Former District Manager at Fastenal
Nick is a Former District Manager at Fastenal and spent over 7 years at the company moving up the ranks. He joined as an inside sales guy and went through the Fastenal School of Business before being promoted directly to a Branch Manager role. Nick then moved up to District Manager where he ran 7 branches in Alaska. He has experience with onsites, selling and filling vending machines, and operating the ‘machine behind the machine’. Nick is now the Regional General Manager at Matheson, an industrial and specialty gases distributor.Read moreView Profile Page
- Great story about one of FAST founders that represents the culture of the company
- Low pay seems to be a large driver of employee churn. This could pose problems longer term unless FAST manage the churn carefully and continually train new graduates via School of Business.
- Fastener category is 90%+ private label with 80-90% gross margins!
- Branch Managers lose a % of revenue to onsites but get more time back to serve smaller customers and recoup the lost revenue
- By being Onsite with the customer, Fast effectively becomes a quasi-employee for customers
- Vending may reduce branch sales in the short term because customers save so much through wastage but the customer spend grows to other categories over time
- The flexibility of the vending machines is impressive and it's possible to serve all kinds of use case for the customer
- Challenges onboarding new vending customers
- Unit economics of a typical vending machine
- How customer behaviour changes once they adopt a vending machine
- The importance of owning the distribution to improve the customer experience
Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.
Nick, can you share some context to your role and responsibilities when you were at Fastenal?
I stared with Fastenal as an inside sales guy, learning the business. Went to outside sales and was doing really well. I got promoted to the manager position, ran the store there for about a year, and then moved up to district manager position. I did that for a little over five years, up in Alaska.
Did you go through the Fastenal School of Business?
Yes; I went through many programs, when I was out in Minnesota. They are always looking to improve everyone’s ability, whether that be in selling, management or whatever it is they do. They do a great job at the Fastenal School of Business. From my time there, I know there were a lot of people would go through it, get a lot of learning, do pretty well and then wind up getting picked off by somebody else that doesn’t do that kind of stuff.
What makes the School of Business unique?
They keep it going; they keep it in the forefront. It’s part of their culture to train. We get offered classes at my current company, through vendors, but they’re not required. This is in-house and there are so many things that are required, each year. They do it just like university where you have to take one before you take another. They build on each other and they really get the employees to understand either the business, leadership or just products. There is a lot of hands-on training in the construction industry, where you are out there, using the tools, understanding what it means to crank a bolt too hard. Everyone in the world would be surprised how a bolt starts to break down and become elastic, without a ton of pressure; it’s pretty impressive.
So they almost get you being the customer, using the products, to understand how the customer feels when something goes wrong or when you deal with them?
Yes; and there are so many details about every product. I’ve forgotten more than I ever wanted to know. They can really get down to where someone brings something into you and you look at and it’s amazing what information you can get off little tick marks on a bolt.
Can you recall any specific principles or learnings from your School of Business experience at Fastenal?
It probably all started with Bob Kierlin. He is one of the five founders and the original thought guy behind Fastenal, way back in the 60s. I remember him talking about a couple of things. He talked about being only as good as the people we have. He wanted to make sure we were both training our people and trying to find the right people. The other thing was that they always talked about the culture there. Nobody was above anybody else. You could call the CEO; you could email whoever you wanted. There is great story about being in the restroom, at corporate. Bob Kierlin was retired and, I think, not even on the board of directors at this point because he made a rule that, once you turned 78, you couldn’t even be on the board of directors anymore. He was literally just around and he was in there, cleaning the bathroom, just because he loved Fastenal. You’d never know this guy was a multi-millionaire.
Why do people churn away from Fastenal?
When it comes to their margins and their money, Fastenal is a tight company and I think, competition wise, when it comes to paying the employees, they weren’t really high on the scale. If people learn all these great selling techniques, there are sales jobs out there that tend to pay a lot more.
That’s the other thing. You do have some people in Fastenal and that is where they deserve to be. If you had 10 people and you put them from one through 10, maybe the bottom six are getting paid what they are supposed to be getting paid. But then you’ve got those three or four at the top that separate themselves from the pack, where Fastenal really need to pay these people a little bit more to keep them, or they are going to jump ship.
It is not that Fastenal is a bad company. We all work to get a pay check and you can do some good things there and make some good money. It’s just that they hire young, but I’m not saying that they don’t hire older people too. But as district manager, we have lots of different hats we put on and one of them is recruiting. We would go to the universities and go to the business classes and teach a business class for a day; talk about sales, running a company, management styles and you get to have relationships with those students. You start to say, do you want to do a paid internship? They come and start working part-time for Fastenal at 20 years old. We’re just paying them minimum wage, or a little more than that, they graduate, they start to learn a lot of things and then maybe they jump ship or, in terms of their career, they really wanted to be something else.
So there is little flexibility in the pay, in those inside and outside sales jobs?
Do you think that is a problem, long term?
I don’t know; they’ve been doing it for so long. Knowing Bob Kierlin and all his sayings, the culture of everyone being on the same playing field, that is there. But I do wonder, because he’s not around anymore, if he doesn’t know that maybe they need to pay their people more to keep good people. At the same time, they’ve been doing this for quite a while and they’re still trucking along. Even when I left Fastenal, as a district manager, and was doing quite a bit up in Alaska, I knew that the great big blue machine would truck on, even after I left. Even though I felt as if I was a big part of it, I knew that someone would step in and do the work because there were a lot of great employees there. It really is a good company.
I think they’ll do just fine. I think it’s a little bit part of their business plan to have turnover. Everyone knows there is going to be some turnover.