We get a 10% discount for our club. That is so sad about your LHS. We are pretty lucky here since there are many within a couple hours drive and several within 30 minutes or less. Most of the good ones around here also sell over the internet and really concentrate on trains with 2,000 to 6,000 sq ft. So, they make it worth the drive.
You might want to see if Walther's will set you up as a reseller if you have enough volume in your club? Horizon requires a brick and mortar store, so they are trying to keep the LHS alive.
Richard
They may have put themselves into a bind by increasing their fixed costs for the new shop without increasing revenue, or having a serious plan of how to do it. My LHS offers 10 or 15% off to the regulars and club members. (I became a regular when I was given this discount on my first purchase.) He also takes special orders by e-mail, and I pay when I go to pick it up.
At the same time, I help the shop by always paying in cash, even if it means a trip to the ATM beforehand. Debit and credit cards charge a fee to the seller for each transaction, so by cutting the bank out I give the shop a break without having it cost me anything.
It takes an iron man to play with a toy iron horse.
Ya I suspect hobby shops are generally running on a thin line between making a profit or not, so any new expenses are going to be a potential problem. Growing up I used to walk to Hub Hobby in Richfield MN, when it was located in the Hub Shopping Center (strip mall) in the middle of town. At some point in the eighties, the management of the mall decided that all the business had to get new signs - they would install the signs, whether the store wanted it or not. For Hub Hobby, it amounted to several thousand dollars, which they couldn't afford. The owning partners ended up splitting into two - one partner moved opened a new hobby shop on the east side of town, and the other owner moved Hub Hobby to the west side of town where it still is today.
Yes, I'd say most LHS's close due to self inflicted causes. I've been to more than I can hope to count during my travels all over the US, working out of town in many states and making it a point to visit 2 or 3 shops in most cities I traveled to for work.
I almost never buy from hobby shops which sell at or near MSRP; you simple don't need to. Blame mail order, blame the internet, blame blame blame. As long as the hobbiest has mulitple options, the LHS selling at or near MSRP is on the road to closing, it's just a matter of time.
The brick and mortar stores which stay open now are the ones which combine traditional sales with web sales etc. Of course this topic has been beat to death hasn't it.
Rio Grande. The Action Road - Focus 1977-1983
From what I've seen in this forum, the reason hobby shops fail is they don't stock every item in the walthers catalog, give 50% discounts, and have VIP sales associates for every customer.
Can we stop beating this very dead horse.
Milepost 266.2 Can we stop beating this very dead horse.
I don't think so. I know your question was rhetorical, but it deserves a little consideration. I wrote something similar when a long time LHS started getting out of the business here--after many generations. And that's the point--loyalty, verification, conversation, community, etc all of this adds up over the decades and when something is taken away that was/is important to you--it matters. And therefore I don't think for several reasons, we should stop beating this very dead horse--imho.
Train Modeler Milepost 266.2: Can we stop beating this very dead horse. I don't think so. I know your question was rhetorical, but it deserves a little consideration. I wrote something similar when a long time LHS started getting out of the business here--after many generations. And that's the point--loyalty, verification, conversation, community, etc all of this adds up over the decades and when something is taken away that was/is important to you--it matters. And therefore I don't think for several reasons, we should stop beating this very dead horse--imho. Richard
Milepost 266.2: Can we stop beating this very dead horse.
I agree with Richard..When something ends that is part of our lives then we should be able to discuss it.
I miss the old days when the faithful gathered at the LHS every Saturday morning where lasting friendships was made,new models displayed(and bought),modeling techniques and layouts were discuss..Inventions to visit a layout or join in on their operation night was given.
Today most of that comradeship has been lost to the cold and flat modeling forums where everybody is nameless and faceless...
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
Milepost 266.2 From what I've seen in this forum, the reason hobby shops fail is they don't stock every item in the walthers catalog, give 50% discounts, and have VIP sales associates for every customer.
Righteo. The above will never happen and I know your point is the ideal world will never exist so just shut up. BUt IMO, you don't give many of us much credit by oversimplifying and turning this into a characature of what people want but can't have in their "idealized word". But most intelligent and "aware" people know that hobby shops can exist AND satisfy customers if they are run intelligently and adapt to the market. Those who can't close, those who can may continue on. Personally I would don't have any illusions about it being an easy job anymore, and I don't envy these people.
Still this should be a topic that can be discussed in a mature way and not locked by the moderators.
There's never time to do it right, but always time to do it over.....
It is a dynamic and inter-dependent relationship. What one does affects the other directly. If a store raises prices, it is because their revenue has been insufficient to pay their bills and living or desirable wage. Or, that is the perception and determination of the proprietor. However, the other part of the team is also bringing to the dynamic his/her own contribution of effect. The customer also acts in ways to cause the business owner to adjust his/her own behaviour. Some of them may behave in a number of ways that force the business owner to adjust prices, or to reduce stock, or to insist upon advance orders being paid in full.
Businesses close because they are no longer viable. It may be something that the owner does or fails to do, but it is just as likely to be something the customer does or fails to do.
Crandell
It is so very nice to read all the know-it-all comments on this and other online forums regarding the pricing structure of the LHS, and why it should be this or that, or else we're going to buy online and put the local dealer out of business... After all, we "modelers" or would-be "modelers" are so infinitely more knowledgeable about the costs and business side of this hobby than the dealers, most of whom who are simply trying to make an honest living at it. After all--they're all just greedy hogs and don't need to pay for their own health insurance because the government is going to provide it for everyone, right?
Anyone who has ever worked in a fine train only store has a much greater appreciation of the realities of the business than most of the whiners on internet forums. The whiners on internet forums don't see the costs of health insurance skyrocketing on the train stores. The whiners on internet forums don't see the actual lease or ownership costs of the store, the actual (nowadays ever shrinking due to increased distributor margins) profit margins of the merchandise or the actual utility bills.
I politely suggest you go build a model or run a train rather than whine about the economics of the LHS. The ones that remain are doing the best they can, and bashing them online or pontificating about why their pricing structure is absurd is utterly useless.
Fine train stores make up for the price margin by also providing exemplary customer service. Last time I checked, that never ended. The real customers know they are paying for the service when they need it.
Larry--I mean no disrespect--there are still fine train stores where all the Saturday morning activities of the past still go on.
John
UP 4-12-2Fine train stores make up for the price margin by also providing exemplary customer service. Last time I checked, that never ended. The real customers know they are paying for the service when they need it. John
John, for most of my life, I have never been able to "afford" the "service" (ie, the near MSRP prices). Thats fine if you have the disposable income to pay for this luxury, but many folks are just getting by so "service" is a luxury to them. Perhaps you and a few of your associates have been blessed with good financial fortune - thats good. But realize everyone isn't one the same economic plane. I'm not complaining; in the world economy, my standard of living has been better than the majority most of my life, so it isn't fair for me to compare myself to all the folks I pass on the Washington DC beltway who are driving Mercedes and BMW's and can afford to pay for "service". Don't get me wrong, service is a good thing, but remember, it is a luxury to many - and this has never been a cheap hobby.
Here in Germany, we see a kind of resurrection of the good old LHS. People who are prepared to spend a little fortune on their trains, seem again to appreciate the service a good LHS offers. With ongoing quality issues, people also like too see what they are about to buy, before cashing out those 500 to 800 $ for a loco. Going back to good old values?
I have no problem paying MSRP and sales tax at my LHS for items they have in stock. I enjoy sifting through boxes of structures, detail parts, and resale shelves. I enjoy the banter and listening to the talk amongst the other modellers. I enjoy chatting with the guys behind the counter and asking for their advice on balkly loco's and other tips and techniques. This all comes with a price and if it means I help keep a local business open that employs local people, I'm happy to do my part.
Do I buy things on the internet and shop around? Of course. But I'm tired of the philosophy that if it can be found cheaper on the internet then screw the LHS. Like any other shop, if I find that the LHS doesn't appreciate my business I'll go elsewhere. Until then I'll do my part to keep them around. I sorely miss the local record / CD shops, book stores, etc.
-----------------------
John,I only wish that was true around here..I really miss those Saturday gatherings.The last shop that did that closed several years ago.
disrespect? LOL! None taken my friend..
Sir Madog Here in Germany, we see a kind of resurrection of the good old LHS. People who are prepared to spend a little fortune on their trains, seem again to appreciate the service a good LHS offers. With ongoing quality issues, people also like too see what they are about to buy, before cashing out those 500 to 800 $ for a loco. Going back to good old values?
From what I have seen of the cost of German/European loco's etc, they have been about double the cost of Americn equivelents historically, so maybe y'all are more prepared for that higher cost. Certainly American trains as a rule have more engines pulling them, often 3 to 6 engines, especially in the mountains, where as German trains have 1 or 2 loco's on the front from what I recall watching trains during my 4 trips there. So in Germany a modeler on the average probably buys and uses far less engines for European modeling.
Plus, the scale of economy is different. An Austailian modeler was chiding Americans last week about how we don't have the stomach for 200 - 300 dollar engines here in America, many of us, where as they are used to them costing that much for a single diesel. But thats like saying we can't handle $6-7/gallon gas that you may have in Germany or England. But since our economy is scaled to gasoline price at half of other countries, doubling the price of gas would cripple our economy because it isn't scaled to that, and it would be terrible shock to adjust to it. Overseas, countries have been scaled to that for years and years, same for the hobby. So it really is an Apples and Oranges thing.
But I'm tired of the philosophy that if it can be found cheaper on the internet then screw the LHS.
Perhaps people have the "it can be found cheaper" philosophy out of necessity, ever think of that? People who have plenty of money take it for granted. My wife, who is from a poor working class town in England knows this more than most Americans, where the class differerences are much more pronounced and the rich or well off, look down on the poor. Watch some Catherine Cookson movies on Netflix and you'll start to see what I'm talking about. Well, this attitude is alive and well in America, just not as well developed and long standing as England.
Why Hobby Shops fail has a lot to do with poor business practices
BUT!
Now a days having to pre order stuff that probably won't be manufactured for years is NOT going to make a Hobby Shops life any easier!
Then there is always the ones that can get it cheaper on the internet and then when the item doesn't work
get on the forums and CRY and CRY about the stuff not working.
YET!
If they would purchase it at the Hobby Shop - you could test it to be sure it worked !
The trade off we do to save a BUCK!
BOB H - Clarion, PA
BOB H -
--------------------------
I wouldn't mind spending that extra buck if the shop stocked the new items beyond the canceled orders or orders that wasn't picked up..Why should I buy something from my LHS that I can't use just because its in stock? That is exactly what drove me to the Internet shops..I don't preorder since as you noted it could take months or years before the model hits the shelf or the shop's order is shorten because his credit line isn't the best..
So,in the end it may not be the buck we save as much as it is the availability.
We're lucky to have 2 good LHS's here in London ON...and a couple more outside London as well.
Lots of kvetching lately?
Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry
I just started my blog site...more stuff to come...
http://modeltrainswithmusic.blogspot.ca/
The death local hobby shop is just a sign of the free market competition working. Right now mail order companies can out compete brick an mortar hobby shops because they have lower fixed costs and thus can offer a lower price.
I can some up another problem facing the LHS in one sentence: "we don't have it but we can order it for you." When I need something like a ground throw or scenic cement or turf right away and I have fought the traffic on I-85 to get to the LHS, the above sentence is the last thing I want to hear. I the LHS wants to compete with the mail order company, then "instant gratification" needs to be the name of the game. I don't mean for specialty items like locomotives but for the basics. I believe the LHS could compete by being the place you go to get a replacement ground throw when one breaks a few hours before the operating session, or the guy who has the scenic cement or the plaster cloth when I run out in the middle of a project.
Modeling the Pennsylvania Railroad in N Scale.
www.prr-nscale.blogspot.com
Hobby Shops are failing because there is an increasingly smaller market for their items and the hobby has not been able to recruit enough new members interested in getting into the hobby. We can debate the causation of this trend but the fact is that there are fewer and fewer hobby shops each year. Selling (and manufacturing) model railroading equipment is losing it's profitability.
I live near two model train stores. I drive 10 miles more to get to the farther one because they have a better selection, better prices, better service and a mostly knowledgeable staff which is in direct contrast to the much closer hobby shop. The better hobby shops will be the last ones standing.
John R.
EmpireStateJR Hobby Shops are failing because there is an increasingly smaller market for their items and the hobby has not been able to recruit enough new members interested in getting into the hobby. We can debate the causation of this trend but the fact is that there are fewer and fewer hobby shops each year. Selling (and manufacturing) model railroading equipment is losing it's profitability. I live near two model train stores. I drive 10 miles more to get to the farther one because they have a better selection, better prices, better service and a mostly knowledgeable staff which is in direct contrast to the much closer hobby shop. The better hobby shops will be the last ones standing.
Is one of the better one's Trainmaster?
No reason to, obviously many find the topic interesting, maybe the real question should be "why do people reply to threads that do not interest them?" The "Dead Horse" reply is even dumber than an often repeated thread, the topic of the thread is VERY CLEAR in the title, why do you waste your time even opening the thread, then reading the thread, then HEAVEN FORBID wasting your time replying to a thread that you feel is BEATEN to DEATH.
Just pass on over it to a thread that you might find some interest in. There are plenty of threads every day on the forums that I find no interest in, I just don't open them, and find some thing that I am interested in, I don't criticize a thread or those that post or read it, maybe some others should try the same idea.
Now back to your regularly scheduled thread.
I am fortunate to have several Train specific stores near me as well as some well stocked general Hobby shops nearby as well. IIRC the current owner of Whistlestop Trains in Portland, OR said the store originally opened in 1973. I remember going there when I was very young and riding the bus to get there in poor weather and riding my bicycle in good weather. WST is a Great example of the service and Friendliness that used to be found more often. With the economy the way it is, I have not been as frequent a customer as I had been, but still I am told when I shop to stop and visit more even if the budget doesn't allow for any thing new, just stop by and say Hi.
I Hope that I never read or have to write here of one of the LHS's here, and WST in particular, having their "Final Sale"
Doug
May your flanges always stay BETWEEN the rails
I can buy locomotives on the Internet to save a few dollars.
I can buy a package of rail joiners on Saturday afternoon at the LHS. Until I can't anymore.
The Internet will always be there, so support your LHS now while you still have it.
Many folks are making good points here and much truth in this topic. Which, in a way is why people use the "beating a dead horse" comment, because many of the comments while true, are repeated over and over and over, and are still true! =P Nothing is really resolved though.
And this comment above, is actually not true, its just lots of kvetching going on for years and years. Nothing new under the sun lately, ain't it?
Fifty years ago I remember going with Dad to the local hobby shop on a regular basis and peering at a the cases filled with Model Railroad stuff. I remember all the MRR chit chat that went on as I look at all the things the store had to offer. As the years went by I began to notice the gas powered model airplanes hanging from the ceiling. I remember building my first wood airplane kit and saving like crazy to buy my first Cox.049. This lead to bigger planes with bigger gas motors and by about age fifteen I was building my first Radio control plane with a six foot wingspan. When I hit 16 I got my drivers license and was off to the R/C airfield for years of fun.
That first R/C plane kit I bought came in a box about 4' long and when I opened it up it was nothing but a big pile of balsa wood. It took countless hours for me to build that thing, building the wings rib by rib and putting the covering over it. It took a lot of newspaper delivering and shopping cart returning at Safeway to pay for the Radio equipment. Nothing was better than flying that thing with its six foot wing span coming in on final approach to the runway with real exhaust trailing behind. Flaps down, gear down and another perfect landing.
If it had not been for that hobby store I doubt I would have discovered the world of model planes. Now a kid goes to "TOYS R US" and gets his battery powered plane or helicopter made out of styrofoam for $50.00 fly's it around the back yard for ten minutes gets board and never touches it again.
I got as much fun and satisfaction out of flying my R/C plane as I did flying real airplanes (real planes were the next step after R/C planes) You had to build it right and fly it like a real plane or it would end up a pile of kindling.
The disappearing hobby shop is a sad situation, but it goes along with the disappearing hardware store, lumber yard and so on. We all go to home depot now, right?
Scrapbooking now has specialty shops, gaming has specialty shops, arts and crafts, ever heard of Michaels? Model trains have model train stores.
The demise of the hobby store has more to do with the number of products that can be sold to people in a hobby store. As that list shrinks through the growth of specialty stores so does their bottom line.
If you have a choice of turning right to the hobby store or left to the train store, I know which way I am turning. A specialty store will survive if the owner has done his or her homework before going ahead.
Not many of us just wonder into a specialty store. I just wonder how many kids will never discover the world model RR or R/C planes or something else because they don't have a local hobby shop.
Brent
"All of the world's problems are the result of the difference between how we think and how the world works."
riogrande5761 Many folks are making good points here and much truth in this topic. Which, in a way is why people use the "beating a dead horse" comment, because many of the comments while true, are repeated over and over and over, and are still true! =P Nothing is really resolved though. Lots of kvetching lately? And this comment above, is actually not true, its just lots of kvetching going on for years and years. Nothing new under the sun lately, ain't it?
I wonder..
Maybe modelers are like soldiers..Not happy unless they are kvetching?
I been in this hobby for eons(so it seems) and I never met a modeler that didn't have some kvetching to do.
Some times I think kvetching is just part of the hobby.
BRAKIE I wonder.. Maybe modelers are like soldiers..Not happy unless they are kvetching? I been in this hobby for eons(so it seems) and I never met a modeler that didn't have some kvetching to do. Some times I think kvetching is just part of the hobby.
Probably because the majority of us are grumpy old men? =P
Wierd to think that even at age 53, I may be on the younger end of the spectrum of gumpy old men modelers - that doesn't bode well for me because if I follow the trend, I"ll get grumper as I get older! =P
No wonder so many topics get locked around here!
*** In before the lock!!! ***
I think it is due to the I Remember When Syndrome....
Would any of you make it a point to go to a Ford/Chev/Toyota/Fiat dealership to buy so that they would stick around for the foreseeable future? I fail to see the point, and certainly not the obligation, in patronizing a local hobby shop for the same reason. It's about economics. We each do what we can to carve the easiest and longest path for ourselves. If we elect to undertake a more arduous or otherwise costly process, or path, that is strictly a personal decision. I won't be following you.
It's like Walmart buying/selling American made, then NOT, pushing a lot of mfgs overseas for cheap labor(think Schwinn in OH). It is so much about our individual economic and other experiences maximization.
I sometimes pay more to vendors who are excellent. I also give the mailman a Christmas card/present. But a lot don't, it's all good.
Retailing has been changing for years. The big box stores started it and the internet is finishing it. Small shops can't compete on price with the big box stores, so they had to specialize in what the big box stores don't carry and then came the internet which allowed someone to set up a discount business that could sell specialty items world wide and the result is the demise of most hobby shops. America laments the loss of good knowledgeable service, but mostly buys at the cheapest price.
I miss the old hobby shops too. I think my favorite was Arlington Hobby Crafters when it was next to Parkington Shopping Center on Glebe Rd (this is in northern virginia) . I used to stop in and chat with the owner and buy a kit or two. I bought my first S scale and first O scale kits there. All of the model train hobby shops in the area from then (70's) are gone now and several that opened since then are also gone. The few I see now seem to be making it on 3 rail O gauge - mostly Lionel, mostly MSRP; with a little HO and N on the side.
Now I buy at train shows and online. S scale isn't available otherwise.
Enjoy
Paul
Lots of Economists in here. Fine. Harry Truman said if you laid economists end to end they'd all point in different directions. However, I think we can all agree, the cost of doing business is rediculous vs. the profit you might gain.
Why do shops go out of business. Well, I have my ideas:
They are only open when everyone else is at work. Uh...that's a good strategy.
The guys that work there have the personalities of Torquemado , The Inquisitor. Nothing like Customer Service!
The shop hasn't blown the 10 years worth of dust off the shelves.
The clerk is asleep and cannot be awakened to ring you out. (that actually happened to me)
The shop is now located between the Tatoo Parlor and Oriental Massage, oh ..and next to the Biker Bar.
Nothing in the "Brass" case is for sale...well, it is but the Owner is out of town for several weeks and he has to approve all brass sales.
Have fun with all this.
I think another reason a small number of hobby shops go out of business is they were opened by people who enjoy the hobby and think running a hobby shop might be fun. That individual may be passionate about the hobby and open the shop without realizing what they're getting themselves into.
IRONROOSTER I think my favorite was Arlington Hobby Crafters when it was next to Parkington Shopping Center on Glebe Rd (this is in northern virginia) .
I think my favorite was Arlington Hobby Crafters when it was next to Parkington Shopping Center on Glebe Rd (this is in northern virginia) .
Heck, Parkington Shopping Center isn't even there any more. Isn't that where Kettler Iceplex is now?
GP-9_Man11786 I think another reason a small number of hobby shops go out of business is they were opened by people who enjoy the hobby and think running a hobby shop might be fun. That individual may be passionate about the hobby and open the shop without realizing what they're getting themselves into.
That could be very true. A coupe of years ago, I was talking to a well respected Lionel service tech, and mentioned that I was looking for something to do on the side, as business was very slow, Henry asked me "Do you ENJOY your trains?" I said "Yes, that is why I considered doing repairs for extra income" to which he replied "Then DON'T DO IT" He said that doing train repairs would be a very good way to turn a Hobby, into a JOB, and eventually drain much of the Enjoyment out of it. After I thought about what Henry had said, I came to realise, that it was probably very Good advice fom someone who has been there and done that. Henry is an Excellent service Tech, and does still enjoy his trains, but does find himself spending less time on them than he likely would have, and spends more time on other things that maybe wouldn't have gotten as much attention. The advice that "If it is a HOBBY, keep it a Hobby" can be very Good advice.
I didn't read this whole thread, but...
How about the mfrs cutting out the middle man? ExactRail went direct, and Athearn recently announced that they're shortening the dealer discount effective November.
Internet only is the way of the future, and I hate it.
FlyingCrow Lots of Economists in here. Fine. Harry Truman said if you laid economists end to end they'd all point in different directions.
Lots of Economists in here. Fine. Harry Truman said if you laid economists end to end they'd all point in different directions.
Hard times and recessions has a way of making economists out of all of us doesn't it? My parents were raised during the Great Depression and they were home economists and pinched pennies and watched the budget quite well. The last four years haven't been a joy ride either for lost of folks so we do what we can to economize so yeah, we all have opinions and didn't go to college for it.
I'm sorry to get off topic...
But in the last 6 months our 2 local video outlets (DVD movies/game hire etc...) have closed down. I live in a lower income part of Perth, Western Australia, and this was the place we would go to for a cheap night in. Now these places are gone and a large percentage of people in the area have blamed the moves of management and online services.
1/ The shop moved to a new developing area about 5 kms away.
2/ Not a lot of people have cars here but they have kids. (buses are well utilized in this area)
3/ Only a small percentage of our area can access the internet, let alone a mobile/ home phone.
4/ The movie hire shops must have expected a growth in business with the new area development. Poor planning has caused them to close down. They didn't realize that the wealthy community they moved away to join didn't hire movies from shops. They have FOX and ITunes.
4/ Now with no one willing to walk 5kms with there kids just to get a movie they have left us with no movie hire within 15km of our area and let the business fail.
5/ They have removed 6 local jobs from the community.
A warning to Managers.
My local hobby shop is 25kms away, I buy most of what I need online. Postage is usually less than a train and bus fair.
Cheers...
Chris from down under...
We're all here because we're not all there...
UP 4-12-2 It is so very nice to read all the know-it-all comments on this and other online forums regarding the pricing structure of the LHS, and why it should be this or that, or else we're going to buy online and put the local dealer out of business... After all, we "modelers" or would-be "modelers" are so infinitely more knowledgeable about the costs and business side of this hobby than the dealers, most of whom who are simply trying to make an honest living at it. After all--they're all just greedy hogs and don't need to pay for their own health insurance because the government is going to provide it for everyone, right? Anyone who has ever worked in a fine train only store has a much greater appreciation of the realities of the business than most of the whiners on internet forums. The whiners on internet forums don't see the costs of health insurance skyrocketing on the train stores. The whiners on internet forums don't see the actual lease or ownership costs of the store, the actual (nowadays ever shrinking due to increased distributor margins) profit margins of the merchandise or the actual utility bills. I politely suggest you go build a model or run a train rather than whine about the economics of the LHS. The ones that remain are doing the best they can, and bashing them online or pontificating about why their pricing structure is absurd is utterly useless. Fine train stores make up for the price margin by also providing exemplary customer service. Last time I checked, that never ended. The real customers know they are paying for the service when they need it. Larry--I mean no disrespect--there are still fine train stores where all the Saturday morning activities of the past still go on. John
Not around here anymore - and I use to run one of those train departments in a full line hobby shop 30 years ago.
We could see way back then that the increase in product selection, and the increase in discounting was going to require three things for success in the future:
One - buying direct from most of the manufacturers to be able to discount and still make a large enough margin.
Two, being physically big enough to have a big inventory - both in item quantity and selection.
And three, doing business via walk in trade and mail order to support the volume necessary to accomplish number one and two above.
I don't pay retail anymore - actually there is no "service" other than a good inventory that I need or want from a train store at this point in my model railroad life.
And thanks to "preorder" heaven, a good inventory is largely a thing of the past.
Why hobby shops fail -
$200 retail locomotive bought by mom and pop LHS from distributor for $120, discounted 15%, leaves not enough profit to run business - $170 sale price. 30% gross margin - really needs to be 35-40% to make money.
$200 retail locomotive, bought by big mail order outfit with retail store directly from manufacturer in large volume for $80 - maybe less. Discounted 35% - sale price $130 - 39% gross margin - Profitable!!!!!!!
Obviously mom and pop LHS cannot get anywhere near $130 price - that is just barely above their cost.
But what do I konw, I just use to run a train department and have been self employed most of my life, and one of my own business ventures was also retail sales - but surely the above facts cannot be right.
Sheldon
swoodnj I didn't read this whole thread, but... How about the mfrs cutting out the middle man? ExactRail went direct, and Athearn recently announced that they're shortening the dealer discount effective November. Internet only is the way of the future, and I hate it.
Anybody selling model trains for more than 15-20% off has already cut out the middle man. How much markup do you thing there is in this stuff? Not as much as you think.
Athearn has single point distrubution - ALL dealers pay the same price and ever since the did that the dealer discount was larger than the old "traditional" discount. If they are shortening the discount, and getting back closer to the "old days" it will effect all dealers the same and you will simply see smaller discounts off the retail prices.
The future of this hobby is manufacturers selling direct to dealers and direct to customers - NO middle men - the distributors are dead, a few of them just don't know it yet. And shops that rely on distributors will have to get bigger or go home.
ATLANTIC CENTRAL The future of this hobby is manufacturers selling direct to dealers and direct to customers - NO middle men - the distributors are dead, a few of them just don't know it yet. And shops that rely on distributors will have to get bigger or go home.
And its not just hobbies seeing that. Movies/TV shows, music, video games, and eventually all printed media have converted to formats that lend themselves to direct to customer sales. The only thing you need a middleman for (and you don't NEED it anyhow) are things like exposure to potential customers and format controls.
I can completely envision a time when major bands/recording artists never release a physical album. And, after that, never need a label either.
NittanyLion IRONROOSTER: I think my favorite was Arlington Hobby Crafters when it was next to Parkington Shopping Center on Glebe Rd (this is in northern virginia) . Heck, Parkington Shopping Center isn't even there any more. Isn't that where Kettler Iceplex is now?
IRONROOSTER: I think my favorite was Arlington Hobby Crafters when it was next to Parkington Shopping Center on Glebe Rd (this is in northern virginia) .
Pretty much. At the time they occupied a small house that fronted on Glebe Rd. a little way along the block from Randolph towards Wilson. The house/shop was torn down when they rebuilt the shopping center.
Ever since I have lived down here.--.about 37 years now.--.Tucson has had problems keeping hobby shops in business. I don't know what it is but I sometimes get a feeling that residents there have somewhat of a ho-hum attitude as to whether they have a hobby shop available or not.
When I used to be a more frequent visitor to Roy's Train World in Mesa I would frequently encounter people in there whom I knew as residents of Tucson; whether they had come up specifically to visit that hobby shop or whether they were on other business I have no wey of telling. As I said there seemed to be a somewhat lacadaisical attitude about giving support to hobby shops in Tucson.
I have had occasions to visit various hobby shops there over the years. About 20 years ago there was one that had fantastic bargains and terrific inventory and on one singular occasions I spent $300+ in there following a division meet; next year I had another $300+ to spend but sadly it was gone.
From the far, far reaches of the wild, wild west I am: rtpoteet
R. T. POTEET Ever since I have lived down here.--.about 37 years now.--.Tucson has had problems keeping hobby shops in business. I don't know what it is but I sometimes get a feeling that residents there have somewhat of a ho-hum attitude as to whether they have a hobby shop available or not. When I used to be a more frequent visitor to Roy's Train World in Mesa I would frequently encounter people in there whom I knew as residents of Tucson; whether they had come up specifically to visit that hobby shop or whether they were on other business I have no wey of telling. As I said there seemed to be a somewhat lacadaisical attitude about giving support to hobby shops in Tucson. I have had occasions to visit various hobby shops there over the years. About 20 years ago there was one that had fantastic bargains and terrific inventory and on one singular occasions I spent $300+ in there following a division meet; next year I had another $300+ to spend but sadly it was gone.
You answered your own question as to why that shop was gone the next year - "fantastic bargins", but likely he was not buying at a good enough price to be selling at those low prices.
Even the retail giants NEED to make 30% - that is if they sell you something for $100, their cost better not be any more than $70 or they are loosing money after operating expenses.
Small businesses generally need even more - 40% is considered the benchmark number for success and profit.
No disrespect to other opinions but I love my HS in RI. It is a 30 minute drive one way and there are no discounts. But the owner knows what I model, makes recommendations, and has offered valuable advice. I also enjoy bumping into other modelers there. I'm not wealthy by any stretch but I have no problem with the time it takes, gas it costs and a few bucks extra I may pay by going there. My humble $.02. Long live the HS! (I hope).
PJ
PJ,
A nice hobby shop can be a pleasure to go in and brouse. I don't want folks to think I don't enjoy going and looking for nice things to buy. For me it does make a difference if items are discounted, at least some. I don't expect hobby shops to discount 30% like online dealers but 10 or 15 will get them a sale if they have something I would like to take home that day. I also enjoy chatting and talking trains as much as the next person.
Another non-economic reason for the decline of hobby shops may be that he shop owners are getting old and retiring. Just as there aren't a lot of young people entering the hobby, there aren't a lot of young people refilling to enter the business.
GP-9_Man11786 Another non-economic reason for the decline of hobby shops may be that he shop owners are getting old and retiring. Just as there aren't a lot of young people entering the hobby, there aren't a lot of young people refilling to enter the business.
That is very true about the age of most of the shop owners I have visited. The bottom line is the LHS business in most cases cannot be sold since the P&L statements do not measure up to what a bank would finance. We all want a bargain and we tend to shop for most of the big ticket items on line since discounts are always attractive to our budget. The other situation for items like brass models is they are so expensive only a few very large hobby shops stock them today. That was not the case in 1970. I used to find nice brass models at small shops in my business travels. The LHS can only dream of a day now when they might have some new model in stock made of brass. Food is a necessity, but model trains are fun and a hobby.
That is very true about the age of most of the shop owners I have visited. The bottom line is the LHS business in most cases cannot be sold since the P&L statements do not measure up to what a bank would finance. We all want a bargain and we tend to shop for most of the big ticket items on line since discounts are always attractive to our budget.
The other situation for items like brass models is they are so expensive only a few very large hobby shops stock them today. That was not the case in 1970. I used to find nice brass models at small shops in my business travels. The LHS can only dream of a day now when they might have some new model in stock made of brass.
Food is a necessity, but model trains are fun and a hobby.
As I often said when we hear about a shop closing 99% of the time the reason is not given.
As you know hobby shops close for many reasons from failing health to retirement from family sickness to a divorce settlement from the lost of customers to lost of store lease.
So,it may not be the sky is falling doom and gloom we often read about.
I do suspect the younger hobby shop owners will have a walk in and Internet presence..
I believe that's what happened to Woodcraft Hobby in Minneapolis, "the old reliable on Lake and Bryant". It was started in the 1930's by Claude Newman, his son Paul took over in the 1970's. As I recall his kids weren't interested in carrying on the store and he didn't get any good offers from anyone interested in taking over the shop, so they just closed it.
With reference to the various comments that not all closings are because of poor profits.
Very true, but it is one thing to keep a well established business going.......
It is quite another to leverage your house and retirement account, rent a space, borrow a pile of money from the bank and start a new hobby shop (or as John suggests "Fine Train Store") and hope to do well based on the math and business facts I presented earlier.
And, if someone does "take over" an exisiting shop, that usually means the new owner has debt that the established owner did not - that changes the picture considerably.
And yes, many small family owned businesses (of all types) simply get closed when the owner wants to retire and no one in the family wants to take it over. OR, sometimes, just like an outsider, the resources are simply not there for a family member to take it over.
So, if any of you have about 40 million you would like to invest (or 40 of you with a milliion each), I have this plan to open the most complete, well stocked, customer friendly train store ever - with great discount prices, an on site repair shop, DCC decoder installs, custom kit building, layout clinics, several in shop display layouts, and free space for a local club the shop would sponser.
It would also have a mega web site with real time inventory and uber fast shipping - worldwide. All the sales girls on the phones would be from the South, so that none of them would seem rude or in a hurry.
Somewhere here in the Baltimore/Washington suburbs, because the Mid Atlantic does seem to one of the model railroad meccas, we would purchase outright a shopping center with an empty grocery store for our location. The rest of the shops in the center would be carefully selected to keep the kids and wife busy while we are shopping for trains. And those rents would help provide additional capital for the train shop.
If you think this sounds crazy, it was actually talked about with a group of investors back in the mid 80's (except of course for the web site part - would have been simple mail order).
And if we do it right, we might show a profit in 5 years, and be able to take the 40 million back out with interest in 15 more.
Who's in? I'm ready to to be the general manager?
Any thoughts on the framework of this MRR business? Its seems to be quite successful.
http://www.pacific-western-rail.com/archive/dyn.What_We_Do.php
BATMAN Sheldon Any thoughts on the framework of this MRR business? Its seems to be quite successful. http://www.pacific-western-rail.com/archive/dyn.What_We_Do.php Brent
Sure, they have low overhead - no retail rent.
Fast product turnover by virtue of targeting a specific market and custom sourcing product for that market.
Low return on investment expectations from their fellow model railroader investors.
It's a winning formula - for the limited market and products they supply.
The one HO item that came up on that web site is of no interest to me? - CORRECTION - the web site link do not work correctly the first time - I'm checking it out furture.
I would likely never be a customer.
ATLANTIC CENTRAL BATMAN: Sheldon Any thoughts on the framework of this MRR business? Its seems to be quite successful. http://www.pacific-western-rail.com/archive/dyn.What_We_Do.php Brent Sure, they have low overhead - no retail rent. Fast product turnover by virtue of targeting a specific market and custom sourcing product for that market. Low return on investment expectations from their fellow model railroader investors. It's a winning formula - for the limited market and products they supply. The one HO item that came up on that web site is of no interest to me? - CORRECTION - the web site link do not work correctly the first time - I'm checking it out furture. I would likely never be a customer. Sheldon
BATMAN: Sheldon Any thoughts on the framework of this MRR business? Its seems to be quite successful. http://www.pacific-western-rail.com/archive/dyn.What_We_Do.php Brent
Brent, Once I finally got the web site to work somewhat, I checked the "instock" list of several brands I buy frequently, and found mostly "sold out" listings.
They seem to be mainly a new release and special order mail order house - nothing new there, the web is full of them.
As I said before the only "service" I want from a train store is INVENTORY and good pricing.
When I got into the HO scale side of the hobby over 8 years ago, there were three LHS within 20 minutes of my home.
They were owned and run and staffed by nice guys. They were extremely knowledgeable and shared their expertise. They universally discounted all merchandise 20 percent. They were well stocked and quickly ordered what you wanted if they didn't have it in stock. Without these three LHS, i wouldn't be in the hobby today. They taught me everything I knew.
One thing did them all in - - - the Internet. They could not compete with the pricing, instant availability, free shipping, no sales tax, whatever. They couldn't afford to renew their leases and still make a meager profit. So, they closed up shop. It is that simple.
Rich
Alton Junction
ATLANTIC CENTRAL Low return on investment expectations from their fellow model railroader investors. It's a winning formula - for the limited market and products they supply. Sheldon
Low return on investment expectations from their fellow model railroader investors. It's a winning formula - for the limited market and products they supply. Sheldon
I would sure like to no what the ROI is.
They have a good size staff and have been around for quite awhile, so they must be doing something right.
richhotrain When I got into the HO scale side of the hobby over 8 years ago, there were three LHS within 20 minutes of my home. They were owned and run and staffed by nice guys. They were extremely knowledgeable and shared their expertise. They universally discounted all merchandise 20 percent. They were well stocked and quickly ordered what you wanted if they didn't have it in stock. Without these three LHS, i wouldn't be in the hobby today. They taught me everything I knew. One thing did them all in - - - the Internet. They could not compete with the pricing, instant availability, free shipping, no sales tax, whatever. They couldn't afford to renew their leases and still make a meager profit. So, they closed up shop. It is that simple. Rich
And as I have explained repeatedly, if they were buying from distributors and selling at 20% they were already on the edge of not making money - the 35% to 40% off guys just put the final nails in the coffin.
Well after seeing this topic come up again I just had to add my two cents, Folks this is officially no longer a dead horse. It is now a gelatinous goo all over the ground. Hobby shops come and go. some because of their own fault, some because of other circumstances. either way there is not much that we can do except support those that are still around by means of the occasional purchase. Keep it on the high shiny stuff. Neil
I'm still waiting for the private meassages from the 40 of you who want to help me open the mega store?
ATLANTIC CENTRALI'm still waiting for the private messages from the 40 of you who want to help me open the mega store? Sheldon
The lack of private messages are probably due to too many of us having seen way too many LHS's close down and well, you could say anyone with their eye's open probably just doesn't want to go down that road (ie starting up a model train shop of any size, small or mega!) It's kinda like following a pack of lemmings off a cliff! I think I'll just stand on the side lines and watch the show.
Neil,
It's gelatinous goo not because people people keep getting some new revelation at 3am in the morning about why hobby shops fail, just because they couldn't sleep. My tupence about this that we modelers are made up of a demographic of mostly grumpy old men who love to go on like a bunch of hens, and need to vent regularly, perhaps due to boredom! =P
ATLANTIC CENTRAL I'm still waiting for the private meassages from the 40 of you who want to help me open the mega store? Sheldon
Sheldon, I am ready to kick in my million, but I have two concerns:
1. Given your DC bias, I think that DCC users will avoid your mega store.
2. You have to agree not to stock Spectrum Light Mountains.
richhotrain ATLANTIC CENTRAL: I'm still waiting for the private meassages from the 40 of you who want to help me open the mega store? Sheldon Sheldon, I am ready to kick in my million, but I have two concerns: 1. Given your DC bias, I think that DCC users will avoid your mega store. 2. You have to agree not to stock Spectrum Light Mountains. Rich
ATLANTIC CENTRAL: I'm still waiting for the private meassages from the 40 of you who want to help me open the mega store? Sheldon
Don't worry Rich, there would be plenty of DCC, on site while you wait decoder installs, a big stock of BOTH DCC and DC locos. And all brands would be as well represented as the supply chain would allow.
And there would be DC throttles, direct radio, all of it!
In a past life I sold MATCO TOOLS, the secret to success was having what people wanted when they wanted it.
As for Bachmann, we would have lots of it, and at good prices. And hopefully when you had a problem with anything, we woud have replacement in stock to just swap yours out right away.
I am in for $500,000 Sheldon. I was going to by a new 50' C & C Sailboat but it is rediculous what they are charging for these things now! I've just decided its time to hold back.
richhotrainWhen I got into the HO scale side of the hobby over 8 years ago, there were three LHS within 20 minutes of my home. They were owned and run and staffed by nice guys. They were extremely knowledgeable and shared their expertise. They universally discounted all merchandise 20 percent. They were well stocked and quickly ordered what you wanted if they didn't have it in stock. Without these three LHS, i wouldn't be in the hobby today. They taught me everything I knew. One thing did them all in - - - the Internet. They could not compete with the pricing, instant availability, free shipping, no sales tax, whatever. They couldn't afford to renew their leases and still make a meager profit. So, they closed up shop. It is that simple. Rich
What they needed was some TARP money..........either that or a loan from Bain Capital.
Reading thru this by accident and see sooo much utter nonsense and hypcrits on nearly every post.
U want discounts, u want this, u want that, wont prepay for orders so u rather order prepay online instead??, and noooo internet sales and overseas sales n ebay cant possibly be the cause of ur shops closing or in general many different types of shops closing down or business indirectly effected shutting shop. its all a tangled web but yes, dodging the retail side effects down to the local builder n mechanic n plumber.
Its u the customers avoiding the shops for a few bucks savings. Ok sometimes big savings. But for good reason, shops have costs, product obligations, employ people, pass the money around etc. U dodge it, u send it direct overseas. It dont come back.
Just listen to yourselves.
unfortunately the western world follows America, Us in Australia have taken on this same mentality and are now seeing the death of traditional retail.
We are our own worst enemies and refuse to see or acknowledge the results of the doom of our own economy and employment and business etc until it is all gone. ie.. I'm right mate. So the save myself $50 by buying on-line is good enough for me. Bugger the shop. Which is the supply chain.
So everything slows down and grinds to a halt and the money go round ceases.
Only the money all ended up overseas.
Sounds like the current state of the economy in America, Europe, Australia. ie. the western world's mentality. Tho Germany, god bless them, has a policy in customs of delaying all incoming air parcelpost by up to 4 weeks, its working, their small business and general economy is thriving. The general customer isnt prepared to wait 4 weeks for a prepaid item. Their small business and larger ect r doing quite nicely. Cant say the same for any other country in the western world.
So think before u buy from online sites. U r damaging ur neighbours and ur own employment prospects, sometimes even if its from inside ur own country.
Lee Mazengarb Its u the customers avoiding the shops for a few bucks savings. Ok sometimes big savings. But for good reason, shops have costs, product obligations, employ people, pass the money around etc. U dodge it, u send it direct overseas. It dont come back. ....are now seeing the death of traditional retail. .....So think before u buy from online sites. U r damaging ur neighbours and ur own employment prospects, sometimes even if its from inside ur own country.
....are now seeing the death of traditional retail.
.....So think before u buy from online sites. U r damaging ur neighbours and ur own employment prospects, sometimes even if its from inside ur own country.
What rubbish. Urging folks to change their model railroad purchasing behavior because it's for the general good is like trying to convince people to pay more for gas at full serve gas station (are there any left where not mandated by law?) or pay full retail for their cars - all in the name of the greater "good".
Human behavior is what it is. Ranting in the forums doesn't change it. The traditional hobby shop business model had a good run - from the '50s to the '90s.
But mail order became on-line ordering, and has become more and more convenient, while saving money on your purchases. To be able to survive at a higher price point (required due to higher fixed costs), the hobby shop has to offer something more than a higher-priced alternative to buy the same merchandise.
Sheldon and others hit it on the head. To thrive, the hobby shop must be more convenient than the competition. That means having what I want in stock when I walk in the door. I can see it and touch it - which leads to desire and purchase. Offers to "order" what I want are useless - seldom are the hobby shop's ordering procedures as convenient as the on-line store. And have a location reasonably convenient to a sufficient-sized customer base. And have a knowledgeable staff that can answer my questions accurately, without making up stupidity.
A shop I used to visit in San Diego would open the box on most cars and car kits, and then seal the open box with plastic. Then I could see what I was buying, no guessing, and no having to request to open the box.
Another possibility to enhance hobby shop appeal is "exclusive" deals with manufacturers. Partner with the manufacturers to sell their merchandise only in selected hobby shops. Horizon did this for a while with their dealers - you had to demonstrate a real brick-and-mortar presence to buy Athearn/Genesis/Roundhouse stock from them. I'm not sure if this is still the case, but it cut down on the number of basement Internet sites selling Horizon merchandise. Blackstone apparently controls who can order their proucts, too. This takes patience from the importer because he can't flood the supply chain with a fire-sale of his entire shipment from China.
One of the problems with exclusivity is that plastic locomotives - especially diesels - are on their way to becoming a commodity. There is little to differentiate between one importer's Chinese model and another's besides paint scheme and sometimes prototype.
Retailers have to spend a lot more time chasing manufacturers than in the days of ordering through distributors. They also have to tie up a lot more money in inventory than in the days of only a handful of mass producing manufacturers who introduced maybe one new model a year. This makes the hobby shop model a lot riskier - you simply have to have some kind of edge over the on-line competition.
An example of how to survive and thrive is running a lumber yard or hardware store in this age of Home Depot and Lowe's. It can be done, but your customers have to have a reason to choose you over the big box. And HD and Lowe's will still retain a lot of potential customers just because it will take a knowledgeable customer to recognize what you offer over the big box.
just my thoughts
Fred W
The other day I recieved the following Email from Blue Ridge Hobbies, which is about 40 minutes from where I live.
"First of all let me say thank's to everyone for their support of Blue Ridge Hobbies. As some of you may know, the model railroading hobby is in a bit of a quandary at this time. With the slowing of the economy starting in 2008, our hobby has taken some hits.The closure for several model railroad factories in China has led to supply shortages and delays in product releases. The workers in China are realizing that they have been under paid as well and that capitalism seems to be a better way. Oil prices have effected the hobby as well. From increased product production costs and fuel costs for both the consumer and the shipping. Also, due to changes in credit card and banking laws the fees to process credit card transactions have gone up as well in November. All of this leading to higher prices for product. The manufacturers continue to upgrade their tooling to make a better product. Unfortunately, with the above-mentioned situations, this means higher prices on the hobby products we all buy. I think all of us have reached the breaking point on pricing. BRH has done all we can to hold the line on pricing. We have had to make adjustments to our pricing to cover these increases to keep our bottom line close to the same. These areas of concern are not only affecting Blue Ridge Hobbies, but most store front based hobby stores. Many have already closed and some are on the verge of closing. This is currently not the case with Blue Ridge Hobbies at this time. The business model that made BRH the success that it is has to change. And here is way.The first indication that the business model for the overall hobby industry was about to change came in November 2011 when Horizon Hobby (Athearn, McHenry and Roundhouse) started the Horizon Hobby Trains website. This site allowed them to sell direct to the consumer with a 10% discount. BRH still was beating this pricing, but many local hobby stores that discounted 10% no had more online competition. Not from other hobby stores, but from the manufacturer itself! Some stores have already closed because of this direct to consumer tactic. While I understand why they are doing this for their bottom line, is it good for the hobby in the long run? I do not think so. All hobbies need to have a local store for you the consumer to visit and see new product or get expert advice from. This in most cases, can not be done over the phone. However, it seems that the manufacturers and wholesalers seem to think they can do this. Also, the dealer website for Horizon was not functioning properly for a month effecting our ability to update.Modeling is a hands on hobby, not a virtual one. This seems to be lost on the manufacturers and wholesalers as they are bringing sales all in house. Also, in the last 5 years or so Walthers and Horizon Hobby have been selling via the of Amazon and Next Tag online for example. This new approach to the hobby industry in not a good one for all of us. In December, Walthers in conjunction with several other large volume dealers that included BRH, started Beta Testing a new online system for the dealers. This system has helped BRH to have a better handle on product availability on our BRH website. This has greatly increased our productivity and assists us in keeping costs down. The next big indicator of things to coming down the pike was in January. Several of the top Walthers dealers, including Blue Ridge Hobbies where asked about a change in pricing for the 932 and new 910 product line. The MSRP was going to increase by 10% to cover the production costs and upgrades to the products. This all happened in March. But what was not included in the conversation was the reduction of the dealer discount by 10% as well. So Walthers is trying to make another perceived 20% more on the new items, not just hold the line on pricing! Then, in April Exact Rail decided that they where going to sell direct to the consumer. At full price plus shipping. So they now will not sell to dealers or wholesalers like Walthers. Also, Aristo-Craft / Polk Hobby started a new site that offered manufacturer direct pricing to the consumer at what used to be the dealer discount and then offered the dealer another 10% off. This does not really help the overall bottom line to the dealer or our sales of Aristo Craft items. Yesterday, Horizon Hobby advised all dealers that they where reducing the dealer discount another 5% on all Athearn, McHenry and Roundhouse items. Some pricing took immediate effect yesterday.So the bottom line we feel is that the manufacturers want to maximize short term profit by bringing the product availability process in house and selling direct to you, leaving the dealers that can not absorb the increases, out in the cold if not out of business entirely. And the lack of product availability leaves a store front with nothing to sell at any price. Like the currently situation with Atlas track and Midwest cork. Even with the price increases, some products are announced and are continually delayed in arriving. There is no immediate relief in site for the product availability to change. In most cases the delays are blamed on China production problems. Our solution! Bring the manufacturing home! Back to the USA. Some companies are doing this. Two years ago I mentioned this to the CEO and his number two for one of the biggest manufacturers of model train products. They advised me to do so there where to many cost issues. Union and wage cost. They advised they like to pay production employees a starting wage of about $12.00 per hour. I advised him that is the going wage here in South Carolina. Come on down, we have plenty of capacity and factory space with many incentives. That was 2010. Look where we are today. Closed factories in China. The Chinese not returning the product production mold to the manufacturers. Thus, we have one of the slowest slows period the industry has seen in a long time." The email locks a lot of interesting points and also kind of lets us see things from the shop owner's point of view.
To me, this is a perfectly natural evolution in capitalism. Production becomes more costly in natural cycles due to combinations of factors. In PRC, they know they have the big engines and the low wages. They also possess much of the infrastructure that is ready for production, and that includes the tooling. Remember that '...possession is nine points of the Law." Look what happened to Broadway Limited Imports when MTH settled with the Korean manufacturer; they lost access to the tooling for the Big Boy, the GG1, the J Class, and other money-makers. Here we read that the Chinese are also withholding the tooling. And, this when the wage demands are rising and the skilled labour is able to work almost anywhere it wants. As replacements, itinerant/rural unskilled unemployed people take up the less 'importan't and lucrative assembly tasks. They can go on for quite a while tapping that vast resource...maybe another forty or fifty years.
The Chinese had better watch their step, though. If they develop a reputation of underhanded business practices, they will be the authors of their own demise as a competitive manufacturing region. Other regions are actively and aggressively courting the manufacturers and importers.
selectorThe Chinese had better watch their step, though. If they develop a reputation of underhanded business practices, Crandell
There is no " If ", its been a fact for years, the stories I could bore you with their underhanded tactics.
Business is aware of this, they still have to factor where is their breaking point before they say goodbye and look elsewhere.
"The true sign of intelligence is not knowledge but imagination."-Albert Einstein
http://gearedsteam.blogspot.com/
Lee Mazengarb Tho Germany, god bless them, has a policy in customs of delaying all incoming air parcelpost by up to 4 weeks, its working, their small business and general economy is thriving. The general customer isnt prepared to wait 4 weeks for a prepaid item. Their small business and larger ect r doing quite nicely. Cant say the same for any other country in the western world.
Tho Germany, god bless them, has a policy in customs of delaying all incoming air parcelpost by up to 4 weeks, its working, their small business and general economy is thriving. The general customer isnt prepared to wait 4 weeks for a prepaid item. Their small business and larger ect r doing quite nicely. Cant say the same for any other country in the western world.
There's no mechanism to actually do something like this in the US, unless you want to break the economy.
And by break I mean completely destroy.
I've read some things upstream that touched on economic theories, which is dangerous. I'll just say, pure free-capitalist theory is made with the assumption that every participant is practicing capitalism equally. It doesn't translate as well when capitalists try to trade freely with noncapitalists who centrally manage or manipulate their economies. China will not so freely send back the tooling we developed for them, just because labor wages are equalizing.
Pure capitalist theory suggests that labor will ultimately flow to where the demand is. So if producers are cutting out the middle man and shipping directly to the buyer, then they must be expanding their shipping departments and order-taking departments. So....the displaced LHS owner and employee gets a job in Exactrail's, Horizon's, or Bachmann's mailing department. Of course, where the theory fall's short is that those jobs are now in China, not in the next US town or State down the road. Not to mention they will have to compete with the people, say, in California who used to make Athearn's and still don't have a similar job. Understand why experts are predicting a permanently higher unemployment rate?
Maybe displaced hobby workers can all compete at getting an order-taking job to work with those nice ladies at Trainworld, or at MB Klein; or a job as a website maintainer, or a UPS driver delivering trains to doorsteps.
- Douglas
On the customer service end of things it doesnt help to encourage repeat patronage when the LHS owner angrily yells at you for mearly offering an alternate method of doing something, which years ago happened to me quite unexpectedly, my responce was simply to say "Ya know, your right" and got out of there as quick as I could, and I've never returned. Sadly I've since determined that this was not isolated to this shop and happened to alot of other people across the country.
Have fun with your trains
Hobby shops don't fail because production is in China or because of the Chinese business practices and state support. That's all part of the cost of production. When China is no longer the low cost option, production will shift to where it is.
Hobby shops fail because marketing in changing. Even if the goods are made in the U.S. (or Vietnam or Germany or wherever) it won't matter. The Internet enables direct sales and low cost retail operations. Distributors are no longer needed and small store front operations are no longer profitable (with some uncommon exceptions). The only small retail operation that seems to work is the train show vendors although their numbers seem to be down as well. Even large well stocked store fronts seem to need an Internet operation with discounts to survive.
I don´t know on what basis Lee Mazengarb developed his opinion that German Customs authorities have a policy of delaying clearance of incoming goods. This is simply incorrect. I have ordered model railroading supplies from the US and Japan, and it usually takes less than three days to clear customs. In any case, such a policy would not affect buying habits and thus would be useless.
I think there is no single reason why hobby shops fail, but a whole bundle. Bargain hunting may be one of them, but the extreme variety of available materials and the credit crunch may be others. No mom & pop store is able to keep stocks of the entire range of products available in the market, tying up working capital which cannot be financed through banks and repaid by sufficient margins. Why order through the LHS if you can do it yourself?
Sir Madog I don´t know on what basis Lee Mazengarb developed his opinion that German Customs authorities have a policy of delaying clearance of incoming goods.
I don´t know on what basis Lee Mazengarb developed his opinion that German Customs authorities have a policy of delaying clearance of incoming goods.
I wouldn't take seriously anything that "Lee Mazengarb" had to say in his rant.
It is not the first time that someone joined the forum just to put down one or more of our fellow members only to disappear and never be heard from again. This type of person is undoubtedly not even a model railroader.
My understanding is that first time posts are moderated by the forum administrators. I was disappointed that this post, replete with tons of misspelled words and improper grammar, was permitted to be posted.
All business is failing. U undercut and bypass the supply chain.
U cannot do business competing against ur manufacturer.
As I said earlier, today another company closed due to incoming competition.
These were steel workers.
Actually another also announced off shoring 1/4 of its workers as well.(radio station)
Retail is near dead.
They promptly have united with other similar companies and have all
gone on strike...eureka..more of an example why it is being done then an action to stop it.
ie. their products were being undercut from overseas. Internet has drawn us all
nice n tight and we are not on the same even playing field when it comes to
doing business. We in the western world have decades of laziness and unionism etc
that has driven our economies to be uncompetitive with an eastern asian country.
public liability, product standards, property prices and rents, Employee entitlements, wages, electricity,
list is endless.
All jobs, all industries can and are being effected by undercutting the supply chain and
the factories selling direct vie the net to the customer.
Its really really simple. U make ur bed, u lie in it. The web stores dont even need the stock to
sell it. They could just go down the road to the factories and collect ur order nice and fresh.
I know at least 1 wholesaler who I have ordered both air and sea freight quantities through that
does just this.
only option is for manufacturing to come back to ur country if u cannot stop the direct sales
from the overseas factories. having said this, u need wages n other business costs to come down.
At least in the US, a lot of things have been coming down in price. Especially realestate.
In Australia, we r doomed as far as getting manufacturing restarted. Unions are way way
too strong. And they still keep coming up with more touchy feely entitlements like husband
maternity leave as well as wife maternity leave. Oh n personal favourite is sick leave and
long service leave for casual workers. And realestate is just out of control, despite Australia
being so well empty.
Cheers.
Lee.
ps. Just my rant, sorry to raise too many hairs.
IMHO it all comes down to the times are changing. If you can order direct from the mfg why would you go to a LHS?
There are actually quite a few reasons for LHS's to fail anymore. Local business taxes in downtown core areas are one. Another is the credit crunch. I used to have up to 4 CC's at one time...having paid them off I took myself down to one. And it is only used for emergencies now. There really are a lot of reasons...not one reason stands out.
I'm still looking for the 40 investors for the mega store. If the store and internet site goes well, we could branch out into manufacturing our own products right here in the USA.
I still say that a store could (and some do) just fine with good prices and good inventory.
Trainworld seems to be doing just fine with two stores and a web site.
MB Klein/Model Train Stuff actually expanded the size of their new retail space after moving out of downtown. They seem to be doing fine after getting over a few mis steps right after their move.
Star Hobby in Annapolis MD seems to do well. They do not even push web/mailorder but will of course ship you stuff if you call them up. Their main thing is a great inventory of specific product lines and they attend all the regional shows here in the east. They have great prices on nearly everything, especially Bachmann and have a ton of Bachmann and Bachmann Spectrum in stock all the time.
It has become too easy for customers to shop price, so that is the first part of the equation - brick and mortar or mail order - you need to buy direct from the manufacturer to be able to sell at the low price while still making a decent margin.
After that, own your building so rent does not eat you up. You need a good location but you don't need a great one - keep the real estate costs down.
INVENTORY - dispite all the current trends, you cannot sell what you don't have, buy it up, organize it well, let people know you have it ALL!
But what do I know, I have only been around this hobby business for 45 years now.
ATLANTIC CENTRAL I'm still looking for the 40 investors for the mega store.
I'm still looking for the 40 investors for the mega store.
CORRECTION:
You are only looking for 38 investors. Me and Ken Cuda already stepped up with our million apiece.
Lee Mazengarb,
out of consideration for forum members, whose native language is not English, may I ask you to use proper English in your posts? I find it quite difficult to actually capture what you intend to express.
Sheldon,
you can take my name down on the list of investors. Will a deposit of Greek Drachmas be fine?
Sir Madog Sheldon, you can take my name down on the list of investors. Will a deposit of Greek Drachmas be fine?
Ulrich,
Speaking on behalf of Sheldon, we accept your kind offer. Greek drachmas can be used as payment for purchases so long as such purchases are restricted to DC ONLY equipment.
mmmmm...weeellll...we be still working out bugs here
As for Lee....I'm still unpacking the first sentence's meaning....
ATLANTIC CENTRALMB Klein/Model Train Stuff actually expanded the size of their new retail space after moving out of downtown. They seem to be doing fine after getting over a few mis steps right after their move.
Really? The one time I made it to the new store, they were just closing for the day, so I didn't get any further than the door (which they were locking), but from what I've heard the retail space is tiny. They've greatly expanded their online presence (and very well, I might add), but based on reports from others, the vast majority of their new location is warehouse.
IRONROOSTER Hobby shops don't fail because production is in China or because of the Chinese business practices and state support. That's all part of the cost of production. When China is no longer the low cost option, production will shift to where it is.
The China issue is slightly OT, but not entirely,: Laws that prevent a producer from moving its production assets to another country to take advantage of lower labor costs increase the cost of production. The only other option is for the producer to build a new set of tooling. I doubt that Athearn would want to build two sets of new Genesis GP38-2's tooling, only to leave one in China to compete with them if they decide to move production. They will more likely work with Chinese officials to try to keep labor costs down as much as possible. That level will be higher than if China truely traded freely and allowed companies to move jobs elsewhere. Athearn would have to make a strategic decision to accept higher costs, and pass them on, or build new tooling and leave the original in China.
That inflated cost of production squeezes the distributors to the point to where they cannot support the standard of living they are accustomed to, which is what we're really talking about. The LHS is a distributor. In theory, they can continue to get jobs in the distribution chain, but it will be with the companies that ran them out of business, in the types of jobs that ran them out of business1.e: mail order packaging departments of the manufacturer, mail truck driver, and website maintainer. At least some of those jobs remain in America and would be available.
This problem has been brewing for 20 years., and in many different industries. For something like autos, the Japanese, Germans, and Koreans located plants here in America, so displaced GM workers can get jobs building Honda's. BMW's, and Hyudai's. We'll see how the Chinese behave.
The hobby shops that I know of, that have a lot of inventory, don't seem to sell the new stuff. They sell it 7-10 years later, when market prices finally increase enough on the new stuff to allow MSRP on the NOS to seem reasonable. 7 years is a long time, in terms of overhead costs, to hold inventory.
And...as for as an LHS offering advice and expertise.,well, the Internet has taken that advantage away too. Thanks to forums, youtube, and websites that share knowledge, we have many more options for researching items other than asking my one expert down at the LHS.
One sided free trade policies and free internet advice is why hobby shops fail. But if that's good for the hobbyist consumer, does it really matter?
Doughless IRONROOSTER: Hobby shops don't fail because production is in China or because of the Chinese business practices and state support. That's all part of the cost of production. When China is no longer the low cost option, production will shift to where it is. The China issue is slightly OT, but not entirely,: Laws that prevent a producer from moving its production assets to another country to take advantage of lower labor costs increase the cost of production. The only other option is for the producer to build a new set of tooling. I doubt that Athearn would want to build two sets of new Genesis GP38-2's tooling, only to leave one in China to compete with them if they decide to move production. They will more likely work with Chinese officials to try to keep labor costs down as much as possible. That level will be higher than if China truely traded freely and allowed companies to move jobs elsewhere. Athearn would have to make a strategic decision to accept higher costs, and pass them on, or build new tooling and leave the original in China. ....
IRONROOSTER: Hobby shops don't fail because production is in China or because of the Chinese business practices and state support. That's all part of the cost of production. When China is no longer the low cost option, production will shift to where it is.
....
I don't disagree with what you are saying. But I see that as part of the cost of doing business with Chinese companies.
It may be that the business model needs to change and have the tooling in a more favorable place and use China (or others) for assembly, painting, and packaging. Adds to the cost, but then risk is a cost too.
Milepost 266.2 ATLANTIC CENTRAL: MB Klein/Model Train Stuff actually expanded the size of their new retail space after moving out of downtown. They seem to be doing fine after getting over a few mis steps right after their move. Really? The one time I made it to the new store, they were just closing for the day, so I didn't get any further than the door (which they were locking), but from what I've heard the retail space is tiny. They've greatly expanded their online presence (and very well, I might add), but based on reports from others, the vast majority of their new location is warehouse.
ATLANTIC CENTRAL: MB Klein/Model Train Stuff actually expanded the size of their new retail space after moving out of downtown. They seem to be doing fine after getting over a few mis steps right after their move.
Milepost, my one visit to the new store sort of mirrors what you say. As I recall the old store, the shelves were piled high with all the available items for sale. The new store seemed a lot less cluttered, but there did not seem to be the same depth of product on the shelves. As a matter of fact, they used to have tables at the Timonium show (apparently not any longer) and it seems to me that they brought more to that show than what I saw displayed on the shelves in the new store.
There did seem to be a couple of computer terminals at the back of the store with folks gathered around. I don't know exactly what these were for. I thought that maybe they were being used to check availability of items "in the back", but I'm probably wrong. Anyway, I found the visit disappointing.
IRONROOSTER Doughless: IRONROOSTER: Hobby shops don't fail because production is in China or because of the Chinese business practices and state support. That's all part of the cost of production. When China is no longer the low cost option, production will shift to where it is. The China issue is slightly OT, but not entirely,: Laws that prevent a producer from moving its production assets to another country to take advantage of lower labor costs increase the cost of production. The only other option is for the producer to build a new set of tooling. I doubt that Athearn would want to build two sets of new Genesis GP38-2's tooling, only to leave one in China to compete with them if they decide to move production. They will more likely work with Chinese officials to try to keep labor costs down as much as possible. That level will be higher than if China truely traded freely and allowed companies to move jobs elsewhere. Athearn would have to make a strategic decision to accept higher costs, and pass them on, or build new tooling and leave the original in China. .... I don't disagree with what you are saying. But I see that as part of the cost of doing business with Chinese companies. It may be that the business model needs to change and have the tooling in a more favorable place and use China (or others) for assembly, painting, and packaging. Adds to the cost, but then risk is a cost too. Paul
Doughless: IRONROOSTER: Hobby shops don't fail because production is in China or because of the Chinese business practices and state support. That's all part of the cost of production. When China is no longer the low cost option, production will shift to where it is. The China issue is slightly OT, but not entirely,: Laws that prevent a producer from moving its production assets to another country to take advantage of lower labor costs increase the cost of production. The only other option is for the producer to build a new set of tooling. I doubt that Athearn would want to build two sets of new Genesis GP38-2's tooling, only to leave one in China to compete with them if they decide to move production. They will more likely work with Chinese officials to try to keep labor costs down as much as possible. That level will be higher than if China truely traded freely and allowed companies to move jobs elsewhere. Athearn would have to make a strategic decision to accept higher costs, and pass them on, or build new tooling and leave the original in China. ....
Yes, I think we are agreeing, and the business model may need to change.
It is my understanding that many of the hobby producers share manufacuring facilities and rotate in their particular equipment for whatever batches they run. This is also why there are limited runs of newer models; company management has to allocate floor space and time to produce whatever level they think will sell, then move out for the next guy. If they guess wrong, they either lose money if they may too much product or lose the ability to make more money if they don't make enough. In order to eliminate the guesswork, they demand preorders which allow them to know exactly how long they need to occupy the space and how much labor they need to produce the designated run. If this is the way its done, then I doubt that the manufacturers take their equipment out of China during the time they rework paint schemes and road numbers to gear up for the next batch. I could be all wrong here.
The end result is that protectionists laws in China squeeze margins. Thin margins do not allow an abundance of middlemen distributors. Essentially, the wealth and income that LHS owners have enjoyed is being transferred to chinese nationals, elevating their standard of living.
Also, with the Internet, we have the ability to touch and feel the product at the LHS first, then use our mobile phones to see an exact copy all over the 'net and price shop 10 feet outside the LHS's doors. Its remarkeable that they all haven't failed. The survivors are apparently building warehouses to participate in the new distribution business model.
I don't know how long ago you were there, but when they first moved the retail space was small - maybe 60 x 60. And there were issues with the system by which walk in customers could buy products from the warehouse.
About a year ago, maybe more, they doubled the size of the retail space and fixed the problems with serving walk in customers.
It is true that less product is on display when compared to the old downtown store, but if you ask, someone will look it up and run in the back and get it for you to look out, and buy or not buy.
Now first off I have not read all the posts on this thread so if I missed this, I am sorry!!!!! But what most fail to relize is that hobby shops are closing for one reason more than any other, WE are changing!!!!! We used to know all our neighbors and would conjugate at various locations to communicate, this is fast disappearing. Ask yourself, do you know all your neighbors, unless you are in a rural location, most will say no!!!!!!!! We used to own a farm along with my moms other siblings, they used to know everyone in a 10 mile radius. Now the population is less than when she grew up and the children of a brother still runs the farm, some of their direct neighbors they no longer even know. My point is we used to go to the local hobby shop to talk as much as buy stuff and many times we got talked into buying stuff that we had no intention of as a reason for the trip. Business in general has become too short sited is a second reason, they think only of the bottom line today and not long term, another reason no one gets rich in the hobby shop trade, most successful people have at least a 10 year plan, look it up!!!!!!!!!!!!!!!
rrebell Now first off I have not read all the posts on this thread so if I missed this, I am sorry!!!!! But what most fail to relize is that hobby shops are closing for one reason more than any other, WE are changing!!!!! We used to know all our neighbors and would conjugate at various locations to communicate, this is fast disappearing. Ask yourself, do you know all your neighbors, unless you are in a rural location, most will say no!!!!!!!! We used to own a farm along with my moms other siblings, they used to know everyone in a 10 mile radius. Now the population is less than when she grew up and the children of a brother still runs the farm, some of their direct neighbors they no longer even know. My point is we used to go to the local hobby shop to talk as much as buy stuff and many times we got talked into buying stuff that we had no intention of as a reason for the trip. Business in general has become too short sited is a second reason, they think only of the bottom line today and not long term, another reason no one gets rich in the hobby shop trade, most successful people have at least a 10 year plan, look it up!!!!!!!!!!!!!!!
Indeed and if I may.
To be blunt LHS is indeed a dying thing since there's no money in it since you're depending on your customers disposable income.What young man with a family would gamble his family's future with a high interest small business loan knowing most small business close within 5 years?How you going to compete with the bigger on line shops,pay state and local taxes on everything in your shop's inventory and support your house hold bills,car payments,home mortgage,pay property and school taxes and save for the kids college while maintaining a store inventory that will keep your ever shrinking customer base returning??Once the old establish shop owners retire or pass there will be very few takers and some of those that do will fail.Most young men will want that $30-35,000 a year cubicle job instead.
Who can blame them?
I can't fault them for wanting to provide the best for their families.
The world seems to work in mysterious ways. A good way to look at the financial end of it is to look at it like physics. To every action there is a equal reaction somewhere else. The only trouble is when it comes to planetary finances the reaction is usually somewhat long in coming.
All countries have different tax rates. Some countries have different levels of Government that all want their pound of flesh. Be it income tax, corporate tax, property tax, water rates.....on and on. Then there are import duties, Tariffs etc.
When the leaders of the G8 meet, to decide the course the world will be set on, we all see the press pictures in the photo ops on TV and to most of us that is as far as it goes. One really has to go out of their way to be informed on why things are the way they are.
Canadians pour over the border to buy products in the United States. Why? Because all those made in China products are way cheaper in the U.S. than in Canada. Why? Because Canada puts big tariffs on Chinese imports to protect manufacturing jobs in Canada. The U.S. puts little or no tariffs on Chinese imports Why? I'll let anyone that's curious do their own research on it. The reasons are straight forward and completely understandable.
In the 1970s Canada decided to join the rest of the world and go to the metric system. All political parties unanimously voted in favour of it. However the outrage from the population was loud to say the least (people hate change) The Government quickly embarked on an educational campaign on the benefits of being on side with the rest of the world. The loss of export opportunities which translates into loss jobs and a loss of billions in revenue to the Government from not going metric was huge to say the least.
I was watching a PBS show that was following a Platoon of U.S. Marines in Afghanistan. The Briefing was all in metric, as in "we will go out 3 Kilometres before turning West etc. Later in the show they were pinned down and were calling in air strikes. Bering 240 degrees at 800 Metres from our position etc.
Nasa works in Metric. If you ever heard the telemetry when the shuttle was approaching the space station they say things like "closure rate 2 metres per second.
It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. The cost to business and thus country through loss of jobs of not being metric is staggering. The so called facts and figures are in many business magazines. But then maybe we shouldn't believe everything we read.
The United States is Canada's largest trading partner. We have a saying North of the Forty ninth that go's "when the United States catches a cold Canada gets Pneumonia" It is to the benefit of the entire planet to get the U.S. back on a stable footing.
Instead of China bashing for economic woes. As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering.
BATMAN .... It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. ....As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering. Brent
It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. ....As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering.
Because our units are much more intuitive.
Everyone understands how much a stone weighs, how tall a hand is, what a cubit is. Who would want to give up furlongs, chains, and fathoms for a metric system that is not intuitive. Leagues, rods, roods, etc. are what everyone understands.
Besides, how can you into a pub and order something other than a pint?
IRONROOSTER Besides, how can you into a pub and order something other than a pint? Paul
Once you go metric you will start ordering beer by the litre. How's that for incentive.
BATMAN Instead of China bashing for economic woes. As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering. Brent
I don't know if the entire post was a means to go OT and have the thread locked,but at least my posts were not meant as China bashing or for discussing general economic woes. I entered the thread when others started blathering about economic theories, thinking that policies, exchange rates, taxes, whatever, has anything to do with production costs or LHS's closing. Yes, those those issues impact the situation in the short term, but don't drive the situation.
Bottom line: whoever possesses the molds are the people who will produce the product and will drive the ability for everyone else involved to make a living. For just about any product, BTW.
For example, Model Power continues to sell, and I assume produce, building kits that were originally tooled in the 50's. Over the years, those kits were produced by, IHC, AHM, TYCO, Revell; and probably originated from european companies such as Faller, Kibri, or Heljan. Over the years, the names have changed but not the kits. Apparently, American companies were able to buy the molds from european companies, back and forth, from whoever had the most advantageous cost structure at the time. All of the economic theoretical garbage was irrelevant because through all of the noise, the molds kept cranking. Western Europe, Canada, US all had no real inhibitions to moving those assets from place to place if needed; aided by the policies of the various countries that allowed such a thing.
I'm hoping that Horizon Hobbies is not short sighted enough to locate the equipment for making state of the art designed GP38-2s in China, for they may have to keep it there for the next 30 years, and deal with whatever consequenses come with it. Apparently, higher retail prices that are having a real impact on sales being one of them, or else producers would not start a policy of officially eliminating LHS's from the distribution chain.
I'm assuming that Exactrail has officially eliminated the LHS from the distribution chain because they have concerns about the ability to relocate production equipment to a lower cost area. General economic issues like fluctuations in taxes, regulations, unions, healthcare costs, may in fact have little to do with it.
No skilled workforce anywhere else? Did Lifelike have an experienced skilled workforce in 1990 when they started the process of producing highly detailed products at low costs? Seems like that if wages are too high in China, move the equipment to Vietnem and build stuff there.
Possession is 9/10ths of the law, and you only really control the assets, not by holding title, but by having the physical ability to get the stuff back if the possessor doesn't want to give it up. Its all a very risky business model and extremely shortsighted, IMO.
"Blathering", huh?
Doughless BATMAN: Instead of China bashing for economic woes. As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering. Brent
BATMAN: Instead of China bashing for economic woes. As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering. Brent
The United States cannot go metric unless and until some government agency appropriates the funding and manhours to re-write over 300 years worth of property deeds, Legal Right-of-Way records, Road Docket records, and infrastructure plans that were prepared in English units to metric. Since they can't even find the money to fix our current infrastructure, re-writing the records is never going to happen.
Pennsylvania tried going as you say "all metric" during 1972 and again during the 1990's. Both times they reverted to English Units--the last time due in part to Legal issues regarding Right-of-Way Plans--plus the construction and right-of-way plans look hideous and are nearly impossible to prepare with dual units, English and Metric, all over the plans. I know; I have prepared them.
Also, no property owner wants to hear land areas in square hectares--in Pennsylvania--they will shoot at you--even today, when trying to negotiate Right-of-Way Claims just in English units. I have personally talked to PennDOT R/W negotiators who have been fired upon.
Instead, Pennsylvania has "soft converted" to metric so as not to discriminate against any contractor or supplier who chooses to build in metric. The statewide standard drawings used for federal and state funded highway construction all have both English and Metric units on them. These drawings are for bridge items, box culverts, rebars, precast concrete items, pipes, etc.--all standardized details are both English and metric units.
However, our actual final construction and R/W plans now only have one unit of measurement--English--but as I said, any contractor may follow the metric specifications for materials if he/she chooses.
John, a highway engineer.
The discussion of Hobby shops closing is a discussion of economics, as is discussion of product rights, patents, ownership of molds or whatever. All these threads seem to focus on the low wages paid in China, fair enough.
What are the things that can bring back manufacturing to countries like the U.S. and Canada? Lets talk about some of the other things that are causing our woe's, maybe things we can do something about. The metric question is a puzzle to me and I am asking for only opinions on the subject. It is a cost factor where importing and exporting are concerned. Unfortunately it can be a cost that's the difference between success or failure.
UP 4-12-2 Doughless: BATMAN: Instead of China bashing for economic woes. As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering. Brent The United States cannot go metric unless and until some government agency appropriates the funding and manhours to re-write over 300 years worth of property deeds, Legal Right-of-Way records, Road Docket records, and infrastructure plans that were prepared in English units to metric. Since they can't even find the money to fix our current infrastructure, re-writing the records is never going to happen. Pennsylvania tried going as you say "all metric" during 1972 and again during the 1990's. Both times they reverted to English Units--the last time due in part to Legal issues regarding Right-of-Way Plans--plus the construction and right-of-way plans look hideous and are nearly impossible to prepare with dual units, English and Metric, all over the plans. I know; I have prepared them. Also, no property owner wants to hear land acres in square hectares--in Pennsylvania--they will shoot at you--even today, when trying to negotiate Right-of-Way Claims just in English units. I have personally talked to PennDOT R/W negotiators who have been fired upon. Instead, Pennsylvania has "soft converted" to metric so as not to discriminate against any contractor or supplier who chooses to build in metric. The statewide standard drawings used for federal and state funded highway construction all have both English and Metric units on them. However, our actual final construction and R/W plans now only have one unit of measurement--English--but as I said, any contractor may follow the metric specifications for materials if he/she chooses. John, a highway engineer.
Doughless: BATMAN: Instead of China bashing for economic woes. As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering. Brent
Also, no property owner wants to hear land acres in square hectares--in Pennsylvania--they will shoot at you--even today, when trying to negotiate Right-of-Way Claims just in English units. I have personally talked to PennDOT R/W negotiators who have been fired upon.
Instead, Pennsylvania has "soft converted" to metric so as not to discriminate against any contractor or supplier who chooses to build in metric. The statewide standard drawings used for federal and state funded highway construction all have both English and Metric units on them.
Thanks John ,I found that informative and food for thought.
BATMAN It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. The cost to business and thus country through loss of jobs of not being metric is staggering.
It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. The cost to business and thus country through loss of jobs of not being metric is staggering.
LOL
Well, there you have it.
Hobby shops fail because they resist going metric!
richhotrain BATMAN: It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. The cost to business and thus country through loss of jobs of not being metric is staggering. LOL Well, there you have it. Hobby shops fail because they resist going metric!
BATMAN: It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. The cost to business and thus country through loss of jobs of not being metric is staggering.
Thanks Rich. I knew the answer was staring me in the face.
I apologize for going of topic but some of what I read got me going in that direction. Please return to your regularly scheduled programing and forget every question I shouldn't have asked.
BATMAN Thanks Rich. I knew the answer was stating me in the face. I apologize for going of topic but some of what I read got me going in that direction. Please return to your regularly scheduled programing and forget every question I shouldn't have asked. Brent
Thanks Rich. I knew the answer was stating me in the face.
Awww, geez, now I feel bad.
The metric question is an interesting one though. I recall that we made a modest attempt to go metric about 40 years ago, and the public strongly resisted.
Now that we are back on topic, though, I repeat my earlier reply to the OP.
Hobby shops fail because of the Internet, pure and simple.
After reading all of the postings about having a LHS, all I can come up with is that I have never had any hobby shops to buy from so it has all been online.
I have never had a need to see and touch any item I bought as they have mostly been from companies who I know what they produce. When I buy Kato or Atlas engines I know what level of quality I am getting. Same with their and other name brand rolling stock. Same with Pikestuff, BLMA, Athearn, etcetera.
And for the ones that I am not sure about, there is all the info I need some where in a forum or other online sources to make a decision.
As to the local hobby shop going under, most of the many reasons have been stated. I would like to also add, that no matter how well stocked one is or what prices they have, sales are limited to their local city or county. For most of the LHS's it is to late to expand with internet sales and would not do any more then stave off the inevitable for only a little longer. Plus end up farther in debit.
The already bigger and longer established online sellers pretty much have the web sales thing all tied up in their favor. Being able to sell and already selling, with very few exceptions, in any city, county, state, province or country. To start from scratch and gear up to their level of operations is cost prohibitive and most likely foolish.
Even many of the larger chain hobby shops have not been able to do this against the established competition. And some have suffered from trying.
Ken G Price My N-Scale Layout
Digitrax Super Empire Builder Radio System. South Valley Texas Railroad. SVTRR
N-Scale out west. 1996-1998 or so! UP, SP, Missouri Pacific, C&NW.
selector "Blathering", huh?
Crandell, you called me out for use of that word, and I humbly retract it.
Brent, I mistakely read the tone of your post in a way other than you intended.
These LHS demise threads seem to always turn to things like, regulations, taxes, price of oil, etc. purely economic, supply and demand issues. I let the thread go until about page 5, when those issues were raised again.
In fact, the demise of the LHS may not have much to do with those macro economic factors at all.
Being involved in the lending profession, I can tell you that a lien, a mortgage, or a title to an asset means nothing. You have to possess the asset in order to control its use. If you need to repo a car, waving a title in the air and in front of a Judge isnt' going to bring it back. You have to be ready to get a "dog the bounty hunter" type of repo man or an armed Sherriff to physically remove the squatter from your asset..
In terms of an inventory, a business closes because of slow sales, but when a bank tries to repo the inventory, it miraculously then flies off the shelves (and into the back of the proprietors' brother-in-law's van).
Muscles, bullets, and physicality put assets under your control, not paper waving lawyers or economic theories.
So, if Horizon Hobby wants to relocate their recently installed china tooling to vietnam, and the chinese find a way to never have the trucks that would take the take the equipment to the vietnamese border show up, what should the CEO of Horizon do? Call a lawyer, a judge? Call an Admiral to have him send an aircraft carrier to go get his stuff? Or, settle for a not-truely-supply-and-demand based labor agreement.
What about exactrail? Maybe they have tried to move and found it "complicated" . Seeing the history of Model Power kit molds, they figure that if they don't use their molds, somebody else will start using them 6 months after they walk away. Seeing this, they choose to make whatever profit they can and need to officially cut out the LHS to do so.
Prices and changes in the hobby may not be influenced by macro economic factors as much as we think, so I get a bit worked up when comments default to those causes.
Today there is a lot of difference between a LHS, Local Hobby Shop and a LTS, Local Train Shop.
A good size LHS is not far from me and has much more than trains. RC cars, planes, stuff is very big in the place.
The owner depends a lot on two or three retired fellows who do model trains. One fellow specializes in DCC mods for the shop.
One fellow works on four different scale layouts in the place.
How many here have actually run a LHS or LTS?
How many, any kind of business?
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.
Doughless Brent, I mistakely read the tone of your post in a way other than you intended.
Not to worry Mon Ami. I tend to be very "matter of fact" when communicating or try to inject humour where clearly none should be injected. And on another note, maybe the imperial system of measure isn't so bad after all. The wife just ordered 15 Cubic yards of bark mulch, at least it wasn't 15 cubic metre's of the stuff.
I might be in a bad mood tomorrow so watch out!
maxman As a matter of fact, they used to have tables at the Timonium show (apparently not any longer)
It costs them too much to rent a trailer, the table space, and labor to do it. I happened to be in there one day (after being at hte show all morning) and someone in the store asked them about it.
Oh, and the US is a metric country already. That's why the military, NASA, and everyone uses it! Its the states that aren't metric. And private industry.
Nope.....NATO is Metric.
I'm a military contractor. We're still "Inch-Pound".
richg1998 How many here have actually run a LHS or LTS? How many, any kind of business? Rich
Let's see, at age 13, in 1968, I was working "under the table" in the local hobby shop for $1.00 per hour in merchandise. At age 14 that became legal employment at $1.50 hr in real money. At age 15 I spend the summer helping that owner set up a new shop in Harpers Ferry WV and helped build a professional diorama of John Brown's 1859 raid.
All through my teens I worked in that, and then another shop and by age 21 was the train department manager of that second shop.
After leaving there, I have been self employed most of my life in a number of different businesses.
We still need 37 more guys.
FlyingCrow Nope.....NATO is Metric. I'm a military contractor. We're still "Inch-Pound".
I guess it's a good thing that the U.S. military calls in Air Strikes in metric. If all the other countries are using metric the last thing they would want to worry about is whether or not that Spanish pilot flying Air Cover got his feet to Metre's calculation correct.
BATMAN Doughless: Brent, I mistakely read the tone of your post in a way other than you intended. Not to worry Mon Ami. I tend to be very "matter of fact" when communicating or try to inject humour where clearly none should be injected. And on another note, maybe the imperial system of measure isn't so bad after all. The wife just ordered 15 Cubic yards of bark mulch, at least it wasn't 15 cubic metre's of the stuff. I might be in a bad mood tomorrow so watch out! Brent
Doughless: Brent, I mistakely read the tone of your post in a way other than you intended.
And it appears you have chosen some fine equipment to move the mulch. If its green and yellow, it holds its value well.
Beats the heck out of a wheel barrow.
richg1998 How many, any kind of business? Rich
I had a fencing/ light construction company for a while. We modeled it after the student painting companies. We went from nothing to 16 employees instantly and couldn't handle all the business. I was making money hand over fist. I hated it in short order even though I came up with the idea. I was to young to pace myself and if I wanted to work that hard I would have been a professional like everyone else in the family. I left the company to my partner and moved on.
I never had a problem making money be it buying rental properties or day trading before people new what that was. I worked 38 yrs for the Government of Canada. I would work copious amounts of overtime that I would take as time off instead of the pay. I would take months off and travel the world or spend all my time skiing, golfing or mountain biking or hang gliding or flying or scuba diving. People wonder why I didn't get married until I was forty, it was because I was to busy to think about it. Besides I almost always had a girl friend anyway.
My hat goes off to anyone that owns a business. In most cases you're chained to it. Like professional life it wasn't for me and looking back I made the right choice. I am comfortably retired at 55, though too beat up to take full advantage of it. I'm glad I've got my trainroom.
cedarwoodronThe other thread, about pleasant hobby shop memories and experiences, was probably the more interesting read. However, one way of summing up the demise of LHS's is to quote from that old cigarette commercial (1960s): Times change, tastes change... I have to wonder, vis-a-vis the repeated mention of China in these posts and related others, if there is a significant internal Chinese hobby market for model railroading, considering their far- more- recent steam heritage, that may be a positive factor in hobby-related manufacturing. They have a burgeoning middle class, one with some leisure time, and does that play into the economics of all of this? Cedarwoodron
With all the talk of returning Manufacturing to the U.S. It really makes me wonder what the breakdown is for world wide sales of trainstuff in all parts of the globe. What percentage of U.S. manufactured trainstuff would be exported from the U.S. and to what parts of the globe, now wealth is beginning to be accumulated in other countries.
Doughless selector: "Blathering", huh? Crandell, you called me out for use of that word, and I humbly retract it. ...
selector: "Blathering", huh?
...
S'aright, Buddy. Been there meself, and sooner than I would like to admit to. I figured you just ran away with a thought, or that it got away from you. No foul.
I own and run a Local Hobby shop.
Started it from scratch 5 years ago.
We are still running today....just.
Yes, we are on-line as well.
Taken to its ultimate conclusion, there can only be 1.
So whoever is cheapest gets the sales.
As I pointed out, much to some peoples dislike.
Retail shops are closing down.
Many reasons, mostly rising living n business costs
and Union driven costs and overseas business practises are the
cause of the retail shops closing down.
Before that I owned and ran a Local Surf n Skate shop.
Started that from scratch too. Lasted 5 years or so.
Had to close that as it became apparent manufacturers were
starting their own direct sales and shops.
Something similar to what is discussed here with the hobby shops
being out maneauvered by the manufacturers. In general
this is occuring to all retail.
Only solution is for manufacturing to come back to your own
country. I did not realise china was restricting the removal of
factory equipment back to other countries. They'l happily sell it.
However, as a hobby shop, we do repairs and advice
and testing and about to have race track.
Though a lot of people dont want to pay for
that service.
That and our prices are equal or at most 20% dearer then online/ebay.
We dont do trains..:(, we do send everyone enquiring about trains to
another older chap still running a small train hobby shop a suburb away.
We advertise on TV now and then.
The USGS did its original geodetic survey in metric. We're an original signatory to the Metre Convention. In fact, the official definitions for foot, pound, mile, etc are in direct reference to their portions to SI units.
We're a metric nation. We just don't use it in day to day life.
BATMAN The world seems to work in mysterious ways. A good way to look at the financial end of it is to look at it like physics. To every action there is a equal reaction somewhere else. The only trouble is when it comes to planetary finances the reaction is usually somewhat long in coming. All countries have different tax rates. Some countries have different levels of Government that all want their pound of flesh. Be it income tax, corporate tax, property tax, water rates.....on and on. Then there are import duties, Tariffs etc. When the leaders of the G8 meet, to decide the course the world will be set on, we all see the press pictures in the photo ops on TV and to most of us that is as far as it goes. One really has to go out of their way to be informed on why things are the way they are. Canadians pour over the border to buy products in the United States. Why? Because all those made in China products are way cheaper in the U.S. than in Canada. Why? Because Canada puts big tariffs on Chinese imports to protect manufacturing jobs in Canada. The U.S. puts little or no tariffs on Chinese imports Why? I'll let anyone that's curious do their own research on it. The reasons are straight forward and completely understandable. In the 1970s Canada decided to join the rest of the world and go to the metric system. All political parties unanimously voted in favour of it. However the outrage from the population was loud to say the least (people hate change) The Government quickly embarked on an educational campaign on the benefits of being on side with the rest of the world. The loss of export opportunities which translates into loss jobs and a loss of billions in revenue to the Government from not going metric was huge to say the least. I was watching a PBS show that was following a Platoon of U.S. Marines in Afghanistan. The Briefing was all in metric, as in "we will go out 3 Kilometres before turning West etc. Later in the show they were pinned down and were calling in air strikes. Bering 240 degrees at 800 Metres from our position etc. Nasa works in Metric. If you ever heard the telemetry when the shuttle was approaching the space station they say things like "closure rate 2 metres per second. It is obvious why the military and Nasa use metric but for the life of me I cannot understand why the U.S. doesn't go metric. The cost to business and thus country through loss of jobs of not being metric is staggering. The so called facts and figures are in many business magazines. But then maybe we shouldn't believe everything we read. The United States is Canada's largest trading partner. We have a saying North of the Forty ninth that go's "when the United States catches a cold Canada gets Pneumonia" It is to the benefit of the entire planet to get the U.S. back on a stable footing. Instead of China bashing for economic woes. As a change of course I would like to hear opinions from Americans on why the U.S. does not go metric. Improvement in the economy will come a step at a time, so why not take a couple of free steps that going metric will give. Just wondering. Brent
BATMAN richg1998: How many, any kind of business? Rich I had a fencing/ light construction company for a while. We modeled it after the student painting companies. We went from nothing to 16 employees instantly and couldn't handle all the business. I was making money hand over fist. I hated it in short order even though I came up with the idea. I was to young to pace myself and if I wanted to work that hard I would have been a professional like everyone else in the family. I left the company to my partner and moved on. I never had a problem making money be it buying rental properties or day trading before people new what that was. I worked 38 yrs for the Government of Canada. I would work copious amounts of overtime that I would take as time off instead of the pay. I would take months off and travel the world or spend all my time skiing, golfing or mountain biking or hang gliding or flying or scuba diving. People wonder why I didn't get married until I was forty, it was because I was to busy to think about it. Besides I almost always had a girl friend anyway. My hat goes off to anyone that owns a business. In most cases you're chained to it. Like professional life it wasn't for me and looking back I made the right choice. I am comfortably retired at 55, though too beat up to take full advantage of it. I'm glad I've got my trainroom. Brent
richg1998: How many, any kind of business? Rich
Gentlemen,
The question is: Why Hobby Shops Fail.
Not, can someone explain the macroeconomic impact of international trade on large manufacturing companies.
I have never seen a thread drift so far off course as this one. Nine pages of this kind of stuff and, still, the thread goes on.
Let me assure you, Roger, a retired Rock Island engineer who ran our LHS, and Howard, his faithful assistant who was a retired Thrall Car Mfg. Co, employee, never owned a metric tool, never visited China, and never owned a computer or surfed the Net.
They ran a storefront model train shop. Primarily HO scale. They wouldn't be caught dead stocking or selling RC stuff.
That's the definition of a LHS.
Even Lee Mazengarb concedes that he never owned or ran a LHS in the true sense of the word.
Hobby shops likely fail the most often from the shifting interests of the public. People do not build models now-a-days, which was the basis for a hobby shop in the past, when these types of activities was far more popular. If a large and at one point extremely successful INTERNET hobby dealer such as 1st Place Hobbies can fail, what else can it be; but, peoples interests changing. That and a long faltering economy!
NP 2626 "Northern Pacific, really terrific"
Northern Pacific Railway Historical Association: http://www.nprha.org/
Isn´t it time to move on now?
We have at length discussed why hobby shops fail or don´t, whether it is world economics or politics, buying habits and whatsoever.
Fact is that some shops fail and others thrive. Fact is also that times are changing and that we have to adapt to those changes.
Back to model railroading!