Start a tool company

[d.mcfarland]

From a very educated business major, you cannot profit right now doing what you want to do.

You basically want to be Snap-on minus the truck service. Can you start a business and profit? Yes. Can you make high quality tools in the USA and profit by selling that above their cost to produce? Probably. Will anyone pay the price you will need to sell them for in order for that profit to happen? No.

Main reason being is that you have no name recognition, high startup costs, barrier to entry in the market, high per unit costs, and a society that does not want to pay the price it costs to produce high quality products.

 

[ChrisLS8]

Got some chuckles out of this.

 

[gatlibs]

It would be pertinent to know prices for something. I'm not sure how others have come to the conclusion guesses earlier in the thread. I would think that the cost of learning the price of using tool manufacturers to create a line of product would be in the three digits worth of cost per quote.

I'm not convinced that the cost per tool of the WF products nor Wilde is that high. I doubt that companies sell products at advertised sales prices for less than an amount which renders a product.

I think that there would be a large market for a tool seller who sells the same items with a different brand - even without a warranty. You could just look thru the thread in here for equivalent tools sold under different brands. Somehow I have purchased many a Lisle branded tool for much less than Lisle's M.S.R.P.

I think that there would be a large market for a company that either directly compares products and prices to other companies with straight links to the other web-sites or maybe for legal reasons just gets around via word of mouth. So many specialty tools and hard line tools are available from current manufacturers which sell their lines to tool sellers that I would guess that no other option of entering the market as a tool seller would be close in affordability.

Base the company in a state that doesn't compact for the purpose of sales or use taxes. Always charge shipping costs. Eventually, technicians could see that hey all of the rebranded stuff is available from this one web-site in an easy to find way and the charge is sometimes one third plus shipping.

In the many times that I've went shopping for a particular tool to accomplish a task with budget minded persons I've never heard one of them mention warranty. The cheapest price is what was desired to complete whatever task required it. The individuals which are worried about warranty are not the ones looking for the lowest price.

I know of no reason why you cannot realize your dream; I don't even know your name. Even if this model isn't yours, then I'd suggest that you continue to post with your progress here. It seems that this forum works best when the poster is continuing to update so that the community has new information to react to reading. If you don't, then there will be just more posts about the same things indefinitely. Good luck.

 

[lardy1]

While I totally support the concept of buying domestic over import, I don't see a domestic upstart in this highly competitive arena being able to compete at a profit. I fume a little bit inside when people say COO doesn't matter anymore. But I also think the reality is that the people that are truly committed to buying domestic are a very small segment. That segment does produce some massive sales. But the established competition in that arena seem to stack the deck against new ventures.

My $.02.

 

[m6z]

You could rebrand existing tools that are made in the USA. Starting up your own foundry is an entirely different matter.

You've got to find something that'll set your brand apart, what's that going to be?

I would think tool sales in general are on the decline. More people are leaving repairs to the professionals.

 

[sberry]

This is like saying I am going to start a store tomorrow and kick Walmarts azz.

 

[Oggy]

Admittedly, I did not read even half of the posts here.

If I were looking into this, seriously looking into it. I would first find some industry resources that can provide the market data.

Second, I would parse that data for what products have the biggest gaps.

Third I would look into whether I could meet the demands that are needed to be profitable, given the barriers to entry.

I'm interested in what the best value for my money is, and that varies for me with what it is. For a tool I use a lot, I want durability, if I'm going to use it only once and never again, I want inexpensive, it changes.

Sent from my Pixel 2 XL using The Garage Journal mobile app

 

[fatfillup]

To the OP's question, yes I would be interested in a new tool company producing here in the USA. Love the idea of creating jobs and offering new products to consumers.

Viability is a whole other question

 

[mcj115]

The thing you need to realize here is that to replace Craftsman you need to start a marketing company, and not a manufacturing company. Craftsman has not and does not make a single item itself; if the future it's parent company will manufacture tools but not as of today.

Now lets look at Tekton. Mid priced descent tools with a great warranty. The sell US made screwdrivers, pliers, and some wrenches. Granted they have a mix of imports and US production tools. You won't find a manufacturing facility with their name on it, it doesn't exist. They, likely, contract with Wilde, Western forge, and others to make their spec tools in the US and abroad. If they are good marketing company you would ever see a packaging site or distribution center; a good modern asset light company would just use contractors such as PCA (Packaging Corporation of America) and DHL (for distribution) to keep fixed costs and assets off their books This is very similar to what Craftsman was in their golden era.

As others have said if you build a better mousetrap customers will come. The problem is that most hand tools are essentially a commodity. No one, without economies of scale, could justify the costs of building a facility for a new brand of mass market tools with no recognition. This is why any startup will outsource their production. SDB (and Craftsman) are the exception with their upcoming plant in Texas. My guess is that this SBD "Craftsman" plant will eventually produce some Proto tools (also under the SBD umbrella). Heck Tekton may even contract with SBD to make tools at the new site under their brand.

 

[lis2323]

Wow. Not to be rude, but the OP asked the question about this being a crazy dream. The answer is YES

 

[sberry]

You can buy a wheel bearing internet white box for 40$. I bet Napa or similar can get it 25. They change 1 digit on the part number and slap a sticker on the box in the back room at the store and brand it Napa, 90$ You can find it internet under a semi brand for 90 too,,, gives the illusion you are buying up in quality and pricing apples to apples. Even if you lose 1/2 the sales to the competitor you each make more than if they sold for 40 and got all the sales.
Its why some things sold cheaper in a different venue are actually the same as the next level, not much to be saved from extra inventory and work to save a few cents when there is 50 bucks to be made putting it in a different box.

 

[sberry]

If I could afford to do this I wouldn't bother.
Be like winning the lucky mega lotto,,, and buying tools to work on rusty junk. You could hear my tools hit the floor.

 

[ChrisLS8]

You can buy a wheel bearing internet white box for 40$. I bet Napa or similar can get it 25. They change 1 digit on the part number and slap a sticker on the box in the back room at the store and brand it Napa, 90$ You can find it internet under a semi brand for 90 too,,, gives the illusion you are buying up in quality and pricing apples to apples. Even if you lose 1/2 the sales to the competitor you each make more than if they sold for 40 and got all the sales.
Its why some things sold cheaper in a different venue are actually the same as the next level, not much to be saved from extra inventory and work to save a few cents when there is 50 bucks to be made putting it in a different box.

Companies take advantage of ignorance. Most people don't want to do the legwork to see where the river starts. I never get took like this, for instance Koyo or NSK make the OEM wheel bearings for my Nissan, they are 130ish at a normal dealer each, 90 ish at a reputable Nissan shop, 35 something on Rockauto or since I looked a while I get mine for 28 off Amazon with 1 day shipping for an NSK, I bought 6.

Ishino stone makes most the OEM gaskets, same for Honda and Acura and a few others. Pop the OEM number plus ishino into eBay and get OEM gaskets for 1/4 the price of dealers

 

[Mechanical Noise]

Whatever you do don't listen to persons on this forum about warranty. They all want free warranty for everything. That was a part of the reason why Sears went into he toilet.

The Craftsman hand tool warranty generated business for Sears. They kept track of the numbers and they knew they were coming out ahead.

Harbor Freight has practically the same warranty for most of their hand tools. Presumably corporate suicide isn't their plan.

 

[Monte]

Why so negative ? If Elon Musk can start a car company from scratch....

 

[Bigblockyeti]

Why so negative ? If Elon Musk can start a car company from scratch....

He didn't, the DOE did. Musk was just was just an executive deciding how to spend others' money.

 

[Parrothead]

The tool buying public doesn't give a **** about COO nor do they perceive CM as poor quality. Therefore your demand will be very thin in a very crowded field. (GJ distorts our perception of reality)

If you want to become a millionaire in the tool business you better start as a billionaire.

Yep! There’s a 1 million square foot food production facility that’s never seen a tool truck, and wouldn’t care if one showed up. The maintenance guys use stuff from AutoZone, Lowe’s, Menards, formerly Sears. And those are quality tools to them.

The general public doesn’t give a rip about COO, and not only don’t they consider Craftsman poor quality, they perceive it as a quality tool. In their defense, I’ve got a lot of CMan USA and am very pleased with most of it.

Good luck if you try it, but be aware you’re going up against some longtime players with a more established history.

 

[dsaabm]

He didn't, the DOE did. Musk was just was just an executive deciding how to spend others' money.

A DOE loan in 2010 gave Musk the $6.3 Million he invested in Tesla in 2004?

 

[Man of Many Vices]

Random thoughts...
Find one industry that you know something about. Observe what repetitive tasks its workers perform that could be improved with a simple tool. Make that tool. Let them try it out. When they agree that it is useful, labor-saving, safer, more durable, cheaper, etc., sell them 1,000 pieces.
I bumped into a seller at a local swap meet making leather belts and pouches on the spot. As I appreciate handcrafted items, I spent a little time talking to him about his fine work. He wanted to hire me on the spot because I understood quality, and he just got an order from a local Amazon warehouse to make thousands of holsters for their belt-carried inventory "guns."
One customer/user needing thousands of tools is an easier sell than one tool per customer multiplied by thousands of transactions.

 

[sberry]

Obviously starting with no experience in the industry.