A flatter playing field

By Staff -- Industrial Distribution, 11/1/2000

The economic and construction boom has sparked solid hand tool sales gains each year since the mid-1990s, and although experts foresee several more years of steady gains, higher-quality imported products are becoming a competitive force.

According to The U.S. Hand Tool Market report published last year by Business Trend Analysts, Inc., the average annual growth rate of U.S.

manufacturers' sales of hand tools is projected to be 5.7 percent between 1998 and 2008. In addition to surveys, the Commack, N.Y.-based market research firm factored U.S. Department of Commerce data into the report.

Contractors aren't the only good hand tool customers these days. Ron Foltz, the president and general manager of Tallahassee, Fla.-based Cornerstone Tool & Fastener, Inc., says manufacturers are buying more. Foltz's customer base is in a 130-mile radius and he says he's benefited from extensive industrial market retooling, particularly in southern Georgia. The Specialty Tools & Fasteners Distributors Assn. member is also selling more to vocational technical high schools and post-secondary schools.

Distributors agree that hand tool imports have created price pressures, particularly since the quality of these foreign-made products has improved over the last decade. Foltz says proper marketing is a necessary component of selling the higher-priced domestic-made products.

User brand preferences are less of a sales factor now that most tools sold are considered quality tools, says Bill Derville, president of the five-branch Portland, Oreg.-based General Tool & Supply Co. Derville also explains that even though hand tools are not a commodity item, the increasing similarity in quality among products has led to a commodity-like market.

"In general, most of what you see available are quality [tools]," Derville says. "While some are better than others, you don't see any shoddy quality in the workplace anymore."

K.B. Winterowd, president of Construction & Industrial Supply Co. in Kansas City, Mo., expresses a viewpoint similar to Derville's when he says that although he buys few imported tools, the changes do affect him.

"There are a lot more imported tools accepted in the marketplace," Winterowd says. "You're finding large distributors ... going and making deals with people who are bringing in good quality imported tools and bypassing the image companies."