I had given this some thought years ago about opening a train only store where I live. The problem is like many have said, is location, the internet, and like any other type of retail store business, would be to get customers to venture to a new store, especially one that specializes with a limited category. Amazon isn’t a concern as I’m sure they have train sets and have third party people listing things that have a high ticket. My background is in sales in the toy business, and over the past 5 years I’ve seen the small retail specialty base decrease. Unless you’ve been established in a major town/city, you’re probably not going to succeed.
Established train stores or hobby shops that devote the space and expertise to a category, have a decent chance to survive. Let’s not forget some manufacturer’s sell direct to both dealers and consumers. In the RC Car business, one wholesaler sells the car kits cheaper than what they sell it to their dealers! What do those dealers do? They carry a few cars but carry an entire array of parts and that’s how they try to make their money (these cars do crash alot).
I’ll support the LHS or LTS (local train store) as much as I can. If they can match an online price (some do), they’ll get my business.
My favorite LHS is strictly for trains carries plenty of Woodland Scenics scenery material which has very similar materials to Scenic Express. It would be difficult to allow shelf space for both. Scenic Express does offer Super Trees which would be difficult to stock because one box takes up a lot of space. Rarely do I go in there for scenic material when they don’t have what I want in stock.
The other LHS I frequent deals in a number of hobbies and I would guess about 1/3 of the store is devoted to trains. He too
I moved out of Columbus, OH about 16 years ago but still frequent the two LHS I used to even though they are almost an hour drive away. I can do this because I still bowl in Columbus twice a week and the bowling alley is about a five minute drive from the two LHS. I wouldn’t want to make a special trip into Columbus just to visit a LHS but I have done it if I really needed something right away. I do buy somethings online as well but those are usually the big ticket items like locos. I do this partly for the price and partly for the availability.
Sales. Start your “store” as online only, and once you’ve got your sales built up to $1 million/year you can safely look at a physical retail location. At that point you’ll be able to secure financing for your venture based on your sales volume, and your online sales will carry your venture until the store is up and running and bringing in business on its own.
Unless you have very deep pockets, never start any “bricks and mortar” business without first having sales lined up…
Walthers will not sell any NEW online only stores, unless they had a store, closed it and continued online. New dealers would have to go other distributors. Not sure what Horizon’s policy is…
Is Walthers the same company it used to be, no. You can get stuff from other chanels. The reason I say this is just look at their catalog, used to be over 1000 pages in just HO, latest catalog combines HO, N and Z and is not as big. There are more products out there now. Yes some have gone because of limited runs but that only accouts for a fraction of the loss and the new catalogs have more fluff than they used to.
Interesting thread. I’d suggest that to have a successful shop, one needs to lower their standards. Now that I have your attention…
Many people here are way past the trainset and Athearn blue box stages of the hobby. They know what they want and they know where to get it at the best prices. But the key is the new guy/beginner. They will be willing to spend some money and listen to a knowledgable person as well.
I deal with this all of the time in a discussion group that I’m part of. It represents people who are probably at the 90-95 percentile in model railroading. Discussions center around “the correct color” or whether or not a stirrup should have one rungs or two or what kind of roof was on that 85,000 series XYZ boxcar… tons of beginning model railroaders don’t care about those things yet. They want to get their Plywood Central up & running so they need more basic supplies than specific detail parts. Cater to those people as well and you will be working on a “feeder” system that should keep customers coming back for future purchases.
Oh yes, good model railroad shops are a destination business. People will go out of their way to go there… often driving 40-50 miles or more to find what they want.
The question remains ehether the customers are willing to pay that extra the shop owner needs to finance the working capital, the decent location and the staff to give them the service they ask for.
The only shop in my area is so small and run down that I have more stock than they do. If I want something more than a starter set for kids it has to be ordered wich means two trips to the store and a premium price. No thanks.
What I would like is an online store that is in a location where I occasionally vacation. Then I can stop by, build a relationshhip, and continue to buy from them when at home. I’m currently on google looking for stores near Vero Beach or along 95 between SC and Vero. If I find one I will stop, pick up a few things, talk to the owner, and move them to the top of my list when ordering online.
Considering the massive and pervasive trend to online sales, it’s obvious that Walthers will be forced to change their policy because their base of stores will dwindle to the point it will be not be feasible to continue. I’d have to think the time is fast approaching where they can’t play that game anymore. Adapt or die.
YES… I tried to make that point before. There is no better cash cow than a newly retired “beginner” to scale model railroading that is eager to start his new hobby and enjoy the final phase of his life.
My two cents worth is the hobby shop is in a terminal decline, as are most b&m retail stores. In the end, the only physical stores left standing will be convenience stores and Dollar General.
In order to compete, hobby shops need to be the instant gratification guys, the ones who can put the item in my hands then and there. That would make up for the price premium and having to pay sales tax. “We don’t have it, but we can order it for you” isn’t going to cut it.
However, manufacturer business practices make that virtually impossible. You can’t be the instant gratification guy if the product is made of unobtanium. You can only make so much profit off Woodland Scenics stuff.
True…hobby shops have had their once numerous ranks dwindle quite a bit. When they are all gone, some genius is going to say…“Hey…how about a hobby shop!” I believe things go in cycles, but I’m not sure how long these cycles take…years or decades? I do know from first hand experience that on line purchasing is for folks who know what they want. I doubt seriously if a possible newbie will get the bug by looking at choo choos for sale on a monitor screen. There is now a huge potential market…not for kids…but for baby boomers now retiring and looking for a hobby. They have now plenty of time, funds, and knowledge of railroading, and most likely could be influenced and enter a new hobby. A smart shop or good model train show should be able to reach these folks and there will be many.
Retirement really sucks if one just retires with nothing new to go into…be it a new vocation or hobby, but something they can really like or love.
It seems that there is not an easy answer to this. If there were, there would be more shops opening. And whenever anyone comes up with a good idea, everyone else will want to copy it and it will become a fad.
Many years ago ceramic shops were the fad. There were none around, and suddenly there was one or more in every town. I can’t think of any left around here now.
Perhaps there needs to be a combination of things that will attract people. The latest thing around here is a painting and wine tasting place. The ladies go there to try there hand at painting (pictures, not something useful like rooms —but I digress) and taste wine. We now have two of them.
Something like laundramat and tile, or possibly bar and scale trains.
I have to disagree with that based on the fact that I got the bug by looking at the toy train section in the Christmas catalog from Sears at first and then later looking at the Walthers catalog. Websites are just an electronic version of a catalog.
I remember that if you wanted an Athearn blue box kit you pretty much had to know what you wanted ahead of time because the boxes didn’t have a picture on them and it was a hassle to open up box after box to look inside. One store I went to had the boxes opened and shrink wrapped and hanging on a peg hook so you could see inside. I’m sure that helped sales a lot. I bought a vast majority of my rolling stock from them.
Magazines like MR and RMC were also inspirations. Advertising in them does work for creating demand for models.
I have an idea similar to this but better. I can’t post it or someone will steal it, but if anyone is serious about opening a shop in a tourist town I would be interested in working with them on it as a minority partner. Las Vegas or Orlando might be the ideal location for my plan. If anyone is interested let me know.
Wrong, B&M, in particular malls, are losing stores because of mismanagement and if they let it go too far, there is no recovery. Now they do this for two reasons, one is tax loses and the other is, just as you raise rents when times are booming, you need to lower rents when things are not as good. Basic landlording 101. They think they can keep things at a certain price point and it is just not possible, basic supply and demand.