Mobile dealer!!

[yogitech]

Hello all!

I have worked as a tech for Ford for the past four years now, but, I find my self looking for more. I know theres some amazingly talented and knowledgeable people on this board, so I need some advice.

I'm currently entertaining the idea becoming a mobile tool dealer (independent). I'm good friends with my current dealer, and he has agreed to assist as much as he can. I have alot of knowledge about tools and equipment and feel that would give me a good edge on the competition. I understand its not going to be aesy and that I have to put in what I want out of it. I've never ran a business, nor have schooling in business.
I've been doing alot of research and am willing to do what ever it takes to make things work for me and my family...

That being said, what do you think are some of the things I would have to look into (besides acquiring a truck, etc)? Personal stories? Do's and Don'ts?

Any tips or suggestions will greatly be appreciated. Thanks

Mark

 

[krusty the clown]

the one piece of advice i would give is, be a hard *** on collecting. it's YOUR money and if niceness WILL be considered weakness.

the one advantage of being independant is you can buy cheaper.........
the one disadvantage is you don't have the financial backing of company credit for big ticket items.......

 

[chadster1]

I've never ran a business, nor have schooling in business.

If you have no business experience, I would recommend going with one of the franchises if you want to get into the tool business. The franchises have a business plan that works and would be a less riskier way for you to learn the tool business.

 

[Here2Learn]

I have caught the "I want to run my own business" bug before. Your comment, "I've never ran a business, nor have schooling in business." makes me think that your idea is pretty risky, especially in this economy. Of course, you are very much more aware of your situation than I, but you may want to consider some research into business before "getting into business".

 

[yogitech]

Thank you everyone for your comments. I've gotten some good information, but, it seems like everyone is suggesting going with a franchise rather than independent. What are the advantages, are things less risky? Are start up cost reduced, any details? Thanks...

Mark

 

[Fedwrench]

Think of how your peers in the Ford dealership treat your existing tool dealers? do they hide from them? Rush out to pay? Try to get him to warranty broken tools from Ebay and elsewhere?
What type of hardline would you sell SK or Asian like Genius, Toptul, or Gearwrench?
With declining hours flagged, techs don't have a lot of money left to spend on tools. There's also fierce competition between dealers for what money is out there. Ther hardest part about being your own boss is kicking yourself in the **** to get what needs to be done, done.
I have always felt bad for the way some tool truck dealers are treated by techs and dealership management (don't park your truck here, you can only stay here 20 minutes during lunch time, etc.). Mechanics are mostly great people but, we sometimes aren't great at keeping our personal finances and lives in order. Reflecting on the interactions I've seen over the years between toolmen and techs, I would pass on being a tool dealer. No amount of money or being your own boss (if one can ever say that), would be worth the headaches but, that's just my thoughts. Good luck in your future endeavors.

 

[yogitech]

Thanks Fedwrench,

Atleast at our shop the guys are honest and actually seem genuinely excited when the dealer comes around. I understand this is most likely the exception, but, Am I really that clueless? I'd like to think theres still good honest people in the industry..

 

[Billin21]

Thank you everyone for your comments. I've gotten some good information, but, it seems like everyone is suggesting going with a franchise rather than independent. What are the advantages, are things less risky? Are start up cost reduced, any details? Thanks...

Mark

Probably more expensive if you go with a franchise. However, you get national advertising, nationally recognized tools, a business plan, a credit program, a computer program to keep track of customers and inventory, customer service to help with all your questions and customers questions. I never even considered going independent and still wouldn't. I initially went with Cornwell, but I wouldn't recommend doing that either. Just make sure and do your homework and make the decision thats best for you.

 

[Zrexxer]

Don't mean to rain on your parade, but I saw this same thing happen a half dozen times around here during the bust in the late 80's... one guy after another said "Hey, surely no one can afford Snap On right now, I'll buy a step van and become an independent tool dealer carrying less expensive lines of tools!" Trouble was, the techs didn't want cheap(er) tools, even if money was tight. They wanted Snap On even if they had to buy it on credit.

None of the independents lasted more than about 9 months.

 

[Merkava_4]

One thing good about being an independent is there's no sales quota to meet; you can slack off as much as you want and not have to worry about getting your franchise pulled. Another thing is you can drive whatever truck you want; you aren't required to have a truck that's no more than 3 years old.

One advantage of a franchise however is the theme; when you step on a Matco truck, you're stepping into Matco world. It's harder to create a theme with various brands of tools on your truck as an independent.

 

[krusty the clown]

One thing good about being an independent is there's no sales quota to meet; you can slack off as much as you want and not have to worry about getting your franchise pulled.

if you slack off your done........regardless of whether your a franchisee of not. you have to hustle.

there really isn't a sales quota, but they will require you to mainain a certain purchase average (the company doesn't care if your selling the stuff, just that you are buying from them).

 

[Merkava_4]

if you slack off your done........regardless of whether your a franchisee of not. you have to hustle.

Awe man, when you're an independent, you can sleep in 'til 2 o'clock in the afternoon and then get up and make a couple of stops.

 

[yogitech]

I may be new at the business aspect, but, not to tools and and dealing with techs. Keep in mind I have a good friend who is my current dealer. Hes agreed to help guide me along as much as he can. After 25+ yrs in the business I think hes on top of his game... He's looking to retire soon, so I'm trying to continue what he has built.

Also, Is anyone familiar with ISN? I've been to a couple of the tool shows they put on, and everything seems well organized and layed out. I think structuring the business will be my biggest obstacle. Not exactly sure what to do just yet.

Thanks everyone for the help.

Mark

 

[yogitech]

We haven't had a MATCO dealer in over two years. So theres lots of guys in the shop who are a little uneasy towards Matco. But, that also may be a chance to re-build trust in the guys seeing a familiar face.

 

[Billin21]

I may be new at the business aspect, but, not to tools and and dealing with techs. Keep in mind I have a good friend who is my current dealer. Hes agreed to help guide me along as much as he can. After 25+ yrs in the business I think hes on top of his game... He's looking to retire soon, so I'm trying to continue what he has built.

Also, Is anyone familiar with ISN? I've been to a couple of the tool shows they put on, and everything seems well organized and layed out. I think structuring the business will be my biggest obstacle. Not exactly sure what to do just yet.

Thanks everyone for the help.

Mark

I use ISN and Medco,they are both good companies. What kind of competition would you have and what kind of dealers are they. Is your competition good? Do they do their job, Show up, sell tools, warranty tools... ETC? I have said it with Cornwell and will say it about independents to, If a Matco or Snap-on dealer brings their B game, they will serve an independent or Cornwell dealer their ***... Just my opinion, but that's what I have seen time and time again.

 

[yogitech]

Awe man, when you're an independent, you can sleep in 'til 2 o'clock in the afternoon and then get up and make a couple of stops.

Merk, I don't think I'll have a problem with this seeing as how I can hardly sleep anyway..

 

[Merkava_4]

Keep in mind I have a good friend who is my current dealer. Hes agreed to help guide me along as much as he can. After 25+ yrs in the business I think hes on top of his game... He's looking to retire soon, so I'm trying to continue what he has built.

What brand of tools does your friend sell?

 

[yogitech]

I use ISN and Medco,they are both good companies. What kind of competition would you have?

There's currently a Snap On guy, and an independent that works out of an econoline van w/ no inventory ( no one likes him anyway) and my buddy who's an independent w/ retirement plans... Its really not as competetive as other shops.

 

[yogitech]

What brand of tools does your friend sell?

Gearwrench, Armstong, Martin, OTC, KD, Lisle, SK (who knows how much longer), Sunex, Gray, Astro pneumatic, Mountain, etc...

Always has everything in stock unless its a larger item. He also caters to bodyshops and truck shops.

 

[mrshaun]

The local mac guy has gone 1/2 ind and the rest mac. The techs are starting to shy away from him. He has stopped his warranty and it takes him 5 weeks to get a repair kit for a ratchet. So he is going down hill. He even re-painted his truck and took the mac signs off, he just put the mac stickers on again, but still no warranty on most items. now and then he will let you have a part off the truck.
Be careful in any decision you make.
Looks like Snap On and Matco are the franchises of choice.
Have a back up plan like someone else suggested.

 

[nelstomlinson]

Two questions: why would I buy from you rather than the Snapon or some other tool truck? Why don't you start buying into your retiring buddy's business?

Your buddy seems to have an answer for that first question, and since he wants to retire, you could buy it from him and do you both a favor. Maybe you could work with him part time for a while to learn the business?

People who are buying Snapon aren't looking for cheap, so you had better plan on giving better service than the other dealers.

 

[yogitech]

Two questions: why would I buy from you rather than the Snapon or some other tool truck? Why don't you start buying into your retiring buddy's business?

Your buddy seems to have an answer for that first question, and since he wants to retire, you could buy it from him and do you both a favor. Maybe you could work with him part time for a while to learn the business?

People who are buying Snapon aren't looking for cheap, so you had better plan on giving better service than the other dealers.

We've only recently acquired a Snap On dealer at the shop. He's a new dealer that doesn't have everyones trust yet. He's also having financial issues with his business and I don't believe hell be around much longer. Myself on the other hand can atleast gain the business from my co-workers (customers) alot easier and quicker. They don't have the Snap On craze like alot have mentioned. So, in a way I don't think I would have a problem having a customer base with them at least. At that point it will just be gaining other accounts at other shops.

Taking over my friends route is an option I was looking into, but, Im affraid that the asking price might exceed my ability. I think that it might actually be cheaper to go in on my own and do it at my own pace... Understanding that I'll be starting fresh but, I just have to work that much harder to get things working.

 

[SpiderGearsMan]

if you don't have the money , don't start a business
try to listen to dave ramsey or something , no money kills all business

 

[yogitech]

if you don't have the money , don't start a business
try to listen to dave ramsey or something , no money kills all business

I have start up money to a certain point but, I can't go out and buy out someones established business. You know what I mean? I have to start from the bottom. Just trying to weight out my options and see whats the best route to take...

Thank you all for the insight

 

[yogitech]

Thanks Spidergearsman!

I just checked out Dave Ramsey as you said and hese got alot of good information, thank you...

Mark

 

[Snappy]

The local Mac guy has gone 1/2 ind and the rest mac. The techs are starting to shy away from him. He has stopped his warranty and it takes him 5 weeks to get a repair kit for a ratchet.. So he is going down hill. He even re-painted his truck and took the mac signs off, he just put the mac stickers on again, but still no warranty on most items. now and then he will let you have a part off the truck.
Be careful in any decision you make.
Looks like Snap On and Matco are the franchises of choice.
Have a back up plan like someone else suggested.

That hurts

 

[Danglerb]

Part of why a franchise tends to have more success is that they won't let you in unless you have enough money to give it a chance. Because hundreds of other people have gone before you, they also have a pretty hard idea of how much money you need.

How good are you at selling things?

Not just taking orders for things people want, but actually selling them things they didn't plan on buying, can't afford, don't need, etc.?

How good are you at refusing an item you can't warranty?

How good are you at collecting debts and repoing tools?

 

[Skyline]

What do dealers do with used tools they repo? I guess there's two potential deadbeat purchase types, those that buy on truck credit, and those that buy on tool company credit.

If it's tool company credit, does the dealer still have to get involved in the reposession? Is the dealer on the hook for the money? Does the dealer end up with the used toolbox or whatever?

I assume truck credit comes right out of your pocket...so you now own a used tool. I gather eBay is useful for this, but I've never seen used stuff on my S-O guy's truck.

How often do dealers get the local sherrif involved? (Thats who enforces repossessions around here).

 

[yogitech]

Part of why a franchise tends to have more success is that they won't let you in unless you have enough money to give it a chance. Because hundreds of other people have gone before you, they also have a pretty hard idea of how much money you need.

How good are you at selling things?

Not just taking orders for things people want, but actually selling them things they didn't plan on buying, can't afford, don't need, etc.?

How good are you at refusing an item you can't warranty?

How good are you at collecting debts and repoing tools?

I'm extremely comfortable talking to people about tools and equipment. It's kind of my passion actually... suggesting a product that someone may need is not a problem.

I have a general idea of what is acceptable as a warranted item and what is clearly an abused item. But, depending on the value of the customer sometimes you have to go beyond he norm to keep the customer coming back for more.

As far as collecting a debt, I'll have to develop a system for dealing with that. But, I can guarantee that I'm not going to take no for an answer. It's my income and my family on the line. At that point its about number one first...

 

[yogitech]

Is there a set system for collecting debt? What do you base the payment on? If there is a default on payment, how do you attack it?

 

[sberry]

Good tools and sources for them as well as pricing is becoming more competitive every day, a tool truck isnt something I would want. Lots easier ways to make a buck, buy and sell a few used cars, a small garage with 2-3 stalls and work up a small steady reliable clientèle, take the stuff you are good at, avoid the long expensive jobs such as engine re-mans. Brakes, axles, wheel brgs, find a few customers that are turning away from dealers, you don't have to be drastic cheaper, just enough to be a bit of incentive.
I have a handful of customers that say, fix it, I never up sell something they don't need and am careful and thorough. I had one the other day with something that wanted shocks just cause he had never replaced them, I said, you don't need them,, but do need rear brk work, exhaust hanger and a U joint and brk line on front. Guy whips out the cash, thank me big. I could charge well without robbing the customer. In my case I try to avoid drive ability stuff and as much mystery as I can, brks, clutch, u joints, suspension parts, broken stuff involving welding. Things I can do within easy time frame without gobs of parts. I charge 30$ the other day for broken exh hanger I fix vs replace, same difference to the customer, gave me the money for 20 minutes vs just making the parts guy rich.

 

[nelstomlinson]

Taking over my friends route is an option I was looking into, but, Im affraid that the asking price might exceed my ability. I think that it might actually be cheaper to go in on my own and do it at my own pace... Understanding that I'll be starting fresh but, I just have to work that much harder to get things working.

I wasn't thinking of paying cash up front for the whole business. If you and your buddy trust one another, and are willing to work together, you might be able to work something out. Could you take over running the business, take a commission on sales and still have some profits left over to pay your buddy a return on his capital? You would be the active partner, with little capital invested but much labor, and he would be the mostly inactive partner, who would be looking over your shoulder and giving advice until you were ready to finish buying him out.

You could get a taste of whether you like it, and your buddy could get a taste of retirement, and if it didn't work out, he could buy back the 1/3 or 1/4 share that he sold you and go back to running it himself. Of course, if you two don't have a very solid friendship and handle the deal in a very businesslike fashion, you could ruin a friendship.

If you decide not to get involved with your buddy's business, try to ride along with him for a few weeks. Since he's a friend, will he let you look at the books if you aren't going to buy?

We've only recently acquired a Snap On dealer at the shop. He's a new dealer that doesn't have everyones trust yet. He's also having financial issues with his business and I don't believe hell be around much longer. Myself on the other hand can atleast gain the business from my co-workers (customers) alot easier and quicker. They don't have the Snap On craze like alot have mentioned. So, in a way I don't think I would have a problem having a customer base with them at least. At that point it will just be gaining other accounts at other shops.

Not all your potential customers will have the Snapon craze, but for many of them, the brands you will carry aren't what they are used to. If you don't carry the brands I always buy, why will I buy something from you? If you do carry the familiar brands, why will I buy them from you instead of the usual places?

You could probably get a lot of business from your old shop but you are going to have to have a good answer to that ``Why should I buy from you?'' question at every other shop you try to visit. Even at your old shop, you will have to be at least as good as the competition in the long run, to keep their business.

Whichever route you take, you may well find that what you end up owning isn't a business, but a job. You will have a lot of capital invested, and you will make wages for the hours you spend on the road selling tools, but you will also have many unpaid hours at home doing paperwork and hassling with suppliers.

You might want to consider taking that money and investing it in Treasury inflation protected bonds (TIPS). Work as hard and fast as you can at your current job all day, stay late to finish things up, and then spend some hours each night and weekend taking some accounting classes and such. Live on half your current income, and save the rest. That will be a good foretaste of what it's like to own a job, except that you will come out ahead financially.

 

[Dstosh]

Awe man, when you're an independent, you can sleep in 'til 2 o'clock in the afternoon and then get up and make a couple of stops.

Thats what my independent tool guy does-Not really, but somedays it seems like it.

 

[Britwrench]

You may not want to buy the businss of your friend, but someone else may.
So now you have a rival with an ESTABLISHED route and customer base, contacts, supplier information etc, etc. You will be working real hard to overcome that.

If you don't have enough money to buy into an established and proven business, you haven't got enough money to survive.

 

[garfunkle24]

You may not want to buy the businss of your friend, but someone else may.
So now you have a rival with an ESTABLISHED route and customer base, contacts, supplier information etc, etc. You will be working real hard to overcome that.

If you don't have enough money to buy into an established and proven business, you haven't got enough money to survive.

You make a good point to start out but I don't agree with your last comment. Every business was a start-up at one point.

 

[krusty the clown]

You make a good point to start out but I don't agree with your last comment. Every business was a start-up at one point.

it takes money to establish a business. buying an existing business is instant cash flow. building a business to the point that it has cash flow eats up a lot of capital. when i started with matco i had 12k in operating capital and 48K in inventory, the working capital was gone before before i was able to maintain my target.