Why can't the hobby shops survive?

Tbone Jun 25, 2007

  1. Tbone

    Tbone Permanently dispatched

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    I agree 100% Tim.
     
  2. FriscoCharlie

    FriscoCharlie Staff Member TrainBoard Supporter

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    TrainBoard is not a shop but we get over a million hits per month. If each person donated one penny..... but they don't.

    You agree with why he likes to go to a local model train store.

    This is not the question that you asked to start this thread....

    The thread has gone off topic because now people are posting why they enjoy going into, or why they enjoy doing business with, a local store rather than online ordering.

    The original question was why a city the size of Nashville can't support a LHS.

    It's quite simple, and as I already said in different words, it's costs versus income - plain and simple.

    You may feel really good about supporting a local business when you go in and spend $20 or so now and then, and maybe sometimes you spend more, say $100 or more.

    But, how many times per year do you do that? If it is 10 times per year, you spent $1000 there over the course of a year.

    But, people have to do that en masse to keep a business open, especially when competing against businesses that offer "deep discounts".

    If we do double our goal at our store this week then we are covered for next week (if you think like that) but the next week after that, you start again at zero and the money has to keep coming in.

    Charlie
     
    Last edited by a moderator: Jun 25, 2007
  3. sd90ns

    sd90ns TrainBoard Member

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    My nearest hobby shop that stocks model RR supplies is 125 miles away, one way. Needless to say I don’t visit it often.

    Therefore I do 90% of my business by e-tail. Not only do I get better prices but I save around $30 in gas as well as 8.somethingorother% in state tax.

    When I lived where there were shops within bicycling distance I did 90% of my business with them.
     
  4. Tbone

    Tbone Permanently dispatched

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    E-8 , would you like for me to post a new thread for why we visit our LHS?I think it is all relative.I think you are missing the whole point I was making.
     
  5. Tony Burzio

    Tony Burzio TrainBoard Supporter

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    That's making fruit punch out of a bunch of apples and oranges, but that's OK, I like fruit punch! :teeth:

    The second thing you learn after becoming a model railroader is that you got took at the hobby shop.

    The first thing is that some N Scale stuff is really bad and just plain junk. :eek:mg:
     
  6. FriscoCharlie

    FriscoCharlie Staff Member TrainBoard Supporter

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    No, I'm not missing the point.

    I think it goes without saying that if people did not like the service they receive from any store that they would not visit and if that were the opinion of a majority of people the place would wither and die.

    I've been in train stores where the people there couldn't be bothered with my presence.

    I've also visited stores like Engine House Hobbies in Wichita, Kansas where the owner and employees make you feel like someone they care about and even offer free popcorn for you to eat while you watch a train movie in their theater, and will bend over backwards to help you.

    Like you, I love spending time in an environment like that and enjoy visiting with people.

    But, in your original post, you asked a question:

    That's is the question that I have tried to answer for you.

    Your question using the words "can't" and "support" in the same sentence infer that the shop in question is lacking support (meaning business).

    As a person who owns a store, I'm simply pointing out what most people fail to understand, and that is the amount of money that must enter the cash drawer each week in order to keep the doors open on such a business.

    It's usually much more than you think.

    This will generally hurt the storefront operation and favor the business with a lower overhead (i.e. Internet).

    Charlie
     
  7. Benny

    Benny TrainBoard Member

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    I understand completely what Charlie is saying. It's really simple. Touching cars doesn't keep the LHS in business. Testing engines doesn't keep the shop in business. Munching popcorn and watching his movies does not keep him in business. Up to this point, he has had ZERO dollars enter his register. And worse, now he has to Discount the stuff you touched even further because you broke it and quickly snuck it back in the box. Or you knocked over the display. Or you put everything back in a different place then from where you took it. In general, you spending that poor man's money faster then a so-hoe[sorority chick for the polite folks] can spend her daddy's retirement fund as you peruse his aisles.

    You can get the Car for 12 on the internet or for 18 in the shop and the MSRP is 20. The MSRP is what the owner really needs to stay alive, it's not set arbitrarily, even if it feels like it - because, afterall, it only took the manufacturer 10 dollars to make it, so why can't the owner sell it for 11, right?

    The problem isn't one car, the problem is, you're buying 20 cars, that becomes 240+6 on the internet or 360 from your B&M. A differenc eof 120 bucks??? heck, I can make my E-bill 360 and throw in a really nice steam locomotive in there too to pull the lot, AND it has DCC!

    But you want to see it first, so you go to your local amusement park because, hey, admission is free, and you get to test and play with everything you're going to buy in the internet for free anyway - its a killer deal for you!

    Now here's the REAL killer for business. You think all that stuff "disappears" once it sold? Come on over to my house sometime, I'll let you look at my "hobbyshop in a closet." And I'm willing to bet many more of you have closets taht look much like mine. Mine, for instance can't hold by comeplete set anymore, there's too much. So i sell stuf off on Ebay.

    Guess what - as soon as I sell and buy stuff on ebay, I am satisfying someone elses satiable train fix, and I am satisfying my own as well, and the LHS never once sees the item again having seen the stuff leave their shop.

    There's simply too Much STUFF in this world to play with for a narrowminded shop to stay allive. Hence the big box walmarts. Think about that ;)
     
  8. Tbone

    Tbone Permanently dispatched

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    No,I think you are missing the point.All I wanted to know is why the LHS cant survive.I didnt like going to the internet to buy one piece of track plus shipping.I liked going to my hobby shop to look around and touch my locomotive before I bought it.Wow it was just a question,I didnt know I was not suppose to agree with someone.
     
  9. FriscoCharlie

    FriscoCharlie Staff Member TrainBoard Supporter

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    I didn't know I was supposed to agree with you.

    I am a business owner and I just tried to answer your question from that vantage point because that is the input I thought you were seeking.

    I guess what I didn't understand (according to you) is that when you said, "Why cant a city like Nashville with almost three million people in the city and surrounding counties support our LHS?", what you really meant was, "Why do you or don't you patronize a local hobby shop?", and your meaning is that you like to hang out there on Saturday morning and pick up a piece of flex track here and there.

    You aren't really asking a business question at all like I thought you were.

    I thought you were perhaps looking for economic reasons why such businesses are in decline in some places.

    Charlie
     
  10. Fotheringill

    Fotheringill TrainBoard Member

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    T Bone-

    I will try to answer in a different fashion-

    A retail establishment needs to charge more due to "retail" rent, staff requirements, stocking requirements ( you wouldn't want to wait for that Code 55 23.675 degree crossing [or somesuch] if you wanted it today ) and the cost of liability insurance, commercial rent tax, worker's compensation insurance, etc., stocking, including, very possibly, interest on the front money required to carry that crossing. The average person walking into that store may decide to pay full retail for a particular item but not if purchasing in bulk.

    A city the size of Nashville may have enough modeling interest to support one store, but not several if all that is going to be purchased is "emergency" stuff needed on the spot. It is something that is not possible after the advent of deep discounters on line. Also, If I have to drive and spend several dollars on gasoline (maybe parking) and take an hour each way to get there, I would rather wait five days, spend ten minutes on line, pay for shipping, save on gas and time, and receive my order by UPS or USPS. Whether it is a small town of three million or a hamlet of one hundred people, or the New York Metropolitan area of twelve million documented people, the answer is still the same. Poeple will save money if they can. I live in Nassau County, New York. New York City, itself, probably has no more than fifteen shops that carry N scale supplies. Nassau has six or seven and Suffolk a few. All but three, to my knowledge are full retail and will not give a penny in discount for bulk orders. I understand it and will only spot buy at these places.
     
  11. YoHo

    YoHo TrainBoard Supporter

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    I'm actually rather surprised more Hobby shops haven't branched out into the more general crafts field.

    Michaels is the hundred pound gorilla there, but I see lots of independent stores doing well. Valuecraft in Escondido Ca. has a model section and a fairly extensive model train section and they can afford to have it. It's great too, because I can buy almost everything I need to build and scenic a model railroad except the lumber from one location.

    I think beyond that, you need to maintain a reputation bigger then your immediate area. I drive 70ish miles to goto Milepost 38, because of it's reputation. That's not a "local hobby shop."

    I think there are additional ways that hobby shops could branch out beyond the internet, but they are very non-traditional and I don't think most hobbyshop owners thing non-traditionally.

    There's a big generic hobbyshop in San Diego that's actually based in a warehouse in some business park. This is a good idea. Avoid the added cost of the storefront.

    I would buy out of someone's house. Or, perhaps share space with a club.
     
  12. Fotheringill

    Fotheringill TrainBoard Member

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    I can't find it now, but someone alluded to 10% of engines coming in DOA from e-tailers. I found one that I can trust to open a NIB and pre tests an engine for me before shipping. He has not done me wrong. A LHS that I used to purchase engines from would test run on a 3' length of straight track above my eye level, once each way and pronounce the engine sound. Both went back to Bachmann. Each was replaced.
     
  13. FriscoCharlie

    FriscoCharlie Staff Member TrainBoard Supporter

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    Based on a couple of e-mail messages and private messages I received, I would like to apologize for my comments in this thread.

    I normally do not participate in many discussions on the site in order to remain neutral but I understand that I have offended several people with my posts here.

    I will return to support issues and helping people only.

    Again, I apologize.

    Charlie
     
  14. JCater

    JCater TrainBoard Member

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    Well, however you say it, Charlie is right in that to be in business one must have cash flow. Overhead is outrageous! My business is small but there are so many things that must be paid for, like work comp, employee benefits and wages, taxes, and insurance (we currently must carry 2 million in liability!). There are other problems as well. There is no chance that the LHS will be able to carry all the doodads you may want. Yes, it can be ordered, but then you may as well get it off the net. The local LHS just opened (wahoo!!!) and currently is selling RC cars and planes. BUT they have a plan to use their profit from this to expand into a large model railroad shop (I have been asked to help build the layout and start a club!). He will also be doing lots of e-business. Even with all of this though, it will be very difficult to stay in business. How many RC cars can one person buy? Its not really a consumable good (tires and other parts on the other hand are). I am afraid, like many of the railroads we love, the LHS may be destined to become a Fallen Flag in its own right. Just my 2 cents worth as a business owner...
    John
     
  15. Pete Nolan

    Pete Nolan TrainBoard Supporter

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    Can we accept the fact that the US economy has changed? It's not just the local hobby shops, it's any small retail business that does not have a technical specialty or an exceptional location. The Internet and national chains have changed the economic model that let small businesses thrive, except in the largest of cities, and except in those businesses that are essential to a neighborhood, like small groceries in New York City. Most of the US is not like NYC. We operate under a different economic model. One that eliminates small local businesses.
     
  16. Doug A.

    Doug A. TrainBoard Supporter

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    Expect the worst, and you will never be disappointed!

    I wasn't necessarily talking specifically about DOA from the factory/distributor, although that would be included in my count. Could also be DOA post-dealer from some rough shipping from e-tailer to me, or something just moving a micrometer out of allignment and causing a short, or whatever. Also, I wasn't saying that that service isn't offered by some shops, and I think that's good service, but I don't require it.

    I've never had a DOA locomotive, from anywhere. (EDIT: Some of the fire sale LL GP20's--straight from the factory--did need to have their pickups put back in place. So technically DOA, but easily fixed. At $16 each, I got over it.) I did have a MP15 that tested fine when I got it, then I sold it soon after and it was DOA when it arrived there. I attribute that to some hitch in shipping...it just happens, and I'm betting the law of averages catches up to me someday, thus my "factoring that in" to what I pay an e-tailer for goods. I am not experiencing that 10%, but it's padding just in case.
     
  17. txronharris

    txronharris TrainBoard Member

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    I think that the "ebay mentality" is the reason most smaller shops are going under. I tried for a year or so to do a on-line and train show only shop and with the little capital I had found it very difficult. Even at the train shows, people are only looking for the best deals. I'm sure I lost several sales because I wouldn't take 10.00 over cost for a loco that had just been released. The flip side is that as a consumer, if I can get a loco for 30-40.00 less than my local shop (plus save the tax)by going online with someone I trust it's really tempting to do so. I do almost all my model buisines with the local shop because they sell everything at 20% off list and I appreciate all the perks that go with having a shop you can hang out at and get your questions answered by a knowlegable staff. I don't think that saving less than twenty dollars is worth the mail order hassle. But if I need to purchase a few locomotives and they're mail order for 69.99 and the shop is charging 110.00, I usually go the mail order route.
     
  18. Tony Burzio

    Tony Burzio TrainBoard Supporter

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    Of course, the obvious follow on to the Internet shop is to have the factory sell direct. For example, you can usually get a PC cheaper from the HP web site than going to even the deepest electronics discounter.

    :teeth:
     
  19. Glenn Woodle

    Glenn Woodle TrainBoard Member

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    I'm a Nashvillian an i'll give you my take on this problem:
    1) Sales Taxes at close to 10% are too high. Too many big dollar purchases for lokies go out of state. Ask the Gscalers where the get their supplies.
    2) The Internet makes it possible for a ELHS to compete against other states locations. Shipping charges can be less than taxes. Efficient UPS trucks link Nashville with the world, plus you can track shipment from anywhere. Once the package hits Memphis, count on next day delivery to Nashville. It may be as easy to deal with USPS.
    3) High rent prices many small retailers out. From barbershops to camera stores, to eateries, only the big chains seem to have the money to pay high rents. I'm not sure if the LHS can afford to discount prices if they don't have high traffic to move goods.
    4) It has been over a year since the GATS/Nashville show. At one time, it was a well attended event, even with high parking & entrance fees. Most of the vendors were from out of state. Not sure how good the TN taxmen are for all the vendors.
    5)The market for Model Railroading may be larger than the numbers from MR, MRC etc would suggest. I suspect most may have bought a starter set from Hobby Lobby & are looking to add more cars, locos, etc to the set. The big MR layout with the double decks filling a basement has little appeal. MR would be better off having articles on how a small layout can grow by adding a few items.
     
  20. Benny

    Benny TrainBoard Member

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    Charlie, you're right on the mark though, you've given the perfect answer. The fact of the matter is, a Shop CANNOT survive on the base of selling a piece of trak here and a touched locomotive there. Why not? BUSINESS!!!!

    If you were buying a case of track at a time, along with all your friends, THEN your favorite shop would stay in business - for a day longer. But honestly, you're going to get the besty deal you can, you're a capitalist!!

    My favorite shop is combined wiht an Ace Hardware...hmm, Might go there today :D
     

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