Hardware business in Kenya :How to start and make millions

Starting a hardware business in Kenya could be one of your best decisions, if you employ the right strategies.

In fact, hardware stores are ever green since people are always building, whether there’s an economic meltdown or not.

Of course, profitability isn’t that huge when the economy is struggling.

But chances are, you will still realize some profits.

Here are our tips to help you start and make millions from a hardware business in Kenya.

Starting and running a successful hardware business in Kenya

I will answer some of your questions before I give you the steps.

How much capital does I need to start a hardware store?

I am always asked about the capital required to start the business so let’s start there.

In general, you need about shs. 500,000.

You can obviously start with less – let’s say shs.200000- but you’ll have to first stock only the essentials since the amount won’t afford you variety.

But like you’ll learn later, some locations – those with the biggest players- may demand that you have over shs.1 Million to compete.

Is hardware business profitable and how much is the typical hardware business profit margin?

It depends on the product but sometimes the margins are crazy.

For instance, if you sell fast moving plumbing accessories worth shs.10000, you may end up with shs.6000-7000 profits!

PPR fittings also give 100% profit as do waste fittings and a couple of other accessories.

Having said that, some items have smaller margins but overall, you can expect good returns.


What licenses do you require for hardware business in Kenya and what’s the cost?

You need the normal business licenses.

The exact amount depends on the location (counties charge differently) and your store’s floor size.

To be on the safe side, budget between shs.7000-shs.30000 (for larger stores).

Don’t forget to negotiate.

Here now are the precise steps to take:


Hunt for a good location

The best place to establish a hardware business in Kenya is up-coming  estates.

You see, these are more likely to have homes, schools, roads, and other infrastructure projects under construction than older estates.

Examples are Kitengela, Athi River, Kangundo road, Joska, Utawala, Mlolongo, and Ruaka in Nairobi.

It’s always good to select an area without many competitors but sometimes, the presence of competition means there’s good business.

That brings me to areas such as Gikomba, OTC, and Nyamakima.

The avalanche of hardwares here means good business if you get a good location next to them, preferably fronting a busy road.

The only drawback – I mentioned this earlier- is that you might need more capital to attract clients here, unlike in the estates where you can start small.

You can also target upcountry market towns with great potential though you will need to research adequately.


The Preliminaries

Having settled on an area with abundant hardware business opportunities, it’s time to make the strategic decisions.

Do the following:

1.      Get a lease and start fixing the shop

Some landlords can be mischievous and kick you out when they realize that you have built a lucrative business.

You don’t want to be a victim so ask for a lease as soon as you pay rent.

Then, hardwares need shelves to hold stock and may be a counter.

Hire a fundi to do the fittings for you.

It doesn’t have to be the cutest shop around but at least make it organized.


2.      Research what moves

As the fundi is working, you’ll be out in the field collecting data on what moves in your area.

Ask around, talk to foremen, fundis, and everyone with helpful information.

Also, spy on rival hardwares and see what they stock.

You should, by the end, have a good idea on what to stock first (more on this later).


3.      Identify suppliers

The hardwork now begins.

Venture out with your hardware store items list and approach wholesalers as you compare the prices.

This is important since amazing prices will quickly bring hordes of buyers.

Needless to say, getting the pricing wrong will only advantage your competition.


4.      Create some hype

Brand your shop well and put up a huge banner.

Be creative and don’t say “COMING SOON”…that’s a tired one.

The idea is to create lots of hype and make people curious.

Also distribute flyers to workshops around you, construction sites, the estate, etc.

Posters can also help build up some hype ahead of your launch.

In the meantime, buy stock and get everything ready- including a receipt book (and an ETR machine where necessary).


5.      The grand opening

Your promised big date is here.  Don’t disappoint.

You can even go back to the places you had distributed your flyers inviting prospective clients to visit you.

Also print and put up a new banner: “We are open, welcome!”…or any other warm message.

Here is what else you need to know about running a successful hardware business in Kenya.


What to stock

If your hardware will be in a rural setting, the fastest moving goods are:

  • Nails
  • Ironsheets
  • Cements
  • Plywoods
  • Red oxide
  • Hinges
  • Screws
  • Electrical items
  • Doors
  • Door frames

If in town, add variety including MDFs, pipes and taps, tiles, tools, PVC ceilings and such.

If unsure, just start with items with the basics.


ALSO READ: Hardware store items list [what to stock in your hardware business]


Where to get supplies at cheap prices

The best hardware wholesalers in Kenya are in Nyamakima, OTC, and Gikomba (Kombo Munyiri road).

You can also approach manufacturers if you’re loaded and buying in bulk.

Factories typically set a minimum threshold.

If, for instance, you want to purchase cement from the factory direct, you must order a minimum of 600 bags.


How to survive the competition

Every high-income business will face competition at some point and you need to be smart.

The following tips might help you deliver a knockout blow to the competition:


·         Online hardware business

Notably, very few traders have explored online hardware business yet more Kenyans are online.

You can start by opening a Facebook page for your hardware business and promoting your offers aggressively.

Also be active and answer all queries promptly.

Over time, launch a website and use it to market your hardware.

Webhosting is nowadays cheap and you can bargain with the designer to charge you about shs.10000/-


·         Fall in love with field marketing

Don’t just sit in the shop mourning. Money is out there.

Tour every new construction site near your location and advertise your offers.

Do all you can to create an excellent relationship with plumbers, supervisors, and every other decision maker including sweet-talking the owners.

You can, for example, offer them temporary credit terms if they’re just starting their projects.

You shouldn’t, however, sell on credit to projects nearing completion – these are normally thin on resources and are riskier.

Customers will eventually come.


·         Shun fakes

You don’t want to give your competitors a stick to beat you with by selling fakes or stolen items.

You, especially, need to be careful with fundis or other parties who walk in with random supplies – most are ‘unclean’ or counterfeits.

To avoid temptations, identify a dependable supplier.

Above all, ask for receipts for all your purchases/deliveries.


·         Provide free delivery

Hire someone to deliver goods on time to site. People like freebies and that can be a masterstroke.

If you have to charge for transport, be fair.

ALSO READ: Hardware wholesalers in Kenya -Where to buy supplies cheapest

Success in hardware business in Kenya – other helpful tips

  • Avoid loans, at least during the early days– you don’t want the extra interest cost without a proper financial foundation.
  • Invest in CCTV cameras– It will help scare fraudsters and bad elements. Do this when you get spare cash.
  • Maintain proper books and records– keep an eye on your stock movement, expenses, and sales. It will help you know when you’re sinking.
  • Be enterprising– if you don’t have an item, convince the customer to wait as you ‘get it from the store’. Rush to the neighborhood warehouse, buy, and deliver. It will help you retain customers.
  • Understand your market– Speaking from experience, you must know your market- that is; your prices must match the living standards of your clients.

For example, you will struggle to sell Dura Coat paint brand in low income areas. But the moment you stock the cheaper Contractor brand, sales sky rocket.

  • Be a customer service champion– talk well to customers, recommend alternative products, and provide pleasant packaging.


Final words

Hardwares have always created millionaires and I don’t see why you shouldn’t succeed if you follow this guide when starting your hardware business in Kenya.

To quote Moffat Machingura,  “The first step (is) the hardest in (every) journey of dreams…..”

So step out, work hard, and keep the faith.

Good luck.


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