The hardware retail landscape is competitive, featuring giants like Home Depot and Lowe’s alongside franchises like Ace and True Value. Nevertheless, small hardware stores are successfully carving out their own space in the industry nationwide.
So, how does one open a hardware store? Check out our 12-step guide below to kickstart your journey!
💡 Key Takeaways:
- Despite intense competition with big-box stores, opening a hardware store is still a popular and profitable choice
- Opening and running a successful hardware store relies on several key steps, each of which is outlined in this guide
- KORONA POS provides tools to streamline sales processes, manage inventory, and enhance customer engagement, all in one place
What You Need to Know About Starting a Hardware Store
With total sales of 64.8 billion U.S. dollars in the US alone in 2024, the hardware retail industry is thriving. Driven by steady demand for home improvement, DIY culture, and housing renovations, this sector is resilient, even during economic slowdowns.
While big-box retailers dominate, opportunities exist for local stores to carve out a niche through personalized service, convenience, and specialty inventory.
Why Open a Hardware Store? Benefits to Consider
Opening a hardware store offers more than just a steady income—it connects you to your community, supports local trades, and taps into America’s ongoing love for DIY and home upgrades.
Benefit #1: Steady, Year-Round Demand
Hardware is an evergreen business. From plumbing emergencies to seasonal yardwork and home fixes, customers rely on local hardware stores for urgent, everyday needs.
This consistent demand helps cushion the business against market volatility and builds a loyal, repeat customer base.
Benefit #2: Community Trust and Loyalty
Unlike big-box chains, local hardware stores can build personal relationships with customers. Being the go-to expert in your neighborhood builds trust, drives word-of-mouth referrals, and keeps shoppers coming back—not just for products, but for advice they can count on.
Benefit #3: Diverse Revenue Streams
Hardware stores can expand into services like key cutting, equipment rentals, repairs, or garden supplies. Such flexibility allows owners to adjust to market trends and maintain profit margins throughout the year.
Benefit #4: Lower Risk with Franchising Options
New entrepreneurs can reduce risk by joining an established hardware franchise. Brands like Ace or True Value offer name recognition, supplier networks, and systems that work, giving you a running start while maintaining local control.
Very happy with my decision to use this software and track the performance of my hardware store. KORONA POS is well worth the money. I chose it because it did not require a payment processor. Highly recommend!
-Guss S.
How to Start a Hardware Store? 12-Step Guide
Starting a hardware store takes planning, capital, and a strong connection to your community. Let’s walk through the 12 essential steps to opening a hardware store:
1. Choose Between a Franchise and an Independent Hardware Store
Deciding between a hardware store franchise and an independent hardware store shapes your business model, startup costs, and long-term flexibility. Franchises offer built-in support, while independents allow more control.
Each has trade-offs—so choose what aligns best with your goals and resources before starting your retail business.
Franchise Hardware Store
Joining a hardware store franchise like Ace Hardware or True Value gives you access to an established brand, bulk pricing, and proven systems—ideal for first-time entrepreneurs.
Pros | Cons |
National brand recognition | Franchise fees and royalty payments |
Vendor and supply chain support | Less flexibility in store operations |
Marketing and training assistance | Less connection with customer base |
Independent Hardware Store
An independent hardware store gives you full control over your inventory, branding, and business operations—perfect for experienced retailers or those with a strong local vision.
Pros | Cons |
Complete operational freedom | Must build your brand from scratch |
Custom product selection | No franchise support network |
No ongoing franchise fees | Higher risk |
Cost Comparison Table
Feature | Vendor-Managed Inventory (VMI) | Consignment Inventory |
Ownership of Inventory | Retailer owns inventory once delivered | Supplier retains ownership until items are sold |
Independent Store | Supplier monitors and restocks based on sales data | Supplier may restock, but ownership remains with them |
Payment Timing | Retailer pays upon delivery or based on agreement terms | Retailer pays upon delivery or based on agreement terms |
Inventory Risk | Retailer bears the risk of unsold goods | Supplier bears the risk of unsold goods |
Typical Use Cases | High-volume or essential goods with stable demand | Niche, seasonal, or trial products with unpredictable demand |
Returns | Usually limited or not accepted | Often allowed for unsold inventory |
Storage Location | On retailer's premises, but supplier may control stock levels | On retailer's premises, supplier retains ownership rights |
2. Set Up Supplier Relationships and Plan Inventory
Reliable supplier relationships are critical to keeping your shelves stocked and customers satisfied. Focus on key inventory categories like tools, plumbing, electrical, paint, and seasonal items.
Build in plans for emergency restocks and adjust orders based on seasonal demand. Use smart inventory valuation strategies to avoid overstocking or shortages that can hurt your margins.
3. Invest in the Best Hardware Store POS Software
Look for a hardware store POS software built for retail complexity that supports barcode scanning, work orders, and multi-store syncing.
Cloud-based POS systems are critical. They increase convenience and efficiency and provide greater data security. The best POS systems for hardware stores offer multiple features that serve your business, all in one place.
Get started with KORONA POS today!
Explore all the features that KORONA POS has to offer with an unlimited trial. There’s no commitment or credit card required.
4. Create a Business Plan for Your Hardware Store
Outline your goals, target market, startup costs, and revenue projections. A well-thought-out plan also helps secure funding and keeps your store growth-focused from day one.
Choose a Strategic Location and Store Layout
Choose a space with strong visibility, steady foot traffic, and proper zoning. Internally, design clean, intuitive aisles by category—tools, plumbing, electrical, seasonal. Explore smart retail layouts to improve both navigation and conversion rates.
Define Your Unique Selling Proposition (USP)
What makes your store stand out—personalized service, rare inventory, or competitive pricing? Define this early and weave it into your marketing, signage, and customer experience.
Set Financial Projections and KPIs
Outline expected startup costs, monthly operating expenses, and projected revenue. Define KPIs like average transaction value, customer retention rate, and inventory turnover to stay on track.
5. Define Your Niche and Understand Local Demand
To stand out as a local hardware store, identify your typical customers and build a store that meets their needs. Whether it’s eco-friendly supplies, DIY project kits, bulk contractor materials, or tool rental services, align your offerings with what your area lacks.
6. Estimate Startup Costs and Explore Financing Options
Starting a hardware store can range from $100K to $500K+, depending on whether you choose an independent hardware store or a franchise. Consider financing options like SBA loans, term loans, or equipment financing to cover expenses.
❗Pro Tip:
Use online tools or calculators to estimate your loan costs.
7. Register Your Business and Get Insured
Registering your business is a crucial first step. Obtain your EIN, apply for a business license, and ensure compliance with local zoning laws. Additionally, secure liability insurance to protect your store from potential risks.
Here’s a quick checklist to help you stay on track:
Business Registration checklist:
✅ EIN (Employer Identification Number)
✅ Business License
✅ Zoning Approval
✅ Liability Insurance
8. Start Marketing Your Hardware Store
Retail marketing strategies should begin on day one. Leverage social media, local SEO through your Google Business Profile, online reviews, and local directories to ensure customers can easily find you. Combine with offline efforts like local radio, flyers, and community events to drive traffic.
9. Build a Customer Loyalty Program
A strong customer loyalty program keeps customers returning and improves customer experience in your retail store. You can opt for digital punch cards via e-mail or points-based loyalty programs to make rewards easy to access.
10. Offer In-Store Services to Stand Out
Offering in-store services like key cutting, blade sharpening, screen repair, or tool rentals can set your business apart—especially if you’re running a neighborhood hardware store. Convenient, value-added services like these keep customers returning and strengthen your reputation as a one-stop shop.
11. Hire and Train Knowledgeable Staff
Invest in training that builds strong product knowledge and communication skills. To stay flexible, consider balancing full-time and part-time roles, especially when hiring for peak seasons.
Well-trained employees not only help customers find what they need (which is crucial in a hardware store) but also create a positive shopping experience that keeps them coming back.
12. Engage With Your Community and Give Back
Community engagement helps build loyalty and shows customers you care. Support local efforts by setting up donation bins, hosting nonprofit DIY events, or organizing repair cafés.
These activities not only give back but also create meaningful connections with your audience.
Is Owning a Hardware Store Profitable?
Owning a hardware store can be profitable, with average profit margins typically ranging from 10–20%. However, profitability depends on factors like location, niche focus, service offerings, supplier deals, and choosing the right POS system.
Stores that offer specialized services or tap into underserved markets often perform better. According to data from IBISWorld, profit growth tends to build steadily over time rather than overnight.
Ready to Open Your Hardware Store? Here’s What’s Next
If you’re ready to open your hardware store, it all starts with a solid business plan and the tools to set you up for success.
Take the first step by choosing KORONA POS for hardware stores. Our powerful point-of-sale system simplifies inventory management, boosts sales, and helps you create relationships that last.
