[Brian]

Background…. For over 20 years I have wanted to open and run my own model shop. Selling not only model railways, but related modelling items too - Small electrical parts, paints and accessories, plastic kits etc etc
In 2000 I seriously considered setting up a shop in my home town, but I could I take the risk of loosing many thousands of pounds should the venture fail.? No, so I needed help….
I went and sought guidance from a local 'Enterprise' group who were set up to help new up and coming businesses. I was advised to "Start small". They suggested I start by "offering mail order only". So with renewed vigour I approached the major manufactures. "No sorry, we can only supply to a business address such as a shop or business unit, not home addresses!" So what chance does one hold of ever being able to offer my fellow modellers a new shop dedicated to their needs - None!

My question is :- How do you really get a foothold on the retail model shop ladder? Are there any retailers out there who can give me any guidance or tips on where to start etc?

 

[Doug]

I looked into this too a few years back.

1st word of advice is that you have to be a businessman and not a hobbiest to succeed.

A knowledge and passion for the hobby helps, but it is more important to know how to balance the books, get good deals from suppliers and come up with interesting and perhaps innovative sales ideas.

If you're looking for a 'foothold', think seriously about buying out an old established shop that's owner is perhaps retiring or one that is just going bust (find out why first).

Perhaps buy a toy shop and convert to hobbies.

What you need is a good location, display space, storage space and security.

Just note this. Margins are coming down, rents are going up. Calculate how much you have to sell just to pay the rent. Figure out how many people will walk by and hopefully walk in.

Another option is to have a cheap, low rent shop and a large profitable mail order business run from the back office. That's what the owner of my local hobby shop is now doing after he had to close his last shop in town.

 

[Gary]

The key question is how much do you need to make out of the business?

Only then can you work out what you have to do.

Forget hobby. This is business. Bankers lending you money will not be interested in your hobby interests. In fact they will see it as a BIG negative as they will view it as a distraction. They WILL be interested in your customer service and marketing skills.

Thats the way it is. Don't mean to put you off but its not easy.

Happy modelling
Gary

 

[rb277170]

I have also always been tempted . I think these days you would need to offer e-commerce ie a web page with automatic ordering. People can see how many items are in stock etc. I've thought of a fast turnover, low margin type of business stocking only the major fast moving items in the ranges. Something with the sophistication of the web pages of easy jet but for models. Remember in this day and age most people are becoming accustomed to on line shopping from Tescos to Ebay.

Russell

 

[CeeDeeI]

I think that you must bring yourself to accept the fact that you are going to take a risk with capital, no matter how you eventually approach retail sales. If you feel that a risk, any risk, is unacceptable, then I would forget the whole thing.
I don't want to put a damper on the thing that you want to do, I would have loved it myself many years ago, but the risk factor is going to be there right from the word go.

 

[Makemineadouble]

QUOTE 1st word of advice is that you have to be a businessman and not a hobbiest to succeed.
Doug probably given you the best piece of advice. I'm retired I retired at 55 having worked for my employee's for the last 25 years. I worked every Christmas, Easter, and public holiday. I was robbed on many occassions, I lost most of my friends because I was so busy working. For a change and to experience freedom again I returned to the UK to live to retire. Then in my local village I saw an empty shop, nice location, free parking nearby, no competion for miles. I had this crazy thought why not open a hobby shop. This insanity didnt last long and I didnt need treatment.
Then I thought to myself why bother, tie yourself to a shop, tie your cash up in stock, Have to be nice to customers "nonsence". Rather have a good time and sod working
it's for the birds - there's far too much competion on the net these days. If you want to make a few bob try Ebay first.

Besides I've always thought it bad practice to have a hobby the same as your business

 

[60134]

I first worked in a model shop over 25 years ago. It was run by enthusiasts who really knew their stuff (between them they owned a De Glehn compound - 12" / 1' scale) and I learned a lot. However, a number of career moves later and I find myself back in the trade. Having spent time working in "serious" commercial environments I can see where retailers in the hobby come un-glued. Given that margins in the industry have been squeezed so hard, overheads will become the biggest governing factor in deciding the fate of many high street shops. Rent, rates (a real concern), wages and utilities will be the factors that are likely to determine who survives (given that most retailers pay the same wholesale price).

To survive and grow today, businesses must be lean, efficient and offer the best service possible. The days when a shop could carry every item in a supplier's catalogue will soon be over and "just in time " will become the order of the day, thus throwing stocking costs back on the manufacturer or importer. It is not going to be pretty and I can foresee casualties.

60134

 

[CeeDeeI]

I don't know if this is of any interest Brian but I came across this site tonight. Must be about as cheap and fairly risk free as you can get but whether you could make a living, that's another story. I have no idea how his prices compare with others but they look reasonable at a quick glance.
http://www.users.globalnet.co.uk/~jumbojet/page2.html

 

[Scooter]

I can give you some figures, but these are from a mate who owned a medium sized Model Shop until September 2005.

I can tell that the reason he closed down, was simply finances.

He rented a Unit in a small-sized City Centre Shopping Centre.

His rent for the Unit was £20000 per annum until last year, when the Shopping Centre owners decided to increase the rent to £25000. Add onto that the Business Rates from the Local Authority of £5000 per annum, then electricity costs etc. then you see you've to make £30k a year before you even earn a wage, let alone any profit.

So he packed in.

 

[drummond]

Well a lot of very good advice from all quarters. My experience was in photography back in the 80's. I had no shop front and decided that I would complete a course in general photography.It took a year and I was thouroughly fed up with it at the end. Although I had made lots as an amateur by word of mouth repeat business, when it came to full time it was sparse. I ventured down the path of commercial photography for large companies. Fine except they don't pay for months and I spent hours chasing money. Then I thought if I can buy consumables such as film at my prices I could supplement the bad times with film sales etc to garages paper shops etc. Fine but other clever reps for a plethora of items started to jump on that band wagon and that killed that off as I couldn't compete. Next plan! Advertise in the photo press. Too expensive. Then, bright idea, contact the editors about a special offer that I could give their readers. Yep front page splash for free. It generated about as much interest as a f**t in a space suit. I eventully gave up and retrained yet again. So my advice is don't. The big boys have it all sown up. If you do make sure that you pick a good location for your shop e.g near a railway frequented by railway enthusiasts. In my town we have 3 model shops and none of them are particlarly good but they survive. God knows how.