RetailAce Hardware

What Type of Business Is Ace Hardware?

Ace Hardware 5

Ace Hardware is one of the most recognized names in the home improvement industry. With a history dating back to 1924 and over 5,000 stores worldwide, the company has been a mainstay for do-it-yourselfers and professionals alike. But what type of business is Ace Hardware, and what sets it apart from its competitors? In this comprehensive guide, we’ll delve into the business model, history, products, and services of Ace Hardware, and how it has managed to stay relevant in the ever-changing retail landscape.


Ace Hardware operates as a retailer-owned cooperative business. This means that it’s a business owned and operated by individual store owners who buy shares in the corporation. Each owner can purchase products from the co-op’s warehouses, utilize the brand’s logo and branding, and receive dividends based on purchases. This unique business model has allowed Ace Hardware to become a major player in the home improvement industry.

A Unique Business Model

Unlike most businesses, Ace Hardware operates on a cooperative business model. This means that its store owners are also its shareholders. Each store owner buys $5,000 in shares and can purchase any of the 80,000+ products from the co-op’s warehouses, make use of the well-known red-and-white logo and branding, and receive dividends based on purchases rather than equity. This model allows even smaller stores to compete effectively at retail despite larger stores in their market.

As a retailer-owned cooperative, Ace Hardware franchisees are the owners of the corporation. They do not pay royalty fees, and a portion of the profit gets distributed back to them each year. This collective buying power is one of the key factors that have contributed to Ace Hardware’s success.

A Rich History

Ace Hardware’s roots trace back to 1924, when a group of hardware store owners in Chicago joined forces to negotiate lower prices on merchandise purchased from wholesalers. The company was named Ace Hardware Corporation in 1931 and experienced dramatic growth following World War II, tripling its sales between the late 1940s and 1959. Today, Ace Hardware Corporation is the world’s largest hardware retail cooperative and the largest non-grocery American retail cooperative.

Wide Range of Products and Services

Ace Hardware offers a wide range of products and services for home improvement, maintenance, and repair. From hardware and home safety items to lawn and garden products, tools, grills, and outdoor living items, Ace Hardware has something for every homeowner. They also offer various in-store services, such as assembly, blade sharpening, and screen repair, to name a few.

Competitive Edge

Ace Hardware differentiates itself from its competitors through a focus on helpfulness, community orientation, convenience, customized marketing, unique services, adaptability, and strong brand recognition. The company has won numerous J.D. Power awards for its excellent customer service and has been recognized as one of the top 10 franchises in the world by Entrepreneur Magazine.

Staying Relevant in the Ever-Changing Retail Market

In the face of competition from big-box stores like Home Depot and Lowe’s, Ace Hardware has managed to stay relevant through a combination of strategies. These include a focus on community and small business, expansion of store presence, investment in digital and omnichannel shopping experiences, providing a personalized retail experience, and engaging younger DIYers through influencer marketing strategies and PR activations.

Financial Performance and Market Presence

Despite challenges, Ace Hardware has shown strong financial performance and market presence. In 2022, the company reported record full-year revenues of $9.2 billion, a 6.7% increase compared to the previous year. Ace Hardware operates more than 5,500 locally owned and operated hardware stores in approximately 70 countries, and it continues to expand its store network.

In conclusion, Ace Hardware is a unique business that leverages a cooperative model to deliver a wide range of products and services to its customers. With its rich history, commitment to customer service, and adaptability to market changes, Ace Hardware remains a major player in the home improvement industry. Whether you’re a DIY enthusiast or a professional, you can count on Ace Hardware for all your home improvement needs.

Frequently Asked Questions

What is the cost of starting an Ace Hardware franchise?

The initial investment for starting an Ace Hardware franchise ranges from approximately $272,500 to $1,561,500. This cost includes the initial franchise fee, equipment, inventory, and other startup expenses.

Does Ace Hardware provide any training for new franchise owners?

Yes, Ace Hardware provides comprehensive training for new franchise owners. This includes classroom training at the Ace Hardware Retail Training Center as well as onsite training at the franchisee’s store.

Does Ace Hardware offer any online shopping options?

Yes, Ace Hardware offers online shopping through its website, where customers can choose from thousands of products. Many of these items can be picked up in-store or delivered directly to the customer’s home.

What types of products does Ace Hardware sell?

Ace Hardware sells a wide range of products, including tools, paint, grills, lawn and garden supplies, plumbing, electrical, and home safety items.

How does Ace Hardware’s cooperative business model work?

In Ace Hardware’s cooperative business model, the store owners are also the shareholders. They purchase shares and can buy products from the co-op’s warehouses, use the Ace Hardware branding, and receive dividends based on their purchases.

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