Failure to Adapt

Looks like it was well stocked hobby shop. Obviously, inventory is not the be all end all to success. Their eventual closure could have been easily predicted. Notice nowhere on their web site is an online catalog, means of e-commerce, or even a simple electronic order form? Three store pictures of train supplies does not an inviting presence make. Even their social media links are hidden in text when we live in a recognizable icon world. I feel for the owners and local patrons that are affected but the handwriting on the wall should have been clear 10 years ago.

How BnM business owners turn a blind eye to the success of Amazon and eBay is bewildering to me. 

to add to it

Another shop closes

It would have been a lot nicer to say " sorry to see you go" instead of telling them what you think they did wrong

You know, its not just the store closing that hurts. What about the guys without a job now? What about the customer forced to drive further because he wants to see it before he buys it?  What about the grandparent who can't take a grandchild there just because? How about the shops in the area that lose business from the hobby shop closing.

Meant as a bellweather to others

It's called root cause analysis. Sorry to see you go is a polite way of saying I have nothing to offer to others in similar situations but my condolences which, while a nice sentiment, is of no value to a business.

I hate to see it

There is the crowd that attacks us with. "Why dont you support your local Hobby Shop"?

Well I would if I had one.

shops closing

i like to see and be able to pick up items i want to buy, seeing them on the  web is one thing, but seeing them in person is another. i'm 42yrs old i'm young enough that i have been around computers my whole life. i have 3 hobby stores around in the cincinnati ohio area, i also like if i have a  problem with a engine,boxcar,decoder or whatever i can go back and get help with it. i sometimes buy items on the web also but they are usually used items on ebay that i can't get at one of the shops and when division 7 nmra has swap meets.  

                                                                                                             bill

@ Engine 4

You're kidding me right? Other than the owner, how many guys do you know of support family's,homes, and cars on a job working in a hobby shop at 8 bucks an hour.  Most hobby store's that I've shopped at either had family only running the place or maybe a part time retired executive with more money in the bank than God. And yes I speak from experience.

I believe there are several reasons for these stores closing most of which have to do with no interest in model railroading from our current youth, and the fact that some of the store owners still think they can charge full MSRP and compete with online sales which are discounted at least 20%.

Just my opinion......

the future is online

I love the LHS and try to support them.

When I lived in Cumming, GA Trainmaster Models  [http://www.trainmastermodels.com/Default.asp] was about 25 minutes away from me and I always tried to support them.  The owners were wonderful as were the employees and I got expert advise as well as good pricing (aways at least 15% off list).  They also always honored Walters sale prices.  And they were right across (50 ft) from the NS mainline!  There was usually a few of my model friends there so we could chat and run to the windows when the 1 to 1 scale went by.  They were intelligent enough to see the future and maintain a good web presence in addition to a fully stocked store. Oh, and they also have three operating layouts with one you can work on every Wednesday night and get hands on experience along with fellowship.

Now that I'm in the Orlando, Florida the one shop we had, Colonial Photo & Hobby lost it's "train friendly" employee.  As a result the train portion has gone down hill VERY quickly.  They stopped giving our local club a discount and as things run out of stock they haven't been replacing them.  They couldn't care less about model trains and have nobody there that even knows anything about model trains.  I don't waste my time going their anymore and now buy most everything online or at train shows.

More of the story

Death of Another LHS

The reason I don't support my LHS is simple, I don't have one.  I model in N-scale and the closest model train shop that has anything in N-scale is nearly a 1 1/2 hour drive from my house.  At $3.50/gal for gas, I should make this trip for the privilege of paying full list price for an item with state sales tax of 6-7% added on and possibly have to wait while they order the item from Walthers, etc.?

99% of what I buy now comes from M.B.Klein in Cockysville, MD.  They have competitive pricing, at least 20% off, they ship quickly, I've ordered items in the AM and have received them via UPS the next afternoon on my doorstep,  I pay no sales tax because I'm in an adjacent state.  They have a real-time inventory system which tells you exactly what they have in stock.  They also have a mechanism whereby they'll E-mail you when an out-of-stock becomes available. If you really need to see an item before you buy, you can visit their bricks and mortar store in Cockysville.  They are now in their 101st. year of business so they must be doing something right. 

The bottom line on LHS's going out of business is simply they're not competitive.  In the current environment, any business that does not have an on-line presence is doomed to fail.

Bob

We had a retailer close in

We had a retailer close in the Greater Vancouver area; he said some one would come in and look at his engines and rolling stock, structures and scenery, then order off the internet.  That same guy might purchase a jar or two of paint.  He felt he was supporting the guys who were buying off the internet.

He now sells internet only.

I agree with Frank.  A single

I agree with Frank.  A single person might be able to survive working in a really well-patronized model shop in a large city, but a Mom 'n Pop is not going to keep another family afloat...not by a long shot.  Even so, in order for both the mom and pop AND their single pimple-faced 20-something who just left home to live on the economy, they'd have to compete with etailers and larger distributors who can undercut them. 

I am on a fixed income, and I really want to stay in the hobby.  So, I have to be careful choosing how to spend my odd hobby dollar.  I could drive 40 km to my Mom 'n Pop (yes, it's there, and that far away...), and back again, and pay their inflated MRSP item shipped from the USA to Canada, or I could pay the shipping and get it much cheaper from the USA.  In fact, even if I have to pay GST for import to Canada, plus shipping, and the lower cost of the item, it still comes out much less than my real costs for driving and acquiring, with taxes, the same item from my Mom 'n Pop.  Remember, driving an automobile is not just paying for gas.  Tires, belts, the odd light lens, lubes, batteries, and so on...filters...oh, and insurance each year....plus the cost of depreciation...oh, and eventually replacing said automobile (that has to be kept in mind every seven to ten years)....  You can't drive a Corolla for less than 30 cents a mile.  In rational and real terms, driving to the store would set me back nearly $15.   What's my time worth?  I would rather do something else than spend the better part of two hours in my car and in the store, to be honest.   Never mind that the store has only some paints and scale lumber that I use for painting rails or building a trestle.  They have no models I want, and even if I did, they're too darned costly!!!

-Crandell

It's happening to all brick and mortar retailers

This is a problem that's affecting all brick and mortar retailers see:

blog.ontechies.com/2012/01/31/brick-and-mortar-vs-online-retailers-a-decade-later

Do names like Blockbuster, Circuit City, Borders, or Kodak ring a bell? All casualties of the changing times.

So it's not just hobby shops going under, it's many brick and mortar retailers - and if you look at the above list, some like Kodak (not a retailer per se, but still a household name for a century) have been in business for a long time, and they're now going under.

In short, it's more about failure to adapt to how people want to buy products than it is about things like the hobby dying. In fact, I have an in-depth study of the hobby's health that I've done where I've collected empirical data on the health of the model railroading hobby and it's been on the upswing for much of this last decade. 

The Hobby Manufacturers Association (HMA) recently published a poll they've done of hobby manufacturers and their poll found that of all the modeling type hobbies (model cars, model airplanes, model ships, dollhouses, model railroading) that one hobby is on the rise in terms of sales - model railroading.

If you know about Google Trends, you can also do research with it - it shows you what things people search for online, which gives some indication of what the general public's interest is in different topics.

In all cases, modern model train subjects that might interest families with kids (lego trains, thomas the tank, polar express) are all steeply up in the last several years. The National Train Show in Atlanta this last summer also set an all-time record for attendance.

So no, you can't take this and say the hobby's dying. Changing, yes, but it's far from dying.

What's Your Point?

You know, its not just the store closing that hurts. What about the guys without a job now? What about the customer forced to drive further because he wants to see it before he buys it? What about the grandparent who can't take a grandchild there just because? How about the shops in the area that lose business from the hobby shop closing.

Have you ever met anyone who was a full-time employee of a hobby shop (other than the owner) and who managed to support a wife and family on the proceeds?

As for the customer that "needs" to drive farther, it's kind of hard to have any sympathy since the nearest hobby shop to me is an hour's drive minimum. There was a hobby shop here 10 years ago, but they sold at MSRP and didn't have much in the way of  model railroad inventory. They didn't last long. In any case, the demise of that shop had a lot lower economic impact than when the Circuit City a few stores down closed and even that really can't compare to when Fort Ord closed. I seriously doubt that the Costco, Save-Mart, Target, Kohl's, etc., really suffered much when the hobby shop here gave up the ghost. I have no reason to believe other merchants will lose that much when Franciscan closes.

Do you have any idea where Franciscan Hobbies is in SF? It is not in the best of locations to begin with.  It's on a busy street with inadequate parking and it's nowhere near where people actually go to do non-hobby shopping.   http://tinyurl.com/m58hvzf   It's also an "all things to all people" hobby shop  rather than specializing in something like R/C or trains.  I'm surprised they lasted as long as they have. 

Mike

minimum wage

The fast food industry is protesting to raise the minimum wage to 15.00 an hour.

What happens to the LHS then?

The future is online.

There is no arguing about that. But don't blame the victims here. The local bookstores, music stores and hobby shops that have closed were not run by bad businessmen who were ignorant of the internet, they simply were not in a position to entirely transform their business.

Don't get the idea the internet is paved with gold. The startup cost is enormous. You have to lease a warehouse and keep enough stock to meet all orders in 24 hours and everything must be bought in quantities that earn distributer's discounts. You need staff for web design, server maintenance, inventory, picking and packing, telephone support and accounting. (In California, you have to compute sales tax based on about 200 different tax jurisdictions, and that will soon be required nationally). Online card service charges are much higher than swipe charges, and you have to pay for quarterly security surveys. The survival rate for online enterprises is probably less than 5%. Of course brick and mortar stores fair no better, but you are telling folks they have to abandon a functioning if struggling business for something even more risky.

There are stores that have made the transition, but long term survival is a different story. Online business is brutal. You have to either have a unique product or dominate the market.

These folks deserve our sympathy and admiration for making it this far, not our derision. pqe

Well said

Well said. We're not dancing on anybody's grave here ...

If there is a way to evolve your business to keep up with the times, you need to consider it. The main point is you can't just keep doing business as you always have and make it these days. You need to adapt to the times.

This all said, not all businesses are relevant any more, either. It wasn't the blacksmith's fault they went under in the first part of the last century, it was the changing times. In some cases, that's the story here too - there may not be a good way to adapt: you simply need to cut your loses and get into a different business.

Some other possibilities

Interesting discussion so far. I beleive there are many factors behind the demise of certain products and retail outlets.

I can't quite put Kodak in this group that Joe mentioned. I don't know how many know this or have heard, but since I live near the Yellow Box I have some friends that are/have worked there. They have told me that Kodak back in the 70's had developed a digital camera. They decided not to market it because it was to "hi tech or modern" for people to except. Poor marketing decision on their part. Kind of like the Tucker automobile. It was to far advanced with disk brakes and seat belts. Word was the car must have been unsafe if seat belts were needed. So I'm saying that sometimes the owners/ceo's make poor decisions that have dire consequences down the road.

The other thing I see nobody has commented on. In that article are these three sentences.

I have to question the first two sentences. Why would a supplier do that or a better question do they do that and why. The last sentence I can see that right in my own family. My brother has a 10 year old boy who's only interest is in playing with his i-something or other and has absolutely no interest in kit's or mechanical stuff what so ever. I am also aware that it may not be what he is interested in, but it seems I see more kids/young adults that have there noses buried in there i-devices and could care less about using there 10 digits assembling a kit when they only need two to use there i-pad in a virtual reality world.

And here may be a partial answer. A friend sent this link to me. Quite interesting: http://www.ostpubs.com/copycats/

Food for thought and a good discussion.

Bernd

Blacksmiths didn't go under

They adapted to changing times and they are still around. Look at the equestrian market today. Much in need of blacksmiths or should they be called farriers? Friend of mine worked for for a company that modified pickup trucks for farriers. Very lucrative business.

Bernd

I don't buy the Xbox theory

While there is no question, many kids love their Xbox's and i-thingys, I don't believe for a second that kids have no interest in anything else.  My son got into R/C racing a couple years ago at camp, and every time we take the trucks out on the street, the neighbour kids are out there gathering around, wanting to drive them.  Going to the local train show, too, you see hundreds of kids clamoring to get a glimpse of the trains, especially the Lego ones.  

My son enjoys his video games as much as the next kid, but if I ask to play a board game or build a Lego kit or drive the R/C trucks, he will almost always say yes and drop the video games.  The issue is exposure to these other things.  Maybe not with every kid, but with a good many of them.  I think a lot of parents have to look at themselves here, too, and ask themselves if using the Xbox as a babysitter has contributed to the problem or not even attempting to get the kids doing something else is the underlying problem.  A lot of parents don't even let their kids outside without strict supervision, so the kids stay inside.

Broad Statement

Dave,

I made that as a broad statement to see the reaction. Good for discussion. I'm know there are other kids out there like yours. I've also seen many kids at shows that have a high interest in the hobby. But this spurs discussion on the whys and hows of what's going on today.

Bernd

blacksmiths and Ithingies

At least get into the game

Total business transformation not required. While I agree with you statements about all the infrastructure required if the goal is to become an Internet powerhouse, I posit they didn't need to be a dominant player. They just needed to be a player and clearly they weren't.

Even though we often associate online shopping with low cost, price alone is not always the determining factor. If it were, then the one company with the lowest price would eventually be the only company. Price is absolutely a major factor but there are others as well. This hobby shop didn't even put a dog in the online fight.

If this shop had sufficient staff to jabber with customers endlessly to make a sale, then surely they had enough staff to pack a box and send an email when an online order comes in. I don't buy it that a business needs to be transformed. Yes, they need a little bit of IT they might not already have, but other than that it is business as usual except they are making sales to virtual customers instead of physical ones.

I'm betting it was old fashioned stubbornness to change.