Great news on New LHS

[chuck geiger]

https://www.pahomepage.com/top-stories/new-model-train-store-is-dream-come-true-for-owner/

[x600]

He'll make a small fortune....if he starts with a large fortune, ask me how I know.

But I wish him luck.

Greg O.

[StarCruiser]

How do you end up with a million dollars in the hobby industry?

You start with two... 

[JMaurer1]

Never make a hobby into your business...you'll end up hating both. I was told this 30 years ago and after watching several others make this mistake and prove the theorem.

[Rivet Miscounter]

First off, I wish the guy great success.  He seems well spoken and motivated on the video, and it does look like he found a low overhead location which is key.

Having said that, soooo many questions...
1. What does a business plan for a hobby shop look like these days?
2. Why would a banker be on board with this?  (likely answer: to bleed this poor guy...)
3. Where is this guy's friend?  You know, the one that is brutally honest with you to prevent bad decisions?  I'll be nice and assume his friend was on vacation when this went down.

OK, so those were a bit tongue-in-cheek, sort of, ok not really.  Look, I'm the never-say-never type.   I do believe that there are ways that a new hobby shop could work.  But when I hear "dream come true"....   

And yes I did consider it at one point.  A good friend of mine and I were considering going in partners for a predominantly online shop but the risk-reward from our research wasn't really giving us a good vibe.  We both know quite a few folks that are proprietors or otherwise in the industry and have a pretty good insight to the business.

I think if I were doing a true brick-and-mortar, traditional shop I would try to make it more of a "destination".   Have a lounge for modelers/railfans to meet up and have coffee.  Maybe a meeting room to rent for clubs and presentations.   Millennials, GenZ, et al tend toward the "experiental" aspect of shopping, and I think that could be a good strategy in the right location and with the right people in place.  It's easy to dismiss all of that social not-distancing at this time, but the reality is a lot of people crave face-to-face human interaction and in person meetings will eventually return as the norm, even if Zoom does steal some of that thunder.  Some manner of online presence is of course a requirement too, but if you have to have a physical presence, thinking a little outside the box might be worthwhile.

[Maletrain]

what I am seeing around here for train related hobby shop survival is either:
1. going to a warehouse motif with almost no customer display space, much less any space to relax or actually build or run anything, or
2. having some train related merchandise but catering to the more numerous customers who like military models, car models (display and racing) and drones.  Even model airplanes seem to be slipping.

[StarCruiser]

Okay - seriously folks...

You CAN make it running a Hobby Shop these days. At least, in theory.

1. Do NOT ignore the internet. You have to be visible on the internet but, you should also take advantage of it as a means to reach more cusstomers.
2. Decide what range of products to carry. Be careful about trying to be JUST a Model Train Shop. It's good to have some diversity.
3. Because of #1 - keep in mind you need to price competitively to get sales. Look into purchasing in 'unbroken case lots' to get some more margin.
4. LOCATION is critical. You need to be sure you aren't too close to any serious competition and that you can afford the rent/NNN/expenses in that spot.

That last one is probably the biggest factor to consider before anything else. If you can't afford the rent, you wont make it. If it's in a lousy spot (dirty, nasty etc...) you may not get many customer. If you want to focus on the internet and forget about a physical store, you can rent a fairly cheap industrial space - or look for a mixed use spot at a good price.

When deciding what to carry, keep in mind what other stores have and what the actual inventory costs are likely to be. Model Trains and Radio Control are both expensive to stock as compared to Plastic Kits. The margin for most regular items (outside of paints, brushes and tools etc...) is typically about 40%. That means a gross profit of ~$4 on a $10 item.

Yes, I've looked into this quite a bit over the years. Even with the risks, if I had the money, I'd do it in a heartbeat.

[Ed Kapuscinski]

I wonder who's going to be the first to successfully move model trains through Amazon.

I know I sure wish I could include that O scale scribed siding I need in my order for HDMI cables and dog food that'll be here within 48 hours of ordering it.

[ednadolski]

You CAN make it running a Hobby Shop these days. At least, in theory.

It does help not to have empty shelves for too long.... 

Ed

[wazzou]

...If you want to focus on the internet and forget about a physical store, you can rent a fairly cheap industrial space - or look for a mixed use spot at a good price.

That is going to limit your availability of some products supplied to you then as there are vendors-wholesalers that require Brick-Mortar storefronts.

[mmagliaro]

I'm sure everyone hates to be a "naysayer" about this.  I watched the news story and his interview.  I sure do wish him well, and I hope I'm wrong, but this does not look like the way to launch a business.  Just looking at the storefront and the way his merchandise is presented inside the store, it does not look at all like he is ready to be open.  It looks like a train show set up in a gym on a Saturday.  Products are just plunked down on folding tables with minimal signage or decoration.  Nothing on the store front, nothing on the walls. 

I know he was busting it to open before Christmas, but after a brief surge of locals who stop in to see the "new place", I cannot imagine it holding on.  Customers are so demanding and short of attention span.  That store has to JUMP off the street to make people want to go inside, and it looks like a space for rent.   

[StarCruiser]

That is going to limit your availability of some products supplied to you then as there are vendors-wholesalers that require Brick-Mortar storefronts.

Yep - and that's part of the issue in general. Some suppliers will not sell to a pure internet dealer. They want a physical store...

[peteski]

Yep - and that's part of the issue in general. Some suppliers will not sell to a pure internet dealer. They want a physical store...

I think that in today's world (with the ever-increasing number of online-only vendors), that is a very self-limiting decision on the part of the manufacturers.  I know Athearn was one such company, but I don't know if there are others. Plus, does Athearn still even enforce that rule?

[tehachapifan]

Isn't that rule primarily focused on keeping some random person from posing as a store just so they can get models at wholesale....keeping some and then selling the rest at eBay or whatever?

[CBQ Fan]

I think that in today's world (with the ever-increasing number of online-only vendors), that is a very self-limiting decision on the part of the manufacturers.  I know Athearn was one such company, but I don't know if there are others. Plus, does Athearn still even enforce that rule?

Isn’t it Horizon Hobbies that owns Athearn?  I was thinking it was their policy.  I seem to remember online shops that used to sell Athearn but got cut off.