West Branch, Mich.-based independent distributor Don Oestrike (Renegade Tools) doesn’t like to tell his customers “No.” He’d rather put in some extra time with phone calls and research to find whatever has been requested.
And that’s one of the reasons he said he likes to use Medco. If Medco doesn’t handle something he needs, “they’ll suggest where to look, they’ll give me a phone number … because that’s one thing, I try not to say ‘No,’ ” Don said. Despite the added phone calls and research, he wants to always be the source for his customers.
Being the source is especially important to Don, where in some areas of his territory he competes with up to seven other mobile tool distributors.
As far as having seven competitors, Don feels it keeps him on his toes, and he said he benefits from being “the old man on the block,” among the group. Don has 17 years in as a tool dealer, the last four as an independent (though he’s bought from Medco through all 17 years); prior to tool sales he was a collision repair tech and instructor.
One of the benefits of going independent for Don was taking control of his territory in terms of where he stopped. He reduced his route geographically to save hours of “windshield time” every week, without taking a hit on sales as he added more shops that he used to pass by. In fact, he’s got more customers now.
“I’ve centrally located myself, to where my house is about a half-hour away from any day’s route,” Don said. Which means he can get special orders to a tech who meets him half-way, before or after a day’s work, in just 15 minutes.
Another benefit for Don, is he doesn’t feel as “pushed” to sell to every tech at every stop.
“I haven’t had a ‘bad’ customer in close to two years,” Don said. He attributes it to being able to take time to evaluate new potential customers instead of feeling pushed to sell immediately.
“I didn’t like that,” he said.
CHANGING ROUTE
As far as types of shop, Don stops everywhere: marine, body shops, independent garages and more, though his stops have shifted over his time selling tools.
“Today’s market is totally different than 17 years ago,” he said. “In Northern Michigan, we’ve lost nearly every factory; in West Branch, I used to spend a whole day in the industrial complex, and now they don’t even have an industrial complex.”
In the changing economy, he said he’s seen several dealerships close, which put many of his customers out of work. But he did find a silver lining here: “Several techs have opened their own small shops after not finding jobs,” Don said. “I find I’m dealing with a lot more one- and two-man shops.”
The economy didn’t just change his stops, but how he stocks his truck.
“When the economy went south, I also changed a little bit of how I stocked the truck,” Don said. “You don’t necessarily have to have three of everything all the time.
“Stocked to the gills is nice, but make sure you’re properly anticipating your customers’ needs,” he said.
Stocking the truck is one of the biggest things that changes with becoming independent, Don said. For instance, finding a toolbox line to carry.
“I’m trying out the Extreme line right now, because they look similar to what the competition carries,” Don said. “That’s one thing about being independent, it’s hard to find a good toolbox line.”
“That’s one of the good things about Medco, is they can set you up to use one of four different lease companies,” for customers who are making bigger purchases like a toolbox or equipment like a fluid exchange machine, he said.
STOCKING THE TRUCK
“I use Medco for my advantage because they give me information I need. I can call them anytime, and they were there for me when I went independent. They helped suggest and stock the truck with a starter inventory,” Don said. “Being independent, I like that the volume of what I can sell, what I have access to, is quadrupled.”
For instance, he likes Milwaukee Electric’s cordless tools because his techs like the power and the price, and he has a nearby repair center in Midland, Mich., for any repairs/warranty service. He also offers Ingersoll Rand and Makita power tools to have multiple price points for customers, as well as expanded options for a customer who may not like a tool from one brand or another.
“Right now I’ve got about 85 percent of my customers on the book to the max I’m comfortable with for each of them,” Don said. He added that towards the holidays in November and December, new sales tend to dwindle a bit.
“To increase sales … or add new customers back onto books, then I’ll do a lot more promotionals, like take in spray guns to the body shops or stock more new-to-market items,” Don said. He also tends to do more toting into the shops when his accounts are down.
Though his sales have been on a decline for a few years, 2010 has kicked off to where he expects to finish up about 30 percent over last year.
One thing Don does to draw customers onto the truck on occasion, particularly when he falls behind on stocking tool shipments, is he’ll stack the boxes in the truck. He said the techs treat it like Christmas, as they tear into boxes to see what’s available.
“I even told my neighbor, a Snap-on dealer, about it,” Don said. “He said, ‘Holy cow, that really works!’ ”
Taking care of your customers is, point blank, the most important part of this job. That’s what they’re paying for. It’s the service … going that extra mile,” Don said. “Even when that means delivering a toolbox on Christmas Eve.
“I like to think my customers will always come to me first if I deal well with them, likewise I like to go to Medco to deal with them and expect them to take care of me.
“I enjoy my job. I’m not pushy … I learn from my customers,” Don said. “If I wake up some day and I’m not having fun, then it’s time to get out.”
MEDCO MARKS 40 YEARS SERVING MOBILES
Medco, the Philadelphia-based tool distribution warehouse, has focused on the mobile tool dealer for the past 40 years, supplying such brands as OTC, Ingersoll Rand, GearWrench, Chicago Pneumatic, SK and more. The company has grown to a 10-warehouse enterprise with coast-to-coast national and Canadian delivery.
“I would honestly say that we understand and respect the mobile tool dealer better than anyone in the industry,” said Andrew Keim, Medco president. “We understand the limitations of territories, the difficulty of financing every purchase, the increased competition created by the Internet, and the uncertainty of the current economy.”
Medco’s sales team is available from 3 p.m. to 11 p.m. Central time. The sales staff receives training from manufacturers on a weekly basis to make sure that they are fully versed about new products, features, benefits and application usage. A specialized customer service team is available from 7 a.m. to 11 p.m. and staffed by tool and equipment experts who can bring knowledge to the conversation, in addition to being able to take orders and provide solutions.
The company developed an online warehouse offering to give mobile distributors 24/7 access to the inventory in their primary warehouse and the ability to compile an order electronically throughout the day.
Medco developed an online electronic catalog with thousands of pages of product information, including parts breakdowns and manuals, organized by category and brand for ease-of-use, and is about to make the information available on DVD for those dealers without wireless internet access on their truck.
The review of new manufacturers and new products is an ongoing effort; Medco added more than a dozen new manufacturers and more than 500 new items in the past year.
“In order for us to carry a new product, it has to add value for our mobile tool professional and their customers. The last thing that this industry needs is more “me too” choices that take up valuable room on the truck without helping our mobile customers to actually sell more,” said Michael Rau, director of marketing/category management.
Medco also helps mobiles market what they sell:
• Six times per year, Medco develops a full-color flyer that is pre-priced with a 40-percent margin.
• Special promotions drive seasonal products.
• Special leasing options help sell high-ticket items.
• Special offers are available via fax or email on a bi-weekly basis.
And, more than just a traditional tool warehouse distributor, Medco carries a full line of paint and body tools and supply products for progressive mobile tool dealers to get into the hands of their collision repair customers. Everything from safety supplies to gloves and respirators, abrasives, spray guns, disposable cup systems and more are available.
“The decision to make traditional PBE tools and supplies available to the mobile tool dealer seemed like both a significant opportunity as well as a natural evolution,” said Scott Andersen, director of mobile marketing.
