Put AI Where the Money Is: Why the Front Office Comes First

Nearly every distributor I talk to feels they should be doing something with AI, and much of that conversation starts in the back office, with purchasing and forecasting. Those projects can save money, but orders are won or lost in the front office.

One of our customers, Kregg Cheek, put it better than I can. He runs LH Industrial Supplies, a family-owned industrial distributor in Indiana, with his two sons.

“If I’m going to invest in AI, I need something that’s going to help me with sales, because that’s where you’re going to see your biggest bang for your buck.”

He’s right, and I’d add one thing for distributors of any size, from single-location shops to companies with hundreds of branches: bring in someone who does this every day instead of building it yourself.

Speed and knowledge for every rep

To thrive with AI, a sales team needs speed and knowledge, and most are short on both. Reps lose hours keying line items off PDFs, and the product knowledge that wins orders sits with a few people nearing retirement.

Distro takes the typing off their plate. It reads a PO or RFQ in any format, matches each line to your item file, and builds the quote in your ERP. When a customer asks for a part you don’t carry, it finds an equivalent you stock, so the rep can still say yes.

It also puts that knowledge in front of your whole team, so your newest hire can answer like a 30-year veteran. Another customer now puts new hires on Distro their first day and no longer requires quoting experience.

What it looked like at LH Industrial

Each LH Industrial rep used to build 15 to 30 quotes a day. LH Industrial connected its ERP to Distro without migrating any data and went live in 29 days, a week ahead of plan.

• A batch of emailed POs that took a rep six hours now takes about one, and 93% of line items match correctly on the first pass.
• Product questions that took five or ten minutes get answered in about five seconds. “We sell so many products that we can’t be experts in all of them,” Kregg said. “Now that expert is right there on our computer.”

The results hold at much bigger operations. A 12-branch HVAC distributor we work with cut RFQs from 30 minutes to as little as five, and a plumbing and HVAC distributor with around 300 locations went live in under two weeks.

What Industrial Distributor Time is Worth

Say each rep saves 20 minutes on 20 quotes a week. That’s about 333 hours a year per rep. On a 100-rep team, it’s more than 33,000 hours, the selling time of 16 full-time reps. If each rep turns that time into one more $2,500 order a week at a 25% margin, that’s $31,250 in gross margin per rep a year, and more than $3.1 million across 100 reps.

Why buying beats building

“I’m not an IT person, and I don’t want to be,” Kregg said. For a small distributor, building your own AI tools hands the owner a second full-time job. For a bigger one, it ties up an IT team that’s already stretched. And when your tool gives a customer a confident wrong answer, that’s on you. A partner stays on the cutting edge so your team doesn’t have to chase it.

It’s also about people. We onboard every customer on their own live quotes. The day LH Industrial went live, the customer success lead running the call was home sick. Kregg opened by telling his guys to go easy on her, and she told him she wanted to make sure they were up and running.

Smarter with every order

This is the part I’m most excited about. The right AI gets smarter the more your team uses it. It learns your products, your customers, and the way they like to order. When one of Kregg’s reps pointed out the shorthand his customers use for a common screw, the system had it that same week, and so did every rep on the team.

The distributors who start now will answer faster and more accurately every month, and their customers will feel the difference. So will their revenue.

Jason Sullivan is the founder and CEO of Distro, the Palo Alto-based, Y Combinator-backed AI revenue platform built for distributors.