Another One Bites the Dust

Feb 26, 2013

Memphis area toy train seller leaves the station

 

After 15 years of operation in the Memphis area, Charlie Tigrett, the owner of Dream Machines Lionel Trains in Collierville, is calling it quits.

 

Tigrett cites competition from online retailers as well as deteriorating dealer support as the reasons for closing Dream Machines.

Agree Harvey,also the times are changing,Computer, social media, kids just don't care for hobbies like we did.Its cheaper to buy a computer than starting a layout, and the time and space needed. Even a N-scale layout is pricey in this time in the economy.

Don't SUPPORT you local toy train dealer and they will be GONE.

It's a shame too because I just don't get the same satisfaction buying online as I did wandering around the train shop for hours dreaming of all the things I wanted. You could see them, touch them and know what you bought. BoxKar Hobbies in Cedar Rapids Iowa started out in this huge store and over the years they have moved to smaller and smaller stores. Still fun to go there but the selection is less now, and they are the only game left in town - used to be several stores.

Dan

That is a self-fulfilling prophecy if that shop did not have an online presence.  You have to adapt... if that is the excuse, it's nobody's fault but their own. 

 

The online retailers I deal with are someones LHS, maybe not mine.  A lot of you all purchase online from one of my LHS's - Lantz's.

With disposable income being tight, its difficult for many to support the LHS when their prices are much higher than the train show and online vendors.This could be the reason that local hobby shops are falling by the wayside quickly. The combination of the Obama depression, a changing demographic, their seasonal nature and the competition from virtual stores are working against this type of retailer. The hope for LHS survival (as I see it) is for the LHS's to focus on the higher profit items like scenic supplies, track and to stock multiple gauge stuff. 

You really have to be able to adapt in any business to survive. Always was that way and always will be. Today you just have to adapt quicker and smarter. It used to be you could get 10-20 years out of a business without changing. Now you have to reinvent every few years.

 

I've had many businesses, all in the food industry, and there have been huge changes since I started my first one fresh out of college in 1977. I have been lucky enough to sell a few when I saw the trends changing. I will say this is the most brutal period I have ever faced.

Hate to see any business closing especially train shops but what did this shop do to get their name out there? 

 

Dream machines, never heard of them, never saw a advertisement, never popped up when searching online for shops.

 

The number one reason to not succeed is as Jeff stated, you have to change with the times. 

 

Sorry to see him close but I would look in the mirror before blaming others on his demise.

Many folks here continue to rather dramatically underestimate the impact that the continuing loss of brick-and-mortar stores is having and will have on this hobby.  We have already seen significant changes in the past half-dozen years and you WILL see even more profound impacts in the not-to-distant future.

 

The "I can get all I want or need on the Internet" crowd will be seeing--relatively soon, I suspect--how it all works out for them.

 

Is the sky falling?  No, not by a long shot.  But the choices that you enjoyed in this hobby in the past are being impacted in profound and lasting ways.  We made our bed; now we have to sleep in it.

 

The other statement in the article that no one has touched upon is the "deteriorating dealer support".  This has become a huge problem in this industry.  The sales departments and service departments at all of the vendors is poor at best.  The dealer gets zero breaks from the vendors concerning shipping expenses, low margins, return phone calls that make take a week to get returned, warranty issues to name a few.

 

I got a kick out of one BIG O gauge companies "how to make a successful train store"  publication a few years ago, stating the a successful B&M store should have a gross margin >40%. Funny that all of their product had a less than 40% margin at MSRP.

 

Now for the flaming to begin!

I would say that some hobby stores have to make their own beds too, Allan.  Change is part of nature, and more often than not is imminent.  As a hobby store you either adapt to change in order to increase your chances of remaining viable and relevant, or remain in a paradigm paralysis and make yourself vulnerable to greater risk of failure.

 

If a hobby store decides not to compete with online stores by maintaining a web presence where one can look & buy online and price competitively in addition to having a brick and mortar presence then they are the ones that are hurting themselves in the long run.

 

Does the above guarantee that a store won't fail?  Of course not, but it can certainly improve their chances.

I truly hate to see it happening but it will continue.

 

With exception of some direct purchases in MTH"s early days and two engines I bought at shows years ago and one from 3rd Rail recently, all of my Locomotives came from Local O-gauge Shops in Greensboro, Winston-Salem and Spencer.

I realize I probably paid 10% more than online in most cases but I at the same time I paid for a connection----a relationship, one that had a value for me and still does.

But times have changed and we will surely miss them!

I think Alan is spot on.  Sure folks ask about a web presence but take a look at who frequents train shows and what is left of hobby shop customers.  We are aging and the hobby will need to introduce itself to a new crowd.  That is not as easily accomplished on a tablet or PC.  The brick and mortar shops offer experience, the chance to see and touch something AND see it work.  A computer simply cannot replicate that experience.   It would be like turning the controls of an aircraft over to someone who has only "flown" MS flight simulator.  Do the shops need a web presence, absolutely, but the face to face interaction is what sells the hobby.

People tend to romanticize the local hobby shop and I understand that there is value to a physical store with people with whom you can speak.  At the same time, however, many of the "LHSs" with whom I have dealt over the years offer little in the way of service and prices that are, simply put, not competitive.  This is particularly the case in the DC metro area, particularly those areas close to the District.  On the other hand, the "LHSs" that have a web presence, offer actual value and good customer support (Trainland / Trainworld, Nicholas Smith, MB Klein, Pat's, Train Station, etc.) all seem to have managed to survive and I would daresay thrive.  (I say this as someone who at one time or another has lived or lives in areas within the service area of these stores.)  And the O gauge hobby offers the average hobbyist greater choice and higher quality at any time in my adult lifetime.  Stated differently, an argument could be made that for the O gauge enthusiast, now is a better time than, for example, 1950 in terms of the offerings, quality, and pricing. 

 

So while I will never be happy that someone's business has closed, from the macro perspective I think it's hard to argue against the proposition that the O gauge market has managed to offer us an impressive array of products, service, and venues from which to purchase them.  What we are seeing, in fact, is that, because of technology, geographic distance no longer can mask the shortcomings of a business.  It may not be a good thing for those local LHSs, but I do not see an overall downside for the hobby.  Quite the contrary in fact -- those people who offer great service (Jeff @ Train Tender, for example) now have a world of customers open to them that were previously limited.  The folks who don't know how to offer competitive service and pricing go out of business.   

You people make to much of the internet, I'll ask again if it's only about a web presence why wouldn't a sharp business person see this  buy the store a get a good web site and turn it into a nice business, they never sell they just close! . My point is this, LOW PROFIT MARGINS and lack of dealer support. They are trying now but my feeling is  "to little to late" if you ask me..

Have you ever read where a store owner blamed himself or herself? It's always someone else's fault.

 

Why are you saying that as consumers we should be more supportive? Any seller has to provide the right combination of price and value to stay in business. Some consumers just want price. Others want a higher level of service and are willing to pay a bit more for it. The dealers who fail are those who either cannot keep up with the times (which are always changing) or fail to ever really develop the right market niche.

 

We are the people who spend money to buy something. We would be really stupid if we didn't try to maximize what we get for it.

 

Gerry

To the best of my knowledge, all the "internet dealers" I deal with are in fact Brick and Mortar stores too. They sell in their store, they sell on the internet, and they sell at train shows. That's why they are successful.

 

Ken

Do whatever floats your boat, folks.  We'll all see how it works out in the long run, and at the rate things are going it probably won't be all that long a run.  Nothing to be gained in rehashing what has been discussed here time and again over the past few years because minds are apparently not being changed.

If you read the comic strip "Retail", from time to time the cartoonist has touched upon the online vs Grumbles brick and mortar department store shopping operations.  For instance the district manager is oft heard to say "Internet shopping just a fad, people will flock back"

 

I regularly try to visit Caboose Stop Hobbies in Cedar Falls and buy SOMETHING, a car, building. 

I know that Henning's Trains established their Internet store and it made a huge difference in the revenues.  They still have a brick and mortar store, I stop in frequently.

I'm guessing that when retailers started offering catalog sales, Montgomery Wards, Sears, etc. it killed off some competitors who only relied on folks coming into their stores to make sale and no mail order. When radio stated offering advertising there probably were a few who didn't take advantage of it because they felt word of mouth would carry the day and they died on the vine. Along came television and you could reach an entire country at one time and those who used it were rewarded for their efforts. Now we have the internet with all it's good points and bad but to stay competitive a retailer has to use it and use it properly. Simply having a website and no sales capabilities or outdated stock availability or not answering email inquiries does more harm than good. If you have a well run, well stocked, competitively priced B+M operation a good web presence will only help your bottom line. 

I personally like to wander a hobby shop or hardware store or to go to a car dealership to look for a new car but there are those out there that for whatever reason only buy/look online. If your item comes in perfect great, but I prefer to make sure it's OK before I buy it and take it home, less hassle to resolve the issue. I do buy things online, but it's usually something I can't get locally or something unique that can only be had either a half a world away or online so I have to buy it that way. 

The internet is just another tool that retailers need to use to stay competitive, it's not the be all and end all of sales tools. We've all heard the horror stories of various online only operations that jerk the customer around with shipping charges, no receipts, long delays, no returns without a hefty restocking fee, horrible customer service, etc., the only reason they stay afloat right now is they have a large resevoir of untapped clients online who don't know about them and their problems yet. After awhile they will be weeded out but not until the "It's (insert current year), get with the program. " group gets sufficently screwed over to start avoiding them. Most of us in this hobby are pretty well versed in whats a good deal or a bad deal and we know who to avoid unless we absolutely have to but there's many out there who are just getting into the hobby who don't know any better but they have ready access to the internet and they are the ones getting burned. Just look at all the posts around Christmas from newbies complaining about trains they bought from so and so online that didn't work the way they should. These folks would be better served by a visit to an LHS instead of buying online but they didn't for what ever reason and now their unhappy with the whole experience and probably not too impressed with the trains either.

 

Jerry

Some 25 years ago or so, I was into HO and one of two places I bought my stuff was The Model Railroad Shop in Piscataway NJ .... http://themodelrailroadshop.com/history.htm .  A truely great shop. Jam packed with absolutely every modeling item you would need .... parts, scenery, rolling stock and engines, kits, books, test track, etc ...  And, owned by the nicest people.

 

But, apparently even back then, some people would take advantage of the shop's huge inventory of the little stuff, but turn to mail order when it came to buying that more expensive engine.

 

Taped on the wall was a small piece from a Model Railroader magazine article stating this phenomenon ..... and predicting that, if it continued, it would prove to be the demise of our local train shops in the future.

 

Here we are.

 

 

 

(The Model Railroad Shop is still in business, but not online. The other shop I used, Tom's Trains in Scotch Plains, isn't.

 

Though I live in nw NJ, I consider Nicholas Smith Trains near Philadelphia my LHS. They are brick&mortor, online, and really nice people ... all criteria I take advantage of.)

Ah, yes!  And this is a hobby made up of a whole lot of "little stuff."  Imagine what folks will be paying in the future when they need the myriad of small supplies that are necessary for building a model railroad.  Take the cost of the "little stuff" and then add on the ever-increasing shipping costs, and you can see why a good many will just forsake this hobby at an early stage.

 

Are most of these things available on line?  Sure they are, IF you know where to look and IF you know precisely what you are looking for.  But a good number of these products are best selected when you can actually see, up close and personal, what you're getting.  A Google search won't give you that.

 

As far as the "things" of the hobby are concerned, I'm pretty well set for whatever the future might bring.  I trust that the majority of you folks are also shooting for that goal.  I want the dealers I deal with--all of whom have a brick-and-mortar store presence--to be in business for many years to come, and I will support them as best I can for as long as I can.  I know how vital they are to the future of this hobby, and I'm confident that those who disagree will eventually learn that the Internet, for all it's greatness, is not the be-all and end-all for keeping this hobby going and growing.  

Hmmm...I'm not sure I agree with that statement. Here's a great example of the power of the internet:

 

 

Rich, I think  this is apples to oranges,  I think you guys miss my point, I agree you should have a internet presence and I have no problem at all with internet dealers at all. My point is the low profit margins in the toy train industry have more to do with train stores failing than lack of a good web site.

Thanks for mentioning The Model Railroad Shop. I love that place. I've been going there for over thirty years. If there's something I want and they have it, I make every attempt to get it there. I dread the thought of that store being gone.

 

Bob

This hobby would be far less enjoyable for me if my LHS closed.  So I do all I can to give the vast majority of my business to my LHS, and recommend them to anyone when I can.  I by all my "small stuff" there and they convenience is significant compared to ordering something on line and having to wait several days for it to arrive so I can finish a project.  

 

But I also put my pre-orders and most of my purchases for locos through my LHS, paying close to full list price - paying pretty close to list price, which I figure is, itself, the "price" of having them there for me.  

 

The only thing I don't like is it seems to take forever to get my pre-orders.  It should not bother me: I wait months for Lionel to ship it and then another month for it to get to my LHS as compared to the big Internet retailers who ship it a day or two later.  For example I am still waiting on my Legacy N&W J and GS-2, which hopefully will arrive later this week.

According to the Small Business Administration 41.1% of all retail businesses in the US fail each year! That included both on-line only and traditional store front classifications. Small businesses just fail, it happens every day in every state and I would venture in nearly every county. Why lament just one type the LHS?

 

To all who proclaim to buy from only their LHS in order to maintain the intrinsic value do you buy your milk from a milk man, meat from a local butcher, shirts from a local tailor, shoes from a local cobbler? I bet no is the answer to all of the above, why not, because they were not worthy of your support as much as LHS?

 

To Allan's comment  "The "I can get all I want on the Internet" crowd" you have clearly not spent enough time searching the internet -- you in fact can buy all of anything you might ever want on the internet. Take a good look, there is anything you've ever imagined for sale there by someone, someplace, and a lot of things which you've never imagined and would hope would never be for sale (there are some dark places in the back alleys of the internet, where train men need not go.)

 

To those that talk about overhead being the difference between a web only and LHS, take a good hard look at where these places are located -- it is not next to an Apple Store or Starbucks or in upscale malls or shopping districts -- never. They are in small towns with antique stores or in class C type strip malls or in back of nowhere and down two flights of stairs. There is no lower overhead available, anywhere, warehouse and office parks are higher per square foot space. On-line retailers and business in general have costs just like the LHS, lights, water, rents, there is no such thing as business inside the magic box that sells trains, or anything else. It is just that on-line retailers use different sale channels to reach their customers, rather than a sign and the yellow pages it is Google ad word and Facebook and Youtube.

 

Off the soap box, enjoy your trains, no matter where you bought them. There are Chinese villages just happy you’ve bought them.

 

Support your local Hobby Shop!

 

 

Retailers join NAtional Retail Hobby Stores Assoc. and be a "voice" and not a "watcher"!

Find out at www.nrhsa.org

You are definitely a most modern man Cincinnati Western.

Dewey Trogdon,

 

I will take that as compliment -

 

Oddly everyone of my friends, all 30 and 40 somethings, call me the "Old Man" and ask how life was like in the 1950's, I'm 38 -- because of my interest in toy trains and involvement with Scouting.

Well we have something in common, you're 38 I'm 81. And, I was presented the "Good Scout Award" for New York City during the 1980s. [not for merit badges--just for raising money].

Now back to LHSs!

Dewey Trogdon --

 

Too funny

 

I'm active with the endowment and fundraising sides of Scouting for our local Council (South Florida) and with the national organization.

 

Thank you for your support of Scouting!

I see to many LHSs take too much stock from a manufacturer. Imagine all the dollars tied in inventory. That is the power of the Internet. The added reach let's you know what sells. And what sells quickly. Just like Large retailers learned long ago, the last thing you want is stock.

Actually, I do . . . for the most part, at least whenever they can contribute as much to my enjoyment of the experience as my LHS can. If they can't, they wither as far as I am concerned.  But that means its wine from a local wine shop. Meat from a butcher two doors down.  Fish from the local Chinese market (next door to the LHS)  Cheese - and yes milk - from a tiny local shop.  And curry -  I must have my Tandoori Chicken and Lamb Vindaloo at least twice a week, from a local Indian place run by people who are now very good and valued friends after going on 25 years.  And since last year, veggies from the local co-op about 30 weeks a year.  Not sure how much it helps the economy, but it can't hurt, and doing so really makes life richer and comfortable.  Still, my LHS remains my favorite. 

Schneider,

I always wanted more stock. I always felt I couldn't sell it if I didn't have it.

Lee Willis,

 

Good for you walking the talk!

 

Sounds likes like a wonderful place to live with services that were once common but mostly gone, except for the new very trendy moves towards a lifestyle just as you've described -- mostly by 20 something hipsters, except with ipads not trains.

I live in a bedroom community of Raleigh that many people criticize as strange and stuck up (there is actually a city committe that has to approve the appearance of each new building - its colors, look, etc.,) but alot of this is that the city tries to control the city "flavor" and thus encourages small retailers and non-mall shopping centers --- I love the result.  Yes, we have a few mega-markets including a big Walmart and Target within two miles of us, but there are independent butcher's shops, wine stores, book stores, laundry cleaners, hardware stores - all independent and most Mom and Pop like my LHS, and such nestled in among our community, including a Pharmacy/Drug store that is original (from the 50s) still in business, where we do our presciptions. 

 

It does take noticeably longer -- more stops to do the shopping each week, to buy this way, but it's enjoyable time spent and I both feel more connected to the community and more a part of it.  I've made some good friends.  I imagine a lot of thatfeeling  is what people really miss about the '50s: you can shop at the Super Target and get all you need in one stop, but its anonymous in a way.

 

Still, for all of those stores, I like hanging out most at my LHS - I count several people there as good friends.

I think Lee hit on the comfort level a lot of us have with mom and pop sole proprietors versus the monolithic franchises. When I went for a visit to rural Ireland it was as if I had journeyed fifty years back to the communities of my youth. Rather than a kid clerk who occupies a temporary, part time position just passing through, I prefer to be greeted by name, and there is no substitution for folks who actually have some knowledge of what they sell. 

It seems to be a common thread that we accept and even promote this sort of faceless thing with our wallets and then bemoan the fact that we have traded convenience for community. The same applies to electronics, everybody wants the latest and greatest until there's no one local who can fix the darned things because we bought it via the internet. Wheres the convenience then? It seems simple enough. We can't have it both ways and yet that's exactly what we want. The same corporatism that knocked off Main Street and the sole proprietors who were our neighbors took away the human scale of being what Lee said, of being social by nature. The sad part is there is no going back, no re-dos or reinvention of the wheel. It's what my mother used to say, you get what you pay for and all the cheap deals in the world won't sustain the local hobby community by way of the internet. We all say one thing and turn around and do the other without a second thought and in this I am as guilty as the next person.