Some might say it has a screw loose, but things are really pretty snug at Fastenal. The company operates about 2,600 stores in all 50 US states as well as in North America, Asia, and Europe. Its stores stock around 1.2 million products in about a dozen categories, including threaded fasteners (such as screws, nuts, and bolts). Other sales come from fluid-transfer parts for hydraulic and pneumatic power; janitorial, electrical, and welding supplies; material handling items; metal-cutting tool blades; and power tools. Its customers are typically construction, manufacturing, and other industrial professionals.
Fastenal added stores at an annual rate of approximately 5% in 2011. The company plans to open between 100 to 150 new stores in 2012 (a rate of 4% to 6%).
Net sales accounted for some $2.7 billion in 2011, an increase of around 20% compared to 2010 net sales. Part of the growth in net sales was attributed to the company's FAST Solutions program and higher sales in older stores and to a lesser extent newer stores. FAST Solutions offers vending machines equipped with such products as cutting tools, inserts, round tools, and all way to refrigerated drinks for workshop personnel. Net income also increased to around $358 million in 2011, an increase of about 35%, compared to 2010.
It has been cutting spending but adding more sales personnel, in hopes of boosting revenues. The company aims for each store to log $100,000 to $110,000 in sales on average per month by 2013. By bolstering sales, Fastenal believes that it can meet its profitability targets. The company is optimistic that when the economy fully recovers, North America can support at least 3,500 of its stores in small, midsized, and large markets. (More than 2,475 locations are currently located in North America.) Fastenal also looks to continue expanding in China, Southeast Asia, and Europe. The company opened its first locations in Panama in 2010, and it entered Brazil in 2011. Nearly 10% of Fastenal's revenue is generated outside the US.
Fastenal stores have been moving away from their traditional focus on wholesaling. The company's "expected inventory" format tailors stores' product offerings to demands in their specific geographic areas with the goal of being the best industrial and construction supplier in their local markets. Stores are supplied by about 15 distribution centers throughout North America.
Products manufactured by other companies account for about 95% of total sales, and the remainder comes from items custom-made or modified by Fastenal. Threaded fasteners typically bring in about 90% of revenue while the balance is generated by sales of various non-fastener products, such as material handling, electrical, and janitorial supplies. – less