Thinking of Buying a Hardware Store in Australia? Here Are 3 Vital Questions to Ask

Australia’s hardware retail industry generates $26.5 billion annually across more than 8,200 establishments.

While Bunnings controls over 50% of the market, there is still considerable opportunity for independent store owners — especially in regional areas or niche segments.

With 1.2% annual growth forecast through to 2029 and a strong mix of trade and consumer demand, now is a strategic time for buyers to enter this essential and resilient sector.

1. Is the Business Financially Viable?

Why It Matters:

Industry-wide profit margins average 5.8% in 2023–24, with EBITDA multiples ranging from 1.5x to 3.5x depending on size, lease terms, and inventory turnover.

The best-performing businesses maintain a strong balance between bulk trade supply and higher-margin DIY products.

Managing supplier relationships, pricing control, and efficient inventory systems is key to ensuring stable profit performance.

What to Check:

• Gross and net margins: Are profits tracking in line with the 5.8% industry benchmark?
  
  

• Inventory turnover: Is capital tied up in slow-moving or obsolete stock?
  
  

• Supplier terms: Are rebates, credit arrangements, or exclusive product access in place?
  
  

• Revenue mix: What percentage comes from DIY versus trade customers?

2. Does the Location and Customer Base Drive Reliable Foot Traffic?

Why It Matters:

Hardware store success is closely tied to regional demand, housing activity, and proximity to trade professionals or renovation zones.

Stores in regional growth corridors or semi-urban areas often outperform metropolitan competitors due to less saturation and strong community ties.

Foot traffic is also influenced by local convenience and customer loyalty — both vital when competing against national chains.

What to Check:

• Catchment area: Is the business located near active building zones or rural hubs?
  
  

• Trade accounts: Are there long-term relationships with builders, landscapers, or handymen?
  
  

• Local competition: How close are nearby Bunnings or large-scale suppliers?
  
  

• Community engagement: Does the business benefit from local reputation and repeat visits?

3. Is the Business Operationally Set Up for Efficiency and Digital Readiness?

Why It Matters:

Only 6.6% of hardware industry revenue currently comes from online sales, but digital services like click-and-collect, loyalty programs, and inventory visibility are increasingly expected.

Operational strength, including staff capability, supplier systems, and product knowledge, will determine long-term viability.

Franchise models (e.g., Mitre 10 or Home Hardware) may offer operational support and scale benefits, while independents rely more on local trust and flexibility.

What to Check:

• Technology use: Are there digital tools for inventory, trade account management, or point-of-sale systems?
  
  

• Labour structure: Does the team include knowledgeable staff who can support both DIY and trade customers?
  
  

• Franchise affiliation: Is the store part of a network offering marketing and supply advantages?
  
  

• Growth readiness: Can the business scale services like delivery, online orders, or special orders?

Ready to Invest in a Thriving Hardware Store?

With the sector set to rebound alongside housing and renovation activity, hardware retail remains a strong investment for hands-on operators.

Stores with strong trade relationships, local loyalty, and smart operational systems are well-positioned to compete in this enduring industry.

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