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Advice from any hobby store owners

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Posted by riogrande5761 on Wednesday, August 12, 2015 6:37 AM

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I still think "mega stores" can do well in this business - but the corner mom and pop - bad idea.

So do we have any takers on my 10 million dollar investment deal to open the mega store?

Sheldon

I never stayed in one city that long to watch shop metamorphasis over such a long period like that.

Anyway, there are some mega stores out there doing business in a big way and making black ink that way which is a good thing.  Of course the original poster isn't in that category from what I can tell.  He is in the "mom and pop - bad idea" category.  Hand writing is on the wall - die is cast, etc.  Tea leave readings do not tell a good story.  Best to listen to wise council.

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Posted by ATLANTIC CENTRAL on Tuesday, August 11, 2015 4:25 PM

riogrande5761

I think those who have been around a long time, say who are in their 50's and 60's have seen a theme of shops closing over and over in many cities, and the rate at which it has been happening seems to have been accelerating as time has been going by.  For those who are much younger, and have not been around long enough to see this pattern, it may be easier to ignore the ominous odds and forge on ahead.

At minimum, it would be wise to gather much data and statistics and weight the weigh it all before sinking your personal credit score, years of time etc. into what is most likely a losing endevour.   Do your homework for sure, but probably it's better to work at something which more profitable and enjoy model trains as a relaxing and enjoyable hobby rather than as a money pit and source of stress.

 

When I was 15, in 1972, there were no less than eight full line hobby shops with good train departments and/or model train only shops in the Baltimore metro area.

Today there are only two or three.

The population of the region was about 2 million then - it is nearly 3 million now.

City or suburb, hobby shops and train stores are just not what they use to be.

The hobby has changed, the marketing of the product has changed, and the people have changed.

That is not a "the hobby is dieing" statement - but the hobby has changed dramaticly.

Here is what I think.

The more "serious" practice of the hobby has never been for the "poor" - no different now.

BUT, many with means now participate in the hobby in an "expensive" but "casual" way - less model building, more model collecting.

Those into the serious operation or building aspects of the hobby don't need hobby shops anymore - they are web and mailorder savy, they have clubs or round robin groups and they know their hobby is expensive and time consuming - they are looking to save both.

Shops cannot "stock" inventory like the old days, for a number of reasons, so a big part of the "value added service" of a brick and mortar store is lost.

If I have to wait for stuff to be ordered I may as well order it right from the guy who has it.......

And if I have to pre order, or "buy it now", to get the items I want, again why should I bother with a store? The whole idea of a store is that they "store" things until you need, want or can afford them - without that function, what is the point?

I still think "mega stores" can do well in this business - but the corner mom and pop - bad idea.

So do we have any takers on my 10 million dollar investment deal to open the mega store?

Sheldon 

    

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Posted by riogrande5761 on Tuesday, August 11, 2015 6:57 AM

I think those who have been around a long time, say who are in their 50's and 60's have seen a theme of shops closing over and over in many cities, and the rate at which it has been happening seems to have been accelerating as time has been going by.  For those who are much younger, and have not been around long enough to see this pattern, it may be easier to ignore the ominous odds and forge on ahead.

At minimum, it would be wise to gather much data and statistics and weight the weigh it all before sinking your personal credit score, years of time etc. into what is most likely a losing endevour.   Do your homework for sure, but probably it's better to work at something which more profitable and enjoy model trains as a relaxing and enjoyable hobby rather than as a money pit and source of stress.

Rio Grande.  The Action Road  - Focus 1977-1983

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Posted by Steven S on Saturday, August 8, 2015 6:48 PM

What kind of hobby shop?  Strictly trains?  Or will you be doing other stuff.

A lot of train shops around here have gone under.  We do have a couple of hobby shops that seem to be doing well.  But one of them seems to get most of its business in the RC plane/car section.   They also established an internet presence early on.  The other has a large section of crafts and scrapbooking stuff aimed at women. 

Steve S

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Posted by Bayfield Transfer Railway on Saturday, August 8, 2015 11:30 AM

How do you make a million dollars in the model railroad industry?  Start with two million.

According to the Small Business Administration 51% of small businesses close within five years.  Consider that.

And if despite all advice you DO open a model train store, my first advice is KEEP IT CLEAN.  I've been in too many shops that smelled of mildew, or worse!  Nobody wants to shop in a store where you're afraid to brush up against the displays!

Disclaimer:  This post may contain humor, sarcasm, and/or flatulence.

Michael Mornard

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Posted by riogrande5761 on Saturday, August 8, 2015 8:29 AM

mlehman

Paradoxically, location may be less important than it formerly was. I'm not saying it's unimportant, just that things have changed.

In the past, you really needed as high-visibility a location as you could afford. You had two basic methods of advertising -- the Yellow Pages and hobby publications. So visibility was key to getting folks in the door.

For homes, location is everything, for hobby shops, since walk in traffic isn't going to keep your shop in the black and internet/online sales is, location is of course a totally different ballgame.  You need really low rent really and high visibility online.

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Posted by BRAKIE on Saturday, August 8, 2015 6:37 AM

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Many are located in small rural towns, seamingly in the middle of nowhere, but they are actually a reasonable drive from three, four or five "major" population centers.

I can vouch for that..

Back in the 90s I went to a well stocked hobby shop located South of Lima in the middle of no where in a rebuilt 2 car garage that offered a nice  discount at check out based on the total purchase price.This shop was 90% HO with 10%  N Scale.

Every Saturday morning the shop was packed with buying customers.

I wish I could find another shop like that.

Larry

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Posted by BRAKIE on Saturday, August 8, 2015 6:20 AM

Nick Westfall

Hey guys, I have been seriously considering looking into opening a hobby store recently but before I do anything I would love to talk to anyone who has owned or worked in one. I would love honest opinions and advice. Thanks guys!

 

If I may.. I would not even think of opening a hobby shop today unless I had a web page and e-Bay store so,I could have a country wide market instead of depending on walk in customers..

Several years ago I dabble  as a part time train show dealer (I did 4 or 5 of the larger shows a year) and made money at it.

What I should have done was bought quality collections and estates instead of buying my stock through a distributor.

 

Larry

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Posted by ATLANTIC CENTRAL on Friday, August 7, 2015 11:18 PM

mlehman

Paradoxically, location may be less important than it formerly was. I'm not saying it's unimportant, just that things have changed.

In the past, you really needed as high-visibility a location as you could afford. You had two basic methods of advertising -- the Yellow Pages and hobby publications. So visibility was key to getting folks in the door.

With the internet, people can find you much easier. If they do even the most casual of searches, your shop SHOULD come up along with all the usual info now at one's fingertips.

So I would argue high-traffic count is less important than it formerly was. Don't pay a premium to get good numbers, because most of your potential customers are unlikely to drive by anyway.

Things like parking and perceptions of a secure nieghborhood remain important, as does a non-leaky roof, reasonable utilities, etc. But the attention that high traffic counts used to have can slide in importance. An affordable rent may be more easily obtained for space elsewhere, but accessible. That's one trade-off that is likely fairly safe to make that could help make a shop viable.

 

Mike, you are spot on about the location thing. At least as it relates to being in a "shopping district" verses some other sort of commercial location. 

Traditionally, successfull hobby shops and model train stores have been located in "lesser" shopping centers or older "town center" shopping districts where rents are generally less than high profile retail areas like Malls or up scale open "malls".

Having worked in this business, I can tell you that even 30 years ago "walk in" traffic accounted for very little of our business, and the visablity of our location only attracted a few of our customers.

Most people only came to our location to visit our store - then they took their purchases home.

What is more important in my view is not the detailed "type" of location, but the region of the country one selects to be in for this business.

It makes the most sense to be where most of the people are. That targets three/four primary parts of the country - southern California, the upper Mid West, the Mid Atlantic or the North East.

With the last two being where NMRA memberships suggest the most modelers are.

Even with a good web presence, shipping is faster if you are closer to most of your customers - I live in Maryland, I have received orders from Trainworld in New York the next day!

And the likelyhood that people will drive "regionally" to visit your store is increased if you are near more of the people - the area northeast of the Potomac River remains heavily populated, generally has high average incomes, and has weather that lends itself to "winter" indoor hobbies like model trains - and again the NMRA membership numbers support this theory. So does the anecdotal evidence about layout size that has been discussed on here from time to time.

We still have some great train stores here in the Mid Atlantic and North East - most are not located in big cities or expensive suburbs - but a few are.

Many are located in small rural towns, seamingly in the middle of nowhere, but they are actually a reasonable drive from three, four or five "major" population centers.

And people in this part of the country are not generally shy about driving. For exampe a great many people live in southern Pennsylvania and drive to Baltimore every day to work - a distance of 40-50 miles. An equal number of people live in the Baltimore/Annapolis region and drive a similar 40-50 miles to work in Washington DC.

So driving from my house, 22 miles to MB Klein, is just another day around the neighborhood. Or even a trip to Strasburg, Gettysburg or Blue Ridge Summit, all in PA, is no big deal for me.

Blue Ridge Summit? who ever heard of that place? it truely is in the middle of nowhere - Mainline Hobby Supply - great train shop, as is Gillberts in Gettysburg and the Strasburg Train shop.

These are just three examples - we have more in this region......

So I think region means more that "location" as used in the traditional real estate sense. Good retail "locations" are too expensive for this business - generally always have been.

Another secret is to own your own building. Now many MBA types say this is a business no-no these days, but it can be a dramatic reduction in fixed overhead - especially once a property is paid for (part of the orginal secret to success of MB Klein in Baltimore......and still the secret of success to several others in this region)

But what do I know, I've just been self employed most of my life, run several retail businesses, and worked in the hobby/train business - and I don't have an MBA or any other college degree.

Sheldon 

 

    

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Posted by richhotrain on Friday, August 7, 2015 5:06 PM

Soo Line fan

A LHS? I couldn't think of a worse investment. 

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Posted by mlehman on Friday, August 7, 2015 3:53 PM

Paradoxically, location may be less important than it formerly was. I'm not saying it's unimportant, just that things have changed.

In the past, you really needed as high-visibility a location as you could afford. You had two basic methods of advertising -- the Yellow Pages and hobby publications. So visibility was key to getting folks in the door.

With the internet, people can find you much easier. If they do even the most casual of searches, your shop SHOULD come up along with all the usual info now at one's fingertips.

So I would argue high-traffic count is less important than it formerly was. Don't pay a premium to get good numbers, because most of your potential customers are unlikely to drive by anyway.

Things like parking and perceptions of a secure nieghborhood remain important, as does a non-leaky roof, reasonable utilities, etc. But the attention that high traffic counts used to have can slide in importance. An affordable rent may be more easily obtained for space elsewhere, but accessible. That's one trade-off that is likely fairly safe to make that could help make a shop viable.

Mike Lehman

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Posted by riogrande5761 on Friday, August 7, 2015 2:00 PM

As they say the Real Estate Business, the 3 most important things: location, location and location.  Of course as I well know, in the Washington DC area, generally the closer you are to DC the higher the price, generally (at least in Virginia).  I don't know Maryland as well.

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Posted by rrebell on Friday, August 7, 2015 1:32 PM

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A LHS? I couldn't think of a worse investment. Well, maybe a VHS store. Invest in yourself. Take a class, get some certifications, online or in person. Make sure it is a career with a future doing something you enjoy.

You have extra money and don't know what to do with it? Open an online stock account. Learn about the market and put the money there instead.

Keep the hobby a hobby.

 

 

 

Now if anyone really wants investment advice, buy land - they are not making any more of it.

My rental properties are far and away the best "return on investment" I have ever made in my life.

Sheldon

 

Raw land is ussually a bad investment, being a landlord the best.

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Posted by ATLANTIC CENTRAL on Friday, August 7, 2015 1:22 PM

Soo Line fan

A LHS? I couldn't think of a worse investment. Well, maybe a VHS store. Invest in yourself. Take a class, get some certifications, online or in person. Make sure it is a career with a future doing something you enjoy.

You have extra money and don't know what to do with it? Open an online stock account. Learn about the market and put the money there instead.

Keep the hobby a hobby.

 

Now if anyone really wants investment advice, buy land - they are not making any more of it.

My rental properties are far and away the best "return on investment" I have ever made in my life.

Sheldon

    

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Posted by riogrande5761 on Friday, August 7, 2015 8:30 AM

Anyone who does try to run a brick and mortar shop needs to have a major online presence because the walk in traffic won't even come close to keeping your your store in the "black".  Optimism is a good quality, but it's not a magic wand; but there is nothing like finding out for yourself first hand.

Keep in mind many/most people are going to be on tight budgets these days and looking for the best deal they can find, which means shopping online so you'll be competing against the major online vendors - it's why so many LHS's aren't making it and closing up.  You'll be entering into, for the most part, a losing game right from the get-go - it's a dog-eat-dog business and whoever has the lowest prices sell out first and so on down the line.  You'll be competing against all the major online presences out there basically.  Add to that some of the biggest brands such as ExactRail by pass hobby shops and sell direct through their website - a trend we may see increasing.

The LHS is a "romantic notion" who's time is pretty much a thing of the past and is a dying thing, sadly yes.  It's your choice of course but at least you can't say you weren't warned.

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Posted by Soo Line fan on Friday, August 7, 2015 7:18 AM

A LHS? I couldn't think of a worse investment. Well, maybe a VHS store. Invest in yourself. Take a class, get some certifications, online or in person. Make sure it is a career with a future doing something you enjoy.

You have extra money and don't know what to do with it? Open an online stock account. Learn about the market and put the money there instead.

Keep the hobby a hobby.

Jim

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Posted by One Track Mind on Thursday, August 6, 2015 11:47 PM

Closed my store two years ago. It was open from 1997 - 2013. In the current climate, I would NEVER advise anyone to open a model train shop.

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Posted by snjroy on Thursday, August 6, 2015 3:52 PM

I truly admire your enthusiasm. At 24, your first strength will be your energy and perhaps your limited financial responsibilities (At 50, I have many mouths to feed, at home and at work!). You probably will have a lot of fresh ideas that may distinguish you from the crowd. Older folks would probably have other strengths, like business contacts and experience. This is why my only advice would be to find a mentor with a lot of business experience (maybe the owner of the shop that closed?). Keep in mind that most of those that start their business fail at their first attempt - try to beat the odds by helping an old hand help you. I think you already showed a lot of maturity by asking the question here, keep going and good luck, the hobby needs people like you!

Simon

 

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Posted by Nick Westfall on Thursday, August 6, 2015 2:43 PM

Thank you guys so much for your feedback! I know a lot of people have been saying think hard about it/don't do it and for that I am grateful. I know the area that I live in (central Virginia) is very underserved since the last store closed because the owner retired. I would love to try and fill that gap and I do believe a store run by someone my age (24) could do well and fill in a variety of spaces left by other stores. Our area has many specialty stores (two card game stores that do very well) so I believe that it can work, but we shall see!

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Posted by cprfan on Thursday, August 6, 2015 2:41 PM

I almost opened a hobby shop once and am I ever glad I didn't. Consider this. I assume you have a passion for model railroading. Otherwise, there are much easier ways to make money. I have always had that passion and also a passion for computers and electronics. I went into electronics repair as a career and was good at it. I then branched into computers. Eventually I opened a computer sales and service business. I soon lost any passion I had for computers. They became a chore, something I HAD to do. I spent all my time and money on the shop. Model railroading took a back seat. Heck, it wasn't even in the same car! My family took a back seat and that is a VERY bad thing. In the end I lost my house, and started from scratch financially. I have rebuilt my credit and thankfully never lost my family. They stood by me at the worst of times. 

I don't blame my failure on anything but myself. I am good at fixing electronics and computers. I am not a good salesman or financial manager. Maybe if I had someone else taking care of those things I could have concentrated on what I loved and did well.

Know what you are good at and what you can't do well. Everything has to be managed to a high degree of excellence to be a success. 

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Posted by snjroy on Wednesday, August 5, 2015 4:51 PM

Lots of interesting advice here. I asked a similar question in the following thread:

http://cs.trains.com/mrr/f/88/t/246202.aspx

Good luck!

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Posted by rrebell on Wednesday, August 5, 2015 1:54 PM

Now to be fair, you can make a good living at it but only if you do everything right, almost all don't!!!!!!  You have to offer the things that the internet dosn't, like decoder installs and be unbiased as far as power, IE DCC,DC or dead rail. There is a big demand for DCC decoder installs and dead rail. Sell the little things, don't expect to sell alot of the big ticket items, think of Home Depot's model, they make nothing selling the toilet but make a bundle selling all the extra parts like the seat and bolts etc. You need to have the internet. The one hobby shop owner that I know that realy made money was one that offered a layout building service as a side, of course all the hobby material for said layouts were bought at his shop (he accually had others do the building and he ran the shop).

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Posted by mlehman on Wednesday, August 5, 2015 1:05 PM

Lots of good advice here.

Owning a hobby shop is perhaps best regarded as a hobby in itself. To be even modestly successful, one needs to also have an internet presence. And you must discount...MUST discount...or the internet competition will be unbeatable.

Even then, shape your inventory closely. First, pay attention to what your customers want. That's hard to do in model RRing, because of all the prototypes and the emphasis on modeling to prototype these days. That's where many that otherwise would have succeeded have failed. Generic model railroading is a thing of the past, so if you stock your store like that, it soon will be, too.

Second, concentrate on fastmoving items, stuff people use everyday and may run out of and don't want to wait on mailorder. If you don't have basics like railjoiners, styrene stock, Kadee couplers, flex track, minature fasteners, and Bright Boys, you'll miss a lot of small sales. They're profitable and in some cases may even be doable at full price, unlike much of the rest of the stock, because people need them now when they run out. But still best to discount if you want to achieve quantity sales of any of these items.

Third, don't order more than you think will sell in the next two months. Otherwise you end up with a store full of excess stock that no one's interested in. People spending on the hobby regularly usually want the latest and greatest, after that it's hit or miss.

Fourth, emphasize if you don't have it in stock, you'll have it quick. One store I use places Walthers orders when they reach the minimum required amount (whatever that is), so there's no telling when they'll have something for you. It might be next week, it might be next month. That's unsustainable in the world of 2 day away mail order.

Fifth, be open hours when customers shop. Without evening and Sat/Sun hours, you'll miss lots of customers, who have the internet available to them 24/7/365.

Sixth, give customers reasons to come to your store beyond spending. Give clinics on both basic and new item topics. Get on social media and incentivize customers to do so. Support the Scouting merit badge program for Railroads. Etc, etc to the extent of your imagination. Oh, and have a layout, for testing, display, and demonstration, but don't let it look like it's just catching dust.

Seventh, if you can, specialize in an area that could be a successful internet biz. Lots of niches in this biz. DCC. Garden RRs. Lionel. N scale. And narrowgauge, my favorite. That may give you the ability to compete better in your advertising spending, discounts from vendors, and selection for customers. You really cannot cover everything in this hobby, as a look at even the big dogs in this biz shows. Better for the small start-up to have a focus it can grow. This is much easier to do now with the help of the internet, which can bring in customers from around the world.

All that still won't guarantee success, but gives you a fighting chance compared to not doing any or all. A tall order. But if I won the lottery...HmmWink

BTW, never owned a hobby shop, but have worked in retail, wholesale, and customer service. Used Kalmbach materials to explore opening a LHS about two decades ago and decided I needed to make a living and that was far from guaranteed. I've been a keen observer of LHS for 40+ years is all, but I'd still do it if it was money I could afford to lose, which ther's none of presently.

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Posted by Howard Zane on Wednesday, August 5, 2015 9:26 AM

I take my hat off to any individual or whatever who is willing to open a train store in today's high tech climate. Advice..............? Give it a serious mess of thought and then think again. I have owned a shop, became an on line brass dealer, and promoted a huge model train show for over three decades and have learned a bit about the hobby business and still what I do not know would fill volumes.

I sincerly believe that a good (actually great) shop can survive and possibly do quite well. There is no middle road today. You have two choices.....small and safe or huge like Caboose Hobbes in Colorado. You must decide to follow the path or make the path with the latter being a gamble, but rewards could be quite worth the effort.

I'm a high tech dinosaur and I hate with every fibre in my being today's on-line activities, but if I were to open a shop today, I would first get a degree in computer science or take on a partner who is high tech savy. A business degree or great experience is also a major plus if not mandatory. A train store is a busness and must be run as a business.

I sincerely  wish you the best of luck, and for the sake of the future of our hobby, I hope you succeed.

HZ

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Posted by BroadwayLion on Wednesday, August 5, 2015 8:55 AM

A guy in Dickinson had a shop, his daughter was in my nursing class, I bought stuff from him, but my railroad is so specialized, and my budget is so limited that I could not support him, and apparently many in Dickinson could not either.

Then there was Dave in Bismarck. He even advertized in MR, he had a good store with a great layout, but 30 years was a long time, and sales dropped (and thefts went up, especially in the War Lords section of the store.) In the end he quit and even abandoed the layout that he was working on, kinda lost interest in it all, and there was no buyer for his store or even for his layout.

BAck to Dickinson, a young lady and her husband opened a store, she was into trains and he into planes and cars. Looked like a good combination, but now the trains only occupy a small corner of the store, most is radio contrtol and UFOs or unmanned ariel vehicles (with cameras in them) She is doing good buisness with her arts, crafts and sewing sections. But she is in a small mall whitot a good physical presence and no anchor stores. The store with the most sales is the Chinese resturant, which has expanded three times, followed by the hardware store. The whole mall would have failed but what two big units are occupied by the motor vehicles department. They in turn got kicked out of the state building because the cops wanted more space.

She survives because her husband has an outside job.

 

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Posted by da_kraut on Wednesday, August 5, 2015 8:42 AM

Hi,

good for you for wanting to start a hobby store.  As mentioned there are a lot of down sides and the competition is very stiff.

Interestingly enough I have watched a hobby store start, expand and thrive in this competitive marked.   They started by selling out of the basement of their house, and went to the train shows.  Also offered technical services and always discount their prices.  At the same time they started a web site and sold online.  The other major consideration is that their store is outside of major metropolitan areas where real estate is cheap.  This enabled them to eventually build a store on their property and expand.  It took a lot of hard work, sacrifices and a team effort of the family making this work.   Even though I moved many hundreds of KM from them I still like shopping there.

If you do start a store, send me a pm, I can always mail order. :)

 

Hope it helps

Frank

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Posted by mobilman44 on Wednesday, August 5, 2015 8:09 AM

Hi, and welcome to the Forum.........

I've played with hobbies (mostly MR) since the 1950s, and was a business analyst when I retired.  Hearing of your thoughts on opening a hobby shop, my first reaction is "DON'T DO IT".   But, that is really not fair, so I'll say more......

Any business needs three skill sets - people, technical/product/service, and money.  Very, very few folks are adept at all three.  Of course most folks think they are, but they are not. 

Hobbies (in the normal sense of the word) have slowed down a lot over the last 60 years.   Many of the long standing hobby shops have closed, leaving mainly the Hobby Lobbys and Michaels megastores. 

Addressing MR shops, well, they are diminishing rapidly.   Online stores may be doing just fine, but I suspect their business is pretty seasonal at best.

Many years ago, Model Railroader did a pretty intensive no holds barred interview regarding the ups/downs of owning a hobby shop (of course it was train related).  This interview was before the internet popularity, but as I recall it's points were timeless.

Some were:

   -  customers come in for advice and repairs and small purchases, but buy big dollar stuff from the big advertisers/discounters.

   -  you may love the Illinois Central or Florida East Coast and want to stock your store with their names.   But, your customers want the Santa Fe and NYC.

   -  you hate "Thomas the Tank" stuff and refuse to stock it.   But, that is what is selling (at that time).

   -  people steal.  yes, even those nice friendly great guys may be shoplifters.

   -  owning/managing a hobby shop leaves you less time to enjoy the hobby, often turning you away from it (I personally saw this at an old LHS here).

   -  etc., etc., etc.

ENJOY !!!!

 

ENJOY  !

 

Mobilman44

 

Living in southeast Texas, formerly modeling the "postwar" Santa Fe and Illinois Central 

  • Member since
    June 2007
  • 8,867 posts
Posted by riogrande5761 on Wednesday, August 5, 2015 7:48 AM

It doesn't take too many testimonials and watching what happens to real shops over the period of a few years to see that the odds are stacked heavily against you and you will likely loose a great deal of money and incurr a lot of stress and and perhaps bad health effects by going into the business of a hobby shop.

It was a different line of business, but I worked for a guy in a different city who was advised not to go into the waste hauling business.  He personally knew people in the business who had been doing it for years and basically those folks knew from personal experience that the only way you could make a profit was to pad tipping fee's and to cook the books and do thing illegally.  Most of these people had been in trouble with the law over time as well.  It's just the "economy" of that line of work apparently.  Well, against all advise, he took out loans and bought two trucks and a bunch of roll-off containers and tried to run an honest waste hauling business.  The only thing that saved him was that he ran another consulting business on the side which ended up making enough money to keep him afloat while the waste hauling business continued to lose money, as his friends predicted.  After a 3 or 4 year "bath" he sold everything and worked to pay off the debts, lesson learned and went back to his original work which did make money.

Lesson?  Listen to those who "know" from experience.  Not that it can't be done, but chances are infinitesimally slim and likely you'll just join a long list of unfortunate statistics.  Best you don't do it and find a good way to make money and enjoy the hobby the way the rest of us do, as a "hobby".

Rio Grande.  The Action Road  - Focus 1977-1983

SBX
  • Member since
    March 2008
  • From: Ipswich, UK
  • 122 posts
Posted by SBX on Wednesday, August 5, 2015 6:38 AM

I spent 20 years of my life as a currency trader in the City of London and 16 years travelling the world designing and promoting banking front office software to traders. I thought I knew what stress was. Ha! Then I opened a model shop. I sold scale plastic models mostly and then extended into airbrushes (Iwata agents) and DCC of various makes. Firstly, I stuck with what I knew intimately, hence those choices. Secondly, I bought intelligently so the stock was right. Thirdly, I made sure that I had all the little things that modellers require. Did any of this help? No. The 7 years that I ran the shop were the most stressful of my whole life.

As a good programmer, we had a very good and efficient web site that was always upto date to new arrivals. We shipped quickly with free postage. We had a very loyal customer base (still friends with some of them) and managed to get around 50% of our mail order/internet to be worldwide rather than just UK based. It ate money and we ended up selling our house and moving into rental to pay off the accumulated bank debt (we had no trade debt as we paid for everything as we bought it).

The problem in any business like this is that you have to compete with the well know concerns. For my part, it was the warehouse 50 miles up the road that stocked (at any one time) 30,000 items so I was always fighting against them, even though their service wasn't anywhere near as good as ours. In the US I guess that you have to contend with Walthers, MB Klein, etc.

The main problem, eventually, was the intense "new release" syndrome. In the end it became such that if we bought in a new kit and still had it on the shelf after 3 weeks, it was almost certain that we wouldn't sell it. Everyone who used the shop - foot customers or internet/phone had the spare cash to buy whatever they wanted at release time. If they didn't buy it, it wasn't that they would buy it later - it was because they just didn't want it!

One tip, if you do start a shop - remember everyone likes an Alladin's Cave. However, such a shop if full of stuff that doesn't sell and eventually the owner will run out of money! We sold up, paid off the debts, retired and have never regretted getting out.

Long Haired David
A.K.A. David Pennington
main man on the Sunset and North Eastern R.R.
http://www.gmrblog.co.uk
from the UK

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