A trade approach with broad appeal
Trade clients are not “customers” at Melco Home & Trade, Noosaville — they are business partners who depend on the store’s building industry background for professional guidance…
Store:Melco Home & Trade
Owners: John & Mark Melville
Group: Mitre 10
Take a look at any hardware store and try to guess the background of the business. There are some stores that, quite obviously, were started by former antique shop owners; others have a distinct “tax agent” rigidity about them. And then there are those like Melco Home & Trade, Noosaville, which cannot hide its roots in the provision of timber and building supply products.
Melco Home & Trade can be found in Noosaville, Queensland
The signs of Noosaville’s trade orientation are clear: fast and frequent delivery services, expert staff who regularly visit clients on-site to offer advice, an insistence on practical parking bays with good access/egress, and a generally “busy” atmosphere of high-volume turnovers, utes and blokes in overalls. The impression is of a store that is interacting with its clients for the common good.
Owned by John and Mark Melville, the Noosaville store was started in 1988 as a “predominantly timber and building supplies operation selling to builders,” explains John. The current store is less than five years old, and its predecessor serviced mainly trade clients in the first decade of the business. The enterprise was so strong that subsequent stores were opened in Gympie, Maroochydore and Caloundra, and all four are today branded under Mitre 10’s “Generation 21” corporate colours.
Many more “mum and dad” customers are coming into the store
Noosaville became a Home & Trade store in early November last year, a process that involved a 50% increase in floorspace. “Our store has two buildings: a retail shed of 1,500m2 and a trade shed, complete with a drive-through, of 1,350m2,” says John. “The total 2,750m2 is on a block of almost two acres. We have off-street parking for 40 cars with easy access in and out.
“With this upgrade many new ranges were added, and existing ranges increased and some areas that were not performing were rationalised. The upgrade gave us the chance to refine our store to what we believe is a very strong total retail and trade offer, with our increase in sales of over 30% showing our customers are happy.
Staff really know the industry inside out, according to John Melville
“We have a total of 32 staff on site with a fortnightly roster ensuring enough staff to meet all our customers’ needs in the busy times. Because of our trade background our business is approximately 60% trade and 40% retail; approximately 20% of the trade business is done in deliveries.” While timber makes up 30% of overall sales, other strong departments include power tools, paint and garden.
Now that the store is bringing in more consumer customers, the heavy trade emphasis is in fact bearing dividends for “mum and dad” customers. This is due to: staff who really know the industry inside out; store layouts that are vast, logical and laid out for busy professional perusers; and a willingness to accept that “no job is too difficult”.
The common sense layout is reflected in other aspects of the business, right down to the advertising and in-house computer systems. “We use a fully integrated software package with POS and accounting,” says John. “The system we run is called Prostix, and we have also written our own software which integrates with the Prostix system.
While timber makes up 30% of overall sales, other strong departments include power tools, paint and garden. See pic below too.
Similarly, advertising is a streamlined process. “Our advertising is very varied, but the backbone of it would be the Mitre 10 catalogue program,” he says. “We also use our own catalogues, radio, TV as well as a very successful Trade Night once a year that produces exceptional sales.”
With a busy mix of trade and consumer clients, as well as the efficiencies (and potential inefficiencies!) of four stores, there is always a need to reappraise the business and make sure it is as profitable for the owners as it is appealing to the public. John says a group ethic is a core feature of success and growth.
“There are several reasons why we are members of Mitre 10 with our four stores (three Home & Trade, one Handy),” he explains. “Their promotional program, warehouse and buying strength make it very easy to run a profitable store.
“Our biggest challenge is to solve our customers’ needs and thus ensure they come back and do not shop with competitors. Margin management in today’s competitive world is getting very hard to maintain. The happiness of our staff requires us to keep them interested in their job and customers. And not getting too ‘pressured’ is a big thing in the workforce today.
“The key strengths of the business are our service, the ability to solve our customers’ needs, and a range of products that gives customers a genuine choice.” The moral of this story is that a trade philosophy can be applied successfully to consumer markets — after all, every customer believes he or she deserves to be treated like a pro!
Story by John Power