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"The first transition era - wood to steel!"
It would seem to me that having fulltime employment plus running your own fulltime business would be pretty hard - if not impossible!! In my area, there are several guys who have sort of 'semi-pro' hobby shops, they are open like one day a week out of their basement or other part of their house. A lot of their money comes from selling at flea markets and train shows in the area. I'm sure some of them do it just to help subsidize their hobby - get stuff at wholesale price from Walthers or others. The 'semi-pro' option might be more realistic than renting a shop in a mall - you have to think about staff (assuming you're not going to be there FT and at your job FT), maintenance on the building, heating and A/C, insurance etc. once you get a shop running.
p.s. You may not be able to just stock "best selling items", I've heard LHS owners complain about how to carry certain companies products you have to carry X amount of what they choose to send you. Like to carry a certain magazine you might have to buy a minimum of say 50 a month, you might only sell 10 or 20.
Railphotog wrote: The only way to make a small fortune in a hobby shop is to start with a large fortune!
The only way to make a small fortune in a hobby shop is to start with a large fortune!
Or, as boat owners say, the two happiest days of your life are the day you buy it and the day you sell it.
Dave Nelson
Some thoughts from one who teaches business strategy for a living:
On the American commercial scene today, a small retail business of any kind is an extremely tough proposition. Plain fact is, we are becoming a nation of superstores (superstores of both the bricks-and-mortar and "virtual" varieties). This process is reducing everything except high-end luxury merchandise to a "commodity."
If you're still going to attempt to make money in a LHS it seems you need some combination of the following strategic ingredients:
- A market, i.e., a community with a fairly large polulation of "serious" modelers
- An encyclopedic knowledge of what these serious modelers want to buy
- a big budget for advertising in national model magazines
- a good web site for selling online too
- good inventory management, which leads to good customer service, i.e., have what buyers want, and be prepared to deliver quickly on what you advertise.
- maintain and grow your "knowledge base" of what moves in your store and what doesn't.
- Be prepared not to have a life outside the store. This includes having an extremely supportive spouse. It's a recipe for burnout, since we have also become a nation of seven-days-a-week shoppers (i.e., those of us, say, past our early 50s, remember when main streets and shopping centers were closed and deserted on Sundays --- Everybody had a day per week off --- but no more. And, with the general exception of maybe two days per year when the country shuts down, we've fogotten how to observe "holidays.").
- keep growing your knowledge base of the hobby. New products and technologies are arriving constantly, which is amazing when you consider that the entire gross national sales of the MRR industry is (so I understand) nowhere near a place on the Fortune 500 list. For example, you have to be a walking authority on all the technical trivia of things like DCC.
- Sell , in general, for something like 20% below sticker price. Judging from comments on this and other modeling forums, it seems that modelers are reserving a special ring of hell for the seller who does not discount enough.
- Resist the temptation to carry brass imports. That seems to be evolving into a sub-specialty with unique economics all its own, in which the owners can handle very high-priced, very slow moving inventory.
I may think of some more gems but this list will do for now
The biggest problem with having a LHS is that customers will STILL buy it off the internet no matter how low your prices are as they can just sit at home and push a button on the computer and it arrives in the mail.
I know this as our local hobby shop is having the same problem.
Yes they should be on the internet but have not done so yet!
But why then have a shop, just go total internet (as so many others have done) and eliminate the rent, insurance, etc!
I know one dealer that has NO shop or internet service but just goes to the train shows around the country. He is on the go every weekend and is traveling from coast to coast.
As for making money he is only grossing $300,000 a year BUT is never home!
BOB H Clarion, PA
Chuck Geiger wrote: Thanks for the feedback...I am going to put it on hold.
GARRY
HEARTLAND DIVISION, CB&Q RR
EVERYWHERE LOST; WE HUSTLE OUR CABOOSE FOR YOU
A store will be nice but a Internet service will help you alot.
Discounts bring in the sales, a little bit back to the supportive client base tends to generate more sales as they spend percieved savings or dont get eaten alive by taxes.
There will be times you are going to sit there with no one in the store while your utilities hum away... up to deal with UPS you go. Boxes to open, stuff to inventory and all kinds of things going on.
Communications with your distributors, junk mail piling in as soon as you get your business license and wonderful telephone charges are going to be really good.
When you do have a day off from the shop, are you going to lay awake wondering if you left the coffee pot on during the night?
What are you going to do when people come in who dont know beans between a Athearn Blue Box and end up buying the nice Intermountain RTR because they dont have all of those tiny parts?
The ones you remember are those who return asking why the couplers wont work with the old black plastic things off the trainset?
There is one trend that is difficult for me. Have a product get announced, wait a year until you learn the ETA from China or wherever then wait some more. Can you stand to carry 10 or more BLI engines on your invoice with each person asking you if you know when they are coming? Never mind those who need to layaway some items.
And maybe one or two items finally arrive only to have the customer go Yuck! I dont want THAT! back into stock it goes. It will be tough to dust off the Walthers kit sitting on your shelf a year while the exact same kit flies out of Ebay for 5-7 times retail because it is out of production and everyone wants it.
My personal secret is to find a BIG club that is well manned and just starting out. The revenue alone from that is almost worth the start up pain. Some stores do hold seminars, others try to run a club and more tend to sell on Ebay as a store.
And finally what are you going to do if Mr Picky arrives and demands the most obscure little lost-wax brass casting item that has been OOP for 50 years? If you are not feeling too cool and have a temper, dont be thundering from behind the counter when a simple "Hi" or assistance might be much more pleasant to the customer.
Be careful when a spouse calls in by phone a very large christmas order sight unseen for her husband with a credit card ready. "I want a choo choo that whistles and talks" ok,... $450.00, anything else?
Keep your hobby a hobby.
EXACTLY! After you retire at 38 as a hedgefund manager making 52mil/year then by all means open your own train paradise hobby store
I've already got my eye on a 10,000 square foot old gateway computer store building that I would open a shop on one side and build a layout on the other. Oh, and the CLUB would build the layout for me while I would run trains. Ahhhhh the possiblities. If only I truly were a hedgefund manager.
Bob Boudreau
CANADA
Visit my model railroad photography website: http://sites.google.com/site/railphotog/
The two well stocked Train stores in our area are run by retired folk for fun and extra cash. They certainly are not making a living at it. One store is all trains, and the other is half trains/half remote control cars. One store owner is a retired long haul trucker and runs it with his wife, while the other is a self made millionaire. No kidding. And he does it mainly for socializing and fun. And yes he has probably the best stocked train store around and he's only open 3 days a week, because he can afford to.
I think if it were me and I were going to actually try and make something called "profit". I would go internet ONLY. My garage would be stocked full of merchandise because the only way to make a profit is to buy in large quantities from the manufacturers and then sell at a discounted price no one else could match. Sounds like a lot of work to me. I can make a quicker profit in real estate. Not as much fun, but the money is there.
If you have a full time job, when are you going to have the time to do these clinics and run the store?
My question is with California rental costs. How much are you going to have to sell just to cover CA. rent, electric and insurance? Pretty pricey state to do business in. I don't think the part time hobby shop as a hobby is going to fly. You'll probably be working 80-90 hours a week for the first year or two.
Don't open a shop!!
One of my LHS shops started on the same idea that you have, full time work, business leaves no time for the hobby. You start to hate the hobby and your friends for not buying from you all the time. I have talked to the owner before he thought he was doing everything right, best prices in area, attend trade shows, custom runs and such, go to clinics, his 2nd yr sales declined and he can't find a cause. The only cause he could find was his customers were not loyal to him, and he wondered why? This hobby is very weird when its comes to business, customers have to support the people that are giving them service. A good LHS will give you a very fair price, and support u. In this day and age with China products you need good customer support!!
Caso
My LHS (Maine Trains in Chelmsford, MA) does not rush anyone. When I go in there, I know I may have to wait 15 minutes to purchase anything while Gerry and his son Mike take care of other customers. Of course, when it's my turn I chat for a while, too. If I only have time for drive-by shopping, I'll come back later.
This shop does have an Internet business (www.mainetrains.com if you want to check the site out for an example) and he does a lot of custom work - both painting and electronics installations. He will order anything he can, and he gives discounts to the regulars.
The shop has short hours - 10-to-5, Tuesday through Saturday. In the summertime, he closes Saturdays, too, but stays open late on Thursday nights. And he shuts down for a couple of week-long vacations, too. I suppose some would say that is a bad business model, but it doesn't bother me. Besides, some of his vacations are for rail-fanning excursions, so who can argue with that?
I'd rather support this kind of shop than fling my e-dollars through cyberspace.
It takes an iron man to play with a toy iron horse.
"I want to make my hobby a hobby".
Most hobby people i know that go into the commercial side end up grumpy at the least. No-one appreciates what they have to do/achieve/what their costs are/etc. It's a good way of wrecking a hobby for yourself.
As for providing a point of evangelisation... a shop is not the place to do this as a rule. People go into a shop to get the things they want (and/or browse for the things they want but can't afford). Explaining, answering questions is good ... but it can annoy the people building up in the queue to the point that the queue walks out... sometimes with your stock still in their hands.
Clubs, shows, magazines and forums/fora(?) are the places for spreading the word.
A store that I've found very good has recently had a modification of management. They were easy going and friendly... now they are heading towards deadlines Yes, they have a business to run... so much depends on style and a light touch.
Increasingly I turn to the internet. If I can't get persoanl service with a smile from a store I might just as well save myself the trip and get a bare bones service.
Also... as many posts here in the past have noted... the shopping public are/tend to be a pain in the butt.
I would love to do the same thing but I noticed a few things about most train only stores.
The owner operator is retired and he does not need to make much of a profit.
The trully successfull shops that seem to stay are in high rent areas as are the people with the disposable income who make large purchases in a train store.
Closings seem to occur for three main reasons;
The owner operator has decided to call it quits and his crew are not able to keep it running.
It closes from a bussiness decision, no profit.
The owner fails to keep up with the times and offer mail/internet service which goes back to lost profits.
Also, I sure you have noticed that most stores carry only what the owner seems to want to carry instead of what would sell. I am always surprised when I enter a shop that does not carry Peco track because of the cost, so they stick with Atlas that mostly the beginner or those with less purchasing power will buy.
If you give it a go please advertise. There was a shop(Red Canyon, I think) near me that closed I never new about and I have been in this area for many years.
John
What are the pros and cons of opening a brand new HO and N hobby shop in a town like Fresno? They're are several scattered train stores with no focus, Tom's Trains, Roy's in Clovis and Hobbytown USA. Idea is a strip mall lease with all new stock of only the best selling items. Athearn, Kato, Atlas, Walthers, etc. Much like Discount Trains in Dallas, with discount off of retail price. Offer "how to clinics" every Saturday morning. Spread the word of the hobby past the purist to the masses. Ideas? (Everyone who has done this regrets it and gets out. There is no money to be made, but that's not my idea, I have full-time employment, I want to make my hobby a hobby).