Attached you will find a copy of a letter currently being circulated by someone whom I believe to be a Current Distributor who wishes to remain anonymous. Mac Tools Canada has never had a Distributor by the name of J Robson. This in my mind does raise the question, why is he not proud of being a Mac Tool Distributor and share his true identity. This creates a great opportunity for me to address each point and share with the entire distributor force how we are performing to date. I would also like to comment on the positive and negative aspects an association could bring to your independent Mac Toots Distributorship.
Pt#1 Serious Problems, Mac Tools has just gone through a major reorgariization of its distribution centres. Mississauga Ont. and Sacramento Ca. were consolidated into the Columbus Ohio facility. The driving factor behind this initiative was that the Canadian Distributor could be better served from an inventory of$40M than Sl.5M. Although all was not smooth in the transilion we definitely feel the worst is behind us. This is evident by the recent service levels and the fact thai shipments arc arriving in a timely manner.
Pt#2 This news is old and not very accurate. This was addressed by Tim McDonald in the recent Distributor meetings. Mac Tools in the US has initiated a program called Mac Direct. These Mac Direct distributors are Mac Tool employees. The main reason behind this program is to become better deployed in the field and to improve the ratio of Mac distributors to that of the competition.
There are no plans to introduce Mac Direct in Canada. Mac Tools in Canada enjoy a higher route fill ratio than that intire US. A market survey conducted in 1993 and 1996 established that Mac owned a steadily increasing marketshare of the mobile tool business in Canada. The geographical size of Canada and population would make managing the employee distributor very costly, and not feasible. We do however need to develop some additional strategies to fill the open routes we presently have identified. These plans will most likely be centred around more creative financing of new traditional distributors.
Pt#3 This is once again very old news, it was in 1995 that we experienced poor service levels. During the transition the service level dropped for a 4-6 week period. I am happy to report this has improved over the past few weeks to be currently at the highest ever experienced in Canada, I think you will agree. Current back orders are at an all time low. Tool truck inventory managenient is the responsibility of the distributor and the mix and level is as individUal as the sales volumes for each Distributor. The Distributor that plans what he will sell in the week and has that product in stock will enjoy a much higher fill rate from the truck than the Distributor that has no plan and is taking orders.
Pt#4 While credits were delayed during the transition due to some computer programming issues I am happy to report that these issues are all behind us. If you have any outstanding credits please contact your DBM for follow up. The terms of the Distributor Agreement in regards to accounts is Net 30 days or 2% discount for payment in 10 days. This compares quite favourably to the terms offered by other major mobile tool competitors. If for any reason you are not receiving you credits in a 30 day period please contact your DBM for follow up.
PT#5 As far as refinancing is concerned, this is as personal to your own given situation as the clothes you wear. If the plan that was laid down for you at the outset of your business has been followed by your self, there should be no reason to re-finance. in my experience I have found that some Distributors abuse the bank line of credit to enhance their lifestyle, so to that point, some of the problems are self inflicted. Mac Tools continues to be a viable opportunity if you follow the plan. Most importantly Mac Tools remains very committed to the success and profitability of its independent traditional distributors. This is best evident in our reccnt change in distributor margin on hard-line product.
PT#6 Is an association a good idea? An association can be okay if all of the thoughts and actions are laid in a clear, concise, thoughtful manner so both parties can grow together. in other words, a win, win situation. Associations are not good if they become adversarial in nature. In other words if you are going to join an association to change the world. you will be sadly disappointed. it is my view that if all Mac Tool Distributors would take steps to work the Mac Tool program, then each one will have their financial needs satisfied. Certainly the longer term distributors will verify that point. The majority of Mac Tools distributors became distributors to utilize the entrepreneurial skills and motivation each one possess. This drive, plus knowledge and experience is what makes the difference in sales volume and efficiency of operating each distributorship. I believe that the rewards you get out of a Mac Tool distributorship-are still in direct proportion to the work ethic you display.
If you have any concerns about this letter or my reply, please contact me personally and I will be glad to help you out. Thank you once again for your ongoing support andd committment to the success and growth of Mac Tools in Canada.
Phone Office 1-800-668-9146
Home 1 905 847 8589
Voice mail 8978O
Steve Eyre
Sales / Operations manager
Mac Tools Canada.
cc John Cory
Tim McDonald
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