Victory along the Marathon Route

Along a Winding Route, Marathon Tool Has Made All the Right Moves. Now in a Strip Mall, Its Front-Counter Sales Keep Business Hopping

By Alison Lutes, Contributing Editor -- Industrial Distribution, 12/1/2005

The aroma of ginger and spice from the Szechuan Garden to its right, and the whiff of solvents from the Nail Perfection store to its left, are the first indications that Marathon Tool and Industrial Supply Co. is not your run-of-the-mill distributor.

Located in a strip mall in Medway, Mass., Marathon's course has been long and winding, and not always free of bumps, but as it enters its 20th year in business, the company takes comfort in the ebb and flow of the construction market it serves.

"The nice thing about the construction business is that when new frames tail off, remodeling typically increases," says Bill Olson, Marathon's president. "Only two or three times have we not increased our sales over the previous year, and part of the reason is our good [product] mix, and knowing how to keep the customer coming back."

Back in 1986, Olson and his friend, Ken Pinkham, were both busy pounding the pavement as salesmen for W.W. Grainger.

"We started to hit the tail end of the construction boom, and hit the front end of the collapse," he explains. Internal changes at Grainger had both men pondering a career move, and months later, Marathon Tool came to life, out of Olson's basement in Norfolk, Mass.

"We both said let's give it a try, and the next thing we knew, our wives Donna [Olson] and Karen [Pinkham] were loading trucks in my front yard, while Ken and I went out selling," says Olson.

"Even the neighbors were in on the act," adds Donna, who was thankful to have the muscle to help unload trucks.

From these humble beginnings, Marathon Tool has grown to a staff of 17 that sells in four states. Pinkham, co-founder of the company, is now a manufacturer's rep that calls on Marathon. "It's worked out nicely," Olson says, "as he has so much knowledge about the many brands we carry."

The company started with the idea of being an industrial supply business, but soon cut its niche in carrying, demonstrating and fixing nailing guns.

"We knew nothing about nailing guns, as they were relatively new at the time," says Olson, "but they took over."

Today, nailing guns are the company's biggest seller, followed by cordless tools, power tools, and nails. While Marathon Tool has serviced municipalities and utilities, more than 80 percent of its current business is in residential and commercial wood framing.

"Nail guns have evolved dramatically since we got into the business, with the entry of more manufacturers, and smaller and more comfortable tools," says Olson. "The smaller mini-coil guns, with adjustable depth used for siding and subfloor work, have really come on strong, and pneumatics are still the dominant player," he adds.

A year after setting up shop in his garage, Olson moved the business two miles down the road to a retail space just feet from the Boston-bound commuter rail.

"The place would shake as the trains pulled up," says Donna, who serves as the company's vice president.

Located downhill from a commercial parking lot, the shop was susceptible to flooding, and after its first incident, the Olsons started thinking again about relocating.

"Luckily, one week before the disaster, we bought shelving, so all inventory was off the floor," Donna adds.

Five years later, the company was outgrowing its home in the neighboring town of Millis, when it ran into some real estate luck. Olson, who had since bought out Pinkham, was about to sign a lease for an industrial warehouse in Franklin, Mass., when he was approached about an abandoned supermarket down the road.

"We knew it was much too expensive for us, but we showed the realtor our lease in Franklin, and he matched it—and bought us a forklift to boot. It was completely by accident, and no risk!" according to Olson.

A CVS pharmacy came next, and the retail mall on Route 109 was soon back in business.

Knowledgeable help at the distributor's front counter is credited with bringing in roughly one third of Marathon's annual sales. A hardware store behind the shop and a nearby mill are rented to house large equipment, allowing the smaller items to squeeze into valuable counter space.

"We're constantly trying to figure out how to get more and more in a small area," says Olson. "Power tools draw people in, so we want to show plenty of them up front. If they are too far away, they might go out the door for free."

The importance of brand cannot be understated, Olson says, and his front counter shows it. While customers try to follow along brand lines, the staff is mindful to fit the customer to every tool, regardless of the brand.

"I can't just say, 'You'll really like this circular saw.' Just like shoes, there are certain styles that just don't fit," Olson explains.

One manufacturer's rep that works closely with Olson when it comes to the lines he chooses is Jack Hurley, president and owner of Jackson Sales in Brockton, Mass.

"I've worked with him since day one, and Bill is one of those new-age guys, one of the future guys of distribution," Hurley says. "He's progressive, and he goes out of his way to find good people and good lines."

Some of the smaller lines the distributor carries were found at The Specialty Tools & Fasteners Distributors Assn.'s annual trade show, and these tools make Marathon unique, according to Olson.

"STAFDA is awesome that way. We can find hundreds of small vendors there that differentiate us from the Big Boxes. You can't find a German Stabila level just anywhere," he says

Marathon has also found payroll service discounts and credit card processors through the construction trade show.

Add-on sales are second nature to Marathon's counter staff, who are trained to push accessories with every tool that leaves the store.

"If there is an accessory that attaches to a tool, you have to make money on it, because you're not going to make money on the tool," Olson says.

If sales are not moving, accessories are shifted around and the counter freshened up.

"We've never had a professional redesign of the counter—we just do what makes sense to our customer. The more stuff out there, the better," Olson notes.

Marathon hangs its hat on a bustling repair business that employs three full-time people, that according to Olson, keep the customer coming back.

"We know what we're selling, and we know how to apply knowledge, how to attach this to that," he says.

It's not uncommon for the repair department to help a customer that left Home Depot, three miles down the road, to find and buy a tool at Marathon.

"Some of these 'Big Boxes' don't even know what they carry, or how one thing works with another," says Olson.

According to Olson, his repair department has much more life experience than actual time in the business. Two of his employees had already retired, but had excellent work habits and did not want to sit idle, so the distributor hired them, and with little effort, taught them how to fix tools.

"It's a testament to their intelligence and backgrounds that they were able to pick this up quite easily and make for a valuable part of our team," Olson says.

Repairs typically take two to three days, but if a customer is loyal, the company can turn the repair over "like lightning," he adds.

Inventory and money, and finding the right balance between the two, is one of Marathon's biggest challenges, according to Olson. The price of gas has complicated matters, pushing the company to rethink the amount of driving it does to job sites and its rental properties.

"From the middle of 2004 to the middle of this year, we spent $10,000 more on gas than in the previous year. We had to tighten up on deliveries, and our customers understand it. We have not had one gripe," Olson says.

Another concern is the ever-increasing cost of healthcare for the distributor's 17 employees. "It's frustrating," says Donna. "Small businesses like ours are paying the higher premiums. We need the government to step in and subsidize guys like us."

Adds Olson, "Donna had cancer. She's doing well, but healthcare is certainly not something we're going to scrimp on, but we have had to make some changes. I don't see any answers, and I don't see prices coming down any time soon."

Olson's five-year-out, unlimited resources dream is to be in a bigger building to allow for better-laid-out displays, and an enhanced repair and demo area. But, he stresses, the tight-knit group he has built would not get much bigger.

"I'm at my comfort level. More people means more hours, and I don't want employees working weekends," Olson adds.

Previously marathon runners, the Olsons now are avid cyclists, and the husband and wife team train for bike rides that raise money for cancer research. "We want to have a life on our weekends, and so far, we've gotten away with it!"