Latest / Small Business Success with Fexingo: Local Companies, Main Street Stories, and Community Commerce / How a Local Hardware Store Built a Tool Library That Tripled Foot Traffic
Transcript
- Lucas: You walk into a hardware store, you expect the smell of sawdust and fertilizer bags stacked to the ceiling. But Cooper's Hardware in Burlington, Vermont, has a wall of power tools that you cannot buy. Luna: Wait — they are not for sale? So what are they doing there? Lucas: They are for borrowing. The store runs a tool library. Fifteen dollars a year, you get a membership card, and you can take any tool home for 48 hours. Hedge trimmers, tile saws, pressure washers — the stuff people use once and then let gather dust in the garage. Luna: Okay, that is genius. But also sounds like a nightmare to manage. Lost tools, broken tools, someone not bringing back the circular saw on time. Lucas: Absolutely, and we will get to the operational side. But first, the origin story. The owner, Jenna Russo, bought the store in 2022 from the Cooper family, who had run it since 1974. By late 2023, she noticed something in her sales data. The best-selling power tool was a forty-dollar hedge trimmer. And the second-best-selling was the exact same hedge trimmer. Luna: Because people kept buying new ones instead of storing them. Right. Lucas: Exactly. She realized that most of her customers were homeowners, not contractors. They were buying tools for single weekend projects. A pressure washer costs 150 dollars and gets used maybe twice a year. So she asked herself: what if we stopped trying to sell the tool and sold the access instead? Luna: That is a classic shift from product to service. But hardware stores operate on thin margins. The tool library had to make financial sense. Lucas: And it does. Russo told me the numbers. The tool library launched in March 2024. First year, they signed up 800 members. At 15 dollars each, that is 12,000 dollars in pure membership revenue. But the real story is what happened to the rest of the store. Luna: I bet people borrowed a tile saw and then bought the tiles. Lucas: Exactly that. Russo tracked purchase patterns. Members who borrowed tools spent, on average, 37 percent more per visit than non-members. They came in to pick up a post-hole digger and left with potting soil, paintbrushes, a new hose. In 2024, the store attributed about 200,000 dollars in incremental retail sales to the tool library program. That is a 16-to-1 return on the 12,000 dollars in membership fees. Luna: Sixteen to one. That is ridiculous. So the tool library basically functions as a loss leader that drives higher-margin add-on sales. Lucas: Correct. And it gets better. Foot traffic tripled. Cooper's Hardware used to average about 150 customers per day in the off-season. After the tool library, that number jumped to over 450 on peak weekends. The store became a destination, not just a place to buy a lightbulb. Luna: Okay, but I need to push back. Three times more people walking through the door — that also means three times more stuff getting stolen, more questions for staff, more clutter. Did Russo have to add staff? Lucas: She added two part-time employees, which added about 30,000 dollars in annual labor cost. But her gross profit on the incremental sales was roughly 80,000 dollars — assuming a typical hardware margin of 40 percent on those 200,000 dollars in sales. So net, she came out ahead by about 50,000 dollars before you even count the membership fees. Luna: Alright, so the numbers work. But I keep coming back to the operational risk. A tile saw costs 300 dollars wholesale. What if someone does not bring it back? Or returns it with a cracked blade? Lucas: Russo implemented a few guardrails. First, every member signs a waiver accepting liability for damage. Second, they put a 50-dollar deposit on tools over 100 dollars in value. Third — and this is the clever part — they track everything on a simple Google Sheet that syncs to a shared calendar. No expensive software. When a tool goes out, staff scan the member card and log the tool ID. When it comes back, they inspect it and check it in. The loss rate in the first year? About 2 percent. Three tools total, all under 50 dollars. Luna: Two percent is impressive. Most library systems lose more than that. So the deposit plus the waiver probably screens out the irresponsible types. Lucas: Russo thinks the social accountability helps, too. Burlington is a tight-knit city. People know each other. If you do not return the hedge trimmer, you cannot look your neighbor in the eye at the farmers market. Luna: There is something about a physical membership card that creates a different relationship. It is not a loyalty app pinging your phone. It is a card in your wallet that says you belong to this community. Lucas: And that card drives repeat visits in a way that a digital punch card cannot. Russo told me the average member visits the store 2.3 times per month. Non-members visit 0.8 times per month. That is almost three times the frequency. Every visit is an opportunity to sell something. Luna: So the tool library is not just a revenue driver. It is a relationship builder. It turns a transaction into a recurring touchpoint. Lucas: That is the framework that I think a lot of small businesses miss. They look at what the big boxes do — Home Depot rents tools, but it is a different experience. Home Depot's tool rental is transactional. You go to a separate counter, fill out forms, pay per day. Cooper's is a club. You get a membership card, a little handbook showing every tool they have, and the staff knows your name. Luna: But does this scale? Could a hardware store in a city of 100,000 people replicate this? Or does it only work in a small city like Burlington with strong social ties? Lucas: Russo thinks it works anywhere a hardware store has a strong local identity. She has actually started consulting with other independent hardware stores. There is one in Portland, Maine, that launched a similar program three months ago and already has 200 members. The key is that the store has to be willing to cannibalize some tool sales. You are signaling to customers: buy less, borrow more. That is a weird message for a retailer, but it builds enormous trust. Luna: And that trust translates into them buying the higher-margin consumables — paint, soil, fasteners — which is where you actually make money. Lucas: Exactly. Tools have a low margin anyway because of competition from Amazon and big boxes. But a bag of mulch? That has a 50 percent margin and nobody wants to ship it. Luna: So the tool library is essentially a traffic engine fueled by an anti-consumption message. That is a smart paradox. Lucas: And it is one that small businesses can pull off because they have the flexibility to experiment. Cooper's Hardware did not need a 50,000-dollar software platform or a marketing agency. They spent 1,200 dollars on shelving and a barcode scanner, and Russo spent a weekend building the spreadsheet. Luna: Alright, let's talk about the downsides. What has not worked? Lucas: Two things. First, they tried offering a premium membership at 30 dollars per year that included access to larger tools like a chainsaw and a log splitter. Only 40 people signed up. Russo thinks the perceived value was not there because those tools require more skill and people are nervous about damaging them. Second, they had a problem with hold times. Members would reserve a tool online, then not show up to pick it up. About 15 percent of reservations were no-shows in the first six months. They solved it by requiring a 10-dollar deposit on online reservations, refundable when you pick up the tool. Luna: So a simple deposit solved the no-show problem. That is good. And the premium tier — maybe they just need to market it differently. Frame it as the 'renovator's tier' or something. Lucas: Russo is actually considering bundling the premium tier with a one-hour tutorial on how to use a chainsaw. She thinks the barrier is not the price, it is the fear of using the tool incorrectly. If you pair the tool with knowledge, the membership becomes more valuable. Luna: That is a great insight. Hardware stores are not just selling products; they are selling the confidence to complete a project. The tool library plus a workshop is an even stickier combination. Lucas: And it is exactly the sort of thing that Home Depot cannot do well. Their workshops are generic and often poorly attended. A local store can create a workshop that feels like a neighbor helping a neighbor. Luna: I want to go back to something you mentioned earlier — the sense of community. Cooper's Hardware now hosts a monthly 'Tool Talk' event where members come in, grab a coffee, and share project tips. That is not a revenue event. But it builds the kind of loyalty that no loyalty program can match. Lucas: And it feeds back into the tool library. People hear about a tool they never knew existed — like a manual sod cutter for 15 dollars — and they borrow it for their next project. The community drives discovery. Luna: You know, conversations like this remind me why we do this show. It is about seeing how small, creative moves can transform a business without requiring a huge budget or a tech stack. And if these episodes have ever given you a practical idea or just a new way of thinking about your own work, that is exactly why listener support means so much. Lucas: Yeah, absolutely. Keeping this show ad-free and focused on stories like Cooper's is only possible because of people who chip in at buy me a coffee dot com slash fexingo. Every contribution goes straight into production — research, recording, editing — so we can keep finding these under-the-radar case studies. Luna: It is a small way to keep the conversation going. And it really does make a difference. So if you have gotten value from the show, consider it. Lucas: Anyway, back to the tool library. One last number that stuck with me. Russo told me that in the first year, she had zero customers complain about the tool library. Not one. But she had five customers come up to her and say, 'This is why I will never shop at Home Depot again.' That kind of loyalty is priceless. Luna: That is the sound of a moat being built. Not through technology, but through trust and convenience. Lucas: And it started with a simple observation: your customers do not want to own a hedge trimmer. They want a trimmed hedge. The tool library is just a smarter way to sell the outcome. Luna: I love that. So for any small business owner listening, the question might be: what are your customers actually buying? Is it the product, or is it the result? And can you sell the result in a way that brings them back more often? Lucas: That is the takeaway. Next episode, we are looking at a local bakery that turned its surplus bread into a subscription service for restaurants. Spoiler: it involves a 1967 Ford van and a lot of sourdough. Luna: Can't wait. I'll bring the butter.