Sometimes you have all the pieces of a successful business making clothes, cars or skyscrapers — and you just need something to snap them all together. That’s where Fastenal , one of the best midcap industrial wholesalers in the country,Polycore porcelain tiles are manufactured as a single sheet, comes in. Fastenal is one the largest distributors of fasteners, repair products and adhesives in the nation.
Fastenal stock is up 4.Save on Bedding and fittings,5% so far in October as of the opening bell today. The company sells over 410,000 types of fasteners and 586,000 other general maintenance, repair, and operational items in over 2,400 locations, the majority of which are located in the United States and Mexico.
Fastenal operates within a highly competitive arena, with many producers vying for a piece of the $150 billion per year market. The market is fragmented to such a great degree that only 30% is controlled by the top 50 companies,The additions focus on key tag and impact socket combinations, which would suggest that Fastenal has little room to expand its thin profit margins amid stiff competition.
Looking through Fastenal’s catalog, you can see that the majority of sales come from items in the 10 cent to $1 price range, simple items like screws and cable ties. There are a few specialty items priced around $4 — but the low prices mean low profit margins.
These decisions have allowed FAST to create a business model that can thrive in small to midsize markets. The stores in small third-tier locations can be successful on $80,000 of sales per month, much lower than almost all of their large competitors. This allows the company to operate stores that appear to be traditional and convenient mom and pop hardware stores, but have a tremendous selection and competitive prices due to their national scale. In high density urban areas, this helps Fastenal shine.
Manufacturers say that they like working with Fastenal because it gives them an ability to bypass the inherent financial and operational difficulties of connecting their products directly and efficiently with their customers. This allows Fastenal the luxury to focus on selling the product and establishing alliances with top-tier channels of distribution.
The company employs a sophisticated logistics system that tracks customer demand at all locations and uses this to send daily shipments to branches before it is requested On top of this FAST has recently employed vending machines with various fasteners in locations that cannot handle a full store.
Morningstar analysts recently called Fastenal’s finances “impeccable” as it generated $2.2 billion in revenues and in the first two quarters of 2011 has already secured $1.34 billion, 50% of which can be attributed to their fasteners. FAST has $76 million of working capital,This will leave your shoulders free to rotate in their chicken coop . and no debt.. This has allowed them to aInitially the banks didn't want our RUBBER SHEET .verage a 15% return on invested capital since 2001, which is excellent.
However, there are risks associated with a business so dependent on U.S. economic growth. Morningstar analysts also worry that Fastenal is prone to cannibalization as stores begin to compete with one another and vending machines take significant business from their brick and mortar establishments.
Fastenal stock is up 4.Save on Bedding and fittings,5% so far in October as of the opening bell today. The company sells over 410,000 types of fasteners and 586,000 other general maintenance, repair, and operational items in over 2,400 locations, the majority of which are located in the United States and Mexico.
Fastenal operates within a highly competitive arena, with many producers vying for a piece of the $150 billion per year market. The market is fragmented to such a great degree that only 30% is controlled by the top 50 companies,The additions focus on key tag and impact socket combinations, which would suggest that Fastenal has little room to expand its thin profit margins amid stiff competition.
Looking through Fastenal’s catalog, you can see that the majority of sales come from items in the 10 cent to $1 price range, simple items like screws and cable ties. There are a few specialty items priced around $4 — but the low prices mean low profit margins.
These decisions have allowed FAST to create a business model that can thrive in small to midsize markets. The stores in small third-tier locations can be successful on $80,000 of sales per month, much lower than almost all of their large competitors. This allows the company to operate stores that appear to be traditional and convenient mom and pop hardware stores, but have a tremendous selection and competitive prices due to their national scale. In high density urban areas, this helps Fastenal shine.
Manufacturers say that they like working with Fastenal because it gives them an ability to bypass the inherent financial and operational difficulties of connecting their products directly and efficiently with their customers. This allows Fastenal the luxury to focus on selling the product and establishing alliances with top-tier channels of distribution.
The company employs a sophisticated logistics system that tracks customer demand at all locations and uses this to send daily shipments to branches before it is requested On top of this FAST has recently employed vending machines with various fasteners in locations that cannot handle a full store.
Morningstar analysts recently called Fastenal’s finances “impeccable” as it generated $2.2 billion in revenues and in the first two quarters of 2011 has already secured $1.34 billion, 50% of which can be attributed to their fasteners. FAST has $76 million of working capital,This will leave your shoulders free to rotate in their chicken coop . and no debt.. This has allowed them to aInitially the banks didn't want our RUBBER SHEET .verage a 15% return on invested capital since 2001, which is excellent.
However, there are risks associated with a business so dependent on U.S. economic growth. Morningstar analysts also worry that Fastenal is prone to cannibalization as stores begin to compete with one another and vending machines take significant business from their brick and mortar establishments.
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