Hardware stores carve their niches

Gladieux Home Center’s niche—its Lionel train department—brings in $150,000 to $200,000 in annual revenues.

When Ron Gladieux Jr. and his family decided to build a new hardware store in 1999, they thought it would be fun to add a small Lionel model train department.

“Lionel started in 1900, so I thought it would be something nostalgic, and something for the kids to do when families came into the store,” said Gladieux Jr., whose family owns Gladieux Do it Best Home Center in Oregon, Ohio. “Now we have a mailing list of over 1,000 people who buy from us. It’s become a lot bigger than we intended.”

In fact, when the Gladieux family redesigned the 17,000-square-foot store a few years ago, they devoted a full 1,200 square feet to Lionel trains, setting up several working displays, including an overhead run with more than 100 feet of track. The store also sponsors three to four train shows a year, which bring in several hundred customers. All told, the Lionel train department produces $150,000 to $200,000 in annual revenues for Gladieux Do it Best Home Center.

“We do the shows on a Sunday, which is our slow day, sending out mailers and offering food to go along with it,” Gladieux Jr. said. “Then people tend to walk through the store and fill their cart with other things, so it definitely creates add-on business.”

Gladieux Do it Best’s Lionel train business is one example of how a hardware store can take a niche department and turn it into a profitable part of the business. In addition to generating revenue, niche departments can also give independent hardware stores a much-needed edge in their marketplace.

When hardware store owner Mike Obermeier tried to resume his old hobby of wine-making after his children were grown in the late 1990s, he couldn’t find the equipment anywhere. So he decided to stock it himself at Obermeier Hardware & Rental in Rockport, Ind.

Obermeier uses one side of a 20-foot aisle to carry stabilizers, sterilants, fruit bases, corkers and bottles for wine making, and malted grains, dried malt, caps and bottles for beer making. The niche serves up $20,000 to $25,000 a year in revenue.

“All our business is through word of mouth, and people come from as far as 60 miles away to buy beer and wine-making supplies,” said Obermeier, whose family has owned the store since 1959. “There are doctors, lawyers, preachers and teachers—you name it. It’s quite profitable also, with the best margins on anything in the store.”

Niche departments come in all shapes and sizes. Johnson’s True Value in Groton, Conn., does a good business in Boy Scout and Girl Scout uniforms, while Lehman’s of Kidron, Ohio, is world famous for offering off-the-grid products like oil lamps, butter churns and crank-powered radios. And then there’s A&G Hardware, a Gillespie, Ill.-based store that takes in dry cleaning while also serving as a UPS drop-off location.

Crouse Lumber, a Do it Best store/lumberyard in Lima, Ohio, also has an interesting niche: Partners Bob Wieging and John Briggs sell house plans, offering a book of designs or custom design services, as well as construction services if required. If the homeowner uses Crouse to build the house, they receive six copies of the plans at no charge.

“Many people only build a home once in a lifetime, and it’s a nice niche for us because we can help them build from the ground up,” said Tim Co-nine, sales manager for Crouse.

Chandler Ace Hardware in Chandler, Ariz., owned by partners Robert Vasquez and Brian Freeland, has several niches, including a selection of complete outdoor kitchens with upscale brands like Viking and Capital grills and rainproof hi-definition LCD televisions.

The store also offers a granite countertop program, through which the customer selects his own slab of granite from the warehouse and can save $5 to $20 per square foot over the nearby big boxes, according to Vasquez.

“What we’re finding out is there are certain niches we can go after and be very competitive,” he said. “With granite countertops, we can beat bigger stores on price. Plus, I babysit every job, so our customers are getting great customer service as well.”

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