Pennsylvania distributor employs unique collection and skips strategy

Tom Zummo, a Mac Tools distributor in Conshohocken, Pa. near Philadelphia, learned the importance of minimizing skips shortly after getting into the business 13 years ago. He has developed a system for keeping close track of collections and taking fast action with slow pays.

"In a perfect world, you want to be able to get all of your money every week, and it doesn’t happen," says Zummo. "I try not to sweat it. Eventually I’m going to get the money."

He gauges the success of his route by transactions per week, versus actual customers on the books. He counts seeing about 350 to 400 customers each week,  with an average of about 275 weekly transactions.

(Read about Tom Zummo's sales strategies for his truck.)

Although Zummo does sometimes have difficulty with collections, he indicates altogether skips are pretty low.  

"The biggest drawback to the business is collecting money. If you didn’t have to collect the money and could just sell? That’d be the perfect world."

With payments from customers, Zummo breaks down his customer base as follows: "90 percent of my customers are very good paying customers. Of that 10 percent that are bad paying customers, 5 percent I have to stay on consistently," says Zummo. "The other 5 percent are guys that once  -- how do I say, once they pay off (their balance), I won’t deal with them again."

Regarding the customers who struggle paying Zummo altogether, he writes them out of his customer list for future purchases.

"I will fix their tools, I will say 'hello' to them. I will congratulate them on the birth of their child – but I will not sell them tools anymore. I explain it to them, 'You don’t understand the whole tool salesman/customer relationship and how it works.' "

This isn't to say that Zummo is rigid with payments for all his customers. He understands that some weeks a customer may not be able to make a payment. He just expects that the customer be able to pay him the next week.

 

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