Bartlett’s Lumber & Hardware had been a successful lumber and hardware store, serving the Texas Panhandle for nearly 75 years, but, until recently, its pricing decisions were mostly guesswork.
During a long economic downturn and encroaching big-box competition, VP Terrill Bartlett knew that “guessing” didn’t cut it anymore when talking about the bottom line.
So in January 2010, Bartlett’s Lumber & Hardware implemented a new spreadsheet program that communicates with its POS system. “It just gives us an immediate big-picture view of how our pricing decisions affect the bottom line,” Bartlett said. “We can make these changes at the SKU level, by vendor, by class or at the department level simply by plugging in a new margin. Once we like what we see, we sync this with our POS system, and the changes take effect the next morning. It has been a big time saver.”
The spreadsheet program shows an overall store margin based on a rolling 12-month sales history. This way, Bartlett’s Lumber & Hardware can see immediate results if it has to change the margin on a particular item. “For example, if we have to lower the retail on 7/16-in. OSB, it will show the immediate effect to the store’s margin and margin dollars,” Bartlett said. “We can then locate other items that we can raise the margin on to make up the difference.”
THE RIGHT FIT
As with many small town, independent hardware retailers that continue to serve their communities profitably during tough times, Bartlett’s bases its success on the foundation of product knowledge, personal service and competitive pricing. Of the three, pricing is particularly important in a market in which patrons can choose from among two Lowe’s and two Home Depots, in addition to Bartlett’s.
“Therefore, we have to remain competitive,” Bartlett said.
Through its wholesale partnership with Orgill, which shops the competition and develops pricing strategies for its dealers, they have been able to do fight fire with fire, he said. “There were a lot of a la carte programs that were offered by Orgill, and with them, you participate in what you want to participate in. That strategy has worked for us,” Bartlett said. “I also like the fact that they are in touch with our needs; they are accessible. There are fewer administrative levels to deal with, so it is easier to talk to the person you need to speak with.”