Modelshops -dealerships?

[jjb1970]

Model railways are an entirely discretionary purchase, nobody needs a model train. As such, if people want them then they will buy them, and sellers will exist to serve that demand. Whether it is via bricks and mortars shops (some of which survive and do seem to be doing well) or by on-line sellers will be decided by the market. I am a model railway enthusiast but I really do not see any reason why the market can't be left to decide which sellers will thrive in a market serving persons who clearly have disposable income and are looking to use it to buy discretionary items to pursue their hobbies or interests. We're not talking about access to potable water here. This may sound brutal, but many of the model shops of yesteryear weren't very good, and the "box shifters" are very good at what they do in offering competitive prices, a wide selection and good customer service (for the most part anyway). Physical bricks and mortars shops survive where they offer something of value to the customer, many of them however don't.

[37114]

The internet being behind the (perceived) demise of the high street model shop is a red herring as people forget long before the internet we had mail order. I vividly remember purchasing a Lima class 60 in 1994 for £25 from Cheltenham model centre rather than my local shop for £40. Yes it would take a week to get to me as I had to write a cheque, post it then wait for the model to arrive in the post.

 

The issue facing the local model shop is being relevant to the consumer while still selling what is a commodity.  A Bachmann Class 47 is still the same Bachmann class 47 whether you buy it from your local shop or rails. You can't differentiate on product quality as it is the same item so your sole point's  of differentiation are either price or service. To differentiate on service is difficult as ordering from Hattons Rails etc can still see you having the item in your hand 24 hours later than walking into your local model shop.  The other differentiator is price and that is only viable if you have scale, a low overhead (as a percentage of sales) which lends itself to the box shifters.

 

The retail market is tough, I was lucky enough to get 90 minutes with the CEO of the FTSE 100 retailer I work for today. The challenges are the same for us as the average high street model shop;

- How do you keep your costs low

- How do you give the best service

- How do you have unique products that differentiate your offer from your competitors. 

 

The last point is perhaps the most relevant, I genuinely believe that the only way that a long term future can be assured for any local model shop is to sell something that can only be bought from them. Inevitably that is a form of commission or a unique product such as the Hattons 66. That requires manufacturers and retailers to consider themselves equal partners in each other's success and get away from a master slave relationship.  Willingness from both side is the key and ultimately will naturally favour businesses that are open in their outlook to survive.

[Widnes Model Centre]

4 hours ago, chris p bacon said:

 

There seems to be an idea that high street rates have increased over the last few years when in reality for smaller shops they have reduced and in some cases are zero.

 

As an example I purchased a shop and the rates bill for the last 4 years has been zero each year.  It had 2 floors plus a basement, the retail area on the ground floor was 340 square feet, the second floor was the same. The building would have been a suitable size for a model shop. Other shops nearby which are larger are also exempt from business rates.

The increase in high st rates was/is paid by the large retailers with 1000's of square feet. 

 

I think it is dependent on the Local Authority, VOA etc. Our Business Rates, since the new system was intoduced, circa £7000 per annum. We are according to the VOA, 15 yards approx into the town centre catchment area. Our retail area is 1527 sq.ft.

 

The VOA have made appeals very difficult, far more than the old system.

[Joseph_Pestell]

9 minutes ago, Widnes Model Centre said:

 

I think it is dependent on the Local Authority, VOA etc. Our Business Rates, since the new system was intoduced, circa £7000 per annum. We are according to the VOA, 15 yards approx into the town centre catchment area. Our retail area is 1527 sq.ft.

 

The VOA have made appeals very difficult, far more than the old system.

 

There is hopeless inconsistency in VOA's work on valuation for rates. It makes some business premises unsaleable/unlettable.

 

I certainly would not encourage anyone to go into the appeals process alone. Engage a specialist chartered surveyor.

[Hitchin Junction]

I'm still not sure what this thread is about. :(

 

Tim

[Dungrange]

44 minutes ago, Widnes Model Centre said:

Our retail area is 1527 sq.ft.

 

Out of interest, is that the floor area that I could visit as a customer, or the total floor area of the business (ie including stockroom, staff welfare facilities and other non-public areas)?  Just interested for the purpose of allocating space in a model building.

[Widnes Model Centre]

30 minutes ago, Dungrange said:

 

Out of interest, is that the floor area that I could visit as a customer, or the total floor area of the business (ie including stockroom, staff welfare facilities and other non-public areas)?  Just interested for the purpose of allocating space in a model building.

 

That would be the total area. Store room with kitchen and toilet. THe toilet is not included in the square footage by the VOA. Probabaly 90-95% is retail area. But as it is a new building there is no obstructions, ie. all the walls are straight.

[Dungrange]

6 hours ago, Widnes Model Centre said:

That would be the total area. Store room with kitchen and toilet. The toilet is not included in the square footage by the VOA. Probably 90-95% is retail area. But as it is a new building there is no obstructions, ie. all the walls are straight.

 

Thanks - you're saying that effectively most of your stock is 'on the shop floor' at any point in time.  Interestingly, that's the opposite of my local model shop who have a basement for the stockroom that's larger than the actual shop floor area.  Anyway, you seem to have answered the question that I posted in another thread asking what proportion of the space occupied by retail premises would be ‘front of house’ and how much would be storage, offices and staff welfare facilities?  It seems that the answer could vary quite significantly from less than 50% to 95%.

 

[Widnes Model Centre]

9 hours ago, Dungrange said:

 

Thanks - you're saying that effectively most of your stock is 'on the shop floor' at any point in time.  Interestingly, that's the opposite of my local model shop who have a basement for the stockroom that's larger than the actual shop floor area.  Anyway, you seem to have answered the question that I posted in another thread asking what proportion of the space occupied by retail premises would be ‘front of house’ and how much would be storage, offices and staff welfare facilities?  It seems that the answer could vary quite significantly from less than 50% to 95%.

 

 

We have everything that will fit, on display. Stock room contains excess items that in theory will replace items sold. If a gap appears on a shelf it is immediately filled. 

 

This time of year the stock room tends to fill up with reserved items that are being  bought with our savings club. Customers tend to collect everything late on Christmas Eve!!!

 

The idea is that the shop should always look full. Not a particular lover of the Argos type setup with all the stock out of sight and only a few items on display. 

[Dungrange]

2 hours ago, Widnes Model Centre said:

The idea is that the shop should always look full. Not a particular lover of the Argos type setup with all the stock out of sight and only a few items on display. 

 

I have to agree.  I'm not a fan of the Argos format either, although I can't accuse my local model shop of that style of display.  They have floor to ceiling display cabinets around half of the shop that contain all of the locomotives, coaches and wagons produced by Hornby, Bachmann, Heljan etc.  However, that means if you wish to purchase a particular model locomotive, they have to fetch a boxed version from 'through the back', which is apparently actually in the basement.  The only things that you can pick up off the shelf and take to the counter are generally the lower value products like tins of paint, sheets of plasticard, brass rod and a range of plastic kits from Airfix, Dapol, Wills and Cambrian.  The shop always looks full and if there is anything that they don't have, then they are usually happy to order it.  I guess that the style of operation of any business has to be governed by the layout of the premises that they are able to secure.  My local shop must be doing something right, since they've been in business for decades and I hope that continues.

[Deltic]

On 22/11/2019 at 10:13, chris p bacon said:

 

There seems to be an idea that high street rates have increased over the last few years when in reality for smaller shops they have reduced and in some cases are zero.

 

As an example I purchased a shop and the rates bill for the last 4 years has been zero each year.  It had 2 floors plus a basement, the retail area on the ground floor was 340 square feet, the second floor was the same. The building would have been a suitable size for a model shop. Other shops nearby which are larger are also exempt from business rates.

The increase in high st rates was/is paid by the large retailers with 1000's of square feet. 

That is not true across the UK, many Councils do not support small retailers with any form of reduction - let alone ZERO RATING.  So for many per sqM they are paying the same amount as the large multiples - in fact use CVAs to seek a reduction in their rent charges also. Not so easy for a small shop.

[Deltic]

On 21/11/2019 at 20:40, Mike Storey said:

I thought at least one, if not two, of the big manufacturers only sold to companies with bricks and mortar establishments. (I realise there is an issue with one of the wholesalers selling on to anyone).

 

Bachmann for example - and therefore Farish - do not use any wholesalers.  Whilst you can obtain Hornby from some the Trade price is normally greater than if you obtained direct. That is assuming you could get a Trade Account with Hornby and others.

[rue_d_etropal]

I think that before the rise of big supe stores most shops would buy from wholesellers. Maybe not the case with model railways, but I found it easier to order what I wanted rather than have to order complete box loads and end up with more than I needed or could afford.

I can understand the reasons for delerships, in the past, but these days we do need to make it easier for small stores. Maybe nice for the reps, and limiting the number of dealerships does mean they don't have to visit so many. It does't necessarily explain why some areas seem to be overloaded with dealers and others have none. In some ways having more than one close together makes it easier for the rep.

Obviously the internet has a part to play, not necessarily for selling from the shop, but can make ordering from wholeseller easier, especially if they have a decent database and stock control system. Having used one such wholeseller who also does retail, I cansay that this is better, and it is one reason I will use them still for myself. The big problem is that too many online businesses do not have proper stock control systems so you never know what they have in stock. One reason why I always recommend anyone considering selling online to be prepared to either do a lot of work or pay for a decent system.

[Andy Hayter]

22 minutes ago, rue_d_etropal said:

 It does't necessarily explain why some areas seem to be overloaded with dealers and others have none. In some ways having more than one close together makes it easier for the rep.

 

I very much doubt that making life easy for the reps is a high priority in companies awarding dealerships.

If there are wide geographic gaps, and I have no doubt there are*, then I think this is more due to a lack of potential traders with a sensible business plan, or a lack of market.  I doubt for example that there are a wealth of dealers in the middle of the Scottish highlands, because there are very few people living there and quite probably even fewer modellers.  

 

* speaking as someone whose only model shop (not mainly railways) shut this year making the nearest shop now a round trip of probably 5 hours or around 200 miles.   

[Mike Storey]

22 minutes ago, Andy Hayter said:

 

 

* speaking as someone whose only model shop (not mainly railways) shut this year making the nearest shop now a round trip of probably 5 hours or around 200 miles.   

 

Which shop was that Andy??

[Andy Hayter]

Modelisme 26 - as said not primarily model railways but they did stock paints, styrene sheet and sections etc.

[rogerzilla]

Are the distributors fussy about who sells their stuff?  I know a bit about the bike industry, which has some parallels (vast range, mainly male clientele, used to be small specialist shops, not very profitable).  In that industry, the barriers to entry are very high because the big-name bike manufacturers will not supply you if you're a small player and you can't guarantee to shift a lot of their product.  Therefore nearly all smaller bike shops only sell cheaper, off-brand stuff, aimed at kids and casual fine-weather pootlers, and the "enthusiast" cyclists therefore avoid them.  This has rapidly driven things to the Internet, since only big warehouse operations can carry the sort of range that is being demanded by buyers and also meet the minimum volumes required by the prestigious brands.  It wasn't like this 30 years ago, and you were as likely to find good quality kit in your small local bike shop as you were at one of the bigger shops.  Now most of the small shops have gone.

[Deltic]

On 24/11/2019 at 15:53, rogerzilla said:

Are the distributors fussy about who sells their stuff?  I know a bit about the bike industry, which has some parallels (vast range, mainly male clientele, used to be small specialist shops, not very profitable).  In that industry, the barriers to entry are very high because the big-name bike manufacturers will not supply you if you're a small player and you can't guarantee to shift a lot of their product.  Therefore nearly all smaller bike shops only sell cheaper, off-brand stuff, aimed at kids and casual fine-weather pootlers, and the "enthusiast" cyclists therefore avoid them.  This has rapidly driven things to the Internet, since only big warehouse operations can carry the sort of range that is being demanded by buyers and also meet the minimum volumes required by the prestigious brands.  It wasn't like this 30 years ago, and you were as likely to find good quality kit in your small local bike shop as you were at one of the bigger shops.  Now most of the small shops have gone.

Anyone can apply to the Model Railway manufacturers to open an account.  There are formalities to go through - Credit / Bank checking for one, obtaining references, location of retail outlet etc.  Then they may well issue you with a Pro-Forma Account, in other words you pay before getting any goods.

 

As with any Business relationships there will be Terms and Conditions to abide by, to maintain the throughput of goods. Once established you may find that you can order up to a certain limit, once reached you will not get anu further goods until previous goods have been paid for.

 

When I was much younger there were at least 5 model railway shops within a 2 mile radius of where I lived - London Suburbs. When I moved into Essex the local Town boasted 4 outlets at one time - only one stocked virtually all Hornby products the others picked the odd model to sell.

[Jules]

On 21/11/2019 at 20:40, Mike Storey said:

I thought at least one, if not two, of the big manufacturers only sold to companies with bricks and mortar establishments. (I realise there is an issue with one of the wholesalers selling on to anyone).

 

I also thought that rents were not the problem they once were (at least outside London) and that major rates relief was due.

 

Having seen at least three, very significant retailers start much from scratch in the last twenty years, with amply stocked shops, an ability to order anything they did not have, and all with superb internet sites, there is a retail model that works. Why, for example, did yet another major retailer open a branch in Guildford just recently?

 

Having lived through around 50 years of prediction of demise of the hobby, but with it now having perhaps the largest number of suppliers ever, plus the largest number of RTR models available, ever, I despair at the doom-mongers. What recent times do tell us is that you need some business acumen to run a model railway shop these days, not like the many, less professional establishments of yore.

 

PS - what amazes me most, is Parrs of Lowestoft (which many moons ago was my local retailer), recently adopted by the daughter of the original owner. No web site, but they seem to have a thriving business, despite internet competition. She does provide a very good service, and has a good range of stock. So it can be done.

Slightly off topic perhaps, but it was wandering into Parrs while on holiday about 20 years ago that got me back into modelling.  Went in just to see what model railways were then like (hadn't really kept upto date in previous 20ish years) and walked out with two Bachmann locos!