Independent survives recession doing it 'his way'

Going independent and switching to using a trailer has helped Central Florida dealer succeed.


Moskalyk finds a trailer every bit as effective for merchandising tools as a tool truck. Larry Moskalyk, an independent mobile distributor in Largo, FL, learned early in his business career not to take anything for granted in running a business. He learned to pay attention to changing business conditions and to take corrective action quickly. These lessons led him to a successful career...


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The trailer was smaller than his tool truck, but with the Ace Tool Co. warehouse close by in Largo, he reasoned he wouldn’t need to carry as much inventory.

 

Trailer provides a solution

The distributor selling the trailer had bought it new in 2006 and refurbished the interior with carpeted walls and wood shelves. The trailer had four shelves on both walls and lights mounted on the ceiling. The distributor had only been in business for nine months and was leaving the business for another opportunity.

Moskalyk bought the trailer for less than one tenth the purchase price of the second tool truck he had leased as a flag dealer.

He hooked the trailer to his Chevy Silverado pickup truck. To ensure power, he purchased a Honda 3000 inverter generator and fastened it to the trailer’s front guard rail. He chose that model generator because it was the only one that came with a 100 percent, three-year warranty. The generator can run three straight days on three gallons of fuel.

There were other advantages.

He caught a big break on insurance. Where he had paid $13,000 per year to insure his tool truck, he pays much less for the trailer. Because the trailer attaches to his Silverado, his pickup vehicle’s insurance, which costs a fraction of his tool truck’s insurance, covers the trailer.

He caught an even bigger break on fuel. Traveling 100 miles a week costs him $100 in gas, which is less than half of what he paid with his tool truck.

In addition, his pickup is more comfortable to drive than was his tool truck. “It’s a lot more relaxing; it’s a simple, laid back way to do it.”

The only disadvantage with the trailer is that it is more difficult to park in some places, he notes.

Moskalyk stops at the Ace Tool Co. warehouse in Largo several times a week before starting his route. “I don’t have to carry a lot with the warehouse being so close,” he notes. He now carries $20,000 to $25,000 in retail inventory, compared to $75,000 to $80,000 he carried on his truck.

Having the Ace Tool warehouse close by also allows him to make deliveries on a day’s notice. No more three- and four-day waits for customers. Sometimes he tells customers to pick an order up at the warehouse.

 

Independence has advantages

Moskalyk learned there were yet other advantages to being an independent. As an independent, there are no territory restrictions. Hence, he is able to serve a larger territory. The advantage to this is he can “cherry pick” his customers. This has been perhaps the greatest benefit of all for Moskalyk.

Where he used to deal with 10 to 15 problem payers a week as a franchise distributor, now he only has two to three problem payers per week.

His computer costs have also been lower since he went independent. Thanks to the Allsoft Technologies management software he got at Ace Tool Co., he pays $450 per year for his software subscription, which he finds very economical for this type of software. The software tracks his inventory, purchases and receivables; prints receipts; and at the end of the year it allows him to calculate his taxes. Ace Tool Co. provides him a tool and pricing CD every few months. Beyond inserting the new CD, there is some tool and price information he must input manually.

Another advantage as an independent is there are no minimum purchase requirements. Without minimum requirements, he feels he has more purchasing flexibility.

His wife, Debbie, handles the bookkeeping for him and does occasional deliveries.

Moskalyk uses a Chase Paymentech credit card processor to accept debit and credit payments. He makes it a habit to write down card numbers in case he might need to collect a payment. While many customers still pay with cash, more are using credit and debit cards. Some pay using payroll deduction if their employer provides it.

He offers most customers $3,000 with 10 weeks to pay. He offers more to those with good payment histories.

Since he got back in the business as an independent, the local economy has improved, but it has not fully recovered. Despite the improvements he has made in his business, he has not reached his 2007 high mark.

 

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