Hey everyone, I will be opening a new hobby/train store pretty soon and I wanted to hear some real modeler suggestions. For instance, what would you like to see on the shelves that most stores lack? What scale do most of you work with? Do most of you kit bash or do you prefer to have your stuff ready to run? Any other comments or suggestions are welcomed. Thank you
Maybe an idea to indicate roughly whereabouts in the world you plan to open a store - the inventory needs might be slightly different in Manhattan compared to Podunk 
Smile,
Stein
Stein is correct. It hinges primarily on the demographics of your region. Also, are there other LHSes in your area that you will be competing business with?
I live near Cleveland, OH. Along with NS and CSX, Pennsy, NYC, Erie, and B&O all sell pretty well here. I was visiting an LHS last Saturday in Cranberry, PA (just N of Pittsburgh) and they were very heavy on Pennsy, B&LE, and W&LE. (My guess is that they probably also sold a number of hoppers to modelers wanting to pull coal drags.)
So - location, location, location! It’s not only important where your business will be situated, it’s also what historical lines and geographic and geological phenomenon would be of interest to modelers in your area. Every region will be different.
For starters, a 20% discount off MSRP on your entire inventory would go along way bringing clientele in. Probably not the answer you were looking for…
Tom
I sincerely hope that you already have a good knowledge of your local market and that you have a firm understanding of what you store is going to be, and that these questions are just to try and confirm your understanding? If not, then I would recommend you put on the brakes and get a lot more research done before using a lot of your financial resources. Small retail is a tough business, you have to make your living $1 at a time in small increments. You will have to do a lot of transactions to make a living or even break even.
Realities are that anyone can go on-line and purchase model railroad supplies for 20% below MSRP without trying very hard. If you are not going to be competitive on price, what will you offer that will cause your customer base to be willing to pay more? Are you going to have an on-line presence?
Do you already have a large potential market of modellers in your area? If not, what are you going to do to get more folks through the door? Are you specializing in MRR or will you be selling other hobby supplies like RC planes and cars? If you do have a large number of modellers in the area then I would imagine that there are already hobby shops serving the market? Perhaps other stores have failed and closed?
I like to see a well stocked store with aggressive pricing that can offer something beyond just sales. DCC expertise, clinics and how-to sessions etc.
Good luck with your planning and execution of your exciting project.
How to make a small fortune in the model train business:
Start with a large fortune.
Seriously, don’t go into this cold. You need a solid business plan, with realistic numbers. Even if you aren’t taking out a bank loan, prepare a business plan as if you had to present it to a bank. Be able to justify all of your assumptions. We are slowly climbing out of this recessiion, but it’s not going to be a quick turnaround.
Now, I go to a place called Maine Trains in Chelmsford, Massachusetts. He’s been in the business for quite a while, and he’s still there. Check his web site at www.mainetrains.com. Really, that’s not an ad. It’s a well-done web site. He has it done by someone (Helen by name) who knows the hobby and knows web design. If you’re going to do this, understand your skills and shortcomings. If you don’t already know web design, find someone who does. And yes, you do need a web presence.
Other things this shop does right:
The regulars (and others, sometimes) generally get a 10 to 15 percent discount. Members of local train clubs get a discount, too.
He does repairs and installations. He does custom painting. Some of these are sent out to other local guys to actually do the work, and some are done right in the shop. He really knows his business.
In general, a small shop can’t stock everything people want. Let people know that you will order things for them. I typically send the shop an e-mail with my orders, he sends in the order and I go pick it up. I save on shipping. There are a pile of the Walthers monthly flyers in the shop, which I go through looking for ideas and bargains. I buy a lot of stuff that way that I might not otherwise get.
If stock isn’t moving, there is a “bargain shelf” that it ends up on, with re
Well I’ll tell you what I want to see, but the hobby stores that used to carry them near me have dropped them or greatly reduced the selection. So I don’t think you’ll sell a lot.
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Paint - railroad colors like Floquil.
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Basswood - sidings and shapes as well as strips and boards.
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Parts - like windows, brake wheels, etc.
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Rail and ties.
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Good selection of glues, including Walther’s Goo.
Depending on where you are setting up, you may need to discount locomotives and cars, but these items which I usually buy in ones and twos don’t need to be - you’ll probably have trouble selling enough to make it worthwhile anyway.
I’m in S, but unless you know you have a lot of S scalers in your area, I would go slow with S at first.
Good luck
Paul
Hi,
You got lots of good advice so far, and may I add…
As a retired senior business analyst for the major oil company, I find myself wondering how successful the businesses are that I patronize. When I go into restaurants, retail stores, service establishments I tend to marvel at those who appear to be successful. There are so many “fickle fingers of fate” that can make or break an enterprise…
One of the best rules of thumb is that it takes three people or areas of expertise to help make a retail business a success. The first is the technical “person”, in your case the guy that knows his trains and the ins and outs of the products. The second is the people “person”, the guy who works well with customers and suppliers that people want to come and buy from, etc. The third is the “money” person, the guy that knows his finances and uses common sense for business decisions.
While one person can often be two of the above, it is an extreme rarity that one can be all three. Said another way, just because you know your trains and are a really likeable guy, that doesn’t mean you know squat about money. This all sounds simple, but it is one of the basic reasons for small business failures.
In these days of a down economy, an awful lot of stores have had to close their doors, and new ones are few and far between. Said another way, your chances of success in a hobby that depends on disposible income is not very good in this environment. And, while you might survive, your chances of getting rich or even a comfortable level of income is very low.
Several years ago (15-20??), MR had an article with a title of something like “So you want to open a hobby shop”. It was fascinating. It was written by someone who has been there, done that and he talked of all the ins and outs of the business. Some of the points I recall are:
- the RR or scale or stuff in general that excites y
If we’re going to be honest, although I’m sure all of us support the idea of shopping at the LHS, many of us only go there to pick up smaller items that we need “right now” like scenery products, couplers, tools, paint, glue and perhaps magazines, and then shop online or go to RR flea markets to find discounted prices on big ticket items like locomotives, hardcover books etc.
For example, I spotted a book at a hobby shop last month that I’d really like to get, but they’re selling it for the list price of $59.95. Tomorrow I can go to the RR flea market at a local high school and get the same book for around $45, so I’ll probably do that.
Asking us customers might be good market research but not the best way to draft a business plan – remember, to the people who watch poker on TV no stakes are too high! We want complete inventory at all times - no gaps. It’s not our money. Look how irked folks get when their order to Walthers – with their warehouse stuffed with trains (I’ve seen it) – cannot be filled. There is a lesson there. I might be the only customer on earth looking for a certain corbel for my depot project - is it really worth it having it in stock for me?
Trains magazine used to have a column by a consulting engineer named John Kneiling who pointed out that for years railroad management regarded a yard stuffed with cars as a sign of success, even to the point of putting photos of such on their annual reports, whereas that actually was a display of assets that were sitting idle – in truth, a sign of failure.
Maybe the counterpart for a hobby shop is that a massive inventory that gives the shop a reputation for being complete and makes the visitor drool might be as much a sign of failure as of success, if all it really is is a display of completeness.
Inventory that moves is the goal.
I well remember a local shop that prided itself at serving the builder/craftsman contingent and on their last day in business – everything was 70% off – one entire wall was still filled with Details West and Detail Associates and Cal Scale parts, of which they had very nearly a complete inventory. The decal file boxes looked as full as ever, too. Almost the entire batch of InterMountain kits remained unsold. Yet the Blu Box kits which they reluctantly carried were all gone. It was quite instructive, in a bitter sort of way.
So creating a dream shop for modelers has its risks. And yet …
One thing that shop did th
I would be willing to suggest having some good modelers come to conduct workshops/classes for the beginners out there…I think it’d be a great way of introducing modeling to the wider community as such…
As for what to sell…I’m in agreement with dknelson, The approach should be on what is doing the moving…but not so much that everything else is thrown out…
Before you invest your money, take it all out of the bank, take it home, spread it out on the floor, and take a good, long look at it.
Cause that’s the last time you’re ever going to see it.
However, if MRR is his hobby, then working on an in-store layout does kill two birds w/ one stone. Even better, he could use that layout for the clinics he should be running - show how to build laser cut kits, then add it to the layout; show how to scenic areas, and so on - I’m being serious here.
While most everyone has given good advice and tips, I have a question - how big will be the storefront. I think small single storefront hobby shops (e.g one storefront in a strip retail center, maybe 25ft wide)have a very limited lifespan (around Long Island, I can think of 4 that opened and closed in about 4-5 years during the 80s & 90s - there were probably more) - this may not matter if you plan to deal mostly w/ Web/mail orders, but if not it will.
It has been mentioned - “Ship to Store” - but for a real world example, messing this up is one reason a major bookseller* is in financial trouble: People wanted to order books & music from the bookseller’s websites, and when the order was ready pick it up at the nearest bookseller’s outlet - lots and lots of People wanted this. in the late 1990s, when the bookseller introduced their website, they didn’t implement it, and apparently never did get it right, which eventually contributed greatly to their financial difficulties. So, you know what to do… Customer submits an order for parts/equipment/models etc on-line to your store (I guess phone order may work too, but could be too much labor) - a small deposit by Pay-pal or Credit-Card is acceptable (so you don’t get stuck w/ stock from fickle customers who otherwise wouldn’t bother to show) - send an e-mail notification when ready, and the customer will probably do some impulse purchases when picking up their order at the store.
*See no reason to name names and get myself in trou
Is this going to be a LTS or LHS? Big difference. Many here are not aware of that.
Today a LHS is the way to go and depends on what hobbies are popular in your area.
Many years ago in my area, there was a LTS. Eventually the owner retired and the new owner turned it into a LHS which was more successful. He has N, S , HO, Lionel, Large scale.
Radio controlled controlled cars, boats, aircraft, electric motor type and combustion engine type and all the required accessories plus a couple experts for technical advise.
He offers our club 20 percent off. One fellow in our club does DCC installs and modifications for him. This fellow picks up the item at the shop and brings it home and does the works. Drops it back at the shop.
The shop has a HO and N scale short test track setup to prove a loco works.
Large scale layout, Linoel layout, N scale layout, HO scale layout. The wooden train set products and many other hobby items. He carries a variety of train items for small engineers.
At least nine different people work in the store at various times.
Don’t expect to make a profit for about three years. Plow everything back into the business. Other than that, it is a piece of cake.
Rich
I think your first step should be to determine how many modelers are in your immediate vicinity, and what they model (scale; ships, airplanes, cars, trains, military, etc.) Without a potential customer base, any local hobby shop is doomed to failure.
There used to be 6 or 7 hobby shops in Tucson, Arizona, that were “train stores.” Today, there’s only one left, and it carries aircraft, model cars and model ships in addition to the trains. It’s inside an Ace Hardware, of all places.
They have only a small N scale layout inside a display case and a G-scale train running on a track suspended from the ceiling, but they carry N, HO, O, and G scale items. None of the employees appear to be very knowledgeable about any of their products as far as being actual modelers, and they have no test track.
They do offer a 5% discount to model railroad club members, which helps offset some of the sales tax. They’re 70 miles from me, so with gasoline prices being what they are, unless I need several items that I know they probably have in stock to make the drive worthwhile, mail order is usually how I shop.
May I be frank?
You want me to open my wallet?
Greet me by name when I enter your store-nothing like a hearty Hi Larry! as I enter a hobby shop.
While I don’t expect you to carry every little item I would like to see the basics supplies.
Have what I need like the newest releases at 10-12% discount-I’m a impulse buyer,so that’s good for extra sales.
Don’t give me a sob story-I didn’t know I was out of KD #148 couplers.I’ll won’t buy it for one micro second.
I ordered you engine,car etc and its out of stock…Funny Walthers says they are in stock as does Horizon.In other words don’t try to BS me.
Please don’t treat me like I’m a new guy and tell me I need DCC,Sound etc…I been in the hobby far to long.
That’s what it takes to make me open my wallet and spend lots of green in your shop on a routine bases.
I spend an average of about $5,000 to $8,000 per year. I buy at about 5 to 7 LHSs some within 10 minutes and others about 2 1/2 hours drive. I buy some on ebay and little at online stores, depending on customer service–definitely not MB Klien–which I used to go to while in the Baltimore area.
Inventory and price are important, I get at least 10% off wherever I buy(at least the places I normally go to). But given that I am more of a modeler vs just playing with trains-a knowledgeable person behind the counter really helps, especially if they are really into the hobby too. Way too many times the guys with cheap prices aren’t really into modeling and prototypes. Many times, the person behind the counter will ask me to help them with a customer while I’m in the store. I don’t mind, but if I were the person getting helped, it would make me wonder. I’ve been called a rivet counter. I really like going to the shops where I can talk trains with other guys on subjects ranging from Amtrak funding to the latest KD coupler. I don’t NEED anything from a hobby store. I have a large inventory of train related products and my wife would like for me to sell some of it. So, I pretty much buy only when encouraged/inspired.
You would be surprised how much being nice and knowing my name or at least remembering me somehow makes a difference.
An operating layout helps for inspiration as well as demonstration. Classes on modeling are nice too.
My 12 year old son like most boys, are inspired to buy something they can see and touch. So if you want to attract the younger generation, having inventory is vital. An example would be last weekend when he went into a hobby store for some parts for his R/C truck, like tires.&
The hobby shops that I like have a bare minimum of stuff in showcases requiring the assistance of a clerk. And this applies to detail parts, couplers and trucks, and N scale. If I have to ask to see something, most likely I won’t, and I won’t buy it either.
Make sure you have the current magazines. A lot of people come in just to get the magazines, and often buy something more. If I know I can’t get the current magazine in a LHS, I’ll need some other reason to visit.
When you take special orders, make sure that your procedure is bullet-proof, and follow the thing until the customer buys it, cancels it, or the items become unavailable. There is nothing more infuriating than placing an order, never getting called back, and then finding the items I ordered on the shelves with the general stock. And this has happened to me at an otherwise good hobby shop.
The LHS needs to stock the basics and staples. This includes paint, hobby hardware, track, tools, trucks, couplers, and scratchbuilding supplies. There are a lot of times when someone is working on a project, and needs that one item to finish it or to repair something, and needs it NOW! This is a market in which mail-order dealers, online merchants, and the chain craft stores cannot compete.
If you decide to deal in used magazines, try at least to sort the magazines by title, and perhaps cover date. It will make it easier for customers to find and buy the specific issues they are looking for. If resources permit, perhaps bundle magazines into year sets. When I was looking for back issues of Model Railroader, I was prepared to pay $15.00 for a complete year set, rather than sort through single issues at $1.00 each.
Make sure you have adequate parking.
That’s all I can think of right now.
You say that you will be opening a “NEW” hobby/train store pretty soon. To me, asking these questions on Trains.com/forums is a good indication that you are not sure of the basics of a successful business. Especially, a hobby business,in these poor economic times. My(previously successful) LHS, from which I get most of my $100-$200/month model railroad supplies,(at10% discount), tells me that business is so slow that he is laying off his one employee,and is going to be open only on Friday-Saturday-Sunday.
Don’t be so hard on them. 99% of the time items like that are in showcases is because of THEFT. It’s hard to believe but there are a lot of model railroaders that are thieves. I’d even bet there are some here that post regularly. It’s sad really…
If you want to open a successful hobby shop then don’t just stick to trains. Slot cars are making a comeback and the market for them is getting bigger every day. Look at Carrera, Scalextric and Slot It in 1/32 scale, it’s getting big. Model cars is also a great thing to sell and it doesn’t take up a lot of space. Doll House stuff is HUGE, I can’t believe how much women spend on this stuff. You guys think we are bad, lol. The cost of a nicely furnished doll house is going to run 10G’s plus.