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Kristin and Bob Nell, the owners of Mequon Ace Hardware.

Customer service still makes the difference at Mequon Ace

In a big box world, there's still room for the little guys.

That was the thinking of Bob and Kristin Nell, the couple that bought Mequon Ace Hardware in 2011, taking the business over from the original owners who founded the store in 1981.

It made perfect sense for Kristin, who started out as a cashier at the hardware store – 11001 N. Port Washington Rd. – at age 16. Her husband, Bob, warmed up to the idea over drinks at a bar in Richfield.

A handful of years into it, Bob, 46, peers out on his store from the conference room on the second floor. He's modest about how complicated it was to make the transition into the hardware space as someone with food service management experience but none in this industry.

"We bought an existing business," he says. "It was easier than building up a business from scratch. It was making some changes and fine-tuning."

Kristin, 37, on the other hand, already knew the store inside and out – and had no qualms going into business with her spouse, and diving in head first.

But their friends asked the Jackson couple the obvious question – in a market with plenty of big box stores, how does owning a neighborhood Ace Hardware store in this era make sense?

Easy, they say. It's about customer service.

Says Kristin, "I stop at Home Depot and Menards every now and then and I don't think I've been approached ever at one of those stores. The one time was at Menards was four years ago and I was shocked … it was a man trying to sell me DirecTV."

"The big box stores, they've been in this market for a while," says Bob. "Since we've bought the store we've been able to build sales every year." In fact, Mequon Ace hit the "Pinnacle Award" level in 2016 as one of the company's top global performers.

Mequon Ace's biggest competitor, they say, is actually Amazon.com.

"Anybody who is in retail, if they're not worried about Amazon, they should be," says Bob.
But, "paint is hard to buy online," notes Kristin.

And so are a handful of screws, but that's not where hardware stores make their money. The highest margin comes from grills and snowblowers and other big-ticket items. So Mequon Ace doesn't just offer advice to its customers, it delivers and assembles its products.

Both Kristin and Bob agree that their competitive advantage is maintaining the long-term relationships with customers who put their trust in their team – teenagers like Kristin once was, as well as long-time employees. Even the former owners, now in their 70s, still work part-time, and a majority of the store's customers come of the area and know the crew by name – and vice versa.

Says Bob, "We find people who have backgrounds that would be valuable in the hardware business. A lot of our guys who work during the day are semi-retired but have worked as auto mechanics or in construction or had a background that would be helpful."

"We hire high schoolers because it is fun to watch them learn," says Kristin. "These are things that are going to help them throughout their lives.

So, even on items that Ace can't sell for less than Amazon or Home Depot, the Mequon store does have some discretion on setting its prices. Currently, the eCommerce via Ace's corporate website is consistent across its stores, but that could change in the future, says Bob.

"At Home Depot you can buy pallets and pallets and pallets," says Kristin. "At Ace, you can buy pallets but not as many as them. So some things are going to be higher some things are going to be lower.

"But you walk in here, and three or four people ask you if you need a hand," says Bob.

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