next article we're gonna talk about

[00:34:45] is about content.

[00:34:47] And it just astounds me.

[00:34:49] And then I didn't realize this because I've,

[00:34:52] and maybe that's a good thing

[00:34:53] because I've only used chat GPT

[00:34:56] or in some of the other tools enough for Gemini

[00:34:59] and so forth for outlines versus writing things for me.

[00:35:04] But I didn't realize this,

[00:35:05] but Darlene was mentioning this to me the other day

[00:35:07] is that some of it even chat GPT

[00:35:10] and some of these other tools,

[00:35:11] they'll drop the emojis or icons right into it as well.

[00:35:16] And that's people are copying and pasting

[00:35:18] all of that together.

[00:35:20] It's like, not a good look necessarily.

[00:35:23] Yeah.

[00:35:24] So that's just lazy marketing, right?

[00:35:27] That's just lazy stuff.

[00:35:30] I know we're gonna talk a little bit more about that

[00:35:32] in a couple of minutes, but.

[00:35:34] Let me hit a couple of the last things

[00:35:36] that it talked about in this article,

[00:35:37] but kind of tied to implications of it.

[00:35:40] So data quality, personalization strategy is important

[00:35:44] so we really understand what our messaging is

[00:35:47] to what audiences, AI and authenticity.

[00:35:50] We just finished talking about that.

[00:35:52] A generational training.

[00:35:53] So training to support across generations

[00:35:56] that will build more cohesive strategies, right?

[00:35:59] So if you have a 50 year old and a 20 year old

[00:36:03] working in their own silos,

[00:36:05] you're gonna end up struggling.

[00:36:06] They're collaborating, it's gonna be better.

[00:36:08] And then a drive for innovation.

[00:36:10] So innovative tactics.

[00:36:12] They talked about exploring new technologies

[00:36:14] to differentiate their marketing.

[00:36:16] So I thought that was a good article.

[00:36:18] Yeah, and just one last point

[00:36:19] before you related to data.

[00:36:20] You know, we, because I spend my life

[00:36:24] working with our customers and their data.

[00:36:27] What we're finding is, is that quote unquote sales data,

[00:36:30] order data, potentially even invoice quote data,

[00:36:34] things like that.

[00:36:35] There's a lot of good data there

[00:36:37] to actually drive marketing.

[00:36:39] So a lot of times marketing data is thought of,

[00:36:41] well, who's on my website or who's reading my emails

[00:36:43] or who's reading my content?

[00:36:45] And you have that and that,

[00:36:46] or who's engaging with my Google ads or whatever.

[00:36:50] Well, that's is data that can be rated for marketing.

[00:36:54] There's a tremendous amount of data,

[00:36:55] especially in our industry that can come from your sales

[00:36:59] and your transactional, financial transactional data

[00:37:03] that can also, we're finding drive

[00:37:05] a lot of good marketing decisions and marketing actions.

[00:37:08] So something to keep in mind,

[00:37:10] well, we can, I'd like to do a deeper dive

[00:37:13] on that at some point

[00:37:14] because they're not separated, right?

[00:37:17] It's like marketing,

[00:37:19] what is marketing's job is to create more demand

[00:37:22] and to build your brand.

[00:37:23] There's a lot of data that can be utilized

[00:37:25] from the sales side of the fence

[00:37:27] that can help facilitate that, so.

[00:37:29] It's great.

[00:37:30] Good stuff.

[00:37:31] So next article, thought leadership is on trend,

[00:37:36] but few can pull it off.

[00:37:40] Well, I think that's exactly what we,

[00:37:43] in some ways what we're just talking about.

[00:37:45] So first of all, I thought this first point,

[00:37:48] an overwhelming majority, nine in 10 decision makers

[00:37:52] or C-suite executives are moderately

[00:37:54] or very likely to be more receptive to sales

[00:37:57] and marketing outreach from a company

[00:38:00] that produces high quality,

[00:38:03] high quality.

[00:38:04] High quality.

[00:38:05] Right, right.

[00:38:07] So, and the reason is,

[00:38:10] is because if you have already had a,

[00:38:14] if you were already exposed to the thought leadership,

[00:38:19] you're starting to build trust in the company

[00:38:22] that you're working with.

[00:38:23] You're starting to get to know them

[00:38:25] and you may even have some interest or demand

[00:38:27] or if nothing else, some intrigue in what they're doing.

[00:38:30] So you're definitely getting a head start as we know.

[00:38:34] As you just said though,

[00:38:35] thought leadership is not going to chat GPT

[00:38:37] and say, write me an article about blah

[00:38:40] and copy and pasting it and putting on there.

[00:38:43] So thought leadership to me is now,

[00:38:47] it's always been about quality,

[00:38:49] but because the quantity has increased so much,

[00:38:52] the importance of the quality to rise above that noise

[00:38:56] is even higher.

[00:38:57] And that's really what this article is talking about.

[00:39:00] That's great.

[00:39:01] Very good.

[00:39:03] Solid stuff there.

[00:39:04] I liked it.

[00:39:05] In fact, I was appreciative.

[00:39:08] Lindsay Young with Three Aspens Media

[00:39:10] who's been on the show before

[00:39:11] and will be on again soon with us.

[00:39:13] She actually wrote some notes

[00:39:15] about this article on LinkedIn this morning

[00:39:18] that she pulled from our newsletter.

[00:39:20] So appreciative of her doing that.

[00:39:22] I just think this is,

[00:39:25] there's such an opportunity for brands

[00:39:28] to become thought leaders.

[00:39:30] And I think about it with us at Lead Smart

[00:39:32] is we do an okay job.

[00:39:34] There's so much more that could be done,

[00:39:36] but there is one of the highlights

[00:39:39] that I looked at this is,

[00:39:42] it talked about the rise of low quality AI content

[00:39:46] that creates opportunities for people to be authentic

[00:39:49] with high quality thought leadership

[00:39:52] and the ability to stand out.

[00:39:54] And there is, when you look at platforms,

[00:39:57] whether it's video content on TikTok

[00:40:01] or it's Instagram posts

[00:40:05] or it's more deeper content

[00:40:09] that you're putting out on X slash Twitter

[00:40:12] or LinkedIn or whatever the platform that you use is,

[00:40:16] and there's gonna be more and more platforms

[00:40:17] coming out regularly is that authenticity.

[00:40:21] And I think people can see quickly through,

[00:40:26] I had an agency do something for me

[00:40:29] or it's just true thought leadership.

[00:40:33] And then even so this gets even more powerful

[00:40:36] and I know one of the podcasts

[00:40:38] and I can't remember,

[00:40:39] Tom what's Chris Walker's podcast title?

[00:40:43] Revenue Vitals.

[00:40:45] Great, great podcast if you're,

[00:40:48] and I'm gonna suggest this is a great podcast

[00:40:51] for executives to listen to

[00:40:53] because so often as executives

[00:40:55] and I've lived this my whole career

[00:40:57] is we watch 20 year sales veterans

[00:41:02] all of a sudden get the title,

[00:41:05] Director of Sales and Marketing

[00:41:07] or VP of Sales and Marketing,

[00:41:09] but their focus is on sales

[00:41:10] because that's what they know.

[00:41:11] And then there's this marketing component

[00:41:13] and marketing might be three social media posts a week

[00:41:20] and a blog post on the website once a month

[00:41:24] and they publish the blog post on their website

[00:41:27] and that's their marketing department

[00:41:29] and then they take care of trade shows and catalogs.

[00:41:31] That is probably the standard across the board

[00:41:36] in wholesale distribution.

[00:41:37] But when we can start having executives

[00:41:41] understanding the opportunities

[00:41:43] for authentic content development and thought leadership

[00:41:47] across social channels

[00:41:49] and across your marketing message

[00:41:51] that includes the senior executives in an organization.

[00:41:55] It includes a CEO that is on consistently on

[00:41:59] and it doesn't matter the size of the organization

[00:42:00] you could be a five person organization

[00:42:05] and your CEO has a relevant presence on social media

[00:42:09] or you could be a Fortune 100 company.

[00:42:11] But if your leadership understands

[00:42:14] this authentic opportunity that we have

[00:42:19] to develop thought leadership,

[00:42:21] it can change the perception of brands

[00:42:23] at your customer level.

[00:42:25] Sure, but it has to be done with high quality

[00:42:29] and authenticity and you have to reuse it

[00:42:33] to rise above the noise

[00:42:34] and otherwise you're just adding more to the noise

[00:42:37] which is kind of the key thing of the article here.

[00:42:40] But anyway.

[00:42:42] Yep, I think this must be we're seeing this

[00:42:44] on our screen that says it resonated with me

[00:42:47] so much great content.

[00:42:49] I think that might be Lindsay that popped that in there

[00:42:52] it's just we're not seeing who that is

[00:42:54] but that's my assumption.

[00:42:55] And I can see this on my other device

[00:42:58] that was Lindsay commenting on that.

[00:43:01] In fact, Tom Mitch popped that up there

[00:43:02] about that other comment.

[00:43:04] Google is now deprioritizing

[00:43:06] largely AI non differentiated content as well.

[00:43:09] So there are a lot of reasons to invest

[00:43:11] in better higher quality original content.

[00:43:14] Lindsay any possibility you can help people do that?

[00:43:17] I thought so.

[00:43:19] Lindsay's company does a great job

[00:43:20] working with a lot of great brands

[00:43:22] with that three Aspens media.

[00:43:23] So good stuff let's kind of jump on

[00:43:26] we're gonna actually there's a few pieces related

[00:43:28] to this that we're gonna talk about

[00:43:30] as well as we talked about that AI piece

[00:43:31] as we get into technology and cybersecurity.

[00:43:34] But another article that we talked about

[00:43:37] and covered here this week was an article

[00:43:39] from digital commerce 360 Granger

[00:43:42] eyes more repeat customers at Zorro.com.

[00:43:45] Tom, if you don't mind,

[00:43:47] I wanna move on through on that pretty quick

[00:43:48] because there's some big stuff ahead of us

[00:43:51] but the key piece of that takeaway for me was

[00:43:54] and I again, that's Granger

[00:43:57] and Zorro has become kind of their

[00:44:00] endless aisles I think is one of the terms

[00:44:05] that they use with that as well is that

[00:44:09] you can put anything online for sale, right?

[00:44:12] This just talks about some of Zorro's growth

[00:44:14] but the idea they're talking about a lot here

[00:44:17] is being really good at acquiring new customers

[00:44:21] but then getting them to repeat shop.

[00:44:23] So I'm gonna flip flop this

[00:44:25] for the traditional typical distributor

[00:44:27] because the typical distributor

[00:44:29] and it doesn't matter if you distribute pool chemicals,

[00:44:32] hard hats or pipe valves and fittings.

[00:44:36] We're all really good at our field sales

[00:44:39] and branch counter sales

[00:44:43] and we do a pretty good job typically of repeat sales

[00:44:47] but we miss typically two components.

[00:44:50] One is expanding wallet share

[00:44:51] which is one of the big tools that we do

[00:44:54] within Leeds more channel cloud

[00:44:56] our technology tool that our company does

[00:44:58] is help visualize what categories are we selling

[00:45:02] to our customer and which ones should we?

[00:45:04] We miss that typically

[00:45:06] but then we're also doing very little online currently.

[00:45:10] So this article talks about all Granger's doing online

[00:45:13] and I see this transitioning

[00:45:16] when looking at it from a smaller regional

[00:45:18] or independently owned wholesale distributor saying,

[00:45:21] hey, I work really well with my existing customers

[00:45:25] in getting them to buy more.

[00:45:26] Now I need to flip that over onto my website

[00:45:28] and even now cross sell, do all of that

[00:45:32] that we talked about regularly

[00:45:33] about what we can do in that setting.

[00:45:35] So good article there.

[00:45:37] All right, where are we going next?

[00:45:39] Technology, cybersecurity and AI

[00:45:41] which leads us back to AI topic

[00:45:45] we talk about quite a bit here.

[00:45:47] Tom this article is about OpenAI CEO Sam Altman

[00:45:51] weighs in on content authentication

[00:45:53] and I think that ties a little bit

[00:45:55] to our previous article there about authentic content.

[00:46:01] Yeah, it's a little bit.

[00:46:03] Basically what this issue is about is

[00:46:07] did you actually create the content, right?

[00:46:09] Quote unquote are you the copyright owner

[00:46:13] of whatever it is that you're talking about?

[00:46:15] And what he's talking about here in this article

[00:46:18] is that rather than using AI to spot

[00:46:22] non authenticated content, how do you use AI

[00:46:25] to actually basically tag and have certainty

[00:46:30] on where that content is coming from?

[00:46:33] Whether that's through digital signatures.

[00:46:35] This is I think where the blockchain

[00:46:36] will really, really start to actually come to life.

[00:46:40] Because the blockchain is all about using

[00:46:44] that types of things to have that

[00:46:46] basically that non something that can never be changed

[00:46:49] or go away.

[00:46:50] So it allowed you to use the digital signatures

[00:46:53] in a way he didn't get into that there,

[00:46:54] but I believe that's a big use

[00:46:56] of where the blockchain will fit in.

[00:46:58] But yeah, he's really, and obviously it's an issue,

[00:47:01] is that how do you tag if you wanna call it that

[00:47:04] or sign or whatever that your content

[00:47:07] is actually authentic and be able to then

[00:47:10] let others know that versus content

[00:47:13] that's not authentic and generated through the AI process?

[00:47:17] Well, there's just a couple pieces

[00:47:19] that makes for that recap there.

[00:47:20] I think there's a couple pieces

[00:47:22] that go with that as well, Tom,

[00:47:23] is they tie in this article

[00:47:26] and I think you've got a lot of this push

[00:47:28] from the current administration wanting to make sure

[00:47:32] that things are gonna be safe and fair in the election.

[00:47:36] So we've got a lot about that.

[00:47:37] Is this real content from this candidate perhaps?

[00:47:43] But I think what's interesting in your comment

[00:47:44] about the blockchain tying to this

[00:47:46] as well as intriguing to me,

[00:47:48] because I think what comes out of that additionally

[00:47:51] is the issue with brand integrity in general.

[00:47:56] I mean, manufacturers are working every day

[00:47:59] with the e-commerce data that's out there

[00:48:02] about their products and who's selling their product

[00:48:05] on Amazon or eBay or reselling their products.

[00:48:08] And I think this kind of almost goes full circle

[00:48:11] in that setting is what kind of tools can we have here

[00:48:15] to authenticate managing my brand,

[00:48:18] not just a statement or a piece of content.

[00:48:21] Yeah, I mean, the whole idea of blockchain is immutability,

[00:48:26] which means that it can't easily be changed

[00:48:30] or updated or altered.

[00:48:32] So I think anyway, we'll see,

[00:48:35] but I think that's gonna become a big part of it.

[00:48:37] Good.

[00:48:38] Well, I think that'll be interesting.

[00:48:39] We'll continue to watch that as we do here.

[00:48:41] So let's dive into our sales and M&A segment.

[00:48:45] Or let's say, I'm sorry,

[00:48:46] we missed an article there about security.

[00:48:48] My apologies, went too fast there.

[00:48:50] This is from Tech Target as well.

[00:48:53] IBM studies show security for Gen.AI projects

[00:48:55] as an afterthought.

[00:48:57] Maybe a recap on that.

[00:48:58] Do you have any thoughts on that?

[00:48:59] And then I'll share a couple of quick ones.

[00:49:02] No, I mean, I think the byline here

[00:49:04] is pretty much tells a story, right?

[00:49:05] 82% say trust is trustworthy is important with AI,

[00:49:10] but only 24% have done anything about it,

[00:49:12] mainly because it's hard.

[00:49:13] It's not an easy answer for this at this point.

[00:49:18] So-

[00:49:18] Well, it's hard when you try.

[00:49:21] If you don't understand even the importance of it,

[00:49:23] it's even harder, right?

[00:49:25] I think there's an awareness factor of,

[00:49:29] and I would look at this,

[00:49:31] I think, hadn't even thought of this is,

[00:49:34] we've in our organization is having some policies

[00:49:37] is what tools are we allowed to use?

[00:49:41] Right?

[00:49:42] And I use that example,

[00:49:44] a couple of times in the past,

[00:49:46] we've talked about this is,

[00:49:47] I do a lot of volunteer work

[00:49:49] with faith-based volunteer work.

[00:49:51] And in my local congregation,

[00:49:53] I've got some responsibilities

[00:49:55] about the safety of the facility

[00:49:57] and security measures and things like that.

[00:49:59] And I had had two documents I'd been given to review

[00:50:02] and I thought about asking ChatGP2 to do the comparison

[00:50:06] and I stopped and thought it's like,

[00:50:08] and this was using free version of ChatGPT3,

[00:50:12] I think it was.

[00:50:13] It's like, wait a minute,

[00:50:14] I have the risk here if I load both of those in

[00:50:17] that I just put out to the world

[00:50:20] if someone else wanted to search

[00:50:22] if these documents were out there.

[00:50:24] So there's just all kinds of risks, right?

[00:50:26] That we wanna be thinking and avoiding.

[00:50:29] And I guess probably maybe the biggest takeaway

[00:50:31] in factor is becoming aware

[00:50:34] of the security issues that go with it.

[00:50:39] And when you're aware of those,

[00:50:39] then you can go do the heavy lifting

[00:50:40] to make sure you're safe.

[00:50:41] Yeah, and there's definitely some frameworks

[00:50:42] and other things that are starting to come out on this.

[00:50:44] So it'll get better or you'll get more,

[00:50:48] being able to do some of this.

[00:50:50] But yeah, it's not an area

[00:50:51] that's really been given a whole lot

[00:50:53] of attention relative to everything else.

[00:50:55] Great.

[00:50:56] Hey, two cool articles in our sales

[00:50:59] and M&A section here.

[00:51:01] The first one which I really enjoyed

[00:51:04] was Brian Gardner's article.

[00:51:07] Brian and I just met recently.

[00:51:10] And Brian is the founder of Sales Process 360.

[00:51:14] He wrote a book called ROI from CRM.

[00:51:18] And that's finished its title there,

[00:51:21] give him the plug he deserves here.

[00:51:24] ROI from CRM it's about sales process,

[00:51:26] not just technology.

[00:51:28] And he wrote a really good article

[00:51:30] about who is your CEO for CRM.

[00:51:33] This is available at the distribution

[00:51:36] strategy groups website.

[00:51:37] He did this in conjunction with that team.

[00:51:39] I thought this was a really solid article.

[00:51:42] Oh, it's a great article.

[00:51:43] And there's a lot, I don't want to recap it.

[00:51:48] I think you're better served

[00:51:51] to take a look at the article

[00:51:52] and really talk about what it means

[00:51:53] to be a CEO of your CRM.

[00:51:56] But what it means is that somebody

[00:51:59] in the organization has to be the steward

[00:52:02] of getting what can be gotten out of the CRM.

[00:52:05] Right.

[00:52:06] And what I find interesting,

[00:52:09] and we see this every day, right?

[00:52:11] Let's face it, a lot of companies,

[00:52:13] we see it think CRM is a four letter word

[00:52:17] because of a lot of kind of the old school definition

[00:52:21] of CRM, right?

[00:52:22] Which is big brother

[00:52:23] and all we're going to do

[00:52:24] is add extra work and blah, blah, blah.

[00:52:26] But I look at the value that I see our customers

[00:52:29] getting in the sort of this next generation of CRM

[00:52:32] and the sales growth that they're getting

[00:52:34] and the value and the enablement

[00:52:36] that's occurring with their sales team

[00:52:38] and the insights that's there, right?

[00:52:40] Is so massive that this idea of the steward of the CRM

[00:52:46] almost like you could have a chief CRM officer

[00:52:50] in the organization.

[00:52:52] And I know that's not the best word,

[00:52:54] but it's really,

[00:52:55] there's so much value to be gained out of it.

[00:52:58] We do a lot from the vendor perspective,

[00:53:01] but within the organization,

[00:53:03] having somebody that can continue to facilitate that value

[00:53:06] is really, really,

[00:53:08] I think something we're going to see more and more of

[00:53:10] as CRM, as people start to understand

[00:53:15] this next generation of CRM

[00:53:16] is not the generation of CRM,

[00:53:18] a big brother and extra work

[00:53:21] and whatever they call it, CRM Saturdays

[00:53:23] or whatever it was.

[00:53:24] So that people were entering those.

[00:53:26] And unfortunately, I wish there was a better term for it.

[00:53:28] I wish there was a new term, but there's not.

[00:53:30] But anyway, the point is in this article

[00:53:32] is how do you actually get the mileage out of it?

[00:53:36] And I thought it was some really, really good advice.

[00:53:39] That CRM Saturdays we got to,

[00:53:42] I've said it a number of times.

[00:53:44] I heard that from Joyce Lansdale from Valen

[00:53:50] who shared that that's not what she wanted her team

[00:53:53] doing, but had been exposed to that in the past.

[00:53:57] But I think you're right.

[00:53:58] So a couple of statistics out of this,

[00:54:00] Brian talks here about 80% through a survey

[00:54:03] of business leaders were unsatisfied

[00:54:06] with the performance of their CRM system.

[00:54:09] And we see and hear that all the time

[00:54:12] from companies who have had a tool in the past

[00:54:16] and so much of it is because one, how they viewed it

[00:54:22] and it was big brother versus being a tool

[00:54:25] where you could truly show your employees

[00:54:29] what is that old term,

[00:54:30] the world's favorite radio station is WIIFM,

[00:54:34] what's in it for me and not showing that

[00:54:38] and it's a big brother tool and so forth.

[00:54:40] So I think that's where a lot of that comes from

[00:54:42] and then poor onboarding which we know is critical

[00:54:46] and when you're doing CRM right

[00:54:48] and you're giving more data to the salespeople

[00:54:51] and not just salespeople but to your organization,

[00:54:53] then you're asking in return,

[00:54:55] you're going to have a great onboarding

[00:54:57] and a great adoption experience.

[00:54:59] This was talking about another research study

[00:55:02] that had been done that talked about effective onboarding

[00:55:04] will increase retention by 82%.

[00:55:09] Bamboo HR says if you have a good training programs

[00:55:13] employees are 18 times more committed

[00:55:16] to your company as well.

[00:55:18] So man, that's a lot of data there that can help.

[00:55:23] Well, and the one thing that I think the article

[00:55:24] did miss is talking,

[00:55:27] they didn't really talk about the functionality

[00:55:29] or capability of CRM in today's world.

[00:55:33] Today's world of CRM speaking from our perspective

[00:55:37] is all about driving sales and driving growth

[00:55:40] and driving a better customer experience.

[00:55:42] It has very little to do with tracking activity

[00:55:45] or being big brother.

[00:55:47] So no matter what you do,

[00:55:50] if you're trying to onboard an organization around,

[00:55:53] hey, you need to track activity

[00:55:54] and we're going to monitor that,

[00:55:56] that's a hard road.

[00:55:58] But if you're onboarding an organization based around,

[00:56:01] hey, you're going to put more money in your pocket,

[00:56:03] you're going to have happier customers,

[00:56:04] you're going to grow the business,

[00:56:06] you're going to whatever the case, drive sales,

[00:56:10] that's a very different story

[00:56:11] and a very different onboarding quote unquote approach

[00:56:15] because the adoption will go there.

[00:56:17] I think inherently he was implying some of that

[00:56:20] but it just didn't call it out exactly in the article.

[00:56:23] Yeah, no, that's good.

[00:56:25] And if you're interested in these types of things,

[00:56:28] reach out and follow Brian on LinkedIn as well.

[00:56:31] There are though, before we go on Tom,

[00:56:33] there are a couple of bullet points

[00:56:34] that were worth talking about that he mentioned here

[00:56:37] as he talks about a CEO for CRM.

[00:56:40] Call it whatever you want, call it a project leader,

[00:56:42] call it whatever it might be within your organization.

[00:56:46] But the idea behind that is,

[00:56:49] and he has a list of eight or nine of these I think,

[00:56:52] but one of the most important things

[00:56:55] is that somebody believes in the value

[00:56:58] of a properly implemented platform.

[00:57:00] It's getting that buy-in by the person

[00:57:03] that's leading the project

[00:57:04] that's not just been assigned something

[00:57:06] but they see it and they understand it.

[00:57:08] They talk about being somebody respected

[00:57:11] in the organization with the power to make changes

[00:57:15] within an organization.

[00:57:16] I think that's great.

[00:57:18] Then he talks about understanding how sales,

[00:57:20] product specialist, marketing, service department,

[00:57:22] management and so forth all coexist

[00:57:25] using the technology, right?

[00:57:28] Skipping over a few of them says,

[00:57:30] has the bandwidth to spend the time needed for success.

[00:57:33] I hear this from you and your team all the time

[00:57:35] of implementing with our customers is

[00:57:37] we could have done three months earlier

[00:57:39] if they would have blocked the time

[00:57:41] and laid things out correctly, right?

[00:57:44] Is IT savvy but does not have to be an expert

[00:57:49] and then understands clearly about how the CRM platform

[00:57:52] will work with other information systems.

[00:57:54] So good article.

[00:57:55] We should probably get Brian on the show one of these days

[00:57:57] and have some further discussions,

[00:57:59] but I enjoy that one a lot.

[00:58:01] So moving on, we covered an article in here.

[00:58:05] We're in our sales and M&A segment,

[00:58:08] but we covered an article a few weeks ago

[00:58:11] about Home Depot's acquisition of SRS Company

[00:58:16] and this article is also from

[00:58:20] the distribution strategy group.

[00:58:23] There's quite a few comments in here from Ian Heller.

[00:58:25] It's written by a gentleman by the name of Don Davis.

[00:58:27] I thought this was a really insightful article

[00:58:30] if you're in the wholesale distribution space

[00:58:33] about the depth and what's going on

[00:58:36] with this acquisition that we saw.

[00:58:41] So SRS distribution, Texas based company,

[00:58:46] mostly roofing entered into landscape

[00:58:50] and pool supplies and so forth.

[00:58:54] A number of years ago, they've done 107 acquisitions

[00:58:59] within their organization at SRS,

[00:59:02] about 10 billion in revenues,

[00:59:04] 750 branches and warehouses in 47 states,

[00:59:10] 2,500 sales reps and 4,000 trucks

[00:59:15] and Home Depot bought them.

[00:59:18] You think there might be an issue

[00:59:19] or a potential threat there?

[00:59:22] I think there is a risk of that

[00:59:24] and this article I think does a really nice job

[00:59:27] of giving a view over Walmart, Amazon, Lowe's

[00:59:31] and Home Depot are the key ones

[00:59:33] that it mentions in here.

[00:59:35] I thought it was really valuable

[00:59:36] and the article quotes Ian Heller,

[00:59:40] who's a good friend of our shows

[00:59:41] and a good friend personally as well.

[00:59:43] And he made the comment,

[00:59:45] he says contrary to analysts assumption,

[00:59:48] all of these based companies can earn higher margins

[00:59:53] in certain sectors of distribution

[00:59:55] than they can in the retail markets.

[01:00:00] But the other issue that they face

[01:00:01] is if they want to grow and move into other segments

[01:00:05] into their own industry, specifically retail,

[01:00:10] they've got a huge risk because of how aggressive

[01:00:12] the current Federal Trade Commission is.

[01:00:14] And Ian quotes here about, you know,

[01:00:15] that Lena Kahn who we've talked about,

[01:00:19] I don't know, five, six times over the past year

[01:00:22] of what she's doing at the FTC to block big deals.

[01:00:26] So if you're a retailer and you want to expand

[01:00:29] in retail, you've got to fight

[01:00:31] a tight and rigid FTC right now.

[01:00:34] Why wouldn't you take the deep pockets that you have

[01:00:37] and go into new markets and new segments

[01:00:39] where you can be successful?

[01:00:41] Yeah, no, it gives them an opportunity

[01:00:43] to be under the radar, do under the radar acquisitions

[01:00:46] of quote unquote, not that these are small businesses,

[01:00:49] but they're not mega businesses

[01:00:51] and they're just going to pass through the process.

[01:00:53] So you see that even in the tech industry right now

[01:00:57] is that more and more M&A actions are under the radar,

[01:01:00] not these big mega mergers.

[01:01:03] And that's what they're saying here.

[01:01:04] And I agree also that there's a lot of,

[01:01:07] they said there's a lot of money to be made in this space

[01:01:10] and these big public companies

[01:01:12] have to keep showing earnings growth.

[01:01:13] They have to keep showing growth, right?

[01:01:15] So yeah, there's a lot of incentive for them

[01:01:18] to do some of this.

[01:01:19] And I'm sure a lot of eyes are on this acquisition,

[01:01:22] the SRS one from these other players to see how it goes.

[01:01:25] And if it goes well,

[01:01:26] then it will be probably, you know, accelerating.

[01:01:30] Well, and you're right, right, spot on, right.

[01:01:34] A lot of this was tied to, you know,

[01:01:37] the cash that these companies have and access to cash.

[01:01:41] They have the resources, they have the teams,

[01:01:43] they have the people.

[01:01:44] So when you look at Lowe's,

[01:01:45] Walmart in 2022 instituted their Walmart business,

[01:01:51] which was just a response to Amazon business.

[01:01:53] But we talk all the time

[01:01:55] about the growth of Amazon business.

[01:01:57] It's pretty astounding, you know, of what can be here.

[01:02:00] So it's something that we'll continue to watch.

[01:02:01] I thought this was a very well written article,

[01:02:04] two great articles that we've focused on today

[01:02:07] from distribution strategy group

[01:02:08] and some of the writers that they work.

[01:02:10] So good stuff.

[01:02:11] You know, we have a people in leadership segment

[01:02:14] each week that we go to as well.

[01:02:16] There's two articles there.

[01:02:17] Oh, yeah, before we finish with that

[01:02:20] in our sales and M&A,

[01:02:21] there's an article there about affiliated distributors,

[01:02:24] one of our great partners that we worked closely with

[01:02:26] as a preferred service provider from Lead Smart.

[01:02:30] They hit record sales in the first three months of 24

[01:02:34] of 19 and a half billion dollars,

[01:02:35] almost $20 billion for sales across their members.

[01:02:39] So exciting that's a 7% increase

[01:02:43] over their 14 divisions

[01:02:45] that are in three different countries.

[01:02:46] So it's good news.

[01:02:47] But as we jump into kind of winding down today

[01:02:50] in sales and leadership,

[01:02:52] there's an article here that from CNBC

[01:02:54] talks about job growth,

[01:02:56] less than expected

[01:02:58] and a little bit of a rise in unemployment.

[01:03:00] And then there's a cool article there

[01:03:02] from manufacturingdive.com

[01:03:04] and it talks about a second chance hiring

[01:03:06] can bridge manufacturing labor costs.

[01:03:08] And it's interesting because within that article

[01:03:11] it talks about hiring former inmates

[01:03:15] or former prison,

[01:03:16] people with prison records and so forth

[01:03:18] and helping them to get into having programs

[01:03:21] to help them get back into the job force.

[01:03:23] And when we talk to wholesale distributors

[01:03:25] and manufacturers every day,

[01:03:27] one of their biggest challenges is,

[01:03:29] employee retention and finding people.

[01:03:33] And maybe there's a balancing act

[01:03:35] that can go through some of these programs

[01:03:37] that reduce recidivism

[01:03:40] or people committing additional crimes

[01:03:43] by having a life-changing impact.

[01:03:45] So kind of a cool feel good article there.

[01:03:48] Yeah, it's an interesting one.

[01:03:51] That'd be an interesting one to get a take

[01:03:52] from Dirk Beveridge on.

[01:03:53] I don't know.

[01:03:55] It'll be interesting to see the pros and cons of that

[01:03:58] and what are the risks of that and so forth.

[01:04:00] But if it can work,

[01:04:01] then it could be a way to fill that gap a bit

[01:04:04] that is obviously quite substantial.

[01:04:08] Very good.

[01:04:09] All right, we'll kind of whine out of this today.

[01:04:11] Each week we have a segment

[01:04:13] called industry scuttlebutt that's in the newsletter.

[01:04:15] Again, we're here live if you're not with us,

[01:04:19] if you're listening to the podcast later in the day

[01:04:21] and not with us live,

[01:04:22] we're looking at a newsletter that we publish each week

[01:04:24] called Around the Horn and Wholesale Distribution.

[01:04:27] So we'll get that just reach out to us.

[01:04:29] But talks about a great acquisition

[01:04:32] that Rexel just did by acquiring Talley.

[01:04:36] Good article there about the follow-up that

[01:04:38] that's from TED Magazine,

[01:04:39] the Electrical Distributor Magazine.

[01:04:41] You can catch that one there.

[01:04:43] Blockhawk Industrial acquired a factory tooling outlet

[01:04:46] in Texas.

[01:04:47] Blockhawk is pretty consistent in their acquisitions.

[01:04:50] But the last thing we'll mention on this arena today

[01:04:53] in the industry scuttlebutt

[01:04:54] is the Industrial Supply Association, ISA.

[01:04:56] I was at their event in Charlotte last month

[01:04:59] and got another event coming this fall.

[01:05:01] And they've had a tool called their Topline Pulse,

[01:05:07] which is a modeling and data analyst

[01:05:10] and forecasting tool.

[01:05:13] They relaunched it.

[01:05:14] If you're in wholesale distributor or wholesale distributor,

[01:05:17] go take a look at its isapartners.org

[01:05:21] and go look at the Industrial Supply Association's tools.

[01:05:26] Really kind of a cool tool that they launched

[01:05:28] and talked about Brendan Brean and his team's.

[01:05:30] Teams growing, they're doing some really neat stuff

[01:05:32] to reinvent ISA.

[01:05:33] So I guess this is not your father's ISA anymore.

[01:05:38] So that's kind of it for us for our articles

[01:05:41] and so forth.

[01:05:42] We had our good reads there.

[01:05:44] You can check in that on our newsletter as well.

[01:05:47] But any closing thoughts on our articles

[01:05:50] or the week, Tom?

[01:05:52] No, there was a lot of,

[01:05:53] that was quite a wide variety today.

[01:05:55] Yeah, we covered a lot of ground, didn't we?

[01:05:58] A lot of ground and thanks for the comments

[01:06:00] and for the things.

[01:06:02] And yeah, we'd have some good guests coming up,

[01:06:03] I think over the next few weeks.

[01:06:05] So you're not gonna just have to put up

[01:06:06] with you and I.

[01:06:07] No, we've got,

[01:06:10] what I'm pretty excited about is we have the CEO

[01:06:13] of the National Association of Wholesalers

[01:06:15] on at the end of the month

[01:06:16] and quite a few other guests lined up.

[01:06:18] We've got Jonathan Vine coming on shortly

[01:06:21] from Distribution Strategy Group as well.

[01:06:23] We'll spend some time talking about

[01:06:24] Distribution Strategy Group's big AI conference

[01:06:27] that they have coming up in June as well.

[01:06:30] So a lot of good stuff and we have,

[01:06:33] I think between now and the end of June,

[01:06:35] I think we have four or five great guests coming

[01:06:38] and then we're starting to stack up our guests

[01:06:40] for the rest of the year as well.

[01:06:42] So if you have suggestions about

[01:06:44] what maybe we should be talking about each week

[01:06:46] outside of what we already do,

[01:06:47] suggestions for a great guest,

[01:06:50] we would love to hear about that.

[01:06:52] The other side of it is if you have any suggestions

[01:06:54] about how we do this or how we can make this better,

[01:06:56] we do this for wholesale distributors and manufacturers

[01:07:01] and hardworking millions of people

[01:07:03] that are involved in that marketplace.

[01:07:06] So keep us posted if you see anything there.

[01:07:09] So Tom, anything exciting for the weekend planned?

[01:07:13] Nothing too exciting, no.

[01:07:15] Okay, good.

[01:07:17] We'll stay at your desk, write some code,

[01:07:20] learn more about AI and go from there.

[01:07:23] So Kevin Brown, Tom Burton,

[01:07:27] thanks to our sponsors at Leadsmart Technologies,

[01:07:30] the company that Tom and I both work for.

[01:07:32] We will wish you all a great weekend.

[01:07:36] Enjoy some time with your mothers

[01:07:37] if that's what you have planned

[01:07:39] and we'll ask you to be kind, be safe

[01:07:42] and do good things.

[01:07:43] Thanks for being with us.

[01:07:45] Thanks everyone.

[01:07:46] We hope you enjoyed today's episode and our guests.

[01:07:49] Each week we try our best to dig into the topics

[01:07:52] that are impacting your business.

[01:07:53] So please reach out to us and let us know

[01:07:56] how you think we can make the show better

[01:07:58] or topics you'd like for us to tackle

[01:08:00] or talk about more often

[01:08:01] and even guests you'd like to see join us.

[01:08:04] We're looking forward to bringing you next week's session

[01:08:06] and hope that until then, you stay safe,

[01:08:09] stay focused and do great things.

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