Hardware Grazing

YGP Grain and Hardware Pty Ltd, based in the Gippsland dairy belt town of Warragul, Victoria, features agricultural products and hardware supplies under one roof – which suits farmers down to the ground…

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Store: YGP Grain & Hardware Pty Ltd
Owners: Len Petch & family
Group: Combined Rural Traders (CRT), a division of Ruralco Holdings Ltd
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There are nearly 400 member stores in the Combined Rural Traders (CRT) national network, representing an annual turnover of approximately $0.5 billion per year.

Caption: Len Petch outside YGP Grain & Hardware in Warragul, VictoriaAHJRetail01Nov05

If there is one lesson to be learned from this 35-year-old buying and marketing group, it is that hardware products and specialist agribusiness ranges make ideal bedfellows. Indeed, the idea of ranging hardware on the back of a related, industry-specific sector makes sense in terms of sales diversification, niche customer loyalty and the potential for market exclusivity or dominance in certain lines.

YGP Grain & Hardware is the perfect example of tandem trading company. Len Petch (Snr) started the business 50 years ago as a stock feed establishment, mainly servicing local dairy industry clients. Then, in the mid-1970s, the store enhanced the scope of its retail operations by joining the CRT group. While the group is a major force in the provision of agricultural chemicals, vaccines, drenches, fertilisers, rural merchandise, pet foods, pasture seed and other items marketed to practising farmers, hardware retains an important place in overall sales strategies. Len Petch (Jnr), YGP Grain & Hardware’s Managing Director, estimates that hardware lines account for 30% of store turnover and 40–45% of gross revenue. Far from being an “add-on” department, hardware is a vital part of the success of the business.

Prime Movers
Major categories of hardware lines include hand tools, power tools, fasteners, fencing supplies, polythene fittings, chains and ropes, along with other heavier products such as tractor drag chains and accessories. Other “big moving” lines include bolts, coach screws and gate hinges and fittings.

AHJRetail02Nov05Caption: Len Petch takes pride in his extensive hardware displays

“In the hand tools sector our main brands are Siddons Proline, F H Prager and Cyclone,” Len says. “Then we have a large range of products from Elmhurst Trading such as barrows and kennels, which are very well suited to our area. In power tools we stock mainly Makita and ETC, while ropes and chains come chiefly from the Siddons group.”

Len says timber stocks are restricted to round stock for fencing and posts, sourced from Jelfor Treated Timber in Traralgon. The decision to deal with a local timber company, he explains, has as much to do with lower freight costs as quality.

All CRT members have access to an online ordering portal called RuralcoNet, which provides storeowners with significant savings through group purchasing practices. “Often, with a company like Siddons, we’ll place an order directly with the company and then get invoiced by the [CRT] group,” Len explains.

Caption: Staff member Dennis Rankin (right) discusses pumps with a customerAHJRetail03Nov05

About 50% of all in-store products are sourced via CRT, with the balance obtained through private suppliers or other groups like John Danks & Son. Individual stores are free to customise their stock to suit local conditions and markets.

Farmers are a captive audience – they all require unique agricultural products that mainstream hardware stores do not carry – but they are equally inclined to purchase general hardware products from an agricultural supplier they know. Len says his bulk packs of fasteners, for instance, appeal to working farmers’ needs while removing fuss and expense. Most of the time such customers are happy to choose items off the shelf like groceries in a supermarket. A new trend, however, is emerging, involving a wave of Melbourne city folk who are establishing farms in Gippsland.

Deer, Emus and Alpacas

AHJRetail04Nov05Caption: Well-presented items like these Sherlock barrows are just “asking” to be purchased

In recent years Melbournians have moved into Warragul to purchase farms, hobby farms and even residential properties. This phenomenon has created new demands for products that (Len admits) belong to a different culture. “We would notice, with fencing, that while a farmer is happy to buy a pine post, many smaller hobby farmers want posts shaved down to 125mm so they’re all the same diameter.” An urban aesthetic is encroaching on the market, matched by an influx of non-traditional farming ventures involving deer, emus, alpacas and vineyards. But Len believes the trend is not a threat to existing business principles.

“We have our eyes open to any opportunities that arise and we’re as well placed as anybody to handle change.” This flexibility, interestingly enough, is typified by a refinement of current product ranges – Len says he is not tempted to embrace categories that lie beyond the expertise of the business. There is no paint department, for example, in the YGP store, nor are there any standard timber building materials.

Instead, Len says he prefers to acknowledge the strengths of the business, with agricultural wares serving as the core attraction for genuine, long-term clients. Meantime, hardware customers who desire paint for their shaved fence posts are welcome to go elsewhere…

Caption: The in-store layout presents different departments in a sweeping progressionAHJRetail05Nov05

YGP has a subsidiary store opposite the main premises for grain, hay, feed and related “messy” items. Len also runs smaller outlets in the Gippsland towns of Trafalgar, Moe and Neerim South.

“It is important for CRT to realise the importance of being able to supply members with a strong turnover of [hardware] buying opportunities to enable them to insulate themselves against drought,” he says.

By John Power