Is the internet killing our hobby shops?

[BNSFGP38]

A small rant from me...

There are 2 hobby stores near me. I goto one, more often because the owner deals with alot of small small companys that are not in the Walthers book. To me, the variety and rareness of some of this stuff, is worth the extra dollar. Even though I am 20, I still prefer to walk around and browse....something you cant do online.
Everytime I go and shoot the scat with owner, I hear the same rederic " Business aint so hot". And both seem to be for the same reason.

Exhibit:
People are going to these stores........asking them to order the latest greatest locomotives, watching them perform on the demo layout and then going online and buying it.[:(!]



In your opinion......is the internet killing our local hobby shops? Are they doing ok in your area ?Do these stores need to give up service and variety to be 10 cents cheaper than the other guy? Or are hobby stores bound for the same fate that our steam locomotives had?

What do you think?

[trolleyboy]

hi unfortunatly there seems to be a general shutting down of the LHS 4 or 5 stores that I used to frequent have shut their doors in southern ontario. Some of it here was the price and quantity of new product comming out but alot of it has been due to ebay buying and the like. Myself I won't buy online until I know there is absoluly no choice to grt it in one of my locals,we are shooting ourselves in the foot by buying so much online I'd rather spend a bit more and know that I've got a knowledgable and helpfull store owner to back my purchases, if I do buy online I will sshop at a sight where there is an actual hobby shop as well at least I'm helping a local owner and not somepne selling from his/her basement. Rob

[Anonymous]

I buy more on line than i do at the lhs.With the price of todays engines and the fact that i have a uncontrollable desire to constantly add to my roster,The fact that I live in a more rual area and there is only one lhs in close driving distance has alot to do with this.But no matter i have to shop for the best price if lhs wants 179.oo for new p2k gp9 with qsi, and i can get it from on online seller for 129.00 where do you think i will buy it from.There are alot of major hobby shops that sell online not just guys selling out of there basement,because they can advertise to a much larger customer base they can order more of a product and make there money in volume with lower prices. I do however try to spend at least some money every month at the lhs,just to support them.

[Anonymous]

In these modern technological times, I think it's a case of "if ya can't beat'em, join 'em". Hobby shops that are using the Internet to sell either through web sites or eBay are doing alright - but I think the stubborn ones who think they can continue to rely on the drop-in trade to keep their doors open are going to fall by the wayside.

The nearest LHS to me is a 5 hour round trip by car, and I do patronize them whenever I'm in their town, three or four times a year. But without being able to buy mail order, either from ads, Internet, or eBay, I simply wouldn't be able to model, period.

The web has helped a lot of things, but it's also ruined a lot of things as we used to know them. But it's here to stay, so hobby shops who want to stay in business will have to learn to use this new tool to avail themselves of new customers, or be left at the station.

I think what's hurting the LHS and the hobby in general more than the web is the increasing price of things, especially from manufacturers who have dropped 7 dollar kits in favour of $25 RTR - but that's another thread.

As always, just [2c]

[Anonymous]

I have noticed one trend in particular over here recently - mail order. Two of my LHS have recently started running adverts in MRR magazines and seem to be doing well as a result. Branching out into mail order sales seems to be a good way to grow the business, assuming the store can employ the extra staff they need to run this. Online sales and using eBay are also great tools - there is one large retailer over here that has taken to selling large amounts of equipment on eBay - if they buy non-running locos as part of a collection they put them straight onto eBay as "Restoration projects". I think the growth in online sales will be great for those stores that use the new tools they have available to them, but may cause problems for the stores that do not "keep up". Just my opinion!

[pike-62]

since I don't have a local hobby shop in town and have not had one for the past 25 years I have no choice but to use the internet. Most of what I buy is from "local" shops who advertise on the net or use Ebay so, I guess I do support someones local hobby shop.
I want to give a different perspective on this though. I am a small manufacturer who runs his business from his home. I manufacture HO scale coal & scrap loads as well as a small line of decals. I went to the major distributors and pimped my product to them. What I was told is that the profit margin for them to carry my stuff would be too low for them so they basically told me to take a hike. I approached several hobby shops directly with dealer pricing and got very little response. Now for me to get my product out to the people who want it I have to go the internet route. And yes, I do have a good response to my product there.

When I need to buy something I will wait untill I am in the town (150 mile round trip) that has a couple of hobby shops and purchase from them if possible.

Dan Pikulski
www.DansResinCasting.com

[Virginian]

I'd say it's a contributing factor. I get just about everything, except out of production and odd stuff I get on ebay, from my LHS. But, he discounts heavily and he's a nice guy to all his customers. Unfortunately he's winding things down and is retiring soon.
Wal-Mart has proven beyond doubt, that to the vast majority of American consumers, price matters more than everything else combined. And the internet has allowed people to sell stuff with virtually no overhead for the lowest cost.
The major retailers are crying because Holiday sales are down. At the same time, online Holiday sales are way up, and a lot of these sales are to companies with brick and mortar operations. I'd be interested to see what the total numbers show without all the smoke and mirrors.

[Anonymous]

Survival of the fittest!! If the guy in his basement can sell on the web for a low price, the hobby shop can also. They don't need to shut down, but they can supplement business. Most choose not to, and then blame others for their failure. The LHS near me has it's address published in Walthers circulars that I get, stating that they participate in Walthers sales, but they do not. 100% list price on everything, no matter what.

The same thing applies to books and magazine subscriptions. If I can buy Kalmbach books at Amaqzon for 20-50% off list, why doesn't Kalmbach sell them for that? I can renew my magazine subscription through a clearing house for $20, but Kalmbach wants $30. Does that make sense???

I am building my little empire for my enjoyment, not to support another business. If I can buy for less somewhere else, that's where the money goes. If you look for the best deal on your house, new car, washing machine, etc, why not model rr'ing supplies?

[Anonymous]

One Answer to your Question,YES!
The Internet is the most POWERFUL TOOL around today!
Even I will idmit I myself must shop online because there are NO LHS in area for more than 50 miles.
There is a LHS in Lincoln,Neb. but im not gona drive over a 100 miles just for one Locomotive or I have at least 200 Dollars on hand or if I go Railfanning in Lincoln it self.

[simon1966]

The internet is changing the way people shop for everything. Bricks and mortar stores have to adapt to this new reality or fail. My local shop has really done a lot to make sure it stays in the forefront.

1. Prices as good or better than most internet sites.
2. A layout that is open for public operation at the weekends. This brings folks in from all over the place. The hobby shop is buzzing at the weekends.
3. Expertise. You can see methods and ideas demonstrated on the shop layout.
4. Digitrax expertise. Great Digitrax pricing and knowledge. Decoder installation as well.
3. Main focus is on MRR, but offers great deals on RC parts. When the RC shipment comes in the place is seething!

Bottom line. I used to get most of my hobby stuff off the web. I still buy from e-bay, but most of the time, what I want can be had for the same or better prices in the LHS.

[CNJ831]

I'm afraid that anyone who does not recognize the damage on-line purchases are doing to kill off the LHS has to be very naive. There used to be 4 or 5 hobby shops in my immediate area. Currently I am down to 1. If that one should go under, it will be over an a one hour, 40 mile, drive to the next nearest one for me.

But, as another poster has already pointed out, the great majority of hobbyists today simply can not afford to pay list or near-list for the increasingly exorbitant prices the manufacturers are demanding for their latest products. I freely admit that I am forced to shop on-line if I want to purchase any of the newer locomotives and certain rolling stock (if bought in numbers). If I were not to do so, I'd be essentially shut out of the hobby where significant new purchases are concerned.

Of course, if on-line shopping totally replaces the LHS it will cause a great reduction in the hobby's viability. If you have to wait a week for that shipment of cork, flex-track, WS ballast, or other very basic items you suddenly find you need at 4pm on a friday afternoon, you are going to progressively put off doing any layout work and many will undoubtedly withdraw from the hobby altogether.

CNJ831

[Anonymous]

Yes, and the LHSs have been under fire since long before the internet. When I got back into R/C model airplanes in the mid 70s, Tower Hobbies had giant selection and great prices. In the late 80s when I got back into HO, Standard Hobby was the paramount in competition! So, for 30-35 years, the hobby shop business has been a tough business to make money in. It's pretty simple to sit here on this forum and shoot arrows at the STUPID LHS which doesn't change for the future! However, the realities of business in this constantly changing atmosphere are truly frightening! Any hobby shop proprietor that can roll with the punches, bob and weave and stay in business has my utmost respect!

[bcammack]

Mail order was the death-blow to commercial slot racing nearly forty years ago (although it's a lousy economic model anyway) and the internet is a similar peril to the hobby shop. I understand that Horizon is already cracking down on discounters w/out a brick & mortar storefront.

Even to this day you cannot hook up with a slot car distributor unless you send 'em a photo of your raceway and a copy of the lease.

[sparkingbolt]

Sometimes I think we can overlook the not so subtle fact that the option of online purchacing promotes the hobby, which promotes business at the LHS

I think I can honestly say that my online purchaces have not hurt my LHS one bit. If they had the product on the shelves, or could have ordered it, I would have bought it there. except for some of the locomotives and rolling stock that I got at smoking deals online, like 1/2 to 1/3 the price, including eBay and were past the possability of ordering even if we tried.Those loco and freightcar purchaces didn't prevent me from making any loco and car purchaces at the LHS.

When I learned that Athearn ran a new batch of SP flatcars, first place I tried was my LHS. They came through for me, cool! Bought 14. In fact it was ONLINE that I learned they were available.

Recently I learned that a couple new model car kits became available again (another hobby of mine) First place I looked, LHS. They had one of the 2, I got it. They ordered the other. Great! Now if they couldn't have or wouldn't have tried, sure I'd go online. By the way, it was on eBay that I learned one was available, and the Scale Auto forum that I learned of the other.

Sometimes online I'll find things that my LHS could get for me, but I couldn't afford locally, and wouldn't buy.

That's when online purchaces actually helps the LHS, since it further promotes the hobby that in turn brings me into their doors.

There are probably people who wouldn't be in the hobby at all, except for the fact that discount houses made it possable for them. Then they buy at least some stuff at the LHS, purchaces they wouldn't have if not for the online purchases. Follow me? Dan

[CP5415]

QUOTE: Originally posted by enduringexp

Survival of the fittest!! If the guy in his basement can sell on the web for a low price, the hobby shop can also.

Buddy in the basement doesn't have to shell out $1000/month in rent + heat + electricity on top of his household expenses does he!

Gordon

[Anonymous]

Gordon,
The point I am trying to make about the guy in the basement is that the guy at the hobby shop can INCREASE sales by adding mail order and internet sales. If the guy in the basement can sell a P2K GP9 for $30 and make some money, so can the hobby shop guy. My experience with hobby shops near me is they try to make a killing on each item they sell instead of making a little and selling a lot. If they increase volume, they also get discounts from the distributors, driving their costs down further and profits increase.

[CP5415]

What people don't realize is to have a nice store to show off your goods costs money!
If the company you worked for didn't make enough income to support all the fixed expenses & your salary, you wouldn't have a job. Think about that!

A lot of people don't think of this as they slam the LHS for charging more.
Sure it's great to make a few extra bucks from your basement but do all these cheap sources of locomotives & rolling stock sell couplers & other needed supplies as well?

Think about that!!!

Gordon

[CP5415]

QUOTE: Originally posted by enduringexp

Gordon,
The point I am trying to make about the guy in the basement is that the guy at the hobby shop can INCREASE sales by adding mail order and internet sales. If the guy in the basement can sell a P2K GP9 for $30 and make some money, so can the hobby shop guy. My experience with hobby shops near me is they try to make a killing on each item they sell instead of making a little and selling a lot. If they increase volume, they also get discounts from the distributors, driving their costs down further and profits increase.

Sure you could add business like that. It would be a great idea.
But the point I'm trying to make is if you had no overhead [aka a store & all the expenses to go with it] anyone could sell a locomotive that cost say $40 to buy & turn around & sell it at $50 + shipping.
You've obviously haven't been close to anyone who has owned a small business.
Not all LHS's are crooks.
Some are there just to make a living.

Gordon

[orsonroy]

If a LHS owner can't compete in the real world, he should go under.

For decades, LHS' have had a virtual monopoly on selling products to us modelers. If we wanted something, we'd have to go to the LHS and pray that they had the item in stock. If they did, we'd then have the privelidge to pay full MSRP for the item. If not, we'd have to pray that the owner was a decent businessman and would actually order, and RECEIVE the product we wanted. If not, we were SOL. Mail order houses were notoriously bad at customer-service, and sometimes closed down AFTER cashing your check!

Mail order got wise, the bad ones mostly died off, and the good ones became hobby powerhouses. Service went up, prices went down, and reliability improved greatly. Those LSH owners with half a brain stayed competitive, while the rest just bitched.

Then came the internet and a generally more price-conscious hobby. Consumers in the 1990s demanded good service, quick responce, and low prices. The internet began to give consumers what they wanted, followed by the mail order houses. Those LHS owners with half a brain increased their stock, improved their relationship with their suppliers, and joined the fray. The rest just bitched.

Is the internet a good thing for the hobby? Definitely yes, from both the modeler's and manufacturer's perspectives. We get what we want., reliably and at the lowest possible price, and the manufacturers are able to better gauge how many of any given model they should make. The internet also allows for instant transfer of ideas and knowledge, giving us more models of higher quality. Is the internet our single source LHS of the future? Doubtful, considering all the consumables this hobby requires (who's going to buy one pack of WS ground foam, five #11 blades, three packs of Evergreen styrene, and one tube of glue off the internet?). But the days of a modeler wandering into the local LHS, looking at a Kato diesel at full MSRP, and walking out the door with it are almost gone.

LSH owners need to wise up and join the 21st century. Create a website with a good inventory system to sell your items at discounted prices. Add MORE inventory to your store, to grab the sales of short run products (most of the high-end stuff these days). Provide more services. Add clinic nights. Advertise. Change locations to be closer (and more attractive) to your customer base. You need to spend money to make money, and you have to THINK to compete in an expanded marketplace.

Frankly, I think that most of the LHS' that are dying off are run by old, crotchety retirees that are too set in their ways to change to meet the new marketplace, or are run as a side business by owners who don't have the money to invest in their business. Let them go.

[rambo1]

I will always support my local hobby stores and visit them. I always enjoy looking and purchasing at the stores. Nothing can beat that.........rambo1...........

[Anonymous]

I think Ray pretty much summed it up.
I can attest to the fact that most of LHS in my area (Ontario, Canada) are run by retirees.
They still think $1USD=$1.5CAD, they still think MSRP is the minimum price and actually charge higher than that.
In one of the stores here in Kitchener there is Kato SD-70MAC for $204USD plus 15%tax (this is canada)
The fact that I can get it for $69.99 at Trainworld doesn't seem to have any effect. And that Kato has been sitting there for over a year.

If it wasn't for internet with its affordable prices I won't even be in this hobby.

[CP5415]

Ray I couldn't agree with you more!
LHS's do have to wake up to the 21st century.

Fortunately enough for me my LHS has a strong following so he'll be around for a while
& he has come around with discounted prices on some stuff. Not all, but some.

Gordon

[Anonymous]

Yesterday, I went to one of my "local" hobby shops, Papa Ben's Train Place in Houston. My wife gave me a gift certificate there for Christmas so I could buy one of the new Kato Alco PA sets (an AWESOME pair of locomotives!) It's an hour and a half drive for me to get there, so it's not really local, but about the best I can do. We got there a little early, but Ben himself saw us waiting outside and hollared out if we wanted to come in and have a cup of coffee. Sure, we sez. That sounds pretty good. Anyway, he let us in almost thirty minutes before he opened, actually sat and visited with us over coffee, even let us go on in a few minutes early to shop. Now, why would I want to save a couple of bucks buying online when I can shop with a guy who treats me like that? He sure didn't have to, did he? So I spent nearly $300 with him. I suppose I could have gotten a better deal off the internet, but I doubt I could have gotten a cup of coffee, or had them run the trains for me before I bought them. For those of you who have to drive a ways, so do I, but I do it, and as far as I'm concerned, it's not an excuse. One more thing, at 11am on a Tuesday, business was VERY brisk. I doubt Ben's store is going anywhere, and I think it's worth supporting someone like that. So that's my sacrifice, a few bucks for some knowledgeable guys who seem to like having you in their store vs. someone I've never met. Good hobby shops will always be around.

m

[ClinchValleySD40]

For sure it is. And not just hobby shops, retail stores in general. Prediction - in 10 years half of all retail business will be internet. No way store front can compete with low overhead of internet sellers.

[IRONROOSTER]

The trend in retailing in this country is Walmart. We the consumer demand rock bottom prices before all else. And we vote with our dollars. The Internet did not cause this. But it does allow this trend to extend to all parts of retailing. To get the volume neccessary to offer low prices a large customer base is needed. In the model railroading business this can't be done in most places with a bricks and mortar store. There are three alternatives:
1. Mail Order - requires advertising, lots of it to reach everybody and it has to list everything you have or you do a catalog which costs money. Plus, it's slow.
2. Train Shows - keeps your advertising and other costs down, but doesn't reach as many people.
3. Internet - requires a site, but everybody can find it, can keep your in stock posted, orders arrive immediately, requires minimal advertising - your site lists what you have. Plus, a lot of folks will find it while surfing the net.

Who resists this trend?

1. Stores that operate with a customer base not overly concerned about prices - not too many of these places, but they exist.
2. Stores that carry products the discounters don't carry. Problem is selling enough to survive. That's why when Walmart or Lowes shows up the downtown starts changing over to antique shops and used bookstores. Places where enough of the populace has money you get boutique shops. In between you get outfits trying to scrape by on odd things that don't attract too many customers. One I like is fountain pens, they aren't sold by very many stores so there are a couple pen stores here in Northern Virginia. For a model railroading store, this means carrying stuff from small producers that the discounters don't fool with because the volume is too low.

But the good thing the Internet does, is that small producers can sell direct much easier.

So is the Internet killing the LHS - no, we the buying public are, because most of them can't offer what we want most - low prices.
Enjoy
Paul

[grayfox1119]

This is purely a case of marketing and economics 101. Why do mom and pops go out of business when WalMart comes into the area? Walmart buys in VOLUME from the manufacturers. So "who" gets the best wholesale prices? You got it, WalMart! So how do LHS compete? It has been stated well by most of you in this thread.They must band together themselves, do VOLUME purchases as a co-op to get best wholesale prices from the manufacturers, they must have a web page and must offer sales via their website to help those who live too far away from their store. They must offer clinics, demonstrations of new products and construction techniques.
Lets face it, if there were LHS's near our homes, that had competitive pricing, and offered these services, the majority of us would support these guys because we want to see it, hold it, be able to just run down the street and GET IT NOW.
I live in central Massachusetts, not exactly in the middle of nowhere, and many LHS have closed here also, and those that are still breathing hard do not have a great selection. So if I travel 20 miles to this store, and they don't have half of what I wanted, at $1.85 a gallon for gas, am I going to waste my time too many times? Of course not, the enet will get my business, no sales tax either.
The bottom line is, most LHS can make it if they do the following:
1. Location, location, location ( low rent, low taxes, good market area for customers)
2. Competitive pricing ( this means volume purchasing on his part and consignment.
3. WEB SITE !! They absolutely have to offer purchasing via their web site.
4. Product line. They must carry enough of the better brands of all items big and small.
5. Promotion. They must advertise, be known in the area as "the" best. ( I.E. Tony's)

Many LHS will not survive, that is a "given". The olde timers will die off because they are either too old, or too tired to change to stay competitive. As the old saying goes, " if a palm tree does not bent in a hurricane, it will be ripped out by the roots"!

I will try to support my LHS as much as I can, but the enet will get my business also because we ALL have limited income and must still pay the taxes, oil, gas, food, mortgage etc. Survival of the fittest guys !!!

grayfox1119[soapbox]

[RedLeader]

Face to face service is still far away from the internet. As for prices, now days, internet is unbeatable. HSs must face this and start thinking of new marketing strtegies before is to late. In soe future internet will also be opsolete by another new mean of comunication and bussiness. But still, going to a place, see the boxes, watch your thing work and talk to people who know their thing, isn't replaced yet by anything.

[Anonymous]

Yes they are, a locomotive purchase puts more dollars in the LHS' pocket. Since they cannot sell any more they lose a major portion of their revenue and profit. My LHS stocks very few loco's and they are priced at a 10-15% off of MSRP, but are still unsold as they are still too high priced as compared to the internet.

My LHS has decided to stock staple items needed by modelers and thereby keep some business. But most of these items are at full price. But if you were to order 2 bottles of paint via the internet the shipping would eat you alive, so it is cheaper to buy via the LHS in this case.

Those of you who suggest the LHS' band together to volume purchase must realize that will no longer work with the Horizon policy as they only sell to storefront locations and there is no longer a wholesaler's discount, this is the profit the wholesaler makes on buying the item from a manufacturer and then selling to the LHS. In Caboose Hobbies Case, they were their own wholesaler and even though they gave the modeler a 10% disocunt on the lines they discounted, they still made more money per item than a normal LHS could that was not their own wholesaler.

In essence the LHS must find it's nitch to compete with the Internet, usually it is service and handling items that the internet stores won't or if shipping is exorbitant on small items. They might also move to a lower rent location or make a deal with their landlords to stay or leave the building empty. Another item would be building kits and painting since the current crop of modelers seems to be incompetant in this regard in only wanting ready to run and painted for their prototype.

Rick

[Ibflattop]

I just think that the Internet helps out your LHS. Sure there are some HS that arnt doing squat. But thats just because they might not want to change product or maybe that are in area that just doesnt do good. in my area the LHS have been going good. Sure we 2 fold in the last 4 years, but one was cause the owner passed on. The other one folded because he wasnt paying his bills and he was shutdown and the doors was locked. THere has beed 2-3 others started in the past 2 years that I can think of. One is a slot car HS and the other is a RR started by my friend in our club.
I just think the Internet helps the shops out, well it helps the shops out here at least. Thanks for reading, Kevin

[BNSFGP38]

Wow, I didnt think I would get so many replies....thanks guys.

I must admit, for this upcomeing purchase of the Atlas DCC system, the LHS I frequent will not recieve my business. Not because of price( although I did find the duo pack for$120 [:)] online ) but because he does not know anything about DCC.
He even admits this is huge gap missing out of his business.

I also agree........some of these guys are old crotchety basterds and your utterly loathe haveing to give them a dollar.

The fact is, I am young and impaitent. I want that new engine now! [8D]
To be honest, I need to see things in my hands, look at the ballast, browse his back shelves and find these little trinkets he has from small small companys that Walthers wouldnt give the time of day too. Its rather like a treasure hunt.
I think these little details and small unusal kits are nice and add a touch of uniqueness to a layout.

I also have bought things there that I would have never given a second thought to even searching for on the net.
The one thing he turned me on to was the fact that, I dont need to buy a 6 billion dollar kit . When some paint, know how and some detail parts will make that $7 IHC kit look just the same.

So often, on events like the Tour De' Chooch, I vist peoples layouts and can practicly give the Manufactuer,price,page and walther # of that building to someone off the top of my head. Maybe its cause I used to work at the great train store, maybe its cause I read the Walthers book all the time..........or maybe, just maybe model railroading is becomeing sterile,cookie cutter business, like modern railroading it self.[2c]