Southern California Cornwell dealer bounces back from the recession

Aggressive marketing and attentive bookkeeping keep Dave Putits in growth mode.

Dave Putits has survived the recession, thanks in large measure to skills he mastered in his first and most challenging year. When Professional Distributor first profiled Dave Putits in 2008, the article focused on how the Southern Californian used basic business skills to run his then eight-year-old Cornwell Tools business successfully. “Smile-Collect-Sell” was the motto Putits espoused at the time, and it worked...

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When Professional Distributor first profiled Dave Putits in 2008, the article focused on how the Southern Californian used basic business skills to run his then eight-year-old Cornwell Tools business successfully. “Smile-Collect-Sell” was the motto Putits espoused at the time, and it worked.

Shortly after that story was published, the economy took a steep dive, putting many automotive repair shops out of business and taking a number of mobile distributors with them. But Putits, sticking to the lessons he learned in the beginning, managed to weather the storm and has resumed his growth.

“If you take care of the customer, they take care of you,” Putits says, repeating the lesson that made him a fast success in mobile distribution. While this statement sounds like a cliché, the second part of it, “they take care of you,” is something some distributors have not understood as well as Putits. He expects his customers to pay him a fair price and in a reasonable amount of time. He tells them that he needs to make a certain margin on every sale to be in a position to honor their warranties in the future.

“I have to run my business in a way to stay in business,” he says. “Consequently, I need to make a dollar amount on every tool. I’m always up front with them (customers) and they know where I stand.”

Putits brought sales experience from the battery business when he decided to get into mobile tool sales in 1999. He sold batteries for a battery manufacturer for several years before getting the entrepreneurial itch. “You’ve got all these jobs (as a mobile distributor) wrapped up into one,” he says. “After riding with a couple of dealers, I knew I could do the job.” His wife, Chris, has assisted him with bookkeeping.

When the recession struck in 2008, Putits knew from his earliest exposure to the business that he was going to pull through. Because as challenging as the climate got in the recession, it was mild compared to his first year in tool sales.

When Putits borrowed $40,000 from his father-in-law to buy his starting inventory, after spending $10,000 of his own money to buy a used, 16’ truck, there hadn’t been a Cornwell Tools dealer in the territory for 10 years. Some former Cornwell customers still needed warranties honored. Others were reluctant to buy from a newcomer.

Putits told the shops he visited that he would offer flexible payment terms. He found success offering customers 10-week payment terms. For toolboxes, he offered customers 7 percent minimum interest for two years if he deemed them creditworthy.

“You can always turn something into a positive sales opportunity if you look at it from a different angle,” he notes.

In determining who to give credit to, Putits considered whether or not they would make a down payment on the purchase. He also looked at the person’s payment history. He pays attention to whether or not they have a credit card or own their own home. People who have credit cards and own homes tend to be more responsible, he found.

Putits was also able to win customers’ trust by being personable, a skill he had honed in his prior sales career. Once he gained a customer’s trust, the customer would tell him what tools he or she wanted.

As an experienced salesman, Putits also knows sales is a “numbers game.” So he made it a point to visit three or four new shops every day. Since not every shop is a good customer, he knew he needed a constant supply of new shops to “test” to replace those that he stops visiting. Most of his stops were clustered in auto malls, which are somewhat unique to Southern California.

Attentive bookkeeping

As important as selling skills was Putits’ attention to strict business management.

Early on, his wife, Chris, instructed him to put aside 40 percent of his sales every week for home and business expenses. This left 60 percent for tool purchases. “You have to put money aside for maintenance, fuel, health insurance and retirement,” Putits says.

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