ReTool: Selling used tools for less

BURNSVILLE -- Wandering among drill presses and table saws, poking through racks holding hand tools of every kind, Larry Pierce scrounged for a deal.

Pierce, a factory worker who does automotive work on the side, figures he visits the ReTool store in this Minneapolis suburb every couple of weeks in search of bargains for himself or his friends.

Power drills in every size and price range cover a 25-foot stretch of one wall. Power saws cover another part. Compressors, tool chests and woodworking machines only a hard-core do-it-yourselfer could identify take up the floor.

''As long as you make your rounds often, you can get some good deals,'' Pierce said.

On one recent visit, he bought a pop riveter for $2.99, a hot glue gun for $3.99 and a fuse puller for 39 cents. He looked admiringly at a Sears Craftsman radial arm saw priced at $129.99 but passed on it.

''They've got pretty much everything you can possibly need,'' Pierce said.

But there's a difference between a ReTool store and an ordinary hardware store. Nearly all the merchandise is used or factory-reconditioned. And most of the tools on display sell for 50 percent to 60 percent off the retail price for a comparable new one.

The concept is one of the latest franchise chains rolled out by Grow Biz International Inc. of Minneapolis, the company that's turning secondhand merchandise into its niche. Its other chains include Play It Again Sports, Once Upon a Child, Computer Renaissance, Music Go Round and Plato's Closet.

''We offer a great alternative to the big box retailers'' such as Home Depot, Menards and Lowe's, said Allen Grimm, ReTool's merchandising manager. ''We save the consumer a lot of money.''

Grimm picks up a basic used Skil 1/4-inch power drill priced at $4.99. It has some scratches and a little rust on the exposed metal, but it works and carries a warranty -- perfect for a new homeowner who just needs to do a few things, he said. Hanging nearby are factory-reconditioned DeWalt cordless drills selling for up to $229.99 -- a substantial discount off the new price -- made for professionals who might use them every day.

Grimm also shows off a ''skillfully used'' Sears Craftsman router with just some wood dust in the nooks and crannies. Sears might sell a comparable new one for $99.99, he said, while ReTool priced it at $49.99.

''It makes your disposable tool dollar go a lot farther,'' Grimm said.

ReTool has 15 stores open across the country with four more opening this summer. Ted Manley, Grow Biz's executive vice president of operations, said the company expects that number to grow to 600 to 700 in the United States and another 100 in Canada eventually.

About half of ReTool's customers are contractors, many of them looking to save some money on a tool they won't use every day, Manley said. Another 30 percent are active do-it-yourselfers.

To keep up its inventory, ReTool also buys tools from its customers. Start-up stores send people to auctions and estate sales to fill their shelves. But once a store is open, it relies heavily on people who come through the front door, Grimm said. Often the tools come from retiring mechanics, widows, serious do-it-yourselfers who are cutting back or upgrading, or someone cleaning out their garage or basement.

''There's a lot of product out there collecting dust,'' he said.

And if a customer is done with a tool, ReTool will buy it back for a portion of the sale price, or take it in trade for another tool. That's especially useful for someone who needs a specialized tool for just one project, such as a compound miter saw for building a deck or a tile cutter for remodeling a bathroom, Grimm said.

ReTool isn't a pawnshop and doesn't negotiate when it buys used tools, but it does offer a fair value based on quality, age, supply and demand, Grimm said. The stores write out checks on the spot for all their purchases over $10 and require proper identification to discourage anyone trying to unload stolen merchandise.

Manley said interest from potential franchise holders has been strong. Because Grow Biz has over a decade of experience in developing and franchising stores that sell value-priced used and new merchandise, it knows how to give new owners the training and other help they need to succeed, he said.

The average start-up cost for a new store is $125,900 to $176,200, depending on its size and location. That includes a franchise fee of $20,000.

ReTool bills itself as the only national chain specializing in secondhand tools. Apart from some scattered independent stores, the company figures it has the field to itself.

''We're going to be the destination of choice if people think about buying, selling and trading used tools,'' Grimm said.

On the Net:

ReTool: http://www.re-tool.com

Grow Biz International http://www.growbiz.com