Mobile tool dealers who still do business on a handshake can computerize to boost profits, says a Reno-based software seller.
Jon Jacobson, president of R/A Profit$, Inc., says his company's sales and finance program can double profits over three years. Hence the name: R/A stands for Revolving Accounts.
Once a route tool salesman himself, Jacobson called on the mechanics at repair shops who keep the motors humming. Such salesmen often work as franchisees for one of the major tool companies, such as Mac Tools, Matco Tools or Snap-on tools.
But a long tradition of doing business on a handshake and then allowing mechanics to pay for tools on time is a drag on dealer profits, says Jacobson, because the dealers serve as interest-free financiers.
This software, he says, will change that.
Dealer financing was not a problem back when a set of wrenches cost $15. But since repairs went high- tech, a set of wrenches now costs $480.
"For a dealer to take $20 a week, as before, no longer pays," says Jacobson.
Tool dealers using R/A Profit$ still can work out payment plans with their customers, he says, but now they can charge interest, which the software will track and tally. The software can reside on computer and online, where users can back up their customer files on a secure server at R/A Profit$ headquarters.
A typical dealer generates $1,600 a day in gross revenue.
And Nevada law allows an interest rate of 24.9 percent. So, over the course of three years, charging interest on a sales balance could double a dealer's profits, says Jacobson.
He expects to have a prototype ready by the end of October. It's being developed by Thomas Marshall, president of Concentric Systems and Associates of Incline Village.
R/A Profit$ already occupies a 2,285 square-foot office at 200 S. Virginia, chosen because the building is on the same power grid as casinos, which Jacobs says will ensure the infallibility and security of his extensive computer server network.
And, he likes its proximity to the University of Nevada, Reno, campus, because he plans to hire 10 students to handle customer tech support.
But neither software nor support is a difficulty. "The challenge," says Jacobson, "is getting the product to market, in front of dealers."
He plans to take the rollout in steps. "We don't want to do a huge launch out of the box."
First, he plans a soft launch in the Pacific Northwest.
"If we have to travel, it's close. Once we're comfortable with that," he says, "we'll add the whole West Coast, and then go to the East Coast."
A hired survey shows a saturation point of 12,000 dealers. The timeline: 600 subscribers in the Pacific Northwest in three months, then another 600 on the West Coast. And on to the East Coast by June. At that time, he plans to add a second shift of tech-support students.
Another challenge, he says, is gaining the trust of tool makers. The program can be customized for each franchise representative with a complete inventory of that manufacturer's parts and prices.
But, he says, competing dealers may be reluctant to provide all their parts and prices, for fear that R/A Profit$ might reveal it to their competitors. "We have no interest in doing that," he adds.
Another revenue stream beckons the software developer: advertising. It's tempting to think of promoting products to tool dealers, says Jacobson, who says he hates spam and pop-ups as much as anyone. So he's determined to cap promotional e-mails at twice a week. But he also plans to help customers by running dealer surveys that could help them order product. For instance, what were the top five tools sold nationwide last week?
As a mobile salesman, Jacobson says he started turning over the rocks of non-typical stops and found new profit streams. That creativity led to a job as sales manager at Snap-on tools. Since leaving that company, he says, "I still want to help other mobile dealers."
