LHS Wake Up Call

[AntonioFP45]

Hello Crew,

I have to admit that I was quite surprised when I talked to the manager at my LHS. Even with his efforts his business is hurting and admitted to me that his business's future appears quite uncertain! This is one of the most popular LHS's in the Tampa Bay area. This store (Happy Hobo Trains) offers excellent service, is LOADED with parts for modelers, features two operating layouts, and the two guys that run the store are cool and down to earth. They're both very knowledgeable.

Really brought home to me the reality of what store owners face with higher fuel prices, competition from ebay and discount hobby shops, and customers that would normally spend money at the shop that are saving it for gasoline.

I always felt secure that this store would always be around. I started feeling a bit guilty as years ago I spent 100% of my hobby money at this store, but in the past year I have bought quite a number of locomotives on Ebay and have even posted it on this forum. I found out that had I checked with this store more often, I could have gotten items that I wanted for nearly the same ebay prices as this store has sales regularly.

Of course we as consumers want the best deal we can get. I'm going to continue checking ebay for deals, but I've decided that I will spend more at this store since layaway is also an option to use.

Hopefully things will get cooking for my LHS this Christmas season.

Just wanted to share this since some of you have brought up the issue about supporting LHS's. I can testify to the fact that even the good LHS can be hurting as well.

Peace.[8)]

[Anonymous]

Use them or loose them?

Will

[Berk-fan284]

Amen brother! I admit to being guilty of hitting Ebay instead of the LHS on a number of ocassions when theLHS could have gotten the good(s) for me if I was more patient. I have noticed that Ebay prices seem to be creeping up (inflation, gas prices,etc) enough that a lot of the deals aren't what they are cracked up to be when shipping, exchange rates, import tariffs are added to the mix the LHS's regular prices can be very comparable if not better.

[MAbruce]

From what I’ve heard, the hobby store business is not something that will make you rich. It’s a niche business to start with, then you factor in numerous sources of competition and it adds up to a crazy investment pursuit.

If I had to start a hobby business (emphasis on “had to”), it would be an on-line store offering deep discounts through high volume sales. I’ve noticed that price and availability are the biggest positives you can offer – more so than service (other than good basic services like prompt filling of orders).

[ndbprr]

There are a couple of dilemas that face us all. Limited funds and increased knowledge limit our need for a hobby shop. A good hobby shop needs at least $250,000 in inventory and that is bare bones. So we have a proprietor in a business that generates its funds from disposable income. To survive local shops are going to have to bring something to the table currently not being offered. Once a customer makes price the ruling issue it is hard to offer service and value. WIth gas going to be high for a long time and prices increasing from the suppliers the consumers are being squeezed and are rebeling at the traditional model and pricing. If I were to win the lottery and go in the hobby business I would go into the manufacturing side and sell through hobby shops with storefronts only. i would sell directly to the consumer but at full list price. That might make a difference but something else is needed that I haven't figured out at the lcoal level to survive.

[BRAKIE]

Guys,I freely admit that I stop using full price hobby shops long time ago except in some extreme cases..To my mind there are to many shops offering discounts and of course the super discounts found on line.I stop playing the e-bay game as many of the so called deals can be beaten by shopping on line and not to mention the ridiculous bidding.
I suspect if the truth was known NONE OF US will rush out and pay $99.95 for a engine we know we can get for less else where-in most cases for $64.95.
I know we need our local hobby shops but,THE OWNER MUST REALIZED WE ARE NOT TO BLAME DUE TO HIGH MSRP WE MUST SHOP ELSE WHERE FOR THE BEST DEAL FOR OUR LIMITED HOBBY DOLLARS! The owner should give discounts and setup a on line store to compliment his local customer base if he/she wishes to survive..

MR.HOBBY SHOP OWNER,Your store's future is IN YOUR HANDS..Whatcha goin' to do? Are you going to sink or swim? Its YOUR call!

[csmith9474]

QUOTE: Originally posted by BRAKIE

Guys,I freely admit that I stop using full price hobby shops long time ago except in some extreme cases..To my mind there are to many shops offering discounts and of course the super discounts found on line.I stop playing the e-bay game as many of the so called deals can be beaten by shopping on line and not to mention the ridiculous bidding.
I suspect if the truth was known NONE OF US will rush out and pay $99.95 for a engine we know we can get for less else where-in most cases for $64.95.
I know we need our local hobby shops but,THE OWNER MUST REALIZED WE ARE NOT TO BLAME DUE TO HIGH MSRP WE MUST SHOP ELSE WHERE FOR THE BEST DEAL FOR OUR LIMITED HOBBY DOLLARS! The owner should give discounts and setup a on line store to compliment his local customer base if he/she wishes to survive..

MR.HOBBY SHOP OWNER,Your store's future is IN YOUR HANDS..Whatcha goin' to do? Are you going to sink or swim? Its YOUR call!

I am fully aware that I pay more at a LHS as opposed to an auction house or online discount store. But I also get a lot more for the extra little bit that I pay. First, shipping can eat away at your savings using the internet. Then you have customer service. If you have a problem take it back down the street to deal with it. I also have a great appreciation for local small businesses. Overall I like having the security of knowing that help is a short drive away. There are so many things that the list could go on for awhile. One of the things that reminded of the virtue of the LHS was last week when I needed an oddball screw for a brass pax car and one of the guys at the store "fabricated" one for me right there on the spot free of charge.

[BRAKIE]

Well to each their own.I just ordered 2 Athearn RTR GP38-2s for $109.98 plus $7.95 shipping for a total of $117.93 vs 2 @.$74.98 each which would be $149.96. that is a savings of $32.03..Not including savings on the cost of gas of driving 53 miles round trip..With that $32.00 saving I could have bought 2 RTR Athearn or Atlas freight cars and still have some change left..[:D]

Again to each his/her own.[:D]

[ARTHILL]

I have found that counting shipping, online always costs more and I don't get to talk to the people. I like flea markets for the good used stuff, but the dealers there are the same price as my LHS, if I count gas, time and entrance fee. I saw my first Broadway Limited there. When I asked my LHS about it, he had some at the same price. I don't have to but I would spend a little more just to keep them in business.

[Anonymous]

QUOTE: Originally posted by BRAKIE

Guys,I freely admit that I stop using full price hobby shops long time ago except in some extreme cases..To my mind there are to many shops offering discounts and of course the super discounts found on line.I stop playing the e-bay game as many of the so called deals can be beaten by shopping on line and not to mention the ridiculous bidding.
I suspect if the truth was known NONE OF US will rush out and pay $99.95 for a engine we know we can get for less else where-in most cases for $64.95.
I know we need our local hobby shops but,THE OWNER MUST REALIZED WE ARE NOT TO BLAME DUE TO HIGH MSRP WE MUST SHOP ELSE WHERE FOR THE BEST DEAL FOR OUR LIMITED HOBBY DOLLARS! The owner should give discounts and setup a on line store to compliment his local customer base if he/she wishes to survive..

MR.HOBBY SHOP OWNER,Your store's future is IN YOUR HANDS..Whatcha goin' to do? Are you going to sink or swim? Its YOUR call!

Actually your access to an LHS is in your hands! The LHS owner can close his shop and get a real job with a better income.

As each LHS closes, you will find it increasingly expensive and frustrating to obtain small items in a hurry. Imagine, needing a small package of very small brass screws or a pack of code 83 rail joiners and discovering that you will have to mail order them. It may be that you will find out just how much you need an LHS.

In addition, the number of newcomers to model railroading will continue to dwindle. If model railroading is out of sight, then it is also out of mind. LHSs promote model railroading. Their disappearance reduces the promotion of model railroading.

To carry this discussion further, manufacturers depend on sales volume in order to develop and produce products profitably. As the numbers of model railroaders diminishes, the ability of manufacturers to maintain profitability diminishes as well. It may be that Life-Like may have seen that their model railroading division was not as profitable as their other endeavors and decided to get out of the model railroading business. You have to ask yourself, if model railroading is so profitable, why would the corporate leaders of Athearn and Model Die Casting (Roundhouse) sell out?

One of the concerns of some hobby product manufacturers is producing the product and getting it out of the storage facilities and into dealers hands. Manufactures do not want to sit on inventory. They want to make the product, ship it, and be paid for it within a very short period of time (if not in advance of shipping). Hobby distributors typically buy large amounts of product and resell it to LHS's in much smaller quantities. Distributors hold a great deal of product in the warehouses all the while waiting for LHS to take products off their hands and pay them for it. When the LHS's begin to sell less product, then the distribution channel begins to choke with product resulting in revenue starvation for distributors and manufactuers alike.

The online world recirculates old product and some new product with much lower revenues. New product volumes are limited to online buyers as the remainder of the distribution channel is not buying and holding as much product.

If the current trend continues, you, the consumer, are going to lose out. There's going to be lots whining and complaining about not being able to get certain locomotives or rolling stock. When manufacturers suck it up and become more fiscally responsible, somethin's got to give and most likely that will mean less new product tooling. You will also see far more short runs of locomotives. Short production runs means that the manufacturer's warehouse clears out quickly allowing him to make more product from old tooling. If you look at the plastic model business you can this happening.

Pretty soon, online dealers will begin to see less competition from LHS's. They will very likely realize that they are leaving money on the the table. They will respond by aggresively "buying out" the manufacturers short product runs and increasing online prices because the know they have the product and you cannot find it anywhere else. INHO we are probably looking at a timeline of 5 years for this to happen.

You just don't realize how much you need your LHS!

[AntonioFP45]

One good thing my LHS does offer is the outdoor "Flea Market", twice a year in front of the store. Spring and Fall.

Anyone can reserve a table and sell their model related items. Quite a number of customers show up and of course, they eventually go inside the store and may even spend a few dollars. The store's owner is not sleeping, he's looking for ways to bring in business.

Something some of us are not realizing. While there are hobby shops that sell items for discounted prices, a number of discount-order web dealers have no store front but miniature storage units, work out of home, or share space with another business. I actually met one well known internet dealer at a train show last year who told me that he works out of his house. Some of you buy from him but I will respect his privacy here.

Result? Very low overhead. So it's very easy to undercut the LHS and even other web dealers.

I'm not criticizing those of you that do buy mostly online. As I stated, I've bought a number of items through Ebay, but my point is that if you happen to have a "GOOD" LHS where quality personnel and service are the standard, consider being more supportive, especially if the price difference is not that great.

For example:
I was going to purchase some Walthers Budd SCL cars on line. My LHS has the same cars. By the time I calculated shipping and handling, my savings would be about $2 to $3 per car. I'm going to buy those Budds from my LHS instead. With the Walther's Flyer the price difference for me would be about $1.50! [:D][;)]

Let's say I want another P2K E7 and my LHS has one for $60. I find the same unit on Ebay for $35; with shipping and handling being $11. I'll ask my LHS manager if he'll have a sale soon or even tell him that I've seen the same unit for a lower price. If he can knock off a few dollars I'd get it from him. If not, only then I would get the unit on Ebay. I found that customer oriented LHS dealers won't mind haggling a bit. At the same time, customers should never be obnoxious (I've seen many that were).

Overdurff put it so simply and so well regarding our hobby shops:

Use them or lose them.

Peace and a Cautionary Yellow.[;)]

[palallin]

I do NOT need my LHS.

Let me explain: my LHS is run by a good friend of mine, so I would buy from him if I could, but he cannot obtain my hobby needs. Since I am not working with the latest and the "greatest" (sarcasm intended), I have to obtain my needs used or old stock. I have no choice. I already have to mail order rail joiners, etc. Although I would feel sorry from my friend if he were to lose his business, I cannot help him in more than a token fashion.

The next nearest HS is over 100 miles away, not exactly a place I can pop into after work (even were it open in the evenings).

I must use online sources or give up the hobby.

[BRAKIE]

CapnAmerica,I probably know more then you realize about the need of a LHS..However,I FLAT OUT REFUSE TO PAY FULL MSRP PERIOD EXCEPT IN CERTAIN CASES!!! Why should I pay full MSRP when the next shop has the same engines and cars 20% less then MSRP?

Now if you think its necessary to buy from a full price hobby shop then by all means go for it but,I WILL NOT support a full price hobby shop as a study customer.

[trainboyH16-44]

I can say that I just went to my LHS and bought a Kato caboose, using all the money in my bank account!
Matthew

[csmith9474]

I do buy some of my "stuff" wholesale, but even some things I can get wholesale I will buy from my LHS so I don't have to wait. Of course a lot of that is that spur of the moment stuff that I do need right away to finish up something that I am working on.

[Anonymous]

I'm gonna admit to having bought a few things online and that I do hound ebay constantly looking for that deal, but I still do quite a lot of my business at the LHS. My LHS is part of a chain of LHS's called Riders Hobby, they have quite a few shops in and around Michigan. Though they do most of their business in their RC Car/Plane Department, they keep a big stock of trains and their train profit has gone up in the last few years. I know this LHS will never go under, they'll always have their RC stuff to keep them alive, but they could stock less and less trains until they're all gone, or keep jacking up the prices. And then what do I do? Internet. See, I've seen in a lot of LHS's go under simply because they refuse to go any lower than MSRP. You have to be willing to deal. Not only will they lose profit but they'll lose a lot of loyal train customers simply because they can get the same thing for way less online. The solution? Maybe there isn't one. Maybe LHS's should start selling online in addition to their store. Who knows. Either way, as gas prices keep increasing and MSRP keeps going up, the internet looks better everyday.

[Anonymous]

It may sound crazy, but I don't subscribe to MR just so I have an excuse to stop at the LHS! Now that I have my layout pretty well established, I may not go but once a month to get something, and that may only be the MR. My problem with my LHS is that the owner poor mouth's about business, but then he only wants to stock the basics- a little track, the Woodland Scenics display, bottom line all plastic freight cars and beginner train sets. Don't get me wrong, I have spent quite a bit of money on track,etc. at his shop but most everything I have bought he had to order for me. Now that I have gotten pretty well established in the hobby, I feel like I can shop online and by catalog and eliminate the middle man. Also, my LHS is pretty much locked into MSRP, which is another deterrent.

I appreciate the fact that I have a LHS that is close by, but if I have to order everything why not do it myself? I guess if it closed I'd have to subscribe to MR.

[IRONROOSTER]

Retailing in this country is changing. First the bigbox discounters like WalMart and then the internet discounters drove out the small stores. It's sad to see them disapppear, but probably unstoppable. Unless the LHS can offer something the discounters can't they will slowly disappear.

The LHS at the nearest shopping center to me closed years ago because he couldn't match the price of the big discount hobby/craft store chains. This is true of the neighborhood hardware stores, etc. If you drive through a small town after WalMart has arrived you find it is out of business.

This may not be the result we want, but it does reflect the more efficient distribution system that gives us lower prices.
Enjoy
Paul

[MisterBeasley]

This is just one disturbing bit of news about what the manufacturers can do to an LHS:

I was buying some switch motors yesterday, and my LHS guy was talking with another customer. Apparantly, Soundtraxx has cut prices drastically on its sound decoders, likely in response to the arrival of Digitrax in that market. The LHS stocks a few of these decoders, and now their MSRP will be below what he paid for them. He's not sure if Soundtraxx will take them back, but he knows he won't be able to sell them at the old price.

[Javern]

as a consumer I shop around for the BEST deal and if that appears online then I go for it. If a LHS can't compete or find a way to compete then perhaps the LHS as we know it will be extinct, just like drive in theatres,mom and pop appliance stores, etc

[brothaslide]

My dad told me once (and probably your father as well), "The only thing certain in life is change." Business models evolve due to changes in the market place. Hopefully your LHS will be savy enough to find out how to keep the brick and mortar part of the business while tapping into the potential of the internet.

[trainfan1221]

I actually got a good deal last time at my hobby store thats actually in Manhattan. They said that they had to do something to get the business in. I bought a little more than usual to help out. I am not in a position to shop online and think the severe lack of these stores is disturbing. we had several close down around here in the past several years and not be replaced. The Great Train Stores also were convenient, though their selection was occasionally limited.

[Don Gibson]

Certain truth's are self evident. To wit:
1. Discounter's are driving most retailer's out of business.
(Think of former Department stores)
2. Discounter's and old 'Cash & Carry' strip down to minimal Service (to reap a profit)
3. Mfr's & Retailers require a profit to stay in business
4. Lower prices may stimulate business from regular customer's, but does it really attract NEW people to the hobby?

When the local MSRP shops are gone, The discounter's will raise prices to increase profit's, and increase services to remain competative WHY? Because most of us will be gone, and the new buyer's will demand it. Already discount's on Broadway Ltd. are decreasing in the big discount houses.

"Unless the LHS can offer something the discounters can't they will slowly disappear. "
Bingo! ... Notice the NY Boy's are constantly cutting back to the fast mover's, like Bachmann, etc. Prediction: P2K will be next.

BRAKIE: I realize you have been in the hobby a long time, and don't need help, but - One question - If your next purchase had identical discount's / prices from mail order firm's, E Bay, or a LHS, - again, @ identical prices - WHERE would you buy?

You and I grew up with the $35/oz. gold dollar. Tomorow's dollar will be worth $750/oz.[or less. Today it's around $500 - $600/oz. That's why everthing cost's more (15X). I remember looking at a Lionel Burlington Zephyr set for $75 department store retail? Now it's $350 - and a bargain.

CapnAmerica didn't have you in mind, but he was right on.

[skiloff]

I would happily make all my purchases at the LHS if they offered the stuff for me in stock (or at least a couple weeks delivery time), and hopefully at a marginal discount from MSRP. I ordered two sets of couplers from my LHS in mid-August. I checked last week and they recieved an order, but my couplers weren't in - they'll go in the next order which needs more items before they will order - likely the end of this month or early November. Why would I bother ordering anything more? Even with shipping and everything, I'd still be paying a little less and getting what I want weeks sooner. Bottom line - offer me even a 10-15% discount from MSRP and at least get stuff in within a few weeks and you have me as a customer for life. Gouge me and give me crappy service and I'm on the internet. The guys at the store are great, but they have to realize that they aren't encouraging me to continue to buy there.

[railroadyoshi]

[#ditto] to csmith's first response. I dont care if i pay more, I support local business, and they support me, thorugh their friendlyness, the help they offer me, the friends the shop has allowed me to make. Had I not shopped at my LHS, I wouldn't know another teen model railroader who lives within 4 minutes from my house. today I sat with him on my bus (a very lucky coincidence that our route is the same) and had one of the best train conversations in person I have had yet!

[TrainFreak409]

It is a shame that local hobby shops don't do as well as they used to. Sure, I use the Internet for many purchases. I just got a locomotive (DD40AX!) off eBay, and RoadRailers off of www.blwnscale.com, but I did buy a casket factory at the train store in Sykesville.

But, you can't really go on the Internet and see a demonstration layout running, can you?[;)]

[Adelie]

Things have changed a lot in the last 30 or so years. Used to be that every kid had a hobby of some sort. There were a lot of teen model railroaders, slot car racers and model builders of various sorts. However, these days it seems like the major interest is in computer or video games. I'm not judging that as good or bad, although it is not good for the hobby we share.

The closest hobby shop to me is one that is impossible for me to spend any real money with. I've bought a jar or two of paint there and a magazine, but their inventory is largely O-scale (I model in N) and gaming. They seem to turn a fair buck at both, so more power to them. And when I need a jar of paint or two, I'll certainly check wit them first.

With less of a market of model railroaders, I think hobby shops that emphasize this and pure train shops need to expand their potential customer base via the internet. Two that I have visited in the last year that seem to do that well are Caboose Hobbies in Denver and MB Klein in Baltimore. I was at MB Klein about 3 weeks ago, and there were two kids (conversation had them late in high school) waiting on customers, two or three guys stocking shelves and helping out folks, and two or three guys in back processing phone and internet orders. They are a classic train store-stuff stacked from the floor to the ceiling in all scales. And they may own the building they are in. But turning their inventory would probably be tough without online sales.

[lesterperry]

I just lost my LHS do to the owner passing away. A good friend. I told this in another topic a few weeks ago but here I am again. HEY LHS OWNER. This man had a few inexpensive high demand items selling at his cost. Like flex track, couplers, connectors. People would go there to get track and leave with a new Loco they just had to have. (they didn't know that before going in to by track) Guess what, his profit on the loco was much more that the track would have been. The customer leaves happy with flex track & loco. Now there are times when the cutomer comes in gets 10 pcs of track and leaves. No profit, but what did he see while in there that he will remember for next trip? Oh yeah I almost forgot. Get to know your customer, learn what he wants. Learn what era and company he modles. Then just by coincedence stock what he is looking for. Read his mind and capitalize on it.

[jwr_1986]

Overhead has just forced another hobby shop in my area to move. They were on mainstreet and now he is moving to an addition on his house in the boondocks. I don't frequent them only because they don't do HO but it is still a loss as it will now take a special trip and a kid can't just wander in and discover our hobby.

Jesse

[jwareing]

About a year ago Tucson Hobby, here in, uh, Tucson, closed for good. It had been in business since just after WWII. (For the younger among us, that's '45 or '46 in the previous century.) Tucson hobby sold trains, yes, and models of all kinds. It had gone through several owners in the past few years.
Three or four months before it closed, I went in looking for some kit or other that was a limited run. The current owner, who never came out from behind the counter that I know of, said, "Yeah, I can get that for you. Lemme look on ebay and if you leave your number, I'll give you a call when it comes in."
I just told him that he didn't really need to bother and thanks, anyway. And I never went back.
Hell, I can look on ebay all by myself.