Metalworking tools and machinery supply shop

Machine shops, fabricators, welding shops, maintenance departments, auto and farm repair shops and small manufacturers.

Margin on products sold, usually 20 to 40 percent on consumables, plus dealer commission on machines and delivery or setup fees. Repeat orders from regular accounts drive most of the income.

• Product knowledge of metalworking tools and machines
• Sales and account building
• Inventory management
• Customer service

• Check state and local sales tax registration, and how to handle resale certificates for business customers
• Check zoning and business license requirements for your city or county before signing a lease
• Get general liability and product liability insurance, plus coverage for stock and any delivery vehicle
• Manufacturers may require minimum orders or opening purchases for dealer accounts, so confirm terms before committing
• Stock ties up cash, so start with fast-moving items and avoid overbuying
• Machines you sell should come with guards and safety information, so check OSHA guidance and manufacturer requirements

Startup costs are typically estimated at around $25,000 to $100,000, depending on your premises, opening stock, any dealer account minimums, and insurance. Starting with fast-moving items helps avoid overbuying and tying up cash.

Monthly revenue is typically estimated at around $6,000 to $30,000, depending on how many workshop accounts you win, your product range and your delivery area. These are estimates, not guarantees.

Check state and local sales tax registration and how to handle resale certificates for business customers. Check zoning and business license rules before signing a lease, plus insurance, manufacturer dealer terms, and OSHA guidance and manufacturer requirements for machine safety.