I oriented my hardware store towards self-service. The area is small and control of the trading floor was not difficult. And it will be important to put display cases under glass, in which it is easier to store especially small goods.
Moreover, add to the possible expenses the wages of sellers (about fifteen thousand rubles), rent, tax deductions and utility bills.
Range
A business plan for opening a household goods store from scratch must necessarily set the goal of rapid self-sufficiency. Moreover, do . Based on these criteria, you need to thoroughly determine the range and quality of the product and, first of all, set a reasonable and realistic markup. Products in the mid-price category will help you gain the trust and respect of visitors. If the price is too high, the buyer will go to your competitor, and even low prices will not help when filling and targeting a retail outlet with cheap Chinese consumer goods. Since word of mouth about the poor quality of goods spreads very quickly, which can scare off even regular customers.
The approximate markup for this group of goods reaches seventy percent. But this is all very approximate, since some goods will need to be supplied at a price of only 30 percent more, and some are quite feasible to sell at a 100 percent markup. And this is within acceptable standards for hardware stores.
But it seems I missed something in my story. That’s right - the price is set for the product, but it needs to be purchased somewhere.
Supplier selection
The final and important step will be to find a trusted wholesaler. The best criterion is the product range and pricing policy provided by the company. The presence in the price list of the main list of goods needed by your store provides you with convenience and benefit. A long period of cooperation while fulfilling all the supplier’s requirements inspires trust and respect, which will allow you to receive some bonuses, for example, in the form of additional discounts or a temporary deferment of payment for the delivered goods.
I was lucky in this regard, since I settled on the MegaTorg company, which is engaged in wholesale sales of a various range of products (except for household chemicals). Several years of our partnership allow me to give only positive recommendations to the MegaTorg company. I will tell you how the procurement process works based on my personal experience of working with this company.
The company's assortment meets the basic criteria that I mentioned earlier - normal quality and lower cost of products. And these criteria allow me, first of all, to put an attractive price on a product that can bring a good income and win the competition.
The range of goods at MegaTorg is very high - cutlery (knives, spoons, forks), tea, coffee and table sets, a huge range of bed linens and towels, gardening tools, ironing boards, a huge selection of haberdashery and knitwear items, children's toys . What does this have to do with children's toys? Even though the store is not aimed at children, this group of products is in demand. I myself often observe how mothers who have visited a store with a child are unable to refuse their child the purchase of a desired toy. And once, for the purpose of experiment, having made a purchase in the children's category, I subsequently did not give up this idea.
Since we are talking about the demand for certain categories of goods, I would like to tell you which products are most often in demand in my store.
First of all, these are kitchen utensils (pots, mugs, teapots, sets). Knives are purchased individually or in sets. About once a month someone needs to purchase an electric kettle. I don’t think it’s worth talking about household little things in the form of cleaning napkins and garbage bags. And in this regard, the best supplier option for me is MegaTorg. They present this product range in full.
I always re-order goods only if the need arises. And in the process of cooperation with the company, I can afford it. The main condition for wholesale purchasing is the purchase of goods worth 7 thousand rubles. And it doesn’t matter whether I buy one product at a time or choose only one item. The main thing is that the total purchase amount is not less than the established amount. First of all, such conditions help me when working with customers. They also allow you to fulfill any of their wishes. For example, there is a real store visitor who needs a table service for twelve people. But my store doesn’t have it either because it’s on sale or because there’s little demand for such services. I can quite easily place an order for one set at MegaTorg and not lose a potential buyer.
The MegaTorg company sells household goods via the Internet. This causes absolutely no difficulties when placing an order. And for you, I think, the MegaTorg company can become a good supplier. Because they deliver goods to all regions of Russia.
All disputes and misunderstandings are also resolved with extreme ease. When a manufacturing defect is identified, company managers always meet halfway. Moreover, they are trying to resolve this misunderstanding.
Operation of the store in the first months
Now I think it’s worth telling you about the first months of the store’s operation. It's best to start working on your own. First of all, this will allow you to find out the needs of customers and then correctly draw up a purchasing plan. After all, very often in the first stages you can order a lot of “ballast” goods. He will not be in demand at all. The money is invested, but there is no profit, and the space on the shelves is occupied. And communication with customers is worth a lot! Remember what I said about “recommendations”? Ethical behavior must be at the highest level. Moreover, never forget that the customer is always right. Any misunderstanding that arises must be resolved very correctly.
At the end of my story, I want to summarize. Thanks to personal control, the money was returned after a year and a half. But I don't stop there. Every time I try to improve the work of my outlet. For example, my store is currently offering a small discount for people of retirement age. This allows you to increase the flow of customers.
I really hope that my story will help you start your own business and earn a decent income. Opening a hardware store is a real business, and not particularly difficult. Go for it, and everything will work out for you.
So, you have decided to start your own business. A completely logical question arises: where to start? First of all, you should think carefully about how prepared you are for difficulties and risky investments of money, whether you know enough about the field of activity that you plan to engage in. Then step two is to choose the specific type of product or service that you will offer to potential clients. Well, after all the long deliberation, step three is to competently draw up a business plan. It will need to clearly indicate your goals and objectives, as well as ways to achieve them.
Let's say you decide to open a hardware store. With the help of a business plan, you determine the range of products.
Products for the garden and garden;
. Household goods;
. Disposable tableware
. Construction Materials;
. Household chemicals;
. other.
Store location - a hardware store should be located in a densely populated area with good traffic.
Personnel - for a store with an area of 100 sq.m. As a rule, 2 sellers are enough. It is also necessary to think over a system of salaries and motivation for staff.
Suppliers - goods for the store can be purchased both via the Internet and from wholesalers, as is convenient for you.
Taxation - an acceptable form of taxation for retail trade in household goods is UTII. In addition to UTII, you must pay personal income tax (13%) and unified social tax (34%).
Calculate approximate income and expenses and the payback of the store based on the store area, number of staff, purchase price of goods, advertising and equipment costs.
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The more successfully a business plan is drawn up, the greater the chances of attracting sponsors, investors and creditors. The easiest way to start drawing up a plan is with regular notes in a notebook, where all the ideas for promoting your household goods store, organizing the work process, sales methods and ways to attract customers will be outlined. Then, after a while, return to the notes, add something new, cross out unnecessary ones. In general, try to structure what you write, and based on what you receive, make a plan. Ideally, its volume should not exceed twenty to twenty-five pages.
A standard business plan for a household goods store must necessarily contain the following points:
Title page
. Introductory part. Specifying a goal
. Description of the business you plan to start
. Analysis of the household goods market
. The area where the store will be located
. Personnel and store management methods
. Financial calculations
. Financial growth
. Documentation
. Development prospects
. List of business and personal recommendations
Of course, it would be a good idea to read literature and online resources on this topic, communicate with other entrepreneurs working with household goods, and simply go to hardware stores to get acquainted with the product and note for yourself the advantages and disadvantages of this business.
It is important that the business plan is drawn up by you personally; you can only download examples of its preparation from the Internet. Then your plan will be unique and will have a greater chance of being implemented.
Household goods are things that may be needed at any moment, so buyers usually go to the store that is “at hand” to buy them. For example, in the nearest grocery supermarket or in a pavilion next to the bus stop. The household assortment is very wide: household chemicals, kitchen utensils, various tools, gardening tools, and so on. If you are thinking about how to open a hardware store, first decide what product groups you want to deal with. This determines the size of the premises you will need to find and the amount of initial capital.
To create a universal hardware store, you will need a fairly spacious room - from 100 sq.m. If you focus on two to three product groups, the store area can be 50 square meters. m and less. As for the investments required to open a business, their amount directly depends on the size of the retail space: the larger the premises, the more expensive the rent and the more money you will have to spend on filling all the shelves of your store with goods.
Individual entrepreneur registration
Before you start choosing a room,... The IP form with . You can start working on the “imputed” market, if it is provided in your region for trading household goods.
When choosing types of activities according to OKVED, immediately include all possible codes suitable for trading household goods. This way you will provide yourself with flexibility in your assortment without having to contact the tax office to enter additional codes.
At the next stage, draw up a business plan for a household goods store:
- Analyze the competitive environment in the place of proposed location (supermarkets with hardware departments, individual retail outlets, their assortment and prices).
- Determine the approximate range of products (2-3 main directions, additional, seasonal offers, suppliers).
- Calculate the costs of the premises (rent, repairs - from 70,000 rubles), equipment (from 100,000 rubles).
- Set aside an amount for the initial purchase of goods (from 500,000 rubles).
- Take into account fixed monthly expenses (personnel - from 30,000 rubles, rent and utilities - from 35,000 rubles, taxes and other expenses - from 15,000 rubles)
- Based on these data, calculate the target revenue required to break even and the payback period of the project.
In our example, a store with an area of 100 sq.m. should trade for 200,000 rubles. per month, so as not to go to a loss. For the store to pay for itself in 1.5 years, revenue must exceed 300,000 rubles. monthly with an average markup on products of about 60%.
Premises, equipment, sellers
When all the formalities are completed and the preparatory work has been done, you can proceed directly to opening the store.
As mentioned above, it is better to choose a densely populated residential neighborhood as a place to locate a hardware store. Of the 100 sq.m., approximately half of the area will go to the warehouse and utility rooms, the rest to the sales area.
An open form of trade is optimal for a hardware store. People are already accustomed to the self-service format; it is much more convenient for them. You can calmly walk around, choose a product, hold it in your hands, and read the information. In addition, in such markets, buyers add more goods to the cart than they originally wanted to buy, therefore, the level of sales will be higher. When selling over the counter, the customer usually takes only what he came for and quickly leaves.
To place your goods, you will need shelving installed along the walls and in the center of the sales area. Some of the goods can be placed on the floor (household and gardening equipment) and hung on special hooks.
For the salesperson/cashier, set up a small cash register area (table and cash register). For a self-service store, one salesperson per shift is sufficient. It is advisable to make the earnings of salespeople dependent on revenue: employees should be financially interested in active sales.
Assortment and suppliers
The assortment of the hardware store is designed primarily for a female audience. Women do housework and purchase dishes and kitchen utensils, bathroom accessories, cleaning supplies and consumables, packaging materials and various small items such as batteries and light bulbs. Customers often also take related products at the same time: socks, handkerchiefs, stationery. That is why it is worth expanding the household assortment and offering them textiles for the kitchen and bedroom, bath towels, hosiery, and inexpensive goods for children.
Tools, electrical equipment, and repair materials intended for male buyers should be presented in small quantities, since men prefer to buy such goods in specialized stores or construction markets.
Be sure to purchase seasonal goods: for summer residents (seeds, fertilizers, tools), for tourists (rugs, skewers, camping equipment), for children's recreation (inflatable rings, balls, mattresses). Sets for the holidays (March 8, February 23) and New Year's decorations (toys, garlands, candles) will also be relevant. Your assortment should be flexible and adapt to customer demand.
To constantly replenish inventory, enter into agreements with several suppliers: wholesale centers and sales representatives of large companies. Agree that they take over the supply of products, this will allow you to save on freight transportation.
Beginning of work
So, you are all ready to open a hardware store. Inform the residents of your neighborhood about this important event. Distribute leaflets with a list of assortments, discounts and special offers. Prepare discount cards as a gift to first customers. Don’t forget to periodically hold various incentive promotions – nowadays you can’t do without it.
Make the opening hours of your store convenient for customers: they should be able to stop by on their way home from work or on the weekend, otherwise they will buy everything they need at the nearest supermarket.
Why did I decide to open a hardware store? The answer to this question is extremely simple: a hardware store always has a wide range of products that are needed daily. Demand for it practically does not depend on the time of year. That is, it depends, but is easily adjusted. For example, in summer, goods for the garden are in high demand, and in winter, you can focus on souvenirs, household utensils and dishes. Household chemicals, light bulbs and other small items remain equally popular throughout the year. In any case, buyers will come to you.
Store registration and OKVED codes
I started implementing the plan to open a store by registering an individual entrepreneur. It was possible, of course, to register as an LLC, but I liked the option of becoming an individual entrepreneur and reporting taxes using a simplified approach much more. Agree, the less worries you have with paperwork, the more time you have to get the store running.
I’ll warn you right away: when choosing codes according to OKVED, immediately indicate as many codes as possible that correspond to the goods you will sell. If you decide to expand the range during work, you will have to contact the tax office again to enter an additional code.
The codes that worked perfectly for me were:
- 44.2 – household utensils, dishes, knives,
- 46.6 – gardening tools,
- 48.31 – household chemicals,
- 47.3 – paper and stationery,
- 42.6 – stockings and socks,
- 48.39 – other non-food products.
By the way, do not forget to obtain permits from the fire department and the SES in a timely manner.
Where is the best place to open a hardware store?
This issue must be approached as responsibly as possible, since your success and the profit received depend on the location of the store. The format of a small “everything for the home” store, where you can quickly run for light bulbs and washing powder, assumes that your outlet will be located next to residential buildings. A sleeping area would be an ideal option. Since many residents do not go to large hypermarkets for small items, they will stop by your store on the way from work. A good location is next to a major public transport stop or a small regional market.
When choosing a location, be sure to consider the proximity of large chain stores and competing stores. It will be difficult for you to fight with the first ones because of their huge assortment and prices, which often fall below wholesale prices. With the latter - because of the popularity of their names among the local population. Since your main buyer is a middle-aged or retired family woman, the “fame” of the store among her social circle plays a huge role. Such a buyer would rather go to a familiar saleswoman than to a new, recently opened store. Even lower prices than you offer cannot prevent this.
You could say I was lucky. I chose a location near new buildings that were already occupied enough to provide a constant flow of buyers. At first, various repair products, household chemicals and dishes were especially popular in my store. In general, what a family needs when moving to a new apartment. Fortunately, I was the first, and I did not have to face competition in the early stages of the store’s life.
Expenses
In general, I gave this figure for you solely as a guide, since the cost of each item can vary greatly due to the city where you are going to open a store, the area in which it will be located, the size of the premises, the quantity of goods purchased and luck in the search wholesale supplier.
The ideal area for a store is considered to be 100 sq.m. My space is somewhat smaller, so at first it was very difficult to arrange the entire range of products. But, I saved on rent and can better control what happens in the hall.
By the way, before buying shelving and display cases, you should decide what format your store will be - will you sell from behind the counter or will it be a self-service store. Research shows that in a self-service store, people buy almost 2 times more, picking up a few more useful little things along with the main product they came to the store for (don’t forget: your customers are women, a man who came for shaving foam, will leave you only with her).
For myself, I chose the self-service option. Due to the small area of the premises, it was much easier for me to observe the customers, but to be on the safe side, I had to buy glass display cases for especially small goods.
To additional monthly expenses, immediately add the salary of sellers (salary 12-15 thousand for the first time and interest on sales at your request), the cost of renting premises, paying for utilities and taxes.
What is better to sell in a hardware store?
In order for a store to quickly break even and begin to generate net profit, it is necessary to carefully think through the range of products, their price category and the setting of markups. As practice shows, in order to establish yourself well among new customers, you need to offer products of medium price range and quality. If it is expensive, buyers will go to competitors, and in general, most people prefer to go to specialized stores or hypermarkets for high-quality and expensive goods. If you offer cheap, low-quality “Chinese” goods, you will quickly gain a bad reputation and lose customers.
The average markup on hardware store goods usually does not exceed 65-70%. I specifically say “average”, since in fact, on more expensive items you have to set a markup of 30-40%, but on any everyday small thing you can safely “increase” everything by 100%. This is normal practice among similar stores.
Actually, a markup needs to be set on something, but for some reason I still haven’t talked about where to get products for the store.
Supplier selection
Probably the last important step to success is choosing a reliable wholesale supplier. It is advisable that the supplier’s range covers as many products as possible that you intend to sell. Having one large supplier is not only convenient, but often profitable. With long-term cooperation and mutual trust, you will be able to receive additional discounts on goods or take advantage of deferred payment.
The first months of operation of a household goods store
Well, I’ve already talked about how to open a store and where to buy goods. It remains to mention what awaits you in the first months of work.
In general, it’s better to work in the store yourself for the first couple of months. That's exactly what I did. At first, while I was looking for a seller, I performed all the duties myself, fortunately the number of visitors was not particularly large. This has its advantages.
Firstly, I was able to find out which products are in great demand and generally understand why people most often come to a hardware store. I also observed their behavior and tried to change the location of the goods, seeing that some of them simply went unnoticed.
Secondly, I began to build relationships with customers, trying to be as pleasant and polite as possible. Remember what I said about the importance of a store's "fame"? You need to work on this from the first days. If you offer a good product and are a pleasant salesperson, people will come to you and tell their friends about the new store.
Finally
I want to end my story with a short summary. Thanks to the well-chosen location and the fact that I myself controlled the work of the store during the first months, the money invested in my business was completely recouped after 1.5 years. Despite this, I don’t “relax” and try to constantly improve the store and test different approaches. For example, now in my store there is a small discount on all products for pensioners, which is a great attraction for customers.
I hope my story has convinced you that opening your own hardware store and making money from it is quite possible and not too difficult. I wish you good luck in your business!