MachineTools.com is exploring possibility to have partnership in India: Stu Carlin

MachineTools.com is an international online marketplace that has been connecting buyers and sellers of new and used machines and tooling for more than 17 years. Before the company started in 1999, MachineTools.com Founder and CEO Stuart Carlin was running a fax advertising service for auctions and used machines when he realized that the Internet was quickly becoming the best and fastest way to connect buyers and sellers.

The day his office burned down, he decided that it was time to realize that vision, and with lead developer Joe Qin, the vision became a reality. The company has continued to innovate, adding the industry’s first mobile site in 2007, an iPhone/iPad app in 2012, and a totally redesigned website in 2013 – with a refresh in 2015.

In 2014, MachineTools.com extended its expertise in online lead generation for used machinery to new machinery, further helping buyers find the machines they need.

Early Days

Born in Chicago, Illinois, Mr. Carlin has been an entrepreneur since he was 10. “I had a little business with comic book and when I went to the university, I started a business of vending machines and had them installed in my campus. I majored in Accounting and worked for two years with accounting firm Ernst and Young, but never liked it. I worked only to make my parents happy,” Mr. Carlin told CNCTimes.com.

“Nobody in my family is an entrepreneur. While my father is a lawyer, my mother is a housewife. My family supported my idea of entrepreneurship, but not much,” he said.

Getting the Idea

When asked as to when he developed the idea of starting the business, Mr. Carlin said, “I quit the job in accounting after two years and was jobless. One day while I was walking my dog, I happened to meet a man whom I knew and he was a used machinery dealer in the metalworking industry. He asked me to work with him which I agreed and that’s how I got introduced to this industry. But, I always wanted to run my own business, so I left to sell ice-cream during summer. Then the winter came and I started fax business. I had a big list for auction and machine dealers of whom I had the database using Internet. I used to charge 25 cents per fax and paid 5 cents.”

Initial Challenges

After a year or so when the Internet got bigger, Mr. Carlin developed an idea to trade a site where he can list all new and used machines around the world. “However, there were many challenges as the people from machine tool industry thought that Internet was not viable for selling machines. That prompted me to create a website. I had an angel investor who gave me USD 1 million to start the website as he knew what I did and believed in me. Initially, nobody wanted to list the machine so I listed new and used machines free for a year and showed the industry that you can get the lead by using Internet. After one year, I started charging for the listing which the manufacturers paid. The biggest challenge was to make them believe that Internet can be used to sell the machine,” Mr. Carlin added.

Not the one to lose hope easily, Mr. Carlin overcame these challenges as he had content and needed visitors to get the business going. So he used Google adverts which charged 5 cents for a word. It later increased to USD 20 per word. He also used barter system wherein he used to give free articles in the magazines and gave them banners. This way he got visitors. “MachineTools.com was built right way with the help of machinery people as they told me about specifications. We then went to dealers and distributors to get the listings,” he said.

Business Model

Commenting on the business model, Mr. Carlin said it is still the same the way it was started. We worked on first hand and charged per machine. We didn’t charge commission and viewers loved that. On our site, one can see sellers name and call them which is not the case with our competitors. Our site is transparent. We generated revenue through advertising, listing fees, banners, email blasting and charging per lead for the new machine. We charged per machine for the used machine. In countries other than the US, our charges are 50% less because our penetration not much there while in the US we are very much known,” he said.

Even the US market was very hard when Mr. Carlin started as that was the era of recession. Initial six years were very tough, but the company got new channels and it embraced that.

Market in India

Talking about the Indian market, Mr. Carlin said, “We get a lot of people from outside coming to India. The market here is very big. The used machinery market know us, but new machine market is not much aware of our activities. The issue in India is getting revenue as we had a lot of traffic but not much revenue. To overcome this, we plan to change the pricing system. In the US, we charged USD 2 in 2000 for listing a machine which is now USD 20. In India, we might have to lower the pricing as cost of living is different,” he added.

About the IMTEX 2017, he said he is in awe of this exhibition as it is two times bigger than IMTS show in the US. In India, people are open to talking, are patient and walk around looking at you. He is impressed and plans to do lot more in India. “I am open to working with CNCTimes.com and Plant Manager and exploring that possibility,” Mr. Carlin added.

“People in India are tough negotiators, but the genuineness of an Indian lead is getting bigger. It is the fastest growing manufacturing country and my plan is to have local MachineTools.com. The other thing is this market is very price sensitive. In China and India, we need to change our pricing to make the website more viable. We plan to charge USD 2 per lead for a new machine. We give quality leads so I know that we can work hard in this market and increase our rate once we establish ourselves,” he opined.

Big Vision

Asked about his vision, Mr. Carlin said that MachineTools.com will come up with a new site in a month as he believes in updating the site every three years. The functionality will remain same but the design and look will be different. “It is really hard to become an entrepreneur as one can’t learn it. He needs to have it inside. It is a skill that has to be developed with passing time.  An entrepreneur should be a leader, visionary and possess risk taking abilities. I would encourage GenNext to try entrepreneurship. If they have those skills, they will succeed,” he said.

“India has always been an important market for us. Since most people speak English so language is not a problem and that is the reason behind Indians getting attracted to our site early. Earlier, MachineTools.com was only in English, but now it is available in 13 languages. I was amazed by the fact that Indians found us very fast and feel sad for taking 17 years to come to India. But now since I am here, it’s time to have a local partnership and do business in India. Initially, revenue will not be much, but it will increase once the size increases,” Mr. Carlin concluded.

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