How the Costs of Running a Building Supply Store Can Affect Your Business

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Building supply stores are an important part of the construction and maintenance industries. By providing access to important products for projects large and small, these stores serve as the backbone for the success of many businesses. In the past year alone, the industry has seen incredible growth and shows no signs of slowing momentum in the near future.

Although the success of any business relies on the quality of their products and services, the cost of running such an operation is often just as significant. This blog post will explore the operating costs that can be associated with running a building supply store.

Operating Expenses

Running a building supply store involves a range of operating expenses. These are generally categorized in terms of rent, utilities, inventory and supply, wages and benefits, equipment and furniture, marketing and advertising, insurance and licensing, freight and delivery costs, and maintenance and repair costs.

At any given time, the actual cost of running a building supply store depends on the particular items customers purchase, the cost of inventory, and the extent of services provided.

Here are some typical operating expenses for a building supply store:

  • Rent and property taxes
  • Public services
  • Inventory and supply costs
  • Salaries and benefits
  • Equipment and furniture
  • Advertising Marketing
  • Insurance and license
  • Transport and delivery costs
  • Maintenance and repair costs

One of the most important aspects of running a building supply store is understanding the costs associated with running it. Proper knowledge of these costs can help reduce operating expenses and maximize profits.

Rent and property taxes

Rent and property taxes are a significant expense for any business. For a building materials store, these costs can be especially high due to the cost of land and properties needed to store and display building materials. According to a 2019 U.S. Census Bureau report, hardware, paint, and glassware retail stores have a median rent of .69 per square foot . This rent should then be multiplied by the total number of square feet the store occupies.

In addition to these rent costs, the property tax must also be taken into account. In the United States, property taxes are approximately 1.123% of the assessed value of the property itself and vary between states. This cost must be taken into account in the operating costs of the management of the store in question. On top of that, any additional services such as security or pest control could increase the total costs of owning a building supply store.

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It’s important to remember that the rent and property taxes a business is responsible for is based on the size of the property and its assessed value, but can also be affected by local taxes and region-specific rules. Therefore, it is important for business owners to research local laws before renting or buying property to be aware of any additional costs that may affect their operating budget.

Public services

Running a building supply store involves many operating costs, and one of the biggest is the cost of utilities. According to the US Energy Information Administration, businesses spent an estimated 9 billion on electric utility services in 2019 , or about 11.3% of all their energy-related spending. Overall, business electricity spending accounts for 70% of all electric utility sales in the United States.

Total U.S. energy-related spending for businesses in 2019 was approximately .73 trillion , with electricity being the largest component at 6 billion . Natural gas accounted for the second largest share of energy-related spending at 0 billion , followed by petroleum products at 5 billion and other energy sources at 5 billion .

In addition to electricity, businesses must also consider the cost of other utilities such as natural gas, sewer, water, telephone and internet services. These costs are typically paid on a per-use basis and vary widely based on location, business size, and other factors. For example, businesses may be charged differently for water depending on their level of consumption.

Businesses looking to reduce operating costs can do so by reducing consumption in their building supply stores. There are many options available to businesses to reduce their utility consumption, such as installing more energy-efficient lighting, using water-saving light fixtures, and using solar panels. Companies should also take the time to shop around and compare different utility providers to get the best deal.

Inventory and supply costs

When it comes to running a building supply store, one of the most important operational costs to consider are inventory and supply costs. This refers to the cost of purchasing the inventory your store needs to operate, such as required tools, supplies, and materials. Inventory and supply costs can vary widely, depending on the types of hardware, tools, and building materials your store carries and the supplier or vendor they are purchased from.

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According to the United States Department of Labor statistics, in March 2019, the average inventory and supply costs of hardware stores in the United States were ,802 per establishment .

However, these costs may vary for different types of businesses. For example, an independent building materials supply store will generally see higher inventory costs compared to a franchise. This is because national chains are able to leverage their buying power to negotiate lower prices from manufacturers and sellers.

The best way to keep inventory and supply costs down is to control planning in advance. This can involve things like finding and negotiating better prices with suppliers, negotiating better terms and free shipping offers, and buying in bulk when possible.

When purchasing inventory, it is important to focus on quality as well as quantity. While it can be tempting to go for cheaper supplies, these can often result in poor quality products that require frequent replacements. Quality materials often have a higher initial cost, but in the long run save money due to their durability and reliability.

Finally, it is important to track inventory levels. It is generally recommended to maintain a supply of materials and tools for two months, as this ensures that there are no unexpected shortages which can negatively impact operations. Additionally, it’s important to track demand and seasonal fluctuations to ensure you always have the materials you need.

Salaries and benefits

For any business, salaries and benefits are a major expense and building supply stores are no exception. Cost estimates for salaries and benefits vary between states and regions, and data can be found in official government-published surveys. According to a Bureau of Labor Statistics survey, the average wage and salary for employees in the Building Materials Equipment/Supplies Dealers industry is ,270 per year , as of May 2018. This estimate is national and may vary greatly in different states, depending on local salaries and employee preferences.

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Apart from salaries, companies also provide other benefits to their employees, such as health, maternity and disability insurance, retirement plans and vacation days. In the United States, the total of these benefits constitutes about 30% of the total expenditure on wages and salaries. This may vary with the size of the business and the type of benefits offered. For example, larger companies may also provide stock options or tuition reimbursement plans, which are an additional expense.

It’s critical for building supply stores to keep employee salary and benefit costs down and ensure they don’t eat up a large chunk of the operating budget. Owners should ensure they retain good employees, while keeping a tight lid on their expenses. Regular surveys of local area salaries should be conducted, to ensure that employees are adequately compensated. Putting in place a cost-effective benefits package is also necessary to ensure that the business can retain good staff, while keeping costs low.

Equipment and furniture

When running a building supply store, there are several costs associated with purchasing and maintaining the necessary equipment and furniture. According to the Bureau of Labor Statistics, the 2019 national average for spending on equipment was ,886 . A store will also require appropriate furniture to store items and provide necessary seating for staff and customers. The estimated national average for furniture costs was ,048 . Both sets of costs are important expenses to consider when planning a building supply store’s budget.

The cost of acquiring equipment and furniture will vary depending on the size of the store and the types of items the store will sell. For example, a store that sells large machinery would require particularly sturdy furniture, and the costs for these items would be higher than the national averages shown above. Conversely, a store that only sells small items might be able to get away with cheaper furniture that doesn’t require as much support.

When planning the initial cost of equipment and furniture, it is important to include ongoing maintenance in the budget. Different trends may require the store to replace certain furniture and equipment over time, and small items such as chairs may need to be acquired for additional staff. All of these costs should be considered when estimating the total cost of a building supply store.

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Advertising Marketing

Operating a building materials store requires several marketing and advertising efforts in order to obtain a clientele. Advertising your store’s products, services or promotions helps in effecting customer recognition and loyalty, increasing customer base and profits afterwards. Recent figures (2019) report that marketing and advertising expenses for US companies averaged 0.68 billion .

Of that spend, 38% was directed toward digital marketing efforts, such as payroll advertising, social media campaigns, email marketing, and search engine optimization. As many consumers now research and purchase building materials online, digital marketing efforts are becoming a valuable tool for building supply stores.

Offline advertising, such as TV or radio ads, magazine spots, billboards, and newspaper inserts, remains a viable option for some building supply stores. Over the past year, American businesses reported an average of .30 billion spent on offline advertising strategies.

For any size business, it is important to create and execute effective marketing and advertising strategies. The right mix of digital and offline tactics can help stores reach new customers, drive sales, and build an increased customer base.

Insurance and license

Operating a building supply store involves a wide range of responsibilities and obligations that must be fulfilled in order to remain compliant with local and federal regulations. One of the biggest costs associated with this is obtaining the necessary insurance and permits for your business. Depending on the type and size of the store, the insurance requirements as well as the cost of the permit can vary significantly.

At a minimum, it’s likely you’ll need a general liability insurance policy to protect you from legal claims made against your business. This policy should cover both the physical property of your business as well as any financial losses incurred due to negligence, malpractice, or fraudulent activity. It is also important that the insurance policy covers possible damage to customers’ property while they are on your store premises. Depending on the size and scope of your business, prices for these policies can range from 0 to ,000 per year.

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In addition to general liability policies, you may need to purchase additional insurance such as workers’ compensation, professional liability, and property damage insurance. The cost of these types of policies can range from a few hundred dollars to several thousand dollars each year, depending on the size and nature of your business.

In addition to insurance, you may also need different types of licenses, permits, and inspection certificates in order to stay compliant with local laws. In most areas, these can include business and tax permits, health inspections and fire safety inspections. The cost of these permits can vary widely and can range from a few hundred dollars to several thousand dollars, depending on the size and scope of your business.

It is important to keep in mind that the cost of insurance and licensing for any business is not static and can change from year to year. It is important to consult with an insurer or local business licensing office for an up-to-date estimate of these costs for your particular business.

Transport and delivery costs

Freight and delivery costs are a major factor in the operational costs of a building materials store. According to the US Department of Transportation, the average cost of shipping and delivering goods was .87 to .51 per mile in 2012. Additionally, the Bureau of Labor Statistics reports that there is an Average of 2.6 million truck drivers employed in the US transportation industry. The freight trucking industry alone employed 954,430 workers , accounting for billion in total wages in 2017.

In addition to paying drivers, shipping and delivery companies must also consider fuel costs, maintenance, and other related expenses. In 2018, the US Energy Information Administration reported that the average cost of diesel fuel was .18 per gallon . Of course, due to the fluctuating nature of fuel prices, transportation and delivery costs may be subject to market forces beyond the control of the delivery companies.

The size and weight of the goods shipped can also significantly affect delivery costs. Shippers using consolidated freight services generally pay a lower rate than individual shipments. Additionally, the quantity of goods shipped will determine the size of vehicle or shipment needed and therefore may affect the cost. For example, a full truckload would be more cost effective than shipping multiple smaller shipments in multiple vehicles .

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Maintenance and repair costs

Maintaining and repairing a building supply store and all of its equipment can be an expensive task. Depending on the size of the store, total repairs and maintenance costs can fluctuate significantly. The Bureau of Labor Statistics estimates that from 2017 to 2018, the average cost to repair and maintain a materials store was about 2,000.

These costs are broken down into smaller categories, such as labor or service costs for repairs. 2017 to 2018, labor and service expenses were estimated at 6,000. This accounts for about two-thirds of the total repair and maintenance costs the store has to bear. Additionally, the store must spend an estimated total of ,000 on supplies, such as materials and tools needed for repairs. Finally, the store might need to spend around ,000 on miscellaneous expenses associated with renovations and repairs.

It is imperative that an internship materials budget for these necessary maintenance and repair costs. Routine maintenance is essential to keep all equipment in the best working condition and prevent breakdowns, which can cost the store time and money. Additionally, having documents at hand that can be easily used when needed is also important. This includes supplies like paint, glue, and tile that need to be replaced during repairs.

Estimated repair and maintenance costs for 2018:

  • Labor and services: 6,000
  • Supplies: ,000
  • Miscellaneous expenses: ,000


Building supply stores have become an essential part of the construction industry, allowing professional people to access the materials they need to get the job done. The operating costs associated with running such a store can be quite extensive, but when done correctly, can be done with minimal financial strain.

The key to cost control is pricing these services correctly, knowing when to invest in the store, and staying up to date with the costs associated with maintaining the store. By doing so, businesses can continue to deliver quality services while keeping operating costs under control and profitable.

Overall, understanding and controlling the operating costs associated with running a building materials store can help businesses ensure long-term success and growth.