Debunking 4 Common AI Myths in Distribution

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Adopting AI could increase cash flow by 122% while delaying adoption could reduce it by up to 23%. With this potential, it’s time to pay attention.  

Why do so many distributors hold back from adopting AI? From what I’ve seen, it’s because a lot of distributors are misled about AI. They don’t know where to start.

There’s no reason to limit your success. Let’s talk about four myths preventing some distributors from adopting AI.    

‌AI Myth #1 — AI will Replace Human Sales Teams

People have been predicting the death of the outside sales rep forever — and will continue to do so. And they will continue to be wrong. The impact of AI will not eliminate the need for sales. Instead, it will free up distribution teams to sell more.  

AI can become a powerful tool in your toolkit. It can bring reps up to speed about customers’ activities so when they call they will have something relevant to say. AI can also make sense of data in spreadsheets to get insights about customers. It can help sales reps determine which customers to call and what products to pitch. With AI tackling mundane, repetitive tasks, sales teams can focus on high-value actions. Sales reps are freed to build client relationships and close deals.

We still need humans to understand the nuances that AI will miss. AI can help sales reps do their jobs better, but it doesn’t replace them. AI will replace only those who fail to use these tools to improve their business with distributors who embrace AI to do their jobs better, faster and smarter.  

In some cases, AI can actually increase jobs. When we started our partnership with a large industrial distributor, they wanted to build a proactive inside sales team.  

Our client started with 10 sales reps. They brought in an AI platform to make their sellers smarter and more efficient. They built a process around the insights generated by the AI. The tool helped them create daily structured, systematized, scalable and measurable prospecting tasks.  

For example, on Monday, their reps call only on accounts that haven’t bought anything in the last 12 months. On Tuesday, they call on accounts not registered in their e-commerce portal. They know who to call because they are using an AI-powered CRM that filters the accounts. This distributor built AI into their sales process.  

Rather than eliminate jobs, AI helped this industrial distributor create 100 new sales positions.  

‌AI Myth #2 — We Don’t Have Perfect Data, So We Can’t Use AI

When it comes to AI, the more data a distributor has, the better. No distributor has perfect data. The beauty of AI lies in its ability to sift through the “mess.” AI can identify patterns and produce valuable insights even if data is messy. 

While clean, well-structured data can speed up the process, it’s not a prerequisite for getting started with AI. Nearly every distributor we come across is insecure about their data cleanliness. It’s almost never as bad as they think.  

In this case, it’s quantity over quality. AI handles complex, unstructured data like a pro. However, what is important is data availability. Your data must be accessible to help train AI models. No one has perfect data. But the transactional data from your enterprise resource planning (ERP) platform is pretty close.  

Improving a distributor’s data is always useful. However, in our experience, data clean up represents around 20% of the work of AI implementation.  

What’s more taxing? Overcoming your sales team’s resistance to changing their selling habits — that’s about 80% of the work.  

Myth #3 — AI is a $1M Incremental Investment

Today’s AI doesn’t cost a million dollars. In fact, it’s getting increasingly affordable due to several key factors driving down costs, including:  

• The training costs for large AI models have dropped significantly  
• The expenses for running these models have gone down  
• Hardware efficiency improvements  

This has made AI technology more accessible and affordable, allowing a broader range of businesses to implement and benefit from AI solutions.  

AI doesn’t even need to be an incremental investment. Today, many software tools come with AI functionality already baked in.  

Take customer relationship management (CRM) software. If you haven’t already invested in CRM software, but you’re considering it, you can invest in CRM tools with AI features without adding an incremental AI budget. Depending on the size of your organization, buying an AI-enabled CRM will be well below the $1M mark. 

‌Distributors can get started with AI and see a return on investment without pouring millions of dollars into AI. For example, generative AI ChatGPT is a subscription-based product that costs $20 per month per user. (There is also currently a free version available to try.) 

Certainly, you won’t transform the entire organization with AI by purchasing a single $20 subscription. But you can have your sales teams try out these tools. When they do, they can see the power of having an AI assistant at their fingertips to proofread customer emails or clean up their notes from a customer call. It’s an inexpensive way to get acquainted with.

Myth #4 — AI Implementation Will Take Years

Some software used to take years to implement fully. You may still have a bad taste in your mouth from your last ERP platform deployment. Many distributors do. Depending on your goal, implementing AI could be a multi-year project. But there are plenty of achievable low-lift AI projects that are quick to implement. 

You could implement AI in a small way in less than an hour, such as by installing a Google Chrome extension that performs sentiment analysis of emails. Our average client is go-live ready with our AI-powered CRM in 12 weeks. If you’re building your own AI models to do something bigger, your project will be longer. The time to implement AI really depends on the project type, but it certainly doesn’t need to take years. 

Don’t Be Misled by AI Myths 

The hype — and myths — around AI may prevent many distributors from considering AI tools. But unlike the myths about AI built from misinformation and misconceptions, the potential of AI for distributors is real. When distributors realize AI won’t replace jobs, it doesn’t need perfect data, many tools today already have AI and there are many low-lift AI projects you can get started in just a few weeks, AI is attainable for distributors of all sizes. Embracing AI today can enhance productivity and efficiencies, allowing distributors to stay competitive and grow faster.