Profit-ltl?king strategies that sell fasteners & connectors

wfir;l:::,:1ff"#ffrliffi; a majm profit center for a retailer.

In many stores hardware accounts for l4-154o of net sales, according to the National Retail Hardware Association. Profit margins, they say, average over 4OVo with some retailers using variable pricing to maintain margins of 50Vo or better. With a

Story at a Glance

How to turn fasteners and connectors Into a major profit center ... ideas to help a retailer maintain margins ol 4V/o and better ... techniques that work at independent stores.

high percentage of fasteners in the blind item category, margins can often exceed 807o.

Retailers who are successful with fasteners and connectors work !o create a strong product niche. They stock enough SKUs to fill any need without having to special order and make the section a dominant feature. Broad selections have been found to attract mofe customers than low prices.

Retailers are successful following completely different strategies of department placement. Some place an impressive fastener display at the front of the store, making sure it is one of the fint deparunents seen by the customer. Others locate an equally prominent display at the back with the idea that it draws customers through the store, exposing them to other merchandise. Whether the display is up front on in back, it must be powerful. Developing a s8ong product niche also denands fasteners and connectors be cross merchandised in the lumber and power tool departments as well as near the contractor service desk.

Fasteners and connectors are labor intensive. Constant inventory maintenance is required for a consistent instock position. A store employee or a factory rep must be responsible for checking inventory and maintaining stock on an established schedule. Good housekeeping is second only to being in-stock. Fasteners and connectors are easily mixed up and need constant care so customers can find the items they need.

Bin labels and price stickers must be accurate. Displaying in-use sketches or photos with use instructions can bolster a customer's confidence in making his selection. Some manufacturers including Kant-Sag and Simpson Strong Tie provide displays showing how their products are used. Teco/Lumberlok has posters with line drawings of projects and explanations of hardware needed for them.

Customers like the choice of buying individual or packaged fasteners and connectors. Bulk fasteners sell best to customers requiring only a few. Packaged fasteners, which often have a price break, appeal to those who need large numbers of fasteners and don't mind buying a few extra

Most retailers feel that all but the most experienced customers need help in making their selections. One or more of tle sales staff should be an expert on fasteners and connectors. Stores that have deck clinics or similar project seminars find that spending some time 0alking about the correct fasteners and connectors improves hardware sales. Other stores report good results including fasteners in project kits. Teco is marketing several kits with project plans, lumber lists and fasteners or connectors.

Customers favor stainless steel fasteners and connectors, relating them to rust-free service and high quality. Some retailers have been able to eliminate lightweight, inexpensive fasteners and connectors, finding customers are willing to spend more for higher quality.

A profitable, winning niche in fasteners and connectors is best developed with strong merchandising, offering a wide selection with deep stock, knowledgeable employees, good housekeeping, customer education and letting your market know what you have.

Profit Makers

o Merchandise a Dominate where the competition is weak o Keep a wide selection & deep stock o Always be in stock o Train your employees o Provide customer service o Develop educational displays

O Cross merchandise o Offer bulk, boxed & packaged a Use free standing, peghook or clip-strip displays

O Stock heavy duty, high quality fasteners & connectors o Organize department a Maintain good housekeeping o Use variable pricing

O Promote add-on sales such as power tools o Advertise what vou have and do

Southern Plne Panel Looks Ahead To 2000

Concentrating on future timber supply, environmental issues and competitive products, a panel of 16 soulbern pine industry voluntcers is compiling a bluep,rint for marketing between 1995 and 2000.

The panel proje.cts southern pine lumber capacity could reach l7 billion board feet by the end of the century. Other findings of the group, which has been meeting for the past year under chairman Clayton Barns, Willamette Industries, and vice chairman Larry Kirkwold, Weyerhaeuser: o Western timber supplies will continue to decline because of harvesting restrictions and mill closures. o Southern pine's marketing mes- sage for the next five years should demonsrate wood as tbe only natural, renewable, environmentally superior building material. o Competition for available timber will increase between lumber, panel, engineered wood and pulp producen.

O The South will continue to supply an increasing percentage of the international wood products market, although resource constraints and increased government regulation will inhibit production.

O Environmental restrictions will increase pressure to reduce timber harvesting in all areas.

O Environmental restriction of private and industrial landowner timber harvesting rigbts will increase.

O Safety and environmental issues of pressure treated lumber will need mce attention.

O Present soulhern pine markets will be pressured by substitute products such as steel, concrete, aluminum, plastics, imported wood poducts and engineercd lumber including laminated veneer lumber and l-joists.

New NAWLA/Canadian Council

The North American Wholesale Lumber Association and Canadian Lumbermen's Association have formed an Advisory Council to improve communications between CLA manufacturers and NAWLA wholesalers.

Six advisory councils including those for Western Wood Products Association, Western Red Cedar Lumber Association, California Redwood As-