Spend a day with Kevin Vernon, a Matco Tools dealer in greater Baltimore, and it’s hard to imagine anyone better suited to the mobile tool distribution business. The chipper, 29-year-old Vernon brought experience in retail sales and management which he was looking to put to use in his own...
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Vernon had the benefit of taking over an established route in a fairly dense geographic area. There are about 75 stops with about 280 customers in a 25-mile diameter. Approximately 95 percent of the customers Matco Tools provided him became regular customers. Some of them, however, would not buy from him at first. The district manager advised him to expect some resistance in the beginning, and some customers refused to buy anything for eight months.
He learned that technicians put a high premium on service after the sale. He also learned that despite a hesitancy to buy from a new truck, technicians are prone to support independent businesses.
He was quick to grasp the importance of maintaining a route schedule. He makes it a point to visit each stop not only on the same day of the week, but the same hour of the day. If he can’t stick to his schedule, he calls ahead and lets them know. If he can’t come, he asks if there is anything he can ship via courier.
Vernon says the biggest complaint he hears about competitors is they do not visit on schedule.
He was pleasantly surprised by how willing many customers were to teach him about the tools. “These guys would go as far as to sit down at my counter and draw a picture (of a tool),” he says.
Based on his business plan, Vernon needed to do $750 in sales per day. “I jumped in on faith,” he says. “I figured if I didn’t at least try it, I’ll never know if I could do it.”
His first day, he did $900 in sales. Seeing that some customers refused to buy anything from him at first, he was pleasantly surprised.
The most challenging period for Vernon was in his fifth and sixth months. He was selling so much product that he had to order more inventory than he was comfortable with; he worried that he’d be stuck with unsold products while he was still making payments on the truck. But his customers came through for him.
“That fifth- and sixth-month time span was so nerve-racking, balancing the sales with the tools (purchased),” he says.
Vernon stays current on his weekly inventory balance. He has never allowed himself to take more than two weeks to be current on his balance. He spends anywhere between $3,500 and $10,000 per week on inventory.
Coming prepared always
At each stop, Vernon first reviews his customer orders on his smartphone and on a route sheet.
He “totes and promotes” to customers that don’t buy a lot. For those who do buy a lot, he doesn’t think toting and promoting has any benefit.
He honors product warranties, but he watches the amount of time he spends helping customers with repairs. Repairs can be time-consuming if not properly managed, he says.
Focus on merchandising
One lesson Vernon took to heart managing retail stores is the need to change displays and create excitement. He re-merchandises his truck every two weeks to highlight Matco Tools’ latest specials. “The constant shuffle keeps a fresh look and some excitement,” he says. “Who wants to see the same old stuff? You (the customer) have got to have a reason to want to come out.”
He passes out Matco Tools' flyers every month. He also shows pictures of tools on his smartphone.
He has a box for used tools, which sell at discount.
The DVD player in the truck continuously plays DVDs about tools that are sent by Matco Tools every three months, in addition to DVDs from manufacturers. Vernon is particularly fond of Matco Tools’ DVD demonstrating a toolbox drop test.
One shelf in the truck has a can for donations to the American Cancer Society. This past May, proceeds from all cash sales of energy drinks went to this organization. Vernon also gave a free energy drink for every $3 donation.
He uses some of the techniques he learned managing stores.
Around Christmas, he comes dressed as Santa Claus. At Halloween, he decorates the truck with hanging cobwebs, ghosts and blacklights. Many customers take pictures of the truck.
One of the most important lessons he took to tool sales is making it a point to thank customers for their business. He sometimes sends “thank-you” notes with free pizzas. He thinks that doing something out of the ordinary to please customers creates a better impression than cutting prices.
Cut the price, and the customer will expect you to do it every time, Vernon notes. Give a gift, on the other hand, and the customer genuinely appreciates you. “I think ‘thank-yous’ that aren’t tool-related are more valuable,” he says. “They know that you’re grateful for the business they give you.”
Extend a 'thank-you" to your customers by giving them pizza or cake.
Change up displays, pass out flyers, play DVDs and support causes to generate excitement on your truck.