Tool King expects to more than quadruple sales to $100 million in 3 years
With about 80% of its sales now on the web, Tool King LLC is building toward $100 million in sales within three years, up from about $20 million last year, managing partner Donald Cohen tells Internet Retailer. “We’re seeing much stronger opportunities and better utilization of our resources on the web,” he says.
To fuel its online growth, Denver-based Tool King is doubling the number of SKUs on ToolKing.com over the next six months to 14,000, breaking into new categories including lawn-care products such as lawn mowers, Cohen says. It’s also beginning to sell into 14 European countries plus markets in Africa and Asia.
While increasing sales, Tool King, No. 151 in Internet Retailer’s Top 300 Guide to the largest e-retailing sites, is also reducing shipping costs, Cohen adds. The retailer began using a new Microsoft Small Business Solutions Great Plains web-based order management system seven weeks ago that automatically e-mails online orders to UPS. Although ToolKing.com uses UPS to ship about 90% of its orders from Tool King’s warehouse in Lakewood, CO, it’s planning to use the new Great Plains system to increase the amount of products fulfilled and shipped from UPS’s warehouses to realize savings in shipment costs, Cohen says. He notes that Tool King expects to ship about 50% of its orders through UPS’s warehouses within two years.
The Great Plains system also automatically e-mails replenishment orders to Tool King’s suppliers as online orders are received. Tool King saves on freight costs by having suppliers ship products directly to UPS warehouses closest to its end customers, rather than having suppliers ship products to its Colorado warehouse, Cohen says, adding that he also saves on using UPS’s warehouse space on an as-needed basis instead of expanding Tool King`s own warehouse space. Overall, he figures to save about 20% or more on freight costs using the Great Plains order management and UPS outsourcing systems.
The Great Plains system cost about $200,000 to install on Tool King’s own web servers. “We’ll pay for the system in freight costs savings in the first 18 months,” Cohen says.
Back...
