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: There's a hardware store in Portland, Oregon, called ReBuilding Center — actually, they started as a nonprofit building-materials reuse center, but the story I want to drill into is their tool library. They launched it in 2023 and within six months, foot traffic tripled. Not just to the tool library — to the whole store. Luna: Tripled? That's wild. How does a tool library drive that kind of traffic to a hardware store? Lucas: Right, so the tool library itself is a membership model — twenty bucks a year gets you access to borrow power tools, lawn equipment, even things like tile saws and post-hole diggers. But here's the key: when you come to pick up a tool, you almost always need something else. Sandpaper, a replacement blade, paint, nails. The tool library becomes the loss leader that drives consumable sales. Luna: So the membership fee covers the overhead of the lending program, but the real profit comes from the add-on purchases. Lucas: Exactly. The store told me their average tool-library member spends about forty-two dollars per visit on other items. And because they're coming back every few weeks to return and borrow new tools, that repeat visit frequency is way higher than a typical hardware customer. The typical homeowner might visit a hardware store once a month. Tool library members come in every ten to fourteen days. Luna: That's a huge shift in customer behavior. And twenty bucks a year is almost a psychological threshold — it's low enough that people don't think twice, but it creates a sense of ownership. Lucas: Exactly. The store's owner told me they deliberately priced it below the cost of renting a single power tool for a day. A rental from a big-box store might run you fifty bucks for a pressure washer. Here, for twenty dollars a year, you can borrow that pressure washer six times. The value proposition is obvious. Luna: But what about the economics on the store's side? The tools themselves aren't free — they had to buy inventory, set up a check-out system, deal with damage and theft. How does that pencil out? Lucas: They started with about ten thousand dollars in inventory — maybe fifty power tools, plus some hand tools and gardening equipment. And they budgeted for a ten percent annual loss rate from theft or breakage. But because the membership fees cover roughly sixty percent of that inventory cost in the first year, and the add-on sales cover the rest, they broke even on the program within eight months. The owner said the tool library is now a modest profit center on its own, but the real return is the foot traffic lift. Luna: Ten percent loss rate feels optimistic. I've seen tool libraries that struggle with people not returning items. Did they do anything special on the operational side? Lucas: They use a simple check-out system — a Google Sheet with barcodes — and they require a credit card on file. If you're late returning something, they charge a dollar a day. That's enough to encourage returns without being punitive. And they have a volunteer-run repair shop that fixes tools that come back damaged. That keeps costs down and builds community. Luna: The volunteer repair piece is smart — it turns a cost center into a community touchpoint. People feel invested in the program. Lucas: Absolutely. And the store also uses the tool library to cross-sell classes. They offer a ten-dollar workshop on how to use a pressure washer, or how to tile a backsplash. The class attendees then rent the tools from the library to do the project. It's a flywheel: education drives tool rental, tool rental drives consumable sales, and consumable sales drive repeat visits. Luna: So what's the one thing a hardware store owner listening today should take away? If they want to replicate this, what's the first step? Lucas: Start small. Don't try to buy fifty tools at once. Pick ten high-demand items — a pressure washer, a tile saw, a post-hole digger, a leaf blower — and launch a pilot with twenty members. See if the add-on sales materialize. The Portland store started with thirty tools and scaled up based on demand. You don't need a fancy software system. A Google Sheet and a credit card terminal will get you started. Luna: And what about insurance? That's often the thing that scares small business owners away from rental models. Lucas: Great question. The store added a rider to their existing general liability policy for about five hundred dollars a year. It specifically covers tool lending. They also have members sign a waiver that holds the store harmless for misuse. The key is to talk to your insurance agent — don't assume it's impossible. A lot of agents have seen this model before because tool libraries have been around in the nonprofit space for years. Luna: So it's a low-risk, high-reward experiment. I love that the core insight is: don't compete with Amazon on price for a hammer. Compete on access to the tool you use once a year. Lucas: Exactly. Home Depot can sell you a pressure washer for two hundred bucks. But if you only need it twice a year, the tool library is a better deal. And the store captures that customer relationship for everything else they need regularly. Luna: That's a model that builds loyalty in a way a price discount never could. Lucas: Look, it takes a little bit of trust from the store owner. You're essentially saying, 'I'll lend you my inventory in the hope that you'll buy other things from me.' But when the data shows that tool library members spend forty-two dollars per visit on consumables, and they visit twice as often, the math works. Luna: And the community goodwill is enormous. People tell their neighbors about the tool library. It becomes a reason to drive past the big box store. Lucas: That's the part that's hard to quantify but totally real. The store's owner told me that when they launched, they got a feature in the local newspaper and a segment on the evening news. That's free marketing that a traditional hardware store could never buy. Luna: And it positions the store as a community institution, not just a place to buy nails. Lucas: Right. And that reminds me — if these conversations have moved your work forward in some small way, a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo. That's literally what funds making this many of these episodes. No ads, no sponsors, just listener support. It's a small group already, and it keeps the show viable. Luna: Yeah, it makes a real difference. We're grateful. Lucas: Anyway, back to the tool library. One other detail I want to highlight: they made the membership free for low-income residents through a partnership with a local community center. That boosted usage and goodwill even further, and it didn't hurt the bottom line because the add-on sales still came from those members. Luna: That's a smart move. It builds equity and expands the customer base without sacrificing revenue. Lucas: So if you're a hardware store owner or any independent retailer, the question is: what could you lend? It doesn't have to be tools. A kitchen supply store could lend stand mixers. A garden center could lend soil aerators. The principle is the same: lend the high-price, low-frequency item, and sell the consumables. Luna: It's a new take on the razor and blades model, but with a community twist. Lucas: Exactly. And the barrier to entry is so low — a few hundred dollars in inventory, a Google Sheet, and a willingness to trust your customers. That's the kind of innovation that keeps Main Street alive. Luna: Alright, Lucas. Next week, we're talking about a local bookstore that beat Amazon by doing something completely different. I'll bring the data. Lucas: Looking forward to it. Until then.