Attn: local hobby stores. Please earn my business

Hi, all.
I am starting an N-scale layout, and wanted to share an experience. Read on, especially if you own a hobby store.
I dropped quite a few nickels on Kato unitrack at a local dealer, and asked for a discount. Said dealer refused with a "we are not a discounter". I bought the stuff anyway, because I like hobby stores. I am not pleased that said store has not replaced the stock I bought six months ago, though, because when I go in, there is very little N scale to browse. Browsing is a big part of what I like about brick and mortar stores. This lack of stock has dropped the worth of window shopping in that store.
Last Xmas, a friend of mine asked a local hobby store to order the Bachman McKinley explorer. He felt like an utter idiot for paying full retail, because he saw the invoice, and knew that they paid half of what they charged him for that one phone call, and two day wait. He did not mind giving them a fair return, but he would have gotten it faster, cheaper, and with much less bother by just going on line. Before that, he was hoping I would find a dealer and leave an Xmas list with him.
I went into three hobby stores recently, trying to settle on a maker of DCC units. None of them had ever wired up a layout with it, and all said "it is great for HO, but it is not really ready for N". My local N-scale club disagrees, and Tony's Train Exchange knows a lot more about DCC than these sellers. Again, I am not angry with the dealer, but if I get better advice from Tony's about DCC, why am I paying a brick and mortar dealer.
The moral - these stores are not sure what they are selling, and are willing to see a lot of money walk out the door. This is not a great way to stay in business. You do not have to beat the discounters at every level, but you _do_ have to beat them at a level important to your customers.
So, if you do run a store, consider carefully what you are selling. Remember that your customers can and will save money by buying on line, with less frustration to boot. Further, some of that info on line is better than what you have. Ask yourself why, then, someone would come into your store?
For me, it should be service, a source of expert advice, and the fun of browsing. I am still trying to find a store where I can go in and discuss what I need for my layout, and how construction is going. In return, the store makes sales, because they know what I am likely to need. That is worth a premium.
Scott
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Scott, If you live near Chicago, I can hook you up with a LHS or two that are very good in N.

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Being a business man myself, I can see both sides of the hobby shop/customer thing. I have watched the store owner spend an hour selling decals to a guy he know bought his unfinished loco from a discount flea marketeer. Service or sucker???
Hobby shop ownership is probably REAL tough.
The market is so diversified with product, scale and road names, it has got to be very difficult.
I fortunately live in a town where one of our shops specializes in detail parts and state of the art items. He is also very reliable at special ordering, and will do it (for me at least) with a phone call and no money down. I do all I can to support that shop and will always pay full pop (competitive price anyway) because it provides such great service.
On the other hand, that shop is not into DCC, so I use reliable mail order companies that also happen to be discounters. A win win situation.
I once tried to deal with another local shop that has a great store front and is quite entertaining to look around because they stock a lot and display it well.
I called to order a high ticket kit once and was required to stop in and drop off and prepay full MSRP for a *special order* item. They wanted me to pay full price AND use my money to work with. That is when mail order retail becomes a LOT more convenient and cheaper.
If a shop provides good service, I support them all the way.
My 2 cents worth. Doug
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On 12 Sep 2003 10:13:06 -0700, Doug wrote:
=>I called to order a high ticket kit once and was required to stop in =>and drop off and prepay full MSRP for a *special order* item. =>They wanted me to pay full price AND use my money to work with. That =>is when mail order retail becomes a LOT more convenient and cheaper.
Well, I provide a discount of "special orders", because it's instant turnover. All I want from you is your VISA number (which will be used when and only when the item comes in.)
--

Wolf Kirchmeir, Blind River, Ontario, Canada
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Doug, what specifically would you recoommend that the shop have done differently to provide good service? Not having you stop in and prepay (it sounds like they didn't take a credit card number over the phone)?
In rough numbers, how big was the "high ticket?" $100, $500, $1000, $5000?
--
Mark
The Green Bay Route: http://www.greenbayroute.com /
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I'm going to jump in here.
A shop in Portland, Or., "Vic's Hobbies", was about to get my business for a pair of Bachmann Spectrum Russian Decapods, undecorated.
I've traded at the store for about 8 years. Probably sent $ 4 - 6 thousand over that time period.
Guy behind the counter, with whom I've had a nodding "friendship" allowed as how having none in stock, that he'd have to order then from Walthers and needed my credit card. The price was going to be the Walthers full catalog price. With my card charged that day.
I pointed out the ads in RMC for that product, at a substantial discount off "Walther's list".
Guy was shocked when I said "No thanks" and walked out.
I got them for $ 89.00 each from an RMC advertiser.
I have a real problem with LHSs who want to use my money to charge full manufacturer's list to "special order".
In my area now, Hobbysmith and Bob's Whistlestop get my business, though both are a 10 - 15 mile further drive.
Both discount.
If a LHS wants to earn my business, it needs to understand the concept on not using my capital to fund their operation.
-- Jim McLaughlin **************************************************************************** **************************************************************************** I am getting really tired of spam, so the reply address is munged. Please don't just hit the reply key. Remove the obvious from the address to reply. **************************************************************************** **************************************************************************** Special treat for spambots: snipped-for-privacy@ftc.gov, snipped-for-privacy@ftc.gov, snipped-for-privacy@ftc.gov
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(it
$5000?
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Jim, do you keep records of your hobby spending?
I *try* to keep my hobby expenses on my credit card so I have a handle on what I'm spending. I think costs still sneak up on me because I'll pick up a can of M.E.K. at the hardware store or some "really cool clamps" that I don't expense on the card.
I guess what I'm specifically asking: How did you come up with the $4-$6 thousand number? Do you track your specific expenses? Does your hobby shop have some sort of "punch card" (etc.) system that tracks your expenses? Are you basing it on what you see on your layout? How did you develop the $4-$6 thousand?
Was it a wild-assed-guess?
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Before I retired, I used Quickbooks (Pro) in my business for years for accounting purposes, and long ago got into the habit of categorizing every check written on my business and personal account, or item charged on my business or personal charge cards and tracking those in Quickbooks. If I ask the program to trot out a total for "Hobbies - railroad" during any given period it does so quite readily.
The @ $ 2,000 "fudge factor" comes from a number of "dual use" or "multiple use" items I've bought like a band saw or a scroll saw or a table saw or a serious compressor, lumber, screws glue, etc. Sometimes its easier on the domestic front to "sell" the "need" for tool "x" as being for general around the house maintenance / repair / remodeling as opposed to it being solely for use in layout construction. <g> (The big compressor was a big mistake: Now I'm expected to paint one side of the house every two years. =:{
Once you discipline yourself to use it diligently, Quickbooks can be a very effective money management and expense control / tracking tool.
-- Jim McLaughlin **************************************************************************** **************************************************************************** I am getting really tired of spam, so the reply address is munged. Please don't just hit the reply key. Remove the obvious from the address to reply. **************************************************************************** **************************************************************************** Special treat for spambots: snipped-for-privacy@ftc.gov, snipped-for-privacy@ftc.gov, snipped-for-privacy@ftc.gov
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up a

don't
see
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Jim McLaughlin wrote:

Well, look at it this way: you don't have to paint the other three sides!
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I'm going to jump in with both feet here, and clue some of you in on real life.
Brick and mortar stores cost money in terms of rent, utilities, employees, etc.
Most of the discounters in the magazines are what we call "basement bombers" who work out of their house, and, therefore, have no overhead.
My partner and I used to own a store in Nashville, TN, and I can tell you that the 20 to 40% markup afforded by most of the stock we carried was barely enough to keep our heads above water, much less make a profit!
Brian
On 9/13/03 2:27 AM, in article IFz8b.433773$uu5.77877@sccrnsc04, "Jim

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I don't think that anybody here needs to be acquainted with "real life". We all live it, job insecurity, rising health care costs, housing costs that are escalating faster than the rate of inflation by a huge multiplier etc.
I'm forever amazed how some current and former hobbyshop owners feel that just their presence in an area should guarantee them a healthy living, and cry the blues when their customers for some reason feel the need to maximize the purchasing value of their hobby dollar.
Wake up, this is 2003, and a large percentage of the population has been ravaged by competition. Why should hobby shops be any different?
If a brick and mortar store goes out of business, it probably deserved to. regards, Jerry Zeman
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You make a good point here. All of American business is being ravaged by consumer power. Cutthroat price competition is the norm, everywhere you look. There are giant segment-killing businesses (or in the case of Wal-mart, entire-town-killing) putting everybody out of business AND demanding transfer of all the value in the businesses that supply them (or consume from them, in the case of the now-consolidated oil companies).
I live in a small town, so there's no hope that I'll ever see an enjoyable LHS. I can only guess what it offers. I think most of us would pay 10% over trainworld just to come in and say hello. A good number would pay 20% more to see before we buy. If it's any more than that, the LHS is going to have to be a real pleasure to visit.

real
employees,
bombers"
you
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Joe wrote:

I live in a small town too but we're fortunate to have a nice model train shop near by. Their prices are higher than mail order but usually not full retail. The information I get from the store owner is often worth the extra cost. I do order mail order when he doesn't have something in stock that I want ASAP but I try to balance my purchases by frequenting the store too.
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Brian, Being in business myself, I can assure you I don't need a reality check.
Brick and mortar shops DO have overhead, however, so do the discount mail order retailers. Their magazine advertising costs may even be higher than a bick and mortar's rent/mortgage.
The BIG discounters are buying at warehouse distributor prices direct from the manufacturers and sell DIRECT to retail at drasticly reduced prices.
Unfair??????? Probably, but the manufacturers control the game. It is the manufacturers that create the problem for the hobby shop, not the end user/buyer.
I'll bet you shop for bargains yourself when you are making non-railroad related items.
I'm not trying to be a wiseass. Just making a point. As a business owner myself, I always try to determine *why* I like some stores and not others when I go shopping. Sometimes I learn things that can be utilized in my own business. After all, we are all consumers, and as a result, we are all somebody's customer. Doug Doug
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On 14 Sep 2003 17:05:37 -0700, Doug wrote:
=>As a business =>owner myself, I always try to determine *why* I like some stores and =>not others when I go shopping. Sometimes I learn things that can be =>utilized in my own business. =>After all, we are all consumers, and as a result, we are all =>somebody's customer. =>Doug
Excellent point
--

Wolf Kirchmeir, Blind River, Ontario, Canada
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Hi Doug, Some interesting points you've made. I'm a bit confused as to what you are saying in the first paragraph above. My understanding of what you are saying is that the big discounters are buying directly from the manufacturers and selling directly to the modeller, essentially eliminating the "middle man". Assuming that I understood correctly, I guess am now wondering what useful role the distributor plays in the whole chain of sales from the point of manufacture to the layout. What is the definition of a distributor that enables them to buy at distributor prices? Is he/she simply anyone that buys in sufficiently large quantities that they can buy from the manufacturer at special lower rates? And if this is correct would there be anything fundamentally wrong with a manufacturer selling directly to anyone (even you or I) at these low prices provided they could buy in sufficient quantity? If this is unfair I really am not sure why. Could you help clarify your point for me. Its good to get the perspective of a retailer who is also a model rail consumer. Thanks
Lynn
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Hi Lynn,
I am sure Doug will clarify his point but I feel compelled to jump in too and voice with my big mouth. Distributors in this industry provide a very essential role in getting product from producer to us. A distributor buys from manufacturers in case quantities and breaks bulk thereby allowing retailers to purchase in smaller quantities from the distributor. If it were not for distributors a retailer would have to go to dozens and dozens of manufacturers to get product. They would also have to make much larger purchases from each manufacturer. This scenario would be a logistical and accounting nightmare for manufacturers and retailers. The manufacturer would have to set up thousands of accounts and manage thousands of small orders. This is simply not practical and would raise prices on product to us the modellers significantly. When a retailer buys from a distributor he can purchase 4 of this product from company A, and 2 of that product from company B, and 12 of this product from company C all in one phone call rather. Distributors are essential.
The manufacturer sells the overwhelming majority of their product to distributors not to retailers or us. Manufacturers make things and want to move product in cases not one or two at a time to you and me.
I don't believe the manufacturer create any problem for the industry. They make product and need to sell it. I think if you went to most manufactuers with $10,000 you'd be surprised at what you could buy. But here is the issue, are you in this for the enjoyment of the hobby or do you want to get into it as a business. You could do it and money talks. When a guy pulled up in a van with $20,000 in cash he'd leave with a full van of product at a wholesale discount. If a guy wants to drop 20 G's on product he should qualify for a wholesale discount. Ever been to a train show and a guy has 6 tables with stacks and stacks of product from the same company that he is selling at unbelivable prices. Chances are the day before his van was backed up to said manufacturer.
Some people get so upset because this happens but anyone is capable of doing this is they have the money. With most model railroad companies real cash talks. Some guys pull up and think $200 is going to get them a wholesale discount. That's just not going to happen unless you know the owner.
Is there a problem with that? The only thing I hate is when some people get different discounts because they are in the good ole' boy club. In a perfect world the discount structure would be applied evenly across the board depending on what level you are approaching it at. i.e. retailers would all get the same discount from their distributor, distributors would all get the same discount fromt he manuf., etc. but that does not always happen.
Sal
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Lynn, In a perfect world, the manufacturer sells large volumn to a warehouse distributor, who then sells to hobby shops, which in turn sell to us.
Typicly, a product that costs $10. to manufacure and package is sold to the distributor for $20. He then marks it up to about $28.60 and sells it to a hobby shop that marks it up to about $47.50 and sells it to us.
Everybody makes money and the perfect world keeps turning.
The distributor is the biggest middle man, BUT also the most important in the chain, because he stocks many lines and prints a catalog and is very reliable and experienced at picking, packing and shipping orders.
Eliminating the distributor would have hobby shops buying from manufacturers in small quantities, and as a result, not having much in stock.
But it's not a perfect world. Along comes the renegade distributor that has fallen out of favor with the hobby shops and decides to mail order direct. To be successful, he must discount, so he cuts out *his* middle man, the hobby shop. He does not care about the wellfare of the hobby. He only cares about himself and lining his pockets with money.
The manufacturers *say* they don't like these people, BUT, they pay the same for the inventory as a regular distributor, so......they get the goods.
As time wears on, the market adjusts itself. The *BIG* plastic giants like Bachmann, Atlas, Athearn, Shinohara keep going because their product is very costly to tool up for, BUT also very profitable once the tooling is paid for.
Smaller companies like Fine Scale Miniatures are FORCED to deal direct with the consumers and produce limited run kits that are released once a year.
Even the magazines play ball. Have you ever noticed that the power base is in Milwaukee. Lots of politics taking place to insure the hobby survives. Times were the magazines used to publish articles and layouts that were pro brass and craftsmen type kits and construction.
Now the magazine shift is towards layouts featuring products from the big plastic manufacturers.
It's all just business. The hobby will survive one way or another. Doug
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Doug and Salinas, thank you for your explanation. So as I understand it a manufacturer must choose how he sells his product - in very large bundles or single sized servings ( or somewhere in between) It also depends on how many customers the manufacturer wants to deal with. The manufacturer/distributor/retailer/consumer model is one that has been around for some time. It seems to have worked well for the most part. Everyone picks up a piece of the profit pie by fitting into this chain. Its funny how things change as new ideas and technology enter into the picture. For example the widespread use of the internet and credit cards has made it possible to give most anyone access to the whole world as a market place much easier today than in the past. With the whole world to sell to directly the retailer can afford to buy in quantities worthy of a distributor discount, so the "model" that seemed to work so well in the past gets tested and in some ways may be found to be lacking. There certainly are advantages and disadvantages to dealing with both the local guy as well as the big box by mail order. To compete the LHS has to recognize his strengths and use them to his best advantage. The way I see it we as consumers must look at what each approach to buying uniquely offers, and then decide what we are willing to pay for it. The customer is really the driving force in the whole scheme of things. Those sellers who can *really* understand what constitutes a quality product/service will be the most successful.
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He's probably glad you came along and bought the track. If he does not specialize in N scale and wanted to get rid of it why would he restock the merchandise if he cannot turn it few times a year?

Sounds like the store does not specialize in N Scale. With so many sku's in all the scales very few shops can afford to stock a lot of all scales, or even a lot of most scales.

What a retailer pays for an item has nothing to do whatsoever with what it should sell for - as long as it is not above the retail price. If your friend was concerned about price (not what the retailer paid for the item) he should have the research in advance for the lowest cost source.

If he was concerned about price he should have went online to order it.

Perhaps your expectations of the ability of hobby shop employees to know about every aspect of the hobby are too great.

Most hobby shop owners get into the business because it is an extention of their personal interest in the hobby.

And price according to your opening paraghraph.

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