economy politics and modeling

Model Railroader General Discussion (Model Railroader)
1

I have seen quite a few shops die a slow death these past 8 years. Is it just the nature of the industry or is it a larger issue that has come about due to war and fuel costs affecting everything? I dont see major decreases in costs of selling supplies and rolling stock so are there still a lot of railroaders affording the new ready to run or is it just a midwest issue that the lhs are closing?

On a personal observation I had more money under clinton for hobbies and vacations. my tax records show that i paid about the same taxes for more earnings than i pay now for less. (I am talking about 30k less) It would be $100 minimum per lhs visit now i spend more time looking than i spend buying.

I dont want this to spin into a political diatribe, just make your statement agree or disagree and why.

2

The Mighty Carnack sees the locking of a thread in your near future…[:-^]

3

The economy, politics, and modeling are strongly connected. At the moment, what seems to be driving up prices is the cost of oil. And one reason why oil is getting so scarce and expensive is because people in advanced industrial nations like the USA have become too dependent on the private automobile. All levels of government have had a hand in creating an auto-dependent society, and now so much of life has been reorganized around this mode of transportation that it seems impossible to consider alternatives.

As far as our hobby is concerned, I’ve seen a decline in interest in trains over the last thirty years, and the best explanation I can come up with is that trains don’t have as much of a presence in our lives as they did way back when. The major railways got out of passenger service in the early 1970s, much of the freight hauling has been transferred to trucks, and many railway companies have merged and centralized their operations. So here I’m going to assume that interest in modeling requires inspiration, and when I was young there were enough real trains running to spark my interest.

As real railroading declined, so did model railroading. I saw the writing on the wall when the department stores stopped selling train sets and related model railroad equipment. Some hobby shops had come and gone, and the more established ones either cut back or did not expand their train departments. To me, these are the side effects of a declining presence of railroading in our lives.

4

Get a Model Railroader from the early 1990s and another from the late 1990s, and you will see significantly fewer hobby shops listed in the issue from late 1990s. Hobby shops closing have been discussed here many times. It is probably the internet that is main cause of their demise. With as many products that have come out in the past few years, it would not seem that the hobby has been hurting for customers.

Most people I know are making more now than the 1990s. Of course, neither of us know enough people to be considered representative of the country as a whole.

As for this not turning into a political diatribe, how can something turn into that which it is already?

5

The thing you need most is a better tax adviser.

6

I agree about the declining presence of railroading having an impact on model railroading. Another influence on the decline of brick-and-mortar LHS has been the growth of internet sales, including the many spare bedroom entrepreneurs whose operating expenses are a minor fraction of those of a shop that has fixed operating hours and has to have employees, building rent, a business telephone, etc… Also, a lot of family shops have closed because the owner decided to retire. Their replacements have web sites, not street addresses.

The economy, and especially the current reluctance of consumers to spend on luxuries (Which includes ALL hobby and leisure time expenses) is also having a negative impact on LHS sales.

As for politics, the impact lands just as hard on all of us - and I have yet to hear of a politically inspired economic decision that either made sense or accomplished what it was intended to do. (The ‘tax rebate’ being only the most recent of a long list of examples.)

Chuck (modeling Central Japan in September, 1964)

7

I think the two major factors have little to do with geopolitics or oil.

First, the Internet has changed the way we buy things. When I was younger, the only choice was to go to a store. Now, we can shop from the comfort of our desktops, and we frequently find lower prices as well. For a shop to compete in that environment, it needs either a lot of volume, or it needs to provide a level of service that makes it worth your while to go there. Of course, some shops have started “sleeping with the enemy,” so to speak, by establishing their own on-line presence and doing mail order. But, for the old style shopkeeper who was only minimally interested in trains himself, it’s a tough sell. Over the last few months, we’ve seen the occasional posts about shops that went out of business as the owner retired, too.

The other problem is customers. Us Boomers, the Lionel Generation, are getting older. In my case, that’s a good thing, because it’s brought me back to the hobby after a long absence. Others, though, are starting to feel the pinch of fixed incomes and “downsized” houses without basements or spare rooms. The younger generation is more interested in doing “thumb exercises” with their Playstations than they are in creative thinking or craftsmanship, I’m afraid.

8

**

I think you hit it with the play station, but have you noticed how the kids and adults love the monster trucks with gas engines and remote control? Speed, thats what everyone wants. Acrobatic airplanes. speed boats, race cars. Trains are just too slow to attract people in this age of rush, rush. IMHO.

One of my LHSs has way more invested in this category than trains.

[:(]

Lee

9

Another issue is the diversification of the hobby and the increased knowledge of the consumer.

We don’t want a generic hopper car, we want the type W2 hopper car. We don’t want a phase II engine, we want the phase III engine with dynamic brakes, we don’t want generic sound, we want the non-turbocharged engine EMD sound chip. As a result no hobby shop can afford to stock stuff that meets all of our needs.

And then there is the decreased interest in craftsmanship, increased interest in RTR and you have a decrease in all the scratchbuilding suppies being bought so they are less profitable.

I think that the LHS is undergoing a change, just as a lot of smaller businesses are. When was the last time you bought software or a computer at a local mom & pop computer store? When was the last time you bought groceries at a local mom and pop store?

The economy may affect how much you buy, the market trends affect where you buy it.

Dave H.

10

It’s more complicated than what you stated.

Local Hobbyshops have been closing left and right since the 1950s. Why? It has to do with economics.

Store owners are faced with lots of fixed costs such as rent, taxes, insurance, rubbish removal and other costs. Add to tha the fact that many hobby shops were used as places to leave one’s kids while one went shopping for the stuff one really needed and the fact that those unsupervised kids didn’t just look and you can see why many got out of the business.

There are many more products available than ever before and the

11

Yeah, my response was definitely an over-simplification of the problems of the LHS owner, but aren’t these the same issue faced by pretty much any small-business operator?

Think of how a lot of businesses have changed since our childhoods. Most of the small hardware stores have gone away, to be replaced by Lowe’s and the Depot, or at least absorbed into the franchise world of True Value and Ace. The ones that survive are bigger, too, just to hold the inventory. Paint and wallpaper shops? No, the big-box hardware guys put them out of business, too. Gas stations that used to be able to fix almost anything are unlikely to even have windshield wipers anymore, as they’ve been replaced by self-serve pumps and overpriced convenience outlets. Half the restaurants are fast-food joints, and even the sit-down places are increasingly dominated by Applebees and Outback.

So, we need to look beyond the scope of the hobby to see what ails the LHS. It’s a whole set of problems, and these problems are shared by many diverse businesses, not just model trains.

The times, they are a’ changin’.

12

The internet really just took the place of mail order businesses. As an O scaler in the seventies and eighties my LHS carried a minimal amt of stuff. Generally I got what I needed from Train World or Standard Hobby Supply via mail, or sometimes thru special order at the LHS from Walthers. Now I just order stuff online as often as not; I’ve moved so the “Local” hobby shop is much farther away than before…plus I get sick of going to two or three stores trying to find something when I could just order it online.

13

As previously stated, the probable cause of hobby shop declines is the internet & the loss of interest - due to loss of passenger service (who knows how their purchases are delivered) and also to the increase of electronic “toys” such as computers.

Fuel costs have lately become a problem to all of us - as well as higher food prices etc, etc, etc.

Clinton, Reagen, et al, have not had as much influence on the economy as Mr Greenspan, the congress, and the periodic rise & fall of the economy - don’t try to blame it on one person or political party - enough politics!!

As for the war - I’m a Vietnam vet - don’t get me started about war protesters!!! [:(!]

14

Sadly many hobby shops close because the owner passes…He may retire…He may follow the old school path where he insist on full price on old stock.He may be a grumpy as well believing everybody needs his store…

As far as the economy…Sorry I don’t let things like that worry me…I simply refuse to give up life’s few pleasures because of the stock market woes or economist is crying doom and gloom…

Besides I always thought economy is a personal thing…You see if you have a job "your " economy is good…No job then your “economy” is poor.Of course it doesn’t help if one lives above their means while trying to keep up with the Jones who,in turn,is trying to keep pace with the Smiths who is trying to keep up with the Does and on it goes in a never ending vicious circle that so many entwine their selves in…

As far as gas prices…Well I buy my gas in the “off peak days” since the price was dropped from its former price… Thursday/Friday gas was $4.09.9 and today its $4.01.9…See how its works?

15

Folks:

One of these days I am going to have to use my back-issue-reading time to cull a bushel or two of doom & gloom from the letters pages and then use these quotes, with dates, as a signature. So far MRRing has been murdered multiple times by TV, declining leisure time / income / railroads, slot cars, video games, and the loss of the craftsmanship of the 1990s/1980s/1970s/1960s/1950s/1940s/1930s/1920s/1630s. The hobby survived the '60s and '70s, so I think the death notices may be premature. :slight_smile:

Shops have closed frequently since the 1950s and before. Yes. They have also opened frequently. Unfortunately, most small businesses seem to have short lives.

Think about what you need to know to run one of these things. Even leaving out the business considerations which any small proprieter faces, think of the subject matter.

Few shops can survive on one hobby alone. We vesties and foamers love those general train hobby shops, but there aren’t always enough of us, and even where there are, some shops may want to have a more complete line. One nitrohead who sees “Hobby Shop” and assumes he’ll find RC stuff, and being disappointed, tells everybody the store “didn’t have what I wanted”, can create a bad impression. Besides, multiple-hobby coverage is a good thing – the wingnuts might see trains and say, “Hey, those don’t disintegrate when the power goes out…hmm…”

Now think - how much do you know about RC? Planes? Dollhouses? Plastic models? Not to brag, but I know I could kick conspicuous afterburner with what is available for trains…but most of those other hobbies are a closed book, save some basic interest in car kits. The closest LHS is run by somebody to whom trains are similarly foreign, so I’ve been trying to teach him what I know.

Hobby shop owners read this place, I bet. Maybe, instead of worrying about things, we should have a thread discussing what we think they should stock…maybe help them out a bit. Here’s what I think

16

I see several factors at work.

Retailing is changing, small shops are disappearing. Wal Mart, Lowes, Target, and the other big chains have made it difficult for all but niche markets. They have more selection and offer lower prices. The niche markets like model railroading have some of their potential sales skimmed off by the chains, but also lose more to the internet discounters. Add in the train shows and many customers just don’t need a LHS. Personally, I have for several years spent very little in my LHS, 90+% is spent on internet ordering and train shows.

Wages for many have failed to keep up with inflation over the last 7 years, resulting in less purchasing of discretionary goods. And a stronger desire for discounts.

The recent oil price jumps are making everything more expensive, especially food items and other basics. So people will buy even less of other items.

I think the future of model railroading is good, but the LHS will continue to disappear as people shop elsewhere.

Paul

17

We keep coming back to inventory.

My LHS is small, not much bigger than my own train room. But, I can walk in the door and get anything from the Walthers catalog, or from the Athearn/Horizon catalog. An LHS can order for me, and I end up not paying shipping charges. Sale items in the Walthers catalog are on sale at my LHS, too, and if they’re not on sale, I get a small discount, more than enough to cover the governer’s take on purchases. All it takes is a bit of patience.

If a shop can’t be bothered with this sort of service, well, maybe Darwin should eat them, too.

18

As more and more people insist on a share of a relatively fixed amount of energy resources available over time, the cost of essentials dependent on energy to have them available for retail and then consumption will rise. It’s inevitable, and really quite simple in economic principle. Populations continue to rise, albeit very slowly and usually with the aid of immigration in more advanced populations with more education and technology, so more of “us” will have to contend with more costly resources…drives the price up.

When it gets more dicey to make ends meet, do folks buy lottery tickets (yes, surprisingly many do), movie tickets, new cars, more toys, more entertainment technology…? Darwin’s principle will tell you that those who do won’t be around long to enjoy their unwise purchases. For the rest of us, we will continue to attend to the more important stuff, which means discretionary spending gets pinched. For the breathing and sentient humans who want to stay in a hobby of any kind, funded with discretionary spending, they’ll want to stretch that dollar as much as possible. They already spend money on internet connections, so why not use that monthly cost to find bargains to keep ourselves in the hobby? The LHS’s all have bargains, but not to the extent that most etailers present to us. They are also loath to tell us where a competitor has it for less. So, we will continue to spend more of our dollars at places where we get the most value. As a trend, few of us can argue credibly that it will be to the LHS’s advantage over the long run.

-Crandell

19

The most sensible response so far! [tup]

-George

20

Good night, nurse! [:o] I gotta move to OH and get me some of that! Right now in SE California, it’s $4.41 for regular at the Navy base in El Centro. In San Diego over the long weekend, it was a little cheaper at $4.28.