9 Key Strategies to Growing Your Hardware Business
Building your hardware supply business can be an intimidating thing to do especially if you are unfamiliar with the trade. But perhaps an opportunity to establish one is very obvious that you don’t want to pass up this chance.
A hardware supply store caters to various needs of customers, whether they’re building a house, decorating it, in the midst of a renovation work or simply addressing the inevitable wear and tear of homes, workplaces or business establishments. Blown fuse, busted light bulb or broken pipe? You got nowhere else to go but the friendly hardware store in the neighborhood.
Keep an eye on your neighborhood
Most of your customers will come from your neighborhood so it’s best to be mindful of the surrounding and anticipate how can your shop can serve your neighbors’ needs. Is it near a subdivision? Maybe common household items like electrical supplies, plumbing supplies, locks as well as kitchen and bathroom accessories.
If it’s near a school, maybe electrical wires, fuse boxes and fluorescent lamps. Is it near an affluent neighborhood with large lawns? Maybe gardening tools (hose and sprinkler system). If it’s in a neighborhood with tightly-knit households, maybe sealants and locks are some of the what customers are gonna look for.
Doing so will make your shop the go-to place for basic needs your nearby customers will likely look for. Think about the fast moving items to get the business going (though they have low profit margins):
- Steel bars and rods
- Door hinges
- Roofing nails
- Flooring tiles
- Welding rods
- Plumbing material
Be watchful of your competitors
First, define who are your competitors. Are they other hardware shops even if they don’t sell similar products? (They are more on construction supplies and you’re more on electrical accessories and paint.) Are your competitors established and well-known in town? Although these competitors have the potential to drive you out of business, cooperation could be a win-win scenario; your shop complement what they don’t supply and vice versa.
There is little to no point at engaging in war of attrition on price; the public will benefit the low prices but it could be costly to the bottom line of both of your businesses.
Create your own niche
You need to develop your core set of products and make them stand out (competitive pricing, prominent display and wider variety of choices). This will make your shop the household name for such products. Selection of these products depend on various variables such as your target audience (what are their main problems you’d like to solve?), your competition (which products they are not selling that you might provide?).
Research on worthy suppliers to partner with
Should you choose to be a dealer of hardware items or construction supplies? It’s not just about the end users and your eventual customers. Earlier part of the supply chain includes your engagement with your source.
Construction supplies are often arranged in shorter terms (around 30 days) than hardware supplies (around 90 days) so you have a choice between the two types of products. Hardware supplies might allow you to generate more profits than construction supplies which buyers often spend more time comparing prices between you and the competition.
Expand towards other buying channels
Having a standalone shop may be old-fashioned but in the Philippines, it’s still a popular way of selling products (and establishing relationship with your customers). Also, there are thousands of hardware products that physical presence is necessary to check the right product model. Customers often bring a sample of a broken product to try to get the exact replacement.
But this should not stop you from expanding your hardware dealership business online. Setup a website and display your product line / brochure for easy access on mobile phones without having to visit the store. Allow visitors to inquire for stock availability and make orders they can pickup at the store or delivered at their homes.
Having this presence also aids in inventory and customer relationship purposes. You know which products they purchased so you know what items to secure next time they ask for the same model. It also allows you to upsell similar, more profitable products.
Develop your online presence
In addition to more alternatives and convenience for customers, ramp up your presence online. That’s because you cannot rely on your neighbors to be your customers; this segment must be expanded to others outside of your vicinity.
Not only you’ll provide listing of products, provide tips on things that relate to your products. For example, you can write a blog post on decoration tips, how to save money on utility costs, and why you’ll recommend a product you currently sell. Make every effort to solve your current and future customers’ problems and make use of your online presence to do so.
Don’t forget social media presence where you can showcase individual items on Pinterest and attract audience from this platform. Make your Facebook and Twitter profiles active in engaging customers who may ask questions, offer suggestions or even rant about the quality of products you sell. Doing so makes your business so accessible that customers will begin to trust it more.
Add complementary value to the products you sell
The relationship with your customers should not end at the moment they made the purchase. Establish good rapport with them and offer help as needed. Do they need help in replacement of defective electrical wire? Are they looking for plumbers or reliable lipat bahay referrals? Have them handy. Such partnerships help other partners generate business and return the favor to you in the future or share a referral fee if this is in your agreement.
Even when customers don’t buy from your shop, your thought leadership in your domain (and relevant areas such as say, energy savings, product evaluation and others) will be valued highly. The important thing is that in whatever capacity you have, there is that willingness to offer assistance to your customers. At this juncture, customers may be better known as partners.
Stay in season as possible
Like in a sari sari store where seasonality adjustment helps generate extra income, the same applies to the hardware supply business. During sunny summer season, people might spend time sealing leaks in their roofs and replace their attic so a steady supply of Vulcaseal and plywood helps.
During rainy season, hand shovels and cleaning agents afterwards could be in demand.
Serve the community
Companies spend resources on feeding programs, medical missions or collecting trash from the beach. Your company should, in your own capacity, look back and assist the community that helped sustain the business. Donating light bulbs for the park, or repainting its benches are good examples of serving the community. It gives you the chance to reach out to neighbors, learn about their concerns and be of help in whatever you can contribute.
Doing so also builds a bond between your hardware business and your community. Folks will remember what you did, and they’ll remember your store. Going the extra mile in your hardware business might be the edge you’ll have against the competition.
Building your hardware business requires more than exploration of the market such as learning what your customers want, and keeping a look at your competition. Extending beyond what you do is equally important. Building a good relationship with your community and reaching out to a wider spectrum of customer segment sustains the business and earns you a steady stream of loyal customers, er, partners.