CapnAmerica,So you are saying the hobby shop did not lose customers and above all sales? Tell ya what…If you are ever in the Bucyrus area let me know…We will go hobby shop hopping and then you can plainly see how the discount hobby shops business is brisk compared to a full price hobby shop.
I live in the N. Austin, TX suburbs and don’t seem to have the problem of dissappearing LHSs, just the opposite in fact, until 2-3 yrs. ago there were two stores (Village Hobby & King’s Hobby [amazing, 35 yrs old]) in town and nothing but Hobby Lobbies and Hobby Towns out here (in the 'burbs) until a store opened less than 10 mi. away! (The Collectible Caboose) All of these stores seem to have at least adequate service, & @ King’s & TCC the people are knowledgeable, nice, and they have amazing amounts of even N scale.
There’s a lot to say about having a store where you know the people and know what they’lll have.
I do have a habit of wanting to go to Hobby Stores everytime I’m on vacation, so I’ve gotten to go to Rio Grande Hobbies in Owensboro, KY (4nscale.com); a really nice store that went out of buisness recently in Bedford, TX (DFW); and two cool stores in the Phoenix area.
There is a difference between shops that are doing well and those that are doing a brisk business. I’ll bet that if I were to stand on the corner of a busy street selling dollar bills for 95 cents each I’d do a brisk business. I know of a specific hobby shop not fifty miles from here that went broke while selling over $20,000 per month in R/C cars and airplanes. His shop was always very busy with lots of money crossing the counter. We had a chance to talk. He was paying almost as much for his goods as his customers paid him. His margins were way to thin, but his customers thought he was great. They subsequently spent lots of money in his store.
Unless you have had the opportunity to look at these guys books, how can you really tell if they are doing well?
CapnAmerica says:
Unless you have had the opportunity to look at these guys books, how can you really tell if they are doing well?
Well,I know several hobby shop owners,I have stood on the other side of the counter plus,I was a part time Train Show dealer.That is how I know when a shop is making money even by giving a 10-12 % discount.I would go to my distributor and pay for my order then the distributor would take another 3% off of my bill because I was paying cash up front…Plus like hobby shops distributors have close out sales which means more savings…
Where I live, Erie, PA, there really isnt a good hobby shop localy unless you want vintage Lionel or new Lionel/MTH items. There is a new hobby shop with a very small selection of trains, I get my Bachmann easy track there, but for anything else I either go online, mail order from a few different shops back where my folks live, or ebay. We have two shows localy here, one in the fall and one in the late winter. I set up a display of trains there and sell stuff nolonger needed in my collection. Ebay is great for my era of modeling, 1900 ICRR, as most hobby shops dont carry much for that era, and many of the items are long out of production. I have a good friend back in Kokomo, IN that runs a hobby shop in downtown, he is a full line shop with more than just trains, he also does several train shows and has a website for online sales. He does well but only because of the many ways you can purchase from him. He also discounts trains and believes that volume sales are better than few sales at higher prices and it works for him. I used to to shows with him back when I lived at home with my parents, if a show didnt do well in sales over a couple of years, we went to a different show, there were several to choose from each weekend from late October thru early March. Now with the shop, he only goes to the biggest shows as well as the local show and his staff have the shop open as well that day. Many shops will disappear because of increased competition from internet sales, ebay, train shows ect. Yes its unfortunate to see shops we love go under.
I have a freind opening a hobby shop in the near future now hes mainly into O gauge but heres what he has told me Lionel no minimum in fact he said he wasn’t happy with the idea of dealing with MTH and now he has deiced not to as all the rest have stated no problem send your orders when your ready we see by your prints your in the middle of building all seems fine nott MTH they told him when he finally gets the building built send them some pics and they’ll let him know. Like its an honor to deal with them.
Hes going to see what else the area is interested in as to what else he is going to carry (ie: ho, n, radio controll items ect, ect, ect)
Rt
My experience is that you can have low prices and a local hobby store too. When I built my last layout I invited three LHS’s to bid on my faxed list of flex track, turnouts, cork, tools, etc. The best bid, which was over $1000, saved me a few hundred smackers over what I would have paid by cherry-picking the best prices item by item on the internet or through mail order houses.
The dealer, I’m sure, did fine as well. He made a nice profit by placing one single order, carried no inventory and took no risk. Hopefully, he’ll be there the next time I need a tube of Goo.
I always make it a point to get a LHS quote before I purchase any significant items, even if its 10 hopper cars.
Our hobby shop owner in La Crosse Wi, ABC hobbies, just took over the store. I would spend an avg. $75.00 - $100.00 amonth. The old owner would give us 15% off, so what does the new guy do, you can only get 15-20% off if you belong to one of the local clubs.
We had our yearly show in the Park Sat. to rise money, for the town steam engine display. All the dealers there where doing atleast 25- 40% off. Our local guy had a table, guess who went by his tables 3or 4 times with 3 full bags of goodies. To tell people they must join a club to get a discount in these days of shows and eBay, is like shooting yourself in the foot. Maybe I am over reacting? But I see these things has nothing less that blackmail.
Whew---- I appreciate ALL the feedback from all !! Looks kinda like I opened the fire box and piled in the coal. Great conversation all
I’ll confess to buying a lot of stuff online. It’s far more convenient for large orders. My current layout I built straight from a book (baby steps…maybe I’ll custom build some day) so was able to order up about $400 of track in one fell swoop. The LHS is quite useful, however, for the ‘missing pieces’. Great to be able to swing by and pick up the switch you forgot or another batch of plaster cloth or whatever, instead of waiting a week for an order to show up. I like to be able to scratch the itch when it occurs.
I actually had a really good experience yesterday. It was a fairly cool day for summer in Washington and I needed some plaster cloth. Rather than waiting, or driving out to a chain store I grabbed by bike and rode down to Whiste Stop Hobbies in Old Town Alexandria. Good exercise and a nice trip (besides the loop around the power plant). Also notable from a railway perspective - The Potomac River Generating Plant and the Washington Post printing plant are in Alexandria and have still-used siding trackage that breaks off from the CSX mainline. It’s all grade level, so there’s track running right past office buildings and apartments. It’s my understanding they do most of the actual work at night. While I down at the shop I had a nice chat with the proprieter, and almost gave in on some N-scale rolling stock he had, but the budget didn’t allow it. Made for a good day all around. Certianly’ can’t do that sort of thing on-line!
Did your friend mention the 1/4" thick contract he must sign in order to be an authorized Lionel dealer. There is a clause in Lionel’s standard contract that requires the dealer to maintain a Lionel train layout in the store for 12 months out of the year. The average dealer discount for new Lionel products is 25% off of MSRP. Atlas O Gauge is about 15%.
You might be surprised to learn that all major hobby distributors, to include Horizon, Great Planes, and Walthers, require store photographs and probably at least three industry references in order to do business with them. This is a very common business practice. Further, unless your friend intends to operate as a COD customer, he will have to have good credit references. These folks are not being arrogant as you have implied, but they are following standard business practices with the intention of protecting their dealers. They do not want to sell goods to etail or fly-by-night dealers.
I see, you never paid the bills for a brick and mortar store and I’ll bet you didn’t carry a $1,000,000 liabilty insurance policy when you set up as a part time Train Show dealer.
I’ll bet you spent most of your time working at your friends shop by collecting money at the register, stocking shelves, and answering questions. You really have not have the whole experience and pleasure of paying the bills for a full service hobby shop. Its so simple to just whip out your checkbook and pay upfront for a whole store full of train products, say about $100,000 in order to get that extra 3% discount. You make this all sound so simple and easy that now everyone is going to want to open up a train shop.
The discussion earlier about Walthers having a minimum order of $10,000 for a hobby shop doesn’t sound out of line to me. I suspect they set that requirement to keep out the wanna-bees.
Since Walthers is the distributor for nearly anything trains, you better order $10,000 worth of stuff if you plan to have any kind of decent inventory. Anything less and you are kidding yourself.
I know of one hobby shop that also sold over the internet, and they did so well online that they shut down their brick and mortar operation and went totally online. Profit margin is better.
Just remember, going online is the great equalizer. You can be a mom and pop operation, or a massive warehouse. If you have a nice looking website, who can tell? So you might be surprised to find out how many online shops you order from are mom and pops that just have a really good web site.
IMO, the internet is the best thing that’s happened to the hobby.[^]
CapnAmerica,I started as a part time Train Show dealer with a small business license,a tax id number and $2,500. investment…
As far as my hobby shop experience I have 18 years experience from clerk to assistant manager…One of my jobs as a assistant manager was to pay for COD orders…
What is your experiences standing on the backside of the counter?[;)]
PS…I forgot to mention the cost of attending a Train Show as a dealer.It goes beyond the cost of your table.
Thirteen years with two stores, seven employees, and a $200,000 cash investment. Been there, done that, and got the T-shirt! Sold it all, got a good job, bought a house, and am enjoying a decent living.
My employees always got their paychecks, whether I got one or not. That’s the big difference between being a hobby shop owner and being a hobby shop employee.
I miss many of my customers as they became my friends. I mourned when they died and felt joy holding their new babies when they brought them into the store to show them off.
Its just too bad that I could not make a decent living owning and operating hobby shops.
I know what you mean. I’m from Ohio and 3 went out in my vicinity. Although I don’t think old folks owned them. Even when we travel to Pennsylvania, all the hobby shops are closed or gone. Although, you are right. With ebay and stuff, people always buy through the internet. Including me sometimes.[:D][:D][8D]
About Woodys. I grew up in El paso, spent a lot of time in Woodies in my day. Now live in Penn. Have no real LHS near me, Sometimes I drive 155 miles to either Cleveland, Wings hobby shop, or go the other way to Buffalo N.Y., two well supplied LHS that I like there, K-VAL and Niagra hobby shop. Only when desperate for short order items that I need asap will I order from Walthers, but they do get the stuff to me quick.