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Reply to "Starting a hobby shop business"

I was hoping that someone would make the “Online Only” point, and CA John just did. In this day and age, there is no reason to invest in a brick and mortar store. Your business is not going to come from the community you are located in. That era is over.

You could get started in an “Online E-Business” with a comparatively small investment. You don’t need a fancy store front in the high-rent commercial district. All you need is a small warehouse that could be anywhere. However, it takes a special set of technical and marketing skills to be successful in this business model.

Other things that come to mind…

  • You’ll have to qualify to become a dealer for all the various manufacturers, and not just O scale.
  • You will have to develop a solid relationship with a local bank, because you are going to need their help.
  • Do you have a sufficient credit rating to qualify for bank loan? You are going to need thousands of dollars of start-up cash.
  • You and your Godfather will have to sign personally to guarantee the loans. Is he willing to do that?
  • You’ll have to get set up to accept credit cards online.

This is just a partial punch list of items you’ll need to do.

You will need someone with a great deal of technical expertise to design your web store. It has to be as easy as Amazon to make a purchase, or it won’t work. It also has to look good, or it won’t work. It will take at least $10,000 to build a GOOD online presence.

Once you have your dealer status established with the manufacturers and the web store up and running, you have to start to make some noise in the market to get attention. Instead of running ads in the local newspaper, you will need to run ads in OGR magazine and the OGR Online Forum (yay!) plus Facebook and other social media sites. (ugh!) You’ll have to spend a lot of time  “flying your flag” online and getting the word out. And you’ve got to have plan for developing your stores’ online “personality.” This is not easy, and it demands a full-time, 80 hours a week effort to get started.

There is another aspect of this that has not been mentioned yet in this thread. If your goal is just to build a layout and make some money, you are sure to fail. Your effort must be driven by a passion for the hobby, not just a desire to make money. Marcus Lemonis, host of the TV show ”The Profit”, is one of the most successful businessmen in the country. He makes this point over and over again in his show. You must have a passion for whatever business you are in to be successful. If your goal is just to “make some money,” your business is doomed to fail.

Last edited by Rich Melvin

OGR Publishing, Inc., 1310 Eastside Centre Ct, Suite 6, Mountain Home, AR 72653
800-980-OGRR (6477)
www.ogaugerr.com

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