Fastenal Co. is fine-tuning its strategy of selling through vending machines located on customers’ job sites that automatically place online replenishment orders when supplies are low, broadening a base of steady sales, CEO Daniel Florness says.

“Vending is an example of engagement with our customer … that will serve us well in the years to follow,” he said during a second-quarter conference call with stock analysts last week.

Fastenal is a distributor of products ranging from fasteners like screws and bolts to safety gloves, metal-cutting tools and electrical motors its customers use on construction sites or in the maintenance, repair and operation of their facilities and equipment. It also provides custom manufacturing of fasteners and other products according to customers’ specifications.

The company had $3.87 billion in net sales last year, and for the second quarter ended June 30 reported a 1.6% year-over-year increase to $1.014 billion in revenue. For the six months ended June 30, net sales increased 2.6% to $2.001 billion. Although Fastenal doesn’t break out e-commerce sales, it notes that its internet-connected vending machines are crucial to its relationships with a growing number of customers.

The machines—which provide customers’ employees with a self-serve way of retrieving products like cutting tools and safety gloves needed on the job site—are designed with internet-connected sensors that let Fastenal and its customers monitor inventory levels, plan assortments, and automatically process replenishment orders.

Sales to customers that use the on-site vending machines accounted for 44.6% of total net sales in the second quarter, up slightly from 44.5% a year earlier, Fastenal says. (Vending machine customers may also place orders through Fastenal’s e-commerce site, Fastenal.com, and shop at its some 2700 stores.)

Fastenal installed nearly 10,000 new vending machines on customer sites during the first half, while removing about 7,200 that were no longer needed by customers, bringing its net total to more than 58,000.

Fastenal also set up in the second quarter about 3,000 locker-lease devices in stores operated by Wal-Mart Stores Inc., where Fastenal customers, such as those working on construction sites, can arrange to pick up orders placed online at Fastenal.com. “We think that’s an excellent program for us long-term,” Florness said.

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