Texas Independence: Newcomer carries the torch in a changing economy

In two and half years, this largely self-taught Texan has a promising future in tool sales


Clint Maxwell, right, gives an Ingersoll Rand air hammer to a customer at a shop that services oil tankers. Clint Maxwell never planned to be in business for himself. As a young man, he had aspirations to be an engineer or an architect. But while attending the University of Texas in Arlington, he realized he wasn’t sure what he wanted to do. Fast forward to today, and the 35-year-old Maxwell has...


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Maxwell has found that sometimes a product sells better if it has been off the truck for awhile. “Absence makes the heart grow fonder,” he says. An example is pry bars. Pry bars sold well when he first put them on the truck, then fizzled. After a two-week absence, some customers began asking for them.

Package deals also drive sales. Maxwell says it takes time to learn what tools to pair together as a package deal. The goal is to allow a customer to buy an item at a lower price by buying it as part of a package.

Sometimes he finds it helps not to put prices on packages. This causes a customer to ask about the price, which can lead to a sale, whether or not the tool in question gets purchased.

Maxwell uses Facebook to get the word out to customers about his promotions. He runs drawings for customers to win free tools periodically. He has found this a great way to market new tools. “The next thing you know, you’re selling three or four (new tools) in a shop,” he says.

During holidays, he carries a lot of toys for customers’ kids. This past Christmas, remote control helicopters, tanks and stun guns were popular. Pink-colored gifts were popular on Valentine’s Day.

He offers more liberal payment terms than most of his competitors: 10 weeks for most tools.

He also offers credit.

How does he decide whom to extend credit to? The main consideration is the condition of their teeth. “Good teeth indicates they are responsible,” Maxwell says. “Bad teeth, on the other hand, means they are irresponsible at best and a crack addict at worst.”

Maxwell is wary of customers who want to buy high-ticket items without asking questions first.

He is especially wary of young techs who want to buy new toolboxes. “He (the young tech) wants to show (off),” Maxwell says of such people. “You have to see beyond the dollar signs of the sale; you have to see the actual dollars. It’s little things like that you have to watch out for.”

 

Administrative challenges

One of the most challenging things about doing business in Texas is the varied tax rates that counties and municipalities levy. Maxwell uses colored stickers to designate the local and county taxes which he attaches to all of his inventory. When he quotes a customer a price, it always includes the taxes.

Tagging the inventory with stickers and managing the books with Excel spreadsheets takes a lot of time. But Maxwell has found that paying his taxes monthly allows him to feel in control of his business. It helps him stay current on his receivables. He also gets a 1 percent bonus from the state for paying taxes monthly.

He normally stays within a $14,000 purchase credit limit. “If I stay there, I’m fine,” he says.

Maxwell expects his inventory to turn every two or three weeks. If an item fails to meet that goal, he removes it from his truck and replaces it. “With a smaller truck and a smaller wallet (compared to the flags), I have to pick and choose my battles,” Maxwell explains.

The hardest aspect of the job, however, is the dedication required to succeed. Maxwell has his cell phone with him at all times, and he’s always on call. “You’re never ‘off,’” he says. And when you’re having a bad day, you can’t take it out on the customers.

 

Dealing with collections

Maxwell is like most other distributors when asked what he most dislikes about the job: collections. While only 10 percent of the customers give him problems in this area, that 10 percent is enough to threaten his profitability. About 5 percent of the customers have to be reminded to pay and another 5 percent have to be chased.

One technique that has helped with collections is a “used and repo” bin placed prominently on one of his shelves. These are mainly tools that have been repossessed and sell at discount. “Guys pay attention,” he says. He cites this as one of the most effective techniques he’s used for getting paid.

For the 5 percent of customers who have to be reminded to pay, Maxwell tries to find out why they are slow to pay. Having been laid off himself, he empathizes with people in tough financial straits.

If a customer has made some payments but can’t stay current, he credits the customer based on prior payments if he has to repossess the tool.

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