Opening a Train Store.

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.