Snap-on Driver's Cut or other Truck Brands Also

tdls87 · Jun 19, 2011

I was wondering if anyone "in the know" could tell me how much money any of the truck brand dealers have in a tool or box.

Say the Snap-on man has a set of wrenches he sells for $400, How much does he have in them? I know the truck guys have a system of credit with the main branch that fluctuates as they sell stuff. But what's the cut? Is it a certain percentage of final sale? :beer:

tooth · Jun 19, 2011

I heard profit margin on SO tools is ~30% to the dealer. Im pretty sure my SO truck also carries stuff that is similar to the BP/SO stuff but that he gets from another source and sells at the SO price so the margins are much higher on that stuff. No complaints from me, I run a business and 30% isnt as much as you'd think. Once you pay for all the bills, whatever is left over is in the dealer's pocket, and that, i'd like to know what a good dealer can pocket.

mrshaun · Jun 20, 2011

try and pay our bills for the last week. injector pump on a 2003 24valve cummins
8 hrs labor, damn reman pump fails 3 hours later. more labor and down for 3 days straight. still did 11200 for the week, but it should have been about 17000. also the power converter( 120 volt down to 12 volt ) died last week as well. new one in the am.
body mount broke and the face of the alternator cracked by the bolt hole causing it to shake. new front plate coming as well. so not much left in the bosses pocket after this little fiasco. ac is working good though, thank god. 101-105 the past few days.

tdls87 · Jun 20, 2011

mrshaun said:
try and pay our bills for the last week. injector pump on a 2003 24valve cummins
8 hrs labor, damn reman pump fails 3 hours later. more labor and down for 3 days straight. still did 11200 for the week, but it should have been about 17000. also the power converter( 120 volt down to 12 volt ) died last week as well. new one in the am.
body mount broke and the face of the alternator cracked by the bolt hole causing it to shake. new front plate coming as well. so not much left in the bosses pocket after this little fiasco. ac is working good though, thank god. 101-105 the past few days.

I'm assuming the $11200 is the total sales for the week? If you don't mind me asking what is the normal work week's take home pay? My Matco dealer said he used to be a tech for a chrysler dealership and he cleared $45000 a year. He said he easily clears that now that he's a dealer.

That's what peaked my curiosity, therefore creating this thread. :thumbup:

itsvegas · Jun 20, 2011

are those numbers sales or profit?

Roots · Jun 20, 2011

itsvegas said:
are those numbers sales or profit?

Certainly sales numbers.

Even if there is only a 30% margin for the truck dealer at MSRP, which really is not much. That shouldn't be construed as a profit margin, but an operating margin. Factor in the truck payment, insurance, fuel, maint & repairs, cell phone, internet, health insurance, theft, shipping and handling, non-sale (vacation, sick, meetings, training, etc.) days, interest, licenses, registration, plates, legal, collection, franchise fees, possible franchise finance payments, and on and on.... Taking all of that out of the maximum 30% operating expense, and than you're left with your profit.

That's not even factoring a wage for yourself, relying solely on the businesses profit.

truckdriver · Jun 20, 2011

I would guess that a tool truck driver is alot like being a truck driver. I make good money but the hours I put in to make that would make most cry uncle. You can have a 70-80 hr
week wiped out and then some by a Saturday morning breakdown.Last set of steer tires I bought cost $850. Yesterday I started my father's day at 5:45 am and finished at 11:00 pm. I even saw the Snap on truck going north out of St. Francisville,La so I guess he was working also. Anytime your in business for your self you work when you can, not when you want to.

mrshaun · Jun 20, 2011

that is sales. I work for my uncle so i only get a portion, but i bust my azz every day to make it worth my while.

csmitty · Jun 20, 2011

Last time my dealer was checking the price he could order a ratchet for, or sell I guess is the right answer. He had it on speaker and I got his dealer price. Was about a 90% markup. If I heard it right. Now what happens with all that I dunno. I assume that difference went to him. Wonder what the wholesale cost to factory is.

I'm assuming thats how it works. what it costs the factory to make it, what profit they make by selling it to the dealer (and whatever credit is involved), then what the profit makes selling it to end user (and principal on credit if any)

I'm kinda curious to what a factory employee discount is.

honcho · Jun 20, 2011

Snap-On dealers can't make that much money because if they did 1. There would be lots more people clamoring for franchises and 2. Snap-On would be raising dealer prices to keep some of that money for corporate. In any case, it's a delicate dance where you have a Corporation trying to make all its operations and products profitable and their franchised dealers, who need to make a profit so they can continue to represent the Corporation. I have no idea what a Snap-On dealer makes, but let's say the $11k/week gross is a typical sales week. If a dealer sells 50 weeks out of the year then that's $550 gross. After everything is paid for and the dealer is making 10%, that's $55k for the year. A lucrative Snap-On route owner might clear 100-150k a year in profit. I can't imagine that too many of the franchise owners would keep plugging away for much less than $75k/year but everyone's motivations are different.

As a point of information, I was in a combined Taco Bell / KFC and looked at their business license. In Virginia, the license cost is based on their gross sales (as calculated from what they pay in sales tax) The license said that the license basis was just over $2 million. That's for a place that employs a bunch of people so one person selling over a half a million in tools isn't too shabby.

There may be freedom in being your own boss as a Snap-On franchise owner, but there's a lot of risk too. Get sick, don't get paid. Take a vacation, don't get paid. Make a poor decision, don't get paid. It is certainly survival of the fittest.

chadster1 · Jun 20, 2011

Roots said:
Certainly sales numbers.

Even if there is only a 30% margin for the truck dealer at MSRP, which really is not much. That shouldn't be construed as a profit margin, but an operating margin. Factor in the truck payment, insurance, fuel, maint & repairs, cell phone, internet, health insurance, theft, shipping and handling, non-sale (vacation, sick, meetings, training, etc.) days, interest, licenses, registration, plates, legal, collection, franchise fees, possible franchise finance payments, and on and on.... Taking all of that out of the maximum 30% operating expense, and than you're left with your profit.

That's not even factoring a wage for yourself, relying solely on the businesses profit.

You must own or run a business yourself

chadster1 · Jun 20, 2011

csmitty said:
Last time my dealer was checking the price he could order a ratchet for, or sell I guess is the right answer. He had it on speaker and I got his dealer price. Was about a 90% markup. If I heard it right. Now what happens with all that I dunno. I assume that difference went to him. Wonder what the wholesale cost to factory is.

I'm assuming thats how it works. what it costs the factory to make it, what profit they make by selling it to the dealer (and whatever credit is involved), then what the profit makes selling it to end user (and principal on credit if any)

I'm kinda curious to what a factory employee discount is.

You were not on a snap on truck. All prices are quoted at list or promo list. Dealer cost is not discussed. It is assumed that a dealer can figure cost from the list price.

csmitty · Jun 20, 2011

Was standing on it with him while he had the rep on speaker. I was the only one there and not a high priority customer by any means. But then again maybe he didn't expect the rep to throw it out there. Basically we were figuring out if he could sell the FL80 at the Fathers Day promo price since he thought he had to buy into it earlier in the year. He got 5 more right then.

mrshaun · Jun 20, 2011

fl80 was on sale for 80.?? 90% on that man snap on is making him some awesome deals.

chadster1 · Jun 20, 2011

mrshaun said:
fl80 was on sale for 80.?? 90% on that man snap on is making him some awesome deals.

Shaun,

When was the last time anyone from Snap-on quoted you dealer cost on anything? Everything is always quoted at list or special list.

mrshaun · Jun 20, 2011

they have never quoted cost at all. they always say list and will sometimes tell me the promo price, but never cost. so he is mistaken, unless he was talking to his sales manager and he ahd some stuff he was blowing out the door.

csmitty · Jun 20, 2011

Just saying what I heard. Not sure who he called but he called in gave his number, I heard dealer cost and a price when compared to retail was where I got that number. Which, in the few retail jobs I worked in college was pretty typical. Granted they were more specialized stores. I'll go back and edit the post if ya'll want. I just kinda assumed most people on here knew about SO prices, not that knowing that info would really give you a bargaining position, granted i've been able to get my guy down a bit on the universal set that was a special a month or so ago. still has all of em.

mrshaun · Jun 20, 2011

well your info was not true so it is your call as to whether you edit it, but as people read it they will now that you were wrong and they can make their won assumptions from there.

farmmech86 · Jun 20, 2011

This should give you some insight into the ins and outs of a snap-on franchise

http://www.bizjournals.com/cincinnati/stories/2008/04/21/story17.html

fatfillup · Jun 20, 2011

As I have been told by several dealers, they work on 30 to 35% profit margin. If it lists for a $100, they pay $70. Which as a business owner, that ain't squat. Where a dealer can make a decent profit is when SO offers specials if you order in advance, especially on boxes. And I'm sure SO throws a bone or 2 every month or so on other tools.

A SO dealer can make good money, but it isn't easy or quick. Long hours, giving great customer service, having a big inventory, and taking advantage of specials when they come along. And did I mention long hours? Also keeping up on collections.

It takes a dedicated person to be a good tool man. You must take the long term view and you will roll the dice everyday on getting paid.

mrshaun · Jun 20, 2011

well put mr fatfillup........

csmitty · Jun 20, 2011

Ok, I re read and it seems that you think I meant if he sells something for $100 he only paid $10 for it. I was referring him making $50. So he paid $50, sold it for $100 thats 100% percent markup from what he paid. From what I over heard it was more the 85-90% range. So you could call that profit margin So conservatively 40-45% Atleast on a ratchet. Now not sure if that was a promo price since it was on sale retail as a promo or what. Other things are different I'm sure. I'd like for them to make as much as possible as I'm sure its hard work and lots of operating costs. Sure I'll haggle on some older stuff but he knows I'll buy something. Heck I have to track him down. I'd love for a SO to pull up in front of my office.

Keep in mind i'm just a lowly engineer. Don't pretend to know anything about business other than the few i'm worked retail in back in college.

GeorgiaHybrid · Jun 20, 2011

smitty,

I DO know what my dealer pays for his tools (he is a great friend...) and he will average making a GROSS profit of 30% of the total sale. As noted above, a $100 list price sale will cost him around $70. If that is all he did, he would be in trouble.

He buys items on discounts, special offers, bulk buys, from the return site (dealers only) and sells trade-in boxes and tools. His overhead and costs of sales are huge and, as another business owner, he is like most of now in this economy, two or three bad months from bankruptcy if he makes a bunch of bad business decisions.

csmitty · Jun 20, 2011

Oh I agree. My dad is a business owner and I've seen what he's had to do. I try to help when I can but I've got to go to work to. He was traveling on fathers day to a job in TX from GA but we had dinner Sat and I think he appreciated the gearwrenches I got him. Though he had a choice between that and SL80 and FL80. Thought for sure he'd want a ratchet. Maybe for Christmas. Aaaaanyways

No matter what the margins are I'm sure we all appreciate what the truck drivers do and I know I'm grateful that the guys I deal with take time to meet me even though I try to meet them at a stop. Keep it up. Hopefully things will get better. Hopefully.

mrshaun · Jun 20, 2011

it would have been a sales manager and i bet it was the ratchets that came free with the 212sfsmy sets a few weeks back. those ratchets were 50 bucks or so and the socket sets were on sale as well, but it allowed me to sell the sockets and put the ratchet with it. I bet someone ordered too many ratchets and wanted to get rid of them.

Ziggy'sSpeedShop · Jun 21, 2011

csmitty said:
Ok, I re read and it seems that you think I meant if he sells something for $100 he only paid $10 for it. I was referring him making $50. So he paid $50, sold it for $100 thats 100% percent markup from what he paid. From what I over heard it was more the 85-90% range. So you could call that profit margin So conservatively 40-45% Atleast on a ratchet. Now not sure if that was a promo price since it was on sale retail as a promo or what. Other things are different I'm sure. I'd like for them to make as much as possible as I'm sure its hard work and lots of operating costs. Sure I'll haggle on some older stuff but he knows I'll buy something. Heck I have to track him down. I'd love for a SO to pull up in front of my office.

Keep in mind i'm just a lowly engineer. Don't pretend to know anything about business other than the few i'm worked retail in back in college.

A 50.00 item marked up to 100.00 is a 50% gross profit margin. If you were to take a 10% discount on that item it would be 90.00,20% = 80.00 30% = 70.00 ect so 50% off makes it 50.00. Thats a 50% profit margin not a 100% profit margin. It makes it look like they are getting a better mark up than they are.

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