AI is everywhere in distribution right now. It’s in every software pitch, every product launch, and every vendor demo. Most of the distributors I talk to are either mid-pilot or have recently wrapped one up.
But here’s the pattern: Very few are moving forward with a purchase. Even fewer are renewing after year one.
It’s not that AI doesn’t work. It’s that the return on investment just isn’t there.
Time Savings Alone Aren’t ROI
Nearly every AI product in the space promises one thing, efficiency. They’ll cut order entry time in half, reduce admin work, automate reporting. And in many cases, they actually deliver on that.
But time savings by themselves don’t equal ROI.
Unless that time is turned into new quotes, additional follow-ups, or revenue-driving customer conversations, it’s just… time. You’re not reducing headcount. You’re not expanding your team. So the only path to value is repurposing that capacity.
Here’s the issue: Most tools stop short of helping you do that. They save time, then hand it back to your team without a clear game plan. No prioritization. No direction. No shift in behavior. That’s where adoption stalls—and value evaporates.
The Cost Side Is Real
Meanwhile, the software isn’t cheap. Licensing, onboarding, integrations—they add up quickly. And when you stack those costs against just “doing things faster” the math breaks down.
According to Gartner, nearly 80% of AI pilots never scale into full deployments. McKinsey reports that nearly half of companies that buy AI software don’t renew it after the first year.
That tells you everything you need to know. The excitement is real, but so is the disappointment when the ROI doesn’t follow.
Sequoia Capital recently addressed this same issue in an interview with Manny Medina, founder of Outreach. They pointed out that many AI tools are great at looking impressive in a demo—but fail to make a lasting operational impact.
That’s what we’re seeing on the ground with distributors. The appetite is there, but the results need to follow.
What Real ROI Looks Like
Let me share a real example.
We work with a regional distributor that was processing over 600 orders a week—most of them via email, PDF, or spreadsheet. Their CSRs were spending about seven minutes per order just to get everything keyed into the ERP.
They rolled out our AI-powered order automation platform and dropped that time to two minutes per order. But more importantly, they had a plan for that extra bandwidth.
They told their team:
– Follow up on every open quote
– Call top customers who hadn’t ordered recently
– Support outside sales with cross-sell and upsell plays
Within a few months:
– Order capacity jumped 80%
– Revenue per CSR grew 22%
– Customers saw faster service and more personal outreach
That’s what ROI looks like. Not just cost savings—but more revenue, stronger relationships, and more value from the team you already have.
AI Isn’t About Headcount Reduction. It’s About Unlocking Capacity
There’s still a lingering fear in the market that AI means cutting jobs. That’s not what’s happening in distribution.
You’re not looking to reduce staff. You’re looking to free up time so your team can focus on higher-value work: quoting, upselling, building customer relationships.
Tighe Greenhalgh, Vice President at CentralComponents, put it well:
“I would never terminate half my inside sales team just because we implemented automation. That’s not the point. The point is to help them spend more time selling, quoting, and building real customer relationships. That’s where the value is.”
And he’s right. The real win isn’t efficiency—it’s what that efficiency enables.
Why Most AI Tools Still Don’t Stick
Most AI tools are built with impressive capabilities, but not always with the end-user in mind. They assume your team will log into a new platform, adopt a new workflow, and change how they work.
But that’s not realistic in most distribution environments. If it doesn’t plug into your ERP, CRM, or email—it’s going to collect dust.
Even more frustrating, some tools surface insights but don’t explain what to do with them. Others automate tasks that weren’t big problems in the first place. That’s why pilots stall, usage drops, and renewal rates suffer.
Final Thought
Distributors are open to AI. You’re testing, you’re exploring—but you’re also asking the right question: How does this make me money?
The tools that will win in this space aren’t the ones with the best pitch deck. They’re the ones that fit the way your team already works, help them move faster, and give them a clear plan to turn saved time into sales activity.
If a tool doesn’t help you save time and drive revenue, it’s not going to make it past the first year. Distributors don’t need hype. You need outcomes.
And that’s where real ROI begins.
Justin Johnson is the founder and CEO of Motivate, an AI-driven sales process automation platform for B2B distributors. Motivate empowers inside sales teams to reduce quote and order times by more than 45%, while its patent-pending ecommerce module has been shown to boost distributor online sales by more than 300%. A seasoned tech entrepreneur, Justin has a proven track record in B2B distribution and manufacturing solutions, having successfully built and sold multiple high-growth software companies, including LeadMethod (acquired by Revalize, backed by TA Associates) and MightyRep (acquired by Blue Agave). Justin is a regular contributor to technology and sales process automation thought leadership for B2B manufacturers and distributors.