Creative merchandising pays

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 business. When he came across mobile tool sales two years ago, his sales, management and marketing background got him off to a fast start and he is now on track to exceed goals and launch a second truck.

In fact, Vernon, based in Stevensville, Md., has already launched a second truck of sorts. As a creative student of sales and merchandising, he has established a trailer dedicated to displaying toolboxes in addition to his regular tool truck. Once every few weeks, he hitches this trailer to a pickup truck and drives the trailer to his stops, giving customers a break from the usual routine with a chance to mainly see toolboxes. The trailer has already netted Vernon six toolbox sales in a two-month period.

Vernon isn’t following anyone else’s playbook in mobile tool sales.

He re-merchandises his 18' truck bi-weekly, makes aggressive use of Matco Tools’ specials, has a DVD player running promotional videos in the truck, and specially prepares treats for his customers, including his signature “cake pops.”

Customers look forward to Vernon’s visit since they never know what to expect on his truck except for his big, genuine smile.

How did such a “natural” come to mobile tool sales?

The son of a career military man, Vernon wanted to own his own business from an early age. The seeds for a career in tool sales were planted in high school when he started working part-time at Sears in the Baltimore area. “My goal was to have my own ‘something,’” Vernon says.

After working his way into store management at Sears, Vernon eventually took a sales job for Bosch Home Appliances. He excelled at sales, and was promoted to a sales management position responsible for seven states.

In 2009, after three years with Bosch Home Appliances, Vernon returned to store management at Sears. He organized sidewalk sales, kid's coloring contests, in-store demonstrations, in-store TV entertainment and football parties for husbands. “I really like sales; I’ve done it all my life,” he says.

In search of new opportunity

Vernon liked seeing the immediate results of his sales efforts, but he wasn’t completely satisfied with his management role. There was a lot of travel involved and he didn’t feel completely at home in a big corporation. He was married with a young son and living in a house he bought from his parents.

Vernon began looking for opportunities to own his own business. One day, he got a call from Matco Tools after posting his resume on Career Builder. Matco Tools expected to have an opening for a mobile tool distributor in the greater Baltimore area due to a retirement. Vernon rode with three tool trucks and realized that despite his lack of knowledge about professional tools, he could sell them. “If you can sell a (clothes) washer, you can certainly sell a screwdriver,” he says.

The Matco Tools district manager helped him write a business plan using an Excel spreadsheet. They came up with a break-even scenario which included both business costs and personal living costs.

Vernon leased a 2008 truck with 40,000 miles on it. He took a five-year lease through a leasing company. He financed $54,000 worth of starting inventory through Matco Tools and used $5,000 of his own money. He took out a 10-year loan to pay for the inventory.

He and his wife, Aleks, attended an 11-day training program at Matco Tools headquarters in Stow, OH. The district manager then helped him merchandise the truck.

Making a good first impression

Cognizant of the importance of making a good first impression with customers, Vernon first visited his stops in his pickup truck to introduce himself and pass out Matco Tools catalogs before showing up in his tool truck. “It got me in front of the guys just to say 'hello' before I was out there on the tool truck,” he says.

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.”

Unlike many tool dealers, Vernon pays attention to the specific snacks and refreshments customers like. While he has some staples on his truck, such as energy drinks and beef jerky, he gets products that he knows certain customers like.

“How do you hug your customer?” Vernon asks, rhetorically.

One of the most popular treats has been cake balls dipped in chocolate icing. Vernon’s wife, Aleks, came up with the idea. Vernon didn’t think technicians would like these, but he was pleasantly surprised. “It took off like there was no tomorrow,” he says. “Everybody and their brother was coming out to get one of Aleks’ cake pops. It grew our business by leaps and bounds!” The treats are kept in a small truck refrigerator.

When Aleks went back to work full-time, his mother and grandmother took over the baking.

Management support crucial

Vernon finds the bi-monthly district sales meetings helpful since it gives him a chance to learn what’s selling for other Matco Tools distributors. Recent stars include a 30-1/2” breaker bar with a free ratchet, the Launch CRP123 code reader, 1/2" impacts, digital tire inflators and the cordless Matco Infiniums.

Because the technology is getting more complicated, Vernon thinks it’s important to go to the flag’s annual tool show.

Focus on toolboxes

Vernon realized that toolboxes, being high-ticket items, are an important part of the business. He pays careful attention to his customers’ toolboxes. When he sees a technician with an overfilled toolbox, he suggests they consider getting a new one.

Trade-ins play an important part of toolbox sales for Vernon. When a customer is offering him an old box as part of a new box purchase, he carefully considers what the used box will fetch him.

He has also learned that once a customer shows an interest in a toolbox, it’s important to close the sale as soon as possible. If not, the customer will shop around and may ask him to accept a lower price.

Vernon recognizes that toolbox sales are as impulse driven as any other piece of merchandise. Hence, he came up with the idea of a dedicated toolbox trailer. Toolboxes have unique features, such as heavy duty drawers, that a customer can’t fully appreciate from a picture. “It’s just like buying a car. It’s a lot easier to buy something when you can see it, feel it and touch it. They can picture themselves working with it on a daily basis. A lot of it is impulse.”

He beats the surface of the toolboxes with a hammer to show how strong they are. “You just can’t show that on a picture,” he says. “Most toolbox purchases are impulse buys. You happen to have that right one in just that right color.” He sold one toolbox to a customer because he happened to have the right color: pink.

Vernon owned an 18' trailer for hauling his drag race car. He decided that such a trailer would make a good platform for carrying toolboxes.

Since his truck needs service every eight weeks, he drives the toolbox trailer hitched to his pickup truck during the week his regular truck is in service.

In the first eight weeks he drove his toolbox trailer, Vernon sold six toolboxes. Including one from a customer who swore he’d never buy one.

Cash versus credit?

Vernon tries to establish automatic debit with as many accounts as possible. In addition, about 60 percent of the sales are made by credit card versus cash. “Usually, the guys that pay cash are the only ones I have to ask for money,” he notes.

He normally expects customers to finish their payments in five or six weeks. The longest he will agree to wait is 10 weeks with 10 percent down or $25, whichever is more.

He uses Matco financing for the high-ticket items.

At the end of the year, Vernon offers customers a list of all their purchases for their tax returns.

The worst part of the job is the rare instance when a supplier fails to deliver a tool for a customer. Vernon realizes this happens on occasion.

Skips are also a periodic nuisance. “I’ve been really fortunate,” Vernon says. “The guys I deal with are good to me.”

Bookkeeping takes about two hours a week, in addition to restocking the truck at the end of the day, which usually takes two hours.

If growth continues according to plan, Vernon expects to buy a second truck in two years. His past experience managing salespeople will be helpful once he’s ready to launch a second truck.

He’s working harder than he has in any previous job, but he’s glad he got into mobile tool sales. “There are very few variables other than myself that dictate how well I do,” he says. “I enjoy it so much it doesn’t really feel like work. I wouldn’t dare think of putting a tie on again anytime soon.”