Sales Tip: Getting right-side up with collections

Aug. 16, 2024
Steve Johnston has seen plenty of fellow distributors fall out of the industry because of simple mistakes.

Running a tool truck isn’t easy, especially when you’re dealing with the fact that your workspace can sometimes break down or your customers think that they’ll be better off buying their tools from somewhere else. 

“I mean, you wake up owing money every day,” longtime independent distributor Steve Johnston explains. “You got to pay your power bill, and you got to pay your supplier regardless, so the responsibility is to get out there and run that truck, and you got to have the self-discipline to do it.” 

“So many new dealers, they have a big week and suddenly there’s $15,000 in the till that they need to go put in the bank and pay their bills with, and they go, ‘Man, look at that pile of money,’” he said. “And next thing you know, they got a new jet ski or a new four-wheeler or a new car, pickup, whatever. And well, the shelves are getting a little thinner now because they couldn’t restock everything that they sold to make that $15,000. A little while later, they’re gone. It’s the spiral. I’ve seen it a million times.” 

Johnston mentioned a time when his tool truck was out of commission for two weeks for a maintenance issue, so he simply took his pick-up truck to his stops for collections instead – a strategy he strongly recommends. 

“If you go a little upside down, your turn gets a little high, you've got guys that are short in paying their minimum,” Johnston explained, “take the pick-up truck out for a week and don’t even put any tools in it. Whatever excuse you want to use [for telling customers that the tool truck isn’t available], but collect down your balances because all you’re going to do for a week is collect, and that gets them back right-side up when you're turned because all you're doing is collecting and not selling at the same time, not ordering to replace what you’ve sold. It helps a lot of things to have a collecting week once in a while.” 

“Because you know plenty of guys [with] eyes bigger than their wallet. ‘Yeah, I can do $50 a week.’ They give you $25, give you $30, and their turn is too high,” he said. And [that’s] putting pressure on you because you're collecting what you need to pay your tool bill. Collect a couple of weeks without selling anything. It will get you right side up.” 

About the Author

Griffin Matis | Associate Editor | PTEN & Professional Distributor

Griffin Matis is an associate editor for the Vehicle Repair Group. A graduate of the University of Missouri's School of Journalism, Matis works with Professional Tool & Equipment News (PTEN), Professional Distributor, and VehicleServicePros.com. 

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