The building material and retail hardware industry has taken a hard hit from the global recession and rising living costs in South Africa. People’s money isn’t going very far so DIY and home renovation are unfortunately taking a back seat.
There are ways that you can improve your sales though. Below is some advice from Mica Group CEO Nareen Daya.
- Be aware of who your customers are. Customers can change as areas change, so make sure that the people in your community are the people you are catering for. Take the time to determine what your surrounding community’s demographic is, what their income is, and what their hardware needs are.
- Evaluate your product range. In keeping with point one, people can’t afford to splash out on the brands they used to. Look into stocking non-premium brands which can save customers between 30% and 40% on their projects. Be careful that you don’t compromise on product quality though. There’s a difference between non-premium brands and tack.
- Go through expenses with a fine-toothed comb. When times are good and money is flowing you don’t always pay close attention to your expenses. You can be over paying for services.
- Restructure. If an employee leaves your company, find ways to distribute their responsibilities among other staff rather than employ someone new.
- Negotiate with your landlord. Times are tough for everyone, but try negotiate an agreement with your landlord to either hold off on rent increases, or find a payment scheme that can accommodate you both.
- Eliminate the middle man in your supply chain as much as possible. Consumers are increasingly going to source for their hardware needs. To keep up, try eliminating extra costs that eat into your profit margin by doing the same.