For those who run hobby shops...

I'm strongly considering opening a hobby shop of my own here in London ON... there's essentially only one LHS here, has sort of a monopoly on it as it were. I also think I have some rather creative ideas on making the shop significantly different from his, perhaps mixing in some other retail, like sports collectables, things like that. Focus more on automotive models, less on military models (or is that unwise?), maybe look for ways to keep the prices lower than his (as I've mentioned before, his Tamiya prices are RIDICULOUS.) I also have some backing so jumping into the small business deal isn't terribly risky.

I'm also thinking about weekly seminars and brainstorming sessions (techniques, tips etc) with other modellers, maybe a yearly modelling show. I'd also like to have a rather strong online presence, possibly an ebay store or a store through my own website. There's a couple of great Canadian modelling stores (modelexpress.net, etc) but they aren't located here in Ontario, so I think I could have a reasonably lucrative customer base in the province.

Anyway, this is a long way off, and I've arranged to participate in some personal small business seminars, so hopefully I'll be ok on the "get the business off the ground" side of things. Do you guys have any advice or ideas that might help me out? Much appreciated :icon16:

Will it be your primary source of income?
also use ebay for Tamiya models!

Well your in Canada, and if the prices are good I'll be a customer.

Hey John,
Which LHS you talking about? i go to about two in town. One being Amazing hobbies. Peter (the owner) focuses 90% of his business on RC cars and the rest of models/dicast/gundam/etc. And then theres Mccormicks hobby. Who is MUCH better for modelling, his prices are ok, i usually just go for paint. Now which one are you talking about? And if you opened a shop with decent prices, id definetly stop by.

Actually, you're right in wondering if military/aircraft modeling is more profitable than auto modeling, because it often is for a hobby shop.

Auto modelers are not the finicky bunch that military, aircraft, and railroad modelers are. An auto modeler will refuse to buy a $20 kit if he can buy a slightly less accurate version for $10. A military modeler will do the opposite.

It's often a larger investment in shelf stock to have a good military, aircraft, and especially railroad selection. But I know personally that a hobby shop will often stay open for weeks on one O gauge locomotive sale.

My local hobby shop, Parma Hobby (Bob, Sandy, love you guys and can't thank you enough for ten years running of service), will never drop its automotive selection, but their primary business is RC airplanes and model railroading. The unfortunate truth of the matter is that it takes 5-10 model car kits to equal the sale of one HO scale Athearn Genesis series 2-8-2 Pennsy light Mikado.

And that Pennsy Mike takes up a lot less shelf space than 5-10 model car kits, and it's actually easier to sell one item than it is to sell 5-10.

So, with most other forms of modeling, you have a higher price market that requires less shelf space (generally) AND as the market is generally a more mature one, it's more likely they have the disposable income to spend.

Parma Hobby just sold a $3,000 high range Italian kit of the HMS Victory in a very large scale. I don't think it's very likely there are many car modelers out there looking to drop $3,000 on a kit.

I have some advice.Dont open one.People are cheap bastards now,they will call and ask you questions or look at kits then go buy them where ever has them cheapest.

Actually, you're right in wondering if military/aircraft modeling is more profitable than auto modeling, because it often is for a hobby shop.

Auto modelers are not the finicky bunch that military, aircraft, and railroad modelers are. An auto modeler will refuse to buy a $20 kit if he can buy a slightly less accurate version for $10. A military modeler will do the opposite.

It's often a larger investment in shelf stock to have a good military, aircraft, and especially railroad selection. But I know personally that a hobby shop will often stay open for weeks on one O gauge locomotive sale.

My local hobby shop, Parma Hobby (Bob, Sandy, love you guys and can't thank you enough for ten years running of service), will never drop its automotive selection, but their primary business is RC airplanes and model railroading. The unfortunate truth of the matter is that it takes 5-10 model car kits to equal the sale of one HO scale Athearn Genesis series 2-8-2 Pennsy light Mikado.

And that Pennsy Mike takes up a lot less shelf space than 5-10 model car kits, and it's actually easier to sell one item than it is to sell 5-10.

So, with most other forms of modeling, you have a higher price market that requires less shelf space (generally) AND as the market is generally a more mature one, it's more likely they have the disposable income to spend.

Parma Hobby just sold a $3,000 high range Italian kit of the HMS Victory in a very large scale. I don't think it's very likely there are many car modelers out there looking to drop $3,000 on a kit.

Thanks, I'll keep that mind.

aN4rK1:

I'm referring to McCormicks. I'm a regular there as well, for my kits as well as all my supplies, since I only live a couple blocks away. Tim and I get along great. But some of the prices can be rather exorbitant. I'm hoping to focus more on online sales, maybe find SOME way to get Tamiya here cheaper, deal more with inexpensive old AMT/Revell kits, bargain stuff, that sort of thing.

As for Peter well, he kinda creeps my out. I avoid the place :screwy:

As it has been mentioned, military and train sales probably would account for a large portion of your sales volume and income. At the LHS near me, a third of the store is model trains, a third is R/C cars, a quarter is military, airplane, and ship models, and the little sliver that is left is plastic and diecast model cars. Even the paint section shows the same bias, having one rack of clearly automotive intended model paint, two racks of general purpose model paint, and then about 6 racks of military intended paint.

Remember a couple things that will make you more successful if you do open a shop:
A fundamental principle of economics and supply and demand is that people will demand what companies and business supply, not vice versa. If you stock something, someone will buy it.
If I were in your shoes, I would definately want to focus on model cars and such, because thats my passion. Remember we are in a selective group here where we don't nessecarily "include" other modelers, so we don't know how much more or less of a following they have. You will need to conform to the general public's desires if you open, so don't ignore or give military models the short end of the deal or you might struggle in the business. Even if there isn't a large following for model cars (or trains, R/C, or whatever) by you, go ahead and stock a wide selection if you have the capital to do it. Giving people choices will make them more likely to go to you because they will know they have the best chance at finding what they want from you.

Not sure if it was mentioned but, one of my biggest complaints of hobby shop in general were the hours they kept . . .

Most here in NH usually took Sunday's off (that's a given) and then several days during the week . . .

Realistically, you would think that one would stay open during the weekend and weekdays at altered or extended hours. Especially on Saturday and Sunday because this is when most do their building.

Can't tell you how many times I have run out of supplies be it paint, BMF, etc. only to have to put the kit away for another week because I ran out or needed extra supplies, prolonging the entire build to months sometimes.

It just doesn't seem that hobby shops (and other "weekend warrior" retailers such as automotive shops) have catered to their targeted clientele needs.

Ideally, later hours at night and full hours during the weekend would put you in your highest demand bracket. This would essentially cut the "build time" down and you would think, eventually sell more kits . . .

Also, a good presence on the web with access to current stock would boost your availability . . .

another Idea is if you have a large selection of RC cars. why not build a track on some open land. you can rent it out and make some money of that. of course being in Canada you can prohibably only run it 4-5 months out of the year.

also. don't forget about slot cars. there is a damand for them right now. and thats another hobby people don't mind spending $200-$300 bucks on

Very odd to see my hometown debated here!

Personally, I don't mind any of the shops here in London (Broughdale, McCormicks, Amazing and AFV, or even the new supplier I've just found whom doesn't have a shop!). I think I've found something at each of them at one time or another. Mind you AFV and Broughdale aren't worth a trip to them for me.

McCormicks I use for tools and more specialized supplies. Though I will go in and check for things he hasn't priced right (I picked up three Modeller's Ferraris for super cheap!!) but his tamiya kits are way over priced and not really even worth a look.

Amazing I use for paints and the odd kit. I like Peter. He has fair prices, he remembers my name, and he's good for a quick chat. That's why I'll go there first for whatever I need first.

Now, I'll also make a special trip to Hamilton Hobby Specialists (I think that's the name) if I'm in the area. That's my favorite shop and they're always good to me and have decent prices.

That all said, from a personal viewpoint, I don't know if London would support another hobby shop... not well anyways, perhaps as a hobby (pun really wasn't intended). Mind you, the turn out at the recent hobby show was excellent. I would love to see someone in London selling accessories (photoetch - for tamiya, etc., decals - non-nascar, reference books - racing, etc.) as well as well priced racing car kits - that includes 1/43rd scale and resin (nobody is doing this in london that I know of). If a significant trade online could be rounded up it might be feasable.

A few years ago I thought of setting something up out of the Gibraltar Trade Centre (cheap rent and easy access to a lot of people), that was mostly to get some cheap kits and make a bit of money (I think it'd mostly be a revell/amt crowd but there could be a lot of, "hey cool, I want one" buying until a reputation could be built up). But my dealing with canada's importer of tamiya turned me off that idea good and quick.

Anyways, I'd be more than happy to come and check out whatever you set up if you do! At this point I've got a large enough stockpile of kits that I usually only buy a kit if it's a pretty good deal (or I really have to have it eg. Lotus 78 in 1/12th!), so I'm not throwing a lot of money into the local modelling economy except for supplies. Monthly seminars would be alright... i've still never been out to an IPMS night but would check out something more related to auto modeling. the hobby show seems to be covered now by IPMS though, but working with them to add to it would be good.

But this is interesting and I hope the discussion continues.

Well now I have a better idea who was scooping up all them kits from that hobby/video shop on Richmond when it was going out of business!

Cheers,

Oliver

Thanks for all your replies guys.

Jeff: I think I see what you're saying, and I do really intend to focus on the Automotive, but ya I think I'll definitely save some space for military and sci-fi and all that. I'd just like the primary focus to be automotive. McCormick's has a pretty large selection, but it's still kinda dwarfed by his air force stuff. I will definitely keep that in mind.

Lambo: I couldn't agree with you more, and if I do this, it WILL be 7 days a week! I'd probably mess up the hours on Sunday tho, maybe open 10 am and close at 3 or something, I gotta have a life you know :D ... but ya, it is frustrating sometimes.

gasman: For one thing, I have no interest or experience at all in R/C cars, it'd be kinda hard to sell what I don't know. Your idea of a track certainly has merit, but as I understand it, London has a HUGE R/C community and lots of places to do that already. Amazing Hobbies and AFV both support the R/C hobby very well.

spaceversusmodels: Thanks for the comments. I'm not sure I agree with you on not needing a hobby shop though. Seriously, other than McCormick's, there are no hobby shops here that have a significant automotive presence.

Broughdale is all train stuff, there's one little shelf for car models, and the guys running the place know nothing about them.

AFV carries nothing whatsoever to do with models really, just R/C stuff (unless they've changed in the 6mo or so since I've been there.)

Amazing Hobbies, when you walk in, you get the impression that the place is highly specialized and very expensive (which it is.) He has a decent rack of Tamiya and Revell models, and then nothing else. The rest is all expensive collectable stuff and R/C cars.

I was impressed by the turnout at the Hobby show as well, and I got a ton of good deals from the dealers there! I'll definitely be entering a car next year.

I really think my shop would have a chance to take off because I'd be focusing more on keeping prices down, focusing on the automotive side of the hobby, workshops and seminars on techniques of model building, and as I said I'd mix in some collectable stuff to keep the customers coming in. And be open on the weekends :D

Keep the ideas coming guys, I'm eating this up!

Hi John,

Let me share some of my experience as a business focussed on model cars.

1. Tamiya: The high prices for Tamiya kits in Canada can be attributed to the distributors. They have the exclusive franchise on bringing them into Canada and take their middleman's cut so the wholesale prices are high and therefore the retail prices are high. For example, the Canadian wholesale price on the recent reissue of the 1/12 Porsche 935 was higher than the US retail price. This is probably because Tamiya is their own distributor in the US and have no middle men.

2. Having a retail hobby shop speciallizing in model cars: My advice is don't do it unless you have a location where you won't pay rent and can have very low overhead. As much as we all love model cars and choose them as our hobby, they are a small niche of the overall hobby industry. Look at any IPMS or other model show as an example. The number of model cars is much smaller than the military (AFV, aircraft etc.). So the market for model cars is much smaller than the market for military models and would most likely not be large enough to support a full blown retail operation. Additionally, die-casts are also eating into the build them yourself model car business. If you really have your heart set on it go web only as I did. I do often arrange local pick up for local customers or customers visiting the area without having to deal with the overhead of a retail store. This overhead can be alot more than you think. You will not be able to keep prices low and manage your overhead. You can have one but not the other. Even the expenses for a webstore add up with the cost of the webstore itself, business licenses, advertising, costs to have product shipped to you, customs brokerage fees, credit card fees, Paypal fees and the smaller wholesale discounsts being offered by many smaller manufacturers these days. You need to seriously consider all this before starting anything. Even with the lower overhead I have, Racing Miniatures does not make enough profit to support my family. It is my fun side business outside of my regular day job.

Kits versus aftermarket items: I am actually trying to move away from stocking to many kits for several reasons. First of all, with the higher wholesale prices here it is difficult to compete with some of the web prices, especially those in Asia. Secondly, with Canada Posts current pricing, it is getting expensive to ship larger packages, especially overseas. These higher shipping costs also make it harder to compete with suppliers in Asia etc. I find that 95% of my business comes from outside Canada and 75% to 80% of the business is aftermarket decals, detail parts and transkits rather than plastic kits. The smaller items are also cheaper to ship.

Anyhow, hope that helps a little :-)

Regards and Good Luck,

Ron
Racing Miniatures
www.racingminiatures.com

racingminiatures: thanks, I think I'm set on NOT going exclusively automotive after the advice given. I'd just like to focus on automotive. I don't see how I can do it without renting/leasing a place, but I intend to get a location way towards the end of Dundas, or towards the end of Oxford, or towards the very end of Wellington, somewhere far away from the downtown core where McCormick's is. I think the end of Dundas in particular would be an ideal place to service.

start on the web. get a good web base of customers. treat them right and they will return. I WILL NOT do business with best one hobby, It took me 4 weeks and 2 phone calls to get my money back from a back ordered item. This is a good community to build a base from, as it is international. treat us right and give us good prices and we are customers for life.

Thanks for all your replies guys.

AFV carries nothing whatsoever to do with models really, just R/C stuff (unless they've changed in the 6mo or so since I've been there.)



It's on the side, through a wall but the selection is rather insignificant but the prices were alright the last time I was in there (a good while ago).



Amazing Hobbies, when you walk in, you get the impression that the place is highly specialized and very expensive (which it is.) He has a decent rack of Tamiya and Revell models, and then nothing else. The rest is all expensive collectable stuff and R/C cars.

I was impressed by the turnout at the Hobby show as well, and I got a ton of good deals from the dealers there! I'll definitely be entering a car next year.

I really think my shop would have a chance to take off because I'd be focusing more on keeping prices down, focusing on the automotive side of the hobby, workshops and seminars on techniques of model building, and as I said I'd mix in some collectable stuff to keep the customers coming in. And be open on the weekends :D

Keep the ideas coming guys, I'm eating this up!

You'd enter a car next year? Did you see the Jaguar and the Scott Goodyear lola? Oh, I felt bad for everyone else who put anything on the table! But, yes there were some fine deals there and it would be fun just to have a car on the table.

I think if you could get folks out to the workshops and seminars it would definitely help build a community and loyalty to your shop. And don't get me wrong, I would love to see an automotive focus in a hobby shop in London! Especially if I can get a Tameo kit or two there (something lacking in SW Ontario in any shop really!)

As far as location if you are going to rent or lease... too bad Wortley Village is expensive... but just outside downtown at a plaza like the one on Springbank would be best :) lots of parking and close to my house! Downtown on the lower side would also be good, maybe on Wellington after York... But I do believe there are programs through the city right now for new businesses on the east side... just don't go too far East! really though, if you're beating him on price being within walking distance of mccormicks might not be so bad!

Cheers,

Oliver

Hmm that's an interesting point, if I can compete with him that well huh... oh well, I'll consider many locations of course.

I'm really hoping I can build around the workshops and seminars. Like I'd mentioned, my girlfriend is into scrapbooking, and there's a couple stores in town here that do the same thing, just an afternoon with all the local scrapbookers exchanging ideas and tips and techniques. Really seemed to take off.

Thanks, I'll keep that mind.

aN4rK1:

I'm referring to McCormicks. I'm a regular there as well, for my kits as well as all my supplies, since I only live a couple blocks away. Tim and I get along great. But some of the prices can be rather exorbitant. I'm hoping to focus more on online sales, maybe find SOME way to get Tamiya here cheaper, deal more with inexpensive old AMT/Revell kits, bargain stuff, that sort of thing.

As for Peter well, he kinda creeps my out. I avoid the place :screwy:
Ya you are right. Tim is great, I go in quite often and yes your right some of his prices are just plain RIDICULOUS!! And ya peter is really wierd. Everytime i go in there, he ALWAYS tries to push a sale on me. He was trying to sell me a $500 Rc car when i already have a better one. I htink he died a little everytime i come out of there with nothing in my hand LOL! Its the same for my friend, he bought the 1/12th enzo diecast there from tamiya. And everytime he goes in, Peter tries to sell hima 1/18th enzo which is made by liek some crappy company for $400. Wtf is that? My main beef with Peter tho is hes always about sales, ALWAYS making a sale as if he was on comission. A well thats my $.02 Anyway, back on topic, ya if u were to get cheaper tamiya, iam definetly in. ANYTHING cheaper would be great, and dont forget the three laws of business: Location, Location, Location!! Make sure u setup shop in a very good spot. Cant think of any off the top of my head but iam sure there are some out there. good luck!

Ya, I know, I think location will be key. I really think down near the end of Dundas would be ideal... but spacevsmodels makes up a good point, if I'm gonna compete that well with Tim, maybe I SHOULD stay downtown...

I would support it, I don't have any really good LHS around here. I would take the trip since I live near there.

damn, when i read London i was thinkin "woo..." then i realised you meant London, in Canada.

hope it all works out, here in the other london there's only really one model shop, well only one i've found. i gotta venture a long way out to go get sytrene an stuff.

Ya, I know, I think location will be key. I really think down near the end of Dundas would be ideal... but spacevsmodels makes up a good point, if I'm gonna compete that well with Tim, maybe I SHOULD stay downtown...

Part of the way I see it is like decent record stores in London (Grooves, Dr. Disc and Speed City - mind you I have no use for Dr. Disc anymore) if you're going to look for music you're going to hit all the shops within walking distance (or a short drive), especially if you're only casually looking. So I figure if someone is going down to McCormicks for something they'd think, hmmm, I heard there's another shop that opened up just a couple of blocks away, let's go check it out... As long as I didn't have a problem with a shop owner, even if one was my absolute favorite, I couldn't help checking out the other if they were close. It makes a trip more worthwhile.

Odds are if you open, you'll share business and kinda feed of each other's customers with you doing somethings better then them and vice versa.

Other than that you can try and find out where all the modelers live and plunk your self where most of them can have access to you.

Downtown also has the plus of more people walking around (looking in shop windows) down there now with the JLC and library... there'd be a lot of gearheads going to the JLC for hockey and the seniors rock tours... plus a lot of nerdy types hanging out at the library ; ) both good potential new modelers! If you're talking the end of dundas by the JLC that would be both close enough to McCormicks (2min drive) and a close to the JLC, Bell, the Market, etc.... not bad at all for potential traffic... if you're talking the other end... erm, that's tougher...

Cheers,

Oliver

You know that's a good point, I'd guess people walking around would be stronger potential customers too... thanks.

I don't know if this idea can be used or not, but a friend of mine who owns a hobby shop usually organize classes for anyone who wants to learn how to build models, be it automotive, aircraft, tanks or even Gundams.

He organize those classes every Saturday where he will open the shop until 10.00pm. The tutors will be he himself and his friends (including me :icon16: ) and each will have their own specialties (I myself is responsible for teaching automotive modelling). By doing this, indirectly it will increase sales a bit (paints, glues and tools usually). By the way, the class is free. He has three compressors and airbrush handpiece to be used for teaching.

I will have to agree with the majority of the replies here that automotive models will not be able to be sold as fast as others. That's why he mostly stocks aircraft, tanks and Gundams at his shop.

Just my two cents. :iceslolan

druid: thanks, but I specifically mentioned doing workshops and seminars :D ... but I appreciate the support for that idea. How's his business doing?

druid: thanks, but I specifically mentioned doing workshops and seminars :D ... but I appreciate the support for that idea. How's his business doing?

Seems that I missed the statement, sorry :icon16: .

Well, for your information, the business is doing well, eventhough the shop is just about 2 months old (previously the shop is at different location for nearly two years and need to move to a bigger lot), a lot of customers are coming in. Most of them knew the place through word of mouth, some just happen to pass through in front of the shop (it is located by one of the busiest highway in Malaysia... a banner with red lettering is hard to miss :lol:) but most of them are long time customers and persons who wants to learn at least how to assemble and paint a decent model (and also to have a go at using airbrushes :grinno:).

There are a few new modellers enroll in the modelling class an this indirectly helps the sale as well as helps increase the number of modellers here.

I once had an idea of hobby shop too. It didn't last long though.
But had this idea, that i would be doing my modelling in store. That way i coould be show my models to people and show them techniques using my projects.
Of course, building would happened when no custumers are in store.

Also people could be just there looking your project. Maybe they also buy something.

Hope you get my point.

actually sorta building on that idea... if you are able to have at least one other person in the store to run the register and keep an eye on shoplifters, maybe building while people are there would be a good idea. it would most likely draw the attention of people, including non-modelers if you were in a downtown location. obviously once you have people in your store, they are more likely to buy something. Also if modelers see you do some technique that works well that they haven't tried or seen before, they would almost definately go pick out the supplies for it right then. not to mention, you'll have some people saying, "oh wow, thats what mica red over gold looks like! i gotta try that on my next model!" and they'll probably pick up the paint right then...

Ya, I had considered that too. My only issue is that the painting really couldn't be done in-store (at least not in the main room) for health reasons, but ya, I like that idea too. I have a friend who's willing to partner the business later on, so that might work great.

Ya, I had considered that too. My only issue is that the painting really couldn't be done in-store (at least not in the main room) for health reasons, but ya, I like that idea too. I have a friend who's willing to partner the business later on, so that might work great.


whats the matter, you wouldn't want to invest in an elaborate spray booth with exhaust fans gonig to the outside of your shop? :biggrin:

You know I definitely would invest in that, but still, not in the main room :D