Eric Pagliughi is new to the business. He took over his Matco Tools route in the middle of the Great Recession when another new distributor abandoned the route after only six months. Some people thought he was crazy to assume so much risk in such a bad economy, but Eric saw positive signs. The original distributor had the route for 12 years, so he thought it was “salvageable.” He and his wife had also determined they were financially stable enough for Eric to, at long last, open his own business, and he thought this opportunity offered better odds of success than a repair shop.

Still, it was a tough decision. “I was scared to take a chance on that investment because they can’t really tell you what you’re going to make. They tell you the business is what you make it, and now being in the business almost two years, I understand what that means. The time you spend at it, how much you put into it, that’s what the business gives back to you.”

Eric says he’s glad he made the decision. “I’ve had a good run these past two years. I keep saying to myself eventually it’s going to level off and I’ll be able to relax just a little bit and not have to hustle as much. But it seems like every week is just another crazy week. It just keeps getting better (with) more people on the books each week.”

Background Advantage

Of course, hard work is only part of his success. Eric had worked as a tech on construction machinery, so he knows his customer. Later, he worked for 10 years as a machine operator. He says his time in the construction industry “helped a lot. I think it’s that I showed up on jobs every day working with people I didn’t know. It’s the same here. You’re meeting people, walking into their home, and technically you have no right to be here. So you kind of have to win them over, hope that they want you to show up every week.” Eric considers walking into a customer’s shop “a privilege.”

His previous experience also helped him develop “street smarts. You learn to tell people ‘this is how it’s going to be’…My customers know that if they don’t pay me they’re going to get a call some time that week…I think that’s why it seems like I have fewer skips than others.”

With more than 215 customers on the books, Eric thinks there’s a potential for 400, “but I haven’t really figured out how many guys are on the route. I push the guys who haven’t done business with me yet, who maybe just started somewhere. I’m not real pushy, but I only talk (about) tools with them. Sales and collections: that’s what it’s all about.”

Another advantage, a big one, is the fact that Eric lives in his territory. He drives about 300 miles a week, but it’s all local, which saves time. The main benefit of living in your territory is knowledge and familiarity of the local economy and the people working there.

“Being from here, I know a lot of the guys, so I don’t need to be a pushy salesman, it’s not all business every second I see them. When I was buying tools, I liked the guy that came in and talked to you. I liked that friendly relationship, so that’s the way I like to work now. And it works for me, so I’m sticking to it.”

He carefully manages his customers’ account balance in a way that “lets them think they’re controlling the way we’re doing business. I’ve had people tell me they like the way I do business. And my business reflects that, obviously, since I’m doing well.”

Not Always a Perfect Day

Sometimes the customer really is in control. His territory is centered in Buena, NJ, not far from the southern edge of the state. He has several stops at Millville Airport, including a complex of Boeing hangers where new helicopters are fitted with military equipment prior to deployment. Normally Eric stops there every other week, but the day we rode with him, Boeing called him to come over, and he couldn’t refuse. Since it’s a military contractor, Eric is not allowed to leave the truck, so there is no opportunity to promote business. We spent almost an hour at an unscheduled stop to sell just one tool.

Even worse, the people working there are on temporary assignment and come from all over the country. “They rotate them. They could be here for only six months. You could have a guy who owes you money and he disappears. Sometimes they don’t even know (when they’re leaving), but usually they do. I had that happen, the guy just disappeared, doesn’t answer his phone… just gone.”

Although he doesn’t know for sure, Eric thinks he has fewer skips than others. “I can count on both hands the number of guys I can’t find right now. That’s the part of the business that everyone thinks is the most frustrating, but we have a good skip program in effect with Matco…I’ve had guys pop up in Arizona and Texas that left from here and (Matco) guys found them. Eventually it’s going to come back to me, as long as the guy keeps working and buying tools.”

Not everyone in his territory is working and buying tools. Some customers who were laid off “are collecting (unemployment benefits) and getting used to it. I’ve had guys tell me they’re just going to collect for a little while. You’d think they’d be looking for a job…”

Eric doesn’t expect he’ll ever look for a job again. “I don’t have an exit plan. If you start thinking about that, you’re already on that road. I have a more positive attitude. Get up in the morning, go work, be honest and fair to the guys and it pays off. I’ll expand the route, maybe get more customers, maybe a second truck with another guy to work it.” If a man who started his business in such tough economic times can have such a bright view of the future, then maybe there’s nothing for the rest of us to worry about.

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