Thanks for the replies and the information. I do have a plan, and it is different than most shops, and I have a very business savvy partnerr who will be my assistant manager and my hatchet man combined.
I'll explian my plan later.
Thanks guys!
TheK4Kid
I'm suprised, no one has mentioned this one:
An ATM machine
Vincent
Wants: 1. high-quality, sound equipped, SD40-2s, C636s, C30-7s, and F-units in BN. As for ones that don't cost an arm and a leg, that's out of the question....
2. An end to the limited-production and other crap that makes models harder to get and more expensive.
TheK4Kid:
I do admire your dreams and plans. If you have personal hands on experience financing and running a small business you may do fine. Statistically a small will not last 2 years. A hobby shop is a niche business.
Financing is going to be tough in this economy like it or not. A bank is going to want you to have a LOT of skin in the game. I am thinking they will want to see 60 to 75 percent cash. Plus you will have to sign personally, being Incorporated makes no difference. A realistic business plan too. There is an organization called SCORE that is maned by retired business persons who want to share their experiences. A good source, believe me.
I personally know about niche businesses. My wife and I purchased a very poorly run and managed florist in 2001. Rented store front. I had to have double the purchase price in cash and my wife had 20 years experience before the bank would lend us the balance. By the way my credit score is gold, We were able to sell the assets in 2008 at the end of the lease. I am a fairly smart fellow but I had no idea how expensive this would be.
1. A lawyer to prepare the S Corp papers. Make sure you do an S Corp and don't do it on the Internet. If you mess up the IRS will have you for lunch. This is to avoid cooperate taxes and personal taxes. Avoid paying twice.
2. Get a payroll company like ADP to do your payroll. These companies are not cheap but they are a lot cheaper than paying the penalties which can be huge. Ten to fifteen thousand dollars is the average.
3. When you calculate payroll keep in mind there is a 7.5% that will be added on for every dollar of payroll.
4. Unemployment insurance is required by law and is not cheap.
5. Workers comp is required too,
6. Business insurance is a must and don't skimp. Cover your inventory and future expenses. Your rent is due no matter what happens.
7. Do not buy on credit. The interest will put you in a hole in a minute. If you don't have the cash move on.
8. A POS is great but will cost you plenty. The vendor will get you on the annual fees and upgrade costs. Maybe even help, phone or email. If you have a web site you may want to have your inventory shared by the store and the site. This requires SQL database. And an IT person if you don't have the skill and you will not have the time unless you want to spend all of your waking time working.
9. If you are late with your sales tax run for the hills. In my state it is 10% a month. I know because once our check got lost in the mail. Didn't matter. Don't calculate it wrong, 10%.
10. Carefully signing a lease, make sure you are not the one responsible for anything inside or outside the building. We paid 2 grand a year for signage and maintenance.
11. There is more I could tell you but you may not be interested.
12. Lastly credit card processing. This will cost you too. Start with .20 to .30 cents per transaction. In addition there will be a charge depending on your volume of as much as 3.8%, And you will not get the cash for 3 days. Plus there is a flat fee even if you do not use it, can be as much as 50.
I had the opportunity to buy a LHS when the owner passed. After talking to his widow I decided not to touch it. Sales were great, but the profit margin from most major manufactures is ridicules. Then everyone wants a discount for some reason. They did have an Internet business too. The transactions were processed over the phone. The main reason they did okay is because they owned the building and paid the rent to themselves. They also owned their home...
Having a secure shopping cart is not simple. Your liability is tremendous. You will have to pay a monthly charge too. And you will have to pay someone to maintain it.
Just my opinion based on experience. Just having a business doesn't mean you will make money. Watch out for your friends who don't like the discount they got on that last sale.
Bob
Photobucket Albums:NPBL - 2008 The BeginningNPBL - 2009 Phase INPBL - 2010 Downtown
DoughlessK4- I'm assuming the shop is in your local area. I'm from the central part of the State, so advertise your parking lot sale and I might see you there. Since hobbyists tend to look for specific items and not generic ones, I'm not sure that location of the shop is all that important. I think if somebody is looking for trains, planes, etc. they are in the hobby and will find you, if you are not too out of the way. I wouldn't pay extra for the shop being in a "high traffic area". I may be wrong, but the casual passer by who stops in because the shop looks interesting and is convenient isn't the guy who is going to buy your big ticket items. I would keep your overhead low by not paying for a primo retail location. I don't think a high traffic area location will generate the added sales needed to offset the high rent paid for the building (or price if you buy the place) Just thoughts. Doug
K4-
I'm assuming the shop is in your local area. I'm from the central part of the State, so advertise your parking lot sale and I might see you there.
Since hobbyists tend to look for specific items and not generic ones, I'm not sure that location of the shop is all that important. I think if somebody is looking for trains, planes, etc. they are in the hobby and will find you, if you are not too out of the way. I wouldn't pay extra for the shop being in a "high traffic area". I may be wrong, but the casual passer by who stops in because the shop looks interesting and is convenient isn't the guy who is going to buy your big ticket items. I would keep your overhead low by not paying for a primo retail location. I don't think a high traffic area location will generate the added sales needed to offset the high rent paid for the building (or price if you buy the place)
Just thoughts.
Doug
Hi Doug,
Yes it's a local shop, but I may move it a short distance.
General Steel Buildings has 26 pre-fabs setting in a huge warehouse tht they will sell for pennies on the dollar,so I may build a custom shop later on.
Thanks for the replies once again!I'm doing some homework, and I'll keep you guys posted.Yes, there's some fishy stuff going on, but if I take over, it's going to end.This shop has potential if it's run right.I'm still all ears and eyes, so keep the replies and advice coming!
I'll tell ya what I want to see happen with hobby stores. Get in the gaming business. Put computer games in the stores to invite all them gamers in, then they get to also see all the cool train hobby also and maybe that will help the hobby out. Of course have the Train Sims there.
- Douglas
Yeah, those numbers look fishy to me, too. There's definitely more going on than he's telling. Unless he has another source of income, $1500 is well under the poverty line, no matter where you live. Even $15,000 wouldn't cut it in most places.
First of all, was that $1M the value of the inventory, the cost of the inventory, or the sales generated by selling the inventory. Three very different numbers. It takes a lot of retail stock to make a million dollars, so what's his velocity (in other words, if his average inventory value is $100K, his velocity is 10, because he's selling, on average, 10 times his stock level of each item). Or, more likely, a couple thousand of a few fast-movers and a lot of dead stock. But his claimed sales doesn't square with your image of boxes and shelves of stuff that's been there forever.
And, either his accountant is very creative (or, worse, he's his own accountant) or the IRS will shortly come calling. Or both. Maybe he finally depreciated all of that dead stock to zero, took the hit on EBIT, and is claming no sales even though he pocketed a tidy sum (which is legal, btw, if you don't cheat on the depreciation). Or he has an unmanageable fixed cost burden, in which case you don't want to be anywhere near ownership.
Your idea to hire on part-time (or even full time) is a good one, provided you're in a management position where you can actually LEARN the business. You probably also want to investigate merchandising deals with companies like Woodland Scenics. Sometimes you can work out a deal where they own the inventory, not you, but you still get a percent of sales, or they pay you to maintain a certain stock level.
There's a store near my office that sells only war and roleplaying game supplies. The only thing I can figure is that the guy must own the building and make his living on the rent from the other retail tenant. He's been there for 20+ years, and he does rent a gaming room in the basement, but I've NEVER seen him make a sale to anyone but me, and I seldom even see another customer.
Well, as you can probably see, I love the challenges of running a retail business, but I hate the hours and the constant diligence required to succeed. Any chance you'd be hiring a business consultant?
Connecticut Valley Railroad A Branch of the New York, New Haven, and Hartford
"If you think you can do a thing or think you can't do a thing, you're right." -- Henry Ford
There is something wrong with those figures. First off, if he is trying to sell the place to you he ought to be explaining the barrels of money you will make. When he tells you he only takes home a pittance, either he is truly naive, or he doesn't really want to sell. Either way, the numbers don't add up.
You ought to do a business plan before putting up money. The plan should cover the first two years. You list expenses, rent, heat, utilities, taxes, salaries,cost of goods, repairs and maintainance, insurance, interest, advertising, marketing, trips to trade shows, repayment of principle and unexpected contingencies. Then you list income, sales, repair work, whatever. The business plan MUST show you making money. If your business plan shows a loss, you are guaranteed to loose money. If you can't make money on paper, you will NEVER make money in the real world. The real world is more difficult than the paper world.
In fact, operating a retail operation ought to make more money than investing your capital in stocks and bonds. You can make 6% investing. You ought to be making more than 6% on your money when you take the risks of going into business.
Think about web sales. Ebay works. So does having a web site that is smart enough to show prices and take orders, including credit card numbers, and bill the credit card before you ship. Dunno what a software package that smart would cost but they ought to be available, off the shelf. You don't want to get mixed up in custom software development. That's a bottomless money pit. Trust me, I used to do software development as my day job.
Investigate the manufacturer relationships that come with the store. Manufacturers only sell wholesale to bone fide retailers or disti's. They don't want to give wholesale pricing to every tom dick and harry who is actually a hobbyist who sells a couple of items on the side. Find out what manufacturers he deals with and on what terms, is it cash in advance? Or will they do purchase orders and give you 30 days to pay? Will they sell onsy-twosy or do you have to order a full case? I know a guy who is a very small bore retailer and all he talks about is how difficult the manufacturers are to deal with. According to this guy he could sell a million dollars if only the manufacturers would ship him enough stuff, on credit. If the store lacks good arrangements with manufacturers and disti's it can take a long time to develop them.
David Starr www.newsnorthwoods.blogspot.com
TheK4Kid If you guys could give me your ideas of what you'd like to see in a good hobby shop, I'd appreciate it! Remember, train people aren't the only ones to be catered to. Would you prefer to see a nice layout or a layout combing maybe three scales or three separate layouts, say and Ho scale, an S scle and an O scfaleOr would you prefer to look at train equipment in a display case or actually se it in action on a layout?What if a local club was allowed to build and operate a layout and help explain things to the buying public,in exchange for lower prices on train equipment purchases from the hobby shop? TheK4Kid
If you guys could give me your ideas of what you'd like to see in a good hobby shop, I'd appreciate it!
Remember, train people aren't the only ones to be catered to.
Would you prefer to see a nice layout or a layout combing maybe three scales or three separate layouts, say and Ho scale, an S scle and an O scfaleOr would you prefer to look at train equipment in a display case or actually se it in action on a layout?What if a local club was allowed to build and operate a layout and help explain things to the buying public,in exchange for lower prices on train equipment purchases from the hobby shop?
Engine House Services is perfection then I guess. They have everything you've mentioned. They have a small I want to say 36 inch x 15 inch shelf to display control systems. They have an old fashioned DC TECH 2 with pulse control, and a Digitrax Zephry to try out with added UT4 and DT400 throttles. Actuallyt hey have a pair of DT400 so when I stop today I will see if one of them is the new DT402 I'm hearing about. They have it fully sceniced, set up with multiple switches, dual main, HO and HO/HO3 dual gauge track, and also have a section of dual gauge N/Nn3 track. I've played with it a little, which is why I'm going back today, I want to try the DT400 and Zephry throttle. The main front desk if you will, is a fully enclosed glass display case show casing various lokes in different railroads, along with 1 or 2 undecorated, in HO and N. Most are plastic but they do have a number of brass ones there. And above the head is a very multi-gauge track. It's nothing too much, not like the shelf, it's just track set up on wood board suspended from the ceiling. It show cases HO and O scale and runs trains around the track. There is also some large scale up there, G I think, but I've never seen it running so I don't know it runs or not.
And there's one more added bonus. The sad part is how it happened, but the owner of the National Railroad Museum doesn't know what he's doing. He's trying to sell of a bunch of the museums stock, and kicked the local Green Bay RR club out of it's building, to build basically what will be a kids zone to try and attract visitors to return trips. This is no balogne either, this all comes from one of the proprieters of the shop which is either very close to the club or is a memember, I didn't think to ask. But now here's that added bonus I mentioned. The LTS is set up in a series of multi-business buildings. The business next door to them went out and when the bully running the train museum (who a club member told me he admits to not liking train modelers) kicked them they rented the open spot right next to the train shop. It's pretty enjoyful going shopping for model train items, and then hopping next door to see the local clubs layout. Well, two layouts actually. They have a modular layout and a more permament layout under construction. Now the news is the place is temporary, for now. I'm not sure what's going on but I know the club is keeping their eyes open and ears listening for a permament place to hold shop. Makes me wish I had an extra building big enough. Heck I'd let em stay there till the end of time, so long as they pay utility bills. Well, that and let me be in the club for free
My LHS, which I think of as a brick-and-mortar store, also maintains an Internet presence. He does some mail order, although it's not his primary business. He is an active Walthers dealer, so I can get stuff from Walthers at their sale price. On MSRP items, the regulars get 10-15% off. This is a good arrangement for everyone - Walthers sells stuff, my LHS gets a profit, and I get the sale price with no shipping.
I'm not sure how much of a business it is, but he also does sound decoder downloads. Each of the downloadable decoders has its own special programming box, which is more of an investment than the average modeller wants to make just to do one or two decoders, so having that kind of thing available is a nice asset. Having someone who knows how to do it is even more valuable.
The shop is in a small strip mall. It's on a sort-of-busy street. There is zero foot traffic, but plenty of free parking. The shop itself is quite small, but well-stocked. Sure, a big store in a bustling downtown seems nice, but you have to balance the cost of the real estate with the extra traffic generated.
It takes an iron man to play with a toy iron horse.
Hi from Belgium,
A good layout in any scale and a lot of ...AMERICAN trains even in display case!!!!!!
I didn't want to see anymore Marklin or Fleischmann or Roco european trains which are often oversized(Marklin) with big couplers and spaghetti layout with trains running at full speed with poor modeling qualities.
Thats my wishes.
Modeling in N scale I must order nearly everything in the USA. As I know there is only four or six good shop who market American prototypes in Europe and for N only one at Paris in France.
Marc
Philly Bill Lots of good advice from CT. I don't have retail experience, but as a lawyer I've seen the results of bad deals lots of times. Some of the old inventory could have gained value if it's rare, so it might be worth seeing what comparables are going for - ebay is a great idea. A written business plan and a realistic budget for making these upgrades is important. Due diligence, have a good attorney review the contracts in addition to an accountant on the books. Look for some warranties and/or insurance to cover any claims that may arise from transactions made before you took over, but pop up after. Provide for a transition period, at least a couple weeks, where the seller will stick around, introduce you to regular customers, show you how he does stuff (even though you're going to improve everything, you still need to know what's been done. As the buyer, you've go the clout to get terms you need -- because you'll have to live with them.One other thing, good insurance coverage is a must Whatever happens, good luck! Sounds very exciting.
Lots of good advice from CT. I don't have retail experience, but as a lawyer I've seen the results of bad deals lots of times. Some of the old inventory could have gained value if it's rare, so it might be worth seeing what comparables are going for - ebay is a great idea.
A written business plan and a realistic budget for making these upgrades is important. Due diligence, have a good attorney review the contracts in addition to an accountant on the books. Look for some warranties and/or insurance to cover any claims that may arise from transactions made before you took over, but pop up after. Provide for a transition period, at least a couple weeks, where the seller will stick around, introduce you to regular customers, show you how he does stuff (even though you're going to improve everything, you still need to know what's been done. As the buyer, you've go the clout to get terms you need -- because you'll have to live with them.
One other thing, good insurance coverage is a must
Whatever happens, good luck! Sounds very exciting.
Thanks Philly Bill,
I still haven't totally made up my mind, and I could simply turn my back and walk away from the whole thing.However I do appreciate your advice, and a good friend of mine is a lawyer, and I intend to talk to her and bounce this whole thing off of her.
For now, I want to negotiate a deal where I work as a part-time employee, but am allowed to try out some of my ideas,if they work, they work, if not, I'll find something else to do for a living. More or less, stick my foot part way in to test the waters before making the plunge.
Once again, I'd like to thank everyone for their inputs, it is appreciated!
CTValleyRRK4 Kid -- I have no experience in running a hobby shop, but I have lots of retail experience. By all means, have an audit done if you don't have the skills or knowledge to do it yourself. That's basic "due diligence". For some more general retail advice: 1) It sounds like the guy uses FISH inventory management (First In, Still Here). That's the number one no-no of retail. You're depreciating the value of your inventory (or you should be). If it's been there for a while, you can sell it cheaply and still make money. Dead stock doesn't make you money. 2) You can't make sales if you can't get customers in the store. Yes, it's a high traffic area, but if it's all High School or College kids on their way to and from classes, chances are model trains won't get 'em in the door. You need an attractive, well-organized store, rotating sales (people come for the sale items and leave with an impulse buy. BTW, this is why I hate going to my LHS -- I always leave with a half dozen more items than I went in for. 3) Get a computerized inventory system. One of my LHS's uses paper tags scotch taped on to his items, which he pulls off and uses to reorder. That's ok, but it doesn't let him track what sells and what sits. You need to have certain "never out" items -- again, these should get people in your store, in hte hopes that they will walk out with impulse buys. 4) SERVICE is what separates a brick and mortar establishment from the Internet. You can't compete with an e-tailer on price, so don't try. Don't bother with the "I can order it for you" line, either. Most of them can order it for themselves; you should be selling instant gratification (although you SHOULD offer to order an item you don't have if you get someone who's Internet-challenged). Repair, custom part making, painting, clinics, and above all knowledgable, friendly sales staff are all ways to set yourself apart. Well, it's easy to say, but hard to do. Owning / running a retail establishment is HARD WORK, and lots of it. When most of the world is enjoying a sleepy, day after Christmas cup of morning coffee, you're in the store setting out your post-Christmas sale items. That, after having been there late on Christmas Eve trying to get some last minute sales. And every weekend day, and many holidays. You get the picture. That's why I'm not in retail anymore. I wish you luck!
K4 Kid --
I have no experience in running a hobby shop, but I have lots of retail experience. By all means, have an audit done if you don't have the skills or knowledge to do it yourself. That's basic "due diligence". For some more general retail advice:
1) It sounds like the guy uses FISH inventory management (First In, Still Here). That's the number one no-no of retail. You're depreciating the value of your inventory (or you should be). If it's been there for a while, you can sell it cheaply and still make money. Dead stock doesn't make you money.
2) You can't make sales if you can't get customers in the store. Yes, it's a high traffic area, but if it's all High School or College kids on their way to and from classes, chances are model trains won't get 'em in the door. You need an attractive, well-organized store, rotating sales (people come for the sale items and leave with an impulse buy. BTW, this is why I hate going to my LHS -- I always leave with a half dozen more items than I went in for.
3) Get a computerized inventory system. One of my LHS's uses paper tags scotch taped on to his items, which he pulls off and uses to reorder. That's ok, but it doesn't let him track what sells and what sits. You need to have certain "never out" items -- again, these should get people in your store, in hte hopes that they will walk out with impulse buys.
4) SERVICE is what separates a brick and mortar establishment from the Internet. You can't compete with an e-tailer on price, so don't try. Don't bother with the "I can order it for you" line, either. Most of them can order it for themselves; you should be selling instant gratification (although you SHOULD offer to order an item you don't have if you get someone who's Internet-challenged). Repair, custom part making, painting, clinics, and above all knowledgable, friendly sales staff are all ways to set yourself apart.
Well, it's easy to say, but hard to do. Owning / running a retail establishment is HARD WORK, and lots of it. When most of the world is enjoying a sleepy, day after Christmas cup of morning coffee, you're in the store setting out your post-Christmas sale items. That, after having been there late on Christmas Eve trying to get some last minute sales. And every weekend day, and many holidays. You get the picture. That's why I'm not in retail anymore.
I wish you luck!
Thankyou for your knowledgeable reply!
Yes he does use FISH inventory system, except he calls it FILO ( first in,last out) and there are other problems, but I am negotiating an agreement with him to let myself and one good and close friend of minewho has owned and run businesses in the past and who works for him at the present time, run things OUR WAY for awhile, being contingent to purchasing the establishment.This includes a parking lot sale to unload 10 year old or older inventory
I won't attempt to compete with etailers because I will have my own Ebay store to accompany my hobby shop and I have a friend who knows this end of the business like the back of his hand and this will be his only job.
I've been doing my homework!
I think all of you are way too picky. What I'd like to see is a sign that says "Wikious can take anything he wants for free."
Honestly, though, I think my LHS is a good one for the following reasons:- Right next to a busy railroad bridge-Nice assortment of odds and ends you can't get anywhere else. i.e., gears for Athearn locos at 10c a pop. -The shelf of used stuff that's crazy on sale!
Knowledgable technicians who can repair the stuff I bought on eBay.
Dave
Just be glad you don't have to press "2" for English.
http://www.youtube.com/watch?v=zQ_ALEdDUB8
http://www.youtube.com/watch?v=6hqFS1GZL4s
http://s73.photobucket.com/user/steemtrayn/media/MovingcoalontheDCM.mp4.html?sort=3&o=27
I'd like to see a GOOD HOBBY SHOP, I hope a lot of you people out there realize that there are thousands of us that have no access to a hobby shop at all, if so, we drive for hours to find one, so feel lucky if you are even near one.
Phil, I'm not a rocket scientist; they are my students.
I agree with you. I also build and fly RC airplanes, mostly large scale sailplanes and power ships.laser cut parts are in high demand!The decal service would be nice also.An investment in a good printer woul;d soon pay off!
Left Coast RailI would recommend you get an independent audit of his books before you even think of buying the business. It sounds to me like either his accountant is very creative or he is in trouble with the IRS.
I would recommend you get an independent audit of his books before you even think of buying the business. It sounds to me like either his accountant is very creative or he is in trouble with the IRS.
I will demand a complete inventory of everything. he has.If he balks at this, I'll simply walk away.The audit you recommend is exactly what I intended to do anyway.He's a nice guy, but to be quite honest, he's basically the "absent minded professor" type.The store is in a high traffic area, but simply a disorganized mess.
In the past, I've dealt with his wife, who knew I wanted to purchase an item which costabout $500 and he wouldn't budge on the price.She( wife) called me and offered it to me at $ 20 over cost.I purchased it from her when he wasn't present in the store.They had several of of these kits and they had been setting on the shelffor over three years and it was highly sought after item, but his pricesimply was way out of line.She usually gets so upset with him, she simply won't help run the store anymore.In fact, I intend to set up an Ebay store if I do buy him out.he won't sell on Ebay, says it's too much hassle.I have a friend in the eastern part of the country who has a brick and mortar store hobby shop and also sells on Ebay. he is highly successful on both endeavors.
It simply takes some work!TheK4Kid
Autobus PrimeFolks: I want to see stripwood, styrene, and brass, in displays that are restocked more frequently than Halley's Comet flies by. The stores around here are good with the basics, but I really really really really wish they carried Stuff to Build With. Sometimes people claim lack of interest, but how is anybody going to get interested if they can't get materials, hmm? I actually get my stripwood from a local hardware store, which has a Midwest display that gets restocked...rarely. Le sigh.
Folks:
I want to see stripwood, styrene, and brass, in displays that are restocked more frequently than Halley's Comet flies by. The stores around here are good with the basics, but I really really really really wish they carried Stuff to Build With. Sometimes people claim lack of interest, but how is anybody going to get interested if they can't get materials, hmm?
I actually get my stripwood from a local hardware store, which has a Midwest display that gets restocked...rarely. Le sigh.
Thanks for the replies!
Keep them comig.Here's another problem I am looking at.The present owner has told me that he sold well over ONE MILLION dollars ofinventory last year, and after all expenses were met, he barely made fifteen hundreddollars to himself.
I say there is something seriously wrong here with this picture!
As far as old stock and slow movers,take a lesson from Home Depot and dump it even at a loss. People are always looking for the new ,new thing. Sell Walthers new offers to customers who pay in advance,those are the guys who have to be the first kid on the block. Small dicounts for purchass over a hundred bucks or something like that. Half off prices after Christmas. Half off certain items on black friday. Ridiculously loew price on some select goods for fathers day.
My perfect hobbyshop would be a michaels with trains. BILL
You want to have something new for sale as often as possible. I stop by the local hobby shop many Saturdays just for something to do, and many evenings on the way home from work when I need some little bit or piece to finish up a project. While there, if there is something I don't have, (something new), I'll buy it. I'm willing to pay a bit more to buy something I can see and touch before I buy, and buy from a store to which I can return the item should it break after I get it home. Plus I still enjoy the instant gratification of taking home an in stock item. A bit more is kinda flexible. I'll pay something more than "street price" but I probably won't pay full MSRP.
Roadname is important. Local roads like the B&M, the New Haven, BAR, and Maine Central sell better around here than far off roads like SP. We customers love locomotives more than anything else, which is good for hobby shops since locomotives are big ticket items.
You have to carry the ordinary bits and pieces, couplers, rail joiners, Floquil and Polly S, super glue and plastic weld, flex track and turnouts. This is the stuff that makes us stop in on the way home from work. We'd love it if you also carried all the Cal Scale and Details West superdetail parts, a full fine of Nertheastern strip wood, brass strip and tubing, plastic strips, and the rest of the scratch building stuff but the inventory costs will be high. I won't buy ordinary hardware store stuff like Dremel tools from you if I can get it for less at Home Depot.
Companionship is a draw. Part of the fun of visiting the hobby shop is to meet other model railroaders and talk shop. A coffee pot, some chairs, a place to just hang around, will draw customers. Maybe even donuts. An arrangement with a club could pay off.
Don't be in too big a hurry to dump antique stock. Lots of antiques are fun to build. Dust 'em off and they might move. Or try Ebay. You can sell anything on Ebay. Used rolling stock would be a sales draw if the price was right. There is a lot of good old stuff they don't make any more, Bowser and Mantua steamers, Ambroid kits, Central Valley trucks, Trains Miniature reefers.
A store web site doesn't really speak to me, I like to see and touch the real thing. Neither does an in store layout. Nothing wrong with them, but they won't get me to visit any more often. I do expect a test track.
Driline Everything you guys described in the above posts PLUS 20% discount off every single item in the store. Otherwise I'll just buy my stuff from the internet. You have to be competitive or you'll just go out of business like the last shop did in town.
Everything you guys described in the above posts PLUS 20% discount off every single item in the store.
Otherwise I'll just buy my stuff from the internet. You have to be competitive or you'll just go out of business like the last shop did in town.
Unless things have changed since I last worked in retail sales--and admittedly that was some time back--the standard dealer discount is 23%; you are asking him, the dealer, to give you 87% of that. My local doesn't run around in a Lexus nor does he maintain a residence in a neighborhood of multi-million dollar homes and have a vacation home on the North Shore of Mauii. Ten years ago my local gave me a 10% discount--that's 43.5 % off his discount--on a case of Micro Engineering Code 55 flex; I paid inadvance and agreed that when he placed the order I would take the whole case lock-stock-and barrel UNOPENED!!!!!; when it came in all he had to do was log it off the invoice and give me a phone call.
My local puts all his meat and potatos on the table from the proceeds of his business; unlike etailers he doesn't go off to the loading dock at Bustyerbutt Industries every morning and then twice a week go out to that little corner of his garage to see how much of his inventory he can match against his orders. I want my local to stay in business . . . . . . . . . . and not just as a display case; I'm less interested in saving money than I am in having him available.
From the far, far reaches of the wild, wild west I am: rtpoteet
I have the opportunity to purchase a LHS but it is in definite need of reorganization,and needsa good "house cleaning" as what applies to a lot of the inventory of which much of it is very old,and some of it has been on the shelves 20 years or more.
The internet website that goes with this store also needs much improvement.The inside of the store needs a total revamp, or in my own personal opinion, itneeds to be relocated into a newer and larger faciilitiy, which would reduce a lot ofthe maintenance upkeep this old building takes.It does have a repair facility, but it is in total disarray.There is no functional layout that can serve also as a "test track."
It does carry some of the latest in engines and cars, etc, but the prices are way outof line with other shops, and especially internet pricing.There are a number of very knowledgeable employees, but the owner strangles their abilities to make changes I feel would help the shop.He is dead set on the fact that if h can't get a 40% markup on everything, then it will stay on the shelves.Thus there is a lot of very old stock in this shop.My idea would to be to immediately hold a "parking lot" sale and get rid of a lot of the old stuff , and get what I could, and put these funds back into newer items and clearing off the shelves to make wayfor new stock.This store has so far survived the recession, but it simply needs a total makeover which the present owner refuses to do.It not only sells trains, but RC cars and airplanes, and plastic model kits, etc.
I have known the owner for a long time, and there is stock on the shelves that was there when this store opened over 20 years ago.It simply NEEDS TO GO!!!I'd also advertise this old stock probably at costs if I had to, just TO MOVE IT!
My idea is this.There are several local train clubs.If I can find a larger building, I'd ask them if they would be interested in building a club layout,partly sponsored by the store, and by allowing them to hold weekly or monthly sessions on the layout in store which would allow the general public to see trains in action, and what can be done with them, I'd cut the club members" a nice discount on their purchases of items carried by the store in return for their efforts, which should boost my sales.Hopefully it becomes a two way street and a "win-win" situation for both sides!The idea of having "how to" seminars" is a great idea!This would give the club members a place to run their trains, and at the same time showcase model trains in action to the buying public.Or have several club members as "employees" who could run and sell trains at the same time, and provide their knowledge to the buying public.I feel my idea would work because I've never seen a shop like this before, and it is what I myself would like to see.Times are tough everywhere in this country, so I feel you have to use some "ingenuity" and "innovate" to survive.
I'd hold "annannounced" "in-store specials" and mark certain items down to special prices on a weekly basis, so when you come in, you might find something you were looking for has all of a sudden hit a "rock bottomprice!"
Maybe if I knew you were interested in a purchasing several kits or items, but perhaps you were just a bit short of funds, I'd give you a "special price" for buying more than just one of that item.
I'd make a sale, and move some inventory, and you'd be happy also,
BUT at the same time, the general public and other store customers could see what a real layoutlooks like and how much fun a person can have in this hobby.I'd probably also put a slot car track in also, and if room allowed, and outdoor RC car track.But I'd also incorporate a lot of the ideas you guys have said that you'd like to see.
This would be a major purchase for me, but I intend to make it successful if I do it.This shop also has way too many "small items" hanging on hangars along the shelveswhich can just be "lifted " and "stolen" much too easily,, and this owner probably has no idea how much inventory gets stolen constantly, as I don't think he keeps a decent inventory.He is much too often "out of stock" o many items.The place is just in total disarray, and there is just too much what I refer to as "toy junk" in the store.So first project is a total "house cleaning!"
Then a new website that SERIOUSLY COMPETES with other hobby websites!
Your opinions are welcome!
Thanks and to all, have a great day!
Then again, maybe I should go get my head examined for even thinking about making such a businessventure! LOL!Perhaps go to Walmart and buy out all of their Bayer aspirin to take for all the headaches I may encounter!