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YOUR LOCAL HOBBY SHOP ECONOMY


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As I mentioned in a post a couple of months ago, my primary 'go-to' shop has closed its doors, however, the couple of local shops that cater to RC fans seem to be thriving. Fortunately one of them also maintains reasonable model car stock and supplies - not nearly like the aforementioned shop, but hey, I'll take what I can get in this economy.

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You would think that in a metropolitan area of 2.5 million people there'd be one good hobby shop. but no. We have a couple of OK independently owned stores, Michael's, and Hobby People. There are also a couple of good train stores in town. Sometimes the good weather here is a detriment.

Our local hobby shops have big RC selections, and quite frankly, that's where they make their money. RC cars and planes are expensive. They crash. you buy, repair, and repeat.

One of the mom and pop shops has a good selection of models, but most modellers in San Diego build armor and aircraft. Not too surprising with the big military presence. Car modelers are actually a bit of a rarity.

But, none of our local shops compare with the shops I visited in Toronto. Man. Not big in square feet, but stacked floor to ceiling with kits, and a good stock of detail parts, tools, and finishing supplies. They'd kill and eat any shop in San Diego.

I try to shop our local stores first, but they can't always get what I want, so I either have to mail order or drive an hour and some north to Pegasus Hobbies who seems to have just about everything, especially in terms of detail parts.

I'm not complaining tho. The owners are nice, and try their best. I just have esoteric tastes. :)

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Mine is an all-around shop (Thusly named All-Around RC) that caters to the demand of the RC community but has a little something for everyone. Helos, gliders, trains, etc. They at minimun have enough models to keep the shelves full. One half of the shelf (the only shelf) is military, the other cars. But I'll never complain, cuz they can order me whatever I wish.

I do order most kits online because of the wide selection but i still have to make the trip to the store for paints and such, since these can't bemailed

paint cant be mailed? I got some by mail last year....
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My experience buying online.

Hey, sweet! Moebius Hornet for $18.99, plus $8.00 shipping! Ordered it a week ago, and the package is still in friggin' Mississippi.

My experience buying from my local shops.

Hey, sweet! Moebius Hornet for $24.99, no shipping, and it's on my way to/from work so fuel burned is a moot point, and it's in my possession immmediately. I'm supporting the local economy, having a pleasant conversation with Ed or Dean, maybe hanging out with a few local modelers, flipping through the new Revell catalog, bouncing ideas off the other guys for future projects, planning the next show.... yeah, wow... this is so much better than clicking 'buy now'!

B)

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My experience buying online.

Hey, sweet! Moebius Hornet for $18.99, plus $8.00 shipping! Ordered it a week ago, and the package is still in friggin' Mississippi.

My experience buying from my local shops.

Hey, sweet! Moebius Hornet for $24.99, no shipping, and it's on my way to/from work so fuel burned is a moot point, and it's in my possession immmediately. I'm supporting the local economy, having a pleasant conversation with Ed or Dean, maybe hanging out with a few local modelers, flipping through the new Revell catalog, bouncing ideas off the other guys for future projects, planning the next show.... yeah, wow... this is so much better than clicking 'buy now'!

B)

Amen, my friend, Amen!!

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My experience buying online.

Hey, sweet! Moebius Hornet for $18.99, plus $8.00 shipping! Ordered it a week ago, and the package is still in friggin' Mississippi.

My experience buying from my local shops.

Hey, sweet! Moebius Hornet for $24.99, no shipping, and it's on my way to/from work so fuel burned is a moot point, and it's in my possession immmediately. I'm supporting the local economy, having a pleasant conversation with Ed or Dean, maybe hanging out with a few local modelers, flipping through the new Revell catalog, bouncing ideas off the other guys for future projects, planning the next show.... yeah, wow... this is so much better than clicking 'buy now'!

B)

Chuck, I feel like this too, but sometimes a kit is just not available, so I order on line, but you are right I check the LHS first and if they have it, I'm one happy camper.

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Frankly, my LHS, will order anything i want, it only costs $1 or $2, I don't pay shipping and "handling" and I get an hour of conversation.

I have only ordered Aoshima and Fujimi kits online. All the rest come from the LHS. I would really be lost without it.

joe.

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Swap meets here in Rapid have mega OLD kits but 1 has to wait a year @ a time. this next year I'm guna get names n addresses. this meet isn't houge but there r 100's O kits. that's where I got my "Blazen" kit n a few others.

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In the '60's and '70's there were at least FIVE hobby shops in the area that I can think of.......possibly more. And that doesn't include the Mom and Pop corner stores and pharmacy places that sold models. Now we're down to just one--------Kranzel's Hobby Shop in Camp Hill. He's got a good number of kits, but he also focuses heavily on RC which is where the money is for him.

About 35-40 miles down the road from me in Gettysburg, is a train shop called Tommy Gilbert's which has THE BEST detailing need for those of us that are in to superdetailing our models. A lot of train stuff translates into model cars, and Tommy carries all of the plastic stock and brass you'd need to detail something to the max.

He can also order the PE items if he doesn't carry them. He's my go-to guy when I'm out of super small brass tubing, bolt heads, brass sheet, etc.

For those of you into trains--------you won't be able to leave without spending some bucks on something his selection is so vast. ;)

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Tell you what though, as much as I like to support the LHS, lately I've been buying some kits (not at my local hobby shop) from Model Round Up, and I tell you they are fabulous when it comes to shipping and delivering the good in perfect condition. They go out of their way to package those models well.

And no, they are not paying me to say that. :D

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My experience buying online.

Hey, sweet! Moebius Hornet for $18.99, plus $8.00 shipping! Ordered it a week ago, and the package is still in friggin' Mississippi.

My experience buying from my local shops.

Hey, sweet! Moebius Hornet for $24.99, no shipping, and it's on my way to/from work so fuel burned is a moot point, and it's in my possession immmediately. I'm supporting the local economy, having a pleasant conversation with Ed or Dean, maybe hanging out with a few local modelers, flipping through the new Revell catalog, bouncing ideas off the other guys for future projects, planning the next show.... yeah, wow... this is so much better than clicking 'buy now'!

B)

I just put a Hornet on my list!
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I have a Hobby Haven not far from me. But every time I go in there I 1) never get greeted 2) never get asked if they can help me 3) always seem to be overpriced. I don't mind paying a bit more if I get good customer service but I'm not going to pay more than Hobby Lobby AND not get assisted while doing it.

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I would be curious to know what kind of a mark up the stores make in order to stay afloat.

I think.. but I could be wrong. It's not so much a "mark up" as it is a "mark down" Most wholesalers invoice retailers at MSRP. From there, the wholesaler will mark down the total invoice cost depending on how the retailer pays the bill. A different percentage comes off, if a bill is paid C.O D, 10 days or 30 days net due. Generally around 40 to 60 percent... I'm sure there are other formulas out there, especially for high volume buyers, But it is close to what the average stand alone shop does.

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Ed, I just went through it with my book. They wanted exactly 60 percent off the retail price of 29.95, so I would have to give them a huge price break just to that they can make money, which is fine with me, but I'm not the publisher nor distributor of it.

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Aside from my LHS's, there are some swap meets around like this Sunday. There's always a large crowd so parking is the problem, but it a decent show. It's the second show of three this year. My wife and I caught the last one in November last year, but missed the first one in January. It's much bigger than I thought. Plenty of vendors/tables and 1000's of models. I picked up 5 or 6 kits for cheap or very reasonable. Even my wife enjoyed the show and picked up a kit. And she doesn't build...although she's going to give it a try. If your in Milwaukee this Sunday, check it out.

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Since I am one of these LHS', I can speak on the subject from this side of the counter.

The area where I live (Atlantic Canada), there is my shop.....the next closest is in Halifax, which is about a 4hr drive south, and Quebec City, about a 6hr drive north (that is of course if you don't count the massively overprice kits at Micheal's)

So you could say I am in a unique position with not much in the way of competition.

My shop grew out of the lack of a "good" hobby shop in the area. The one we did have, the owner really didn't have a clue as to what he was doing, we as a modeling community would tell him what was new coming out, but he never bothered to bring any in, and if he did, it was usually one or two...and once they were sold out, he would never bring them in again. This became frustrating as he always complained about his high min. orders from suppliers, yet when someone came in to ask to special order something, laying down the cash for said kits up front, well more money than what would be needed to make the min. order quota....and he would pass the money back and say he couldn't do it. This coupled with the fact that his family owned the building they were in, located in the downtown core with tons of people coming and going (although he never had anything anyone wanted), so he paid little to no rent.

Such a wasted opportunity is what bore what is now known as Elm City Hobbies.

I first started looking for retail spaces around the city and quickly realized that if I wanted to make a go of a hobby shop, that paying rent would not be the way to start out. I was looking at anywhere from $2/sq ft in the downtown core, to well over $10-$15/sq ft closer to the malls. The one location I did look at downtown, was about 900 sq/ft....and would have cost me about $2000/month before ever opening the doors (nevermind heat and lights).

So I had to make a choice....take the high rent, and have the walk-in traffic, or sacrifice the walk-in traffic and have no rent and just run the shop from my home. I chose the 2nd choice, and at the home we had...the dining room became the shop. Couple of years later, we moved to a larger house, and I now have the whole basement for the shop, with a separate entrance.

Being a modeler myself (not just cars, but everything, which is probably why my stash is 600 kits +++), as well as spending 15+ years in the grocery and retail business, I kind of had the know how to run a business such as this. It has been a slow climb....not going to be cashing that $1million cheque anytime soon, but I enjoy the work, enjoy helping people find the kit they want.

As far as what to stock....first off, I don't do RC....mainly because I personally have no interest in it....I mean yeah sure,.....love to play with them, but the logistics of selling them I don't love. My way of thinking, if I am selling Buggy X....then to provide good customer service, I need to have all the consumable parts for said Buggy X in stock. That in itself isn't so bad....except for one thing...if the same company puts out Buggy X, and Buggy Y, most of the parts on it aren't interchangeable, so there for you have to have different parts for each, and there in lies the large amounts of $$$$ that you have tied up in parts, so I choose not to get into the RC market, especially considering that one of the largest RC retailers in Canada is about 2 1/2 hrs away, and does a large amount of mail order in RC parts, coupled with the fact that there have been 3 RC shops that I know of within a 90 min drive that have opened, and then closed within 6 months, doesn't seem like that smart of a business to get into IMHO.

Something I do for customers on my mailing list, is every week they get an e-mail outlining everything that has been released during the pass week by my suppliers, and the prices the kits are going to be. Lets face it....I can't have everything that has been released in stock....otherwise I would have gone out of business long ago, as well, if I feel that the price of a kit is going to be too expensive, and that I don't think the customer will pay the price, then the weekly e-mails allow that one or two customers that will pay it, to get me to order it in for them.

I try to gauge what customers are going to like and not like. Price has a big factor in it as well of course, but I try to keep up on the latest releases and make sure they are stocked, based on what my customers like. I am involved with Revell and their Preferred Partner's program, so I do get their new releases earlier than most places, and so far that has worked out well...other than sometimes I would like to have more control over what I get, as sometimes there are some releases in there, that I would like to have less of, and more of something else....but alas, it is, what it is.

As far as suppliers go. I am loyal to my suppliers to an extent, but if one is offering kit A for $2 cheaper than another supplier, then it is a no brainer. Doesn't seem like much, but if it makes a new Revell car release $22.75, vs $24.75....then it is good for everyone.

When I first started the shop, being in Canada, and not having a "retail" store front, Canadian suppliers didn't want anything to do with me. No retail store front....then no sales. So I went stateside, and any of the US suppliers I talked to basically said....you got a credit card, and an address to send the product to....that is all we need. I live about an hr to the closest US/CDN border crossing, and have all my US originating orders sent to a PO box there. This not only cuts down on the cost of shipping, but also allows me to take advantage of shipping and cash payment discounts that my suppliers offer, which are only valid if the order is going to a US address. The alternative is much higher shipping into Canada, and UPS/Fed Ex take a "pound of flesh" in brokerage fees to process the orders. The amount I would pay in brokerage fees for one order would pay for the rental on my PO box in the US for about 2 years....so that alone is a huge savings for me. I have since gotten on with a few smaller CDN suppliers, now that I am an established business they all seem to want my buisiness now, which I find funny, as nothing has changed...still no "retail" store front.

As far as suppliers, they list the price of a kit, accessory, bottle of paint, tool, etc, etc, at the MSRP, and give you a percentage off of it, which ends up normally being about 40%. Suppliers that also act as the importer of the product line, can increase that discount off the MSRP to as much as 52% depending on the line.

I know, I hear it all the time about how the prices of kits and such keep going up, especially here in North America, as compared to Asia. Fact of the matter is....the reason that places like Lucky Model, HLJ, Hobby Easy, etc, etc, can offer the prices they do is because they are buying 99% of their product factory direct (and oh btw, the factory is located just down the road, so there is no shipping cost to have it shipped halfway around the world added to the price), and therefore can offer the kits cheaper. Like I tell people, if I had the Trumpeter, Dragon, Tamiya, Revell and Hobby Boss factories all within an hr of my shop....I could probably buy the products factory direct as well, and offer cheaper prices, but the fact remains that 99% of kits are manufactured somewhere other than North America, and have to be imported/shipped into the NA market. This isn't free, and adversly effects the price of the kit, not to mention that some products can go through as many as 2-3 supplier/importer hands before it gets to the LHS, and at every step of the way another percentage of markup is placed on said kit. I was once told by somene that had contacts in China at the Trumpeter factory, that the $45 armor kit that I am selling on the shelf, you could buy for about the equivalent of $6US direct from the factory. So you all can do that math from cost direct from the manufacturer to the end consumer buying it from their LHS. However....this is really no different than most stuff we buy in NA these days, a good portion is also manufactured in Asia and shipped here, with the same disparagy from factory cost to consumer retail.

When it comes down to it. You have to weigh the cost of our hobby vs the amount of hrs we put into it.

Good example is golf, people pay on average $50-$75 for a round of golf, that lasts 4-5hrs.

Revell car kit, average $22-$25, and can last weeks to months to build. I know what is the better deal in my book!

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We used to have a Hobby Town here in Fargo, but it closed. Also had acouple of others, but the one went to Fantasy Gaming. They are history now also. Currently we have 3 shops. The one is RC planes, the other RC planes, and Cars. But the best one is still here. Hobby Hut. The mgr. used to be with another national chain many years ago. He has stock of all sorts for everything. Also the nice thing is if you need something special, and he doesn't have it, order on Mon. and its in Fri. Great service. In fact I was just there 2 hours ago, and picked my order from last week.

Thanks for the tip on Hobby Hut. I'm hoping to make a trip there this summer to visit relatives in the city and will definitely hunt that shop down.

Rob from the praries of Saskatchewan

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The prices of kits keeps going up and I would be curious to know what kind of a mark up the stores make in order to stay afloat.

Those of you who have to travel for so many miles out of your town, aren't you just tempted to order to the stuff on line?

I have a nearly two hour drive to get to my nearest LHS and the closest one after that will be an additional 2-3 hour drive but its worth the effort to support them. Here in Canada we can't send paint through the mail so having a thriving hobby shop with it's paint racks is a necessity. About twice a year a buddy and I will make a two day tour of all the hobby shops in the province (five shops for a population of a million people). It's a fun trip and between the two of us we always come back with a car full of goodies. The only ordering on line that I do is for things that the LHS's don't carry.

rob

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I have a nearly two hour drive to get to my nearest LHS and the closest one after that will be an additional 2-3 hour drive but its worth the effort to support them. Here in Canada we can't send paint through the mail so having a thriving hobby shop with it's paint racks is a necessity. About twice a year a buddy and I will make a two day tour of all the hobby shops in the province (five shops for a population of a million people). It's a fun trip and between the two of us we always come back with a car full of goodies. The only ordering on line that I do is for things that the LHS's don't carry.

rob

While you aren't supposed to send paint (depends on what kind of paint actually) I do ship them within Canada, no trouble yet shipping Testors spray cans, or Tamiya Glue. To the US....just ship it via Surface and it is no problem.

My main brand of paint I sell in the shop is Vallejo, which is an acrylic, but not an isopropyl based acrylic and is perfectly safe for shipping any method world wide.

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