Last week, Fastenal unveiled a business strategy that includes hiring up to 900 employees by the end of the year in order to get its salespeople out of their stores and into more customers’ offices.
Will Oberton, the CEO of the large MRO/fastener distributor, said the company will add 150 to 300 people per month for the next six months.
“The majority of the people we'll be adding will actually be part-time support people, which will allow the managers and the salespeople to get out of the store and contact customers,” Oberton said in a conference call with financial analysts, according to a transcript provided by www.seekingalpha.com.
“So we're really getting back on the Fastenal model, the pathway to profit model: add 15% to 20% more - or 15% more hours in the store, and you should get close to 20% more growth,” he said according to the transcript. “We've done a lot of work looking at the historical trends saying, ‘hey, part of our sales growth problem, a lot of it is we need more hours to make more customer calls.’”
The Minnesota-based Fastenal recently released its results for the second quarter showing sales increased 5.3 percent, but as the company looked at its results, it realized that it needs to get back to getting its sales people on more calls to customers.
Fastenal has also been steadily focusing on its fast-growing and profitable vending machine business.
“I thought that vending was going to automatically increase the efficiency in our stores,” Oberton said. “What I was missing is the tremendous amount of work to get to the position where it becomes more efficient, which it does, but there's a lot of work of introducing it and training it and setting it up. And all that work was taking away from sales calls. And that's what we're hearing from our managers.”
Fastenal will, of course, continue to seek more vending solutions for its customers. In fact, Fastenal installed 20 percent more machines in the first half of this year than it did last year.
The company’s manufacturing side of the business continued to climb in the past two months - more than the ISM numbers - but construction remains weak, according to company executives. However, Fastenal, like many distributors, say that the industrial side of their businesses still remains slow.
“So we can't do anything about the economy, but we do have the balance sheet and the strength to go out and add the people to grow the stores,” Oberton said.
To stimulate sales in the construction market that has been “treading water” Fastenal has begun offering additional construction products and will even expand those offerings in the quarters ahead.
Fastenal now has about 2,700 stores in operation, and nearly 16,000 employees.