Have you ever noticed this phenomenon: the hardware stores at the entrance of the community and on the streets and alleys have dusty facades and densely stacked shelves. They rarely see many customers all day long, and the boss is always drinking tea and reading newspapers in the back room.
No matter how you look at it, it looks like it is about to close down.
What is strange is that the milk tea shops in the whole street have been replaced one after another, and the clothing stores have opened and closed. Only that hardware store has stood for several years or even more than ten years without closing or moving. The owner is still living and thriving.
What the hell is going on?
1. A severely underestimated tens-billion market
Let’s first look at a set of data: According to statistics from Chishi Consulting, the total number of retail hardware stores in my country is about 1 million—this number is twice the number of milk tea shops that are “blooming everywhere”.
Even though physical retail has been decimated by the impact of e-commerce, the survival rate of hardware stores is still much higher than that of convenience stores, clothing stores and other high-traffic formats.
In Yongkang, Zhejiang, a county-level city known as the “Hardware Capital”, the annual output value of the hardware industry has exceeded 100 billion yuan, and the per capita GDP has exceeded 130,000 yuan, which has reached the threshold of developed countries.
Behind the seemingly “deserted” business, there is a set of money-making logic invisible to ordinary people.
2. Illusion: What you think is “no one” is actually “no one visible”
The first secret of the hardware store is hidden in the definition of “customer flow”.
When most people go to a hardware store, there is only one situation: their home suddenly “explodes”.
The faucet is broken, the lights are not working, the water pipe is leaking… Only when it is urgent, will you rush into the hardware store that you usually don’t even look at.
This creates a perceptual illusion: a store without traffic will not make money.
The reality is just the opposite.
The transaction rate of hardware stores does not rely on “shopping traffic”, but on “temporary rigid needs”.
Even if people go there only once every six months, they must buy it once.
Even if there are a lot of people coming in and out of a clothing store in a shopping mall, only a few transactions can actually be made; while the purchase conversion rate of customers in a hardware store can be as high as 80%.
What’s more important is that the group of people who really patronize the store the most – the decoration team, plumbers and electricity masters, community property management, and construction site contractors – they don’t hang around, take pictures, or post on WeChat.
From the outside, it looks like a “deserted” scene.
3. The truth: 20% of customers contribute 80% of the income
The income structure of hardware stores follows the classic 80/20 rule.
Those B-end customers who have regular cooperation are the real “financiers”: the decoration team needs to buy wires, switches, and pipes in batches; the plumbers regularly replenish drill bits, tapes, and accessories; the property management company needs to keep maintenance consumables; and small factories have fixed purchase needs for tools.
These customers have large volumes, high prices, and stable repurchases. They are the hardware store’s most stable revenue base.
The emergency business of C-end retail is the “dessert” of profits – urgently needed items, without bargaining, the profit margin will be larger.
A hardware store owner revealed: It seems that not many people come in a day, but as long as you capture a few regular customers, it is not difficult to make a net profit of 20,000 to 300,000 yuan a year.
4. Moat: Three reasons why e-commerce cannot be defeated
With e-commerce so developed today, why can hardware stores still survive so steadily?
First, urgent use scenarios cannot be replaced.
After three days of waiting for the express delivery, the house would already be flooded with water.
When you need a screw, a seal, a drill bit of a specific type, only the hardware store downstairs can save you.
Second, professional matching cannot be copied.
Ordinary people go to e-commerce platforms to choose products on their own, and nine times out of ten they won’t be able to “buy the right product the first time.”
But when you step into a hardware store, no matter how abstract your description is – “It’s just that round thing, about this long, with an eye on it” – the boss will understand, and the right thing will be handed to you in the next second.
This kind of “human-flesh matching” ability cannot be replaced by algorithms for the time being.
Li Hong, a hardware store owner in Jinzhou, Liaoning Province, recently became popular due to a video of “selling goods on the night shift”.
In the video, the customer gestured “that thing in the water”, and he immediately answered, “Wash basin or vegetable sink?”; the customer took out his mobile phone to look at the picture, and he could find the product at a glance.
The phrase “Yes, there must be!” has become his signature, and the video has been played more than 30 million times.
Netizens lamented: This is the Northeastern version of Doraemon!
Third, service is sticky and cannot be achieved quickly.
Hardware store owners often double as “community maintenance consultants.”
Which screw goes with which wrench, which glue can stick to which material, or even come to help an elderly person change a light bulb – the trust accumulated through these services is a moat built over time.
In Li Hong’s store, someone came to buy 15 nails, and he gave them away directly in exchange for “I’ll buy them from your house next time if I need anything.”
This kind of human exchange cannot be provided by e-commerce.
5. Survival Philosophy: The simplest business is often the longest-lasting
The business model of a hardware store is so simple that it is even a bit “primitive”: products have no shelf life, and screws and wires will not expire even if they are left for ten years; the store does not need a prime location and can survive in every nook and cranny; it does not require marketing investment, relying entirely on rigid needs and repurchases; capital does not look up to it, and large companies are too lazy to invest, but they live a stable life.
In Yongkang, Zhejiang, a whole set of “wave economy” logic has even been formed: when a product becomes popular, local hardware factories can immediately adjust their production lines to keep up. After making a wave of quick profits, they stop and look for the next outlet.
This ability to be flexible and adaptable has allowed this “mineral-free” county-level city to “forge” an industry worth hundreds of billions.
