Fastenal Company (FAST)

weiwentg (78.29) Submitted: 5/31/07 2:40 PM

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I disagree about the moat thing. True, Fastenal's position isn't as secure as Wal-Mart's, but their distribution system is topnotch, and they have a wide network of stores. they also run at very low cost, eg making customers serve themselves and operating on cheap real estate. I suppose Home Depot, for example, could dislodge Fastenal if there were some sort of vendetta, but it would take far more effort than it's worth.

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tsusilverado (< 20) Submitted: 12/04/07 1:42 PM

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The fasteners that are sold in package quantities are not specialty. They are the most common fasteners purchased. Specialty fasteners for the most part can be ordered in specific quantities. Fastenal is focused toward industrial distribution. The business model is not setup for hardware store purchases. 99% of the time contractors, MRO and OEM customers are saving a ton of money by purchasing in package quantities.

The reason competitors cannot break into Fastenal's niche is because they limit themselves by centralized governance. The benefit of a Fastenal store is the fact that every store can makes its own decentralized decisions. They can also make their own part numbers. Try calling Grainger and ordering something not in their catalog.

Another benefit is the extreme amount of product knowledge training each employee undergoes. How many MSC or Grainger reps can tell you what fastener or other product you need in a specific situation.

In order for a competitor to be able to conquer Fastenal, they would have to invest billions in a transportation network, an extensive training program and an overall business model overhaul. It would take years to complete and by that time Fastenal would have already succeeded in conquering another aspect of the industry. How many Graingers can crimp hoses, cut metal to length, weld bandsaw blades, or fix your power tools? NONE!

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pgersma (< 20) Submitted: 3/20/08 1:38 PM

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As a distributor, it is more cost-effective to supply packaged fasteners than not. Whereas Fastenal can supply speciality fasteners, they can't afford to procure from their manufactors, one bolt - it just won't happen. They are not a hardware store, yet they are the only industrial distributor to sell retail - try going into a Grainger or MSC and getting the same results. The fact that they are a decentralized organization, trusting their employees to run their own businesses and capture market share is remarkable, especially in today's market place. They've doubled their sales in five years by investing in well-trained, educated outside salesmen, and by opening up new stores. After looking to see how Fastenal's competition is growing, it's not hard to see that MSC's growth is due in large part to acquiring another industrial distribution company. Fastenal tremendous growth is purely organic; capturing market share from competitors and providing a service that will lead to excellent ROI's. Do the research, or call the CEO, this is a solid investment that's weathered the weakening market and will continue to out perform the market.

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brettannica (< 20) Submitted: 5/16/08 2:34 AM

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I work at Fastenal as a machinist, I get orders all the time for custom made bolts that are low quantity production (even 1 pc.). Not sure where you are getting your information from.

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