Wednesday, March 14, 2007

How the Big Box Hardware Stores Make Money

Recently two of my kids had a school project that required a trip to the hardware store. I don't like hardware stores. My idea of "do-it-yourself" is researching the service I need online and asking someone to come out and fix it. In fact, my history of fixing things myself has been one of making what ever needed repair far worse off than before. Any way, I couldn't hire a handyman to help with this project, so off to the store I went.

I had a list of items necessary to build, what I thought was, a guillotine at first. Fortunately it ended up being a catapult, which could be dangerous but was clearly safer than a guillotine. My oldest son wrote me the list that his little brothers would need at the local Home Depot -- mainly nuts and bolts. When I got to the nuts and bolts aisle I notice that all they had were boxes and bins marked appropriately and you would simply grab what you needed. Most of the items were cheap, 15 cents here, a quarter there, etc. There was one or two dollar plus items in a list of around 20 things, but I was wondering how they were going to make any money.

Finally I got to check out. It took around 40 minutes to find what I was looking for (I told you I was pathetic), so I was ready to go. The lady who checked me out looked at my bag of metal pieces and said, "you don't know how much these cost, do you?" I had a blank look on my face that, I'm sure, answered that question. "Okay" she said as she went to a giant price book to look things up. I gulped. It appears that the hard part had actually come.

She went through the list, matching each item to the picture and a number on each piece. I began to notice that she wasn't charging enough on a few items. This was after around 10 minutes (it seemed) and only going over two or three items. I had to tell her the truth, even though we were only talking pennies here, when all of the sudden she charged me around $2.00 for an item that I recall was around 85 cents. There were now two such items, now I'm at $4.00 when it should be approximately $1.70. I was getting worried and when she was finally done (it seemed around 20 minutes), I was clearly paying more than what was in that bag. But was it worth it? I decided that it wasn't and it appears I was forced to pay a "time tax" in order to get out of there with some day left.

I have spoken to others and this is a problem with hardware stores in general. Since all the competitors do it this way, there is little to no impetus to change. So, as I walked away after wondering how the big box stores can make money off of all those little pieces, I realized it was one minute at a time.

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