If you plan to open your own retail store with building and finishing materials, but do not have the necessary funds to purchase a large number of expensive goods, then you should pay attention to the business associated with the sale of hardware. Hardware (short for the phrase "metal products") is a common name for a wide range of different metal products. This includes all metal products that can be divided, in turn, into industrial and general-purpose. The last group includes products that are used in everyday life (knives, saws, scissors, forks, shovels). And the first group includes various bolts, nuts, washers, screws, rivets, crutches used in railway construction, bolts, metal wire, etc. We are primarily interested in building hardware: bolts, screws, screws, nuts, screws, washers, cotter pins, nails, dowels, anchors, cables, welding electrodes, etc.
At first glance, a hardware store does not seem to be as profitable as a retail outlet with a wider assortment. This conviction emerged during the recent economic crisis, when more than half of the highly specialized outlets simply closed. This is partly due to the unfavorable situation on the market (a significant decrease in the pace and volume of construction, frozen facilities, and a decrease in household incomes). But still, the main reasons for the failures are the mistakes of the point owners themselves, who either did not take their business seriously enough or did not respond flexibly to changing circumstances. How not to repeat their mistakes and create a successful store? First of all, you need to decide on the format of work.
Hardware can be presented in a separate section in a hardware store. In addition, you can open a specialized store where mainly fasteners will be sold (although their assortment is still desirable to diversify a little). Consider the second option of organizing your own business, as it requires less cost. Before starting work, experts advise you to draw up a business plan. It is useful even if you are not going to look for investors or take loans from a bank. First of all, you need a business plan so that you can calculate the costs of renting or purchasing premises, equipment, salaries for employees, estimate the costs associated with the purchase of goods and with the promotion and development of your business.
The location of your store is critical. Experts advise opening it in the construction or utility market. It can also be a construction base or just a place with high traffic near large construction (non-specialized) shops. Sometimes such points open in sleeping areas on an area of 20-25 square meters. meters in the mall or near it. This option is not the best, however, if there are no alternatives, choose at least an area with a large number of new buildings and get ready to change the location of your point when all the houses in this area are built and the apartments are repaired.
Most likely, you will have competitors (and, possibly, in large numbers), however, in small cities with a population of no more than 500, 000 people, it is very difficult to find a store with a wide range of fasteners. Typically, the choice at retail outlets in construction markets is very limited. In the best case, there are various dowels and screws that are used most often. However, when it comes to more reliable fasteners (for example, used when collecting furniture, installing shelves and equipment), finding it becomes very problematic. Examine the range of competitors, evaluate the competence of their sellers. Of course, for this you yourself must be well versed in what you intend to sell. Therefore, you need to start by studying the product itself, which you will sell. 200-300 positions for retail will be too small.
On the first purchase, it is better to focus on a minimum of 450-500 items. This list may include the following items: drywall screws, roofing screws and self-tapping screws with a press washer; rigging, turnbuckles, wedge anchor and anchor bolts with nuts; construction nails with 5kg packing (sizes: 4.0x120, 4.0x100, 3.5x90, 3.0x80, 3.0x70); slate and finish nails; bolts and nuts according to GOST 7798-70 and GOST 5915-70 (up to 27 diameters); DIN 933 galvanized bolts (and zinc nuts to them); bolts of strength class 8.8; netting: mesh 45 and 50 (black and galvanized); knitting wire (heat treated) 1.2mm; abrasives for metal (sizes: 150, 180, 230); simple power tools (mounting pistols PC-84 and screwdrivers); mounting cartridges D4; dowel-nails for mounting guns (4.5x50, 4.5x60, 3.7x30); with countersunk head (6x80, 6x40), staples, electrodes, universal screws in yellow zinc. In addition, it is worth buying drills for metal and concrete, rigging (chains, clamps, carbines) and a minimum set of tools (riveters, screwdrivers). In addition to the actual fasteners, you can sell consumables (drills, bits, drills, saws, etc.). You can also include some household goods in the assortment, but you should not hurry up with a complicated and expensive power tool, otherwise your worries and expenses will increase significantly (warranty repairs, finding reliable suppliers, a place to place such a rather large-sized product, etc.).
In the future, the assortment can be gradually expanded to 900-1000 items. The main difficulty is that you and your sellers, if any, should be well versed in the specifics of your product: know what each product is used for, where and how. In addition, it is unlikely that you, without having experience in this field, will be able to purchase the necessary amount of the most popular products from the first try. Subsequently, it may turn out that you will not be able to find the most popular positions, and the place in the warehouse and in the store will be occupied by unnecessary goods. Therefore, it is so important to carefully study the demand for fixing materials, the assortment of competitors (pay attention not only to the product as a whole, but even to its location in the store - usually the most popular positions are laid out ahead), to establish an accounting system and, most importantly, plan inventory. Most sales are made of drywall screws (fleas, black), self-tapping screws with a press washer, dowels with an impact screw for quick installation, carpentry nails, universal screws, dowels with hooks.
If you do not understand such products and in the business of selling hardware, then follow a few rules. First of all, if you do not have experience in sales, it is best to seek the advice of "experienced" entrepreneurs. If there are no acquaintances in this area, then you can study the range of competitors (it is unlikely that you will know the number of product items in their warehouse, but at least understand what to look for). But keep in mind that usually galvanized fasteners are laid out on the windows, which looks the most attractive and has a high margin, but this does not mean that it is in the highest demand. The most disadvantageous option is to ask the fastener supplier to select an assortment for the first purchase for the amount you designated. This option is the least good, since most likely your supplier, seeing that you do not understand, will try to sell you all your illiquid assets. In no case do not invest all your money in the first purchase. Hardware - a specific product. It is highly probable that most of the individual positions you will acquire under the order. Therefore, you should have working capital (ideally at least in the amount of 30-35% of the amount spent on the first purchase), on which it will be possible to bribe the necessary fasteners. Carefully choose a supplier, even if it seems to you that they all offer the same thing. Select key products and compare prices from all fastener suppliers in your city. Also take into account the proposed working conditions, restrictions on the minimum purchase amount, discounts for certain volumes, forms of payment, etc.
Be sure to decide on your target audience. In fact, this is also one of the most important points, which determines the assortment, the location of the outlet, the methods of promotion, and pricing. Hardware, as a rule, is bought by finishing brigades, furniture manufacturers, small and medium-sized firms that carry out repair work. According to a rough estimate, this group of customers provides up to 35% of the store’s turnover. Before purchasing the first batch of goods (this can be done even at the stage of drawing up a business plan), find all potential small wholesale buyers of fasteners (small manufacturers of furniture and windows, construction crews, companies that sell various equipment, etc.) and offer them purchase goods with a small margin (up to 30% of the purchase price) from you. This will ensure up to a third of the turnover during the first months of operation. But this option also has disadvantages. With such a margin and, most importantly, regular customers, you can insure yourself at the very beginning of work, but subsequently, under a favorable set of circumstances, you will still have to increase selling prices, including wholesale. And here your recent partners can easily refuse to continue cooperation, and you, accordingly, lose profits and the time that you have to spend looking for new customers.
Consider your pricing policy in advance. It is worthwhile to set prices lower than the competition for the most popular items. In the future, when your company earns a reputation and forms its own customer base, the mark-up can be done higher, compensating for this with a large selection and a high level of service. According to entrepreneurs, the retail margin on some fasteners can even reach 300% to ensure high turnover. On the other hand, dumping is also not the best way to stand out from the competition, especially if it is the only one. Yes, and most potential customers prefer to purchase hardware in the same place as building materials, so the small wholesale direction is of greatest interest to hardware stores. In this case, you can use the Internet to attract customers. Add your company to various specialized Internet directories and order a simple business card site with your contacts.
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