If you believe experienced entrepreneurs, opening a small retail outlet in this area will bring its owner more losses than profits. The reason for this conclusion lies in the fact that the costs of renting a trading area and warehouse, wages, taxes and public utilities, take away almost all profits and do not give the business the opportunity to develop.
Is it really impossible for an entrepreneur who wants to open a small building materials store without significant investments to create a profitable business? Let's figure it out.
Usually, in search of materials for repair and construction, a potential buyer is inclined to go to a large construction center, the area of which can be 1000 or even 2000 sq.m. The reason for this is several factors: the ability to purchase everything you need in one place, a wide range, and receiving a free consultation with a specialist if questions arise.
But there are also cases in which the buyer is more likely to go to a small construction pavilion: collecting materials that have run out during renovations, purchasing a small amount of building materials for cosmetic repairs, the location is close to home.
The moment that determines the profitability of a business is the choice of an advantageous location for sales. While large sellers are forced to sell their goods on the outskirts of the city, you can expand your business in a residential building, shopping center or local market.
How to choose and prepare the right premises for a store
Where to start to get building materials from scratch? To open a profitable point for the sale of construction and finishing materials, experts recommend paying attention to the first floor of a residential building near new buildings, or a construction market located within the city.
When opening such a business in a residential building, make sure there is an emergency exit in the premises - this will be needed to pass the inspection fire safety. If the apartment is located in a residential building, in order to process documents and legally carry out trade, you will need to remove it from the housing stock.
The profitability of your business will increase significantly if you own the retail space, but entrepreneurs do not recommend rushing into this and working in rented premises for the first 2 years.
If soon after opening, you discover that this place is not profitable month after month, then it will not be difficult for you to simply leave this outlet, without the need for subsequent sale of real estate.
If you choose a construction market, before purchasing products and renting premises, walk through the pavilions, study what your future competitors are selling and at what price.
Remember: you will be of greatest interest to the buyer only if you offer a unique product that is not on the market, or the same one, but at a more attractive price.
Decoration of a building materials store
When preparing a trade and warehouse area, there is no need for expensive finishing materials. The finished room should be bright, clean and dry. Make it inexpensive cosmetic repairs and make sure there is good ventilation. This is all that is required from the premises for successful sales of your business. To prepare the premises you will need an average of $6,000 – $9,000.
Equipment for a building materials store
To trade building materials, you will need to purchase a cash register, as well as counters, display cases and shelving that will help in displaying finishing materials. Organize the lighting on the shelves in such a way as to create an opportunity to clearly see the products on offer.
If your business sells power tools, be sure to equip your display cases with several outlets.
Registration of a business selling building materials
The sale of building materials, like any business, requires pre-registration with the tax and pension authorities. For a small pavilion, registering as an individual entrepreneur is sufficient; this will help significantly save on taxes.
OKVED codes to register such activities they present an impressive list, depending on the presence or absence of your trading platform on the Internet, courier delivery and other specifics. The main code that you will need when registering is 47.52 Retail trade in hardware, paints and varnishes and glass in specialized stores.
What documents are needed to open a building materials store?
Construction materials cannot be obtained without passing inspections and paperwork. You will need to obtain a permit and patent to trade. What is needed to obtain a permit: the following documents must be submitted to the trade department of the city administration:
- Conclusion from the fire inspection and SES;
- A certified copy of documents confirming your registration as a legal entity or individual entrepreneur;
- Lease agreement or documents confirming ownership of retail and warehouse premises;
- Certificate of registration in tax office;
- Document on the qualifications or education of the founder;
- Information about the operating hours of the enterprise.
As for the trade patent, it can be obtained from the tax office. When applying for a patent, you will go through the registration procedure cash register. All these activities can take from two weeks to several months, and the cost of registration and preparation of all documents necessary to start activities will be about $300.
Construction store assortment
When choosing an assortment for your organization, it is very important to provide the buyer with products of various price categories. As a rule, at least two thirds of products are presented in the middle price segment and one third remains for cheap and expensive representatives.
The assortment of the trading platform may consist of the following construction products:
- Paints, varnishes;
- Cement;
- Tile;
- Wallpaper;
- Skirting boards;
- Hand power tools;
- Construction accessories;
- Gypsum;
- Parquet, linoleum, laminate;
- Self-leveling floors;
- Various primers;
- Spatulas, brushes, rollers, etc.;
- Drywall;
- Glue;
- Construction mixtures, etc.
Construction materials store staff
To open a building materials store, owners usually limit themselves to hiring one salesperson, or, in order to save money, stand behind the counter themselves.
A seller working as a single person must have sufficient knowledge in the field of construction, design and architecture, as well as a good knowledge of the range, purpose and features of each item of goods.
If there is an experienced and experienced person behind the counter knowledgeable person, your organization's sales will be 30% higher than otherwise, so it is recommended to take this moment with great responsibility and attention.
Profitability of a hardware store
Let's calculate the profitability and find out how much it costs to open building materials with an area of about 100 sq.m.
Investments:
- Purchase of goods for sale – $10,000;
- Registration, inspections and paperwork – $300;
- Cosmetic repairs, preparation of the trade and warehouse area for work – $8,000;
- Purchase of shelving and cash register – $7,000.
Total: $25,300.
Monthly expenses:
- Rent, utilities – $560;
- Replenishment of goods - $4,000;
- Salary to the salesperson – $280;
- Accounting – $80;
- Taxes – $130.
Total: $5,050.
Profit:
We will take into account the profit based on the trade margin - 45%.
The cost of sold building materials for the month is $4,000.
Profit for the month – $5,800.
Gross profit – $750.
Thus, with regular sales of at least 40% of the total stock of goods monthly, the investments made will pay off in 3 - 3.5 years of operation.
Speaking about how to open a hardware store from scratch and make it profitable, it is useful to know a few from experienced entrepreneurs:
- Group products. Location has great value. It is important here that the buyer can familiarize himself with all products of one category in one place. Also distribute the products according to their intended purpose. Let brushes and rollers lie next to paint products, and screws and keys next to screwdrivers;
- Samples. Each product, which has a wide range of colors and textures, should have a catalog of samples that can be examined and touched. Place samples by color scheme and indicate the article number for each item;
- Access. Give customers the opportunity to turn on and see how a drill or any other power tool works. Open access to your products;
- Don't stop at one point of sale. One small pavilion will not be able to generate a sufficiently high and stable income. By developing and opening new points, you can protect your business from sudden surges in demand and significantly increase your income.
- Something that the buyer may forget about. Small consumables, such as light bulbs and batteries, are best placed near the cash register. The buyer will definitely remember that he wanted to purchase them while waiting for payment or his turn.
In this article we have given recommendations regarding how to building materials. Calculations and experience of entrepreneurs in this area have shown that, under certain circumstances, this enterprise can be truly profitable and effective.
In any locality Russia always has and will have a need to build facilities for various purposes. And over time they deteriorate and require repairs. This means that we cannot do without construction and finishing materials in our lives. Hence the conclusion - the sale of such goods is a popular and profitable business.
Reconomica Today I will share with you, dear readers, the experience of a successful entrepreneur who combined the production of building materials with the sale of not only his own, but also similar products from other companies.
The main tool for the development of this business was the organization of an office to receive orders from consumers for similar goods. You will learn about the positive and negative points, the benefits received and the prospects of the specified business.
Greetings. My name is Mark. I am 37 years old. I'm from Astrakhan. Now I am selling tiles, tiles, decorative mosaics and many other related products for construction, renovation and interior decoration.
I don’t have a store, but an office for receiving orders. Trade turnover ranges from one and a half to two million rubles per month, from March to November inclusive.
Sales begin with the onset of the construction season and until its end. I’ll briefly tell you how I came to this type of activity.
My first steps in the construction business
It all started with the production of paving slabs; I organized this business in 2014.
Production of paving slabs.
Things weren't going well with production. There was only enough money to rent premises, pay staff and pay taxes.
At first I worked with virtually no profit. There were orders constantly, but it was almost impossible to make money on them.
There was a need to increase production volumes and reach serious clients. This step required huge investments in production. There were no such opportunities.
Choosing the direction of further development of the business
The further path of business development was vague. It was necessary to either urgently decide something or stop business activities.
How the idea came
An acquaintance of mine worked at that time in a managerial position in a manufacturing company that specialized in the manufacture of bricks and concrete products. He suggested ways for further development.
Finding ways to promote your business
I thought that production was built first, and then the goods produced were sold, and the business flourished. Maybe this happens on paper, in fantastic business plans, but not in reality. First, you need to trade someone else’s goods and replenish your customer base, and when stable demand arises, you can open your own production if it is profitable.
Opening without market knowledge and experience is a path to failure.
Proof of this is the many small businesses that opened and closed, accumulating large debts.
First mistakes
I was like that too. I read an amateurish business plan in some social network. Everything seemed easy and simple. But in fact, he had almost said goodbye to the invested money and was ready to sell his car to pay off the accumulated debts.
Business is a science and a way of life. This craft can be mastered. The main thing is to set the goal correctly and find a short path to it.
Initially I wanted to try something I was unfamiliar with. Business does not tolerate amateurism. Especially in the manufacturing sector. It took a long and difficult time to get out of the current situation. It’s very good that I found an experienced person who told me what to do next.
Stages of opening and developing a sales office
Choosing a retail location and its purpose
Even if there is no one to sit there, the sales office should be in order to:
- receive clients;
- present products;
- conclude contracts.
Conditions for renting premises
There was free space on the territory where I rented the production workshop. Its area was 150 m², the rental cost was 15 thousand rubles. per month, without utilities. The total amount of payments was approximately 18 thousand rubles. per month. I reluctantly took this step.
Equipping the office with everything you need
For full-fledged trading you will need:
- furniture;
- racks;
- computer;
- printer;
- various stationery items.
I spent 70 thousand rubles on furnishings and equipment for the office.
The furniture was the cheapest. The printer was also included in this price; the computer had to be brought from home. The retail space was large, but there were no other options.
Setting up a full-fledged office is expensive.
Later, the space of this office became insufficient.
Methods for displaying products on the sales floor
The first thing I did was exhibit my products. Since there was a lot of space, paving slabs laid out in all sorts of ways. Combined two, and even four different colors tiles of one model, which could be laid in different colors.
Showing samples of paving slabs is a necessary sales attribute.
Thus, I could not show my products in a workshop environment.
Expansion of the range of building materials
So I became a representative of a mini-factory for the production of building materials.
In the sales area, he displayed the bricks they had made, and placed catalogs of the rest of the products, which, due to their large dimensions, could not be placed in the office.
Display of samples of bricks and other products in the sales office.
I placed samples of floor slabs and foundation blocks near the gates of my workshop.
Product promotion activities
The next question concerned information support for trade - marketing.
The office was located on the roadway. The administration allowed advertising banners to be placed on the building. I made two banners measuring 1 by 4 meters to hang them on different sides buildings. Their cost was 8 thousand rubles.
And they also made a remote stand, which was located in front of the entrance to the building. Its price was 2 thousand rubles.
From 4 thousand to 7 thousand rubles were spent on promoting products in Avito, newspapers, making leaflets and business cards. per month.
How to make money selling construction products from third-party companies
As a result of the increased demand for their products and the inability to satisfy the needs of consumers with the available production capacities, it was necessary to urgently make some decision.
Reasons for turning to other manufacturers
There was no money to expand production, and I didn’t really want to increase it.
In the warm season, it was still possible to pay rent, but in winter, when there are almost no orders, and production premises you need to heat, the rental cost was significantly unaffordable.
The solution was to negotiate the sale of tiles from other manufacturers .
My advantages when choosing a partner
In the modern market, the problem of any manufacturer is the sale of products. In such an environment, with fierce competition, manufacturers who do not have their own sales channels become hostage to sellers.
If I have a good client, then the company provides a minimum wholesale price for the products.
The commodity producer always has a need for cash– these are debts on wages, rent, debts for supplied raw materials, or simply a person has a loan from the bank.
The manufacturer is always happy to sell, even with minimal markup on the product. I took advantage of this situation.
Very often he earned more from sales than the manufacturer.
Positive changes in business provide impetus for further growth
When organizing any business, constant movement forward is necessary. Otherwise - stagnation.
Significant progress in trade after the conclusion of the partnership agreement
Finding a manufacturer to collaborate with turned out to be easy. An agreement was signed with him. The list of products presented far exceeded my product output. A quarter of the room was occupied by an exhibition of their products.
I started searching for suppliers who could provide exhibition samples, stands, catalogs and other promotional products for free.
Finding new ways to increase sales
And a certain style of work in such auctions also emerged. It was necessary for the manufacturer or wholesaler whose products I represent to release the goods from the warehouse at the sales price in their office.
Not everyone agreed to such cooperation, but still there were entrepreneurs who wanted to expand. They also had conditions - if I represent their assortment, then I no longer work with anyone.
Samples of reinforced concrete products in an open area.
Optimization of retail space
The trading floor began to fill with samples of various goods. Then he divided the trading zones. On the production site he placed the largest specimens - reinforced concrete products.
Roofing samples.
They were joined by samples of timber, roofing, mesh, metal products - everything related to construction.
Samples of rolled metal.
I divided the office space into three parts - an office and two halls. The first hall served to display products for construction and landscaping, the second hall presented materials for finishing rooms and bathrooms.
Sales area with samples of finishing materials.
I filled empty spaces in the trading floors with goods that fit the theme. For example, the sales floor was replenished with two stands - one with LED lighting, the second representing manufacturers of swimming pools for personal plots, saunas, and baths.
Temporary setbacks are inevitable
Not all positions were profitable. Some goods or services were never sold. For example, I have never accepted an order to make a pool or fountain. Mosaics for bathrooms sold very poorly and took up a lot of space, but bright and beautiful stands with such samples had a positive influence on buyers.
Not everything is on sale, but some products create a good atmosphere on the sales floor.
How much does trade in construction materials bring?
I’ll tell you briefly about the profit received from the sale of construction and finishing materials.
Amounts of allowances for goods
I marked up the goods sold by 10 to 30%. The highest markup is for paving slabs and building materials.
Tiles, porcelain tiles, tiles and countertops from natural stone. The average markup was 20%.
What does income depend on?
If the turnover passing through my office amounted to 1 million rubles, then I have approximately 200 thousand rubles left in profit.
From there taxes, deductions, rent, advertising expenses and the salary of the seller and accountant are deducted.
Half of this amount remains. If at the height of the season you manage to sell 2–3 million rubles, then the costs are the same, and the profit increases. I wrote my turnover above. It’s not difficult to calculate how much the business brings me in net.
But don’t forget that January and February are months with almost no revenue. However, money must be paid for rent, and employees of the enterprise must be paid wages. And for this you need to work hard during the busy season.
My trading method
Some, after reading the article, may think that I am an ordinary speculator, and buyers do not receive anything when purchasing goods through my sales office. If that were the case, then customers wouldn't come here.
Consulting customers on products
I made a point of advising consumers regarding the characteristics of the building materials they purchased. In addition, he did not accept low-quality goods for sale.
Consumers did not need to run after sellers and beg for illiterate advice about the product I was selling, since I knew everything and could answer clients’ questions.
Application of the software
I also mastered computer 3D modeling, and made room renovation projects for free, calculating the materials used.
For example, the program calculated the quantity of tiles for a bathroom accurately, and customers did not have to purchase extra material, such as tiles and glue.
Design service
My salesperson also provided design services and helped buyers decide on colors, sizes, and finishing options.
It's very hard work.
An impeccable reputation of a businessman is an important component of a successful business.
Another advantage is reputation. In three years of work I haven’t let anyone down, so they installed it with me business relations wholesale consumers.
It would seem that construction companies can go to manufacturing plants themselves and purchase goods in large quantities.
But, apparently, there are problems that prevent such actions.
When words do not differ from deeds, this is a reputation that also pays off.
In addition to the above, it is very important that the ordered goods are correctly processed, counted, checked and delivered on time.
Future plans
Now I am planning to open a wholesale office-warehouse that works on the same principle. There are many manufacturers who want to sell their goods. Now I want to negotiate with large companies throughout the European part of Russia. I am sure that success will definitely come.
Our reader Vlad Petrov sent us his story about how he developed wholesale business related to the sale of building materials and soil. We pass the microphone to him.
The story began in 2013. I was constantly thinking of all sorts of business ideas, even though I was working in a factory at the time. Apparently, Robert Kiyosaki's books had a very strong influence on me. I was not going to give up, I tried various projects, but it was all frivolous, I quickly got bored, and I again switched to searching for a new “secret of success.”
These ideas sat in my head, from time to time I discussed them with various acquaintances. My next idea was to start decorating the premises - hire craftsmen and take orders. Although, I have never dealt with this area - I just thought that this idea was understandable, which means it was easier to implement.
And then one day I met my friend, whom I had not seen for several months. We talked about this and that, and I suggested that he start this kind of business. He told me that he himself doesn’t really understand this process and doesn’t want to get involved with it. But instead, he suggested that I go into cargo transportation, something that he does himself.
I knew that he was carrying some kind of soil, but I never asked him what it was. Immediately he outlined in general outline his activities and offered to join. I didn’t immediately decide to take such a step, but the idea sank into my soul.
At first I started joining this business in free time– in the evenings I posted ads on the Internet on free boards and called construction companies from DoubleGIS.
Certainly, big money with this approach it could not come - in order to earn money properly, you need to be properly immersed in activity. Therefore, after some time, I again plunged into the factory routine, abandoned the search for clients and worked as usual.
I read the correct words in a couple of books from different business coaches: until a person desperately needs to earn money, he will not lift a finger. I don’t know how it is for anyone, but this was just my case.
I still couldn’t find a girl with whom I would like to build a serious relationship - I met people left and right - on the street, in parks and general companies, but it didn’t work out, even if you cracked. But one fine day I finally found such a girl and was about to get married.
But the salary at the factory would definitely not be enough to provide for a family. So I called my friend and asked if his offer was still valid. He said yes. Thus began a new stage in my life.
We started working in the winter, every day I came to the apartment that my friend was renting, they called clients, placed advertisements, sometimes, overcoming fear, I went to construction sites, talked with foremen, and contacted suppliers.
The first two months, of course, were a bit difficult - there were a lot of calls, there was little use, I, as a rule, heard the same thing - “call back in the spring” or “send a commercial offer by mail.”
Well, this was not a reason to give up - I set a goal to work here for at least six months so that I could talk about something. And I really didn’t want to go back to the factory.
Closer to February, the situation began to improve - the first, thin stream of clients began to flow. I have already earned money for February 26 thousand rubles- more than at the factory. “Well, not bad for the winter month,” I thought. Eh, I wish I knew what would happen in March...
March turned out to be hot - applications poured in like from a cornucopia - people responded to my commercial offers, called through advertisements, some even bought something on the spot - during my first call to them.
When at the end of March I calculated how much I earned, the figure turned out to be interesting - 111 thousand. 7 times more than at the factory - not bad, right?
Of course, not all months were so successful, but still, on average, my income increased 4 times compared to last year - and this is just the beginning. It was a pleasant feeling when I negotiated for a long time, agreed on the price with everyone, and at the end, cars with sand were flying to the construction site all day.
Analyzing my year of work in such a business, I came to the conclusion that the main method of recruiting a customer base is cold calling. The competition in such a business is not bad, so directors of companies and suppliers rarely sit down on the phone and look for who will bring them crushed stone - there is already a queue of companies ready to transport materials to them.
Tours of construction sites are also very useful - I once went to a construction site and asked the foreman for the number of the deputy director of the development company. They mainly rent out premises and rarely build, so I would not have found such a company in the catalog construction companies. And for this site alone, we brought them about 1,500 tons of sand and crushed stone, and removed 1,000 cubic meters of soil and construction waste from them. Therefore, detours cannot be neglected.
However, advertisements also cannot be discounted - not only are there private traders who bring in more than 5,000 rubles from one transaction, but also construction companies they still call sometimes. This happens when they need some kind of scarce product - used road slabs or soil, or when the object is located far outside the city, and the spread of prices for delivery to that address can be very large - it makes sense to compare suppliers.
So, based on the advertisements, I found 3 large clients; one was supplied with about 800 tons of sand and crushed stone over the course of a year, and a couple more were supplied with soil and crushed stone. Therefore, use all the working methods of finding clients and don’t discount anything.
Not long ago, a thought occurred to me - why not help others and help people earn the same money as me?
IN recent years The population of our country is actively building and no less actively renovating new and old apartments. Many cities are now experiencing a construction boom. And that’s why everyone needs building materials. Sale of materials and other components necessary for construction and repairs – profitable business. Many entrepreneurs have understood this, which is why there are many stores with a similar focus. But there are still unoccupied niches and attractive opportunities in this business. Let's look at how to open a building materials store.
Store format
Building materials and accompanying product names are sold in different ways. At construction markets, in small stalls, in warehouse stores, in construction supermarkets and in regular hardware stores. Before starting this business, you need to understand what types of construction stores exist. And which of these types suits your capabilities. Or maybe you’ll study what’s out there and come up with something of your own. So, the conditional division of construction stores:
- Stores small size, from 20 to 50 sq.m. plus a warehouse of approximately the same area. Such a store usually presents one or two groups of goods, with 30 or more items. For example, wallpaper. Or paint. Or floor coverings. Along with the main group of products, related products can be sold. For example, wallpaper and wallpaper glue several items, suitable for the types of wallpaper present in the store’s assortment.
- Larger stores, up to 200 sq.m. total area, the area of the sales area in this case can be 100-120 sq.m. Such a store may offer several dozen product groups. There may be wallpaper, paint, several types of flooring, plumbing, boards, and pipes. Total quantity Product articles can reach up to 5-6 thousand items.
- Large construction stores with a sales area of 1000 sq.m. and extensive storage facilities. Such a store usually has at least ten departments, where you can find almost everything you might need for repairs and construction. Product groups number in the hundreds, and names in the thousands.
- Store-warehouse. There is no division here warehouses and a sales area. The goods are presented to customers in the volumes and quantities that are available in the store. On average, the size of such complex trading enterprises ranges from 2000 to 3000 sq.m. But there are also small warehouse stores that sell goods of one or two directions.
Required Documentation
First you need to register in the Unified State Register as legal entity. After this, you can receive a certificate of registration with the tax authorities.
Typically, owners of construction stores choose one of two legal forms of doing business - (IP) or (LLC). Individual entrepreneur is convenient if you do not have a very large store and you are its sole owner. An LLC is usually used for larger businesses and when there are co-founders.
You will need to choose a tax system. This choice may depend on local laws, and laws may vary from region to region.
A convenient tax is UTII (UTII), in most regions of the country all retail enterprises, which include a building materials store, fall under it.
If your city does not provide UTII for this type of activity, then you can choose the simplified tax system -. This tax is 6% if the object of taxation is income, and 15% if the object of taxation is income reduced by the amount of expenses.
Since 2014 introduced new system taxation, patent. It consists in acquiring a patent for each type of activity. This taxation system is only possible for individual entrepreneurs.
You should receive a notification from the State Statistics Committee that your enterprise has been assigned codes according to OKVED (the all-Russian cadastre of species economic activity) that correspond to your business activities.
In addition, you will need to obtain permission from the following authorities:
- City administration.
- Chamber of Commerce.
- Fire inspection.
- Traffic police (when organizing parking).
Shop space
Criteria for choosing a location for a building materials store:
- Proximity to a busy highway with a constant flow of cars.
- Area of new buildings.
- On a large construction market.
- Close to stores of a similar focus that do not duplicate your store.
- In the area of the industrial zone of the city - there you can find suitable premises at a favorable price.
- The premises must be in a non-residential area, so firefighters will not allow the sale of flammable substances, which make up a significant part of the range hardware store, in a residential area.
- There must be ample guarded free parking next to the store.
- Convenient access roads should lead to the store.
- For a large warehouse store selling large quantities of bulky goods, it is desirable to have access railway tracks.
- The store must comply with the requirements of the SES and fire inspection for the conditions of storage and sale of goods.
The next question that needs to be decided: rent or buy the premises? Owning a premises is, of course, convenient, but it requires large investments that will not be returned soon.
Therefore, if you already have your own suitable premises, great. This will solve a lot of problems. If there is no premises and you do not have substantial initial capital, then better room rent for a store. Perhaps it will be a lease with a subsequent purchase if your store is doing well and you have a stable high income.
Shop equipment
The set of equipment is standard and simple and includes:
- Single-sided racks attached to the walls for displaying goods.
- Double-sided shelving, which is located in the central part of the hall.
- Showcase cabinets with glass doors for placing small-sized goods.
- Showcase counters for some departments of the store.
- Retail nets for hanging suspended goods.
- Fasteners and hooks for placing goods on the walls.
- Packing table.
- Cash register, one or more.
- Trolleys and shopping baskets.
Product range
You should choose the groups of products that should be in your store after considering the following questions:
- Store size. If you have a supermarket large area, then you can have a wide and varied range. If your store is small in size, then you need to choose one direction.
- Availability of similar stores in your city or area. If you want to trade floor coverings, make sure there is no similar store nearby.
- Buyers' needs. Study the construction goods market, find out what is in short supply and what goods are in abundance.
In any case, your store should have a wide range of products. The modern buyer is spoiled by the abundance of goods and is unlikely to return to a store with a meager assortment. If the area does not allow you to set large number goods, you can work from catalogs, to order.
Let's list the standard product groups for a building materials store:
Suppliers
You can search for suppliers in person by visiting all wholesale centers in the city, or via the Internet. The first method is convenient because it is easier to agree on conditions with personal contact, the second is because you don’t need to go or drive anywhere, you just need to look through the catalogs of the required companies and compare prices.
Don't limit yourself to suppliers that have a presence in your city, especially if your city is small. Look for suppliers in nearby major cities. This is usually more profitable.
Often large bases deliver goods to neighboring cities for free for large enough orders. In many cases, you can not only submit a request for a product, but also enter into an agreement with the supplier via the Internet.
Store employees
To open a hardware store and ensure its prosperity, you must find experienced employees. Your store should be managed by a person who has worked in this field for several years. After all, the product range, contacts with suppliers, and personnel management depend on it.
Sales consultants must have all the information about the product; in addition, they must understand the construction and repair process itself in order to give advice or consultation. If your store has several departments, then each should have at least one consultant who thoroughly understands the products of this department.
In addition to sales consultants and management personnel, you will need cashiers, cleaners, a warehouse manager and loaders.
Remuneration for store employees should be stimulating: salary and bonus, the size of which depends on the quality of work and the quantity of goods sold. With this approach, employees work most efficiently.
Business plan for a building materials store
Opening of a small building materials store with an area of about one hundred square meters, according to experienced entrepreneurs working in this business, costs 300–400 thousand rubles.
The average turnover per month is 200,000 rubles. This is with a trade markup on goods of 20-30%.
Most of the turnover goes to payments to suppliers (about 70%). That is, 60,000 rubles remain. You also need to pay salaries and taxes. There will be a very small amount left.
Therefore, opening a small store is profitable only if you have the opportunity to purchase goods inexpensively from suppliers and make a markup on it in the store of more than 30%. In addition, you need to agree with suppliers on the delivery of all goods without prepayment, for sale. And one more thing – the premises. If the rental price is high, your business may become unprofitable.
Conclusion: opening a small-format building materials store is profitable if you have inexpensive premises (preferably one that you own) and favorable working conditions with suppliers.
Opening of a store with an area of about 200 sq.m. will require an amount of 1.5 million rubles, including the full cost of payment for the goods. Monthly turnover is 800-900 thousand rubles, net profit after taxes is 50-60 thousand per month.
Supermarket of building materials, occupying 1500-2000 sq.m. will require investments of 8-10 million rubles. The turnover of such a store is approximately 3 million rubles per month, and the net profit is about 150,000 rubles.
This trading option is the most profitable for the business owner and the most convenient for the client, because he can purchase all the main and related products for repairs in one place.
Promotion of a building materials store
Since competition in this business is high, and the location of the store may not always be successful from a marketing point of view - such stores are often located on the outskirts of the city or in industrial zones - advertising becomes of paramount importance.
By the time the store opens, you need to prepare advertisements in the local press, and, if possible, on radio and television. You can also install advertising posters and banners on the streets of the city, informing about the opening of a new store, its advantages and discounts for first customers.
Be sure to start your website on the Internet, because now they are looking for everything they might need. The website must be made with high quality, it must attract attention, give an idea of your product range and prices. It should contain information about your work hours, options for delivery of building materials, and your contact numbers. Don't forget to update it regularly.
One more effective form advertising – cooperation with repair and construction companies and teams. They will bring their clients to you and purchase materials from you if you give them the opportunity to receive discounts or percentages on the sales of new clients attracted.
Can be attracted sales representatives who will offer your product to companies involved in interior design, renovation and construction. This way you can find profitable regular customers who will purchase large quantities of goods from you.
Be sure to issue discount cards, simple or cumulative, to regular customers. Don't forget to run promotions when new types of products appear. Invite design consultants or builders to participate in these promotions. Organize online and SMS distribution of news from your store to regular customers.
The immutable truth is that a person must live somewhere, which means that housing construction will never stop. And housing is deteriorating, which means it needs to be repaired from time to time. In my entrance, only one of the new movers is doing repairs. The elevator is put out of service by transporting building materials. I go out onto the landing, and there are bags of cement, some cans and sheets of plywood or something else. Understanding people have long understood that the sale of building materials is a popular business.
However, for lately I often hear buyers' dissatisfaction with low-quality building materials. Who does it depend on? Clearly from the sellers. I think that people’s demands for the quality of building materials will only increase in the future. Do you think those who have been selling building materials for a long time are ready to improve the quality? I personally doubt it. Since they are already accustomed to high margins, and reduce their profits due to delivery quality materials they are unlikely to be.
Here is a niche you can safely enter. I won’t say that the niche is simple, but it is in demand with a new approach. Times are changing, but people in this niche are in no hurry to change their views. You can start this business without investment by acting as an intermediary between customers and suppliers. Conduct a detailed analysis of the building materials market. If you seriously intend to enter this market, then one way or another you need to do it. Make a list of all building materials manufacturers in your area, as well as all sellers. I am sure that you will find shortcomings in both.
In our city, for example, bricks are transported from other cities, despite the fact that there is more than one brick factory in the city. Does this fact mean anything? Likewise, in your region there will be a not very high-quality supplier who can be replaced by a supplier from another region. The main thing is to find and negotiate prices. By gradually studying the needs of the market, you will have a complete picture of where and what to buy and at what prices you can sell. Profit can also be calculated in advance.
Now directly sale of building materials as a process. I don’t know how this process is organized in your region, but my observations in our market speak of purely passive sales. The vast majority of sellers place advertisements in newspapers and sit by the telephone waiting for a call with an order. Do you think we can use this moment? It's definitely possible! You should move on to active sales. Several agents are needed who would analyze the allocated area for repairs or construction and would immediately offer building materials with delivery.
It is worth noting that in cities there are teams of construction workers who work. As a rule, suppliers have a direct connection with foremen and interest them with bonuses for orders. Explore this opportunity in your area. Your trump card is the quality of building materials. Don't forget about this when talking with the foreman. And these details should be explained to customers. And if you can somehow prove more high quality your materials, then this will be critical.
Along with agents, it is imperative to create an online store for building materials, since society is moving towards computerization. The sooner you start, the sooner you will get results. Combining work “in the field” and on the Internet will yield results.
To increase profits you can combine production of building materials and sale of building materials. For example, you can produce paving slabs, and take all other items from suppliers. In any case, you will provide customers with building materials with delivery across the entire list.
An additional feature in your business selling building materials can be the sale of used building materials. To include this topic in your business, you will need a constantly updated database of buildings subject to demolition in your region. A team of “destroyers” is recruited and all recyclable building materials are collected from destroyed buildings. Floor slabs are especially in demand.
My friend, who is directly involved in construction, once had a database of all hangar buildings in the region. At any moment he was ready to dismantle these hangars, move them and build them again at the specified location. He offered good price for these used hangars. It seems that his margin was not small.
At some point in your development, your sale of building materials will require the creation of a storage area.
Do not forget that this activity is regulated by section 14 of the Rules for the sale of certain goods (Resolution No. 55 of January 19, 1998 of the Government of the Russian Federation). This section concerns the specifics of selling building materials.
This is where it is indicated how to sort the goods, how to sort and check for completeness, and then store them. By adhering to the provisions of this resolution, you will save yourself from problems.
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