How Menards Builds Demand for Its Products

Menards is a big-box home improvement chain (like Home Depot and Lowes) that is based in the Midwest.

I recently read in the Chicago Tribune that they found a unique way to create demand for their drills, saws, etc.

When Menards wants to build a new mega store, they can negotiate good prices for land. They aquire more than they need, and sell the rest as a subdivision to home builders at attractive prices.

In exchange, the builders agree to buy their building materials and supplies from Menards.

One of their first projects was in the town of Yorkville (at the far west fringe of the Chicago area). In 2001, Menards bought 250 acres of farmland and got Yorkville to annex it.

They used some of the land for a new store, and then put in utilities and infrastructure for single family homes, and sold 129 lots to AMG Homes, who agreed to buy its building materials from Menards.

Since 2005, AMG has built 110 homes there.

Of course, I realized that there is another benefit. When all those future sub-division owners need to work on a home-improvement project, they will find themselves conveniently located next to a Menards ;-)