Another aspect of LHS vs. Internet

[Favrefan04]

About ten years ago, I was very much into RC Cars, I raced them every weekend at my LHS. I had 2 friends that I work with that were also into them as well. At the time we talked about what it would be like to build our own indoor track with hobby shop attached. It came down to needing to get many things that the LHS didn't stock and we would have to get through mail order (mail order was much bigger then).

After reading this post it had relit that thought process, but with a slight twist. Inorder to have the buying power as well as the prices that would make it successful the LHS would have to be turned into a NWHS (Nation Wide Hobby Shop). Something that was a franchise and it had its own warehouse and multiple suppliers inorder to be able to get those hard to buy/find items.

I don't know about the rest of you, but I prefer to hold something in my hand and compare it with a like item before I buy it. This is especially true for new items. Pictures on the interenet or in a catalog are not always good enough for me. I am a hands on person and would prefer to make as many of my purchases that way.

In case you were curious the LHS that I used to do my RC racing at is now the LHS that I frequent for my MR needs. It is not bad but their rolling stock and locomotive stockage doesn't include enough BN/BNSF stuff for my liking, and I am forced to use other methods to get what I want and need often times.

Just my[2c]
-Gary

[TurboOne]

Leon, I agree with you. The mass marketers don't want into the business and that will kill the business. The cool part of Sears was the Christmas catalog and seeing trains. The old movies of kids looking in a store window at a Lionel running in the window. The hobby has changed into a collectors world. BLI come on. They make beautiful trians, that look great and sound fantastic. But if you don't want them when they decide, you miss out. What a croc. Same with proto 2000. What happened to making trains for all, not just $300-$600 dollars engines with a short sales life. And Brass, please. While it is great for collectors, how many people actually have one?

Spacemouse and myself, both in the hobby for less than 3 months have had a blast with our kids, and THAT is the most important part. I love going to my LHS, but they are not friendly to my kids. So I drive 45 miles to a store that is almost full price, but much nicer to my kids. I internet order what I want, or I travel.

I did look into opening a store, I figure I could outsell anyone in the business in town and close by. But with all the scales, and parts, selling trains seems to be a losing business. Trains cost too much, and there are too many items you have to carry. Unless you specialize in 1 scale, and have a huge market, and so many people tra***alking entry level, the market will die, and the internet will be the only place along with the shows. Too bad for all of us.

Maybe I'll give up on the store idea, and start a train club. One where rivet counters are banned, and anyone can run any train. Kids are always welcome, as that is the future of our hobby. One where we have entry level how to's at least once a month, and where the most improtant aspect is fun.

Take care all and ENJOY trains, no matter where we get them,

Tim

[MisterBeasley]

I got to thinking about the volume purchase aspect of competing with these large online houses. It reminded me of the problems the Mom and Pop hardware stores had once the Home Depots moved in. Here in New England, most of them are still in business, but most are affiliated with either Ace or True-Value. I'm not sure how these work organizationally, but I suspect they are more like buying co-ops than top-down corporations. The individual stores retain their ownership and character, but get the advantage of bulk purchasing and national advertising.

It would seem that hobby shops could also benefit from this sort of thing. Is anyone doing this?

[Grubby]

Being from Australia, the shipping costs from the US are too much of an unknown for me... there is something special about the confidence of handing ove rthe cash and getting what you paid for right there and then.... If someone could convince me that I could really save money, I woul use the internet to buy MR for large ticket items...once I had worked out what I really need from seeing the product either at my local MR shop or at a train show. The concept of supporting the "small guy" is admirable and certainly a factor for me, but if I could buy cheaper I would... maybe some Aussies have had sucess with US internet purchases?

[selector]

I may be a softy, but I prefer to help the little guy stay in business. So, I support two LHS's that are between 45 mins and 90 mins away. They are helpful to the extent that I am not patronizing either establishment for something like 1/3 of their annual gross!

They have to deal with suppliers, who have to deal with other suppliers, or manufacturers, all of whom favour the fattest buck/shipment. An LHS will simply not carry four models of a given manufacuter's loco, especially in a young market (young meaning only some can afford/are interested in the higher end DCC/Sound). The conflict lies in the LHs's interest in keeping cash flow and product turnover high so that they can pay their invoices on time; if distributors cut them off, they're outta business...right now. In order to do that, they have to keep a critical mass of customers, and woo new ones (like moi). On the other hand, the distributor, and/or manufacturer, wants exactly the same set of circumstances: turnover and a profit. The answer for both parties lies in providing the service and product that sells.

Having said that, I did purchase my 0-6-0 from model trains.ca. Firstly, I had plunked down nearly $1K Cdn on my first visit to the LHS to get loco #1, so I ought to have been no stranger when I asked him to find me a suitable switcher. Two weeks later, he still had not contacted me. I quickly reminded myself that I was the master of my railroad...and its future. So, I went online and found what I wanted. I had it one week later.

My ratio is 90% of purchases in favour of LHS. It might not stay that way.

[DavidH]

Speaking also as a Canadian and referring to Bob's comments about Canadian pricing vs. a place like Trainworld - I've certainly looked at ordering from the States on some of these things, but the landed cost just isn't that much better. At the moment, the exchange rate premium is about 22% - the Canadian dollar is at .83 USD. For the $82.00 MSRP item, my LHS, who does discount, would probably charge around $100C. The $49.95 item would cost me about $61 plus duty which would bring it over $70, plus shipping and handling which would add at least another $15. It just isn't worth a $15 saving to me to have to wait for the item and not have an opportunity to examine it beforehand and test run it. Once you've had to do a return or two, you can get pretty sour on the process pretty quickly!

Having said that, I know Bob was speaking broadly, and I know where he's coming from, but I'm prepared to pay some premium for face to face service. Of course, I'm also lucky to live in a region with some excellent LHSs available!

David

[Anonymous]

Too bad your LHS didn't think of ordering it from Trainworld or someplace online himself and sell it to you for what he paid for it just to keep a customer happy. It would have been a convenience to you because it took time to find out that the LHS couldn't get it. Then you had to order it yourself.

[MisterBeasley]

Well, that post of mine has certainly generated some lively discussion. The thing that bothers me is that the LHS guy was willing to go to the trouble, and was willing to give a good discount. (I'm a new customer, by the way, with only a few small cash purchases, but he did this for me anyway.) Still, "the system" wouldn't let him compete, even though he wanted to. Please remember this next time you're thinking that the LHS "doesn't carry what I want." Perhaps, the volume dealers have already gobbled up the inventory.

As a side note, I did end up ordering from Trainworld. I was looking at their site, and realized that they are associated with Trainland in Lynbrook (not to be confused with Brooklyn) New York. Trainland was once known as Mulraney's Trainland. I remember always begging my Dad to stop there when we drove by on our way to viisit my grandparents. That was almost 50 years ago. Mulraney's was a big LHS. They've changed their name, but they've adapted to the modern market.

[jwr_1986]

I think this has a lot to do with the mindset of the owner or his/her employees. The closest hobbyshop to me is horrible and gives me that answer frequently. The other hobbyshop I deal with and throughly enjoy really make the extra effert to try and find items thaat aren't carried by his normal supplier.

Jesse

[robengland]

I've been talking this over with my LHS a bit lately. My thoughts:

LHS is dead in all but the larger cities. Not this year, maybe not next, but it's coming. Get over it. The only sales LHS will get are whim buys (like that NWSL-regeared Shay I drool over at my LHS), "let's-get-something-for -Daddy-for-Xmas" and "Mummy-I-wanna-train", second hand stuff, and emergency buys of just one more turnout to fini***he yard or a packet of stripwood. That last category of "just one" of some category after we've bought the toher ten on the internet will never be profitable. The LHS needs to hold lots of varied stock so we will be confident they have one of what we need, but they will get low turnovers.

So that leaves selling expensive eye-candy products at low turnovers and big margins to people who don't know better or can't help themselves, and second-hand stuff at bargain prices. Need a few million population to make that model viable.

Having knowledgeable staff isn't going to make the difference. There is a wealth of info on the web, not least of which is this forum. And just providing advice isn't going to make people buy.

Nor will the web save the LHS. There is little difference for me between buying from my local LHS over the web or buying from Jim in Pennsylvania (or wherever he is) that I DO buy from. And if I want knowledgeable advice I'd buy DCC from Tony's or Loy's, not my LHS. "Local" is no advantage on the web.

But people still want to see and touch and test stuff. If the LHS no longer provides that (un-paid) service, what will? clubs and shows. As mentioned in an earlier post, expect to be buying up large at shows in future. And join clubs to get to test-drive gear.

RIP LHS.

[SpaceMouse]

I looked around for a train set for my son. I found the Hogwart's (the perfect one I might add, at a Ollies Bargain Center (for $24.) So far it has only cost me $2K.

But you'll notice that T1 was right about entry level. Might not be profitable, but it got me into it.

[Leon Silverman]

TurboOne:
I would have to take issue with your last statement about the effect of mass marketers like Sears, Toys-R-Us, etc. on this hobby. Walmart and Target are relatively new companies. However, Sears used to feature trainsets in their catalogues, and Toys-R-Us also used to sell trains and models as well. If they found this product line unprofitable previously, I cannot see them getting back into the market now. Boscov's is the only mass marketer that currently offers even a minimal selection of trains, but I don't recall anyone in this forum ever mentioning they bought anything there. The total market for this hobby is not "massive" enough for the mass marketers to get involved.

[TurboOne]

Here in San Diego, we have 5 stores but each has its own nitch. One is HO and N exclusively, and has NO DCC at all and is full retail. One has all scales, and full retail. One is a craft store, has some items discounted, but when the train guy is in, he is very helpful. One is Lionel store and a little HO, no new products, and full retail. Last store a garden shop, has a lot of LGB, and a little of USA brand. Great layout. Retail prices. None of them carried the Thomas that I wanted at Christmas, said it was junk.

I think if you don't carry the entry level items, you won't be in business long as your customer base will not grow. You need kids to get future customers. While a lot of prototype modelers won't buy the entry level trains, new people will. And if you have entry level classes, your base of clients will always grow. Then as they grow in the hobby, and you have trains running that have lights, sound, smoke, they will move up and you have a better, larger customer base.
Bob said it best, the stores are not delivering, and mail order/internet is. Sad but true.

Lastly, manufacturers are to blame also. Making trains for collectors only, a small run then they are out of product. If a Walmart, Toys R Us, Target, Sears got into the train world, non of the manufacturers could keep up with product. Prices would come down and more people would get into the hobby. Sounds like a good thing to me.

Tim

[SpaceMouse]

My situation is also a no-brainer. Not only are they out of touch with the market, they just plain don't know what they are doing. I, the guy that had been in this hobby since Christmas, have to explain what things are for, etc. To give the guy credit, he is considering joining the train club to get some hands on experience.

Then again, he has a Proto F2 a/b unit for sale for $179.00. I couldn't tell him that I got the same one for $49.99 from Trainworld.

[twhite]

Well, I'd say that my purchases are about 80% LHS and 20% on line. But as some of you guys probably know, I'm in a pretty good locale for LHS', here in Sacramento, we've got two BIG train stores, one in Sacramento and one in Roseville. Both stores have repair service available, and both stores have sales people that are really knowledgable about the hobby. And both stores carry a large inventory of what I need, most of the time. Okay, maybe it costs a little more than on-line, though both stores offer less-than-retail discounts, but if I get a lemon, they'll take care of it, without my having to go fight the manufacturer. I guess it's my upbringing, but I was raised in a Mom and Pop business atmosphere. I look at my LHS' as being in business for two things--make enough money to survive and make sure the customer is satisfied. Both Bruce's and Roseville Hobbies do that very well, in my opinion--so I very seldom have to go on line or to the big catalogue warehouses (who often don't have what they advertise, anyway). So I'm hoping that I can remain at my ratio--80%/20% for a long time to come.
Tom

[Anonymous]

No one is going to "dump" on you. SiberianMO.

Gone are the days where everything is availible inside the LHS. Those stores who hold tribal knowledge such as MBKlien in Baltimore (They have been around a long time) will probably be around after most of us die.

The rest of the LHS's either go into radio control, wargames or some stuff unrelated to the hoby to generate sales from a disinterested younger generation.

Some LHS's will survive on a large number of customers and near clubs that constantly require everything you can think of in the Hobby. You will find Lowes and Home Depot in those areas as well.

In Arkansas PRR is not a major road name. Thus when BLI hosted a major sale last winter the distributors figured Arkansas would not really particpate in the sale so they failed to pass the information along in a timely manner to the LHS's there.

I learned about the sale and bought a BLI engine with the help of one of these stores who could not match some of the lower prices being offered but probably lowered the cost to me to almost nothing profit wise. I am happy that I have this engine as they are now "out of stock"

ebay has a million copies of the same engine 3 months later for half of what they once were worth on retail. You think that a LHS will not be able to make a living with these costs.

eBay is now the one reaping the sales revenue and we are saving the hassle of paying taxes. (shipping is another issue let's shelve it for a moment) Sales taxes on a Major engine purchase is worth at least several RTR rolling stock or that needed item to help the railroad perform better.

Walthers recently released alot of good kits. Now a few years later you cannot get them anywhere. This is the problem of walthers not anyone else. The very same kits that are OOP are selling for 2 times retail value on ebay. Recent articles published in MR has lists of kits to model a harbor scene.

Most of which are difficult to find these days.

Bottom line, the internet for me, has saved the hobby. If I could not literally do the "legwork" and locate the items myself and pay for it to be delivered within a week instead of 6 months on back order.

Back order may as well be thrown away as a obselete term. Those two words are killing potential sales in the Hobby.

Major problems such as MTH, Lionel, Horizion buy outs of beloved Athearn and Roundhouse along with models being pulled off the Union Pacific trademarking and piles and piles of problems related to non availibility, quality control and possibly lack of corperate desire to spend money making a less profitable item in favor of limited runs that will enable us to visit the LHS one time per year on a forward reservation basis.

Instead of looking over that nice new item in the store, I am constantly being asked if I want to order a model train that I have never seen before, with usually just text straight from the supplier that you have to sit thru and dechipher and then research google all before a deadline set weeks away.

Months after you order the item only then will you see images of what it looks like, features and maybe a review.

I for one am tired of that game.

ebay, trainshows and internet mail order is becoming the favored method of acquiring items in the hobby. I support my LHS's as much as I can but increasingly the money coming out of my budget goes to the three non-LHS sources of hobby stuff. This is money that the LHS will never see.

The trend away from LHS's started about 3 years ago and accelerated when suddenly products that are sought after became OOP, back ordered, not availible etc...

I might as well take the 5000 dollars I spend a year on the hobby, bank it for that major trainshow in Timonium Maryland and ship the loot home by truck freight once a year.

[siberianmo]

About 2 1/2 years ago I decided to construct the HO railroad of my dreams in our basement. This project turned out better than I could ever have hoped for ..... layout and trainroom. Just great.

All of my purchases to construct the trainroom were made from local sources (hardware stores ......). That makes sense - can't even imagine ordering what I needed from an internet site ..... just have to "feel" wood - size it up, etc.

The overwhelming majority of my HO purchases were made on the web. Walthers Hobby Shop just being one of at least a dozen sources - two in Canada I might add, just to get the roadnames I wanted. Why the web? Primarily because the two LHS I frequent just didn't stock what I required. I model VIA Rail - BC Rail - CN - CP/CP Rail and Amtrak. Even with the LHS ordering through their suppliers - MY suppliers beat 'em every time AND it was far, far cheaper. No taxes factor in quite nicely.

So, my railroad, approximating $10k in costs, would have easily cost me somewhere between 1/3 and 1/2 more had I gone with the LHS. This really was a no brainer for me.

Hardware stores stock and provide what's required for construction. Too bad LHS' cannot do the same for the hobbyist.

BUT before I get dumped on mightily - I UNDERSTAND WHY - really do. Overhead, etc. Costs of operation for those LHS folks probably have chased all but a few die hards from the scene. For those of us "out here," however - do we spend our money based on "sympathy" or getting the best return on the expenditure? My choice is and will continue to be the latter.

Hope this helps.

[Anonymous]

Some shops are more efficient and aggressive in placing orders for their customers. Some also have mulitple sources so they have more ability to find something for you.

Too many times I've been told "I can order it for you" and have waited way too long to get the item. Nowadays I'll say "I can order it for myself, thank you". Some shops in our Canadian Maritime Provinces often wait until they have a minimum order from Walthers to qualify for a good shipping price. So they only order every few months and by then the hot items are often sold out.

A quick call or message to Trainworld in Brooklyn can often get what I want delivered within two weeks. Just placed an order yesterday for an MDC EMD-1 "Critter", an early EMD four wheeled diesel. It lists for US$82.00, and this is what local Canadian shops would base their price on, adjusting the price to take into considereation the exchange between US-Canadian money (around 27% or so these days). So it would cost me probably around $125.00 Canadian with tax if I ordered one locally. Trainworld had them on sale for US$49.95, so the choice was easy - order it myself!

Bob Boudreau

[Anonymous]

I've had similar problems with ordering online, so it's not just LHS. Spent a few weeks last year trying to get hold of an LGB boxcar from an e-tailer over here, was marked as "in production" on LGB site, but apparently all stock had been sold. The problems are mainly with sites that list everything, even though half of it is not yet available - very few will only list what they have!

[jacon12]

In the only shop within a100 miles of me, there often is no one there that knows the slightest thing about model railroading. The shop, which will remain nameless, carrys model planes and radio controlled cars which seem to be their main business. All the locomotives are locked in glass cases and getting anyone to open the case is a pain sooooo.... I mostly just pick up the smaller items that aren't locked up and purchase them.
Sad but true. It's so bad that I've even contemplated becoming a small homebased dealer and I don't even know anything about it at this point... :)
Jarrell

[simon1966]

I have had several instances where I tried to order something from a vendor. The one that comes to mind recently is a BLI Wabash E7 that after several weeks of waiting I was told "Could not be obtained by the supplier". This was at a time when the model was shown as "in stock" on the BLI web site. It did not make sense to me, so I got my money back and had the model I wanted in my hands inside 5 days from another supplier. I guess that there must be a network of middle men distributors that LHS buy from and for some reason, they don't all have access to all products?

[Anonymous]

I'm very new to the hobby and this has happened to me a couple of times already. The Walthers catalog (from which my LHS uses a 2004 edition!?!) will on occaision show what I'm looking for but the supplier won't have it. Discontinued items usually so I'll check eBay first and then the 'Net vendors. So far, I've found what I'm looking for one way or the other.

[Fergmiester]

Unfortunately the Internet retailers order in bulk and are able to pass on the savings to the customer. The LHS is not offered the same price when they order in small quantities. I would love to order more big ticket items from my LHS but they can't offer me the low prices.

Fergie

[MisterBeasley]

A couple of weeks ago, I tried to buy the Lifelike P1000 R-17 Redbird subway train set from my LHS. Not surprisingly, he didn't have it in stock, but he offered to order it, and suggested a discount that would be comparable with Internet prices. I thought this was great, but when I next contacted him, he reported that his supplier couldn't get that set. So, I ended up ordering on-line.

Is this a common problem? Or is it something that just happens now and then?

I still plan to buy as much as I can from the LHS, incidentally, but it just didn't work this time.