We recently began offering workshops for distributors on how they can use AI to drive new levels of productivity and profitability. It quickly became clear that people regularly conflate “AI” with tools like “ChatGPT.”
“We use AI all the time,” one person told me. “We use ChatGPT to write most of our emails and it saves us a lot of time.” That’s great but it’s barely scratching the surface of what AI can do for a distributor. That’s like claiming you sell electrical supplies because you added batteries onto your counter displays. Sorry, but that’s a huge exaggeration.
The prospective AI “stack” for distributors includes transformational technologies that can be applied across your enterprise. From quote to order automation to returns, rebates management and more, these specialized, purpose-built applications use AI in highly impactful and specific ways. Unlike ChatGPT, you don’t have to figure out the use cases for these technologies or try to adapt the tool for the job.
Why the Confusion?
The capabilities of LLMs like ChatGPT are so amazing and impressive that it’s easy to think of them synonymous with AI. But that dramatically undersells AI—just take a look at the “boxes” in the graphic above. This is an incomplete list of areas in your business where you can find AI-enabled applications that will dramatically improve your company’s performance today.
The AI Stack for Distributors
Here’s a little extra detail on how AI can be applied across your company:
- Pricing Optimization: AI analyzes transaction-level detail, customer behavior, and competitive data to recommend price levels that maximize margin without losing business. Instead of one-size-fits-all pricing, distributors can set dynamic, customer-specific price points at scale.
- Demand Forecasting: Traditional forecasting often leans heavily on gut feel or spreadsheets. AI forecasting models incorporate sales history, seasonality, even economic and weather data, giving you sharper inventory planning. The result: fewer stock-outs, less excess, better turns.
- Dynamic Routing and Slotting: AI-driven logistics systems optimize truck routes in real time and rearrange warehouse pick locations automatically. Drivers spend less time on the road. Pickers walk fewer miles. Fill rates improve. Customers get faster service.
- Warehouse Robotics: Robots powered by AI are moving beyond novelty. They are already streamlining picking, packing, and replenishment. When combined with slotting algorithms, you’re not just moving boxes—you’re optimizing labor and throughput.
- Rebate Management: Distributors leave millions on the table every year because rebate programs are too complicated to track. AI can automate accruals, validate claims, and surface missed dollars. That’s pure profit found with almost no incremental effort.
- Quote-to-Order Automation and Cross-Selling: AI can turn quote requests into orders instantly and recommend add-on items based on purchase history or similar customers. That means faster transactions, bigger baskets, and happier customers.
- Marketing and Product Information Management (PIM): AI is transforming how product content is created, translated, and syndicated across websites, catalogs, and marketplaces. Paired with marketing automation, distributors can deliver campaigns that feel personalized at scale.
The Bigger Picture
When distributors conflate ChatGPT with AI, they risk missing the bigger opportunity. Yes, LLMs can save time in drafting emails or summarizing meeting notes. But the most dramatic gains in productivity and profitability come from embedding AI deeper into your processes—where it can handle complexity, scale decision-making, and eliminate manual inefficiencies.
Takeaway
ChatGPT may be the most visible face of AI, but it’s only the tip of the iceberg. The distributors that thrive in the next decade will be the ones who understand and apply the full stack of AI technologies to transform how they operate.
If your AI strategy starts and ends with ChatGPT, you’re missing the real prize. The future belongs to those who embrace the entire AI stack—and put it to work across the enterprise.
We’re producing a live conference on how you can use these applications (and others) to transform your company’s performance. Join distribution and technology thought leaders from across the industry as we convene to learn how to use AI to drive new levels of performance.
The Profit and Productivity Summit for distributors will be held November 10-12 at the Chicago Marriott O’Hare. We have a terrific lineup of distribution executives and technology experts who will explain exactly how you can embrace these technologies to supercharge your results right now. Don’t miss it!
Ian Heller is the Founder and Chief Strategist for Distribution Strategy Group. He has more than 30 years of experience executing marketing and e-business strategy in the wholesale distribution industry, starting as a truck unloader at a Grainger branch while in college. He’s since held executive roles at GE Capital, Corporate Express, Newark Electronics and HD Supply. Ian has written and spoken extensively on the impact of digital disruption on distributors, and would love to start that conversation with you, your team or group. Reach out today at iheller@distributionstrategy.com.