What causes dealers to move on...

[MachineTech]

This question has been on my mind ever since our last Snap-on dealer quit stopping by without any notice or reason. It wasn't like the first time this happened when the dealer told us two months in advance that he was retiring. His truck emptied out and he sold out everything for 1/4 the catalog price and even had a new guy lined up to take his route for him. This last time was different. The dealer had open accounts for thousands of dollars and even a couple of credit accounts through the company, not the truck itself. I can't understand why he would just quit stopping by. I would think he would at least want to finish collecting his money first. After this happened we had a new guy come by ONE TIME! It had been almost a year since the last guy disappeared so we had lots of tools that needed fixing and exchanging. Needless to say we hit his truck hard on that first visit...he never returned. Maybe we scared him? Got another guy now that is really good but why would any dealer just quit stopping with so much money to collect on open accounts. Third time that happened in six years with two different companies. Our new dealer even contacted the one that quit to ask him to transfer (buy) the accounts and the old dealer never got back to him. Is this common?

 

[Ducroix]

I have had dealers disapear but they come back eventually to collect( Mac is the only exception, he disapeared and didnt come back to collect)

 

[TheToolMan]

I was talking to mt dealer last week to see if he knows anybody that would be intrested in a job at my work repairing motors, He said that he himself may be intrested because of money problems, He said he was $500,000 in debt and it was killing him and his family, He also said health insurance cost him about $1,500 a month and he needed a steady income, He has anly been at this gig about a year and is ready to get out

 

[Valsmere]

You Know we have the same problem at work. We can't find our Snap On guy. Problem I have is that I just starrted in the service department of our company and there are a few things that i could use. At this rate I'm just going to order it on line, granted not snap on but what the he**! By the way I scored a nice Snap On box the KRL 1023 in cranberry for 3 grand with the cover, mint condition!!

 

[MachineTech]

The companies themselves are very willing to start up new dealers so easily. Perhaps the market is saturated with so many of them that it's hard for new ones to make it?

 

[billymade]

Well, maybe the law suits might shed some light on the difficulty of selling tools from the tool companies:
http://www.theautochannel.com/news/2004/01/13/176738.html
http://www.mactoolssuck.com/
Could it be that the tool companies paint a rosy and unrealistic picture of the potential profit of selling their tools and present potentially fraudulent sales claims? The law suits claim heavy pressure to extend credit to the dealer for stock and then many are unable to sell as much tools as their managers have led them to believe; dead beats probably don't help either. I think tool sales is probably like many sales type jobs; many people are not cut out for it and everyone is not a good business person! Why do they move on; at the most basic level is probably MONEY and the other is they decide it is probably not for them; if it was so "easy" wouldn't everyone do it and stick it out if they were making "so much money"? I don't have first hand knowledge on any of this stuff but the fact that in my area the dealers kept changing and some never replaced their reps (mac tools, no truck here for 10+ years); gives you pause. On the other hand the current Snap-On dealer has been around for quite awhile and the Macto dealer has been here for probably 20+ years; I think this gives credence to the idea that it takes a certain type of person to sell anything. I have a feeling selling tools off a truck is a tougher job then the franchisee commercials lead people to believe!

 

[MachineTech]

Looks like this is actually quite common by reading your links. Sad actually. I mentioned over saturation of the market above...does anyone think this could be why it's difficult for new or even old dealers for that matter? I know that every couple of months or so our dealer has a tag along (new recruit) thinking about starting out.

 

[TheToolMan]

I agree with billymade it is very hard, My snappy guy was telling me one older guy in his area has been at for 20+ years and has only the basics on his truck, He dosent want the hassle of having to sell $100k worh of inventory

 

[MachineTech]

I have heard that the larger the inventory the more sales. I would keeps lots of inexpensive little objects...it works at the wal-mart checkout lines. Our dealer actually makes a lot of sales on used higher priced items. He told me he actually sells more used boxes made by Matco, Cornwell, and Mac he aquires as trade ins than new or used Snap-on boxes. Makes me think people are trading them in for other used (better) boxes he aquired.

 

[billymade]

On the other hand, if you don't have any stock; how can you sell anything? The most successful dealers I have seen; had so much stock you could hardly walk through the truck! Seems its damned if you do, damned if you don't; I'm convinced many times that if the stock isn't there it is hard to sell it; tools especially are this way to a certain degree. "Touching and feeling" is important but I am sure there are certain items that are high demand that ordering is not a problem; these items are usually hard to keep in stock anyway, they typically sell themselves (e.g. dual 80 ratchets or whatever new tool that everyone is using and is universally accepted as the gold standard for whatever it is). Impulse buys are also very integrated into the touch/feel moment of being on the truck and buying a tool on the spot (even though you didn't "need" it moments before walking on the truck!). Speaking of used tools; I bet they make more on used tools then they do on the new stuff (buy low sell high), just like new car dealerships; the used car department always has a higher profit margin then the new car lot. How about some of the former tool truck guys chime in with their experiences and tell us what they know about the tool truck industry?

 

[krusty the clown]

what do you want to know?

 

[MachineTech]

I'm guilty of the impulse thing myself...as much as $320 worth. Our Cornwell guy had a bore scope that was better than what a Dr. uses to give colonoscopies with. I didn't need it but I imagined how I could look deep into the floor vents in my house and see all the things my kids have lost down there over the years. Had to have it.

 

[billymade]

Questions: Why they got in it, were they successful, was it financially rewarding, did the reality of selling tools off a truck meet the franchise marketing hype that was presented to you, does it take a certain type of person to be successful in the biz, is "fraud" a real issue with the tool companies with their franchise programs, did the buying out or mergers and consolidation of many of the smaller companies into the "big 3" (snapon, danaher and stanley) cause financial stress, forcing many out of the tool truck biz and why they got out of it?

 

[TheToolMan]

I am also curious at what kind of prices the snappy guys get their stock for, I.E. 30% mark up is what i heard

 

[daveblank]

I am also curious at what kind of prices the snappy guys get their stock for, I.E. 30% mark up is what i heard

That's about the average profit margin BEFORE expenses. It takes hard work & commitment to do well.

 

[Merkava_4]

By the way I scored a nice Snap On box the KRL 1023 in cranberry for 3 grand with the cover, mint condition!!

I hope you realize that making a statement like that obligates you to providing pictures!

 

[MachineTech]

I actually heard there is a 50% or larger mark up, more for larger ticket items then small.

 

[daveblank]

I actually heard there is a 50% or larger mark up, more for larger ticket items then small.

Many large ticket items like diagnostic equipment & shop supplies have a very small margin.

 

[krusty the clown]

Many large ticket items like diagnostic equipment & shop supplies have a very small margin.

this is true usually 25%. however matco now gives a 50% margin on tool boxes to the dealers instead of running monthly specials. so in escence all of the toolbox line is on sale all of the time. most of that discount is used to over inflate the trade in on the used box and by the time you give up 7% to matco's in house financing for carring the note you may only end up with 30% profit on the deal.

 

[daveblank]

and by the time you give up 7% to matco's in house financing for carring the note you may only end up with 30% profit on the deal.

it's now 9%

 

[krusty the clown]

Questions: Why they got in it, were they successful, was it financially rewarding, did the reality of selling tools off a truck meet the franchise marketing hype that was presented to you, does it take a certain type of person to be successful in the biz, is "fraud" a real issue with the tool companies with their franchise programs, did the buying out or mergers and consolidation of many of the smaller companies into the "big 3" (snapon, danaher and stanley) cause financial stress, forcing many out of the tool truck biz and why they got out of it?

no, no, no, yes, yes, no......in that order. the main reason that most get out of the biz is deadbeats. that and an extreme amount of overhead makes it VERY hard to keep inventory on the truck. once your inventory gets low and you are spending most of your time on credit hold your customers will run to your competitors like rats fleeing a sinking ship (which is exactly what it is ).

daveblank.........you are a current matco dealer aren't you? how long have you been in the business?

 

[a390st]

I know a family who are in the management portion of Snap On. They used to be with Mac. I have a friend who used to be an engineer with Mac. The joke with all of them is that they "used to work for Mac". They all say they don't see how the other tool companies did it before Stanley came along, because they all worked for Mac and now work for another tool company. When I was growing up, it was Mac everything and everywhere. Now, well, they still have a really good warranty.

 

[billymade]

This may be a explanation of why I haven't seen a mac dealer in my area for over 10+ or even more years: http://www.mactoolssuck.com/welcome/history.htm
So, the assumption is Stanley drove Mac Tools into the ground; is that what you are saying?

 

[rsanter]

not sure if this is still the case, but SO had a deal where they would start the guys as 'company men' to get them started. they paid them a salery that would cover the truck lease and a little more. then they made commission on the tools sold.
made it easy to quit or get rid of them. the account you owe is to SO.
I had a problem where I owed the Mac guy some money on an account. he did not come by regularly but got paid when he came by. he quit/disappered and then I was turned over to collections several months later (through MAC corp) without them ever getting a hold of me. no letters or calls.

bob

 

[a390st]

The friend who was an engineer helped design tools and design testing procedures for them. They would also work up designs for tools that they had conceptual designs for. Things started changing maybe about 15 years or so ago. He went to another company that didn't pay quite as well, but that was stable and fun. It wasn't that much longer that people started getting laid off. That facility is no longer in existence. It didn't make the Stanley cut. I don't know anything about the who or where of Mac Tool design anymore.

The folks who work for Snap On said that everyone jumped ship at Mac Tools at some point. Some went in the years leading up to Stanley and a lot went in the years after. It's a very different company than it was years ago. I just wouldn't buy much Mac anymore because it has become obvious that they are not committed to domestic production and are not supporting their dealers.

What I will say about Mac Tools is that they still have a really good warranty and they aren't afraid to stand behind it. You don't have to search for a truck when you break something if they don't come to your shop regularly. Mail it in and you get a replacement.

I once tried to get the Snap On truck to come to our shop. He had plenty of business and wouldn't bother to stop by. We would have bought some things every single time if he came monthly, but he couldn't be bothered. I broke a ratchet and he repaired it happily, but it took me months to track him down. On the other hand, I know of several folks he would demo tools to and forget about them for years until he came by one day asking to be paid. I think he was afraid we would require too much warranty work being that we worked on heavy equipment and 4x4/off road trucks.

 

[Valsmere]

I hope you realize that making a statement like that obligates you to providing pictures! Merkava_4
Yes I do!! I hope this comes out. I need to get some better pictures in the next few days. This picture actually looks black.

 

[wantedabiggergarage]

My first Snap~on guy, refused cash, and refused to get a signature. When he quit, corporate (who was local at the time), came around trying to figure out who bought what and owed what. We didn't have much owed, maybe $160 for the ENTIRE shop, but we let them know what we thought.
Next guy lasted MAYBE three months.
Last guy, had the route a year, they told him he would do better then he did, our area (according to the different tool truck guys I know), has a 75% repo rate on toolboxes, and he didn't know that. He was following their "my box is bigger then your box spiel" and then it would get transfered to Snap~on credit, but as the agent, he was somehow on the hook for it. Had the truck a year, sales were down, diesel was WAY up, and it was costing him to drive the vehicle, and corporate wouldn't allow him to drive his van. Then they told him he needed to buy a new truck or something like $50,000 extra in merchandise.
There was a sucessful Matco guy in our area (friend, but didn't stop at our shop), he just got tired of it, and they were having quality issues at the time (brand new hydraulic jack failed on the first use as an example). He went into the wrenching business, but lasted little more then 1 year, from buying all the toys (must invest in any business you own).
Our first Matco guy (got a ratchet warrantied, that he had to call corporate to find out its vintage, somewhere in the 50's to early 60's), could have been good. He went wacko and brought a gun into one shop, lost that street and 75% of his area. Next guy was told "get out or have the cops ****** you out. He asked for a relocate and never had a Matco guy again (10 or so years).
Mac guy (father of a kid that worked for us), like MANY of the others, gets harassed by the city, for parking "a commercial vehicle" in a residental area. I've bought a few things from Mac, (our Mac guy), but he doesn't know his catalog well, keeps a slim inventory (basics and one of each only), is SLOW at ordering or warranty, and they don't carry everything they should. (I ordered an IMPACT locking extension, and received a regular one (which he warranties since I DID order an IMPACT one).
Snap~on tried to recruit me twice, I also have some idea of the theft rate on the trucks, NO THANKS!
SK and Cornwall, both came around and said they were going to have someone in the area, nothing became of either.

 

[bowtie3]

Our first Matco guy (got a ratchet warrantied, that he had to call corporate to find out its vintage, somewhere in the 50's to early 60's), could have been good.

I'm afraid they lied to you about the age of your ratchet their is no Matco ratchets from the 50's or 60's. Their is no tools branded Matco before 1979, they just made boxes before that, all the tools were branded Mac.

The tool business is tough and I think impossible with some companys in some areas. Alot of families has been ruined by the tool companys. Some guys do pretty good, some do very, very well but they are few and far between, we have a Cornwell guy that has been around for around 15 years (was a Matco guy for some of that time) and he seems to do pretty well. The Mac guy next town over has been there a least 20 and does very well it seems. No Matco guy since the Cornwell guy switched and the Mac and S.O. guys are revolving doors. I don't think anyone with a brain should take a chance on the mobile tool business.

 

[wantedabiggergarage]

I'm afraid they lied to you about the age of your ratchet their is no Matco ratchets from the 50's or 60's. Their is no tools branded Matco before 1979, they just made boxes before that, all the tools were branded Mac.

Good to know. I really didn't have ANY experience with Matco, and this was the ONLY Matco tool in the shop, which the owner had said, been a LONG time since he saw one.

 

[Vinko]

After this happened we had a new guy come by ONE TIME! It had been almost a year since the last guy disappeared so we had lots of tools that needed fixing and exchanging. Needless to say we hit his truck hard on that first visit...he never returned. Maybe we scared him?

As I mentioned on another thread, I just talked to our SO dealer who I really think's a good guy. He's been at is for about 30 years. He said that warranty items can prove to be a real pain because you give up inventory that you've bought from SnapOn, have a 2 month delay while you get enough together to send to SO, then merely get a "credit" toward future purchases from SO. So it can really hurt your cash flow.

So think of that new SO guy. He just gets his **** together, maybe starting out, has payments, business expenses, new inventory that he needs to sell to pay for everything, and gets hit with all this warranty stuff. It's got to hurt him.

 

[Merkava_4]

If the new guy wins the state lottery and is able to buy his truck and first inventory payed for in full, he'll do alright.

 

[Moose-LandTran]

I read a thing the other day about a guy in Scotland who murdered his Snap-on dealer over a $310 (£155) debt and sold the contents of his van, $80,000-worth of tools for about $4,000.

 

[Nealcrenshaw]

With all this bad news about tool dealers,makes me kind of think Craftsman may have the best warranty.

 

[Moose-LandTran]

It really depends on the dealer themselves. My dealer doesn't come to collect his money, but he warrantied a ratchet i bought off eBay (i told him where i got it) that wasn't even broken. The hole in the coverplate for the drive was worn and grease seeped out, he swapped it for a brand new cover off a ratchet he had on the van.

 

[chammyman]

Theres only 2 snap on guys I have seen in my local area. 1 parked in my old works yard, it was left overnight and another guy done the garage down the road.

Anyway both were the usual arrogant types, I need this warranted, tough was the usual answer from eithe rof them. If they would warranty something it would be a case of leave it with me and 2/3 months later it would be back. Even if you pestered the guy that parked in the yard!

The lifetime warrenty has quite a few clauses on it, people don't realise it, its all there on the website and even on the inside cover of the catalogue.

They both seem to be doing well at their game though

 

[kf4zht]

Just a curiosity on the posters original question. When you sign a contract (or buy tools on credit) with a tool dealer is there a statue of limitations or similar for the credit? Let's say you negotioated $2000 worth the tools paying 200 a month, for 11 months (just basic numbers with some interest). You pay the first 2 months, then the dealer stops showing up to collect. A year later, he shows up and demands the rest of the money, in full. Or even that you start making payments again.

I've never bought off a tool truck so I have no experience with buying on credit.

 

[chammyman]

the key is never buy on credit! if you can't afford it don't get it make do until you can.

 

[Moose-LandTran]

I have an account with Snap-on, nothing on credit. It's compound interest, so you pay a lot more on finance.

I asked my dealer what the limit is on the account, he told me it varied on whatever you could afford to pay each week, he was going to let me buy a box on account and not finance.

 

[Merkava_4]

The key is never buy on credit! If you can't afford it, don't get it; make do until you can.

I read that 4 or 5 times trying to make sense out of it; I finally decided to fix it myself.

 

[eschoendorff]

With all this bad news about tool dealers,makes me kind of think Craftsman may have the best warranty.

Not necessarily. It depends on the dealer in you area. Our Snap On dealer is to notch - dependable and a real pleasant guy to work with. I have been buying more from him than Sears lately because a) I don't have to make a 50 mile round trip and b) he service is excellent. Of course, he's been in the business for years and knows his way around...

Couldn't be happier.

It's too bad that not everyone has this kind of dealer....