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by Justin Guinn,
Market Research Associate
Last Updated: December 7, 2016

Much of the inventory in a hardware store is small, difficult to distinguish from each other, easily mixed in the bins by customers, and challenging to price mark. Some of the products sold by a hardware store must be accompanied by a material safety data sheet (MSDS), but only under some circumstances. There are literally hundreds of thousands items in a large hardware store. Inventory, point of sale (POS), order entry and receiving are the accounting system components most important to a hardware store. There is also a need to support the physical inventory counting process. Aside from MSDS documents, there is little inventory that is strictly regulated.

Accounts payable, accounts receivable, general ledger and payroll are standard. There are some peculiarities for the customer relationship management (CRM) and POS. These are primarily in the areas of job costing and estimating. They affect both contractors and do-it-yourselfers.

Common Features of Hardware Store POS Software

In evaluating software, hardware store owners should evaluate the following functions to meet their unique requirements:

Integrated parts database and UPC catalog Because of the large number of hardware items, the system needs to provide a catalog of products and UPCs. The catalog must be updated frequently or better yet, available online.
Sell by measure Hardware stores sell many bulk items that are sold in cut portions. Examples include lumber, chain, rope and wire. The system should handle selling by measure for these items. The inventory should be accurately tracked, including accounting for all scrap.
Shelf and bin location The inventory and POS systems should support locating products by shelf and bin location. In addition to providing better customer support, having inventory location assists with the physical inventory process.
Estimating The POS and inventory system should allow estimates to be prepared. If the customer accepts the estimate, the system should be able to generate a customer order easily. It should generate orders for stock not on hand and special orders as necessary.
Contractor sales The system should support contractor sales. It should calculate discounts, track terms and provide billing. It should also track lines of credit and notify the customer and back office staff when credit thresholds are reached.
Job costing The system should be able to track multiple jobs, for both contractors and do-it-yourselfers. The job costing should be part of the POS. A single transaction should be able to be split over multiple jobs. The job should include the customer’s job number. Each customer should be able to have multiple jobs concurrently.
Seasonal orders The system should recommend or order seasonal merchandise; for example, salt and holiday decorations for the winter and barbecue grills in the summer. The system should also support inventory sell-versus-store decisions at the end of each season.
Kit sales Hardware stores often sell plans and materials as single kits; for example, to build a storage shed or a play set. The system should correctly decrease the individual parts inventory counts when a kit is sold.
Special orders The system should handle special orders. It should track deposits, integrate with order entry to place orders and notify the customer when the order is received.
Work orders Many hardware stores offer special services. Examples include rescreening and engraving. The system needs to track the work orders, post deposits and notify the customer when the work is complete.
Material safety data sheet (MSDS) handling OSHA requires that the required MSDS for a product to be delivered by the seller, but only for certain customers. The systems should have a repository of MSDS The POS and CRM systems should printout required data sheets at the time of sale.
Gift registry For a variety of reasons, hardware stores are starting to maintain gift registries. Customers should be able to register for desired merchandise by name and event. The system should track which items have been purchased and what is still on the list.
Rental management The system should have a rental management module. It should track costs, billing, maintenance and equipment lifecycle management.
Lookup by description Since many hardware items are similar, the POS needs a look up by description, which can narrow the range of items. The the clerk or customer then can select from a limited list.
Inventory images The system must show pictures of the items. The images should be available during ordering, receiving, selling and physical inventory.
Case/unit breakdown Many hardware parts are ordered in cases and sold in as cases, boxes or singles. The POS system should decrease the inventory properly how ever the items are sold.
Physical inventory system The system should support physical inventory. It should interface with handheld devices to record the count. It should create physical inventory sheets by location as well as item number. The count sheets should have the option to display the image.


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