AI has become ubiquitous faster than any technology preceding it. Some say it’s a solution looking for a problem. Never underestimate the power of denial, I say. I’ve been in many leadership meetings over the years where the same thing was said about social media as an influencing and marketing medium. Oops. After an introduction to this tech, 72% of focus group participants polled believe AI will significantly displace or impact knowledge workers. Nine percent understood why.

Unions that represent creatives are winning concessions to keep AI out of their channel to hedge against displacement. Distribution should be the antithesis of that movement. The first-mover advantage of its implementation in your distribution business isn’t optional anymore. New AI platforms are being rolled out each day, with more computing at a lower cost and easier implementation. Your competitors are intrigued and shopping. 

The Problem

Distributors are the true middleman. However, there are significant challenges in the middle. You’re squeezed both up and downstream in the channel. You move product; you extend credit; and you hope subcontractors don’t price-shop you into oblivion. Direct-to-consumer (DTC) is breathing down your neck. Third-party logistics are nipping around your margins. That’s not a business—that’s been a slow march toward irrelevance, leaving more insightful leadership scrambling for the safe harbors of private equity and mergers & acquisitions.

Meanwhile, Amazon and AI-powered supply chains are salivating over the inefficiencies. If you’re not adding Magnificent Seven value, you’re just in the queue to be disintermediated. 

A Solution

AI-powered, value-added services and educating your workforce on the use of AI agents that turn your distributor business from a simple materials provider into a high-tech, high-touch (John Naisbitt - Megatrends) strategic partner. Investing in AI doesn’t just keep you competitive—it future-proofs your business against the inevitability of its imminent dominance, helps create new revenue streams, leverages your talent, builds a moat around your enterprise, and locks in customer loyalty. The companies that control data, automation, and predictive analytics will control the supply chain. The question is: Will you be the disruptor or the disrupted?

Imperatives

Inserting AI, even current basic consumer versions (Perplexity, Claude, ChatGPT), into your business will immediately bring value by:

• Creating augmented professionals within your enterprise
• Enhancing efficiency and accuracy in your customer engagements
• Optimizing inventory management, reducing overstock and stockouts
• Automating order processing and predictive logistics
• Streamlining supply chain operations, cutting lead times, and improving on-time delivery rates
• Using AI-driven (CRM) tools that personalize outreach, boosting sales and conversion rates
• Having AI-enhanced pricing algorithms that dynamically adjust margins based on market conditions, increasing profitability

It will also have the halo effect of demonstrating your leadership's commitment to providing the investments and vision needed to educate and support a culture of imagination, willingness and sustainability to the employee experience.

Creating augmented professionals in your company will produce the same results as Steve Jobs' strategy of putting computers in the hands of one million creative people generations ago. 

What It Means for You (The Distributor)

Forget competing on price—AI implementation moves you beyond materials and into Intelligence-as-a-Service (IaaS), creating a distinction between your offerings and your competitors. Subcontractors aren’t just buying products from you—they’re paying for a competitive advantage that your experiential data with analytics, leveraged by your existing creatives, can provide them. Here are some byproducts:

• New Revenue Stream Opportunities: Offer a monthly subscription fee for AI-powered services
• Higher Retention: Subcontractors who use AI-augmented distributors have a deeper connection to you
• Bigger Orders: AI-powered incentives and intelligence drive volume-based loyalty and margin explosion
• Data Monetization: You own purchase trends, job forecasts, and bid intelligence

AI Imperative: Adapt or Wallow 

The flooring distribution game is no longer about who has the best inventory—it’s about who owns the intelligence that moves the inventory. You’re either evolving into a tech-driven powerhouse that makes subcontractors more competitive, or you’re waiting in line to be replaced by someone who is. AI is an accelerant in the difference between being indispensable and being invisible.

The data-rich, automated distributor will control margins, lock in loyalty, command pricing power, and have a key element in private equity desirability in who to invest in—while the others fight for sustainability in models that are being rendered obsolete.

The platforms that harness predictive analytics, just-in-time delivery, and AI-driven financial models will own the future of distribution. If your strategy is still built on credit terms and a good sales team, congratulations— you’re preparing for irrelevance at scale.

Hard Truth 

Amazon, shifting consumption patterns, private equity, and technology engineers don’t care much about your legacy. Subcontractors must choose the partner that makes them richer, faster, and more efficient—not the one that’s been around the longest. You have a brief window to position yourself as a high-margin intelligence provider, rather than a low-margin logistics mule. Someone is going to Thomas Edison the heck out of this thing into legacy wealth. 10% will adapt and control 90% of the future. Why not you? AI is the moat. 

Data is the currency. Execution is everything.

If you’re interested in planting the seeds of future growth to your business, I’d love to share my experience and talent with you. DM or email me to help.