Fastenal's second-quarter sales were up 5 percent and profit was up 7.5 percent, but another number captured analysts' attention during the company's earnings call this week: double-digit growth in vending.
The Winona, MN-based company boosted its FAST Solutions vending total 15.7 percent to 50,620 machines for the quarter compared to the same quarter a year ago. The sharp increase reveals a clear mission for the company, which has a "group of store employees, district managers and national account members that are keyed at driving that number," said CFO Dan Florness.
"The vending machine is a sign of engagement with your customer," he said. "If you are truly engaged with your customer, you should be able to put vending machines out there and it makes the business stickier. And it’s good common sense to have a reason to be in talking to your customer multiple times a week."
The company invested heavily in vending the past three years, building capacity in both personnel and equipment, according to President and CEO Lee Hein. That focus has placed the company in a "steady state" of vending installation, something it sees as a competitive advantage in distribution centers and factories.
"When a competitor comes in and they see our blue machines in there, our folks are starting to understand that how tough it is for the competition to get us out," Hein said.
At the same time, however, the company's growth of customers with vending dropped, giving Fastenal more impetus to push vending to customers of all sizes in all geographies. "We are targeting every customer that has the business potential to justify it, whether that customer is a national account or a local account and in Eau Claire, WI," Florness said.