Apex Tool isn't your typical warehouse distributor. They're not looking to add locations. They have no interest in offering product options down to the third and fourth tier. Their inventory will never hold thousands of SKUs, and the same guy who answers the phone just might pack your order and carry a business card that says owner.
Apex Tool isn't your typical manufacturer. They don't own a factory or employ hundreds of people. Outside of crossing the Puget Sound into Canada for a single item, they don't import products from overseas. Nor do they mass produce thousands of a particular tool.
Rising from the farm fields and country roads of southern Indiana, Apex Tool doesn't try to be typical, and their customers appreciate it. Originally founded in 1972 by a mobile tool dealer who worked out of a van in selling heavy-duty tools up and down the eastern part of the country, Apex is now owned by Bob and Fred Neff. This father-son team worked for Kent-Moore before deciding to go out on their own.
"I was born into the business," explains Fred Neff. "My dad would let me come on his sales calls. Pretty soon I was the only 9-year-old in the world who could counterbore an engine," he laughs.
Taking over where their predecessor left off, Apex now operates out of a 20,000-square-foot warehouse with a strict focus on heavy-duty tools and equipment. They carry products from Tiger Tool, OTC, Adobe Air, Associated, and they're one of the largest NEXIQ heavy-duty scan tool distributors (see sidebar on page 29) in the U.S. They also manufacture and distribute their own line of heavy-duty line pullers, seal installers and timing pin tools.
Made To Order
"Almost all of our manufacturing is done in Eugene, OR," explains Fred Neff. "We work with a number of small machine shops in producing our line of Apex Heavy-Duty Tools. So they're not being punched out by a machine operator in large volumes. Rather, our products are being made by tool makers who take a lot of pride in the product's craftsmanship. Quality control couldn't be better, and the end result is a precision-forged tool that you can't find just anywhere.
"Also, because of their specialized nature, the biggest run of tools that we do is about 100. So, again, this helps ensure better quality while keeping costs down. The end result is a premium tool at a good price that, in many cases, the customer can only get from us," explains Neff.
Production is based primarily on the Neff's feel for the business. Their background lends a great deal of credibility in deciding what tools to create and how many to make. This also minimizes back orders and margin-reducing overstocks. In fact, there's enough extra storage space that Neff opened a DIYer tool store and consignment center for everything from lawnmowers to toolboxes.
The rationale behind Apex's niche approach stems from product gaps that the Neffs saw while servicing the heavy-duty industry. "We're focused on the heavy-duty truck mechanic," explains Neff. We want the small guy to have the same opportunities as the larger fleets and dealerships."
Much like the current situation on the light-duty side, heavy-duty vehicle makers are also trying to capitalize on service by limiting the amount of diagnostic information and tooling that's available outside of their dealer network. "The non-dealer is being shut out," continues Neff. "So we specialize in creating and selling tools that wouldn't otherwise be available to the independent repairer."
Although Apex does sell to some end-users, Neff states that their best customers are mobile tool dealers. "With a typical cost of $300 to $500, these products are better suited for the mobile dealer to buy and sell. This allows the end-user to pay for it over the course of a couple weeks, instead of all at once. We also have special distributor pricing to help this process along," he states.
Their Knowledge Is Your Power