How Ace Hardware Powers 4,000+ Independents with a Shared Supply Chain
A few weeks ago, I walked into an Ace Hardware store just outside Columbus. It looked nothing like the big-box chains we’re used to—no endless aisles, no towering shelves of seasonal overstock. But what it lacked in scale, it made up for in precision. The store felt intentional. Local. Efficient. That’s when I started asking a simple question: how does Ace, a patchwork of independent stores, manage to stay so consistent?
The answer, I found, is one of the most underrated logistics models in retail.
Ace isn’t a chain. It’s a network.
Built to Empower the Edge
Founded in 1924 and transitioned into a cooperative in 1973, Ace doesn’t run its stores—its stores run Ace. Each of the 4,800+ locations is independently owned, yet tied together through a shared supply chain, data ecosystem, and logistics strategy. Store owners are shareholders. They vote on decisions. They get a piece of the pie—$346 million in patronage dividends was returned to them in 2022.
As of 2023, Ace's average store size is around 8,000 square feet—small by big-box standards but optimized for high SKU turnover and neighborhood-level responsiveness. While Home Depot stores average 105,000 square feet and Lowe’s stores are roughly 112,000 square feet, Ace proves that efficient logistics can make a small footprint highly profitable.
Most retailers operate like a pyramid: corporate at the top, stores at the bottom. Ace flips that. It’s not about corporate control; it’s about cooperative enablement.
The Distribution Core
Ace runs 15 regional distribution centers (RDCs) strategically located to serve every store within a 400-mile radius, a range that ensures efficient delivery frequency while keeping transportation costs in check. These RDCs span more than 7 million square feet in aggregate and handle 100,000+ active SKUs.
Each week, over 65,000 truckloads move from Ace's distribution centers to stores, delivering everything from fast-moving inventory like plumbing fittings to seasonal items like snow shovels or garden mulch. Average delivery frequency is 1.6 times per week per store.
Ace uses a warehouse management system (WMS) integrated with its proprietary POS and forecasting systems. This enables highly accurate slotting, wave planning, and real-time inventory visibility across the network.
Shared Data, Independent Judgment
Ace provides nearly all of its stores with a unified POS and inventory system called Ace Retailer Soft, adopted by over 90% of locations. Real-time sales data flows back to HQ and regional centers, helping with demand forecasting, inventory rebalancing, and routing.
Store-level decisions still matter. If a store wants to carry locally sourced garden tools or niche items like hunting gear, it can—but it still benefits from central analytics, promotional alignment, and seasonal forecasting.
This hybrid model shows up in results: Ace has one of the lowest inventory shrink rates in the industry (estimated at 1.1%) and maintains an industry-leading in-stock rate of over 96%.
Owning the Flow
Ace owns and operates more than 400 tractors and 800 trailers, giving it control over more than 60% of its total store delivery volume. By 2022, its fleet covered over 26 million miles annually, enabling it to serve both high-density urban markets and remote rural stores with the same service standards.
The average order fill rate stands at 97.5%, and store satisfaction with delivery consistency remains above 90% in internal surveys. Route optimization software enables Ace to reduce deadhead miles and adjust dynamically based on store-level volume, with seasonal surges (like spring gardening or holiday lighting) baked into the model.
Fuel cost volatility is partially hedged through regional staging, load consolidation, and a multi-tiered routing schedule.
The Network Effect
Here’s where it gets interesting. Each additional store adds to the overall system value. More stores mean:
More sales data = better forecasting
Higher route density = lower delivery cost per store
Shared promotions = stronger vendor negotiations
Network redundancy = higher resilience during disruptions
This is the power of distributed scale. While most chains scale through replication, Ace scales through participation.
Omnichannel That Starts at the Store
Ace’s omnichannel approach is uniquely localized. Roughly 75% of e-commerce orders placed on acehardware.com are fulfilled by local stores, either through ship-from-store or in-store pickup. This is possible because of the network's tight inventory integration.
The "Buy Online, Pickup In Store" (BOPIS) model is not an afterthought—it’s a first-order function of how the logistics backbone was designed. Ace doesn’t run centralized e-com warehouses; it turns every store into a micro-fulfillment center.
This model improves:
Speed (same-day or next-day delivery from store inventory)
Efficiency (no duplicative warehousing)
Customer loyalty (personal relationships at pickup)
Vendor Strategy and Procurement
Ace negotiates directly with over 1,200 core vendors, using aggregated demand to lock in pricing and delivery terms. Stores get the benefit of national pricing with the flexibility to opt in to local promotions.
Vendors participate in annual category reviews, collaborative planning sessions, and direct-store-delivery pilots to test new SKUs or bundles. Ace also co-invests in vendor marketing, reducing the financial burden on individual stores.
Final Thoughts: Outsmarting big box stores
Ace isn’t flashy. It doesn’t make headlines. But under the hood, it runs one of the most coordinated, data-aware, and resilient logistics networks in retail. It’s a case study in how decentralized ownership doesn’t have to mean operational chaos. In fact, with the right backbone, it can be a competitive edge.
In 2022, Ace reported $23.1 billion in retail sales, up 7.5% YoY. It opened 232 new domestic stores and saw net membership growth for the ninth consecutive year. Inventory turns averaged 4.3x, and its return on equity was one of the highest among U.S. retail co-ops.
This isn’t just a hardware chain. It’s a logistics company disguised as a co-op.
And it’s quietly outsmarting the big box.
