kenrk As a former owner of a small business ( home beer & wine making supplies ) I have to say that 1- impossible to have everything in stock just look at track alone, also DCC systems, and of course Engines & rolling stock, buildings, ballast, etc. 2-Location Location Location= top dollar rent 3-Knowledge of just about any type of repair on any type of equipment 4-Willingless to accept returns ( thorn in any body's side ) 5-Service is the most important asset of any business 6-Competition from the Internet, unless you are willing to sell in the store at the same price as the Internet 7-Don't think your pretty face will drive them to your store or web site, competition is fierce I have a shop in my hometown that is going out of business, place has been around town for 45 + years, excellent service, kind of place where everyone knows everyone ( aka Cheers ), but the rent, internet, and lack of not having the product you may want, most times drives people to the net, especially when prices are lower w/ free shipping and you don'thave to leave the house 8-I love small & local business, but the competition is fierce, which I think makes the net so popular. I shop at my local store and will continue to do so until the day comes. You can't find that relationship on-line
As a former owner of a small business ( home beer & wine making supplies ) I have to say that
1- impossible to have everything in stock just look at track alone, also DCC systems, and of course Engines & rolling stock, buildings, ballast, etc.
2-Location Location Location= top dollar rent
3-Knowledge of just about any type of repair on any type of equipment
4-Willingless to accept returns ( thorn in any body's side )
5-Service is the most important asset of any business
6-Competition from the Internet, unless you are willing to sell in the store at the same price as the Internet
7-Don't think your pretty face will drive them to your store or web site, competition is fierce
I have a shop in my hometown that is going out of business, place has been around town for 45 + years, excellent service, kind of place where everyone knows everyone ( aka Cheers ), but the rent, internet, and lack of not having the product you may want, most times drives people to the net, especially when prices are lower w/ free shipping and you don'thave to leave the house
8-I love small & local business, but the competition is fierce, which I think makes the net so popular. I shop at my local store and will continue to do so until the day comes. You can't find that relationship on-line
You can make most buisnesses do well, but it takes more work than most people are willing to put into it and you also can't be you. What I meen by the later is you have to put personal feelings aside, such little things as that lookie lou. You may see him as a pain that never buys anything but you never know when that will change or who his freinds are. I was always a lookie lou, not that I never bought but bought only what I really wanted and ussually at a bargin basement price. My freind however had no problems spending lots of his money on anything he wanted and was not really concerned with price, and he bought a lot of stuff, especialy engines. He proubly would have bought even more from what was his main shop but the guy running it had an attatude and one day I was looking at a display of LGB and my freind said to me, don't buy it here, I have a set, the store owner overheard and yelled at my freind thinking he was stealing a sale and my freind was going to sell me his set but what he realy wanted was funds for his next big purchace having picked up the LGB in a lot sale with other stuff he wanted. Never went to that store much again and the guy knew we were together as I never went there without my freind as this place was road trip distance away for me and my freind was there at least evey couple weeks for the latest and greatest like his ongoing collection of Big Boys.
While I agree, customer service is a very big part of things, there are other important things as well.
Case in point: One store near me, got all my DCC business while they were around. They sold Trains, R/C cars and planes, kites, and dolls.
The first time I went there, I asked a few questions on a DCC system. Len not only answered them, but demonstrated the system on the in-store layout.
I purchased the system. Went back in two weeks to pick it up. I purchased a couple more decoders, and a bag of ballast while there that second time.
The next time I went back to the store, about 6 months or so later, due to travel distance, as soon as I walked in, Len said "Welcome back Ricky. How is the (name of DCC system) running?"
I was very impressed.
I then gave him all my business. He could get anything I wanted, at a decent price, and I saved on shipping to boot.
Problem was, his location was not near enough any other major stores. Due to expenses, and lack of a large enough customer base, he had to close.
So, location has a hand in it as well.
Another big issue - Getting what I am looking for. If I go to your shop, even if I am willing to special order something, if I only hear that you can't order anything from brand-X, its a little annoying.
Then, as has been discussed, pricing matters. I will not pay more than $35 higher on a loco, with DCC/Sound, just because you have a shop. I can save money by purchasing online, and save gas and time. That more than offsets any shipping charges. (Even if I need it express, 2 day delivery, which I really don't.) Smaller stuff? Much closer margin. I have a full-time job, yes, but gross under middle of middle class. (I am lower middle class, if not below middle class income.) So, if your price is too high, I don't buy.
So, for a small hobby shop of any kind to survive, it will take a big, almost perfect, combination, of right location, right inventory (or ordering availability), right price point, good customer service, and a large customer base.
This is even more important for a "new store" to get right.
As the saying goes, "the chances are slim, to none." And, I think I see slim headed towards the door...
Today, unless you do more online, and hit the jackpot on the above combination, you will have a very tuff time hanging on.
Ricky W.
HO scale Proto-freelancer.
My Railroad rules:
1: It's my railroad, my rules.
2: It's for having fun and enjoyment.
3: Any objections, consult above rules.
Brass is a whole other subject, the way they are tuned is way beyond what is needed in other engines, not that other engines don't need fine tuning but not to the extent brass dose.
Howard Zane I suppose I'm really a dinosaur. I have shopped for price and I come from a Jewish background where word "retail" is repugnant", even still, quality and service have always come first. There are still shops who sell for "MSRP", but offer exempilary service and stand behind what they sell. Check out #######. I know this company well as I started it in 1986 aka Piermont Division. I sold it to #### in 2005 above other higher offers as I was convinced that he would make the best of it.....He has and then some through old world business ethics and excellent service. My business will always go to the firm who offers a combo of the best product and best service.....and you bet, the best price. I do look for a combo of all three. Of course this is me and certainly not gospel or retailing in your face. And I'm quite certain there will be radically different opinions. HZ
I suppose I'm really a dinosaur. I have shopped for price and I come from a Jewish background where word "retail" is repugnant", even still, quality and service have always come first.
There are still shops who sell for "MSRP", but offer exempilary service and stand behind what they sell. Check out #######. I know this company well as I started it in 1986 aka Piermont Division. I sold it to #### in 2005 above other higher offers as I was convinced that he would make the best of it.....He has and then some through old world business ethics and excellent service. My business will always go to the firm who offers a combo of the best product and best service.....and you bet, the best price. I do look for a combo of all three.
Of course this is me and certainly not gospel or retailing in your face. And I'm quite certain there will be radically different opinions.
HZ
Howard, I understand, and I personally am not just price driven.
Even though I don't generally buy brass, I am familar with that company we can't name - first class outfit, no question. But brass is a "special" catagory in this hobby......
But let's face it, when one guy asks $300 for a loco, and the next guy only asks $185, anyone with any common sense is going to question the higher price.
Hence my point about back in the day, when most of what discounts there were, were not so deep.
And you talk about new people, what message does this wide range in pricing send? Not a good one.
It's like the home improvement commercials for 50% off - come on, if you can give 50% and stay in business, you were charging usury level prices in the first place. That guy is not working on my house - but then again I know because that's what I do - restore old houses....
You and I know that's not true of the small dealers in this business, but it does not look good to the customers - seasoned or new.
And now another point - customer service - OK, if something is defective I want it taken care of - short of that, not meaning to sound too arrogant, after 50 years at this I don't need much in the way of customer service. I don't need anyone to tell me how to lay track, or install Kadee couplers, or build a craftsman kit - I just need the stuff I need.......
OK, others may need or want various other services - I provided those services when I sold trains. But again, the disparity in pricing is a problem, a big problem.
And again, only the manufacturers can effect real change......
Sheldon
There are still shops who sell for "MSRP", but offer exempilary service and stand behind what they sell. Check out [company name removed]. I know this company well as I started it in 1986 aka Piermont Division. I sold it to [owner's name removed] in 2005 above other higher offers as I was convinced that he would make the best of it.....He has and then some through old world business ethics and excellent service. My business will always go to the firm who offers a combo of the best product and best service.....and you bet, the best price. I do look for a combo of all three.
Skirting the rules is easy, done all the time, especialy today.
nealknows Walthers will not sell any NEW online only stores, unless they had a store, closed it and continued online. New dealers would have to go other distributors. Not sure what Horizon's policy is... Neal
Walthers will not sell any NEW online only stores, unless they had a store, closed it and continued online. New dealers would have to go other distributors. Not sure what Horizon's policy is...
Neal
If true, Sheldon probably gave the answer. Any shmoe can start a small online store that ultimately is started to serve he and his buddies' hobby discounts. What Walthers is doing is trying to eliminate the online version of the B&M "basement store" customer, something they've been doing for years with retail basement stores. There has been a requirement that the owner can't live in his store, it can't be his dwelling, so I'm told.
If the owner was a B&M store that was already a Walthers customer....then went purely online, he probably is a "legitimate business" and met Walthers' standards when he was B&M.
I'm sure there are one offs here and there where somebody figured a way to skirt the rules, if they really wanted to go to that much trouble.
- Douglas
Howard Zane When I first openend my shop, Columbia's Hobby and Craft World, in 1973 I soon learned many things....mainly about wholesale, very wholesale, and really very wholesale. These forms of wholesale were directly predicated on the size of your order. I do not know how this works today as my shop was almost a half century ago. I also learned that distrubuters (and ther were many) could be circumvented just by doing your own shopping within the many cottage craft makers and builders during this period. The end result was winding up with an almost unique inventory except for the staples which did come from distrubuters. HZ
When I first openend my shop, Columbia's Hobby and Craft World, in 1973 I soon learned many things....mainly about wholesale, very wholesale, and really very wholesale. These forms of wholesale were directly predicated on the size of your order. I do not know how this works today as my shop was almost a half century ago. I also learned that distrubuters (and ther were many) could be circumvented just by doing your own shopping within the many cottage craft makers and builders during this period. The end result was winding up with an almost unique inventory except for the staples which did come from distrubuters.
And it was similar in the late 70's and early 80's when I managed the train department at Glen Burnie Hobby World.
Today, all the big players are buying at some where between "very wholesale" and "really very wholesale" and then selling to the public at "wholesale".
As I said, the little guys don't stand a chance.
Howard, you seem to be ignoring the issue of price in your thinking about his. Respectfully, resources are clearly not an issue for you. But for many who are in this hobby, resources are clearly a factor. Price is king.......
In 1970, or 1980, the deepest discounting was generally about 20% off retail. So the mail order places, and the few big shops who bought direct and discounted had strong margins which allowed them to fund large/deep inventories.
And not eveyone lived near such a shop or was willing to buy through the mail. 20% was not a deal breaker for most customers, especially if your local shop had good inventory, good service, a few deals now and then, and maybe a 5-10% discount for your club, etc.
But today, most every big ticket item can be bought at 25-40% below retail, pushing margins to the lowest profitable levels even for the big players.
But more importantly it has undermined the "perceived value" of the products in the eyes of the customer. MSRP has become a joke and most everyone expects to buy at these deep discounts.
The reasons for this are evolutionary, and I will not go into my thoughts on how it happened or who/what caused it.
But the only people who can fix it are the manufacturers. Athearn took a big step toward fixing it with single point distribution, and a "narrowed" range between "wholesale" and "really very wholesale".
People said this would kill Athearn - the reverse was true - it saved them........
And in this day age, we really don't need multiple distributors all over the country for every product. The cost of warehousing and distributing are much lower with todays technology and shipping networks are faster.
Until the manufacturers see their product as having "value", no one else will either.
Closeout sales on products that were just made last year prompt many a customer to just "wait for the sale". After all, if you are willing to wait a year for a preorder, then why not wait a year for a lower price?
There is one brand in particular, who products I will only buy after the dust settles, because they always get cheaper.....
Then there is another brand, who I have bought a lot of, who's MSRP is highly inflated compared to their "really very wholesale" price, and even their new releases are easily purchased at 35-40% off MSRP. And interestingly they don't work on preorders.......
Then there is Athearn, who's products now seem to have settled in at a consistant 20-25% off MSRP - I wonder why?...........
But again, what do I know.
Howard, all this talk of getting new people in the hobby is nice, but at the end of the day, price has become king......only the manufacturers can fix this.......
PS - now I'm off to Greenbergs to look for some deals.........
OK, to both of you, I understand what you are saying, and as long as policies are uniform, you are correct. Manufacturers can set whatever standards they feel benefit their products.
But if such policies are not uniformly applied, and it can be proven, they may, and I repeat ONLY may have issues. The laws regarding such things are complex and subject to lots of interpretation.
But all of that is a minor point in this question. Small retailers cannot stay in business with large retailers selling to customers at just a few percentage points above what the small dealers pay for product from the distributors.
A long list of manufacturers in this business have and do sell directly to dealers at various price levels, not requiring dealers to buy from distributors.
Again, I predict an end to the middleman in the model train business, and I do think whatever Wathers is doing is a step by them to get out of distributing other brands to dealers.
ATLANTIC CENTRALEven then, if I have a bussiness licence, a retail sales tax license, conduct business full time on any business platform and meet their minimum order and credit requirements they might be asking for trouble by not selling to me.
.
This is incorrect.
They would ONLY be in trouble if you try to purchase at FULL RETAIL, and they refuse to sell to you, then you might be able to claim discrimination, but still not black and white, you need to prove your case. If you want wholesale, dealer net, preferred, or discount pricing, you better be ready to play by their rules and meet their requirements.
Manufacturers set up all kinds of requirements that you must meet to become an authorized retailer.
Your only other option is to buy from another supplier and sell at tertiary price markups.
Try to become a Games-Workshop retailer if you do not believe me. You should see the dealer contracts we enforce in my field!
-Kevin
Living the dream.
I can speak from experience being in thece toy business. Manufacturers ARE NOT required to sell someone just because someone has a tax ID and does it full time, or has an online presence. No one can be forced to sell anyone they don't want to. Manufacturers, just like retailers can choose whom they want to sell to. You can restrict where you want your product to be sold. It's being done right now, not only in the toy/hobby business, but in many classes of trade.
riogrande5761 nealknows Walthers will not sell any NEW online only stores, unless they had a store, closed it and continued online. Neal Considering the massive and pervasive trend to online sales, it's obvious that Walthers will be forced to change their policy because their base of stores will dwindle to the point it will be not be feasible to continue. I'd have to think the time is fast approaching where they can't play that game anymore. Adapt or die.
nealknows Walthers will not sell any NEW online only stores, unless they had a store, closed it and continued online. Neal
Walthers will not sell any NEW online only stores, unless they had a store, closed it and continued online.
Considering the massive and pervasive trend to online sales, it's obvious that Walthers will be forced to change their policy because their base of stores will dwindle to the point it will be not be feasible to continue. I'd have to think the time is fast approaching where they can't play that game anymore. Adapt or die.
I would question the truefulness of this, and also question its legality.
What Walthers might be doing is not accepting small dealer accounts that lack a brick and mortar store to prevent "basement operators" who actually order very little product, only sell at train shows and online part time and who are more a front for a few guys to get all their stuff at dealer cost.
Even then, if I have a bussiness licence, a retail sales tax license, conduct business full time on any business platform and meet their minimum order and credit requirements they might be asking for trouble by not selling to me.
But, back to the main question. In my view, the only hope for model train shops, of any size, is a more stable supply of product, and more uniform stable pricing.
Distributors are dead, and any actions Walthers is taking are more likely a move away from being a distributor to only selling their own products strictly as a importer/manufacturer.
Direct distribution, like Athearn/Horizon is the real future.
Direct distribution with similar price structures to retailers of all sizes would serve the customers better and give smaller retailers, online or brick and mortar, a fair shot at serving the needs of customers.
But as long as manufacturers take no responseablity for equal and competitive access to their products, and are only interested in how fast they can run stuff out the door at any profitable price, small shops and the distributors who serve them are doomed.
The MB Klein's and TrainWorlds will continue to control large blocks of product and deliver it to customers at the lowest possible prices, and that is fine. But don't expect anyone to try to sell model trains down the street from you at 30% above the big boys prices - it is simply crazy.
Example - no train shop in their right mind would by Bachmann from Walthers. Bachmann is not that hard to buy direct at a very good price, but you do need to move a fair amount of it. But Trainworld and ModelTrainStuff sell Bachmann for about what a small dealer would have to pay from Walthers. Walthers has Bachmann so they can service their retail customers who for some crazy reason pay retail prices, not to serve small dealers.
I predict you will see more companies sell direct to both shops of any size and to customers, fewer distributors, and even a fair number of examples like Exact Rail - only sold direct on the web.
And I predict Walthers, and possibly Bowser, are on their way out of the business of distributing other brands, just like ConCor, once a big distributor now only sells their own products.
Once a manufacturer sets up a system to sell to customers directly, selling to small dealers is no problem. With the right minimum requirements even small dealers could be given near the lowest wholesale price level, eliminating any need for distributors and stablizing prices.
But what do I know........
GP-9_Man11786 My two cents worth is the hobby shop is in a terminal decline, as are most b&m retail stores. In the end, the only physical stores left standing will be convenience stores and Dollar General. In order to compete, hobby shops need to be the instant gratification guys, the ones who can put the item in my hands then and there. That would make up for the price premium and having to pay sales tax. "We don't have it, but we can order it for you" isn't going to cut it. However, manufacturer business practices make that virtually impossible. You can't be the instant gratification guy if the product is made of unobtanium. You can only make so much profit off Woodland Scenics stuff.
My two cents worth is the hobby shop is in a terminal decline, as are most b&m retail stores. In the end, the only physical stores left standing will be convenience stores and Dollar General.
In order to compete, hobby shops need to be the instant gratification guys, the ones who can put the item in my hands then and there. That would make up for the price premium and having to pay sales tax. "We don't have it, but we can order it for you" isn't going to cut it.
However, manufacturer business practices make that virtually impossible. You can't be the instant gratification guy if the product is made of unobtanium. You can only make so much profit off Woodland Scenics stuff.
Lone Wolf and Santa Fe Rabid What I would like is an online store that is in a location where I occasionally vacation. Then I can stop by, build a relationshhip, and continue to buy from them when at home. I'm currently on google looking for stores near Vero Beach or along 95 between SC and Vero. If I find one I will stop, pick up a few things, talk to the owner, and move them to the top of my list when ordering online. I have an idea similar to this but better. I can't post it or someone will steal it, but if anyone is serious about opening a shop in a tourist town I would be interested in working with them on it as a minority partner. Las Vegas or Orlando might be the ideal location for my plan. If anyone is interested let me know.
Rabid
What I would like is an online store that is in a location where I occasionally vacation. Then I can stop by, build a relationshhip, and continue to buy from them when at home. I'm currently on google looking for stores near Vero Beach or along 95 between SC and Vero. If I find one I will stop, pick up a few things, talk to the owner, and move them to the top of my list when ordering online.
I have an idea similar to this but better. I can't post it or someone will steal it, but if anyone is serious about opening a shop in a tourist town I would be interested in working with them on it as a minority partner. Las Vegas or Orlando might be the ideal location for my plan. If anyone is interested let me know.
Oh, I know. A train shop in an RV or large Airstream.
RabidWhat I would like is an online store that is in a location where I occasionally vacation. Then I can stop by, build a relationshhip, and continue to buy from them when at home. I'm currently on google looking for stores near Vero Beach or along 95 between SC and Vero. If I find one I will stop, pick up a few things, talk to the owner, and move them to the top of my list when ordering online.
Howard ZaneI do know from first hand experience that on line purchasing is for folks who know what they want. I doubt seriously if a possible newbie will get the bug by looking at choo choos for sale on a monitor screen.
I have to disagree with that based on the fact that I got the bug by looking at the toy train section in the Christmas catalog from Sears at first and then later looking at the Walthers catalog. Websites are just an electronic version of a catalog.
I remember that if you wanted an Athearn blue box kit you pretty much had to know what you wanted ahead of time because the boxes didn’t have a picture on them and it was a hassle to open up box after box to look inside. One store I went to had the boxes opened and shrink wrapped and hanging on a peg hook so you could see inside. I’m sure that helped sales a lot. I bought a vast majority of my rolling stock from them. Magazines like MR and RMC were also inspirations. Advertising in them does work for creating demand for models.
Howard Zanewhat would it take today to open and run a really succesful shop besides on line sales?
It seems that there is not an easy answer to this. If there were, there would be more shops opening. And whenever anyone comes up with a good idea, everyone else will want to copy it and it will become a fad.
Many years ago ceramic shops were the fad. There were none around, and suddenly there was one or more in every town. I can't think of any left around here now.
Perhaps there needs to be a combination of things that will attract people. The latest thing around here is a painting and wine tasting place. The ladies go there to try there hand at painting (pictures, not something useful like rooms ---but I digress) and taste wine. We now have two of them.
Something like laundramat and tile, or possibly bar and scale trains.
True...hobby shops have had their once numerous ranks dwindle quite a bit. When they are all gone, some genius is going to say...."Hey...how about a hobby shop!" I believe things go in cycles, but I'm not sure how long these cycles take....years or decades? I do know from first hand experience that on line purchasing is for folks who know what they want. I doubt seriously if a possible newbie will get the bug by looking at choo choos for sale on a monitor screen. There is now a huge potential market....not for kids..but for baby boomers now retiring and looking for a hobby. They have now plenty of time, funds, and knowledge of railroading, and most likely could be influenced and enter a new hobby. A smart shop or good model train show should be able to reach these folks and there will be many.
Retirement really sucks if one just retires with nothing new to go into...be it a new vocation or hobby, but something they can really like or love.
My two bucks............HZ
Modeling the Pennsylvania Railroad in N Scale.
www.prr-nscale.blogspot.com
danmerkel But the key is the new guy/beginner. They will be willing to spend some money and listen to a knowledgable person as well.
YES... I tried to make that point before. There is no better cash cow than a newly retired "beginner" to scale model railroading that is eager to start his new hobby and enjoy the final phase of his life.
Rio Grande. The Action Road - Focus 1977-1983
1. Strong online presence.
2. Location at a vacation destination.
The only shop in my area is so small and run down that I have more stock than they do. If I want something more than a starter set for kids it has to be ordered wich means two trips to the store and a premium price. No thanks.
HO & N scale. Digitrax DCC. Mostly L&N (Louisville and Nashville) railway using a mix of brands. Back in the hobby after a looooong absence.
The question remains ehether the customers are willing to pay that extra the shop owner needs to finance the working capital, the decent location and the staff to give them the service they ask for.
I don´t think they will!
Interesting thread. I'd suggest that to have a successful shop, one needs to lower their standards. Now that I have your attention...
Many people here are way past the trainset and Athearn blue box stages of the hobby. They know what they want and they know where to get it at the best prices. But the key is the new guy/beginner. They will be willing to spend some money and listen to a knowledgable person as well.
I deal with this all of the time in a discussion group that I'm part of. It represents people who are probably at the 90-95 percentile in model railroading. Discussions center around "the correct color" or whether or not a stirrup should have one rungs or two or what kind of roof was on that 85,000 series XYZ boxcar... tons of beginning model railroaders don't care about those things yet. They want to get their Plywood Central up & running so they need more basic supplies than specific detail parts. Cater to those people as well and you will be working on a "feeder" system that should keep customers coming back for future purchases.
Oh yes, good model railroad shops are a destination business. People will go out of their way to go there... often driving 40-50 miles or more to find what they want.
dlm
Well, you could ask this guy:http://k-10smodeltrains.com/
One man with courage is a majority!