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Herman guesses his territory has close to 1,000 potential customers, but can’t help the “die-hards” for other brands. “I try not to give up a stop if I possibly can sell anything there.
“I sell service, I don’t sell tools. If you sell service, tools will come. And I think that’s how you beat out your competition. … You won’t see me tote and promote. I’ll bring in the new tools, but that’s about it. Other than that, I just make myself available, take care of my customers, and I figure sales will come.”
Herman hands out sales fliers to everyone at every shop. “Every box gets one, whether they buy from me or not. I walk by everybody, even the guys that don’t talk to me,” and he’s sure to ask how they are doing and if they need anything.
“Then with my active customers, I’ll spend a little extra PR time,” he said. He’ll rotate each week which customer groups get the little extra time each day “so that at the end of the month, I’ve kind of PR’d everybody.”
For Herman, there was a learning curve to the business. He thinks his time as a tech helped him, but that anyone who starts selling tools with a “get-rich quick” mentality will have a much harder time getting established.
“The first six months is the hardest. Then the next six months gets a little better. Next six months, a little better. Then after about two years … you get the business turned around.
“Let’s face it, until then you’re trying to build customers. That’s taking money out of your pocket,” he said. “I doubled the recommended inventory the first year. So I didn’t put money in my pocket, I put it back in my business.
“The good thing about this business is everything’s relative to how much you sell and how much you buy. If I sell $200 in one day, and collect $500, I’ve managed to do enough to cover my truck. … You break it down, daily if you need to.” In covering the truck for the day, Herman refers to payment, fuel, maintenance, insurance, etc.
“There are some days you’d like to collect more than you put on the street. Then there’s times where you’ll sell $3,000 in a day and collect $1,200. Then another $1,800 has got to come from somewhere.”
Buy in bulk
More than selling and collecting, Herman said buying smart is essential.
When the Cornwell annual tool fair and rally was in his hometown this year, Herman bought as many on-site samples from booths at higher discounts as he could.
Buying in bulk always helps, he said, especially since the tool fair won’t be in your town every year (or even any year for most distributors). Being in the habit of buying in multiples keeps you ready to take advantage of limited specials and discounts, he said.
“If I buy one tool cart, it costs me about $486; if I partner with another distributor and buy 10 to split, we can get them close to $300 apiece.”
In adding that extra profit into more items, it becomes easier to pair some better-selling higher mark-up tools into deals with stale products you just want off the truck.
“I used to sell quite a few boxes, but I started looking at it – if a box is on a truck for very long, why keep it? It’s just sitting there getting dusty.” And after you sell it, you get one guy that’s paying you maybe $80 to $100 a week.
“Well, I could take the same dollar amount of carts and put 10 carts on the street, and collect from 10 guys, $50 a week.
“That’s $500 a week versus $80,” he said.
“With the times the way they’ve gotten, that’s the direction I’ve moved … selling a lot of little stuff, with a lot of people.
“Then, hopefully you collect — and I do — quite a bit more than you put out on the street.”
Herman has the stock on his truck split with mechanical tools to one side and body shop product on the other. He would like to add more body shops to his route if he could.
“Body shops buy mechanical and body shop tools,” Herman said. “They lose more tools and they’re more tool hounds than mechanics.”
Beyond body shops, Herman likes selling at dealerships. Some of the bigger dealerships in his area are 2-3 hour stops for him, where he has dozens of customers to see.