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Post by bdhicks on Aug 20, 2012 7:03:21 GMT -8
Who's closing in Sacramento?  Bruce's Train Shop. |
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Post by Deleted on Aug 20, 2012 7:09:32 GMT -8
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. A hobby shop can not survive on selling a jar of paint, glue or other small items. There is very little profit in these items after the store gets done paying the "hazardous material" shipping charges. Depending upon a store's volume it pays either half or the entire shipping charge from the distributor. UPS and FedEx rates over the last few years have skyrocketed meaning more money cutting into the store's markup. The owner of my LHS said he's making very little even charging full retail on paint and glues. The shipping prices and reduced discounts are eating up the bottom line. Another MAJOR problem is that even paints and glues now become unavailable for long periods of time. A store can't sell what it can't get. A hobby store has to find a way to compete on all items. The higher priced models have much more profit in them, even when the store offers them at competitive prices to internet sellers. This where a store needs to be customer friendly and not customer "UN-friendly" which some store owner's still practice. In any business, whether its a hobby shop or an HVAC contractor, the smart business owner will survive. The one that just doesn't get it will fail, especially in tough times and right now times are generally tough. |
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Post by calzephyr on Aug 20, 2012 7:11:53 GMT -8
Who's closing in Sacramento? Bruce's from what a friend told me Sunday after visiting the store. He went there and checked out and purchased some stock and was told they were closing out the stock. I don't think it is posted as of yet, but he said they verified it was coming. I used to go by there and purchase items at full price and ordered some books also in the past, but three months ago, there was so little in the store I could not find anything to buy. Larry |
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Post by riogrande on Aug 20, 2012 9:07:54 GMT -8
They are dropping like flies! I used to live in Sacratomato back when dinosaurs roamed the earth but back in the early 1990's I returned and Bruces had replaced The Wistle Stop and moved down to the end of the strip mall - nice store. Sad to see it is closing.
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Post by Deleted on Aug 20, 2012 10:22:50 GMT -8
They are dropping like flies! I used to live in Sacramento back when dinosaurs roamed the earth but back in the early 1990's I returned and Bruce's had replaced The Whistle Stop and moved down to the end of the strip mall - nice store. Sad to see it is closing. Hobby shops historically do not turn enough money to afford the better retail space. Many times you will find them in out of the way places or in older strip malls usually in the less expensive space. If you want to find a reason why store's are dropping like flies look no further than to the store's rent. The real estate boom before the recession saw commercial rents sky rocket. My friend and his now closed hobby store is a perfect example. The strip mall he was in was an old structure. The anchor tenant of the mall was the mall's owner, who operated a store specializing in fine collectibles such as Lladro porcelain figures. The owner decided to retire closing his store and selling the mall. My friend went looking for another space of similar square footage in the same area. What he found was a first year rent which was more than he currently grossed a month. The lease terms were for five years with prescribed rent increases for every year and stiff penalties for terminating the lease early for any reason. He had been in business since 1994 and closed the doors for good in 2008. When he opened his store in 1994 the area was just starting to take off as far as residential construction. By the time he closed in 2008 the population of the area had tripled and construction of new commercial real estate was booming. Existing space whether it was newer or older was just keeping up with the rents of the new spaces. My friend refused to put his family's financial future in jeopardy by getting tied up in a five year lease with punitive penalties for breaking the lease early....even if the store was going out of business. You may not see an owner of a closing hobby shop come out and say it. When the current lease ends and you are faced with higher rents, a long lease period with early termination clauses and poor revenue growth it is a perfect time to call it quits. |
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Post by carrman on Aug 20, 2012 16:32:07 GMT -8
Who's closing in Sacramento? Bruce's Train Shop. Whoa. |
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Post by valenciajim on Aug 20, 2012 16:54:07 GMT -8
The poster was right that the sales tax issue was heavily discussed on the old Atlas forum. There are tremendous political interests trying to tax on-line purchases. Bricks & mortar stores and the real estate industry. I am a CPA and there is considerable discussion in professional literature on this topic. I would be stunned if sales tax was not extended to on-line sellers in the next three to five years.
I understand that software companies are developing software for the mom and pop sellers to deal with the accounting complexities. The states and municpalities are so starved for revenue, that once the mechanics of dealing with the bookkeping are solved, Congress will act.
By the way, it is sad that two stores in CA are closing. Both were great shops.
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Post by dti406 on Aug 21, 2012 7:00:49 GMT -8
I would be stunned if sales tax was not extended to on-line sellers in the next three to five years. I understand that software companies are developing software for the mom and pop sellers to deal with the accounting complexities. I would be stunned if they did implement sales tax to on-line sellers. They have a group to streamline the sales tax codes in all the states and make them uniform for over ten years and they have gone nowhere in that process. States will not give up the revenue they have received for some items that other states do not tax. And because of the rules the software is useless as it does not tell the seller what items are taxable and not depending on what state you are in. Also boundries in the areas will make it hard for someone to know what tax rate to change what with city boundries being the middle of street with one rate on one side and another on the other. I used to receive items from Caboose Hobbies in Denver when I lived in Loveland, and I was only charged the CO State tax and not the county and city tax where I lived. Rick J |
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Post by mlehman on Aug 21, 2012 8:18:52 GMT -8
One more reason why worrying about taxes re hobby shops, because as an externality that affects all small biz pretty much equally it's usually a waste of time... A lot of the time, people worry about things that haven't even happened yet -- and may not. Life is just too short.  And when the discussions take these turns, notice how quickly we slide into things that aren't even about model railroading anymore, including me.  I'm more interested in the things peculiar to model railroading that affect the hobby, where we might have some chance of influencing a more positive direction by our discussions and actions. Jim's earlier comment about paint is a good example of something peculiar to hobby shops and model railroading that's worth discussing (to me, anyway). I'm certain he's right and pretty much knew that. My point was that if I don't have a reason to come through the door over a $4 jar of paint, the opportunity to sell me a $400 loco is missed, let along a whole lot of cheaper, just as profitable other impulse purchases. That wall of Blue Boxes that some seem to pine for? What gets me coming back is knowing there'll be new stock on the shelf to tempt me the next time I happen by. Yet, inventory and shelf space cost $$. That's one reason why I feel the hobby is in better shape than ever. There's always new stuff. Few shops can afford to sock it all, but I've been in many shops where the same old stuff sits. No one bought it 5 years ago, why should they now? And meanwhile, the cost of everything else has gone up and that stale item has never been discounted. I think that well-run shops are in a position to thrive, so long as they provide some sort of discount off list (I know it's a fragile retail environment, Jim, but so long as people are offering me discounts, I'll keep taking them  ; have fresh stock that appeals to their customers; has a reasonable stock of the things that people run out of and need without the mail order wait; and pay attention to customer service. Then all you need is a critical mass of modelers to support that effort. That's the hard point, even when everything else is taken care of. Once the current LHS shake-out is through and the market recovers (frankly, that's equally the reason behind the spate of closings as much as anything a retailer doesn't or does do right now), and there are going to be some opportunities for those with the resources and will to make it happen. They will HAVE to be on the internet, too, to make it. A tall order? As Jim's noted, it isn't an easy business to be in. |
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Post by valenciajim on Aug 23, 2012 16:15:26 GMT -8
The high rents are one of the reasons why many hobby shops are now located in industrial parks. The rent is considerably cheaper.
As to the sales tax comment about not knowing what to charge, it is conceivable that someone could build a data base for each address in the country, so based on the shipping address the appropriate sales tax will be charged. This day is coming. You can bet that some internet start-up company is already being conceived to develop this for a percentage of the tax collected from on-line retailers. Thier software will be integrated into the on-seller's software.
The other thing that is already happening is increased use tax audits. Several of my clients have been notified by the state of California that they have been selected for a use tax audit and have been asked to provide their credit card statements as part of the audit. The on-line purchases are easy to spot. If you don;t have a recipt showing that sales tax was charged, you get zapped.
"The past was dead, the future was unimaginable." George Orwell, 1984
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Post by atsfan on Aug 23, 2012 19:26:56 GMT -8
The high rents are one of the reasons why many hobby shops are now located in industrial parks. The rent is considerably cheaper. As to the sales tax comment about not knowing what to charge, it is conceivable that someone could build a data base for each address in the country, so based on the shipping address the appropriate sales tax will be charged. This day is coming. You can bet that some internet start-up company is already being conceived to develop this for a percentage of the tax collected from on-line retailers. Thier software will be integrated into the on-seller's software. The other thing that is already happening is increased use tax audits. Several of my clients have been notified by the state of California that they have been selected for a use tax audit and have been asked to provide their credit card statements as part of the audit. The on-line purchases are easy to spot. If you don;t have a recipt showing that sales tax was charged, you get zapped. "The past was dead, the future was unimaginable." George Orwell, 1984 Google wallet will do that. Another reason to avoid. What if you drove to Deleware and bought something then drove home with it? Not mail order. |
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Post by nebrzephyr on Aug 24, 2012 6:17:47 GMT -8
Typically those databases are based on zipcode. Which in my area wouldn't be 100% perfect as within some zipcodes there are 2 different tax rates. I would think it would be a long ways into the future before we see tax tables by specific address.
Bob
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Post by Deleted on Aug 24, 2012 7:21:16 GMT -8
If a business has to collect sales tax by each individual customers location and remit these taxes to the respective state........it will be the END of mail order or prices will spike through the roof in model trains. Don't tell me about giants like Amazon, Mary Kay, Overstock, etc., they have more lawyers on staff than most model railroad internet sellers have employees put together. For the SMALL business owner the paperwork and expense is going to bury them.
A simple solution is if you buy from an M.B. Klein for instance, you'd pay Maryland sales tax, whether you lived in Maryland or Alaska. But for bankrupt states like the People's Republic of California and Illinois they NEED and WANT Illinois residents to pay their tax to them.
Now we have the proverbial Mexican stand-off.
ASTFan brought up another stinky fish in the kettle. Those people that live in one state but have merchandise shipped to states that have no or a low sales tax rates. So do you tax by shipping location or address of bank account?
Mexican stand-off number two.......
IF sales taxes based on shipping address or credit card or bank account address, you can kiss e-Bay as we know it good bye! It will make it very hard for someone to sell off items they no longer need or desire. This will make the limited run scenario even harder to deal with in the hobby. E-Bay has always been THE source to look for out of production, sold out items.
I received a newsletter from e-Bay stating they are lobbying aggressively against the sales tax and or national sales tax issue in Congress. I also took from e-Bay's newsletter that should the taxes become reality, that e-Bay will put the burden of collection and remittance on the shoulders of the seller.....bye bye individual looking to sell of some unwanted items. Bye bye to sites like HO Interchange since BY LAW the sellers would have to charge sales tax. Bye-bye to the classified section of Model Railroader since by law you'd have to collect sales tax....
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Post by calzephyr on Aug 24, 2012 7:55:07 GMT -8
I received this email below from Overland today. They are addressing the problem of reservations and LHS going out of business. It is a sad day for the hobby when so many of the LHS continue to go alway!
I was thinking about one of the dealers having numerous orders with Overland for brass. Any ideas which dealer is going out of business that did a lot of brass sales?? Larry
Greetings!
In the past week we have received notice of multiple Overland Models Dealers closing their doors, retiring or changing their business model. This, understandably, has generated a number of communications with the final retail customer, but we still have many unaccounted for customers for these dealers. Out of respect for these dealers and to not create any more negative news toward these dealers we are not naming names. Customers of these shops I am sure are aware who is being referenced...and each of these customers are the folks we are reaching out to with this message.
At Overland Models we track pre-orders by date and by dealer/shop name. With dealer/shop orders we DO NOT have the customers name to match with the particular model and therefore it is nearly impossible to personally contact the folks that have made the pre-order/ reservation. We have made efforts to reach out personally to many customers that we do know through some pre-order communications or we may have drop-shipped items and had their contact information from there. In MANY cases through we do not have any contact information and in other cases we have customer names, but do not have a phone number or e-mail to make the necessary connections.
Our concerns are many:
1. Customers that did place deposits with these dealers have not been transferred to OMI, so we are not in a position to offer credit.
2. Many of our products are built to order based upon pre-order reservations. We do accept what we call 'stand-by' reservations if an order is placed after we have finalized our production quantities.
3. One of the dealers in question has NUMEROUS models on order and we need to find YOU so that we can properly place the product and make sure that the order is valid and that you are covered.
4. If customers do not present themselves to us with a list of the models that were on pre-order with these dealers (and preferrably with some sort of confirmation attached then we have no way to match the orders and in many cases the models will be offered to the next customer in line based upon the date the order was presented to Overland Models.
At this moment we are about to close pre-orders for the GE Evolution Series locomotives in HO scale that contains the following railroad products:
BNSF ES44C4 (2 versions)
CSX ES44AH (3 versions)
CN ES44DC (1 version)
CP ES44AC (4 versions)
NS ES44AC standard and ten Heritage Series paint schemes (11 versions)
UP C45ACCTE (5 versions)
Pre-orders for the above models are due on Friday August 24, 2012. If you had a pre-order in for the above models at one of the shops closing its doors we ask that you contact us immediately with your model request to assure future delivery in the first half of 2013.
This weekend we need to send out Pick-up Notices for the following products. It is of utmost importance that we receive replies from customers that have pre-ordered from the dealers that are closing their doors immediately to assure we cover your needs...or your products may be sold to the next reserving customer. The items we will send out Pick-Up Notices this weekend are briefly described below.
NS F9A/ F7B/ F7B/ F9A Business Train sets (OMI #AJ-1010)
NS F9A only (OMI #AA-1360/ AA-1361)
KCS FP9A/ B/ A (OMI #AJ-1011 and AJ-1015)
BN F9A/ B set (OMI #AJ-1012)
CN FP9A-A set (OMI #AJ-1013)
ET-909 Test Car (OMI #AA-9091/ AA-9093)
GN Heater Car (OMI #AA-9096)
BN Heater Car (OMI #AA-9097)
Amtrak Heater Car (OMI #AA-9098)
more models from this series will follow this shipment...so please do not be alarmed if you do not see the model you have ordered from this group...but we still need to hear from you.
If you have any specific questions...please contact me immediately by e-mail or phone using the contact information below.
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Post by Deleted on Aug 24, 2012 8:10:01 GMT -8
I received this email below from Overland today. They are addressing the problem of reservations and LHS going out of business. It is a sad day for the hobby when so many of the LHS continue to go alway! I was thinking about one of the dealers having numerous orders with Overland for brass. Any ideas which dealer is going out of business that did a lot of brass sales?? Larry This is what Brian Marsh posted on Train Orders. "I frankly am uneasy about mentioning the names but after reviewing prior posts it is fairly clear that the largest of our concerns is for Overland Models customers of Canadian Model Trains. Another dealer that closed due to the owners passing is Rivershore Models in North Carolina. I was made aware of Matts passing but am holding a number of caboose orders that were placed by his customers. A small handful of other dealers have made some statements to their customers of their stores closing but we have been able to match up the customers and their reservations so we do not need to name them. Brian Marsh, Overland Models." Canadian Model Trains closing is another hot topic on TO. It appears the the company took deposits and now people don't know if the the money is gone or if it will be refunded some day or? ?? Customers have been unable to make contact with CMT.....interesting times...... |
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Post by mlehman on Aug 24, 2012 10:26:09 GMT -8
Put me down as one of the people who don't believe that having to pay taxes is a sign of the apocalypse. If people who haven't been paying taxes suddenly have to, whatever effects there will be are no more significant for model railroading than for many other things in life.
True, food, shelter, and gas may come first in most budgets, but taxes are usually not dodgeable on that sort of stuff. True, if someone has been avoiding sales tax through mail order, then they're facing a less than 10% cost increase, but they'll likely not suddenly drop trains for another hobby over that -- and there will be taxes on that stuff, too, right?
And if we're talking about factors that aid or hinder the LHS, then I'd say a sales tax crackdown will HELP the LHS become more competitive. That's still a good thing, right?
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Post by calzephyr on Aug 24, 2012 11:07:24 GMT -8
I received this email below from Overland today. They are addressing the problem of reservations and LHS going out of business. It is a sad day for the hobby when so many of the LHS continue to go alway! I was thinking about one of the dealers having numerous orders with Overland for brass. Any ideas which dealer is going out of business that did a lot of brass sales?? Larry This is what Brian Marsh posted on Train Orders. "I frankly am uneasy about mentioning the names but after reviewing prior posts it is fairly clear that the largest of our concerns is for Overland Models customers of Canadian Model Trains. Another dealer that closed due to the owners passing is Rivershore Models in North Carolina. I was made aware of Matts passing but am holding a number of caboose orders that were placed by his customers. A small handful of other dealers have made some statements to their customers of their stores closing but we have been able to match up the customers and their reservations so we do not need to name them. Brian Marsh, Overland Models." Canadian Model Trains closing is another hot topic on TO. It appears the the company took deposits and now people don't know if the the money is gone or if it will be refunded some day or? ?? Customers have been unable to make contact with CMT.....interesting times...... Yes, I think you are correct about those. I received the CMT announcement and they are probably one of the good Overland sellers in past years. I purchased more than one UP steamers from them, but I believe many of their stock were consigned to them by Overland. I liked Tom's way of dealing with my requests at that time. Larry |
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Post by calzephyr on Aug 24, 2012 11:16:18 GMT -8
Put me down as one of the people who don't believe that having to pay taxes is a sign of the apocalypse. If people who haven't been paying taxes suddenly have to, whatever effects there will be are no more significant for model railroading than for many other things in life. True, food, shelter, and gas may come first in most budgets, but taxes are usually not dodgeable on that sort of stuff. True, if someone has been avoiding sales tax through mail order, then they're facing a less than 10% cost increase, but they'll likely not suddenly drop trains for another hobby over that -- and there will be taxes on that stuff, too, right? And if we're talking about factors that aid or hinder the LHS, then I'd say a sales tax crackdown will HELP the LHS become more competitive. That's still a good thing, right? You might be correct that charging tax on all sales would help the LHS to a certain amount. On the other hand, if they add on about 9% to every order I purchase, I will cut down on orders also. It all has to be paid for and most of us will cut back to a certain amount if tax is added on to Internet and phone orders. I talked to my local shop today and the short discounts and limited runs of hot items has hurt his bottom line. I had asked for a loco two weeks ago that just came out and it is not available any longer at the distributor. He sold the ones in stock extremely quick and tried to order additional models. No more stock. This is an item by Walthers that just came out last month! Pre-orders are fine, but I don't trust the model until I see it after some recent models came out that could not be run on a layout. If some of the leading manufacturers want to import models that do not run well and expect me to purchase them, they need to find a new way of fooling me. Larry |
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Post by valenciajim on Aug 24, 2012 11:39:47 GMT -8
The Mexican standoff is between eBay on one side and (i) the state and local tax authyorities, (ii) bricks and mortar companies and (iii) the real estate industry who leases space to the bricks & mortar retailers. From what I understand, eBay is being outspent. The state and local governments are going bankrupt and the loss of sales tax revenue is making matters worse. The fact that there are companies out there developing software to implement sales tax on internet sales tells me that they would not be doing so unless they thought there was a high probability of an actual need for the product.
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; have fresh stock that appeals to their customers; has a reasonable stock of the things that people run out of and need without the mail order wait; and pay attention to customer service.
