@Andrew B. posted:I don't know whether "many" was correct, but here is one example:
So MTH (or any business) has to stay in business to keep you in business? No one is obligated to stay in business just to keep customers supplied with products.
That's a messed up business model by the dealer not his supplier.
Jerry
@baltimoretrainworks posted:So MTH (or any business) has to stay in business to keep you in business? No one is obligated to stay in business just to keep customers supplied with products.
That's a messed up business model by the dealer not his supplier.
Jerry
I never said anyone had to do anything, I was simply providing a link to a thread demonstrating an example since another commenter said they didn't remember reading anything of the like.
Given the fact that the "new" MTH is probably producing the same as the "old" MTH I am surprised that Mercer Junction decided to close. Without knowing anything it probably was a combination of factors.
@Frank Mulligan posted:I am surprised that Mercer Junction decided to close. Without knowing anything it probably was a combination of factors.
Indeed it was, although MTH closing (in terms of new product and not just repaints of existing items) was certainly one of the determining factors. Believe me, nobody misses Mercer Junction more than I. It was my local train store. I was there when it opened and I was there when the door closed for the final time.
@Andrew B. posted:I never said anyone had to do anything, I was simply providing a link to a thread demonstrating an example since another commenter said they didn't remember reading anything of the like.
The original comment was ...
After MTH put many LHSs out of business, and Lionel's current "shaft the consumer and techs" decision, opening a LHS is simply playing Russian roulette with a bullet in every chamber.
The link was made as supporting evidence that MTH ran at least one LHS out of business which is simply not the case.
Herry
@baltimoretrainworks posted:The original comment was ...
After MTH put many LHSs out of business, and Lionel's current "shaft the consumer and techs" decision, opening a LHS is simply playing Russian roulette with a bullet in every chamber.
The link was made as supporting evidence that MTH ran at least one LHS out of business which is simply not the case.
Herry
I'm glad we can agree that I never said anyone (or any business) had to do anything. Since @David Minarik cited the MTH situation as the "number one factor" contributing to his decision, I provided a link for informational purposes to the individual who did not recall any shops citing the MTH closure as contributing to their closure.
I don't think there's anything else to say.
When I worked for model train companies we had saying -
How do you make a small fortune in the Model Railroad business? Start with a large one!
I believe in todays world before opening a train store you would want to have a very serious talk with both MTH and Lionel. You need to know if you can buy direct or have to go through a distributor. Buying direct would be the best. Find out how much you would have to buy for the menufacture to pay your shipping. MAKE SURE YOU UNDERSTAND THEIR WARRANTIES. If you choose to sell MTH be sure to use their product locator. It tells everyone what you have instock. You must keep it updated. Be prepared to do a lot of custom runs. The more you do the better. Also, when starting out you should try to go to as many train shows as you can. You need to get your name and picture out there. I did it for ten years. My last twenty years I sold strictly from the store.
YOU MUST HAVE A WEBSITE.
Make sure you treat everyone the same. No matter if they spend $50.00 or $500.00. Treat everyone with respect.
HOURS: 11:00 am to 5:00 pm would be good. You should have one evening were you are open to 9:00 pm. I suggest Friday. If you want to do two, I suggest Monday and Friday.
I suggest you carry the complete line of Woodland Scenic Products. You should take a good look at Ready Made Trains. It sounds like Walter may have a winner. It doesn't cost anything to look.
If you want, you may e-mail me at jimstrainshop@comcast.net or you may call me on my cell phone 724-549-2672.
Friend of mine used to really enjoy crafting his own beer, he was really good. Several of us would go over to help with the process and of course sample the results, both good and not quite so good. This went on for several years until my friend was convinced by others he could go into business and make money while he enjoyed his hobby.
The result after a couple of years is yes, he did make money but no longer had time to sit back and just enjoy the beer. He was always busy running the business and making sure his product had consistent quality,.. Now years later he has decided to give it up, he is tired of working all the time,
I very intentionally did not mention any particular store which packed it in following MTH's "closing" announcement. At least I know that I hit a responsive chord. FWIW, I miss visiting Mercer Junction! I also miss visiting Frank Hare's Iron Horse!
As they say, "If the shoe fits wear it!"
@john in western pa posted:FWIW, I miss visiting Mercer Junction! I also miss visiting Frank Hare's Iron Horse!
I also miss the heck out of Mercer Junction.
I have intentions to sell 3D prints at some point as a way to earn some beer/train money. I wouldn't mind revisiting this thread to see if how much my perspective changes on opening an entire hobby shop once I get a few months.
Finish this line..."If you want to make a million dollars in model trains, then start with 2 Million"
MTH and Lionel aren't the only train manufacturers, there are quite a few ho an n gauge manufactures to round out the offerings not to mention ship, plane, truck, and car kits. Radio control cars are also big, kudos if you can also provide service as they are always breaking some parts due to the rough usage. IMHO you would want a well rounded inventory to carry you through the lean months of train buying.
@Shawn_Chronister posted:Finish this line..."If you want to make a million dollars in model trains, then start with 2 Million"
'And quit when you have 3 million in the bank.'
@jim sutter posted:I believe in todays world before opening a train store you would want to have a very serious talk with both MTH and Lionel. You need to know if you can by direct or have to go through a distributor. Buying direct would be the best. Find out how much you would have to buy for the menufacture to pay your shipping. MAKE SURE YOU UNDERSTAND THEIR WARRANTIES. If you choose to sell MTH be sure to use their product locator. It tells everyone what you have instock. You must keep it updated. Be prepared to do a lot of custom runs. The more you do the better. Also, when starting out you should try to go to as many train shows as you can. You need to get your name and picture out there. I did it for ten years. My last twenty years I sold strictly from the store.
YOU MUST HAVE A WEBSITE.
Make sure you treat everyone the same. No matter if they spend $50.00 or $500.00. Treat everyone with respect.
HOURS: 11:00 am to 5:00 pm would be good. You should have one evening were you are open to 9:00 pm. I suggest Friday. If you want to do two, I suggest Monday and Friday.
I suggest you carry the complete line of Woodland Scenic Products. You should take a good look at Ready Made Trains. It sounds like Walter may have a winner. It doesn't cost anything to look.
If you want, you may e-mail me at jimstrainshop@comcast.net or you may call me on my cell phone 724-549-2672.
advice from a great guy. Still offering his services.
Jim, you are great!
Engineer-Joe,
Thank you.
It seems to me if you want to know what it takes to make it work, look at the businesses that are successful. Two examples: Trainworld and Mr. Muffins. I've dealt with both of them from a distance across the country and they have the right stuff. It's called value added. Yes, they are volume players and that matters. But there's more.
During covid, Trainworld showed they get it by adjusting and having You Tube Events. It's now morphed into must see events after the pandemic by the leaders in the industry. Do people buy trains during these events? No. But the events make you want to buy from them, and I would guess the events helped fueled sales and awareness, especially during a time when retailers were shut down.
Mr. Muffins did the same thing by having zoom calls every week and still does them.
But it runs deeper than that. Both companies know their core customer base, know what they want, stock what they know they want and do custom runs that they know they want and know they will sell because they ask their customers. And they love trains themselves and have operating trains on display to prove it. They're passionate. I think Steve Nelson at Mr. Muffins like running, playing and talking about trains way more than making money off of them. Clearly Mercer Junction was the same way.
And, yes, they also have strong, awesome, web sites that make pre-ordering, ordering, canceling, and communication easy. And guess what? They don't try to profit off the shipping and handling. That makes it easy to do business with them.
There are local train shops out there that are successful because they, too, offer value to their customers and know their customers' wants and needs. Sommerfelds Trains in the Milwaukee area is one of those. I've been buying from them for over 20 years and they are rock stars. They cater to the layout builders like us.
Mike
Self-employment is not for everyone.
I like to start the conversation with: Do you understand the difference, 7.65% v.s. 15.3% Social security payments, and the required payment schedule(s)??? Life on the other side isn't always what it seems. IMO, Mike CT. 
Conversation, above, applies to all small business ventures. At the very least a small business is a learning adventure Have fun, Mike CT.
Self-emplyment may not be for everone but it was for me. I loved selling trains. Nothing like helping someone in the store. I worked with my father and great uncle in a hardware from 1960-1973. From 1967 to 1997 I worked for Penn Dot in the signing section. From 1981-2010 along with my wife we sold electric trains. I enjoyed all of my jobs.
I've been watching this thread wanting to respond. Like so many, what I know about retail is from the consumer, not proprietor perspective. Based on his gentlemanly persona on this forum, I have no doubt that Jim was a highly successful shop owner.
That said, I cannot imagine wanting to open a train store in the 2020s or beyond, but also imagine it was a great joy in the past. The internet has permanently changed buying habits that don't benefit traditional retail. While I've NEVER been the kind to shop at a specialty store, pick their brains, and then run to a "big box" store to save 5-10%, I sense many do just that. Heck, I buy at least an overpriced water bottle every time I venture into a bike shop just as I always purchased something, even if just spare parts or track, when I visited the Trading Post Train Shop or when I now visit Stockyard Express. But, why settle for engine in a road name I don't want just because my LHS has it when I can find exactly what I want at a dealer with a website and shopping cart. No more local captive customer bases which has to hurt margins.
I've often wondered if two related themes in the 2010s and 2020s apply to future sellers in our hobby: (1) asset purchases are shifting to subscription services and (2) product manufacturers and distributors are looking adding post-sale value-added services.
Subscription trains? I don't know if that would ever happen in our hobby, but I see just about everything from women's dresses, men's ties and shaving supplies, and prepared foods being offered via subscriptions. Maybe some day we'll pay a monthly subscription, receive a refurbished, gently-used engine or what not, and return the one delivered to us months prior. Who knows?
Service? As a self-taught guy, I'd love to have a expert "consultant" come over from time to time, fix my mistakes and get me unstuck from my periodic drives into ditches in person rather than trying to explain my challenges on a forum. Yes, I'd pay for the service. Not sure this, either, will ever happen in our hobby, but it's happening in other industries.
Just my 2-cents.
You know how to make a small fortune? Start with a large fortune and open a hobby shop.
Alan
So much negativity. Doesn't anyone have something good to say. Any business would only be as good as you make it. You have to put in a lot of time and effort. If you don't want to that, don't open a business. Don't even think about it.
@jim sutter posted:So much negativity.
It's a bummer, I agree with you. I come here to get away from that.
There's an RC shop here in town that has a track last I checked. They seem to do well for themselves. I know there's a track up in Mercer County, Pennsylvania. I would argue that's comparable to model railroading in terms of size and it can be pricey. I think the community that a store/hobby has is heavily indicative of the success that store/hobby will have and I think that's why those places are getting by.
I still lack the funds to open a train store 
but I think it could be done if you were ambitious and thought things through. If Internet Explorer can ask to be my default browser, then open a train store that stays in business could happen.
BillYo414, Never give up your dream.
@jim sutter I was not being negative I was being realistic when I said 2 million to make a million.
The simple fact is you cannot do it on trains alone starting a new shop in today's market and competing with Charles Ro Trainworld & Mr. Muffins is tough. Plus Lionel make you use a distributor and they require a storefront in a high traffic area so that also makes it tough because rent in a high traffic area is insane no matter where you live. I used to work for the Hobby Shop in Delaware and I know the margins which are slim so you have to have more than trains hence the 2 million statement.
So would you open a trainshop only if you were starting today?
@jim sutter posted:So much negativity. Doesn't anyone have something good to say. Any business would only be as good as you make it. You have to put in a lot of time and effort. If you don't want to that, don't open a business. Don't even think about it.
Jim,
Words of wisdom. I admire the entrepreneurs that have the guts to take the risk. My favorite question to ask business owners is, "How many jobs do you think you've created or helped sustain over the life of your business?" For my dad, that was part of the juice that made him a proud American business owner. As a sales guy myself, I know the money is king. But the other stuff is part of the juice that makes it go and makes you proud of doing it.
Mike
Ok, this will be positive. However, it is not a train store. Back in the day we had nine video stores and must have employed over two hundred people through the years. I have people come up to me today and say how much they enjoyed working for Movieland Video. About half the time I do not recognize them because they were teenagers then and now they have wives,or husbands and kids.
Does it make me feel good? Sure. Most of the time we really have no idea how we impact people's lives.
Now, the really positive part. When I sold to Blockbuster it allowed me to buy a whole lot of trains.
Shawn Chronister,
I didn't say you were. I didn't name anyone.
If I owned my own building I would give it a try.
romiller49,
That's encouraging
In person retail is on the wain. The model train business is not what anyone would realistically call a draw year round.
No matter how you do it or what field you do it in, if you are thinking of starting a business contact an accountant in your area and discuss all the costs associated with the business. Ask for a pro forma Income and Expenses statement at three levels of sales and a balance sheet at the end of each of the first five years. Expect to operate in the red for the first three years. Once you see the gross income needed to cover expenses, make a marketing plan to attain that dollar goal. Don't cheat on this, no pie in the sky dream, make the marketing plan as realistic as possible. You will need to know the minimum up front capital requiired. Do not count on a Small Business Loan from the feds. It wouldn't hurt to contact several successful train stores, take the owner to dinner and ask them to review your plan. Ask for comments. Steve at Muffins, Norm in Maine and Greg at ChicagoLand Hobby have all 'Been There, Done That',
Good luck, John
I'm not sure how reality translates in to negativity but most are just being realistic in the current state of the economy and trains sales in general. Yes there are quite a few stores doing well but I would suspect most of them have been established and have a darn good internet presence as well as a loyal customer base. Is it impossible, no but again you have to be able to afford the startup and most folks I know at this point are being very frugal with their money.
@romiller49 posted:If I owned my own building I would give it a try.
Unfortunately, owning your own building means little. Increasing property taxes, rising insurance cost, prohibitively expensive repair and maintenance cost often translates into renting might by cheaper.
Please correct me if I am wrong but wasn't there a time people were buying direct from Lionel and selling mail order out of their houses at low prices, no overhead? Brick and mortar stores complained and the mail order houses were shut down. I doubt that business model will be back.
@rattler21 posted:No matter how you do it or what field you do it in, if you are thinking of starting a business contact an accountant in your area and discuss all the costs associated with the business. Ask for a pro forma Income and Expenses statement at three levels of sales and a balance sheet at the end of each of the first five years. Expect to operate in the red for the first three years. Once you see the gross income needed to cover expenses, make a marketing plan to attain that dollar goal. Don't cheat on this, no pie in the sky dream, make the marketing plan as realistic as possible. You will need to know the minimum up front capital requiired. Do not count on a Small Business Loan from the feds. It wouldn't hurt to contact several successful train stores, take the owner to dinner and ask them to review your plan. Ask for comments. Steve at Muffins, Norm in Maine and Greg at ChicagoLand Hobby have all 'Been There, Done That',
Good luck, John
Excellent advice that you would do well to heed. Given the demographics of the hobby and the current economic environment, luxury goods (and trains are luxury items) are not exactly in demand.
George
G3750,
Yes, demographics play a large part. The visitors at the train shows are getting grayer and grayer. The young families seem to be there for the operating layouts. Same with classic cars. Look who is bidding on cars at the Barris Jackson and Mecum auctions more grayhairs.
@jim sutter posted:So much negativity. Doesn't anyone have something good to say. Any business would only be as good as you make it. You have to put in a lot of time and effort. If you don't want to that, don't open a business. Don't even think about it.
Jim, hope you didn't take my commentary as overly negative. I think retail has changed substantially and permanently across all industries, not just model trains. I think several forum sponsors have figured out a 2020 and beyond model that appears to be working. Different challenges, but also different opportunities, in the internet era.
@CSXJOE posted:Please correct me if I am wrong but wasn't there a time people were buying direct from Lionel and selling mail order out of their houses at low prices, no overhead? Brick and mortar stores complained and the mail order houses were shut down. I doubt that business model will be back.
Yes there were people selling this way and I believe Lionel took it to the extreme in the wrong way. To buy direct you have spend a lot of money in inventory which was the reason for my comment above.
@MartyE the loyal customer base turn’s quickly if issues arise with getting products Lionel did this a couple of times to dealers and customers blame them for not getting preorders the other problems is people calling and telling they can’t take there preorders. I get people have issues that arise but telling the dealer after the product arrives is not good seen happen to many times. It was my dream but seeing how it works I wouldn’t do it again.
We are definatly in a difficult time to try to launch a store. A local shop closed up for now as post covid, his landlord jacked up the rent so much that it was unsustainable for the shop to remain open. So everything went into storage while he tries to find a new place, which has been unsuccessful thus far. All costs have gone way up, from the materials to set up a store to product along with every overhead cost you can think of. At the same time, profit margins on the items have shrunk to where you barely make any profit at all unless you move high volumes. The stores that have or developed an excellent E store have done well thru the covid mess as folks stuck at home got back into their hobbies in a big way. The demographic change is a factor, from parents being unable to afford or willing to pay the cost for a train set. To kids that have never seen or grew up around real trains, so the desire to model that isnt there like it was for many of us. All we can do is keep promoting the hobby in a positive light, keep the "doom and gloom" chat among ourselves as that hurts the hobby if a potential newbie hears all that. Time to get back to enjoying model trains of all shapes and sizes. AD
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