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Why is your store still in business while other hobby stores around you have failed?

We received a lot of thoughtful responses to our What's Selling question this month, and we wanted to share some that we couldn't fit into the November issue.

Published: September 15, 2010
Roy Ballard from Loose Caboose Hobbies, Napa, Calif., had this to say:

That is a sad question because so many hobby shops have closed. Either we’re doing something right or we’re too stupid to know what we’re doing wrong. We have tried to:

A. Cut off poor sellers and low-margin items. Sometimes it’s hard to do because you may have a relationship with the manufacturer. But if it doesn’t sell, don’t stock it even if you love it. Attention manufacturers, the local hobby shop cannot survive on margins of 10-33%.

B. Add new items. You might not think a hobby shop would carry LEGO or Magnum Rubber Band Guns, but they have done well for us.

C. Let employees go. Once one of our employees left us, we did not rehire. We all worked harder and longer to make up for it.

D. Cut out the dead wood. Move old product with sales or dump it on eBay.

E. Cut back on advertising. We should note, we cut back on advertising we were not getting a reasonable response from, such as out-of-town phone books and some small newspapers.

F. Change displays every now and then. Customers always ask, "What’s new?" A display of existing product is “new” and doesn’t cost us anything but time. Don’t be shy. Ask your suppliers for posters, samples and catalogs. Anything that will help sales. Give catalogs only to genuinely interested parties. Some people will take anything that is free because it is free.

G. Just like our customers, we’ve become picky shoppers. We buy from our distributors when they have closeouts, specials and sales. Unless it’s a hot seller, we are happy to stock older releases of locomotives, model kits or toys that we can get at a bargain price and pass that deal on to our customers.

H. Read trade publications and hobby magazines. Find out what’s happening in the hobby world outside your front door.

I. Keep smiling.

It is depressing that so many hobby shops have closed. Even though we may have more customers through attrition, more hobby shops mean that hobbies are popular. I sincerely wish they were still with us.

Don Dietz, from D&S Hobbies Florence, S.C., commented: 

I know why, but I’m not telling!

Shops that have been around for a lot of years or are located in big cities may be doing fine, but all small mom-and-pop retail shops are in a new time and age that will hurt most of them. With big chains like Wal-Mart and the "Wal-Mart of the Internet" and eBay, there are no longer any margins. Everything is based on the lowest price. With the Internet, customers can now shop around until they find the lowest price.

In the hobby business, margins are a joke on most items. Street price of a servo is $34.99. My cost is $29.99. This is from GP [Great Planes] for a Futaba servo. Who set the street price that low? Even GP sells on eBay under Omni Models. Also, it seems that almost anybody can get their hands on hobby items selling below street price.

Also, anybody can be a merchant now. People buy a Traxxas T-Maxx, disassemble it and sell the parts on eBay. In my opinion, if you invest a huge amount for inventory and sell on eBay, you may be able to make it in the business climate that exists now without having another business to support it.

Charles Downing, of King R/C in King, N.C., wrote:

Good question. I am not sure. We provide good service before and after sale. We have employees who are truthful and will guide newcomers and old timers to the correct product. We are willing to help all customers no matter where they bought. If they are in the store, we will help get them going.

Kimberly Miller-Gordon at Turn 4 Hobbies, West Boylston, Mass., said:

I believe we are still in business based on our customer service support and our willingness to match online competitor prices.

Rob Rosati, owner of Robbies Hobbies, Columbus, Ohio, wrote:

I sell a lot of second-hand items, and I run another business. 

Tom Palmer from South Side Trains Inc., Milwaukee, Wis., commented:

Great customers, cheap rent (for good reason, ask me about the 18 inches of water in the basement!), conservative purchasing, and most of all – good luck.

Rick Chin at Uncle Bill’s Hobby, Calgary, Alta., said:

My 40+ years of experience in the hobby in all plastic kits and passion for the hobby to new and old customers, as well as the “good customers never pay retail price” policy to loyal customers.

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