Who owns a model railway shop?

[The Stationmaster]

One point I missed is that shop commissioned limited editions (Hattons, Kernow, Olivias, Rails) are not helping the general model railway supplier.

I'm not sure about that. If the manufacturers make what people want then it will sell (assuming fidelity, quality and price fit what the market will accept) - witness Hornby's recent success with the LNER non-gangwayed coaches where folk seem to be queueing up to buy them.

 

The difference with commissioned models is that they come out of the thoughts and market knowledge of small teams who are very close to the consumer and they still represent a very substantial investment (in percentage terms probably far larger than that for the big manufacturers). Equally i think the commissioning thing is spurring on manufacturers to greater effort - Dapol are doing well out of the reputation they have built with the Kernow Well tank and their own D63XX/Class 22, Heljan have had the benefit of Hattons' contracts plus they are exploiting new market areas and - seemingly - selling what they are making, Bachmann are simply being spurred on to ever greater efforts and that seems to be sustained. Possibly Hornby is a loser but pre-prod samples seen here and in the mags suggest they can step up to the bar with some top rate stuff when they get down to it - and it will sell.

 

The only potential problem created by the commissioners is market saturation and too many whatevers chasing too few buyers but remarkably, perhaps, that hasn't happened (yet) and in fact they seem to have stimulated the market rather than damaged it.

 

As far as non-commissioning retailers are concerned is there any evidence that they are suffering because they don't have commissions? More likely I suspect that other market forces are their potential enemies rather than stimulation of greater interest in railway modelling because a wider range is available.

 

This 'wider market' thing is clearly some other sort of situation. Today I popped into Hobbycraft in Reading looking for a specific Woodland Scenics item - to find they hadn't got it and moreover some of their Woodland Scenics stock level was definitely down. Far more interesting though was what has happened to their Hornby stock - as much Skaledale as ever, same amount I think of track, but not much in the way of wagons, and a major reduction in coaches and no locos at all. Not much to do with commissioned models but far more likely a consequence of Hornby pricing polices and their own reasons for reducing slow moving inventory which ties up a lot of cash. And this is in a large town in a prosperous area where the only other model railway seller is Modelzone and the only decently stocked model railway retailers are 20ish miles away. Somehow I don't think commissions from Cornwall and Liverpool are harming Hobbycraft's toe in the model railway water.

[Allegheny1600]

Well, not much of an answer to the OP but I used to work in a model railway shop!

In the early 1990's (for about 3 years or so), in the midlands, for a "one man" operation.

Fair enough, this shop had rather odd opening hours but far from being my "dream job", it was actually a bit of a nightmare!

Reason: boredom!

When three or more hours go past with no-one in the shop, no phone calls - nothing, then it's a pretty poor place to work!

The owner supplemented his income by doing regular swap meets every weekend, in fact the shop was an excuse to get retail premises and accounts with the major retailers(!) - good job, else he would have gone bankrupt ages before he did do!

It was worth it for me, for the experience, I made a couple of good friends while I was there and I got a strong insight into the model railway trade.

The chap I worked for put a lot of money into his business and worked long hours, particularly the driving to swap meets (I did help with these, too!), I worked hard in the shop, kept it clean, tidy etc, etc but it still failed.

I KNOW that the advice given here is very, very applicable - heed it, if you please!

Ignore it at your peril.

John E.

 

Edit for PS;

Now I've 'got some money', would I open a model railway shop or even, fund one: NO CHANCE!!!

[MJI]

I did 3 months in a shop - not a good idea as you will get fed up.

 

Pay was poor as well,I realised after a couple of months not a good place to work long time, but better than the dole.

 

Got into computers soon after, then IT jobs about a year after that.

[Dave777]

Today I popped into Hobbycraft [...] Hornby stock - as much Skaledale as ever, same amount I think of track, but not much in the way of wagons, and a major reduction in coaches and no locos at all. Not much to do with commissioned models but far more likely a consequence of Hornby pricing polices

 

I've done a bit of a hatchet job there Mike but only to add a comment directed at a specific point - my impression from several people who do various crafting activities is that Hobbycraft charge top whack for everything, so it might not be a result of Hornby's pricing policies, although I admit I don't know either way for definite. The issue of Hornby's pricing has reared its head for maybe 3-4 years now, but years before that Hobbycraft were charging full RRP for Hornby stuff. I can definitely remember visiting a Hobbycraft in 2006 for example and being amazed at the high prices they were charging. Like I said, I don't know either way, it's just my impression that even if Hornby pricing was 'competitive' (however we want to define that), Hobbycraft would still be charging the most they can for it. It's just part of their business model I think.

 

The experience in my local Hobbycraft pretty much mirrors yours though - locos have largely disappeared (no more than a handful in the display cabinet), but there's loads of Skaledale and track. A lot of it has been there, unmoved, for a good 2-3 years now.

[Guest Natalie Graham]

You can't out Hatton Hattons and that was not the intention. However for mail order/e commerce Hattons pretty much set the standard for model railways. Why would some one mail order from a new supplier if you are more expensive than Hattons?

 

As a new entrant to the business someone would not have the volume of turnover to be able to match Hattons on price unless they had the resources to start up in a big way and to sustain a long period of very low profitability.Their business model clearly involves low margins and high turnover relying on volume of sales to provide the profits. A new business trying to compete on price alone would have low margins and low turnover, a recipe for disaster.

 

Why would someone order mail order from a new supplier that was more expensive? That is the factor a newcomer to the business needs to find to give themselves a chance to succeed. It has to be because you are offering something that Hattons and their ilk do not. As an example, (rather than a guaranteed sucessful business model) you might go down the line of supplying a comprehensive range of components for the finescale sector of the market and someone wanting to superdetail and convert a rtr loco to EM or P4 could order all they needed from your business in one go, a percentage of those people might decide it was more convenient to purchase the rtr loco at the same time. Hypothetically, if one out of five do that and if your margins are five times those of Hattons then you are making as much profit as if you sold that loco to all your customers at Hattons' price for one fifth the outlay in stock and one fifth of the effort.

 

It is all about finding the niche for your buisiness and then exploiting it.

[The Stationmaster]

I've done a bit of a hatchet job there Mike but only to add a comment directed at a specific point - my impression from several people who do various crafting activities is that Hobbycraft charge top whack for everything, so it might not be a result of Hornby's pricing policies, although I admit I don't know either way for definite. The issue of Hornby's pricing has reared its head for maybe 3-4 years now, but years before that Hobbycraft were charging full RRP for Hornby stuff. I can definitely remember visiting a Hobbycraft in 2006 for example and being amazed at the high prices they were charging. Like I said, I don't know either way, it's just my impression that even if Hornby pricing was 'competitive' (however we want to define that), Hobbycraft would still be charging the most they can for it. It's just part of their business model I think.

 

The experience in my local Hobbycraft pretty much mirrors yours though - locos have largely disappeared (no more than a handful in the display cabinet), but there's loads of Skaledale and track. A lot of it has been there, unmoved, for a good 2-3 years now.

 

Very good point Dave and of course that was very much the case with the Reading branch although their inability to shift stuff occasionally resulted in locos being reduced to less than the wholesale price. And yes - overall Hobbycraft is expensive, an excellent example is 5mm foamboard which in Reading is available in a similar size at the next door branch of Staples, at just under 50% of the Hobbycraft price for stuff from the same manufacturer

[45568]

Before you read this, please accept my apologies for any offence caused, especially to those named, as it is posted in the best of good humour, but, if you reeeally want to find out what it's like at the top....Have you considered offering Christine Hatton your hand in marriage...????

Ah well, moderated status here I come!!!

Cheers from Oz,

Peter C.

[Horsetan]

.....Hobbycraft charge top whack for everything, so it might not be a result of Hornby's pricing policies, although I admit I don't know either way for definite. The issue of Hornby's pricing has reared its head for maybe 3-4 years now, but years before that Hobbycraft were charging full RRP for Hornby stuff. I can definitely remember visiting a Hobbycraft in 2006 for example and being amazed at the high prices they were charging. Like I said, I don't know either way, it's just my impression that even if Hornby pricing was 'competitive' (however we want to define that), Hobbycraft would still be charging the most they can for it. It's just part of their business model I think.....

 

If you think Hobbycraft are overcharging, pop into Hamleys the next time you're in London. The last time I was in there, they were charging more than RRP for Bachmann RTR.

[The Stationmaster]

If you think Hobbycraft are overcharging, pop into Hamleys the next time you're in London. The last time I was in there, they were charging more than RRP for Bachmann RTR.

Many years ago, when I was about 10, we occasionally had a day out in London and after persistent badgering my dad finally took me into Hamleys. I never mentioned it again - not only was it the most useless shop I had ever been in for model railways but I thought it was a crummy toy shop too. Now W&H - which was still Walker & Holtzpaffel back then - and Hamblings were really something, outdid Hamleys in every way I cared to think of.

[APOLLO]

Just got back from Hattons an hour ago. Now it's a good shop, superb staff, fantastic stock that is very well displayed in lit custom made display cabinets - but it certaintly ain't the "traditional" model shop. Virtually everything they sell is on display, so easy to look before you buy. I wanted to look at a couple of locos, but ended up buying a Bachmann Jubilee "Baroda", which was not on my list BUT it looked great - fowler tender, late crest, and it was on offer at around half list price, just the job jub. !! Got a couple of wagons also which also "looked the part" in 3D rather than on the net / mag advert.

 

The shop is only half the story - Hattons also have a warehouse they dispach orders from - their investment in stock must be into the £millions. Not many can compete with this especially in the small world (!!!) of model railways.

 

The trad model shops I use can't compete with Hattons on most boxed items, and certainly can't on stock levels. I get my bits n bobs & secondhand from them. I buy more s/h than new these days. Some items (even at Hattons) are getting too expensive for me. £66 for a detailed Jubilee is about right for me (and my wallet). If I am in another town I allways try to visit the local model shop, and can usually find something of interest.

 

As allready stated, it's damn difficult out there for the small shopkeeper - (ANY small shop, not just models). The dice are loaded against you, The big retailers, internet, increasing rent, rates, you name it. We modellers (most of us) have limited funds for our hobby, which decrease as the cost of living essentials rise.

 

The world is changing quickly, adapt and survive so they say.

 

Brit15

[Orion]

You could always set up an internet model shop in Somalia - just hijack all the Dapol, Hornby and Bachmann containers as they sail by. People would have to come to you as no one else would be able to get hold of the stock anyway.

 

So, passport ready and suitcase packed - guess where I am off to

[Western Scottish]

This is really quite an interesting thread. Like a lot of us on here I suppose I've always had a hankering to open up a model railway shop , on the basis that it would be enjoyable to have a job that is your hobby. The economics it would seem are against this. I know in business you quite often get discount for buying in bulk but I thought that was not the case in model railways. I'm sure I've seen somewhere that at least Bachmann offer the same price to everyone regardless of volume. I thought Hornby was the same. If it is the case that they do offer bulk discounts its inevitable that trade would be concentrated on a few large retailers eg Hattons, Rails, Signal Box , Cheltenham etc all who get bulk discount, as the rest could not compete. I'm sure this can't be policy from manufacturers, even though there is a trend in model shops closing down. Is it not to protect small retaillers that Bachmann are insisting on max discount of 15%

 

Unless you are already in the model railway trade it will be impossible to produce a business plan , for the simple reason that we don't know the manufacturers price to the trade.

[40F]

"Unless you are already in the model railway trade it will be impossible to produce a business plan , for the simple reason that we don't know the manufacturers price to the trade. "

 

Most if not all manufacturers regardless of what they produce issue a trade price list to their trade customers and this is normally the first price. Then some of the manufacturers offer settlement tems ie pay with so many days and a discount isn given. It is then up to you wether or not you take the discount offered. Roco I believe use a sliding scale for discount ie the more you spend the bigger the discount.

[brightspark]

An observation on the conversation so far. Plus my five pennies worth.

 

It seems that the thinking is that you have to outHatton Hattons. In otherwords the thinking here is that to survive you have to undercut the opposition on price and deliver a quick turnaround and have a large stock holding.

Have I got that correct?

But on the other hand we have a chain like Hobbycraft Toy'R'us and single prime shop Hamleys who do the opposite, charge full price and have a small stock and seem to be making money.

Many years ago now,s when Toys'R'Us opened up, the Model Rail shop that I used to work in lost its main income which was train sets at Christmas & the follow up sales of add on packs.

More recently I note that my local art shops have given up selling artist equipment, paint brushes etc since Hobbycraft opened as sales died off. Even though it charges top price.

 

So how does Hobbycraft work? My local branch seems to be very busy.

 

Strangly enough I keep hearing this comment from various people about Hobbycraft no matter country they come from.(also reflected above which is what made me remember it)

 

'I went in there when it opened up. They had lots of stock. Now the local shops have gone bust I have to go in there and the stock seems to have gone down to nothing'

 

This might suggest that a chain can afford to carry a range of product to swamp the market forcing the opposition out. When they have control of the local market they can trade at a commercially sustainable rate. i.e reduced stock of top sellers and high mark up.

 

The other thing that Hobbycraft and Toys'R'Us do is sell a large range of products so there is something for mum, dad, daughter, son and your Aunty Violet, with a nice car park attached. They don't know and really don't care that they are paying top price for something that the local specialist with product knowledge and service back up could supply cheaper. Possibly that "specialist" might be the reason for putting them off as they may have the fear that they will have to face an expert who rip them off.

See the adverts on TV for Majestic Wine

&

who are obviously aware of that image and need to snatch sales away from supermarkets, again price and a dullard sales assistant wins.

 

Plus (and you have to face the unpalletable truth) a model railway shop will have the "Trainspotter" stigma tied to it. Would any normal person (passing trade) want to be seen going into such place?

 

I have thought about it myself. But the business plan just doesn't work.

[APOLLO]

Plus (and you have to face the unpalletable truth) a model railway shop will have the "Trainspotter" stigma tied to it. Would any normal person (passing trade) want to be seen going into such place?

 

 

I didn't notice any sort of stigma either outside or inside Hattons today. Shop was fairly busy (as usual). The staff, some of which are female, are all both knowledgeable & helpfull. The half dozen or so customers seemed to be a fair selection of "types" sort you would see in any shop anywhere.

 

I think the "trainspotter" stigma is old hat these days.

 

Brit15

[brightspark]

Perhaps it is a regional perception?

But I think it is still lurking in peoples minds and perhaps may add to the fear of going in through the door.

 

OK amend that line to read ...may in some peoples minds have the...

 

 

 

 

I reserve the right to be wrong.

[Horsetan]

....Strangly enough I keep hearing this comment from various people about Hobbycraft no matter country they come from.(also reflected above which is what made me remember it):

 

'I went in there when it opened up. They had lots of stock. Now the local shops have gone bust I have to go in there and the stock seems to have gone down to nothing'

 

This might suggest that a chain can afford to carry a range of product to swamp the market forcing the opposition out. When they have control of the local market they can trade at a commercially sustainable rate. i.e reduced stock of top sellers and high mark up.

 

The other thing that Hobbycraft and Toys'R'Us do is sell a large range of products so there is something for mum, dad, daughter, son and your Aunty Violet, with a nice car park attached. ....

 

This sounds a bit like the opposition to Tesco, etc. Everyone hates 'em, but they then go and shop there......

[mezzoman253]

Coming back to the Hobbycraft theme, I worked in the Basildon branch for almost 9 years, the Hobbycraft idea is you have to make something, be creative, that is you can't go and buy an item that is ready made. Now that tends to eliminate loco's as such, but they were stocked as part of "making a layout" something you have to construct, so broadly came into that ethos .

 

At one time certain branches did Bachmann as well as Hornby, but for some reason they were dropped. The current regime is tending more towards the original idea of making something, hence the lack of loco's and wagons, apart from the fact they are expensive and make great targets for shoplifters, some of our customers thought paying for goods was an option!

 

As for pricing that's between the company and the supplier, deals are done for certain items within the suppliers range, and not others. That's why the full range was never stocked, but items could be ordered if requested.

 

Rob

[Jongudmund]

2 observations. I live near a Hobbycraft and a Toys R Us.

 

Hobbycraft - it feels to me that the model railways are part of the two aisles "for men" along with Scalextric and Games Workshop models and a few plastic kits. They may as well put a sign up saying 'For bored husbands - this way -->' What is good about it is that when they have a sale on they will drop prices considerably on some things. e.g. Skaledale at quarter price recently in my branch.

 

Toys R Us - my (very) local branch had no trains in it last time I went - previously they had one Hornby train set. Years ago (like, 15 years ago) they had most of the Hornby sets, the trackpacks, accessory packs, and soem exatra locos, wagons etc. Now they have none. I think Toys R Us are very expensive and if you shop around you can pretty much get anything they stock much cheaper elsewhere, from Lego to Star Wars figures. They rely on people who don't shop around and presume that toys have to be expensive - and I don't think those people are likely to buy train sets (except Thomas the Tank stuff or Brio)

 

A proper model shop isn't going to be competing with either of them.

 

Having said that, I've been into a few model shops where the owners have been quite grumpy, the stock has been dusty and disorganised and I've left without buying anything. I think those shops will struggle in a tough retail environment.

[MJI]

I am down to a continental DCC specialist, & Cheltenham Model Centre now

 

Antics closing, local MR shop shut, the Ross on Wye shop gone.

 

Mail order now I am afraid unless in Cheltenham

[Zero Gravitas]

Today I popped into Hobbycraft in Reading looking for a specific Woodland Scenics item - to find they hadn't got it and moreover some of their Woodland Scenics stock level was definitely down. Far more interesting though was what has happened to their Hornby stock - as much Skaledale as ever, same amount I think of track, but not much in the way of wagons, and a major reduction in coaches and no locos at all.

 

I was in a Hobbycraft store in the midlands a few months back, and saw much the same thing - the Tamiya acrylics were gone, along with Woodland Scenics and lot of other railway-related items. When I complained to the manager, he told me Hobbycraft had been bought out last year by a Venture Capital group, and are currently undergong what he described as " a condensing of the product range" - and that the emphasis would be on faster-moving, higher margin items. Which would explain what people seem to have been seeing...

 

Best Regards,

 

ZG

[mezzoman253]

I was in a Hobbycraft store in the midlands a few months back, and saw much the same thing - the Tamiya acrylics were gone, along with Woodland Scenics and lot of other railway-related items. When I complained to the manager, he told me Hobbycraft had been bought out last year by a Venture Capital group, and are currently undergong what he described as " a condensing of the product range" - and that the emphasis would be on faster-moving, higher margin items. Which would explain what people seem to have been seeing...

 

Best Regards,

 

ZG

 

Further to that there are large, medium, and small branches. They don't all stock the same products, due to space. Woodlands Scenics did have a problem with deliveries at one time, not sure if that's still a factor. They sell very quickly, so when new stock does come in, it goes fast.

 

Rob

[bike2steam]

Mmm, interesting thread, I used to own a model railway, transport, and military book shop, I miss it because I had a good crowd of regular customers, but don't miss it because drug dealers lived in flats nearby with their scum customers causing trouble, and hookers hanging about outside, which you couldn't do anything about as their pimps were the drug dealers, all in seemingly wonderful Bournemouth - if only people knew.

But if you want to open a new model railway shop these days, it's a good way to throw away money, only do it if you can afford to loose money, as it's no way of making a fortune, just look on it as a service.

[14Steve14]

I have been reading this thread with interest.

 

I once thought about opening a bricks and morter model railway store. What held me back, most of the major suppliers in this hobby. I am talking Hornby, Gaugemaster, Slaters, Peco and many many more. It doesnt help that some of these large suppliers also own many other related companies, or act as wholesalers for other businesses. As a new business, you need business premises before they will talk to you, and when they do talk, they require a large initial order, and we are talking many thousands altogether. To see if the idea is viable, is nearly impossible as they will not disclose standard prices to the trade to a newcomer to the industry.

 

On top of buying stock, you have all the bills associated with running a business. The telephone with broadband is over 20 quid a month, as is the rental on a card machine. If you add all the other bills together, and the rent, insurance, utilities, and more, you have to make a lot of money just to pay the running costs of a business, and this doesnt include the high monthly costs of advertising in some if not all of the specialist railway magazines. If you have a never ending supply of cash, start a model shop.

 

I knew one model railway business who was purchasing stock items from Hattons because they were cheaper than buying direct from the main suppliers, and he didnt have to purchase such large quantities. He has now retired, and once told me that a model railway shop would not create a large enough income to make any money unless you have a smaller income coming from elsewhere.

 

Today, everyone shops around to find the best prices. A lot of shop customers will visit shops to look at products, and then go home and look on line to find a better price. In most cases they will find these better prices without too much trouble. The only reason people use local shops now, is because they want something urgently.

 

I took notice of his advice and have found other things to create an income within the model railway area. If i was the original poster, I would think very seriously about this, and then find something else to do.

 

Now i must apologise for the long rant, and get on with doing something else.

[bike2steam]

Yes, and add that Peco will not supply if they already have a good established outlet within 10 miles of you.