hobby shops succumbing to mail order

As an avid RR photographer, I can see similarities between model train and camera dealers. With cameras there are a few national "super" dealers, like B&H in NYC, that dominate. Part of the problem is that inventory costs are very high and a store has to have very high demand to be able to turn the merchandise.

Kent in SD

As a consumer in this market, I did some research. I am in Canada, so I wanted to compare Apples to Apples.

I have a "local", 35km south of me, hobby shop (LHS) and found a Canadian Mail Order company (CMO) that several people said was good value. .

Flextrack and cork

LHS track $4.89 and 25 pack cork $39.95 CMO track $4.50 and 25 pack cork $41.95

Rolling Stock/Passenger Cars (same line of stock)

LHS $14.95 CMO $13.95

IHC 4-4-0 Locomotives

LHS $79.95 CMO $79.50

-------------------

CMO says their shipping is between $6.00 and $15.00 depending on product size and weight.

Let's calculate, if I want one small train (locomotive and 5 cars).

LHS 79.95 + (5x 14.95) = $154.70 + taxes CMO 79.50 + (5x13.95) + 6 = $155.20 + taxes (and this assumes cheapest shipping)

I am in the area of the LHS once a week on business anyway. I can see the product, take it with me and save $0.50 big deal.

CMO, I have to put on my VISA and wait "We attempt to ship within four weeks of reciept of order" ---------------------------------------- Some will say I could shop from a large US internet/mail order house. But those are the ones who never ordered from the USA. The last item I ordered from the USA was a $95.00 (CDN) DVD set of 4 movies. Two months later I got a bill from Canda Customs for $25.00 duty. It would have been cheaper to go to Rogers Video and get it for $115.00

------------------------------------------ Bottom line, my LHS is the same price and I get it when I want it. Where do you suppose I will be shopping?

Hobby stores think the Horizon deal is their salvation. It is a band aid on a chain saw wound and is only delaying the inevitable closings.

Will,

I know what you guys go through. I have several model railroad friends in Canada(though the TLR) and those guys pay about 15% sales tax(GST/PST). The killer is that there is not very much discounting in Canada - MSRP on the box is the price(after marking up for currency conversion). I attended the Maple Leaf Train Show in Toronto this summer. Lots of dealers there, but after doing a quick mental calculation of the Cdn prices - I found that there was not too much of any discount - maybe 10-15% Some dealers were waiving the GST/PST, but selling at MSRP - same difference. I wound up buying '1' canadian boxcar - That was my entire non-convention train purchase. On the way home to Minnesota, I spent about $200 at hobby shops in the Chicago area - Better selection, better prices...... No wonder there are so many great scratch builders up there. At first I thought the long winters were the reason they cranked out so many great models. I suspect the 'cost' is another good reason.....

Jim Bernier

" snipped-for-privacy@CreditValley.Railway" wrote:

You're right about that...used to be decent camera/photography shops in ever little town around...many small towns would have several.

About all you can find now are chain stores like "Wolf Camera", which in my opinion are are a far cry from a decent camera shop. They're usually in the malls, either indoor or outdoor type.

In my area alone, I've seen quite a few hobby shops close down. Many had been open for a great number of years.

Mail order here in the USA is far different and cheaper so the comparison may work in the GWN. And, any mail order outfit I deal with ships in one day not four weeks.

Your post doesn't mention the "cumulative effects" of these things though. Seldom is there one singele event that puts a company out of business. Yes, a building might burn down and the owner calls it quites, but it's usually a little here and a little there... then over a period of time, it is no longer profitable to run the business.

If a hobby shop owner loses just two percent a year to mail & Internet sales, over a period of five years, that's ten percent and that has to hurt. That ten percent drop in sales could mean a drop in profits by 40% or more. Then some of the other factors that you mention happen and the next thing you know, the shop is no longer profitable.

But I have got to believe that MO, Internet sales and the train shows are a major contributing factor in the demise of many hobby shops today.

dlm

necessarily.

Right you are Jim.

GST (Federal Tax) is 7% PST (Provincial Tax - State to Americans) is 8%

There is also another "rebate" that most Americans do not know about.

Anyone who is not a citizen of Canada is exempt of the GST. However, retails and services HAVE to charge it to everyone.

Say for example you came up and bought something off me. To get a GST rebate, citizens of another country need to stop at the border on the Canadian side and pick up forms to fill in, you have to fill the forms in within a short time period of the purchase and send your "Original" sales receipt along with the form. You then get a refund and the amount of your refund would be applied to my business license. GST is what is called a pass through tax. I pay it for whatever I buy and I collect it for whatever I sell. Quarterly I report my "contributions" I calculate what I collected, subtract what I spent (on business items) and the difference is my payment or rebate. When the Government does it calculations of my submission, the adjust it by any rebates they gave against my business license and I then get copies of your refund sent to me.

Very confusing...

Plus at only 7%, most people think it is not worth the hastle if you spent $100.00, you would get back $7.00 CDN or less than $5.00 US. Most people say it is not worth stopping and getting the forms.

Government knows all the angles.

How does a 10% drop in sales = a 40% drop in profits?

And your conclusion is why they think the Horizon deal is so good for them. Selfishly high prices for them is good for the hobby in their eyes.

The same can be said about my other love which I have had for a long time, shortwave radio. It has the problem that new technology is making it obsolete, with satellite, cable, internet not many need or want a shortwave radio. The ones out maybe superior product but not if you want be using it. I thought about railroad photography, but I realized that I am better off contacting the train company and others who already have spent the time and money. Besides, I am was stopped by a someone recently when I was in Fort Worth with my camera while waiting to take the TRE home to Dallas. Persons are so paranoid, and sometimes rightly justified, that I decided since I am not a newspaper person to abandon the idea of photography. I find my camera could not take a good picture anyway except of a lady friend I have had, though she told me to grow up and get over trains.

I learned about this when at a Hobby Shop in downtown Victoria. I told him I wanted to know more about trains in Canada. He told me about a book by the photographer of the CP. He then told me if I found myself unhappy he would take it back. I think he knew it was not coming back that the book had a new home here in Dallas. Almost makes me want to start modeling it though for now I will stick with my NYC and B&O trains I am have plus some assorted DART bus and light rail models.

This is the same reason that the BBC has quit broadcasts to North America on shortwave as has Deutsch Welle/The Voice Of Germany. The audience they say can now get them on satellite and cable; however; I do not know that many who in this country do so. I still enjoy the transmissions from those who have not given up shortwave but I realize times change. My favorite stores to also shop for sheet music are also gone now.

Of course these are reasons the LHS are closing. We have had two go down in the last year, one of them strictly RR shop. The LHS, as a whole, can't sell as cheap as the basement discount dealer. If this Horizon deal hurts the discounter or forces them out, more power to them. I enjoy going to a hobby shop and looking at the merchandise. Without them you buy sight unseen. That is crap. Jerry

You should have gone to our other hobby store, not the one on Fort Street, The one on Fort Street is a model aircraft store, his model rr section is tiny.

However, the other hobby store, while much more friendly and helpful, unfortunately doesn't really carry a wide inventory but will be happy to order it for you. All you have to do is wait for him to reach his minimum order for the distributor, and then you may, or may not, receive it. several months later.

I've asked for literally dozens of items to be special ordered and have had very little success in ever receiving them.

How does this stack up against other people's experience with "We can always order it for you."?

-- Cheers Roger T.

Home of the Great Eastern Railway

Here's another reason... Went to two local hobby stores here in Ft Wayne, IN to order about $1000 worth of track and switches and with BOTH stores their "train guy" was not in. It was 7:00 PM on a Friday night. I was told to come back tomorrow. Well, I'll be up a little later tonight ordering from an online retailer and most likely won't go back local for future purchases.

Kevin Miller

That's a good example of lousy customer service and why a shop that does this likely will suffer. What some stores don't seem to realize is that they brush of one customer they may in fact be doing it to more than one. This is as in one disatisfied customer tells another and so on. Now if they had jumped all over that order whether a 50 cent screw or a 200 dollar loco they would reap the reward of that same customer telling folks where to go and who to see. The way I do it is I don't have it I check my sources (online) in just a couple of minutes to see where I can get the item. I'll even calI other shops to see if they have the item. I've even told folks where to find items online. Even though I couldn't get the item directly most folks remember you for the effort you put forth in their behalf.

Dave

Dave

Actually 2003 saw a net gain of 200 hobby shops. Hardly a sign of ineveitable mass closings. If any store is run properly it should work. If a store is dingy, minimal customer service, always full retail (even on ancient stock), undercapitalized, and in a bad location it's a foregone conclusion that they are toast. It's just a question of when. I also do not think Horizon is my stores salvation. There is much in the way in merchandise I can get and sell. If not Athearn then something will take it's place. Anyt items that no longer sells in sufficient strength to warrant restocking is marked down and moved out pronto. I don't need Horizon. I also do not need Athearn. It's nice to have but not necessary for my shops survival. If any store has such a high reliance on Athearn to make a profit I'd say they may be in trouble down the road.

Dave

Another good reason to take a vacation again in Victoria. I was only there a couple of days, since the rest of my vacation was in Vancouver. I found his store more by accident since I was looking around for something to eat when I spotted his shop. The best part of the trip was a train ride back on BC Rail one direction after going by boat the first half of the trip. I loved seeing the trains at the station in North Vancouver. I was glad the store I went to was tiny, it kept me from buying what would have been hard to bring back to Dallas. It reminded me of a hobby shop that use to be here in Dallas until the owner closed it. I have found that there are some good trains to be found at stores not dedicated to the hobby; however; I like a store at Whitehurst and Skillman in Dallas since they give me a lot of help. I find some of the staff is more helpful. They have one who gets too eager to sell,"you going to buy or just look?" He has come to understand though I tend to buy more if I am left to think about what is there that would be a nice acquistion. I buy stuff on the low end since I realize it is for fun and I know I will never make any money from what I buy. I also have several other hobbies that take time: playing the guitar, the banjo, shortwave radio, astronomy, photography, cooking since I love to eat and after doing the others I have to cut somewhere. I find an omlette is easy to make, a sandwich and a bowl of soup can just hit the spot. I hope the shop you are at and the one I looked at both can stay around. But there was a movie theater that closed since it could no longer compete against the others and most drive-ins no longer are around. I also realize the trains I model those companies are not around either.

Charles George

When ever I hear "We can order it for you", that is the end of that. Thank you, but If I have to order it, I can order it myself. I don't need a middle man to handle special orders.

............F>