How to Become a Tool Distributor

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Tool distributors have a selected area or territory where they sell hand tools and tool boxes to automobile mechanics. Some tool companies offer you an opportunity to operate a franchise and others allow you to become an independent business owner. You will need a certain amount of funding to purchase inventory and a truck. Good credit is a perquisite if you don’t have cash readily available. Tool companies usually provide training opportunities that can help you run your business more efficiently and effectively.

Contact the company you are thinking about working for and get as much information as possible. Tool companies usually have websites that feature a lot of information. You can also speak with a tool distributor recruiter who can provide you with information about the opportunity. Speak with a district manager as well. He can provide you with more information about the opportunity.

Fill out a distributor franchise application, if applicable. This application allows you to submit personal information such as your name, address, employment history, financial obligations, personal assets and additional information. When the application is submitted, the recruiting team will assess your ability to be a distributor.

Find out about the cost requirements. You will need a start-up fee which could range from $20,000 to $30,000 depending on your own personal budget. You will need to purchase a truck as well as inventory. The cost of the truck will depend on whether you purchase new or used. Inventory for tools could be as much as $45,000 in some cases. Determine if you have to pay any franchise fees or royalties.

Get financing from the tool company, your bank or other financial institution. If you apply for credit with the tool company, it may assign you a line of credit if you are approved. This line of credit is for financing your tools and truck. When you apply for this type of loan with a bank, you may have to use the equity in your home as security. Call your bank to find out about details. Some banks provide financing through the Small Business Administration (SBA).

Determine what type of training is provided. The training will provide information about accepting cash payments, submitting credit applications from mechanics for approval, filling out contracts, returns, credits, and many other policies and procedures. You will also receive training and assistance when it comes to collecting from delinquent mechanics. Many companies have headquarters where you can receive additional assistance from credit analysts, customer service personnel, collection correspondents and credit correspondents.

Tip

As a tool distributor, you will visit garages, car dealerships and other places that mechanics work. You will sell hand tools and tool boxes. Sometimes, you will need to replace or service broken tools. When you visit mechanic shops, there are always opportunities to sell more tools.

When you visit some shops, you may see a competitor from another tool companies selling tools as well.

Some tools come with an extensive warranty depending on the company.

Some of the tool boxes you sell are quite large, such as five or six feet tall and very heavy. Your truck should be equipped with a lift to deliver them.

Sometimes there are collection issues. Mechanics can be transient, and they move from shop to shop. You may have to track down mechanics who owe you money.

Tool boxes and tools will sometimes have to be repossessed. You may have to handle this function or it could be handled by your district manager depending on the company.

About the Author

Melvin J. Richardson has been a freelance writer for two years with Associated Content, and writes about topics such as banking, credit and collections, goal setting, financial services, management, health and fitness. Richardson has worked for several banks and financial institutions and gained invaluable experience and knowledge. Richardson holds a Master of Business Administration in Executive Management from Ashland University in Ashland Ohio.

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