The key to selling safes, or keys, or anything, is that you have to have inventory. Having been in both the locksmith business and now the safe manufacturing business, I know what it is like on both sides. I've seen successful locksmiths who focus on growth and locksmiths who have lots of excuses for not wanting to grow.
So I want to share some of the secrets to running a profitable retail locksmith shop. Obviously you need to carry an inventory but how much is enough? Which products? Where are you going to put it all when you have it? These are all good questions that I have heard many times before.
First take a look at your locksmith shop. The average shop often looks like something from an episode of the TV show "Hoarders" with loads of parts, broken equipment, and just really old stuff that has never sold or looks like it belongs in a museum. I know of one locksmith that keeps broken safes and out dated safes on his showroom floor. He tells me he likes the old ones as a conversation piece and that he will fix the broken ones AFTER someone buys them. (Yes, he really told me that.) He said he retailed less than $2000 a year in safe sales "but they were 100 percent pure profit."
Today he has cleaned up his shop and brought in new safes and retails over $50K a year. Though he is not the largest retailer in his area, he did make a huge improvement in profits to his bottom line. He sells this in a 150-square-foot showroom. So that is not bad. I think he could sell more if he enlarged his showroom and carried more inventory.
Generally speaking, most retailers want to "turn" or sell out of their inventory four times a year. Let’s take my locksmith above who sold $50K. You would only count the wholesale cost of the safe he sold last year. Assuming a 100% markup, he purchased $25,000 last year, or he purchased an average of $6250 every quarter on average or roughly $2000 a month. He did start slowly, building up his inventory with home/microwave safes and only the best selling fire burglary safe. (HINT: Ask your manufacturer or supplier which are the best-selling models; they will tell you.)
In the beginning, he often sold out of a model and missed sales. But he was committed to growing this section of his business and my suggestion to him was to build out his inventory of Fire & Burglary, Office, and home safes and keep a good inventory on hand. These lines are best sellers for locksmiths just starting out or limited with capital money. Gun safes could be added down the road. (As a side note, you can do this with AMSEC, Gardall, or any other safes besides Hollon. I want you to be successful.)
An initial order looked like this:
- One of each home safe in dial and keypad. Put them on a rack and it looks like you have a lot available or you can stack them on top of the FB models. (Just be sure to put a pad down as to not scratch either safe.)
- Next would be an office type safe such as the 3 smallest sizes. Ours would be the models HS-650, 750, and maybe the HS-880. Our home safes look very similar to our office safes so now you look very well stocked.
- But you still need to add the three from the Fire and Burglary line. Go with the three smallest. As an example would be from Gardall's FB line such as the FB-1212, 2013, and FB-2714. My guess is that these are also Gardall’s biggest sellers in this line-up. If you get in dials, be sure to have a safe that has a working electronic keypad of some sort so you can up-sell and demo it.
HINT: I have often had a customer ask if they should get a dial or a keypad. First I let them use the keypad ona the tallest of the FB models. Next, I get them a stool to sit on in front of the shortest safe and dial open the safe. They upgraded to a keypad almost every time I did that!
If you have a big show room but not many safes, I suggest you keep the empty boxes they come in and leave them on the showroom floor, maybe even on a pallet. It will look like you have more inventory then you actually do on hand. This is done even by the big box retailers. You should also always have a back-up of the most popular models in each line.
Hollon Safe offers free shipping on six or more safes. Many times we work with locksmiths that want to get into selling safes and they purchase six safes. They sell the first 2 or 3 quickly, then they don't sell anything for months. The reason this happens is because there is no longer a selection available so the customer goes somewhere else.
Today's consumer is just like you and me. They want a selection to choose from where they buy. Can you imagine going to a Ford dealership and they only have three Ford vehicles? A Fiesta, Ranger, and Econoline 250? You wouldn't hang around and you most likely wouldn't buy any of those models unless you really wanted it and it was a very reduced price.
Gun safes are a larger investment and should have a larger and more diverse inventory in order to be successful. Watch for a separate article on this subject in near the future, along with tips and helpful hints.
Zack Gilmore is President of Hollon Safe. For more information, visit www.hollonsafe.com
