Tom Jarms learned the hardware business from his father, Ron.
“I’m probably famous among Ace dealers for ‘Ronisms’ – quoting my dad. Things like, ‘You’re going to make mistakes. Just hope they don’t cost you too much.’ ”
Alas, parental wisdom can’t anticipate every obstacle in the path to success.
Take Tom Jarms’ computers.
“We bought our current system without understanding it,” Jarms explained. “Our old system worked a certain way, and we made the mistake of assuming certain aspects of the new system worked the same as the old one.”
But when employees hit a particular key, the new software erased what had just been scanned and placed in a customer’s bag.
“It took us 11 months to figure that out,” said Jarms, “and cost me about $100,000.”
Fortunately, mistakes have been few since Jarms moved into his new, 25,000-square-foot building next to Cheney’s Trading Company supermarket three years ago.
During a recent interview, he discussed the evolution of the hardware business, the challenge of finding full-time employees in a college town, and how he relaxes.
S-R: Where did you grow up?
Jarms: Until I was 10, we lived in the Midwest – Illinois, Iowa, South Dakota. Dad managed Osco Drug stores, and they moved him about once a year for 13 years. He got tired of that, so in 1972 he and my mom, Tracy, purchased this business, and they owned and operated it for 27 years.
S-R: What were your early interests?
Jarms: I read a lot – mostly history. I participated in sports, but I was never any good.
S-R: Did you have a favorite class in high school?
S-R: When did you start working in your parents’ hardware store?
Jarms: I swept the floors once or twice a week from the age of 12 on, and started getting paid two bucks an hour when I was 16 or 17. I worked there part time until the middle of college.
S-R: Did you ever think, “Someday this will all be mine”?
Jarms: I might have envisioned that, but didn’t understand what it would take to get there.
S-R: What other careers appealed to you?
Jarms: I always wanted to be in the military. So I did ROTC in college here at Eastern, graduated with a degree in geography in 1983, and served four years on active duty in military intelligence.
S-R: What did you do after leaving the Army?
Jarms: I went to work for Ernst Hardware.
S-R: Did your experience at your parents’ store help?
Jarms: A whole lot. I quickly moved up to department manager.
S-R: Then what?
Jarms: After two years I got tired of getting paid $250 to work 70 hours a week, so I found a 40-hour-a-week job at an Ace Hardware in Tacoma. That’s where I met my wife, Charlene, who also worked there. We got engaged in 1989. The following year my dad made me an offer, and we’ve been here ever since. My parents retired in 1999.
S-R: What skills learned in the military were useful in owning a hardware store?
Jarms: Dedication … self-motivation … leadership.
S-R: How many people did you command in the military?
Jarms: I was company XO (second-in-command) at one point, so I had direct control over 15 or 20, and indirectly over 40 or 50.
S-R: Did the recession impact your business?
Jarms: Definitely – 2007 was a record year; in 2008 we lost 5 percent; 2009 was flat; 2010 we lost another 5 percent; 2011 was flat again; 2012 we saw a minor uptick. Then we converted to Ace, and now we’re up 50 percent from where we were in 2012 – way past our 2007 record.
S-R: Why did you switch from the True Value brand to Ace?
Jarms: A number of reasons. We spent years not seeing adequate sales growth, compared with other companies. Then True Value decided to extend the payout method to co-op members from five years to 10, which aggravated me. Around 2010, an Ace rep invited us to a conversion seminar in San Diego. We were impressed with Ace’s growth, so we switched.
S-R: Have you ever worried the business might fail?
Jarms: I worry every day, because you never know when it could turn off. What explains how in April we had 20 percent growth, and May was off 10 percent? And there’s so much money riding on it. This building alone was $2 million.
S-R: Why did you move?
Jarms: No. 1, it’s bigger. And two, it’s next to a grocery store that puts 2,500 cars a day across the parking lot. At the old location, I was the big boy, and on a good day I drew 400 or 500 cars.
S-R: How has inventory changed since the early ’90s?
Jarms: Product lines are better. Overall, Home Depot and Lowe’s have done the industry a great service, because they have introduced new product lines that 10,000 guys like my dad could never have bought enough of to make mainstream. Home Depot and Lowe’s sell the heck out of Trex (composite decking) – a product that didn’t exist 25 years ago.
S-R: Do you consider Home Depot and Lowe’s competition?
Jarms: Indirectly, sure. We try to convince people that our prices are competitive. Ten years ago, I went to Home Depot and Lowe’s and price-shopped 500 items. I was cheaper on 300 of them, the same on another 100, and higher on 100. The big boys keep the obvious stuff on the end caps priced low.
S-R: But will someone in Cheney drive 20 miles to the nearest Home Depot?
Jarms: Oh, hands down. Most people are smart enough not to drive 40 miles to save $5 on a ton of stove pellets. But they already drive to Spokane two or three times a week anyway. And there’s lots of stuff I can’t stock – either I don’t have the room or I don’t have the money.
S-R: What do you like most about your job?
Jarms: Being on the floor interacting with customers.
S-R: What do you like least?
Jarms: Personnel issues.
S-R: Do you have trouble finding help?
Jarms: It’s very tough to find full-time, permanent employees. We get a rash of college kids applying, but three-quarters of them don’t really want to work. One kid quit because he always spent Memorial Day with his buddies, and I wanted him to work the holiday.
S-R: What do employees earn?
Jarms: That depends on experience. If I hire a high school or college kid, they’ll start at $9.50 or $10 an hour.
S-R: What business decision are you most proud of?
Jarms: Moving to this location.
S-R: How does one move an entire hardware store?
Jarms: It took us six nights, and we kept both buildings open the entire time. We simply couldn’t close, because the cash flow of the business is its lifeblood. Closing would cost us $5,000 a day, and we might lose customers because we weren’t there when they needed us.
S-R: What’s been the biggest surprise?
Jarms: I didn’t understand early on what it really took to earn and keep capital. When people hear business numbers bandied about, they assume you’re rich. They don’t realize that at the end of the day, a $5 million business may net $100,000. That’s all you have left after you’ve paid the bills.
S-R: What’s your best-selling item?
Jarms: Propane. Gotta have it.
S-R: Do some items sit on the shelf for years?
Jarms: Probably half our nuts and bolts.
S-R: How do you anticipate what customers will want?
Jarms: There’s another Ronism – my dad would say, “You always buy for last year.” Last year we sold 150 air conditioners and every fan we could lay our hands on. So last winter I ordered eight pallets of fans.
S-R: Are there any common misperceptions about your business?
Jarms: Probably the main one is that we’re part of a chain. We’re a co-op – the member stores own the company. But 90 percent of Jarms Ace Hardware is uniquely us. Even Ace signage and decor packages are not strictly enforced.
S-R: What’s the outlook for medium-tier hardware stores?
Jarms: The long-term outlook is strong. I won’t be outcompeted. My biggest concern is government regulations.
S-R: What other challenges do you face?
Jarms: We need to continue growing to afford this new building. Also attracting good employees who want to do this work. Most people who fall into retail do so because they aren’t qualified to do anything else. That’s why I’m here – I’m not qualified to do anything else.
S-R: How do you relax?
Jarms: What is that?
This interview has been condensed. If you’d like to suggest a business or community leader to be profiled, contact Michael Guilfoil at firstname.lastname@example.org.
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