Anyone planing on opening a train store. It would be nice to see.
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Its like a magic , you take a big pile of money and "puff: make it disappear"
As soon as my wife wins a lottery above ten million, I'll open one. Be there every day offering a wide selection of O gauge items including LaBelle and American Standard kits. Two rail as well as three rail. Free coffee, donuts, advice and a test track to those who will then go home and find a cheaper price on the Internet. I'll do that while paying utilities, taxes, cleaning crew, insurance and miscellaneous expenses until the money runs out. John
Its been twelve years since my wife and I retired from selling trains. I just can't believe not one person from this forum wouldn't want to be their own boss and sell trains.
Jim, would you be available to provide guidance to someone who wanted to start a store?
Not me, but maybe someone?
RoyBoy,
Absolutely. I would be more than glad to help some one. My phone number is 724-549-2672.
In today's market you'd be better off flushing your money down the drain. Don't get me wrong if you are an established store with a great internet presence you're probably doing ok but to start up a train store today would be IMO a poor decision. Maybe buy as business from an established store but not startup. Any business startup is a risk but trains seems like not the startup business I'd want to try.
Gee I bet most of us could start one right now and have a pretty good inventory based on what we currently have in our basement/trainroom/garage or what ever part of your home houses your layout/collection!!!! 
Opening a train store in an economy that is hampered by high inflation, rising interest rates, and in general people having less disposable income to spend on trains. Sounds like a good plan!
Since it sounds like you miss selling trains, why don't you invest your retirement fund into doing this?
I would love to open a hobby store in general. But the risk of starting any type of business as my main source of income is insanely high because of soul crushing student loan debt. It's not worth failing to make payments on those loans when I have a good paying steady job. I also have very little knowledge in business. I wouldn't know what tax forms I need and yada yada yada.
With the doom and gloom out of the way, I would aim to cultivate a customer base. Some ideas would include letting people run trains on the store layout. Heck, let them rent trains from a store roster to run on the store layout so they get the bug. Host scenery classes, maintenance classes, nights where people can run trains, etc. It would be a cost to the business to do these things but I think experience and knowledge are often barriers for people wanting to start something new. Creating low/no risk opportunities to try model railroading might be an excellent way to remove those barriers. I just don't know if the cost of doing that would be less than the revenue generated afterwards. Hard to say! I'm more or less brain storming for the sake of discussion at this point. And maybe I would love to own my own business one day.
@BillYo414 posted:With the doom and gloom out of the way, I would aim to cultivate a customer base. Some ideas would include letting people run trains on the store layout. Heck, let them rent trains from a store roster to run on the store layout so they get the bug. Host scenery classes, maintenance classes, nights where people can run trains, etc. It would be a cost to the business to do these things but I think experience and knowledge are often barriers for people wanting to start something new. Creating low/no risk opportunities to try model railroading might be an excellent way to remove those barriers. I just don't know if the cost of doing that would be less than the revenue generated afterwards. Hard to say! I'm more or less brain storming for the sake of discussion at this point. And maybe I would love to own my own business one day.
I don't see an issue with what you presented BUT I think it would require a lot of startup cash until that customer base is built. Most likely over many years. I watch restaurants fail all the time mainly due to not being able to survive the startup. The food is always excellent but they just don't have enough funds to survive the 3-4 years to get out of the red or break even. I suspect a train shop could take a lot longer to clear any type of profit.
I don't have any experience in owning a business so I may be way off base but I do pay attention to those that do and startup seems to be one of the biggest hurdles.
My retirement dream is to start a train exhibit, not store per se, rather acquire desirable building (and real estate location) and build a operating layout of first-class, museum quality lighting, scenery, but not a large rectangle, more of a walk-thru experience around sinuous benchwork, yet one that is also interactive and unique such that people would want to purchase a ticket to see and come back again. No delusions on this however, as we lost Roadside America in eastern PA, so I figure it would need an accompanying first-class business selling candy, cookies, beverages, whatever profitable niche I could find via additional hard work to pay the bills of the whole thing. The train exhibit would be secondary to whatever main business I can figure out or partner with. Location is key, and ideally in the countryside - semi-suburban/farm regions of eastern PA where model trains are still appreciated, albeit not as much as they once were. If anyone wants to join me, contact me...I am at least 4 years away from a theoretical retirement, so now is the time for planning & brainstorming.
The fact that so many are closing indicates that we're in difficult times presently.
Without a radically new approach a new store, brick-and-mortar, or online, or both, would not be a slam dunk opportunity.
One positive was the pandemic because it pushed folks into hobbies to keep themselves busy. This is tempering as more and more people consider it to be over, but the seed has been planted. Maybe it can finish blooming and the hobbyist markets can continue to grow.
Mike
@MartyE posted:I don't see an issue with what you presented BUT I think it would require a lot of startup cash until that customer base is built. Most likely over many years. I watch restaurants fail all the time mainly due to not being able to survive the startup. The food is always excellent but they just don't have enough funds to survive the 3-4 years to get out of the red or break even. I suspect a train shop could take a lot longer to clear any type of profit.
I don't have any experience in owning a business so I may be way off base but I do pay attention to those that do and startup seems to be one of the biggest hurdles.
Agreed! It would take tremendous startup money! I also have seen what you're describing. Owning my own business as a main source of income is out of my reach anyway so I try not to spend too much time thinking about it. I'm trying to start a side hustle and that's difficult enough.
MartyE writes:
”I watch restaurants fail all the time mainly due to not being able to survive the startup.”
Nationwide, Bars have the highest failure/turnover rate. Called “bust out joints” where it’s all happening, until the next “bust out joint” opens in the same area, and it’s all happening there, but no longer at your place!☹️
Independent restaurants are next highest in failures, and the most stable business to own? A jewelry store. Initial start up cost is staggering due to inventory procurement. That’s why there are now jewelry store chains, like Zales.
As others have pointed out, a very difficult thing to do. You would need to be in a place where there is enough population density to support the business along with an internet presence (It is amazing to me how bad some places internet presence is, stores that basically say "yep, I exist" with little to nothing else on it, or a 'store' that doesn't list all they have and is difficult to use. My favorite are the ones where you order something, and there literally are no confirms to email, and you can't even look up your order status..).
Bill above had some great ideas in terms of being engaged with the hobby, having a layout, having in store classes,events, etc. A lot of stores IME lack that, they are like "I am here, I am doing you a favor, don't count on more".
You also have to have something unique to offer. A good quality repair service would be huge, given how bad that side of things is these days, with manufacturers barely offering warrantee repairs and nothing beyond that, and the quality (or lack thereof) that is often talked of on here. Also, with stock, if you have the same things let's say Charles Ro has or whatnot, I don't think it would work (they would beat you on price), I think being able to find unique things would be a boon (and not saying that is easy, that means knowing where to find unique things).
Even with all that it will be tough. For all the bemoaning the loss of local hobby stores, a lot of the people moaning the loudest will also go and look at a train in a store, then go buy it on the internet to save a couple of bucks , literally (Have directly seen people buy stuff from the internet to save on total cost 5 bucks on something costing like 800 vs local store). One saving grace is these days lot of internet places are charging local sales tax, that was a huge disadvantage to being a local store.
Even if you do everything right, you are facing an uphill climb on an icy road. It does take a lot of start up capital (even buying an established business, I would bet it still will be, to maintain current base and add new customers) and it will take a while to become profitable, if ever. Lot of hobby stores are retirement jobs where the person running it does it as a hobby in a sense, where they had enough capital to buy into the store and make enough to cover operating costs and make something out of it. One downside is that unless it is one of those rare birds, a hobby store that is flourishing, if they decide to get out it is prob unlikely they would be able to sell the business for much if anything. Might be able to recoup some money via selling off inventory, but one factor in all this would be to assume it will not be easy or possible to sell the business off.
Put it this way, for all the talk of buying local, take a look at what the profits of places like Amazon or the big box stores are doing, and you have an idea of the problem. People talk big of buying local, complain when a small store goes under...and then buys from Amazon, Home Depot, etc, etc.
Would love to read the business plan from someone who is opening a Train Store.
IMO, any train store that doesn't also have a strong Internet presence would be in for a very steep uphill climb. During the pandemic, a stabilizing force at Henning's was their Internet presence.
A friend and I thought about buying a small local hobby shop, that was closing due to a death, a couple years ago.
After doing some research, considering the store front rent (high here on LI), insurance, utilities, etc, it was clear that it would be a big $ looser - even factoring in that our time would be without any $ compensation.
Too many people were going in the existing store to buy paint, balsa, glue and not much more. Train and hobby kits languished on the shelves - seems that most people don't want to pay retail at a small store when such great deals can be had at the larger retail/mail order outlets and train shows. Completely understandable.
Too bad - it could have been fun.
@jim sutter posted:I just can't believe not one person from this forum wouldn't want to be their own boss and sell trains.
Wanting to is not in doubt, I suspect.
The harsh financial realities combined with turning your hobby into a full time business occupying your time is a severe impediment. The numbers here that actually know how to run all aspects of a self-directed business is probably very low.
@mwb posted:Wanting to is not in doubt, I suspect.
The harsh financial realities combined with turning your hobby into a full time business occupying your time is a severe impediment. The numbers here that actually know how to run all aspects of a self-directed business is probably very low.
I suspect the original post was meant to be sarcastic, something the internet doesn't handle well......
@jim sutter posted:I just can't believe not one person from this forum wouldn't want to be their own boss and sell trains.
Oh, I'm quite sure the majority of folks on this forum would (1) like to be their own boss and (2) sell trains, but most also recognize that this is most certainly not the ideal time to be undertaking such a venture. Too much economic uncertainty, too many changes in the industry itself, and then there's the matter of changed demographics to deal with, among other factors and considerations. And without significant prior business experience, it would, at the very least, be a risky venture. BUT, keep in mind that many of the most successful entrepreneurs in our nation's long history were folks who were initially told that "it can't be done."
Thank you for all your replies. Everyone of you had good reasons not to open a train store. I know it wouldn't be easy.
@Paul Kallus posted:My retirement dream is to start a train exhibit, not store per se, rather acquire desirable building (and real estate location) and build a operating layout of first-class, museum quality lighting, scenery, but not a large rectangle, more of a walk-thru experience around sinuous benchwork, yet one that is also interactive and unique such that people would want to purchase a ticket to see and come back again. No delusions on this however, as we lost Roadside America in eastern PA, so I figure it would need an accompanying first-class business selling candy, cookies, beverages, whatever profitable niche I could find via additional hard work to pay the bills of the whole thing. The train exhibit would be secondary to whatever main business I can figure out or partner with. Location is key, and ideally in the countryside - semi-suburban/farm regions of eastern PA where model trains are still appreciated, albeit not as much as they once were. If anyone wants to join me, contact me...I am at least 4 years away from a theoretical retirement, so now is the time for planning & brainstorming.
Sounds EXACTLY like EnterTrainment Junction in Cincinnati. The majority owner was (is?) a hotel magnate (Columbia Sussex) who enjoys trains. He built essentially (with the help of an army of volunteers working constantly) a museum train layout walkthrough with an attached kids entertainment center. He also has an outdoor small-gauge train.
Interestingly, we got called to the Columbia headquarters in Fort Mitchell KY to look at one of his larger gauge ride-on trains that was installed as a curiosity around the base of the 20-story building.
A model of business used years ago still can work today. The key is diversification. Sell Trains and say bicycles or sporting good. They are both seasonal and one can help carry the other in the off season to sustain the business model. Look at Forum sponsor EZ Catch as an example
@MartyE posted:In today's market you'd be better off flushing your money down the drain. Don't get me wrong if you are an established store with a great internet presence you're probably doing ok but to start up a train store today would be IMO a poor decision. Maybe buy as business from an established store but not startup. Any business startup is a risk but trains seems like not the startup business I'd want to try.
But that scenario is also risky as not only are you buying the store, its inventory, but possibly iys name AND REPUTATION that went with it too!
Unless you buy a well established train store with a great Internet presence and regular customers, you had better be selling something else along with it to be profitable.
@prrhorseshoecurve posted:But that scenario is also risky as not only are you buying the store, its inventory, but possibly iys name AND REPUTATION that went with it too!
Gotta do your homework.
I thought about it. The last remaining train store in the Phoenix area that deals in O is selling. The price was staggering but I’m sure negotiable and I assume the seller and I could work something out. What option does he have? He is retiring. The store does not have an e-commerce presence though and I don’t know how to run a hobby shop, or more importantly, an e-commerce web site. I’m a litigator. So is my wife, so we’d still have her income.
Presumably you get the seller to hang around for a few months to help me get up and running and I’d spend a lot of time learning the e-commerce trade. All doable, but then what’s the upside? What’s the income potential? This is where the plan went off the rails for me. I’m sure we all have a dream on some level of running a hobby shop but when it comes down to it you still need to eat.
Now if I win $10M in the lottery, the gloves are off. I’ll open the world’s first o gauge train store/classic car dealership/coffee shop/wine bar!
One question I would have with this venture- how is pricing for an item set? In other words, why can the larger dealers sell for lower prices online? Is it purely their sales volume? Or, are they getting a greater discount from the importers than smaller distributors? Is Ro selling to consumers for less than I can purchase from the distributor?
I think knowing that would go a long way in building a business plan. If you owned the building and could control overhead that way, could eat several years of red numbers to establish yourself and pick up marketshare, and provided top-notch service and sales experience so that you were a destination (online and brick-and-mortar), it would go a long way in making this work.
I suppose that many, if not most of us have fantasized about owning a train store at one time or another. In today's day and age, if I were to set out to open a train store without a huge pile of cash to start, I'd probably start on the internet (internet only plus local train shows) and buy and sell used trains to start, and then branch out into new once established, and then once a customer base is built up, gauge the potential local interest in a physical location. Personally, I would then look for a location to buy or build, rather than rent, to help keep the store's overhead as low as possible. It would be a long, slow process, and a lot of work to just be able to make a living at it.
Andy
In this age of many train Stores closing?
I own buildings in Downtown Harlingen. I deal with people all the time that want to, 'live the dream'. My rents are cheap even for here, about $0.40 per foot per month. For some reason we don't quote annual rents. A good deal of the time when I say I get first and last month and a year lease, the response is, 'can I pay the last month in payments'.
People do not do a 'business plan' and most people do not know what one is. When I say SCORE can help do one I suspect no one ever contacts them at the Chamber.
The two major O Gauge manufacturers have now adopted a business plan for top end 'Collectible' trains that states that they will only build what you have in advance promised to buy. They have moved the risk somewhere else. That might be the dealer or the end buyer depending on how the dealer chooses to deal with payment. Moving forward I suspect it will ultimately be moved to the end buyer/operator/collector.
Regularly, I have people say, 'why don't you do a museum?' I tell them I am willing to throw a building at the project if they are willing to cover the insurance, taxes, utilities, maintenance and finally hire the people necessary to keep the doors open. There is literally no reason beyond winning the lottery, as some people have mentioned, to consider opening a train store or hobby shop. That dream like so many others is pure fantasy.
I realize that playing with toy trains has a fantasy component but let us not be completely nuts.
@Andy Hummell posted:I suppose that many, if not most of us have fantasized about owning a train store at one time or another. In today's day and age, if I were to set out to open a train store without a huge pile of cash to start, I'd probably start on the internet (internet only plus local train shows) and buy and sell used trains to start, and then branch out into new once established, and then once a customer base is built up, gauge the potential local interest in a physical location. Personally, I would then look for a location to buy or build, rather than rent, to help keep the store's overhead as low as possible. It would be a long, slow process, and a lot of work to just be able to make a living at it.
Andy
Agreed. Many hobby shops today own the building that they are in. Rents especially for commercial use properties get expensive FAST not to mention utilities are 7x the rate of household utilities, insurance is another huge cost plus Point OF Sale [POS] on the internet for the stores website. Not much in foot traffic these days compared to e-commerce! Just ask Justrains and M.B. Kleins in Baltimore!
@RJT posted:Gee I bet most of us could start one right now and have a pretty good inventory based on what we currently have in our basement/trainroom/garage or what ever part of your home houses your layout/collection!!!!
Now, that makes sense. As I have not bought much of anything for years, all my stuff is fully depreciated and off the books, so anything I sell is pure profit, so long as you don't allow for inflation and original cost. It would be like printing money!
Capitalism - the answer to everything.
@Bill DeBrooke posted:The two major O Gauge manufacturers have now adopted a business plan for top end 'Collectible' trains that states that they will only build what you have in advance promised to buy. They have moved the risk somewhere else. That might be the dealer or the end buyer depending on how the dealer chooses to deal with payment. Moving forward I suspect it will ultimately be moved to the end buyer/operator/collector.
Which they took the idea from the 3rd major O gauge manufacturer who has been using this business model successfully for many, many years. 
I can only speak for myself, but I retired so that I can do what I want when I want. Being obligated to be somewhere or do something on a regular basis doesn't appeal to me, especially if it's financially challenging. And when you own your own business, there is no such thing as a day off - I learned that the hard way when one of my rental properties had a clogged drain while I was hundreds of miles away at York. (I still have trains, but no longer have rental property. )
A few years ago, I got some glimpses at the wholesale price lists for MTH and Lionel. Wholesale prices were (and I'm guessing still are) a larger percentage of MSRP than one normally expects for retail products. As I recall, wholesale prices varied by item, but were generally around 62-70% of MSRP. And remember that most of us expect to get at least a 10% discount. You do the math - gotta sell a whole lot of stuff to make some money.
I have the utmost respect and appreciation for the folks who choose to run a train store.
Several of us have been looking for a suitable building to open a RR Museum with emphasis on 3 rail model railroading. Between us we have the inventory, the tools, and we believe the knowledge to create, build, and operate a very nice display including real RR pieces for the viewing enjoyment of the general public. Two of us are able to repair trains with one being a current Lionel Service Station owner. One has much prior experience working with several museums in NY and loves working with kids and scout groups. The hurdle for us has been the facility. I am a real estate broker with a lot of contacts. Have written to most of them asking for leads and have come up with nothing so far in almost a year. No one seems to be interested in sponsoring or willing to provide a building (even off the beaten path) for us to occupy and we don't have the wherewithal to purchase or rent one. We have offered for a landlord to charge admission with nothing going to us with no takers as yet!
It seems to me that the allure of owning a real train shop is sitting behind the counter surrounded by train merchandise while a train circles your store layout. Basically, it is putting yourself in the middle of your own model railroad empire while you entertain customers, talk trains with buddies, etc.
Actually making a real profit at this is problematical but the pleasure isn’t in the money; it’s in the accoutrements and the ambiance. The Christmas-all-year glow you feel.
So my advice to you is to create your own “train shop” in your basement where you can be master purveyor of trains to all who come. And then invite your friends over to join your playtime.
@Dave Warburton posted:...
So my advice to you is to create your own “train shop” in your basement where you can be master purveyor of trains to all who come. And then invite your friends over to join your playtime.
This is OGR's "Post of the Day"
There's a Hobby Shop near me in Cary NC called Hanger 18. We have a model car club that meets there along with gamers. He recently expanded to the vacated store next to him. I asked why he didn't carry trains and his answer was the amount of inventory would be staggering to satisfy all aspects of the hobby. His biggest seller is model kits called Gundam which I can't understand the attraction. Gaming kits and components are big too. Sells lots of electric RC cars and accessories. Also carries a large selection of model kits, favoring military. As was stated before, variety is the spice of life. BTW he stayed open during COVID and said the local officials said it was ok as it was keeping the populance sane. He also stays open past 8:00 as opposed to the early closings of some shops.
His diversity of products is a key to his success.
@CSXJOE posted:His diversity of products is a key to his success.
... except, unfortunately, that this diversity doesn't extend to trains.
Mike
Trains are my hobby and I plan to keep it that way. No thank you.
@dk122trains posted:A model of business used years ago still can work today. The key is diversification.
There is one hobby shop in the area where I live. They relocated their established business and started up new here in an area where interest in trains is very minimal. They sell R/C, diecast aircraft, models, model supplies and trains. Most of their local sales are R/C. They have a good website and stay afloat through internet sales.
@Paul Kallus posted:My retirement dream is to start a train exhibit, not store per se, rather acquire desirable building (and real estate location) and build a operating layout of first-class, museum quality lighting, scenery, but not a large rectangle, more of a walk-thru experience around sinuous benchwork, yet one that is also interactive and unique such that people would want to purchase a ticket to see and come back again. No delusions on this however, as we lost Roadside America in eastern PA, so I figure it would need an accompanying first-class business selling candy, cookies, beverages, whatever profitable niche I could find via additional hard work to pay the bills of the whole thing. The train exhibit would be secondary to whatever main business I can figure out or partner with. Location is key, and ideally in the countryside - semi-suburban/farm regions of eastern PA where model trains are still appreciated, albeit not as much as they once were.
Actially setting up by an active short line with scenic train rides such as Steamtown, New Hope, PA, Jim Thorpe, PA Boyertown, PA or even Orbisana, PA ,etc. Would help you out immensely. Just look how the Choo Choo Barn worked out!
Two shops are closing in my area in the next few months. The last nearly closed but managed to keep its lease. It is sad times.
@Mellow Hudson Mike posted:The fact that so many are closing indicates that we're in difficult times presently.
Without a radically new approach a new store, brick-and-mortar, or online, or both, would not be a slam dunk opportunity.
One positive was the pandemic because it pushed folks into hobbies to keep themselves busy. This is tempering as more and more people consider it to be over, but the seed has been planted. Maybe it can finish blooming and the hobbyist markets can continue to grow.
Mike
Mike what your are stating is very true. But most of the LHS that are closing the owners are retiring. My two favorite shops The RailYard in Roanoke ,VA and Catotin Mountain Hobbies in Thurmont MD both are closing for retirement. Paul was Thurmont was open for close to 25 years and Jim in Roanoke for close to 35 years and both were hobbies for the owners after retiring from their jobs. So IMH owners age is a big part of all the LHS that are closing and I’m sure Jim closed his shop in Homer City PA for probably the same reason all three of the shops I mentioned were/are great shops that were run by great fans of the hobby. Bill your idea sounds really great and I think it would do really well you could count on me to visit not sure where you are located but weekend field trips to train stores are a lot of fun done a couple with a train buddy of mine and always had a great time and met neat folks like Mark Boyce and Dave from Mercer Junction and Jeff at McCormicks.
Wait, what? Arizona still has an O gauge train shop? I was under the impression that they had all closed...
When "improving the quality of father to son relationships in families" becomes a goal of the government with accompanying grants and operating subsidies to train hobby businesses, that would be the time to open a train store as a 501(c)(3) organization. Use the subsidy to stay financially afloat until the subsidy expires. Likelihood of that happening ... zilch.
Mike M.
@Bill DeBrooke posted:I own buildings in Downtown Harlingen. I deal with people all the time that want to, 'live the dream'. My rents are cheap even for here, about $0.40 per foot per month. For some reason we don't quote annual rents. A good deal of the time when I say I get first and last month and a year lease, the response is, 'can I pay the last month in payments'.
People do not do a 'business plan' and most people do not know what one is. When I say SCORE can help do one I suspect no one ever contacts them at the Chamber.
The two major O Gauge manufacturers have now adopted a business plan for top end 'Collectible' trains that states that they will only build what you have in advance promised to buy. They have moved the risk somewhere else. That might be the dealer or the end buyer depending on how the dealer chooses to deal with payment. Moving forward I suspect it will ultimately be moved to the end buyer/operator/collector.
Regularly, I have people say, 'why don't you do a museum?' I tell them I am willing to throw a building at the project if they are willing to cover the insurance, taxes, utilities, maintenance and finally hire the people necessary to keep the doors open. There is literally no reason beyond winning the lottery, as some people have mentioned, to consider opening a train store or hobby shop. That dream like so many others is pure fantasy.
I realize that playing with toy trains has a fantasy component but let us not be completely nuts.
A couple of comments... Any form of opening lease arrangement invariably gets questioned/negotiated by some potential tenants. Some just don't understand how the leasing process works. It gets even worse if you operate in an area where "1st, last, AND security deposit" (three payments) are all customary. Smart landlords can compete by cutting one of those or negotiating one -- if they can get away with it. (Pressure from landlords' associations and real estate brokers is a real thing.) I've done real estate sales, and leasing -- residential or commercial -- can be lucrative but it's also full of its own unique headaches. Inflationary costs right now are really making commercial leasing even more challenging. In some areas it's hard to keep the going lease rate down to what the market will bear. Cost is up everywhere, and it makes finding a tenant willing and able to pay more difficult than ever.
My wife has run a microbusiness focused on high-end yarns and knitting. She discovered along the way that conventional training for business planning, as well as the expectations of banks and finance organizations tend to favor larger-scale and more "conventional" businesses. Hobbies and forms of entertainment that don't deal in large enough sales volumes are more challenging to fit into typical business plan formats (and get taken seriously) or fit into funding sources' expectations and understanding. She's found that SCORE chapters frequently don't have nearly as much microbusiness expertise as they do for more conventional enterprises like bars, restaurants, franchising, etc. To the point that she was asked if she could help fill them in on her experience to some extent... which wasn't why she'd come to them!
The trouble for hobby shop enterprises like trains or independent craft-focused shops is that they frequently deal in lower volumes and narrower margins which just don't fit or have enough profit margin to appeal to the conventional (and profit-seeking) business financial support sector. That shifts the risk and effort squarely onto the individual business owner -- as in, you will have to carefully bankroll the entire operation yourself, and build up much more slowly as you can afford it, with careful planning and doing your own market research. Not for the faint-of-heart, certainly. Especially considering the cost of acquiring inventory at wholesale for higher-cost items like trains.
@CSXJOE posted:There's a Hobby Shop near me in Cary NC called Hanger 18. We have a model car club that meets there along with gamers. He recently expanded to the vacated store next to him. I asked why he didn't carry trains and his answer was the amount of inventory would be staggering to satisfy all aspects of the hobby. His biggest seller is model kits called Gundam which I can't understand the attraction. Gaming kits and components are big too. Sells lots of electric RC cars and accessories. Also carries a large selection of model kits, favoring military. As was stated before, variety is the spice of life. BTW he stayed open during COVID and said the local officials said it was ok as it was keeping the populance sane. He also stays open past 8:00 as opposed to the early closings of some shops.
His diversity of products is a key to his success.
Years ago when I first got into trains and O-gauge, there were considerably more local hobby shops than there are today. Quite a few that were nominally "train shops" carried a good deal more than just trains. Military models, the Japanese "giant robot" kits and tabletop gaming models/figures were all popular and viable back in the 1980s as well -- and they often took up as much as a third to half of the shelf space at successful train and hobby shops. Sounds like the shop you're referring to has kept that formula going successfully.
It seemed to me that many of the trains + diversified hobby shops quietly closed even before the rise of online shopping mainly through a combination of retirements and a leisure trend through the 90s and early 2000s that focused more on sports fandom and collectibles than on craft-type hobbies. Then once online shopping took hold, even when hands-on hobbies like model-building and trains regained their footing, the market was vastly diluted.
I think getting a table at a local train show now and then has all the fun of a small hobby business without the hassles and risks--no lease; no business, payroll, and sales taxes; no utility bills; no advertising and marketing costs; no redtape from the local jurisdiction or from the manufacturers; no pressure that if I don't sell something or make a certain amount then I can't pay my mortgage, my insurance premium, my kids' braces--really, none of the sacrifice, financial risk, worry, and headaches of a real business.
Take a look at the listing of Lionel service centers on the sheet MPC supplied with their trains or even the listings in old 50's Lionel operating manual, better yet, the retailer listing in old OGR magazines. How many are left now?
It seems to me that to be viable as a train store these days requires that one concentrate on internet/mail order business for the mainstay of profits. Have a bricks-and-mortar building is probably necessary just to store inventory and pack and ship merchandise out. So why not maintain a physical presence since a facility is needed anyway? Depending on cost per square foot for a storefront versus warehouse type facility, of course.
If one structures sales around the on-line business, it may make sense to maintain a physical store as something of a sideline to garner local and even regional customers and make a little extra profit. And perhaps to please the owner with his/her desire to run a train shop and interact with customers in person.
But today, on-line sales are where it’s at.
Just Trains in Delaware is located in an industrial park and is basically a warehouse with an operating layout. Looks like a low expense operation IMHO.
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.
Simply put, and very unfortunately, it's a fool's game to even consider that possibility.
@CSXJOE posted:Take a look at the listing of Lionel service centers on the sheet MPC supplied with their trains or even the listings in old 50's Lionel operating manual, better yet, the retailer listing in old OGR magazines. How many are left now?
I have one from the 50's that indicates they have service centers in Havana , Cuba and Tehran ,Iran.
Do you think they are still open ?
Remember that even back in the golden era of train shops (1950s), many were dual-purpose retailers due to the seasonality of model railroad sales. Since most train sales occur in the Fall before Christmas and in the winter months, having another product line to offer during those other months was often a necessity.
@CHOO-CHOO MIKE posted:I have one from the 50's that indicates they have service centers in Havana , Cuba and Tehran ,Iran.
Do you think they are still open ?
I'll bet the one in Tehran is not open!
@john in western pa posted: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.
John,
How was it, precisely, that MTH put many LHS's out of business?
This is new on me.
Just asking.
Mike
@Jeff_the_Coaster_Guy posted:Sounds EXACTLY like EnterTrainment Junction in Cincinnati. The majority owner was (is?) a hotel magnate (Columbia Sussex) who enjoys trains. He built essentially (with the help of an army of volunteers working constantly) a museum train layout walkthrough with an attached kids entertainment center. He also has an outdoor small-gauge train.
Interestingly, we got called to the Columbia headquarters in Fort Mitchell KY to look at one of his larger gauge ride-on trains that was installed as a curiosity around the base of the 20-story building.
Entertrainmentjunction sounds awesome. Am surmising from the video that the layout was done in G-scale - they must be some tall buildings! The hotel magnate is illustrative of people years ago who initiated their passions after earning their way of life in other businesses.
@Mellow Hudson Mike posted:John,
How was it, precisely, that MTH put many LHS's out of business?
This is new on me.
Just asking.
Mike
I don't know whether "many" was correct, but here is one example:
Other than perhaps health, there is usually several reasons that a store closes. If the loss of one supplier causes a business to close, then something is wrong with the business model. I suspect there were various other reasons and the uncertain future of MTH may well have been the final straw.
@Paul Kallus posted:Entertrainmentjunction sounds awesome. Am surmising from the video that the layout was done in G-scale - they must be some tall buildings! The hotel magnate is illustrative of people years ago who initiated their passions after earning their way of life in other businesses.
Paul, it's almost entirely O Scale. And it's huge. I think it's the largest train layout in the USA but don't quote me on that.
I think most here would be more interested in if:
A hobby shop that we knew and loved WOULD reopen again. Evan it
meant same name different owners ( but kept it the same lol ) .. ...daniel
There’s a well established train store in Hagerstowm Md that’s up for sale. Not a sponsor here so I won’t mention the name. Good way to get a start if you’ve got the bucks.
Perhaps it's beem mentioned previously, but a multi-purpose shop might work. For instance, a Christmas/Holiday store with trains. There used to be quite a few Xmas stores around, but most are now gone as well. almost all gift-novelty type places have gone the way of the dodo. Just not enough interest/money from the public to keep a brick and mortar open.
As others have said, customers come in, pick your brain, manhandle the stock, then race home and order online. They are also usually the first ones to raise holy hannah when the locals close down, but what did they ever do to support the little guy in the first place?
Right after WW2, a lot of Lionel authorized dealers (reading the lists, as has been noted, many were appliance dealers or hardware stores) were listed in the books that came with trains. Do you suppose that that's because instead of store owners' looking for trains to sell, the Lionel Corp. reached out to them, and signed them up into what was to become the dealer network? Appliance guys and hardware store employees were probable a good bet to be established not only as dealers, but as a repair network.
Back then, there were three manufacturers of note: Lionel, American Flyer, and Marx. (Speaking of the toy segment of the larger train hobby) Didn't those companies have middle-men/salesmen who travelled around the country, contacting the stores and making deals with them? Travel was probably cheaper than a phone call back then, and if the traveling salesman represented several different lines, he could be successful and help all those stores be profitable. He couldn't email photos of the products and fax a sales document. It was legwork that brought success.
In the current climate of internet sales, and the plethora of manufacturers, I doubt if any of them are eager to support a network of small dealers other than the few already established big guys. How would the wholesale pricing compare to what is offered to the established stores? How much product would a new guy need to commit to? Draw a circle of say 50 miles diameter around your proposed location. How many model railroaders with disposable income are in the circle? Fifty miles is an hour's drive, generally.
I can't remember the last time I bought an expensive item (trains, sporting goods, automotive parts, tools, etc, etc) by walking into a store. It's just too convenient to "ask the Google" to find the product and click. Amazon promises 4-5 days, and the next afternoon, more often than not, the box is on the front porch, with free shipping.
Considering the MSRP of many of today's trains, I imagine that a small fortune is needed just to assemble a reasonably diverse inventory that would attract a client base and keep them coming back. "We can take your deposit and have it for you in a week or two" is not what it used to be before the internet.
One anecdote, for what it's worth: A small train shop opened in Riverhead, NY, 20+ years ago. Just trains, a few plastic car and boat models, some model plane supplies and a magazine rack. I figured, this is great...let's go in, introduce myself, offer encouragement, and buy at least something. "Grumpy" (I don't know his real name, because when I offered mine, he didn't reciprocate) took my $5.00 for a Garden Railways Magazine that I really didn't want, and turned his fat asset back around to continue watching the TV in the store. Not a "howdy" or "thank you" or "come again" or "what sort of trains are you interested in" or any other vocal interaction. The store was gone the next time I was in the neighborhood, a few months later. I would love to hear the whole story about that store.
Only three manufacturers of note for 3 rail O scale. There were lots of 2 rail manufacturers including Walthers, All Nation and others not to mentio. This was the period where HO started to flourish with the likes of Varney, Mantua, Gilbert and Penn line. I spent yesterday with my father, and he shared with me an acquisition of a Gilbert prewar catalog that had some amazing HO product.
To the topic, I would think a modern train store would need other business lines to be successful; at least if one was to only sell O scale. HO and N make up the bulk of the hobby and that is where any profit might be found.
I'm curious what dealers are ordering now that hasn't already been allocated to a customer through the "bto" method.
When I first started in this hobby (back in 2005), I would visit the local hobby shop (which was an MTH "MegaStation") and find new and interesting things. I probably never walked out of there empty-handed. Seems like better times to me back then.
@Dave Warburton posted:It seems to me that the allure of owning a real train shop is sitting behind the counter surrounded by train merchandise while a train circles your store layout. Basically, it is putting yourself in the middle of your own model railroad empire while you entertain customers, talk trains with buddies, etc.
Actually making a real profit at this is problematical but the pleasure isn’t in the money; it’s in the accoutrements and the ambiance. The Christmas-all-year glow you feel.
So my advice to you is to create your own “train shop” in your basement where you can be master purveyor of trains to all who come. And then invite your friends over to join your playtime.
Dave,
Send me your mailing address. My email in in my profile.
Lou N
On the other hand.......
You could decide to manufacture trains. Find yourself a good oriental contract manufacturer and get a letter of reference (hard to do, most companies won't share their sources). Get a good banker for letters of credit. Then get ready for a 14 hour plane ride to Seoul and another 4 hours into HK. Hey, 4 meals, 3 movies, and 2 crews. Learn a little Chinese and enjoy the food (I did).
Regards,
Lou N
We have a great train store, Electric Train Depot, one hour away and half way between New Orleans and Baton Rouge, the largest cities in Louisiana. It has operating layouts and a large inventory of new and used trains.
It operating hours are 10am to 4pm, SATURDAYS ONLY.
I can not think of a poorer business to be in than train stores to lose your money and shirt. You can have the best business plan in the world but the important thing to know is the size of your probable train customer population is, and that they have lots of disposable money.
Charlie
@CSXJOE posted:His biggest seller is model kits called Gundam which I can't understand the attraction.
Gundam is a long-running Japanese military fiction (giant-robots -- essentally bipedal combat tanks) anime franchise going back to 1979. Sayeth Wikipedia:
The popularity of the series and its merchandise spawned a franchise that includes 50 TV series, films and OVAs (direct-to-video animated movies) as well as manga (comics), novels and video games, along with a whole industry of plastic model kits known as Gunpla which makes up 90 percent of the Japanese character plastic-model market.
The media fosters interest in the merch, sales of which in turn helps pay for the media. Something modern purveyors of animated media here in the West have forgotten (which is why so many ostensibly good animated shows (with decent-or-better ratings) in this day and age...still wind up canceled)
/offtopic
---PCJ
I got my forum moniker from a failed idea to build and sell layouts for Christmas. I figured people would ask me how to build or help a layout so maybe there was a market for train tables, maybe with a loop of track on it, maybe a tunnel. So I built a few small ones got tables at a few local train shows around Christmas and quickly realized people want it cheaper than it can be built. Lots of comments like, "I can build that myself cheaper" or "That shouldn't cost more than $100" or "What do I do with it after Christmas?" to one guy who got on me for cutting in on the limited and small train market. After my third show I cut my loses and said forget this.
While a hobby store does sound like a dream job to us it's still a job and one you really can't go home at the end of the day from, if you're struggling it's a nightmare that sucks your soul and if it's thriving it generally is a 24/7 thing to deal with.
Jerry
Finish this line..."If you want to make a million dollars in model trains, then start with________________"
It's never how much you sold it for the real question is "how much did you buy it for?"
The folks who have had long relationships directly with train importers have the deep discount deals and they order in quantity.
In my other business there is the courtesy 10 or 20 percent discount, then the commercial or dealer discount of 40 percent, then the long deal is 60 percent WD or warehouse distributor discount.
Of course buying overruns is the greatest deal going. Very sharply cut pricing. However, BTO is killing that situation.
With overhead today one needs to have a heavy spread to make it in the long run.
two million, if you want to have a million left...
@CSXJOE posted:I asked why he didn't carry trains and his answer was the amount of inventory would be staggering to satisfy all aspects of the hobby.
That is one of the core problems, often overlooked, I think. Model RR'ing is such an old, deep and established hobby, even now, with so many branches, including the dead-end ones, that a typical establishment, even before the Internet was around, had trouble offering everything for everybody. I have seldom been a buyer at a train shop (admittedly I have never had access to many) because what I wanted was not in stock.
It's a complex field of interest, hard to serve by small physical establishments, especially at a profit. It probably always was.
“Buy high, sell low.” That’s always been my motto selling at train shows and on Ebay. It works pretty well, too!
You remember the old joke about the fellow that noticed his retailer friend was not making any money at all on his sales, so he asked him how he could possibly turn a profit that way. The fellow replied, “volume.”
It’s kinda like that…
@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.
