Tool storage can be a challenging product category for distributors. Navigating customer conversations that lead to toolbox sales can be unnerving, trade-ins can be difficult to negotiate and financing can make or break a deal. Not to mention stocking and displaying toolboxes and carts can be cumbersome and take up quite a bit of space on the truck, or requires additional off-site storage.
Any one of the reasons listed above can turn distributors off to selling this product line. But, if you have ways to address the items above, selling storage can be a boon for your business.
Many distributors who have had success selling tool storage typically focus on volume over selling bigger ticket items less often. Instead of focusing on larger sales, move more product.
“I think a lot of times dealers run into trouble because I think they try too hard to hit it out of the park with every single toolbox sale,” says Sean Ostler, a Cornwell Tools dealer based in Merrimack, N.H. I’m thankful for every single sale I’m given. If a sale is there, great. If I’m not making that much on the sale, but I’m still making something, I’m still happy. A lot of times, dealers are waiting for that grand slam. I’d rather move volume.”
Customer approach
The type of storage system sold to a customer is dependent on a number of factors, including the amount of storage space they’re looking for, the need for mobile tool storage and price of the unit.
But before any of those factors are discussed with the customer, it’s integral to first bring up the subject of storage.
This can come more naturally when a professional working relationship has already been established, which many distributors can attest to.
“You sell what you talk about. I’ve been it in for about 30 years, 13 with Cornwell. When I initially started off learning about the business, I found that the big-ticket items were where you got your clientele, where they would stay loyal to you and be dominant in your market,” says Jerry Neeley, a Cornwell Tools dealer near Dallas, Texas.
“You need to talk boxes. Even if a guy’s got a five-foot long polished, waxed, highly-maintained box. He may want a six-footer. Or an eight-footer,” adds Steve Johnston, owner of SJ Enterprises in Birmingham, Ala. “A guy that’s already invested that kind of money, you know he’s willing to spend that money.”
In addition to always keeping the subject of storage top of mind, Ostler adds that he keeps a pulse on what his customers may be looking for.
“Everybody’s in the market for a box, whether they have a huge box already, that means they’ve got a lot of tools, and they may need to upgrade. Or a small box may need an upgrade, too. But I just run it by anybody: “Hey, are you in the market for a box?” he says.
While broaching the subject is necessary in selling storage, it’s crucial to be observant and to look at and listen to customers for cues that might lead to the conversation as well.
Johnston, who operates SJ Enterprises and oversees three route drivers, says he encourages his drivers “to be aware” when they enter a shop.
“If you see a guy whose wheel is broke off his cart, or his cart is tipped over and the drawers are all wonky, go right at him with it because he wants one,” he says, of replacing a customer’s existing storage. “It’s hard. You’ve got to get them talking boxes, and not be afraid to have a conversation about it.”
Virginia-based Mac Tools distributor Nigel Clarke adds to this, emphasizing the importance of listening to the customer.
“I take the time to listen for what they’re looking for. It might not always be the biggest toolbox we have. It might be a certain color. Something that means something to them. Really customizing their toolbox,” says Clarke.
Whether it be a veteran tech or a newbie just out of tech school -- many distributors have a different approach for bringing up tool storage, depending on the type of customer.
“I deal with guys my own age and in the middle of their career, and I deal with new guys just starting out,” says Neeley. “Different personalities are different approaches.”
Neeley notes that many of his younger customers prefer the smaller storage systems. “The young guys want the carts and roll carts,” explains Neeley. “It depends on where the guy is at in his career.”
He also says that some customers request a toolbox and cart combination. Neeley explains that he creates a package deal, so to speak – instead of taking a dollar amount off the purchase, he will give the roll cart to the customer at no charge for purchasing the larger box.
Neeley says overall, he likes selling larger toolboxes to achieve a higher profit margin. “I like the bigger boxes because there’s more value and more dollar amount in it, so you have more wiggle room.”
“A lot of times a new guy wants to start out smaller and work his way up to the bigger ones,” explains Ostler. For veteran technicians, they may have a larger box, but they’re also purchasing more tools and may have a full box that requires an upgrade, he adds. “Everyone’s looking for something. It doesn’t make a difference; they’re just looking for different sizes, but they’re all looking.”
Those trusted relationships also can lead to loyal veteran techs encouraging younger techs in the shop to buy from a certain distributor.
“You see these guys every week. You gain a rapport with them. At times, they’ll let you know about a young guy that’s got into the business. You just make suggestions on what they (the young customers) might need, and drop little hints,” says Neeley.
Ostler adds to this, saying that seasoned techs will sometimes give him a lead on a sale by telling Ostler that a younger tech is looking for storage.
“Some of the other guys in the shop might say something too. ‘Jimmy might be interested in a box soon’ or ‘I heard Jimmy saying he’s interested in a box.’ At that point, it’s like ‘Let me go chat with Jimmy’ to see if he’s interested in anything,” says Ostler.
Trade-ins
Oftentimes during a toolbox sale, a customer already has existing storage that he may no longer need or want.
Clarke appreciates that the trade-in discussion can naturally lead to the customer thinking about buying a new box. This is when Clarke will mention the Toolbox Configurator program, and invites his customer onto the truck to build a custom box. “It just starts up the conversation – come out to the truck and build one yourself. Tell him about the promos. And while he’s building it, I’ll give him a quote. It takes only five minutes to build something.”
Whether it’s before or after the customer determines he or she would like to purchase a new toolbox, this transaction usually involves discussing the customer’s existing storage. All distributors interviewed for this article agree: never talk bad about a customer’s current storage setup.
“You never insult a box. All the companies make a good box. If he already has a box from a rival company, you ask, ‘Are you looking to move up to a different box? Do you like the layout of this (existing) box? Is there anything I can do to help you out with tool storage? Do you need any additional room – downsizing or upsizing?’ You throw it out to them,” says Ostler.
“You can’t insult the customer either, because they’re attached to that (existing) toolbox,” he adds. “They originally purchased that box – whether they hate it or not now, at one point they loved it. You can’t just go in there and insult away and hope you’re going to get a sale based on your company’s name.
“Treat them the right way, and they’ll buy from you.”
There are two parts to any trade-in: negotiating the trade-in amount, and selling the trade-in unit to another customer.
As a trade-in approach, Neeley shares one way he sometimes reaches out to customers: “Once upon a time, I’d go and stick a sticker on a toolbox and offer so much for his trade,” says Neeley. The sticker he placed would include the suggested trade-in price. “You would get a certain amount (of toolbox sales) that way.”
If Clarke starts a conversation about buying a new toolbox, or trading in, he first examines the customer’s existing box.
“I always look at the inside of the toolbox. A lot of the times, the customer thinks it’s not worth anything. But when we look at it again, and we have so much room to play, and we can give so much more to the customer than what he thinks his toolbox is worth,” says Clarke.
“The customer won’t even approach us about a toolbox because their trade isn’t worth much, or it’s a (different brand) box. But we can still make the profit on the toolbox,” he adds.
When the conversation starts on trade-ins, this means either the distributor or the customer needs to name the initial price.
“They (customers) know the routine and that trade-ins are part of the business. They may ask, ‘What do you think this is worth?’ And you just tell them,” explains Ostler.
“When you’ve been doing it for a few years, you kind of get a feel for the market and where used boxes lie in price and size. You get a feel for it. You just give them a fair price,” Ostler adds. “And oftentimes, you’re going upside down on the used box until it sells.”
With trade-ins, Neeley says that he’ll sometimes offer more than the original price of what the technician purchased it for as well, in order to make the new box sale.
Consider the market as well: some technicians prefer to buy new toolboxes, while others are content trading up by purchasing a used trade-in.
“You’ve got guys that want something functional and in decent shape. That’s where you pull out the dollars that you made with the first trade, and turn it back into profit,” says Neeley.
“You’d like to make a little bit on the new sale, and then more on the trade. The optimum thing is you need to make the new ones go to get the good quality used ones. That’s where the money’s at. I make more on the used box than the new box,” he adds.
While many distributors agree trade-ins are a profitable part of the business, sometimes selling a trade-in item can be challenging.
Johnston takes a different approach on trades. He utilizes his multiple routes to hit different markets, and customers who may not have been aware of the initial trade-in. Having multiple routes provides Johnston the means to show the used box to additional potential customers.
“I don’t try to make money on trades, but the ability to switch them between trucks takes them out of that market that it was in before,” says Johnston.
“If I take it out of (one) market and put it on another truck, I can sell it more easily.”
Financing the purchase
Now the customer is hooked and ready to buy. But there’s one more crucial step to completing the purchase: how will he or she pay for it?
When Neeley talks financing with his customers, he starts off by directly asking the customer about his or her credit as the initial qualification for the purchase – with questions such as “How is your credit?” or “What would you say your credit score is?” – before even beginning the application process.
If a customer says that he or she has a poor credit score, however, there are other means by which distributors can finance a purchase.
Consider having the customer charge the purchase on his own credit card (depending on their credit limit), or by adding it to the customer’s balance on the truck account.
Neeley also has an additional method he employs to finance some good standing customers, which he jokingly refers to as “Jerry financing.”
“I’m so deep and been doing this so long, that I don’t need Cornwell’s financing (every time). I can take the same deal that Cornwell offers them, offer them a better rate of interest and then not only make my profit margin but also the interest for carrying the note.”
Neeley will determine the interest rate based on the customer’s credit score. The higher the score, the better the interest rate.
Clarke has a similar financing program available to him through the distributor group he works with, Big Boy Tools. This group of dealers has the ability to finance customers. Customers must put 10 percent down up front, but then get “zero percent interest.” The weekly payment amount is then determined by dividing the remaining balance over a 50-week period.
While all of the flags provide the means for distributors to assist with financing larger purchases, independents often face more challenges.
“Price is a big deciding factor,” says Johnston, regarding the types of storage he often sells. “Carts are an inexpensive (option for) a beginner mechanic. And I live at the difficult $500 maximum truck account.”
Johnston explains that the Monster brand carts he typically sells are within this price range, after a “reasonable down payment” from the customer.
Up until recently, Johnston did not have an alternative means to outside financing for individual customers. He has now partnered with Lease Corporation of America (LCA), allowing him to extend credit above the previous $500 threshold limited on his truck accounts.
Even if a customer may qualify for credit financing, distributors can extend a note to reliable customers for smaller balances. Oftentimes, when relying on a truck account to finance a customer, distributors will focus on a lower price range.
“I do use my truck account too for smaller purchases. Carts or smaller, older boxes. The less expensive stuff. I can run those on the truck,” says Ostler.
Another way to combat financing issues, and to build a relationship with a customer, is to work with customers long-term by slowly and continuously upgrading existing storage and to fit their budget.
“I recommend to them, instead of buying a $10,000 box, to work their way up. That way they never go into a deep debt. Should something happen – the shop burn down, or something like that – they don’t owe $10,000; they might owe $1,000. If they bought one and traded up, traded up, traded up, until they get to that big box,” says Johnston. “I don’t like to see guys get in over their head.”
Regardless if the truck or flag can extend credit, it is also important to remember the limits of the customer.
“Helping (customers) not overspend helps build trust and integrity with them, it helps you miles,” says Neeley.
Building a lasting relationship
Ultimately, any tool storage purchase is directly related to the relationship built between the distributor and the customer, and an acknowledgement by the customer of his or her commitment to continue working with the dealer.
A toolbox in a shop also represents brand awareness for other techs in that shop. “The way I see it, the boxes are going to create more sales in the future for you because other people are going to see the product you’re putting out there,” says Ostler. "It certainly helps to build a good relationship with the customers first, because they are not just buying the toolbox, they are buying the dealer with it.”
“With a toolbox sale, it’s obviously something where you guys (the dealer and the customer) are going to be connected to for quite a while. I think that you have to develop trust too. The customer needs to know that you’re going to be there to back up the product,” Ostler adds.
“It’s a combination of all that and much more: Sales and service. They want to know that you’re there for them,” says Neeley.
