ToughBuilt Industries, Inc. $TBLT Competitive Landscape
David vs. Goliath
ToughBuilt Industries is a member of the Capital Goods Sector, Miscellaneous Manufacturing Industry.
They share the sector with firms like Techtronics, Stanley Black & Decker, Snap On Inc, Bosch GmbH, and Hillman Solutions Corp. This is a single-digit profit margin industry, where larger firms are more profitable, which implies economies of scale and scope.
They share the sector with firms like Techtronics, Stanley Black & Decker, Snap On Inc, Bosch GmbH, and Hillman Solutions Corp. This is a single-digit profit margin industry, where larger firms are more profitable, which implies economies of scale and scope.
The Environment
According to Traqline September 2023 data in their Power Tool survey here, people buy from these retailers:
Top brands in power tools (unit share):
Power tools channel:
Power Tool shopper demographics:
- ToughBuilt competes with large industrial manufacturers that have tens of billions of dollars of market capitalization, and billions of dollars of revenue. More specifically, ToughBuilt competes directly with three serial brand acquirers Techtronics (China), Stanley Black & Decker (USA) and Chervon (China).
- ToughBuilt sells their products through large retailers that have hundreds of billions to over a trillion dollars of market capitalization. Revenues of their sales channels combined are in the trillions of dollars. Their retailers need volume, value and choice for their customers which ToughBuilt helps to provide.
- ToughBuilt total market capitalization is around $2M and has revenue of around $90 million.
According to Traqline September 2023 data in their Power Tool survey here, people buy from these retailers:
- Home Depot 28% (and growing)
- Lowe's 19%
- Amazon 13% (and growing) - a 73% close rate - best in class
- Walmart 12%
- Other hardware stores & resellers (the rest)
Top brands in power tools (unit share):
- DeWalt 16% (growing)
- Ryobi 8%
- Craftsman 8%
- Milwaukee 6% (growing)
- Dremel 4%
Power tools channel:
- In-store purchase 68% (shrinking)
- Online purchases 27% (growing)
- Other 5%
Power Tool shopper demographics:
- Trade professionals
- DIY buyers typically married, male, long-term homeowners, replacing broken tools or first-time buyers.
The Competition
1. Techtronics Industries Company Limited, TTI, China
Techtronics is a relatively new company that has grown up around innovation of power tool batteries. They have bought brands across power tools, hand tools, and vacuum cleaners (floor care). They focus on integrating and growing those brands, increasing their market power, and driving their market capitalization (currently $19.8B). Milwaukee and other brands still have US corporate offices.
Key Brands for TTI:
Techtronics is a relatively new company that has grown up around innovation of power tool batteries. They have bought brands across power tools, hand tools, and vacuum cleaners (floor care). They focus on integrating and growing those brands, increasing their market power, and driving their market capitalization (currently $19.8B). Milwaukee and other brands still have US corporate offices.
Key Brands for TTI:
- Milwaukee, or Milwaukee Tool
- Ridgid (not the part owned by Emerson)
- Ryobi
- Homelite
- Hart
- Hoover, VAX, Oreck, AEG, Empire, and Dirt Devil
2. Stanley Black & Decker, Inc.
The owner of many American household brands, based in New Britain, CT, with 50,000 employees (source: Yahoo Finance).
Stanley, Black & Decker was formed in 1843 as The Stanley Works and has grown through acquisitions of well known brands. Market capitalization is $13.7B.
Key Brands for TTI:
The owner of many American household brands, based in New Britain, CT, with 50,000 employees (source: Yahoo Finance).
Stanley, Black & Decker was formed in 1843 as The Stanley Works and has grown through acquisitions of well known brands. Market capitalization is $13.7B.
Key Brands for TTI:
- DeWalt
- Stanley
- Irwin
- Proto
- Lenox
- Lista
- Porter Cable
- Bostitch
- Black & Decker
- MAG Tools
- Vidmar
- Craftsman
- Powers
- USAG
3. Chervon Holdings Limited, China
This is a relatively young company that has grown significantly through acquisition. Their market value is $1.43B.
Key brands for Chervon:
This is a relatively young company that has grown significantly through acquisition. Their market value is $1.43B.
Key brands for Chervon:
- EGO
- SKIL
- Skilsaw
- Devon
- Flex (purchased recently, competes with ToughBuilt in the modular storage space)
- Xtron
4. Robert Bosch GMBH
Large, global industrial automotive supplier that also sells tools
Large, global industrial automotive supplier that also sells tools
- Bosch's key brands:
- Worchester
- Bosch
- Diablo (saw blades)
- Dremel
- CST/Berger
- Rolatape
- Roto Zip
- TIF
- Vulcano
5. Other firms that design, manufacture and market professional and DIY tools:
6. Other firms in the space:
7. Other related manufacturers:
8. Store Brands:
- Hangzhou Greatstar Industrial Co., Ltd (Great Star Tools, founded in 1993) is a direct competitor.
- Snap-on Incorporated (targets the professional, directly against ToughBuilt)
- APEX Tool Group (has many brands, and does OEM manufacturing)
- Klein Tools (private) targets the electrical trade but sells similar tools to ToughBuilt.
6. Other firms in the space:
- Makita Corporation, Japan, is a power tool manufacturer with 18,800 employees and market capitalization of $7.0B.
- Hilti tools
- Emerson Electric Co is in the industrial space, along with Illinois Tool Works (sells to corporations / builders)
- MISUMI Group Inc
- Hillman Solutions Corp.
- Einhell germany AG
- The L.S. Starrett Company
7. Other related manufacturers:
- Husqvarna - (Lawn and outdoor construction)
- Illinois Tool Works (ITW) (enterprise tools, not for individuals)
- JPW Industries (Jet Powermatic Wilton)
- Positec
- Yamabiko
8. Store Brands:
- Husky (Home Depot)
- Masterforce (Menards)
- Kobalt (Lowe's)
Lowe's Supply Chain Process:
Lowe's made some comments to CSIMarket dot com about their supply chain which illustrate what ToughBuilt needs to integrate with to grow volumes through this key retail channel.
"We source our products from over 7,000 vendors worldwide with no single vendor accounting for more than 6% of total purchases. We believe that alternative and competitive suppliers are available for virtually all of our products. Whenever possible, we purchase directly from manufacturers to provide savings for customers and improve our gross margin.
To efficiently move product from our vendors to our stores and maintain in-stock levels, we own and operate 15 highly-automated Regional Distribution Centers (RDC) in the United States. Through our RDCs, products are received from vendors, stored and picked or cross-docked, and then shipped to our retail locations. On average, each domestic RDC serves approximately 115 stores. Additionally, we operate five facilities to support our import and e-commerce businesses and flexible fulfillment capabilities."
"Flexible fulfillment allows the customer to order parcel post eligible products that are stocked in an RDC, a store, or in a vendors distribution center, and have them shipped directly to a home or place of business. Most items can be ordered and delivered within two business days at standard shipping rates."
"We also utilize three third-party transload facilities, which are the first point of receipt for imported products. The transload facilities sort and allocate products to RDCs based on individual store demand and forecasts."
Lowe's made some comments to CSIMarket dot com about their supply chain which illustrate what ToughBuilt needs to integrate with to grow volumes through this key retail channel.
"We source our products from over 7,000 vendors worldwide with no single vendor accounting for more than 6% of total purchases. We believe that alternative and competitive suppliers are available for virtually all of our products. Whenever possible, we purchase directly from manufacturers to provide savings for customers and improve our gross margin.
To efficiently move product from our vendors to our stores and maintain in-stock levels, we own and operate 15 highly-automated Regional Distribution Centers (RDC) in the United States. Through our RDCs, products are received from vendors, stored and picked or cross-docked, and then shipped to our retail locations. On average, each domestic RDC serves approximately 115 stores. Additionally, we operate five facilities to support our import and e-commerce businesses and flexible fulfillment capabilities."
"Flexible fulfillment allows the customer to order parcel post eligible products that are stocked in an RDC, a store, or in a vendors distribution center, and have them shipped directly to a home or place of business. Most items can be ordered and delivered within two business days at standard shipping rates."
"We also utilize three third-party transload facilities, which are the first point of receipt for imported products. The transload facilities sort and allocate products to RDCs based on individual store demand and forecasts."
ToughBuilt has grown their relationship with Lowe's, in 2020 in soft goods and in 2023 with mobile storage.
In 2020 Lowe's awarded a portion of its soft sided tool storage business and all of the kneepad business to ToughBuilt, including 30 SKUs. It included belts, bags, pouches and knee protection products. ToughBuilt branded products make up 18 SKUs, and $15.3M in revenue while Kobalt (Lowe's in-house brand) make up 12 SKUs and $7.3M in revenue.
The more I look at Menard's Masterforce TM branded soft goods, the more I think they are very similar to ToughBuilt products.
In 2020 Lowe's awarded a portion of its soft sided tool storage business and all of the kneepad business to ToughBuilt, including 30 SKUs. It included belts, bags, pouches and knee protection products. ToughBuilt branded products make up 18 SKUs, and $15.3M in revenue while Kobalt (Lowe's in-house brand) make up 12 SKUs and $7.3M in revenue.
The more I look at Menard's Masterforce TM branded soft goods, the more I think they are very similar to ToughBuilt products.
Modular Tool Storage Vendors / Competitors:
- Dewalt ToughSystem (Stanley Black & Decker)
- Flex (Chervon)
- Milwaukee Packout (Techtronics)
- Ryobi Link (Techtronics)
- Ridgid Pro Gear (Techtronics)
- Husky Connect (Home Depot)
- Craftsman (Stanley Black & Decker)
- ToughBuilt StackTech