Fastenal Co. continues to bank on vending machines to grow sales. In 2016, the distributor of industrial fasteners like nuts and bolts and safety products such as gloves and goggles reported that vending machine sales are approaching half of its revenue.
The company had 62,822 vending machines in place at year’s end, up 13.2% from 55,510 in 2015, chief financial officer Holden Lewis told analysts on Fastenal’s fourth quarter earnings call today. As of the end of 2016 “46.1% of our sales now go to customers that use vending,” Lewis said.
Fastenal grew its total sales by 2.4% in 2016 to $3.962 billion. The company doesn’t break out internet sales, but customers using its web-connected vending machines accounted for $1.83 billion in sales using Lewis’s number. It also sells online at Fastenal.com.
Fastenal’s internet-connected vending machines, which it and other industrial supplies distributors place at customers’ industrial plant locations, provide customers with ready access to such products as rivets, nuts and bolts used in manufacturing products or in repairing equipment. They can also be stocked with non-fastener items like safety goggles and work gloves, items that workers may frequently need to replace on the spot in order to keep working. Employees typically enter codes into the vending machines to access and retrieve products; machine sensors connected to the internet record when items are removed to update inventory and financial records, and set in motion replenishment orders.
During 2016 Fastenal upgraded or optimized more than 50,000 vending machines, CEO Dan Florness told analysts. “We had rapidly rolled out those 50,000 machines over the last five years and in 2016 we took the opportunity to visit each and every machine and to challenge how we could be more efficient with that machine,” he said.
For the year ended Dec. 31, Fastenal also reported:
- Net sales of $3.962 billion, up 2.4% from $3.869 billion a year earlier;
- Gross profit of $1.96 billion, up 1.0% from $1.94 billion;
- Net earnings of $499.4 million, down 3.3% from $516.3 million.
Fastenal reported for the fourth quarter ended Dec. 31:
- Net sales of $947.9 million, up 2.7% from $922.7 million a year earlier;
- Gross profit of $471.8 million, up 2.5% from $460.5 million;
- Net earnings of $114.8 million, up 2.6% from $111.9 million.
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