There's no question that the accessory market is of tremendous importance when selling power tools and equipment. In an environment where the economy continues to see-saw back and forth, accessories and add-on items become even more crucial.

Indeed, some power tool distributors claim that while revenues are down, margins in the power tool sector are actually higher because more users are keeping their tools longer and making accessory purchases. And many distributors are re-examining their entire philosophy behind selling accessories, including incentive plans for salespeople and which lines to stock.

"Accessories are the bulk of our business right now," says Steve Bailey, owner of Bailey Tools and Supply, with locations in Louisville, Ky., and Evansville, Ind. "People just aren't investing in power tools right now, so accessories are a larger part of our business. Margins are higher, but dollar figures are down."

In an effort to boost those dollar figures, Bailey implemented a new incentive program for his inside salespeople two years ago. His sales staff's commission is now based on the total amount of the invoice.

"The inside people are compensated on the dollar amount that is on the ticket, so in a way they do have an incentive to add accessories," he says. "So, if somebody is buying a drill or something, they will definitely try to add something else on. It's helped us as far as increasing dollar figures per invoice."

However, it's not always as easy as one might think to add accessories. Most distributors have special accessory packages ready as pre-assembled kits for specific tools, so selling add-on items becomes easier. Even so, the salesperson must be educated on the customer's application to capitalize on the higher margins — often between 20 and 40 percent — that are found on most accessory items.

"We usually try to package something together with the tool and get creative and come up with an assortment of accessories to complement the power tool," says Leo Fay, operations manager for Pro Tool Supply in Waltham, Mass. "Better yet, we find out what the customer is doing and what the application is.

"The biggest thing is having somebody competent enough to know the stages of the construction process, not only to help the customer with the application, but actually help make it easier for them."

Fay offers an example: a customer drilling into concrete. In order to simplify the job, Fay's inside sales rep will inquire if the concrete contains rebar, a stainless steel reinforcement product found in many highway bridges, parking garages and other structures. If so, that signals an automatic response on the seller's behalf to add on a rebar cutter, a stronger drill bit specifically designed to cut through rebar without breaking.

"We try to set up different point-of-sale products around the counter, but the biggest thing is just keeping your ears open and listening to what the customer is doing," says Fay. "The hard part is that it takes a lot of experience."

Fay notes that because Pro Tool delivers to a wide range of construction sites, the need for selling add-on items is even greater, in order to cover increased invoicing and delivery costs.

Rick Leighty works the inside sales department for Western Tool Supply, which has locations in Oregon, Washington, California and Idaho. He notes that pressure from larger distributors forces Western Tool to match prices on items such as miter saws, table saws and drill presses. Therefore, it's a necessity to cultivate add-on sales for those items.

"There is more money there, as far as our margins are concerned, so we always try to get add-on sales for the tools we sell," says Leighty. "Especially because we match prices on the tools. We just try to direct the customer to accessories that they might need down the road. That works to increase sales here, but also helps the customer, so they don't have to make a return trip."

According to Leighty, it's important to walk a fine line when pushing for an accessories sale. Often, he'll first recommend only what the customer needs. If a customer is purchasing a compressor, he often will need air hose, as well. A customer purchasing a new planer will most likely require a dust chute, and somebody buying brooms might need dust masks and sweeping compound.

"You don't want to be too pushy, but certain tools require certain accessories that they may not want to buy right away, but we know they will need eventually," says Leighty.

At Burns Power Tools in Fall River, Mass., vice president Jeff Burns says that although power tools make up 25 percent of sales, the segment easily draws the lowest margins. Higher margin accessory items, however, make up 40 to 50 percent of sales. Obviously, the accessories category is "critical to make the whole thing work," says Burns, noting that power tool sales are down again in 2003.

"We try to go to market as an application specialist," says Burns. "If they have any type of cutting problem or finishing problem, we have that area of expertise and we have a full sharpening facility, as well, and we can do special grinding. We try to position ourselves as a resource to solve cutting or finishing problems. We try to leverage our expertise as much as we can."

When it comes to leverage, management at Centaur Enterprises is turning more to the manufacturer, and putting the success of its accessory lines in their own hands. The Grand Island, Neb., construction house is in the infant stages of a program that will give vendors more latitude in deciding what accessory items to stock at Centaur, and how best to market them.

"What we'd like to do is allow them a certain amount of inventory space, and let them figure out how to make it perform, and make sure we get our return on investment and still meet our customer demands," says owner Wayne Garrett. "We're willing to turn it over to them more and more, and let them decide which accessories they want in here and what they think we can sell. We're opening up the door to our vendors.

"It gets to the point where it gets very crowded for accessory space. The big objective is to let the vendors focus on what they are experts at. By turning it over to the manufacturers, it holds them more accountable for product selection, marketing, display and training."

Garrett said the move will free up time, an invaluable asset he claims his staff has too little of these days. By streamlining the accessories process, he also hopes to eliminate the interpretation and wrong application problems that can occur because too many people are involved in a somewhat inefficient process.