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00:22 description Ace Hardware is a well-known
00:25 Home Improvement store that I am
00:27 guessing most of you have been to given
00:28 the fact that they have 60 2 million Ace
00:31 Rewards members there is a good chance
00:33 that you have one nearby right in your
00:35 neighborhood given that there are over
00:37 5,000 of them spread across every US
00:40 state and more than 60 other countries
00:42 around the world in fact by that measure
00:44 they are the largest Home Improvement
00:46 retailer in the United States there are
00:48 more Ace Hardwares out there than Lowe's
00:51 and Home Depot combined however that
00:54 statistic may be a little deceptive
00:56 without adding more context because the
00:58 Ace Hardware Stores themselves elves are
01:00 considerably smaller the average one is
01:02 in the range of 5 to 10,000 sare ft
01:05 whereas the other two are typically over
01:07 100,000 so when you rank them by sales
01:09 it becomes clear that more people are
01:11 shopping at those other stores but I do
01:14 want to emphasize that 9 billion dollars
01:16 is still a large amount of money
01:18 especially when you consider that Ace
01:19 operates under a much different business
01:21 model that is much more comparable to
01:23 hardware chains like do it best or True
01:25 Value and neither of which is quite at
01:28 that same scale this right here is a
01:30 multi-billion dollar chain that operates
01:32 differently from what we typically see
01:34 and that is why I think it'll be
01:36 interesting to take a look at this
01:37 company and try to identify five of the
01:40 biggest reasons behind its success
01:42 starting off with their Co-op structure
01:45 because this is where they really start
01:47 to stand out see almost every other
01:49 company that I cover on this channel is
01:51 controlled by a central organization
01:53 that is either owned by the public
01:55 through the stock market like Lowe's or
01:57 Home Depot or privately owned typically
01:59 by an investment firm or the family who
02:01 started it but the Ace Hardware company
02:04 is different in that it is owned by the
02:06 people who operate those individual
02:08 stores think of it as like a bunch of
02:10 small business owners working together
02:12 because there is strength and numbers
02:14 the company goes back about a century
02:17 when in 1924 four separate owners of
02:20 hardware stores decided to join together
02:22 in part to take advantage of discounts
02:24 associated with bulk purchasing like for
02:27 example if you wanted to buy 25 hammers
02:30 to sell in your hardware store but the
02:31 wholesaler says he'll give you a good
02:33 price if you buy 100 hammers it would be
02:36 smart to find three other store owners
02:38 that also wanted to buy 25 hammers so
02:40 you can combine your purchase and get
02:41 that 100 Hammer discount very simplified
02:44 but that's the general idea that's been
02:46 fueling Ace Hardware for the past 100
02:48 years over that time they have slowly
02:51 grown to involve more and more stores in
02:53 the system because a bigger scale
02:55 translates to bigger savings by the
02:57 1960s there were hundreds of them
02:59 popping up throughout the country
03:01 supported by warehouses that opened in
03:03 California and Georgia and today Ace
03:05 Hardware store owners can buy tens of
03:07 thousands of products from over a dozen
03:09 warehouses strategically placed across
03:11 the country in 2007 they actually came
03:14 close to becoming a more conventionally
03:16 structured public company they wanted to
03:18 raise money through a stock offering
03:20 that they could use to further expand
03:21 and be more competitive but oddly enough
03:24 they ran into complications when getting
03:26 the paperwork together they discovered
03:28 this multi-million dollar account error
03:30 dating back 5 years that required
03:31 multiple restatements plus there was
03:33 opposition from the store owner so in
03:35 the end they decided against it to
03:37 summarize here being a part of the Ace
03:40 Hardware Co-op is a way to operate your
03:42 own business while having certain
03:44 advantages that come from being part of
03:46 a national chain another one of those
03:48 advantages is the next reason behind
03:50 their success having a strong brand
03:54 flying ace was a relatively new term
03:56 when the company started it referred to
03:58 a fighter pilot that shot down on at
03:59 least five enemy planes during World War
04:01 I that is where they derived the name
04:03 for Ace Hardware I'm guessing because it
04:05 was a trendy term that reflected
04:07 expertise and skill having all of these
04:09 stores branded under a common name like
04:12 that helps it become more trusted and
04:13 recognizable to a point where they now
04:16 claim to be among the top 100 most
04:18 recognizable brands in the world and
04:21 advertising has been a big part of it
04:23 for decades now those store owners have
04:25 been splitting the cost of national
04:27 campaigns I'm talking about 100 million
04:30 a year today many of which have included
04:32 celebrity spokespersons like John Madden
04:34 or Suzanne Summers and I have to say
04:36 some of these older commercials were not
04:38 what I would expect them to be and these
04:41 store owners have to perform well and
04:42 maintain certain standards to continue
04:44 on in that system otherwise the company
04:47 won't allow them to use that red Ace
04:49 Hardware branding so it's not like just
04:51 anybody can do it if you see a store
04:53 that's called Ace Hardware you can have
04:54 certain expectations as a customer and
04:57 by the way the main focus of a lot of
04:59 these commercials over the years happens
05:01 to be my next reason behind their
05:03 success customer service see for most
05:06 customers and the people watching this
05:08 this is probably the biggest single
05:10 reason that you would go to Ace Hardware
05:12 over the more popular big box retail
05:14 chains because those others are
05:16 typically Superior when it comes to
05:18 price and selection but Ace Hardware is
05:20 all about service and convenience
05:23 looking at the convenience part for a
05:24 second I already said that there is
05:26 probably one in your neighborhood they
05:28 want to be seen as your neighbor
05:29 neighborhood hardware store
05:31 statistically more people live closer to
05:33 an Ace Hardware than one of the others
05:35 it's just easier to get to so if you're
05:36 doing a small project or need something
05:38 quick for your house it is a likely
05:40 option and that's what they try to
05:42 provide Plus in some cases a smaller
05:44 store format can be appreciated a
05:47 million different options when you're
05:48 buying something can be overwhelming and
05:50 it's simply less walking around and
05:52 searching for things now when looking at
05:54 the service of course everybody has
05:56 their own individual experiences but
05:59 overall all people seem to be pretty
06:01 happy at Ace Hardware every year JD
06:03 Power puts out a ranking of customer
06:05 satisfaction at home improvement retail
06:07 stores it's based on surveys from over
06:09 2,000 customers ranking them in five
06:11 categories and pretty much every year
06:14 Ace Hardware comes in at number one
06:16 Menards the chain in the midwest did
06:18 manage to take that title in 2018 but
06:21 Ace has been the winner every other year
06:23 since 2007 their slogan that iconic
06:26 jingle that I think everybody has heard
06:28 before right ace is the place with the
06:30 helpful hardware folks well originally
06:32 it was the word man but they replaced it
06:33 with folks I believe to make it more
06:35 gender inclusive but the message there
06:37 is about how helpful they are AC has
06:39 built a reputation on having employees
06:41 that are friendly knowledgeable and most
06:43 of all helpful again maybe you disagree
06:45 but they set out to promote an
06:47 individualized neighborly experience
06:49 that you just can't get from the bigger
06:51 stores the next reason behind their
06:53 success is the forever Rising population
06:56 of diyers people who set out to tackle
06:58 their own Home Improvement projects as
07:00 opposed to hiring someone else to do it
07:03 to be clear this could be counted as a
07:05 reason behind the success of almost any
07:06 hardware store but Ace has been right
07:09 there in the center of it for longer
07:11 than most of the others this company
07:13 started in the 1920s shortly before the
07:16 big stock market crash in the start of
07:18 the Great Depression it was incredible
07:20 timing because people didn't have money
07:22 to hire someone else to make repairs
07:24 they were buying their own equipment and
07:26 doing it themselves which of course was
07:28 good for Ace hardare where then
07:30 following World War II more people
07:32 started buying homes that needed fixing
07:33 up and that sparked a giant DIY Trend
07:36 that just continued getting bigger from
07:38 there particularly in the 1980s that
07:41 industry more than tripled in size
07:43 throughout the decade and predictably
07:45 things became more competitive even
07:48 retailers like grocery stores that
07:49 previously had nothing to do with it
07:51 were installing their own Hardware
07:53 sections and notably the Home Depot
07:56 emerged to become the biggest store of
07:58 its kind in 1999 the Home Depot even
08:01 tried to start a new smaller store
08:03 concept called villagers Hardware that
08:06 was very much designed to compete
08:07 against Ace Hardware it never quite got
08:10 off the ground but I mention it because
08:12 it shows how competitive everything
08:13 became I think it's impressive that as
08:15 the market grew and evolved Ace was able
08:18 to keep up with it while staying true to
08:20 their principles the final reason behind
08:22 their success I'm going to say is the
08:25 products that they sell in their stores
08:27 and there's a few different ways that we
08:28 can look at at this remember these
08:30 stores are typically locally owned
08:33 they're operated by people who live in
08:35 the area and theoretically have a pretty
08:37 good sense of what their customers want
08:40 to buy all of those owners have the
08:41 opportunity to select from tens of
08:43 thousands of items to sell in their
08:45 stores but each one only chooses what'll
08:48 sell best in their particular community
08:51 so that's something to keep in mind
08:52 there's obviously a lot of range as to
08:54 what you're going to see when you walk
08:55 into an Ace Hardware also with
08:57 convenience being a main selling point
08:59 they put a focus on smaller items that
09:02 you might just want to run out and grab
09:03 quickly maybe like a light bulb yeah
09:06 they have sold a lot of light bulbs over
09:07 the years because if you have a light go
09:09 out in your house you want to get a
09:10 change pretty quick and one of the
09:12 quickest ways you can make that happen
09:13 is often times going down to Ace
09:15 Hardware in 2012 they were quick to
09:18 start transitioning to LED bulbs so it's
09:20 continued to be one of their bestselling
09:22 categories in 2010 I want to mention
09:24 they made a licensing deal with Sears to
09:26 start selling Craftsman products in
09:28 their stores which was is a big deal in
09:30 addition to many other recognizable
09:31 brands that they were already selling
09:33 but aside from those private label items
09:36 have been big for them you know the ace
09:38 branded stuff private labels can be good
09:40 because they have higher profit margins
09:41 and they help build brand loyalty I am
09:44 just saying if you like these Ace
09:46 batteries you're likely to return
09:47 because you're not going to find them
09:49 anywhere else and that is the case with
09:51 the 12,000 different private label items
09:54 that they offer let me know in the
09:55 comments what do you think about Ace
09:57 Hardware do you appreciate the
09:59 convenience and neighborly atmosphere or
10:01 do you prefer the price and selection
10:02 that you get from those other bigger
10:04 stores personally I can see a place for
10:06 both of them in the market depending on
10:07 the circumstance of course but we have
10:09 to recognize that there is a fair amount
10:11 of variation between them so my
10:13 experiences at Ace Hardware could
10:15 potentially be different from yours also
10:18 do you agree with my reasons behind
10:19 their success or do you think there's
10:20 more to it as always I want to make it
10:22 clear that this is not a complete list
10:24 just the reasons that I believe to be
10:26 the most relevant or the most
10:27 interesting if there is anything else
10:29 you think should be added to it please
10:30 let me know about it and any other
10:32 thoughts you have about Ace Hardware
10:34 leave them in the comments I'd like to
10:37 hear what you have to say stamps.com is
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