Lessons From the School of Hard Knocks

Jonathan Winstel, who operates Matco Distribution Inc. of Monroe, Ga., has managed to survive six years as a distributor despite a difficult economic climate. The 31-year-old Winstel has learned how to survive largely through trial and error. His story...


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Winstel tries to win his share of the holiday-giving spirit as well. While he gives away merchandise, he asks customers to pay $10 more a week to make up for the week they didn’t pay him anything. “You always have to find a way around ‘the customer’s always right.’ You have to make it work in your favor with the ‘gift of gab.’”

The credit crunch hasn’t been all bad for Winstel. Some automotive shops that previously bought tools online found they had less credit available with Internet merchants and began to buy more from him instead. “Those guys now are coming to us [mobile distributors] more. They no longer have the credit [with the Internet merchants].”

2010: Disaster strikes

The business was improving from the recession when Winstel’s truck was stolen in 2010, delivering a major financial setback. The truck was stolen from his mother’s house while he attended a distributor meeting out of state. The police found the truck in a shopping mall parking lot with all merchandise removed.

Fortunately, another Matco Tools distributor allowed him to borrow a trailer and Matco Tools gave him credit to replenish his inventory. Surprisingly, Winstel had his best month ever while working out of that borrowed trailer.

Winstel used the trailer for three months before his truck was repaired. “It takes a lot more time than you think,” Winstel says of the insurance claims process. “It was a total ‘time vampire.’”

Challenge: Keeping accounts current

Because his business now relies more on smaller purchases than it once did, Winstel has found it necessary to work harder to encourage customers to stay current on payments.

The Matco Tools financing software works out a payment schedule. But if the payments are not made on time, the sale will not yield the necessary profit. Winstel has learned he needs to make 33.3 percent gross margin to make money on a sale.

Getting customers to stay current on their payments requires strong personal customer relations skills. It is an area that Winstel considers himself good at. While he knows how to make “small talk” with people, he makes sure he directs the conversation to business after five or 10 minutes. “You always try and bring it back to the tools,” he says. “You have to step up and realize, ‘I’m not here to talk about hunting or about sports.’”

“If you spend a little extra time, you can get something from them,” he says. In many cases, the customer has the money to pay but is hoping for some additional time. “They’re just trying to push that envelope,” Winstel says. “If you push back a little bit, they usually do give you something.”

“There is no ‘next week’ for the tool guy,” he says. He tells customers that if they skip this week, they aren’t going to pay him double next week.

Winstel has learned there is an art to asking for money. “I have to not be rude,” he says. “I do it [ask for money] in a joking manner. A lot of the time, they [the customers] get it. If they don’t, you say, ‘hey, it’s not working out.

“They think, ‘he’s my friend and he’ll let me slide.’ They’re the ones that’ll disappear the quickest.”

He also makes it a point to learn when the techs get paid. If he shows up on pay day, he knows he is more likely to get a payment. “It’s all about observing,” he says.

“Have a friendly relationship and business sense,” he says.

Winning customer loyalty can be challenging if a customer had bad experiences with a previous distributor. “It’s not just a brand; it’s personality, too,” he says. “People are loyal to individuals.”

He makes it a point to walk inside every shop he visits. “If you’re not going into a majority of your shops, there’s something wrong with you,” he says.

Winstel has learned that national service chains are worth cultivating as customers. He says some tool distributors don’t like national chains since these businesses typically have a lot of technician turnover. “Some of these guys, you’d be surprised; they have impeccable credit.” Some of the techs in these shops have $20,000 worth of credit.

Customer financing helps

Winstel finds the Matco finance program one of his strongest selling tools for today’s credit-strapped customer. “I don’t think I could do it without Matco,” he says.

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