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Post by atsfan on Aug 18, 2012 8:58:42 GMT -8
In sad news, the Whistle Stop in San Diego is closing. The rapid closing of so many stores around the country is alarming. Enjoy them while you can. Soon the importers will be down to internet and direct sales only, which will dramatically lower their sales figures.    |
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Post by calzephyr on Aug 18, 2012 12:16:53 GMT -8
In sad news, the Whistle Stop in San Diego is closing. The rapid closing of so many stores around the country is alarming. Enjoy them while you can. Soon the importers will be down to internet and direct sales only, which will dramatically lower their sales figures. It is sad but not surprising that stores close without being sold to new owners. The P&L statements alone would prevent banks from loaning on most LHS and they close instead of being sold. The hobby business in general has been hard hit and specialty stores for trains are even harder to sell since the financing of the business is almost impossible. Larry |
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Post by antoniofp45 on Aug 18, 2012 12:51:09 GMT -8
I must admit that this news has rattled my ignorance. I had assumed that since California was a railfan and model railroad hot spot (especially San Diego), the brick and mortar model railroad stores would generally be safe. But with a shaken economy, a recession, and the competition from web dealers, many of our traditional hobby shops that have been around for decades are vaporizing.
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Post by atsfan on Aug 18, 2012 13:23:20 GMT -8
I must admit that this news has rattled my ignorance. I had assumed that since California was a railfan and model railroad hot spot (especially San Diego), the brick and mortar model railroad stores would generally be safe. But with a shaken economy, a recession, and the competition from web dealers, many of our traditional hobby shops that have been around for decades are vaporizing. Major portions of the USA are now without a decent train store (that sells HO stuff, not a Lionel store.......) Not small areas, major large areas. And with the importers raising prices, cutting discounts, botching delivery, etcetc, it is harder and harder to continue. |
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Post by valenciajim on Aug 18, 2012 13:52:50 GMT -8
Sad, but not surprising.
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Post by jimnorton on Aug 18, 2012 14:04:59 GMT -8
Could it be $35.00 boxcars and $225.00 locomotives closing down these stores?
Jim Norton
Huntsville, AL
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Post by curtmc on Aug 18, 2012 14:39:15 GMT -8
Jim,
Not as much as not being able to get those boxcars and locomotives that sold out and no distributor has... Brick and mortar hobby shops have long made their money being able to restock and sell those items which sell well initially. The limited production schemes of the manufacturers have pretty much put an end to that.
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Post by antoniofp45 on Aug 18, 2012 15:10:43 GMT -8
Good points Curt. Although my fleet is not huge (about 20 locomotives, 40 freight cars, 20 passenger cars) I'm just glad that I have most of the rolling stock I need to represent my modeling era (1965-74) and still have ebay to pick up other items that I have an eye out for.
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Post by edwardsutorik on Aug 18, 2012 15:43:16 GMT -8
IF I owned a hobby shop, and IF I wanted to increase my customer count, I would make every effort to have at least a simple website showing hours, phone number, some photos of the shop, and any thing else I could think of to bring customers in. I'd ask my customers until I found someone who could do it.
I didn't find one for this shop.
Ed
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Post by curtmc on Aug 18, 2012 16:02:22 GMT -8
Ed, some/many hobby shops have found that doing such web sites cost a lot more than the business it might bring in... Many feel the customer on the web is going to buy on the web (and likely from web dealer who can sell for less because of not having the costs of a hobby shop, or because of having a mostly mailorder business)...
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Post by calzephyr on Aug 18, 2012 16:11:59 GMT -8
Jim, Not as much as not being able to get those boxcars and locomotives that sold out and no distributor has... Brick and mortar hobby shops have long made their money being able to restock and sell those items which sell well initially. The limited production schemes of the manufacturers have pretty much put an end to that. That is a good point Curtmc. I certainly agree with you that the LHS can only get a few items and cannot get more when customers want the hot item. The limited runs have probably hurt the local shops more than the discounters. The large so called discounters have a lot more money to buy stock and they know how to dump it if it does not sell. I tend to buy from both discounters and support the local shops since they are the foundation of our hobby. I had reserved the plated Walthers Super Chief train locally and he got shut out completely for the first four cars by his distributor. Then as I had recovered and purchased them at other places, his distributor would dump some cars on the shop since they had too many of that item. San Diego should have been a hot spot for sure for a good hobby shop since the La Mesa club and all of the Balboa Museum clubs should spark some kind of buying by the public. I really hate to see anyone go out of business no matter whay type of business it is. Larry |
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Post by edwardsutorik on Aug 18, 2012 16:18:42 GMT -8
Curt, I can put up a website for about $150 a year. If I felt that it wouldn't bring in more than that, I wouldn't do it, either. This one costs me that $150 a year to keep up: www.sutorikandco.com/But (to your second sentence) I don't see the website as generating web business. It's only there to "fly the flag". So the site and its maintenance is really simple. That said, if I had some used stuff, I might put up a list. That's how I found a really cherry Ken Kidder LS&MS 4-6-0. And it wasn't really a web sale--I just called the guy up and asked if he still had it. It was some little hole in the wall shop in East Gumshoe, SD. But HE MADE A SALE. To a guy 1500 miles away. Take, for example, my local shop: www.just-trains.com/It's exactly the kind of site I'm talking about. I brought the subject up because, with the lack of such a website, I began to question the business abilities of the shop owner. Sometimes retail fails not because of huge external events, but because the owners are just not good at it. Look at how many restaurants fold. And they're almost totally immune to the "internet problem". And the dreaded "made in China problem". They just weren't good (enough) at it. And, by the way, plenty of restaurants have websites. Ed |
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Post by kentuckysouthernrwy on Aug 18, 2012 17:33:25 GMT -8
While not a hobby store my wife manages a retail specialty store (antiques) and has found that their Facebook page and Craig's List for special sales are mentioned frequently by customers, many first timers.
" by the way, plenty of restaurants have websites." that frequently are not updated when they go belly up....we took a half dozen friends on an evening out recently only to fine the place we bragged up to them all was gone but their website was still up as we checked it before we left.
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Post by atsfan on Aug 18, 2012 18:54:16 GMT -8
A store that has managed the transition to internet well over the past decade is MB Klein.
They have an internet site that does a tremendous business. They also have a store still, although not much more than a front for the warehouse in the back. But they are still well in business.
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Post by curtmc on Aug 18, 2012 23:16:26 GMT -8
MBK has done okay on the mailorder side but the in-store treatment of customers has really suffered. To get most items in store you basically have to wait in line for one of two computer terminals to see if what you want is in stock in the back warehouse, then get a store employee to go track it down... On a busy day that can take 30+ minutes IF they actually have it and what they bring you isn't broken... I have had two occasions where items shown in stock could not be found and I ended up waiting 45+ minutes to get told they couldn't find the item.
I have friends who swear the current in-store treatment of customers (not by the nice staff but by the terrible fiasco of the store system they are currently doing) seem as if they are trying to make everybody do mailorder...
- Curt Mc
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Post by mlehman on Aug 19, 2012 6:19:19 GMT -8
Jim, Not as much as not being able to get those boxcars and locomotives that sold out and no distributor has... Brick and mortar hobby shops have long made their money being able to restock and sell those items which sell well initially. The limited production schemes of the manufacturers have pretty much put an end to that. That might have some influence on the success of a store that doesn't manage inventory well. It also presumes that the only thing a model railroader needs to buy are RTR rolling stock and locos. I can tell you that even back before the days of Made in China everything I was in plenty of hobby shops that: 1) had a wall of very familiar Blue Box and other kits 2) didn't have the paint, couplers, spikes, common detail parts, stripwood and styrene, etc, etc Now, if a retail storefront's management is still stuck in a 30 year old model that wasn't managed well even when it could reorder the same things in stock at a distributor that were in stock 5 years back... Well, you used to be able to buy leaded gas and I don't miss that. |
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Post by Deleted on Aug 19, 2012 7:59:18 GMT -8
IF I owned a hobby shop, and IF I wanted to increase my customer count, I would make every effort to have at least a simple website showing hours, phone number, some photos of the shop, and any thing else I could think of to bring customers in. I'd ask my customers until I found someone who could do it. I didn't find one for this shop. Ed My friend owned a hobby store in the Chicago area and had a simple website. It didn't do diddly squat. Remember that a hobby shop is a destination business. You browse at the mall you go to the hobby shop for a specific reason. Why go to a store that may or may not have what you are looking for? A few photos of the store means nothing to the person looking at the site, for they don't know the age of the photo. Was the picture taken recently or when the store opened? There is not date on the photo. Ten years ago, a simple site might have helped. Today, people browsing the web want to be able to see your inventory up to the minute and to order on the web. Buy having a site you can order from, you now have customers around the world and not just in a 50 or less mile radius of your store. The hobby shop I frequent used to have a site that showed pictures of the shop, hours, directions, etc. the general stuff. The owner already had his entire store on an up to date computer bar code inventory system. Even before he went to a site where you can buy, he could enter a stock code in his system and tell you if he had it in stock or had ever stocked it. Here in lies the problem of the VAST majority of hobby shops. They are still stuck in 1955! They still sit there and price tag much of their merchandise. They have the simplest of cash registers, that do little more than add up the numbers and figure the sales tax. Maybe they break down via the register whether it was a train or automobile kit. When a person calls them up, they have to physically walk over the shelf to see IF they have the item. When people hit the internet, they don't want to have the additional hassle of having to call the store, during business hours, to see if they have a certain item. Remember this is a destination business and with the price of gas, who wants to drive 100 miles round trip to a store.....that doesn't have what you are looking for!!!! Secondly, people don't cruise the internet looking for a particular Athearn locomotive from 10:00 - 5:30 when the store is open. When a person is looking for specific merchandise at 11:00 p.m. they want to find a site that has it in stock and where they can sit in their p.j.'s with credit card in hand and order that specific Athearn locomotive. This is the site of my LHS that has online ordering. Personally, I think it still needs some tweaks. www.enginehouseservices.com/ |
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Post by Deleted on Aug 19, 2012 8:23:14 GMT -8
Could it be $35.00 boxcars and $225.00 locomotives closing down these stores? Jim Norton Huntsville, AL There is a notion that the death of the blue box kit and locomotive is leading to the death of this hobby. Poppy cock! NEWSFLASH to ALL that continue to cry in their beer over the loss of the less expensive kit.......they don't sell well anymore........ When Athearn torpedoed the blue box line and some cried it didn't even result in a river.....more like an annoying drip!. Athearn stated that the reason for the end of blue box was: 1. They were not selling 2. Price - a blue box kit would be the same or nearly the same as the RTR version. I recently posted a letter from Jason Shron of Rapido who stated that it takes 7.5 hours for a person to assemble their dome-observation car for the Canadian. The cost in labor is $22.00......for 7.5 hours of work!!!! The cost of our locomotives and rolling stock is in the production of base components and not in Chinese labor. The cost of labor to fully assemble the models is minimal....Now we know why Athearn stated a blue box kit would be basically the same price as an RTR version. People then beat the drum about detailing, painting and applying the decals themselves. Have you seen the price of paint, decals and detail parts recently??? Details West brass horns are now $6.25....for one stinking horn! Decals are $7.00 a sheet. Paint is $6+ a bottle!.....IT IS CHEAPER TO BUY THE MODEL FACTORY DETAILED AND PAINTED THAN DOING IT YOURSELF. Price does effect the hobby. But a store has to compete with the internet. If you want to blame the decline of the bricks and mortar hobby shop, take a good hard look at the computer you are reading this post on! The internet has created an actual world of competition to the hobby shop. The hobby shop that will survive will use the internet to compete itself. This means not sticking something on the shelf at full list price, when it be purchased at two dozen other locations, found on the internet, that offers the item for a reduced price. Too may hobby shops have been historically run by some old curmudgeons! You swear THEY are doing YOU a favor, buy selling you merchandise. You don't need a Master's degree in business from Northwestern University to run a hobby shop, but a heaping pile of business common sense should help you to be successful. |
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Post by Brakie on Aug 19, 2012 9:20:36 GMT -8
have friends who swear the current in-store treatment of customers (not by the nice staff but by the terrible fiasco of the store system they are currently doing) seem as if they are trying to make everybody do mailorder...
- Curt Mc
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I can't fault them..
Think of the class acts they won't need to put up with and the lowered liability insurance rates.
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Jim,Athearn has repeatedly said BB kits sales fell 80% but,there are those that fail to understand a manufacturer can't keep their doors open with 80% down turn in sales.
The days of generic cars may be coming to a end.
Sorry,I don't miss the BB car kits.
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Post by bdhicks on Aug 19, 2012 10:10:31 GMT -8
I suppose another issue is that for the most part stores can tell what people are buying only by what they sell. Since I know full well that my LHS doesn't stock, for example, Archer resin decals, I just order them online. If I mentioned it to them they might have it next time somebody wants some (or maybe somebody will realize they want some because it's in the store). Of course, on the flipside maybe I'm the only one who goes there that may want some and it'll just be sitting there costing them money.
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Post by mlehman on Aug 19, 2012 10:26:30 GMT -8
SNIP Too may hobby shops have been historically run by some old curmudgeons! You swear THEY are doing YOU a favor, buy selling you merchandise. You don't need a Master's degree in business from Northwestern University to run a hobby shop, but a heaping pile of business common sense should help you to be successful. I believe this to be a far more credible reason for the foundering of the LHS than anything else. Customer service is the face of the biz, regardless of anything else. Jim, You comments in general that hobby retailers need to get with the program if they expect to compete are right on. The dearth of young folks in hobby shops? It's not because they can't get a BB kit there any more. It's not because the item they've pined for for three years -- saving their allowance -- is still in stock because that's the same road number they've always made. It's not because manufacturers place ads to alert consumers to upcoming models that, yes, they should order to ensure delivery (as irritating as it can be, if this biz model wasn't working in terms of profit, we'd be back to BB kits, wouldn't we?) It's not because every little town should have a hobby shop (I agree, but I also can feel when I'm banging my head on the sidewalk.) It's because young folks shop online. Why is MB Klein getting bigger all the time, why they devote fewer resources to the walk-in"shop"? Because of the market trends -- people actually making decisions how to spend those always too scarce hobby dollars do it the way that's most comfortable for them. So the big get bigger, or at least the smart and paying attention big do. This is not to say that I spend much of my time doing that. I've ordered the occasional item from people like Klein, Caboose, etc. But most of my business is with a guy who no longer has a storefront, but now does shows and mailorder only. Outstanding customer service, a 20% discount and I can count on him getting me whatever I ask for, given reasonable notice. The world is changing. Irritates the heck out of me sometimes. But you gotta learn to be patient with what you can change, change what you are able, and avoid wasting a lot of energy banging one's head against the sidewalk. I share your optimism for the hobby. There's never been more great stuff with fantastic features available we could only dream of a few years back. Things don't always come out quite as well as expected, but IMO overall there's at least as much value for the dollar as there was in 1969, when I joined the hobby -- and I think a heck of a lot more fun when it comes to operating. |
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Post by Deleted on Aug 19, 2012 12:24:16 GMT -8
Don't get too used to a 20% discount in the future...... There are TWO BIG things that are going to impact ALL hobby retailers, whether they are internet or bricks and mortar. There is also a few little things to consider for a hobby store. 1. DISCOUNT TO RETAILERS Walthers recently cut their discount on their Proto line to 30%. Athearn also sliced their discount on all items. Even massive internet mail order shop M.B. Klein had to substantially raise their prices on the new Proto. Klein used to be good for a 30% discount (I did the math) now its down to 15%. The price increase becomes much more noticeable when dealing with $200 and $300 list products. The response from the big two of model railroading has been their reduction of the the dealer discount was their attempt not to raise the MSRP. When you think about it, whether you get a 30% discount on a $370 MSRP or 15% on a $300 MSRP it all equals out to the same price to the consumer. But selling a $300 MSRP model is a lot easier than trying to sell a $370 MSRP model. 2. BATTLE OF THE "BIG TWO" DISTRIBUTORS For any retailer if you want to have Proto and Athearn products you have to meet the initial and monthly requirements of both Walthers and Horizon. Twenty years ago a hobby shop could fill all its model railroad needs with ONE distributor, Walthers. Now, if you want Athearn (the largest of the rolling stock manufacturers) you need to set a place at the monthly order table for Horizon. Now the store needs to turn some volume to meet the monthly minimum order requirements. The store also needs to have some deeper pockets for the slow period of mid-May to mid to late-September. The owner of my LHS has told me that when big ticket models like the Union Pacific DDA40X's hit in summer, there is very little extra ordering of stock merchandise. Maybe my LHS is too nice, but when a model is pre ordered he knows people may not pick them up for weeks, due to its summer and people are away on vacation. He doesn't like taking deposits either as in the case of the DDA40X's it took Athearn a year and a half to finally get the models in the stores. My LHS owner has told his Athearn and Walthers rep that if a model arrives in the summer months he's not ordering much if any over his pre order models. He also would like to see the expensive models scheduled so they arrive in the "modeling months". During the winter, people are much quicker to pick up their pre orders and extra models purchased for store stock sell much more quickly. But, he also knows we should be happy that it didn't take two years for a model to finally arrive after its initial announcement. THE little and not so little things 1. Hobby shop owners also need to have a home, food, car and family just like their customers. In order to keep a roof over their family's head they need to make money. The expenses of a bricks and mortar store are so much more higher than the nearly zero expense of some guy selling out of his basement or the greatly reduced expenses of an internet mail order only shop. Again, that nasty thing called price gets in the store's way. My LHS discounts its pre orders to same prices found at an internet seller like Klein's. The models that end up on the shelf for store stock are discounted at a smaller discount. But if you are a good customer, the owner will give you pre order pricing even on store stock. The biggest thing missing between an internet sale and a hobby shop sale is the one on one factor. On the net you don't see the guy selling you that engine, you very rarely work up a relationship with the guy behind the computer. Not so with the hobby shop. You actually see the guy behind the counter and provided you are both decent individuals a working relationship can develop. When you get a pick up notice from the guy behind the computer and you don't have the money right now because of some big expense, I wouldn't expect that outfit to hold an expensive model for a month, like the LHS may do for you. Why, because you and the owner have gotten to know each other. 2. Sales tax versus shipping fees. When dealing with larger ticket items the cost to ship can be much less than the sales tax. |
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Post by valenciajim on Aug 19, 2012 13:30:11 GMT -8
Yes, but the day of sales tax on on-line purchases is rapidly approaching. Amazon is already entering into agreements with certain states to collect sales tax for sales shipped into their state. Once Amazon falls into line, the eBay is next and then the others will follow suit. Congress is considering legislation that will make this a federally sanctioned reality.
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Post by Deleted on Aug 19, 2012 15:45:43 GMT -8
Yes, but the day of sales tax on on-line purchases is rapidly approaching. Amazon is already entering into agreements with certain states to collect sales tax for sales shipped into their state. Once Amazon falls into line, the eBay is next and then the others will follow suit. Congress is considering legislation that will make this a federally sanctioned reality. Yes and no...... Amazon is a BIG entity, most places peddling toy trains are relatively small operations. E-Bay has been fighting the sales tax issue tooth and nail, mainly because its going to be a TOTAL financial headache and a costly endeavor for e-Bay. E-Bay is already leaking water due to their policies and high fees. Add on sales tax and the good ship e-Bay may start to capsize. Congress lately does a lot talking and neither party can agree on the time of day, so until grid lock is cured, the Congress has some other hot items like the War in Afghanistan, balancing the budget, health care, Social Security, jobless rates and so on. The upcoming election will either bring things into focus or it will be another two years of nothing. |
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Post by dti406 on Aug 19, 2012 15:53:15 GMT -8
Sales Tax will never be an all over thing as the States will never agree on the amount or what items are taxed or not taxed.
For example MA does not tax a belt but taxes the belt buckle. Clothes are not taxed in PA but are in OH. Clothes under $109 are not taxed in NY, clothes under $275 are not taxed in MA. In CO the city of Lakewood taxes Extended Service Agreements but the RTA, State and County do not.
There is no one program that can keep track of all the differences in the Sales Tax Rules. I have read where the program can file all of the tax returns, but the rules are so stupid and fragmented that a seller in WA has no idea of the what is taxable or not in NC.
Rick J
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Post by Brakie on Aug 19, 2012 16:20:01 GMT -8
The biggest thing missing between an internet sale and a hobby shop sale is the one on one factor. On the net you don't see the guy selling you that engine, you very rarely work up a relationship with the guy behind the computer. Not so with the hobby shop. You actually see the guy behind the counter and provided you are both decent individuals a working relationship can develop.
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Sorry,Jim but,of late I've met some real class acts that thought they were the God's gift to the hobby as in -A big expert me and a know nothing you..
A "hot shot" standing behind a hobby shop counter in Columbus told me I needed DCC since "nobody uses DC any more."
I don't need nor want such lunacy advice.
I been in Columbus hobby shop where there was a gabfest going on about a up coming R/C meet and I was ignored even though I was ready to check out.After waiting I gave up,left my items(around $45.00 worth) on the counter and walked out.
If that's want hobby shops are becoming I'll buy on line and save a 130 mile round trip and the needless hassle.
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Post by umtrrauthor on Aug 19, 2012 16:34:26 GMT -8
eBay has a pull down within their pages for entering an item for sale or auction: within the seller's state, collect income tax or not?
Veering farther off topic: As bad as sales tax will be to eBay, income tax will be worse.
Paypal already reports collection of more than $20K by any individual from any source to the IRS.
I'm told that in order for you to prove that you only made a net profit on that 0-2-0 switcher that you sold, or took a loss, you need to have the original paperwork from your purchase of that 0-2-0. Otherwise the IRS considers your "cost of goods sold" to be ZERO and you owe income tax and possibly self-employment tax on the entire amount.
I think this might have been discussed on the old A-board, but I'm way too lazy to check.
Some who want LHSs to survive would say, "bring it on"-- it would eliminate an advantage that casual sellers have. I think it would just eliminate that particular avenue for sales, but not the concept.
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Post by calzephyr on Aug 19, 2012 17:01:50 GMT -8
eBay has a pull down within their pages for entering an item for sale or auction: within the seller's state, collect income tax or not? Veering farther off topic: As bad as sales tax will be to eBay, income tax will be worse. Paypal already reports collection of more than $20K by any individual from any source to the IRS. I'm told that in order for you to prove that you only made a net profit on that 0-2-0 switcher that you sold, or took a loss, you need to have the original paperwork from your purchase of that 0-2-0. Otherwise the IRS considers your "cost of goods sold" to be ZERO and you owe income tax and possibly self-employment tax on the entire amount. I think this might have been discussed on the old A-board, but I'm way too lazy to check. Some who want LHSs to survive would say, "bring it on"-- it would eliminate an advantage that casual sellers have. I think it would just eliminate that particular avenue for sales, but not the concept. The tax collection and the amount of money that is a profit on any sale will be an issue for a business selling on or off the internet. For instance, when you purchase from Caboose Hobbies or Trainworld by phone or the on line web site, no tax is charged if your shipping address is out of state. I was thinking of having a web site created for possible sales in a limited fashion, but the items I would have on the web site would be consigned to the web site from other collections and some of my items that I want to sell. As a consignment item, the site should be able to pay legitimate taxes on the profit and not be responsible for the original total cost. I hope the LHS continues but I read today of the one in Sacramento is selling off the stock and will close when it is sold out. I purchased some items from them a few months ago but noticed that the stock was extremely low. After reading the post about the store, I realize now why the stock in the store was so low! Larry |
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Post by carrman on Aug 19, 2012 17:20:51 GMT -8
Who's closing in Sacramento?  |
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Post by mlehman on Aug 20, 2012 5:19:50 GMT -8
It's obvious people obsess about taxes (BTW, the US is a relatively low tax nation overall, but facts are troublesome things...)
On the other hand, hobby supplies aren't taxed any differently than most other consumer goods. Hobby shops are suffering, like most small retail, from competitive forces that have little to nothing to do with taxes.
Personally, if something is in stock or not has much more to do with whether I'll buy something right in front of me, rather than any quick mental calculation about how I can go to the trouble of saving less than 10% of the cost by mail-ordering something to avoid taxes. I could see this making a difference with a $400 loco, but most things I buy don't fall into the big ticket category. I'm not going to mail order a bottle of paint just to shave a few pennies off.
That also brings us back to how a LHS is managed. Sure, it may not be able to compete on price on those big ticket items, but whether or not the paint and adhesives are consistently out of stock is going to be far more telling about whether or not I'll go to the trouble of getting to the LHS and walking through the door.
In my mind, the sales tax issue isn't any more specifically applicable to the hobby as a factor than a number of other that generally affect all sectors of our economy. I tend to think it's a distraction in discussion of other issues that more specifically apply to model railroading. Even if by some fortuitous accident hobby items were suddenly exempt from sales tax, most of the problems affecting the survival of the LHS would be exactly the same as they are now.
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