Everyone has an opinion as to the projected future of Hobby Shops. But, I just have a few ponderings for lack of better terminology.
Suppose their economic well being IS NOT based on stocking and selling big bucks locomotives, when they are available in 22 road names? What if they special order locos only to order, and don’t really do anything but cover costs for those (few?) people who do not want to buy sight unseen?
Could there be a future in having lots of little bottles of paint, paint brushes, spare parts, and detail parts? Even if you jack up the price on those they are still relatively cheap. Could there be a future in selling the newer more expensive cars, i.e. profit vs. shipping cost?
Suppose you have a service department that can actually fix something, and charge for that expertise?
I do not know the answers, but I suspect there will be no future for Hobby Shops very far from major metropolitan areas anymore. It’s just going to take a bigger volume of lower profit sales to keep them going in every scenario I can imagine. I am not saying I particularly like it, just that that’s how I see it. Heck, I would gladly go back to the 60’s if I could.
Your description of the future of hobby shops actually reminds me of the local train shop near my house. And while this may seem like a plug for the shop I am going to tell you that it is all fact.
The shop is Train Buddy and is operated by Kim Parker from his own building just off of Jenkins Road in Wake Forest, NC.
He stocks the typical parts including couplers, rail joiners, rail, switches, track nails, paint, decoders and a few structures, rolling stock and a few locos. The majority of clients place orders through him and he passes on the bulk order savings to his customers.
As far as metro areas go, Wake Forest has a population of around 25,000 and it is about 30 miles north of Raleigh. Most people have to make the 30+ miles drive to get to his place.
He also services locos, installs decoders for a small fee, and offers free clincs at every visit.
So in conclusion, Train Buddy local hobby shop has figured out how to make it work! The business model that Kim has in place works!
I don’t think you could sell enough lower cost supplies to make up for the loss of sales on the bigger items. The LHS overhead is just too high for that, and competition on general supplies from big box art supply stores such as AC Moore and Michaels (who have a much greater influence on wholesale prices) would make it even harder.
Could service make up the difference? I’m not so sure. In my experinces, many in this hobby are fairly skilled at self-service. So I wonder if there would be enough takers to make it worthwhile. Could be wrong…
In my limited experience in this industry, the only thing I can think of to make it better for the LHS is that something drastic needs to be done at the wholesale level. Distributors either need to cut their prices or be cut out of the chain.
The other point that comes up (and is a bit more controversial) is that LHS owners need to be better at business planning and dealing with their customers. Let’s face it, some owners are lousy at business and either start out or quickly find themselves under capitalized. The other thing is that they seem ill prepared (or are not good) at is dealing with the retail environment. Customers can be fussy and demanding. They don’t care about your woes as a business owner, and for the most part usually care most about price and selection. Treating them like dirt is not going to bode well for repeat sales. That’s life in
The only surviving hobby shop in Tucson, Arizona that has any trains at all, other than cheap Christmas train sets, is in an Ace Hardware store. They used to have a very good selection of HO trains, but decided last year that they would deal only with Horizon Hobby as their exclusive distributor. The amount of trains they carry is now less than half of what it used to be. They branched off into radio control model cars and airplanes to fill the shelves and survive. It’s no longer worth the 70 mile one-way drive to visit their shop.
My opionion is that you would need to really do a lot of market research. In order to make a go at it with detail parts and supplies, you will need a lot of modelers that are into building. This just doesn’t seem to be the case anymore. With more manufacturers coming out with ready built structures and ready to run rolling stock, it is going to make it more difficult to sell the details. Also the detailing on these structures is getting better all the time.
There will always be the modeler that wants to build everthing, but they are becoming the minority by a long shot.
On the other hand, Maine Trains in Chelmsford, MA, seems to be flourishing. It’s a small shop in a decidedly minor-league strip mall, but that keeps costs down. The shop is well-stocked, and there is always new inventory. Gerry has an in-store layout which is beautifully detailed, and lets you see how engines and rolling stock will perform on 18, 22 and greater radius curves. The shop is mostly HO, but he’s got a significant amount of N available, and there’s a bit of O-gauge around as well.
He does repairs and installations, plus custom painting and detailing. He is happy to offer advice to the do-it-yourself installer, too. He has a small consignment section, and also provides a retail outlet for one or two local custom craftsmen.
The shop maintains a web presence (www.mainetrains.com) and he’ll order things, supporting sales from the Walthers catalog when ordering sale items. The regulars get a discount on all non-sale items, too. Last week, he started a series of modelling clinics in the shop, too.
If you want an example of a shop doing all the right things, well, this is it.
I remember when Gerry first took over his shop that used to be one half model trains and the other half pet supplies/salon. He has since turned a small shop into a dedicated train store that is well stocked for its size. I agree that this is a guy who went into it with a plan, and it seems to be working well for him. Although he does run into the same sorts of competitive pressures that any LHS has to deal with, he seems to be dealing with them as well as can be expected in this market - which is rather crowded with a few other larger LHS’s in the metro Boston area. He also keeps a cheery attitude, which I think is very important.
DISCLAIMER: I do not have any vested interest in this s
I think there is definitely a market need for a shop that sells basic supplies (paint, track, parts, etc.). I buy a lot of stuff on the Internet but find that I always forget to order that particular spray can or switch and go to the LHS for it. In those circumstances, I don’t mind paying a higher price than online. (In some respects, this need could be filled by Michaels or another craft store but that hasn’t happened yet).
Service would also be useful. I’ve bought a number of expensive locomotives (a couple of brass, several BLI and Proto 2000, etc.) and frankly they don’t all work perfectly. A place that could fine tune them (break in the gears, loosen tight trucks, reprogram speed tables, etc.) would be great. Right now, I have no one who can do this (and I live in the suburbs of NYC). The ability to do sound installations would be useful, too. I had to send my two brass locos to an Internet shop for the installations and shipping, because of insurance, was $50 each way.
Whether these two things could generate enough volume to handle the fixed costs of running a shop, I don’t know. One way to improve the economics would be to stock impulse purchase items like magazines, books, mid-sized structures, etc. If I go to a store for paint and see something I like for under $40, I’ll buy it even if I can get it cheaper online. I won’t do that for a $200 engine but I will for smaller things.
Independent shops of all types are disappearing. There are still a few, but to survive and make enough profit you have to offer something unique in services or products or have a cost structure that allows you to compete on price. For the LHS getting the price down is tough - rent, middlemen, etc. You can carry products not available on the net but these are usually not as profitable or of very limited interest and tie up your inventory cash. You can carry very limited run items and wait until the net dealers sell out, still ties up your inventory cash though. You can offer services - special orders, repairs, painting, etc. Or you can do some combination. I think, however, that there will be fewer LHS; because, even with the right combination, 1 or 2 shops will fill the demand in an area where there used to be 5 or 6.
Personally, I have gotten used to train shows and internet/mail order. The first satisfies most of my wants and the second fills in the rest.
Me neither, but I would be without my favorite train resource if this shop were not around. Yes, there are some other shops in the area, but I haven’t found one that matches the benefits of Maine Trains.
Service means bodies (warm ones, not the trains and rolling-stock themselves) onsite. In turn, that means big bucks- personnel expenses for skilled people are likely prohibitive. The only place I’m aware of in the Puget Sound area with an on-site service center (Eastside Trains in Kirkland) concentrates on Lionel/MTH, and seems to deal with a slightly more-upscale customer than my favorite LHS (The Inside Gateway in Bellevue). Maybe the upscale clientele (sp?) affords them the luxury of having on-site people. Of course, they’re also physically larger, and have a larger staff overall. Still prefer TIG’s store, though, because of a larger selection of HO, and a wallfull of detail parts right where you can examine them (as opposed to ET’s smaller selection, behind a counter).
Yes,that could be done IF he/she has a back up plan such as R/C and maybe crafts.
As far as new cars and some low price engines(less then $80.00 plus say 10% discount) he/she could pull it off.
Better would be to get a small business loan,add a employee or 2 and go after the Internet and E-Bay business.That would be the smart move and would require advertising in the major magazines…
Ive enjoyed two good stores for a number of years. Each year they stay in the Hobby and provide what I want or need to continue the hobby on a regular cycle is a good year. One day they may no longer be in the business of selling the trains but Im pretty certain that I might see the owners running trains in a ops session or club situation.
There will always be a hobby shop. But only now the internet is used effectively to get the things we want or need. Particularly information. If a store should open a internet sales department they will need a certain amount of sales to support it. Otherwise they will have to stop being a hobby shop. It’s all about the numbers in the business.
Im not in the business at all. Except as a customer who expects a minimum of a few items across the board in the store. Maybe Im a dying breed but I actually LIKE to go over the entire store and make decisions on purchases based on the items I can look at and evaluate.
Sometimes it seems that the entire hobby is under attack by those who wish to sell directly to John Q Joe the Model Layout owner with just a few digital images on a webpage with some sort of a credit card processing computer on it.
I like to build my computers by ordering parts at a good price off the net. I dont go to a store to look at computers at all.
Someday I probably will have to buy train stuff by internet but in the meantime I am building a small email list of active hobby shops who do ship product. As long there is one store in all of the USA that can do so I will be happy to do business with that one.
If you asked me this question 30 years ago where there is not a walmart in sight or any sort of computers/internet anywhere… I would have laughed at you. Now? Well… what happens if the Internet should disappear?
At least in my home the Internet earns it’s daily keep by serving this family in my house. The day it becomes a liability is the day I call the ISP and disconnect it and sell the computer away. That wi