for a very long time Ive considered opening a hobby shop.. heck, what modeler hasnt? But, lately, Ive been giving it some real though, and before I jump into full swing, I was hoping I could get some advice from some who have made that venture. Anyone willing to share some start-up experiance? advice? brain picking if need be?

Who wouldn't love to own a hobby shop??
of course, it would be a big comittment of money and time
Evan

i would wait unitl the economy gets better because during this time god knows what might happen

Guys,look! you have to think positive,times like this we have to be patient and more aggresive in what we are doin most especially if your planning to have your own hobby shop
it would be better coz even though we are on crisis not only in U.S.but in the entire world even how hard and tough it was always say we will prevail! Here in my country Manila,Philippines i guess you all know we are relying from foreign investor from your people as well as your government support program besides that we are incouraging our own people to open and have business of their choice. I myself started doin little by little doin business selling model kits thru the internet like our armorama.com and thru my modelers club the IPMS-Phils.its just waiting for the right customer to knock in and buy all your kits. Try it,it could be fun and you could gain friends and customer from all over the world,Gudluck,and Good hunting guys? Mabuhay!,mar from Manila.

Tim, you should consider the costs, not just monetary but health-wise. My friend and ex-hobby shop owner, Earl King, who I've known for 30 years, Just closed American Hobbies after his thirty year anniversary. We had several heart to hearts before his decision, and what it came down to was the shop or him. He had a minor (is there such a thing?) heart attack brought on by the stress of the shop. The doctor told eliminate the stress or have another attack.
Earl had an E-bay store along with the main shop, this helped him keep afloat for a lot longer than he could have without it. The internet is great for everybody right now, but unless your prices are going to be really low, it will be difficult to compete.
The owner of the model railroad shop near me has told me, in two years he is closing his doors. He will be able to collect social security (like there will be anything left in that then!) and he ahs had enough of trying to kepp going against the internet.
I know personally, I shop around hard, and my money goes where the best price and selection goes. Some of these places are a joke when it comes to pricing. If you are seriously considering this, go after the items that the other guys don't handle and be prepared to make very little profit vs.overhead. There are tons of guys carrying injection kits, and the few who carry the resin kits are way overpriced. HLJ and LuckyModel are two examples of bang for your buck. When it comes to kits, I look there first. Even with the higher shipping I can save 20 to 30 percent vs. a stateside supplier.
Since American Hobbies closed, I've really relied on the net. I would give it up in a heartbeat to have Earl and his shop back, but not at the risk of not having him around to talk to.
FWIW, Ed

I worked as a sales manager for a distributor in Australia for a couple of years selling mainly RC stuff. I saw many people just like you who set up shop. It's difficult to make money and I would advise against it, but if you do, this is what I recommend. First, BUY YOUR PREMISES, rent kills just about everybody. This is expensive, if you can't do this simple step, don't open a hobby shop. Alternatively, just have a website and operate from home. Not paying rent is the key, because hobbies are cyclical and some weeks or even months will be dead, especially now with the economy the way it is. Your rosy picture of making a living will become bitterness and regret. Saw it happen too many times.

There was a guy in Texas, Keith Magee (I think is the name) who opened a hobby shop several years back. He used to frequent this site regularly. I can't remember if the shop is still open or not (since I don't live in Texas, I didn't follow too closely)
He posted a thread for input before he took the leap also. He would be able to tell you the ups and downs of your question first hand.
Keith or anyone who knows him or his story, please jump in!

Cheers,
Charles

Don't listen to the naysayers here. No offense, but two of the posters are only kids. The others sound a little paranoid to me.

If you have the desire and its a dream, and you have the capital, I say go for it. Do some market research first for the best locations, type of stock to carry, etc. Also, you might want to consider buying into a franchise like Hobbytown USA, they always seem to be doing good business. I think the key is to carry a wide selection of hobby items, not just models.

Good luck.

Tim,

EDIT!! Sorry, it was Scott Millican (viper29_ca) who opened his "shop" not that long ago....he's still floating about here too. I'd drop him a line as one who has gone through it recently. (sorry Scott....got my names bassackwards - - )

A brick and mortar shop will require a whole lot more capital than an internet store. Plus, with an internet store, there's no lease, no utilities, nothing like that. Heck, you could almost run an internet store out of storage unit!

You didn't really say in your post which way you'd like to go with it. BnM? Were something to go "south" with the shop, it's a lot harder to get out from under it whereas an IS would probably be less hassle.

I'm assuming you've already contacted some of the main distributors?

Couple of thoughts.

Mike

If you've got a decent population (customer base) around without too much competition I'd say try it out. I probably wouldn't open a shop in an area where you will have competition from another shop, you're already competing with online places.

A place you might contact for some advice is a store called Wings and Things in Lubbock, TX. They were actually expanding their store before I moved away several months ago.

It seems like a good thing to do is be diverse and have attractions for hanging out in the shop. Wings likely made most of their money in R/C planes and trucks. If you bought a plane from him, the owner would take you out and teach you to fly it. I'm likely moving back there later this year, and I'll buy a plane from him eventually, even if it's $100 or so more expensive than online prices because of the lessons.

He also had a bigscreen tv set up in the back of the shop hooked to a computer that ran an R/C flight sim. Almost everytime I went in there, guys were in the back of the shop hanging out.

I'm not sure on the next part, but if there isn't a comic book shop in your area, maybe have a section of books. When I was in junior high I lived near a shop that stocked comics (I've heard you can't send back unsold books though). I went there to by my comics and even bought a kit or two (I wasn't into models at the time).

Also, depending on the location, you could build an off road dirt track for R/C cars out back. Another attraction for customers and potential customers. Be mindful of the neighbors though, if you have several noisy engines running around several times a week, they might get aggravated. However, you could restrict it to electric racing only for noise. - somewhat cheap investment - barriers for the track and a shovel

Another idea is hosting club meetings at the shop or offering workshops on modeling. Stuff that you can offer in terms of service or personality will help you to compete. right now I'm in Springfield, Mo, there's one shop here that has a very limited selection of kits, but I order stuff through a guy that owns a model RR shop because he's a whole lot nicer than the guys at the other store (they've pretty much ignored me both times I went in, and were reluctant to help when I asked a question about ordering something).

I hope all of this helps some, just some stuff I see from a customer's point of view.
John

Just a word to the Wise Tim, if you turn your Hobby into a Job it is no longer your hobby. One of the reasons for a hobby is to get away from work! How many Professional Mechanics to you see tinkering with their cars on the weekend?? Second point is that Hobby Shops have the HIGHEST Failure rate of any business! With the economy going south a "Luxury" business has a very small chance of survival. But if you do go ahead and start one think hard about being Internet based as it will lower the cash hemorrhaging a brick and Mortar shop will incur. In either case I wish you luck.
HTH
Jeff Larkin

I have to disagree with the whole economy going south and hurting the model business. Although I am in Canada, and it is a bit different situation, business has been at its best these last couple of months. This month of January, being my best month on record to date. Not bad for being in a recession, and only a month after Xmas.

Ask any of the suppliers, and the hobby shops are buying more than ever before because their sales are booming right now.

Reason behind it?

Yes the recession is hurting everyone in the pocket book. But instead of spending as much money, out on the town, dinner, movie, clubs, trips south, etc, etc. People are choosing to stay home. And if you stay home.....you need something to do.....so sales of hobby related items across the board are up, not just in the model industry.

I am celebrating 2yrs in business next month. I do this full time, its not going to make me a millionaire any time soon mind you. For me, I am still having a blast at it.....and although I don't consider the shop a "hobby", I don't really consider it a job, like a regular 9-5 office job, like I said, I am still having fun, and I don't see it ending any time soon.

I pride myself on customer service, the better part of 20yrs in the grocery and retail trade will do that to me. It is definitely not a 9-5 job, if you have any pride in giving your customers the service they deserve. Starting in Jan at the first of the month, I have set regular hours for the shop, and finally able to put a sign up out front advertising the shop (couldn't before because it wasn't allowed where we lived)

I run my shop out of my home, therefore my overhead is pretty much Nil, other than my stock. As well, I supplement the shop, but selling on Ebay. Ebay is not my main income for the shop...but it does help.
I attend shows a couple of times a year, as well as attend club meetings in other cities close by, that have no local shop. Being as where I am in Eastern Canada, there is a lack of shops around...so business is good, and in Tim's case, it will depend on what other shops he has around him.

Jeff: My father is a Mechanic...and he worked on his own and other people's vehicles on the weekend on his time for many, many years.......alot of his friends in the same field, do the same thing.....so not sure where you are coming from with that comment.

Mike: Sean Dunnage? The same Sean from Toronto, Canada? Sean and I talk quite a bit...news to me that he opened a shop, online or otherwise. As far as I know, he is still doing the truck driving thing, and buying/trading kits with me. You sure you aren't actually thinking of me? We were all once (you, Sean, Tim, and myself) mixed up with Jon's (TankRat) shenanigans all at the same time at one point.

Tim: I sent you a PM with more info, feel free to PM or e-mail me back if you have any questions.

Well Tim, did I come off sounding paranoid to you? I was just trying to give you the lowdown on hobby shops in my area. Mike and Scott are right, internet is the way to do it, but carry stuff the other guys don't. If you were to get the right lines at the right prices, you could do okay.
I guess Gino's a psychic that he can tell someone is paranoid or just a "kid". Must be that second sense, or just ignorance. Besides, it's not his money backing you so if you go under he can just laugh.
Jeff has a point as well with the hobby becoming a job, Earl used to do all the hobby stuff, models, RC cars and planes, railroad, but the shop required more of his time each year.
I was in with Mike, Scott, and yourself on the Jon deals if you'll recall. I got burnt out doing his figures and called it quits, have you seen his prices? How can he even stay afloat? Retail prices are closer than his.
If you open a shop let me know, I'll check it out, but I think your own model wrk would be more lucrative than running a shop. Let's face it , you've got a hell of a build rep!

John, Drop me a PM or email. I live in Springfield too.

Tim,
Like Ed, I don't believe my bit of advice bordered on 'paranoid' either. Relatively sound advice as I read it over......ask questions of the person here onsite that has done exactly what you are planning so he can give you the ups and downs.
I'm sorry I don't have a direct contact for him.

Good luck on whatever you do,
Charles

WOW. I come home from work and find myself with some seriously great advice from everyone. Even the 'paranoid' ones are helpful. Ive been considering this for some time, and I do admit, the economy has made me a bit 'skeered' to make the plunge.

Ed/Jeff: thankyou both for your comments. both truly valid points. Which are both REALLY BIG ones, and have both helped sway me to consider this.. first..my health. Im a truck driver in Atlanta! High stress everyday to say the lease.. makes me smoke too much..and have you ever really seen many healthy truck drivers? Not to mention the low pay and unexpected days off due to weather, or lack of work. so, in between..guess what..I build models on commission. so, Im in a way already turned my hobby into a part time job. Actually it was full time for a couple of years. Which really wasnt bad. It paid the bills, we got by, not alot of extra money but we survived just fine. It wouldve been perfect had I also been selling kits (hobby shop) along with it.
So, really thats what it comes down to. Do I want to retire a dump truck driver? making ends meet with my commissions? Or own a hobby shop and still do my commissions while I run the shop?

Some of you have pointed out about running it online out of ther basement. I really think that is going to be my best start right now. At least for a little while until I get oriented and all my ducks in a row. But right now, I think is a great time for a retail store as well. There are really only two in the area, Hobbytown USA, (knocks that idea) and AAA Hobbies. Both great stores, however, Hobbytown sticks mainly with 'just kits' no aftermarket.. and even then , theyre often low or out of stock on ALOT. And AAA, theyre great guys, and stick with just plastic models, but mainly just for your aicraft builders, and not alot of armor and almost none on the aftermarket. Plus, theyre both near Atlanta, too much traffic and hassle to get to. Nearly an hour to one, and over an hour to the other from me. So, the compitition would be almost none.

I really appreciate everyones thoughts..and Scott you will have a PM shortly..I appreciate the help there.

Who are you calling kids??

You don't have to worry about the economy, Obama is in office now!!!

Tim,
Here is the info on Keith Mcgee. He last visited these forums about a month ago so if you email him at this posted email he should get it.

https://armorama.kitmaker.net/user.php?op=userinfo&uname=KFMagee

Good luck,
Charles
(I hope it wasn't me being referred to as 'a kid'! maybe mentally, but chronologically I'm 56!)

I don't think it is possible not to take offence when you are labelled a "kid" or "paranoid". It's a shame to see a veteran site user talking down to younger members who are, after all, the future of this hobby. Not taking them seriously in discussions is a good way to make younger users feel unwelcome at the Kitmaker Net.

Good luck with your idea Tim, but be careful. I may only be a kid, but I know that the scale plastic hobby industry is a hard one to get into these days. A shop near me recently liquidated their stock of hobby kits to make room for R/C.

Chas

Well said
Thanks

I guess the little winky guy and taped mouth things didn't convey that I was joking. Oh well. Guess I'll post a big "Just Joking" sign next time.

Lots of good advice, some not so good in my opinion.

My point is that it would be better to do some market research and talk to actual people in the business than worry about what we modelers might say in our uneducated opinions.

I agree with Scott about the economy too. Most of it is a bunch of media hype to scare people and get better ratings for themselves. Small business is what makes economies grow.

Like I said before, for what its worth, I think its a good idea.

Scott.....I updated my post....how I got you mixed is beyond me. Sorry.

Ultimately, there is some valid advice for you Tim.....take everything with a grain of salt and pulls the parts that will fit with you. Running a shop out of the house like Scott is doing would cut down on the overhead....a brick n mortar actual store would require a lot of capitol...

Make sure you keep us apprasied of what you're doing.

Mike

It sounds like you've got your mind set on it. My ex-boss started selling RC planes and accessories from his garage in 81 and apparently went extremely well. He was also a QANTAS flight engineer and never gave up his job until retirement. When he moved into a warehouse he told me he made more money from home. His job would at times subsidise his business. On a good week he would turnover $30,000 to $40,000, but he always worked at QANTAS. He had 5 fulltime and 3 part-time workers. Even though he was relatively successful, he struggled at times and we would get a lot of pressure to sell, sell, sell. I didn't like him a as a person, but I respected his business acumen. He always put his profits back into his business buying more stock and he negotiated very well always getting price breaks for quantities. Don't let distributors intimidate you. They always try to get you to buy things you may not need - telling you they are selling like hotcakes. If you have dead stock, each year it sits there it actually costs you more money. Also, I would treat each customer equally giving them a competitive deal. You get the oldtimers coming in spending three or four dollars and basically they wanted to talk to you because they had nothing to do. Other staff would brush them off, but I would always talk to them even though I had orders to fill, because once or twice a year they would spend up for christmas or their birthday. People like that can be valuable in difficult times. Don't take your customers for granted. Anyone in retail will tell you it's about establishing personal relationships; be their friend, listen to their personal problems and so on.

Well, I hope you do well and avoid the pitfalls. Maybe, we'll see one of your advertising banners on Armorama in the future.

Hi Tim.

Test the water first. Maybe look at spending a small (relatively) amount of money on some stock. Use distributors as a guidance on what has the best chance of selling. Buy yourself a few thousand dollars in kits or whatever and some tables. In Australia we call them markets basically small home based business can setup for a small fee and peddle their wares. Do this for a couple of months (3 to 6) and see what the interest you generate. If people are stopping and talking then it's a good sign the interest is there. If you put some of your (or borrow others) models in a safe display environment then you get even more interest. While the cost of a few thousand dollars seems a lot it's a better investment than opening up and finding out the hard way.

In my view you won't make money selling kits alone, nor PE, nor paints. Your service will make you money. People will buy because they like dealing with you, not because you're cheaper than the online retailers. I have some ideas for my hobby shop (I've always wanted to open one as well) and would be glad to share should you decide to go for it.

Good luck which ever way you choose to go.

Cheers
Shane