Opening a Train Store

[Oak Park O Scale]

Hello all:

 

Not sure where to go for advice on this topic, so I figured this would be as good a place as any and perhaps the best place as I suspect some current/past store owners are forum members. So here goes... I will try to kept as short as possible

 

I'm looking to make a career change and have considered opening a train store. I would open it in my community which is a VERY affluent area in Southern CA. The area straddles the LA and Ventura County boarder and while affluent the problem I see is that SO CAL isn't exactly the most happening toy train meca in the US. I'm worried I won't be able to see the volume needed to support a brick and mortar business.

 

My rough business plan is to start with just O gauge, primarily Lionel and MTH. I would also have Thomas the Tank Engine toys because there are A LOT of stay at home moms in this area with small children and lots of disposable income. Plus there is no train club for 50 miles in either direction so I was thinking that MAYBE I would form a Club and members could take part in building/running the in store layout. I know too I would need an online ordering solution and would plan for that too.

 

So, can I make a living doing this? Can anyone give me any ideas on the profit margin I can expect from Lionel and MTH? I'm 56 years old, am I crazy to do this at this point? What are typical dues/fees for the club idea? I welcome any and all advice. If you'd rather respond privately my email is rmackinnon77 at gmail.com.

 

Thanks in advance to all forum members.

 

Roy MacKinnon

(If the forum moderators want this moved to another topic area, please let me know.)

[servoguy]

You might want to visit Arnie's Trains in Orange county.  It is a well run business and I am sure the owners are making a living.  They have told me they have no debt, and their prices are good.

[Bob Keller]

A large number of hobbyshops have come and gone in the past decade. Some were good, some were bad. Some were Grumpy Old men shops while others had great service. Some had a narrow focus (O or S) while others were wide range hobbyshops. Each closure had a unique set of cirsumstances, but often the internet, the general economy, an aging hobby demographic, and the lack of new blood entering the various hobbies would come up in the discussion.

I'm not sure I would recommend opening a shop, but if you do, you should, as General Schwarzkopf said, "Prepare the battlefield."

At this point, you don't know what you don't know. You might want to consider offering yourself as free staff to a local hobbyshop for six months to learn the trade from behind the counter. Learn the market – but don't be blinded by your personal hobby interests.

If you don't have a useful website, don't bother. Make it easy for your ptential customers to learn what you have and to buy it. 

Don't presume "if you build it, they will come." Try to gauge where the market is, not plan for an easy drive to work.

If things don't pan out, know when to shut it down. 

 

Best of luck!

[rtraincollector]

Going from what Bob K. said ( because of minor knowelage) a friend opened a Hobby shop when I was in VA. and he wanted to do O guage but found he needed to do models, RC, HO, and even some G and would order n if requested with a non-refundable deposite. His main still was O but had a little of the the other to get others in and would order what eever they wanted with Deposite. Just some idea to think about. 

But as Bob said if you can volunteer your services at a Hobby shop and make sure your not going to be trying to fight a local one already established as you will really be fighting a up hill battle as you being new he really probably can handle a price war better than you can and thats not what you want to get into. you may want to look outside your imediate area if there is one there say 20-30 miles away so its not a bad drive but you not on top of your competator

Just some thoughts

[Bob Keller]

That is a good point. In the Milwaukee area shops with a large amount of O gauge are pretty distant (Sommerfeld's in Butler and Hiawatha here in Waukesha) so neither would welcome a third competing O gauge shop, especially after training the competition. Maybe an HO/N scale shop would be a better choice for "training." They would have the same retail and marketing pressures and distribuitor issues as an O gauge business.

[phrankenstign]

One big question you should ask yourself is, "What will I offer my customers that will make them want to buy at my store rather than an on-line store?"

There are many people who go to brick and mortar shops to see, touch, and operate products only to leave without buying anything.  They then go on-line to buy those same products because of the lower prices available there.

[Buckeye Riveter]

Think about this: Can you fix a Lionel Legacy locomotive's electronics?  Can you fix a MTH Protosound 3.0? If you are selling them, you better be able to fix the majority of the problems.  I only deal with stores that can fix what they sell. 

[rtraincollector]

also lionel and MTH has a special school you must goto and pass to be a authorize repair station

[Bob Keller]

I gather he decided not to do it, so I'll lock'er down. No need to beat a dead horse.