Since I moved to South Jersey a little over a year ago, the only local (read, less than an hour away) hobby shop has closed because the owner retired and he could find no one interested in taking over the business.
Now I'm driving over an hour (one way) to a well-stocked shop with a very knowledgeable owner who is also considering retiring.
I know I can mail order almost anything, but there is something very special, comfortable and helpful about being able to hold and examine a potential purchase...even talk about it with the shop owner, before taking the plunge.
What's happening to our hobby shops. Anyone out there want to open one in South Jersey, near the shore? I'd be a regular customer and so would a number of other guys as well as a club in the area.
When I first moved to Arizona in 1983, there were 10 or so hobby shops in Tucson. Now there is only one. Owners retired and no one stepped in to take over, some went bankrupt or were evicted from the buildings they were in and couldn't afford another location, and on-line sales definitely had an effect on them. The owner's attitude put a couple of them out of business.
The one that is still in business is in an Ace Hardware store. They offer discounts that make them competitive with the Internet dealers, or they would probably have also folded by now. They're 80 miles from me and are the closest even at that distance, but having an opportunity to see the item up close and personal instead of relying on a manufacturer's glowing description sometimes makes the trip worth while.
Stuff happens and sometimes there is nothing you can do about it. Adapt.
Rich
If you ever fall over in public, pick yourself up and say “sorry it’s been a while since I inhabited a body.” And just walk away.
Retail is changing. With the Internet and Big Box stores, shopping has changed. Sure I like the hobby shops, but the nearby one doesn't carry much in trains - and what he does have is mostly Lionel at list. Two others have closed in the last couple of years. So I shop at shows or on the Internet - it's cheaper and the selection is better.
But I do enjoy a well stocked hobby shop when I can find one while traveling.
Enjoy
Paul
In my opinion, hobby shops should focus on service as much as sales, and I don't mean just being friendly and helpful. I mean offering services you don't get elsewhere, like these:
I know this thread is about shops that close because the owner is retiring and can't find a buyer for the business. If the businesses were better, there would be buyers. I really think that hobby shops will fade away if they don't start looking for opportunities to do the things their internet competition cannot offer.
Phil, I'm not a rocket scientist; they are my students.
Guess it depends on the area or region
Here in the Raleigh / Durham/ Chapel Hill and Triad areas of North Carolina we have 4 train shops that I know of that sell mostly model train related stuff. Then there are the crafts shops too in addition the hobby shops like Michaels and A.C. Moore, etc...
Now in the New Orleans area since post Katrina (where we lived until then) I know of three shops that still sell model trains, but they are actually in Jefferson Parish in the cities of Metairie and Kenner, which are just outside of New Orleans proper.
Ryan BoudreauxThe Piedmont Division Modeling The Southern Railway, Norfolk & Western & Norfolk Southern in HO during the merger eraCajun Chef Ryan
I'm far from being an economic genius but I think that one of our problems in this day-and-age is our expectations and fears for our future; this screams at us daily in our current banking crisis and in the heat of this "political campaign." The banks ain't loaning money and the keywords with the politicians are "security" and "guarantee". People want the "security" and "guarantee" of a well-paying, secure job one bereft of "risk". Their are risk-takers out there but the majority of people, I venture, want the "security" and "guarantee" well-paying and risk-free employment. A sizable number of the posts here on the forum dealing with hobby-shop-closings attribute that shop closing to the retiring owner being unable to sell his business.
A substantial percentage of current hobby shop owners opened a new or bought an existing shop using borrowed funds; a great many used the loan guarantees of their veteran's benefits or qualified for a small business loans. Few, I would venture; did it with money from savings. My favorite local got started using funds from an already successful (small) business. This (hobby) business took a number of years before it became perpetuating; the hobby shop was bought by one of his sons and--assuming that his maintenance of inventory is an accurate indication--is doing well. I do not know whether it is maintaining itself with saved funds or whether it is maintaining itself with a line-or-credit from a banking institution but there was something on one of the local television stations earlier this week stating that one of our local banks has either suspended or severely curtailed lines-of-credit to small businesses.
My grandpappy was not a notably successful farmer but he did eke a hardscrabble existance from it; his two sons, however, never saw any return from his endeavors except hard work and a shakey future and elected to go other places for their future. "Security" was a strong motivating factor in this decision--the "security" of a regular paycheck; the "security" of health insurance; the "security" of whatever. My grandpappy would have said that "if you can be fired you ain't got any security!" Despite the anxieties of their future most entrepreneurs wouldn't change their forte in life; they'll endure those anxieties with the possibilities of future prosperity. Like so many others my grandpappy drew a paycheck from the WPA during the '30s but as soon he could he lay his shovel aside and grabbed his plow handles. To the best of my knowledge no one ever fired my grandpappy!
I will venture a prognostication at this moment; as hard-pressed as mortar-and-brick retailers might be the ones with real problems in the current "economic crisis" are going to be the internet retailers. Most of these people's business address and inventory can be found on three shelves in the corner of their garage; few of these internet retailers maintain a full-time business and most do not do a volume of business to sustain life-and-limb. Some, admittedly, do maintain an inventory of frequently ordered items but in almost every topic dealing with internet retailers the number of positive responents is balanced by an equal number of negative respondents. There was a post awhile back where one of the respondents said that he no longer did business with a particular internet retailer because, dispite the fact that this firm's prices were incredibly low, all he ever received from them in a timely manner was back-order slips and charges to his credit card; this guy had been waiting ten weeks, I believe, for something or another and could not cancel the order because the internet retailer had already placed his order with his supplier. If these guys' distributors--or their banks--buy the proverbial farm they are going to buy the farm also; I am going to predict that there are going to be a number of these internet retailers out of business in short order.
From the far, far reaches of the wild, wild west I am: rtpoteet
We've probably all heard the expression "if you're not a part of the solution, then you are a part of the problem". This affects local shops - if you don't shop there, they will probably suffer. I confess I'm in that category. Our LHS is about 15 miles from here, has a fairly decent stock and is run by a retiree who is a model railroader. I drop in from time to time, but there's really not much that interests me or that I might need. Like many in the hobby for some time, I have a decent selection of supplies on hand and only need the occasional small item like some glue.
The shop doesn't carry Floquil paint and only a bit of acrylic railroad colors, so I have to look elsewhere. Also while I have a lot invested in HO scale, my current focus is On30, and this shop has nothing at all for this scale. Everything that I've bought in On30 has come from Internet sources, either shops or directly from the manufacturers. I can't imagine him carrying On30 stuff due to a lack of others locally into it. So I can't really support the LHS because he doesn't carry what I want.
Sure he can order stuff for me, but that way means most of the items are priced so high that I probably couldn't afford them. I did buy my DCC gear from him, an MRC Prodigy Express set. Cost me over $200.00; just around that time Micro Mark had the same outfit for $99.00. So you can see why I don't get high end stuff locally!
Bob Boudreau
CANADA
Visit my model railroad photography website: http://sites.google.com/site/railphotog/
The demise of the hobby shop can be cause by several factors-the owner passes,the owner becomes ill or disabled,killed by old line thinking,killed by full price and last by not least the failure of the owner to move into modern times and sell on line.
Many savvy shop owners have gone modern and sells on the internet,offers discounts etc..
Those that hasn't and believes in the old school methods the end is nearing.
The Quick and the DEAD.
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
Given the economic times there is no doubt that all hobby shops/train shops will be feeling the crunch more and more.
Hobby money is elastic, first the basics then the frills. I am afraid there will be little in the way of frills for the next few years.
We must be lucky here in Mpls., St. Paul, MN as we've got several hobby shops that cater to train enthusiasts such as myself. Scale Model Supplies being the largest and most well stocked for all scales, Hub Hobbies (two stores, HO & N) and a few others. I'll consider myself blessed!
Jimmy
ROUTE ROCK!
Discount sales over the internet make most brick-and-mortars a tough proposition to sustain.
The major selling point store owners offer is when they say, "If it stops working, how are you going to get it fixed on the internet?"Okay, but in 25+ years of model railroading, I have yet to take something to a hobby shop for service, and I'll bet there are a lot of people like me.
Don't get me wrong, I love hobby shops, and I'm glad Caboose Hobbies is in my town. But they're having troubles too, and they do a good mail-order business. The average retired guy who just "wanted a little shop" isn't going to be able to survive much longer.
Here in Colorado Springs, there are two train shops that seem to be doing very well. The one that I shop at is always very well stocked, and if he doesn't have what you want, he will go out of his way to get it for you if need be. I asked, and was told that business is good, and there are no plans of shutting down.
Caboose Hobbies up in Denver seems to be doing OK as well.
BRAKIE wrote:...Many savvy shop owners have gone modern and sells on the internet,offers discounts etc.....
...
Larry, I got a story about one of those shops:
My LHS sells online as well as brick-n-morter. In addition to having a photo of each item they carry, they post up-to-the-minute availability info. I found a long-discontinued and hard to find WKW Cornerstone series kit on their website this afternoon, they only had 1 in stock - so I logged-in and ordered it and will pick it up on Saturday.
If more shops would offer service like this, they wouldn't all be dying out.
-Ken in Maryland (B&O modeler, former CSX modeler)
The two in my area, which are solely devoted to trains, seem to be doing pretty well. I was in Bruce's the other day, and he was unpacking a pretty sizeable Winter inventory. And the one in Roseville is still as well-stocked as ever, so I'd suppose we're pretty lucky in this area. Luckily, they service most of Northern California, and there are quite a few of us in this end of the state that do a lot of driving to them because we pretty much know that what we need will either be in stock or readily available on special order. The owners of both hobby shops are very 'people' oriented, and they both have really good sales crews.
Just hope it keeps up.
Tom
Tom View my layout photos! http://s299.photobucket.com/albums/mm310/TWhite-014/Rio%20Grande%20Yuba%20River%20Sub One can NEVER have too many Articulateds!
don7 wrote: Given the economic times there is no doubt that all hobby shops/train shops will be feeling the crunch more and more.Hobby money is elastic, first the basics then the frills. I am afraid there will be little in the way of frills for the next few years.
Judging by the crowded stores I been in I think the "bad economic" times only applies to wall street and the bankers...The bars and night clubs seems to be doing their usual crowded business on Friday and Saturday nights.
Heck they are building a new condo complex on the Southside of town and down around Delaware they are building a new shopping complex..Never seen anything like it.When finish it will be nice.
NS seems to be business as usual.
I know the current economic crunch hasn't help or hurt me.Life goes on as usual for me.
CSX_road_slug wrote: BRAKIE wrote:... Many savvy shop owners have gone modern and sells on the internet,offers discounts etc.....Larry, I got a story about one of those shops: My LHS sells online as well as brick-n-morter. In addition to having a photo of each item they carry, they post up-to-the-minute availability info. I found a long-discontinued and hard to find WKW Cornerstone series kit on their website this afternoon, they only had 1 in stock - so I logged-in and ordered it and will pick it up on Saturday. If more shops would offer service like this, they wouldn't all be dying out.
BRAKIE wrote:... Many savvy shop owners have gone modern and sells on the internet,offers discounts etc.....
Absolutely! That's how the modern hobby shop owner will survive.Unlike his older counter parts he won't cuss the Internet but,will use it as a business tool.
Phil,
You bring up some good possible revenue idea. But there always seems be another side to most of the great ideas:
The marketing channels are changing, and the LHS needs to adapt to the changes. There are a lot of small businesses that are no longer around, it's not just model railroading and the LHS. The only place you see a small barber, or a newsstand left is in the airport - They have a 'captive' crowd of customers.
Jim
Modeling BNSF and Milwaukee Road in SW Wisconsin
I have been going to the same model railroad hobby shop on Meas for 23+ years. BUT they have changed and not for the good. The last 3 times I was there I was treated quite rudely. The fellow in the shop did not even bother to get off the phone while checking me out. And its not like i never go there , these folks know me. Every bit of track on my layout is from them I have ben upgrading my engine fleet , from them Maybe thats what you call poor customer service. I have to drive 25 miles round trip to get my MR from them. Well not any more If they go out of busimess that might be why. I have no problem paying more to support my LHS , but they need to support me also its a 2 way street
jrbernier wrote: Phil, You bring up some good possible revenue idea. But there always seems be another side to most of the great ideas:Get an Alps printer and print custom decals - They have not been made in years(quality problems) and the call for decals is going down(all those limited run cars/engines). Notice that there are less decals arriving from Microscale?The machines that they use to cut out laser-cut kits cost about $10,000. Read more like $30,000 plus for a system that can do the precision stuff required for scale model railroading. And like a lot of the computerized equipment, you need it working all the time to pay the cost of getting it.How about a decoder installation service? Free if you buy the loco in the shop, $30 including the decoder if you bring in the loco. Offer it as a while you wait service with the choice to come back later to pick up the loco. There are lots of decoder install services out there, and $30 sounds good, but there are a lot of 'warranty' service as customer manage to mess up the decoders.If they are out of stock, a hobby store should order the item and have it shipped directly to the customer's home - postage paid. Sure, you lose a little profit on the item to pay the postage, but that customer will return. Shipping time/cost is one of the largest cost items around - and you want the LHS to ship it free because he could not keep it in stock(due to Walthers not having enough of them to start with)?My local hobby store is often out of the item I need. They are so poor at maintaining stock that I rarely go there. APICS is the system of inventory control that the big-box stores use (have you noticed that they are rarely out of stock?). APICS works for small businesses, too. It isn't cheap and there is a lot to learn, but it can make a huge difference in terms of having the items on hand when customers ask for them. You are right - Good computerized inventory control is not cheap - and you need an employee to scan each item in as it arrives so that your data base is curent. Most LHS's have one person in the shop during the day(when the supplies arrive). The marketing channels are changing, and the LHS needs to adapt to the changes. There are a lot of small businesses that are no longer around, it's not just model railroading and the LHS. The only place you see a small barber, or a newsstand left is in the airport - They have a 'captive' crowd of customers.Jim
Jim,
The point I was really trying to make is that hobby shops are frequently not that well run as businesses. If they were btter businesses they would be successful. Here's a case in point: I needed a piece of C70 flex track and that is a stock item at the hobby store nearest me (90 mile round trip). So I gased up the Scion and drove there. They were out. The proprieter said I can order it and it will be here next week. I told him I just burned $10 in gas; I'll order it myself. He said, "OK" and he went back to reading his paper.
That was an expensive piece of flex track, more for him than me. I haven't set foot in his store in 2008.
He could have said "I'll order that for you right now and have it shipped to your house. I feel bad that you came all this way to go home empty handed. You pay for the track and I'll pay the shipping." I'd have my track and he'd still have a customer.
If he'd taken an APICS class he'd know how to forecast and he'd have had his flex track on a min/max system (no computer required). Then he wouldn't have been out of stock.
Taking care of customers is much of what business is about. I think many hobby shops are losing sight of what their customers need/want, and we are not being treated as well as we deserve to be treated. They don't keep up with the times - they might as well be selling buggy whips.
By the way, at $30 bucks each, that laser machine is pure profit after cutting out just 1,000 projects. Properly advertised, I can see that happening in 3 months.
jrbernier wrote: My local hobby store is often out of the item I need. They are so poor at maintaining stock that I rarely go there. APICS is the system of inventory control that the big-box stores use (have you noticed that they are rarely out of stock?). APICS works for small businesses, too. It isn't cheap and there is a lot to learn, but it can make a huge difference in terms of having the items on hand when customers ask for them. You are right - Good computerized inventory control is not cheap - and you need an employee to scan each item in as it arrives so that your data base is curent. Most LHS's have one person in the shop during the day(when the supplies arrive). The marketing channels are changing, and the LHS needs to adapt to the changes. There are a lot of small businesses that are no longer around, it's not just model railroading and the LHS. The only place you see a small barber, or a newsstand left is in the airport - They have a 'captive' crowd of customers.
My local hobby store is often out of the item I need. They are so poor at maintaining stock that I rarely go there. APICS is the system of inventory control that the big-box stores use (have you noticed that they are rarely out of stock?). APICS works for small businesses, too. It isn't cheap and there is a lot to learn, but it can make a huge difference in terms of having the items on hand when customers ask for them. You are right - Good computerized inventory control is not cheap - and you need an employee to scan each item in as it arrives so that your data base is curent. Most LHS's have one person in the shop during the day(when the supplies arrive).
JB:
But barbers and newsstands have always been that way. They were in the train stations, or downtown, near the office buildings. In fact, most every small business that can't attract dedicated customer trips generally survives best when it has lots of potential customers pass it on the way to somewhere else.
I don't think APICS is necessary, and most hobby stores are small enough to keep track of on paper. I do think a lot of store owners could profit well if they tried to learn more about what people bought, and to keep it in stock.
The business model for a modern hobby shop is exceedingly complex. To do the things that today's customers want requires a great deal of capital. Everyone wants discount prices, and they demand high levels of service. Discount prices require volume selling, and service requires manpower. An internet presence requires manpower in maintaining the website and processing orders; in the store it takes manpower to do computerized inventory tracking, barcoding, and point of sale, not to mention providing said customer service and selling product.
It takes a lot of sales to cover a brick and mortar shop's overhead; which can easily exceed $10K a month. If your gross margin is 20%, you have to sell $50K to break even, providing your replenish your inventory. Depending on your market, $50K could be a lot of sales in a month.
I have had careers in banking and in a hobby shop. I now work in education, and I have a MBA. I would love to do another hobby shop, but it would require at least $250K to do it at a minimum, and probably $500K to do it right. I've run projections until I'm all projected out.
I want to do it again. But I won't do it until I can do it right.
In my experiences as a shopper, I think the two big things that affect hobby stores is their location and how they are run.
If a hobby store is located in a small town, it probably isn't going to do as well as a hobby store in a larger city.
How it is run, in my opinion, is probably the biggest factor that would affect a hobby store. I'm not just talking about the store's stock, doing business online, etc. I'm talking about the attitude of the people running it. Here's an example. Back when I was in college and doing major scenery work on my layout at my parents' house, I was going to the hobby store about 20 minutes away since it wasn't too far away for my scenery supplies. The last time I was in there, the owner was at the register talking to his daughter about her new boyfriend. I clearly heard him ask her, "He's not another f-g, is he?" To me, no matter what view you have on the word, that is completely distasteful to be using words like that around your customers. In 2000 when I was living at my parents' house again while getting back on my feet after a layoff, I decided to replace all of my track on the layout, which also involved redoing some scenery. Rather than go to the hobby store 20 minutes away where I'd had the experience several years before, I drove over an hour to Columbus to the hobby store I always stopped at whenever I was down that way. While it might have been a longer trip, I'd rather do business with people who are inviting and courteous to their customers rather than make their discriminating views known to whoever is within earshot.
Kevin
http://chatanuga.org/RailPage.html
http://chatanuga.org/WLMR.html
Maybe many of us need to learn to be better customers. My LHS is only a few miles away, and I can even cut that down by stopping on my way home from work to save a bit of driving. Still, I'm not going to get upset at the owner of the shop because some other modeller came in a few hours earlier and bought the last piece of flex track. (When I was building my layout a few years ago, my LHS ran out of right-hand Atlas snap switches. Somebody just came in and bought his entire supply of them. These things happen.)
In general, my LHS gets his Walthers shipment on Thursdays. Depending on how many customers come in, the boxes might still be unopened when I drift in on my way home from work. So, sometimes my orders are on the shelf with my name on them, and sometimes I have to wait a few minutes while they rummage through the boxes. A couple of weeks ago, I walked in on Thursday and he apologized, because it was a holiday week and the order didn't ship on Monday, so it wasn't in yet. I wasn't expecting anything in that order, but he knew me well enough that he thought I was waiting.
If I lived far enough from my LHS that I had to gas up the car just to go, I'd pick up the phone and call first if there was a must-have item.
It takes an iron man to play with a toy iron horse.
For years, I heard lazy hobby shop owners try to excuse their inventory-control problems with, "If we don't have it, we can order it for you."
Even back, then, I always figured, "Why bother? I can just order it from Long's Drug--or wherever--myself, and it'll even be cheaper."
The internet makes that question even more dfficult for hobby shop owners to answer.
And don't even get me started on the Walthers' order that would go out once a week!
Midnight Railroader wrote: And don't even get me started on the Walthers' order that would go out once a week!
Ah yes that old "Your dealer can get it from Walthers" slogan that fail to mention: That is IF we have in stock..
OK I've stayed off of this one so far, but I'm going to step in.
I do not run the world's best model train shop. I am not the world's best train shop owner.
But I do order from Walthers at least once a week, with a near 90% fill rate.
This urban legend that Walthers doesn't have anything in stock is getting tiresome.
If this comes across as advertising, it's not meant to be. Just had to get that out. Carry on.