What are the pros and cons of opening a brand new HO and N hobby shop in a town like Fresno? They’re are several scattered train stores with no focus, Tom’s Trains, Roy’s in Clovis and Hobbytown USA. Idea is a strip mall lease with all new stock of only the best selling items. Athearn, Kato, Atlas, Walthers, etc. Much like Discount Trains in Dallas, with discount off of retail price. Offer “how to clinics” every Saturday morning. Spread the word of the hobby past the purist to the masses. Ideas? (Everyone who has done this regrets it and gets out. There is no money to be made, but that’s not my idea, I have full-time employment, I want to make my hobby a hobby).
I once turned a great hobby of mine, collecting diecast cars into a full time job by buying them in bulk from distributors and selling them. Soon the fun was gone from both collecting and selling and I got out of it. Once a hobby turns into a job its not much fun anymore.
I would love to do the same thing but I noticed a few things about most train only stores.
The owner operator is retired and he does not need to make much of a profit.
The trully successfull shops that seem to stay are in high rent areas as are the people with the disposable income who make large purchases in a train store.
Closings seem to occur for three main reasons;
The owner operator has decided to call it quits and his crew are not able to keep it running.
It closes from a bussiness decision, no profit.
The owner fails to keep up with the times and offer mail/internet service which goes back to lost profits.
Also, I sure you have noticed that most stores carry only what the owner seems to want to carry instead of what would sell. I am always surprised when I enter a shop that does not carry Peco track because of the cost, so they stick with Atlas that mostly the beginner or those with less purchasing power will buy.
If you give it a go please advertise. There was a shop(Red Canyon, I think) near me that closed I never new about and I have been in this area for many years.
“I want to make my hobby a hobby”.
Most hobby people i know that go into the commercial side end up grumpy at the least. No-one appreciates what they have to do/achieve/what their costs are/etc. It’s a good way of wrecking a hobby for yourself.
As for providing a point of evangelisation… a shop is not the place to do this as a rule. People go into a shop to get the things they want (and/or browse for the things they want but can’t afford). Explaining, answering questions is good … but it can annoy the people building up in the queue to the point that the queue walks out… sometimes with your stock still in their hands.
Clubs, shows, magazines and forums/fora(?) are the places for spreading the word.
A store that I’ve found very good has recently had a modification of management. They were easy going and friendly… now they are heading towards deadlines [|(] Yes, they have a business to run… so much depends on style and a light touch.
Increasingly I turn to the internet. If I can’t get persoanl service with a smile from a store I might just as well save myself the trip and get a bare bones service.
Also… as many posts here in the past have noted… the shopping public are/tend to be a pain in the butt.
[8D]
My LHS (Maine Trains in Chelmsford, MA) does not rush anyone. When I go in there, I know I may have to wait 15 minutes to purchase anything while Gerry and his son Mike take care of other customers. Of course, when it’s my turn I chat for a while, too. If I only have time for drive-by shopping, I’ll come back later.
This shop does have an Internet business (www.mainetrains.com if you want to check the site out for an example) and he does a lot of custom work - both painting and electronics installations. He will order anything he can, and he gives discounts to the regulars.
The shop has short hours - 10-to-5, Tuesday through Saturday. In the summertime, he closes Saturdays, too, but stays open late on Thursday nights. And he shuts down for a couple of week-long vacations, too. I suppose some would say that is a bad business model, but it doesn’t bother me. Besides, some of his vacations are for rail-fanning excursions, so who can argue with that?
I’d rather support this kind of shop than fling my e-dollars through cyberspace.
Don’t open a shop!!
One of my LHS shops started on the same idea that you have, full time work, business leaves no time for the hobby. You start to hate the hobby and your friends for not buying from you all the time. I have talked to the owner before he thought he was doing everything right, best prices in area, attend trade shows, custom runs and such, go to clinics, his 2nd yr sales declined and he can’t find a cause. The only cause he could find was his customers were not loyal to him, and he wondered why? This hobby is very weird when its comes to business, customers have to support the people that are giving them service. A good LHS will give you a very fair price, and support u. In this day and age with China products you need good customer support!!
Caso
If you have a full time job, when are you going to have the time to do these clinics and run the store?
My question is with California rental costs. How much are you going to have to sell just to cover CA. rent, electric and insurance? Pretty pricey state to do business in. I don’t think the part time hobby shop as a hobby is going to fly. You’ll probably be working 80-90 hours a week for the first year or two.
The two well stocked Train stores in our area are run by retired folk for fun and extra cash. They certainly are not making a living at it. One store is all trains, and the other is half trains/half remote control cars. One store owner is a retired long haul trucker and runs it with his wife, while the other is a self made millionaire. No kidding. And he does it mainly for socializing and fun. And yes he has probably the best stocked train store around and he’s only open 3 days a week, because he can afford to.
I think if it were me and I were going to actually try and make something called “profit”. I would go internet ONLY. My garage would be stocked full of merchandise because the only way to make a profit is to buy in large quantities from the manufacturers and then sell at a discounted price no one else could match. Sounds like a lot of work to me. I can make a quicker profit in real estate. Not as much fun, but the money is there.
I would contact Mike Fifer @ www.fiferhobby.com and get his opinion as he and his wife seem to have it together.
The only way to make a small fortune in a hobby shop is to start with a large fortune!
EXACTLY! After you retire at 38 as a hedgefund manager making 52mil/year then by all means open your own train paradise hobby store[:D]
I’ve already got my eye on a 10,000 square foot old gateway computer store building that I would open a shop on one side and build a layout on the other. Oh, and the CLUB would build the layout for me[;)] while I would run trains. Ahhhhh the possiblities. If only I truly were a hedgefund manager.
A lot of the LHS stores around here are gone. The pros include helping local hobbyists with their purchases, I prefer an actual store I can walk into and see this stuff and choose to purchase. I guess the cons would include the INTERNET.
[banghead] Thanks for the feedback…I am going to put it on hold.
A store will be nice but a Internet service will help you alot.
Discounts bring in the sales, a little bit back to the supportive client base tends to generate more sales as they spend percieved savings or dont get eaten alive by taxes.
There will be times you are going to sit there with no one in the store while your utilities hum away… up to deal with UPS you go. Boxes to open, stuff to inventory and all kinds of things going on.
Communications with your distributors, junk mail piling in as soon as you get your business license and wonderful telephone charges are going to be really good.
When you do have a day off from the shop, are you going to lay awake wondering if you left the coffee pot on during the night?
What are you going to do when people come in who dont know beans between a Athearn Blue Box and end up buying the nice Intermountain RTR because they dont have all of those tiny parts?
The ones you remember are those who return asking why the couplers wont work with the old black plastic things off the trainset?
There is one trend that is difficult for me. Have a product get announced, wait a year until you learn the ETA from China or wherever then wait some more. Can you stand to carry 10 or more BLI engines on your invoice with each person asking you if you know when they are coming? Never mind those who need to layaway some items.
And maybe one or two items finally arrive only to have the customer go Yuck! I dont want THAT! back into stock it goes. It will be tough to dust off the Walthers kit sitting on your shelf a year while the exact same kit flies out of Ebay for 5-7 times retail because it is out of production and everyone wants it.
My personal secret is to find a BIG club that is well manned and just starting out. The revenue alone from that is almost worth the start up pain. Some stores do hold seminars, others try to run a club and more tend to sell on Ebay as a store.
And finally what are you going to do if Mr Picky
It may be a potential tax write off. Problem with that is, the amount of the loss may be more than you can bear.
You don’t need to give up on your dream, just change a few peramiters. There are many who would like to do the same thing but can not for time, money, knowlege ect., what you need to do is find a few like minded people and start a partnership with every partner working. Partnerships have many advantages which any one who knows buisness can tell you the +'s and -'s. Some on the plus side, no employees therefore no payrole or ss tax ect. only profit sharing. Lots of varied knowlege and if you get enough partners no one gets burned out. Make sure you have one that knows buissness, law, internet, repair ect. Wish you were around were I live as I would love to be a part owner just for the social aspect and I have the $ but would not want to own a shop by myself and emplyees are just too expencive.
I loved to fix cars in my spare time. Now I do it for a living. When I punch the clock at 5:30 I don’t want to see a car until the next day. The best way to kill a hobby is to do it full time or to make a living. If you love trains keep it as your hobby and pick something else to earn a living. WHY do you think I am on the Train forumes and not the car ones? I MADE THAT MISTAKE! It is possible to maintain the interest but its very unlikely. Best of luck, this is my input.
Owning and operating a train store is do-able. It’s likely to drain you if you do it as a sideline to a full time career. You should have at least $150,000 in capital to start with so you can decorate the building and fill the store with enough merchandise to attract people. You also need that kind of cash to get a discount with suppliers (money always talks in this respect). I don’t know what rent and utilities is like in Fresno but if it’s high, expect to loose money the first year or two. Many successful train store operators started small by dealing at train shows, their homes, or as a sideline to things like bicycle parts and eventually grew into an all train store. That is probably the safest and easiest way to do it.
The biggest problem with having a LHS is that customers will STILL buy it off the internet no matter how low your prices are as they can just sit at home and push a button on the computer and it arrives in the mail.
I know this as our local hobby shop is having the same problem.
Yes they should be on the internet but have not done so yet!
But why then have a shop, just go total internet (as so many others have done) and eliminate the rent, insurance, etc!
I know one dealer that has NO shop or internet service but just goes to the train shows around the country. He is on the go every weekend and is traveling from coast to coast.
As for making money he is only grossing $300,000 a year BUT is never home!
BOB H Clarion, PA
Some thoughts from one who teaches business strategy for a living:
On the American commercial scene today, a small retail business of any kind is an extremely tough proposition. Plain fact is, we are becoming a nation of superstores (superstores of both the bricks-and-mortar and “virtual” varieties). This process is reducing everything except high-end luxury merchandise to a “commodity.”
If you’re still going to attempt to make money in a LHS it seems you need some combination of the following strategic ingredients:
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A market, i.e., a community with a fairly large polulation of “serious” modelers
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An encyclopedic knowledge of what these serious modelers want to buy
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a big budget for advertising in national model magazines
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a good web site for selling online too
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good inventory management, which leads to good customer service, i.e., have what buyers want, and be prepared to deliver quickly on what you advertise.
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maintain and grow your “knowledge base” of what moves in your store and what doesn’t.
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Be prepared not to have a life outside the store. This includes having an extremely supportive spouse. It’s a recipe for burnout, since we have also become a nation of seven-days-a-week shoppers (i.e., those of us, say, past our early 50s, remember when main streets and shopping centers were closed and deserted on Sundays — Everybody had a day per week off — but no more. And, with the general exception of maybe two days per year when the country shuts down, we’ve fogotten how to observe “holidays.”).
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keep growing your knowledge base of the hobby. New products and technologies are arriving constantly, which is amazing when you consider that the entire gross national sales of the MRR industry is (so I understand) nowhere near a place on the Fortune 50