Independent Tool Trucks - How would you do it thread?

[Tim37]

The big problem I see with consumables is I can call Napa (or any other parts store) and usually with in a hour have what I need. And you have to compete with huge companies buying in bulk. While you have to support a van. They can buy it cheaper have a smaller profit margine and still make money. I'm not saying it can't be done hi-line does it but they usually charge 3 to 4 times what I could pay at other places but the boss likes seeing that highline truck pull up for some reason.

 

[dnschmidt]

DON'T DO IT. I sell TOPTUL as a hobby here in the USA and it's about a thousand times harder than I ever thought it would be. TOPTUL makes great wrenches and sockets and I sell them for about a 10th of Snap-On's prices. It still takes me six months to move one $6,000 shipment of product. I'm retired, rich and need something to do with my free time since I blew out my shoulder and can't play golf anymore. If I needed to make a living doing this I'd shoot myself in the head. You're completing against Amazon, Tooltopia and everybody else. I repeat DON'T DO IT!!!

 

[jimindm]

I think you may be on to something. If you go about it by selling your service and not so much price, I think that would take you further.

Many are right that you can get consumables from most parts stores, delivered in a timely manner. The problem is with that is when you need something you need it now and you are out. It takes someone in the shop to look at the racks to order what you are running low on. To order more when you have used the last.

This is where you could come in and just keep them on sort of a keep fill basis. That is what is missing in many small shops today. Larger shops can pay a person to oversee stuff like that, but smaller ones can not.

Simple stuff like nut and bolts. I would bet every one has been there. They go to the bolt bin and find two and they need three. They come in a package of hundred, but nobody ordered them, and now you are waiting to get a package of five delivered from the parts store to finish your project.

Most shops likely would pay more to have products they depend on, to keep production going. You could also help their inventory buy ordering larger quantities of the often used pieces, and smaller quantities of lessor used.

Many have commented on the cost side of what you are selling. What is the true cost of a shop to wait on needed products to do a task.

We have a few guys here that just do bulbs, hose clamps, some filters, fuses, tire repair products, hand soap, stuff like that. You could certainly throw in some tool specials once in a while.

One thing you may have to do is buy in big quantity and sort to smaller quantities. You may also have the sales person stop an do the order and it comes on a truck the next day.

It really is more about the service you want to provide. Think about not only selling it to them, but stocking their shelves with it. Sure a little more time, but it is getting done, and not sitting in box because someone did not put it a way. Or it is not put where it goes.

Figure out ways to make it easier for you and easier for the customers. That maybe includes new cabinets or shelves.

 

[wornoutoldman]

Tool truck = bad idea. Taco truck = good idea. You will service the same clientèle but they will spend much more and often on your product(s). Just my 2 cents.

 

[K13]

Just out of curiosity,, how long have you been in business?

I have been in the distribution side of the automotive business for 15 years and I am well aware of how things work up here.

There are independent warehouses for much of this type of product that sell to "retailers" only so the warehouse gets the pricing by buying bulk. End users cannot buy directly from them. Places like NAPA buy bulk through their warehouses but their stores are still up charged to buy the product from the warehouses so they cannot offer a substantial discount over independants. Tools may be a different story but sundries are very often supplied by independent jobbers in Canada because of this model.

 

[SuitorsGarage]

Storefront and a truck to deliver large items when sold. In my area mid level tools would be popular. Our choices are high end tool trucks, box stores, and Napa. All other parts stores sell junk.

 

[sberry]

The other stores sell the same tools as Napa. I understand how the jobber works. The post above about service has it right. There may be a warehouse he can buy some stuff at the right price so we are as much a shopper as a seller which should have been the start instead of the finish but how much stuff would he have to buy and sell to get markups and clear any money?
A small sales stop with low pricing would net the same money /time could have been made working fast food and wouldn't need to be in business. If you have a stop, sell a 1000 rolls and make 50 cents its a days pay and operation for a 1 man truck. Can yoy pack 100 rolls along with the rest in this van and move them at 10 stops? Same for the brake kleen, my jobber already sells it to me at 1.50 how much juice he gonna squeeze if he sold me to and in that case when would be the next sale?
The noirmal tool truck works on markups not discounts and those are not below cost and are but a shave to incentive a sale. While they work on different margins,,, say the company gets 1/3, the distribution a 1/3 and the vendor 1/3 he clears 10$ on the sale of a wrench and a hundred or more on a set. To makie 100$ on brakekleen got to tote and sell 20 cases if he can get the right price and this is before any expense and overhead.
I did use a roll of paper towels yesterday and a half a can of spray and the object of small biz isn't to see how much can be flushed thru it there will be intense pressure for price that one simply just cant make enough. My jobber has a back room with 50 cases and 3 x delivery where the customer carries it out. While this is happening he is on the phone and shuffling 3 other p[eople some he is selling every hour a gasket set for 89$ they paid 20 for, evrery hour several sales to go along with the cleaner they made 50 on. Not 50 an hour but several.

 

[sberry]

There may be a spot for new business but its not with this model. The first post really says most of it, I want to do this because I love tools and am going to load up a truck and drive around and sell cheap stuff. If they spend 50 a week or 200 a month how much juice is there, 4 stops to take in 200.

 

[sberry]

Is there anything yo can put on this truck to mark up 4 or 5 times at every stop with a 50 or 100$ sale? All the handling, stock and shelves are already being handled by "parts monkeys" now, can you compete with this labor and even some of the investment numbers above don't account for a nickel in fuel or a phone bill, all the invoice cost for every place and the losers you stop and don't need anything that day.
Second, this isn't really new business, you are really looking to scrape some off of what is already there. I had a couple jobbers make calls. I know one, I told him,,, I understand your service pitch etc but do you really want to deliver a 20$ jug 2 hours from your home on occasion I forgot it from 2 others I already use,,, am a small user and will not buy additional but now make it a 3 way split?
Same for one o0f the auto parts, I use 4 stores now, not going to buy more if I sign on with a 5th even if one does have a lower price on a few items I rarely buy there anyway or after doing this a while have already sourced at the best deal.

 

[rice rocket]

Tool truck = bad idea. Taco truck = good idea. You will service the same clientèle but they will spend much more and often on your product(s). Just my 2 cents.

Seriously, unless you start extending credit, you're competing from a lower footing compared to all the other tool trucks out there. And with those tool trucks, the drivers are selling Snap-On/Matco credit, not their own. Unless you somehow have the means to lend out credit in spades, I suggest you go taco truck.

 

[jdlong]

In today's business culture, I would not even begin to think of peddling tools off an independant truck unless I had a least 2 million bucks to buy stock in volume and offer discounts. I would expect at least two years to build enough clientele just to cover my expenses. Lifting your leg with the big dogs means lifting it just as high.

 

[Davefr]

Many are right that you can get consumables from most parts stores, delivered in a timely manner. The problem is with that is when you need something you need it now and you are out. It takes someone in the shop to look at the racks to order what you are running low on. To order more when you have used the last.

That's a "breadman program" and it might work.

You set up a consumables area at a shop and you provide the get started inventory. You monitor it over time and replace what gets depleted. You bill your client what is taken off your shelf or dedicated stocking area. The inventory is yours and not the shops.

The shop does not have to deal with anything other then paying the bill for what it consumed. You do all the rest.

 

[turfgnome]

That's a "breadman program" and it might work.

You set up a consumables area at a shop and you provide the get started inventory. You monitor it over time and replace what gets depleted. You bill your client what is taken off your shelf or dedicated stocking area. The inventory is yours and not the shops.

The shop does not have to deal with anything other then paying the bill for what it consumed. You do all the rest.

now that is a good idea. It has little risk for the shop owner to try you out, lower overhead then going out to buy a truck, and locked in customers. It would also allow you to create a route allowing for more days off.

 

[Empty Pockets]

it's a tough gig. plan to work 26 hours a day and 8 days a week, and you might break even

 

[bob15]

I think you may be on to something. If you go about it by selling your service and not so much price, I think that would take you further.

Many are right that you can get consumables from most parts stores, delivered in a timely manner. The problem is with that is when you need something you need it now and you are out. It takes someone in the shop to look at the racks to order what you are running low on. To order more when you have used the last.

This is where you could come in and just keep them on sort of a keep fill basis. That is what is missing in many small shops today. Larger shops can pay a person to oversee stuff like that, but smaller ones can not.

Simple stuff like nut and bolts. I would bet every one has been there. They go to the bolt bin and find two and they need three. They come in a package of hundred, but nobody ordered them, and now you are waiting to get a package of five delivered from the parts store to finish your project.

The one downside is many large companies already fill that niche. He has to see what the businesses are doing before setting shop. Large companies like: Bowman, Fastenal, Grainger, MSC and even small, already established companies all offer automatic re-fill services for fastener consumables, brass fittings, stock items, tools and tool-room consumables (end-mills, bits, inserts, etc). He needs to make sure there is enough companies that will sign up, but he also needs to be sure they go through enough items so that he is making money and that they don't only order 3 bags of nuts or washers once a month (can't survive on that).

 

[[memphis]]

The one downside is many large companies already fill that niche. He has to see what the businesses are doing before setting shop. Large companies like: Bowman, Fastenal, Grainger, MSC and even small, already established companies all offer automatic re-fill services for fastener consumables, brass fittings, stock items, tools and tool-room consumables (end-mills, bits, inserts, etc). He needs to make sure there is enough companies that will sign up, but he also needs to be sure they go through enough items so that he is making money and that they don't only order 3 bags of nuts or washers once a month (can't survive on that).

You are correct, there are many that do this but there is a lot of red tape involved. A simple one such as paying shipping. A lot of vendors don't bury that cost or pass on free freight savings. I know freight IS a cost of business, I slug oil right now so I get it. But there are many people that won't buy simply because of a freight charge.

We don't have an MSC here, Grainger is ridiculously expensive I don't see them in any shops here. Fastenal won't let you buy from them retail or in small quantities anymore here.

I don't think I would get into many nuts and bolts, too many variations, heavy to truck around.

License Plate Bolts - Yes
Self tappers - Yes
Brass - HELL NO

 

[sberry]

Can you imagine the stock needed to compete with Grainger or Fastenal? Or both? Then there is the auto parts store, the tool trucks and Sams club along with Walmart.

 

[bob15]

You are correct, there are many that do this but there is a lot of red tape involved. A simple one such as paying shipping. A lot of vendors don't bury that cost or pass on free freight savings. I know freight IS a cost of business, I slug oil right now so I get it. But there are many people that won't buy simply because of a freight charge.

We don't have an MSC here, Grainger is ridiculously expensive I don't see them in any shops here. Fastenal won't let you buy from them retail or in small quantities anymore here.

I don't think I would get into many nuts and bolts, too many variations, heavy to truck around.

License Plate Bolts - Yes
Self tappers - Yes
Brass - HELL NO

Maybe I wasn't completely clear/understanding, but the companies I listed actually come into a business once a week and re-order what is needed. Many companies will also have their computers set-up so when a particular item reaches a specific inventory quantity, it is automatically re-ordered (not just nuts and bolts) and delivered to you. And with the companies coming in, such as grainger, they will give huge customer discounts that you or I won't see.

Selling brass fittings and valves can be quite lucrative. Add in selling hoses (tygon, air and fuel line) and grease equipment and custom hydraulic lines and sell the associated fittings, now your in a better (I think) area than "consumables".

Just my 3 cents before taxes

 

[bcoke]

From what I know of them [had a neighbor retire and bought into one] you will be in the MONEY LENDING BUSINESS.........make no mistakes about it......your customers will change jobs/ locations and you will have to chase them down.........selling a guy tools on time EASY getting paid on time Hard.....better to set up a retail store and maybe go broke at least you save on fuel!!!!!! IMHO bobbycoke

 

[[memphis]]

Can you imagine the stock needed to compete with Grainger or Fastenal? Or both? Then there is the auto parts store, the tool trucks and Sams club along with Walmart.

Exactly why I wouldn't dabble in much hardware unless I could drop ship for them.

We don't have Sam's Club anymore... Walmart isn't really in the picture for the supplies I'm thinking of (not shop towels ).

I should have said this from the beginning but the reason for stocking supplies AND tools would be the double dip.

I've been on one tool truck that had a tiny selection of roloc scotch brite disks. My thought is to win over the technicians AND the shop owner.

If I don't sell shop supplies this provides an excuse to get the techs in the van to poke around and maybe buy some tools, if the boss doesn't come out, who knows maybe they would talk and say "eh Tony you should really look at what that scum bag sales man can get ya"

Service ultimately wins in the end but it's getting there. I realize this isn't going to happen overnight. I ain't quitting my day job anytime soon.

 

[sberry]

It isn't that it wouldn't be good for me as a customer, it may in fact be. If the prices are low and you are doing my shopping work for for 4$ an hour its great. Those of us who are pointing this out are not saying it isn't good for the customer. But can you quit your job to sink 100 you likely don't have in to this venture to drive around all day and try to make 5 or 10$ an hour before you buy any gas.
How many tools you figure you could carry on the off shoot a tech who likely has most of it will need the odd thing you just happen to have? Gonna carry all this to offer discount pricing.

 

[sberry]

This is cool, he is just starting, this is a good thread.

 

[jimindm]

This thread is kind of all over the range of things. Do not do it because you can get everything you will offer at box stores, to not to do it because there are others doing it already.

I think what you would really need to consider it what type of business are you going to target. Construction companies would want grease and cutting/grinding equipment, maybe come winter some painting supplies. You know to kind of fully maintain equipment while it is down seasonably.

Body shops, would want strippers, paper goods, adhesives, masking products. Throw in a few bulbs, some wiring products, and a few more lines.

A repair shop could be all of the above. Plus fender/seat protection, and the list goes on.

Know the business you are going after and get the best of the products you can offer that business.

I am not sure I would be going after much earn as you pay business. I think that maybe OK for the middle man in the end, but boy you are sticking it out there aways to get that. You would have to buy from different vendors and likely not getting a real great discount, because you would be stretched out dealing with a few. Instead of just one.

Then you would be getting paid on time after you have paid in full. I think where tool companies kind of have a niche in this is you can buy gearwrench from numerous places, but you can only buy mac and SO from a certain place. Besides that is their business model, so they kind of help the franchise guy get there.

You could also partner with some one that is kind of offering some of what you want to sell. Say the independent parts store has paper products or grinding product. He does not sell a bunch, but enough to keep it around. If you could buy your product from him, he buys more and gets better discounts, that he can pass on to you, and make more money on his walk in guys.

Same true with grease and lubricants. Maybe the little distributor that you can sell their products and and they help you out in the end.

Sort of like a salesman that is selling their products, but doing it for yourself. Their products are getting out and they get better deals because of it.

Having an exit strategy is not a bad thing. Unloading consumables would be tough. Not many out there wanting everything, and likely having to much for any one to want it all.

I am not sure how long you would want to put into this. I could see it certainly taking a while to get it up and going. Even longer in getting it to the point of being able to make a living. Even longer yet, before you could start buying and selling enough to get larger discounts and selling at bigger margins.

One last thing to say. It will not be easy. Any one in business will tell you that. If you want to just be a part time thing or not take it to seriously, or not have the time to get it going, do not do it. Money aside, and you will need plenty of that, you are kind of creating a need for your business. To be successful you will have to pitch that to you buyers first and vendors later.

 

[[memphis]]

This guy is convinced his business model will work.
He hasn't swayed a single degree.

To the OP:
If this fails, will you still make payments on the van and inventory?
Exit plan is more important than business plan.

Yes, I didn't mean to be derogatory but after so many posts someone here needed to acknowledge the mindset and remind him of what failure, as most all predict here, means.
It means no income and the same expenses for maybe 6 years after you fail.

What if you DO fail?
We all predict it. What if you're wrong and we're correct?
I have NEVER started a new venture without the very first question, before anything is Ever even put to paper:

The plan failed. How did it fail.
Then you work backwards from failure to beginning. If you can possibly pick a path where you did not fail, or the ramifications of failure were not devastating, then you write a business plan.
Fail on paper to succeed in reality.

Shouldn't one be convinced they will succeed, if you think you are going to fail why bother even trying?

Ultimately, doesn't everything fail? Look at GM, it was so big and it crumbled, the only thing that kept it alive was the bail out.

I'm not disagreeing with you on working backwards and overcoming failure; in fact it's a great idea but in the end everything can and will fail. I'd say it just depends on if it's recoverable?

 

[Davefr]

Shouldn't one be convinced they will succeed, if you think you are going to fail why bother even trying?

NOOOO!!!

Your business plan needs to brainstorm everything that can go potentially wrong. Only then can you come up with a better plan to mitigate the risks and/or overcome as many as possible.

Going into any new venture as a Pollyanna will only serve to reduce your chances for success.

"Hope for the best, but plan for the worst"

The replies on this thread are not to rain on your parade. They're intended to get you to understand risk factors that you may not have thought of.

 

[Two Speed]

Shouldn't one be convinced they will succeed, if you think you are going to fail why bother even trying?

Ultimately, doesn't everything fail? Look at GM, it was so big and it crumbled, the only thing that kept it alive was the bail out.

I'm not disagreeing with you on working backwards and overcoming failure; in fact it's a great idea but in the end everything can and will fail. I'd say it just depends on if it's recoverable?

I think they want you to consider the various failure points and how you can overcome them before you get backed into a corner.

Since I think I know who you are, you are no stranger to shops and sales, so I got a feeling you already got a good feel from past experiences to what shops want or maybe need. But I would still be questioning how you can compete with the likes of Napa who the shop can call up and have a case of towels, or brake clean tossed in with the morning parts order.
I am also curious as to what the markup on disposables would be to a shop from the main players. I'm sure its not retail pricing. Which means your pricing will be fairly tight. If they are selling retail, I think you got two feet in the door for this venture and your main obstacle will be getting your name out there and providing quick service to establish yourself as the goto guy.

Alex.

 

[Brownsfan]

Look into this : http://www.gearwrench.com/gearwrench_tool_trucks
Seems like a pretty good deal with minimal commitment. I used to have a independent guy that came to my shop. He was great. Had good tools at decent prices. Not as good as say Amazon but decent. Especially when you consider having the truck account and paying weekly. You can't do that with Amazon or box stores.

 

[a52-830]

since op does seem intent on continuing, i will offer one last piece of advice.

create a LLC. provide as much seed money as you can, and go with that. if it fails, which is a possibility, at least you, personally, will be protected from the fallout. they can take back the truck, and the stock, but they can't go after you.

it is possible that a LLC has downsides that are not being considered here, and you should talk to someone who understands the ins and outs to set you up with one, but the protection it will offer will offset a sh*t load of downsides.

even if you ignore all the other advice, think long and hard about this one. an LLC, or something like it, is absolutely something you should do.

 

[Brownsfan]

Definitely get an LLC. If you don't and and get into an accident or someone falls on your truck. You can be PERSONALLY sued. With an LLC you are protected.

 

[bob15]

With single member LLCs, there is some uncertainty as to whether creditors would be limited to a charging order since the rationale for protecting members from other members’ personal debts does not apply if there is only one member.
Punchline : single member llc owner is just as liable in some states as if the llc did not exist.

It varies by state.
In some states it will REALLY antagonize a jury if they think your llc was formed solely to escape responsibilities.
AND: Many to most lenders will not touch your little llc 'I'm not liable' mindset. A personal guarantee at best is required, a down right 'get out' at worst.

Just remember, he is in Canada, not the US.