Money & Model Railroading

If l made any, on some, l blew it on others l wanted.  Can't say l did, and am sure good records, if existed, would say otherwise.  To save money, bail out of it, and take up collecting seashells or ?                                 With a minor caveat😁, (winning the lottery), and a walk through fantasyland, l would join Weaver and Williams in a three rail world like 1950's HO, with cottage industry production of small engines such as the geared loggers, ten wheelers, etc., conventional mode, but set up to easily install your desired electronics. I would want them engineered as robust as Williams, or old Marx , but as reasonably accurate as possible, leaning toward durability.  (now, back to reality)

Arnold,

I do some work with one of our forum sponsors who is a layout builder. Also, several of our forum members are YouTubers, including myself. Once you have so many subscriptions the web site pays you. I haven't gotten to that point yet and that's really not my goal right now.

Dave

One way to save a lot of money, and still be immersed in the hobby, is to have a major theme for your layout and try to perfect it over time.

Fir instance, I decided a year or two ago to focus on The Put, so I am particularly interested in NY Central and structures and scenery reminiscent of The Put, and no longer purchase the Santa Fe or other fallen flag trains outside of the Northeast. And, I never enjoyed the hobby more than I do now.

@Arnold D. Cribari posted:

I guess my ultimate fantasy is making money doing model railroading.

I have hardly made any money at model railroading, or any of my other hobbies, for that matter.

So, I would be interested to know who, on the Forum, makes money doing model railrading, and how?

I write articles, build for others (not much now...), and am an Editor of the model RR'ing magazine.  The line between hobby and work is one that many should not cross as turning a hobby into work can easily ruin your hobby.  Have I made money? Yes.  A profit? Hmmmm......

I do repairs for a long time friend who owns a general hobby shop here in town.  I work predominantly on pre and post war Lionel, but occasionally dabble in Flyer and MTH stuff.  I don't charge a lot of money since my primary goal is to keep the enjoyment of these toys going and I am retired so I have plenty of time to fill.  The work is very seasonal, mostly from October to January.  What money I make goes into my toy train fund.

Rolland

Arnold,

Many people here design or manufacture model railroad product.  Some also design for the train manufacturers.  After many years in, for example, engineering, it is good to continue the skill set to a hobby.

I joke regularly with one manufacturer as to when we are both going to buy Lincoln Navigators!

Regards,

Lou N

I have made money in the past to support my Hobby - so the net gain is pretty low. I used to(until pandemic set in) attend various auctions to purchase trains for resale. My goal is to make more money on the items I purchase in order to keep the items I desire. My mark up is determined by how much I need to make and keep a net zero expenditure. I have sold to date about $300K and have amassed over 100 locomotives and approximately 300 rolling stock. My net gain is about $25K accumulated since 2013 in addition to my collection. I usually sell my items on EBAY and its worked out quite well.

Does that make sense?

The rest of my net profits are these

I've been lucky enough to have purchased large and small post & pre war collections at great prices over the years. Kept what I wanted and sold off the rest, usually at train shows, at a profit. Those profits are what I've used to support my addiction.

One of my most interesting purchases was about 15 years ago. I went to have my new SUV pinstriped and, at that time, my plate said "TOYTRNS". The pinstriper asked if I like trains, I said I did, and he brought me into the back room of his shop. There was a huge (and I mean huge - around the size of 3 ping pong tables) table of trains from 3 generations: his grandfather's Standard gauge, his father's pre-war Flyer O gauge and his post war Lionels.

He asked me if I would be interested in buying them and threw out a $1,000 price. I jumped on the deal. I went to the bank and then to grocery and liquor stores for every box I could find to carry them. Filled up my SUV with the back seat folded down. The stacked boxes covered the back window and the front passenger seat.

Mrs. 'Ski went nuts when she saw me carrying box after box into the basement.

I kept some of the Standard gauge, cherry picked the Lionels and sold the rest over a year or so (after cleaning, lubing and repairing) making about a $2,000 profit. That bought a lot of trains for Warrenville and paid for another collection purchase a year or so later, a lot of that was worked on and then sold at a profit too.

This luck happened to me only one other time since. All of these times it was dumb luck that I was in the right place at the right time.

No! Don't turn your hobby into a business. Been there, done that, it took me 5 years to enjoy certain activities as a hobby again. And don't let a hobby run your financial decisions.

My $.02 worth.

I used to help out at a LHS.  I got a little more off on what I purchased and spent a few hours packing, shipping, and light maintenance.  All in all it was worth it.  I got to see some of the dark sides to the hobby including dealing with manufacturers and customers.  That said I saw the great sides of the business dealing with the same folks.  The good outweighed the bad and I got to get some nice additions to my collection and saved some money doing it.

We have a boat dealer near us who turned his hobby into his vocation. He loved boating before he started selling and working on boats every day. Now, he seems to hate it and is so unpleasant to be around that we stopped doing business with him about 15 years ago. Whenever I think about making money fixing trains, I remember the boat dealer and the thought goes away. I'll fix my own trains and will help friends and fellow forum members, but that's as far as it goes.

For many years I built curved bench work in all scales, usually selling at Howard Zane's Cow Palace in Timonimun MD.   The only real problem was there was never enough time to work on my own RR.  The work was very enjoyable, got to know a lot of people in a personal way, loved the travel and it gave a real sense of accomplishment and a pride of workmanship plus it was a rather positive experience financially.

Since health and another business terminated the bench work  activity, I finally now have time to work on my own layout.

A favorable spin off is that much of my present RR is built from left overs.  Now all work is finally for me.

Here is an old gallery of work.   www.curvedbenchwork.net

@Arnold D. Cribari - I've had the same hope regarding daylilies.  I've always wanted to make money from them in some form or fashion.  That has yet to materialize. Anthony

Tom,

I looked at your link. I knew you were good from seeing the pictures of GRJ’s build, but those pictures are ridiculous! You are a true artist in benchwork!

Chris

LVHR

Just way too easy to make money doing other things, whether it is a little bit of your regular work, or just occasionally buying and then selling a near excellent example of an item in some other endeavor or area where you have some expertise.

18 months ago, I bought a used Kubota tractor with only 700 hours, in extremely nice condition, for $2,500.00, from a guy who was moving to South Dakota.  Cleaned it up, changed the oil, replaced about $250 of worn plastic parts, which I was able to buy at the dealership 6 miles from my house.  All in all, about 8 hours of work.

Let the tractor sit in my garage for the entire 18 months.  Then washed and waxed it.

Sold it last month for $5,100.  Took about 6 minutes of haggling over the price in my driveway.  Buyer just comes with a trailer, loads it himself, and drives away.

How many locomotives or cars, and how much time, and how much haggling would I have to do to make that amount of profit in model trains?    (My nerves just couldn't take it!)

Mannyrock

I bought and sold for awhile when the market was really good. I was involved with a train shop and helped at shows. Sold on eBay and did manage to make some money. When the market started to decline people started to get cheap. Prices started to go down and that’s when it was time to stop. I was at a show and I had a person (No customer I might add) offer me $15 on a NEW Tank car that was Marked $50. When I said No his reply was this I can get on EBay or go to a Flea Market and get it. That’s when it was time to get out. I stopped selling on eBay and stopped selling at shows. I still deal with my buddy at the store to get wholesale prices but that’s it. Did I make money yes some. Would I do it again NO. Now I have fun (Again) and I strongly advise people not to turn a hobby into a business. I leave the buying and selling to the real train stores. Have fun in the hobby, that’s what it’s about.

Some people are lucky and their hobby becomes their business and they still enjoy doing it (the old expression, ya know, do what you love and you will never work a day in your life.....which quite honestly is silly. My son is a classical musician, and it literally is who he is, but the problem is as much as you love anything there are things that are still work. Guys like GRJ who repair these trains I am sure have the customer from h***, the supplier who can't deliver the goods, a train that they just can't figure out what is wrong. The problem is when the things that make it fun are overwhelmed by the non fun stuff.

You can make money on You Tube if you have enough subscribers and/or views, and it can be substantial (likewise, people with You Tube channels often get people to support them through Patreon once they get big enough). The problem is when you start getting big enough to make money on there you also have a lot of work. You have to shoot the video and edit it, and as time goes on people expect a lot more polished product and it can become a bear. It looks like a lot of fun but it becomes a job, figuring out what people will want to watch, editing it, making sure other you tube people don't steal your content and try to monetize it.

When I started buying stuff at certain auctions where trains were sold in lots, I would always wind up with a bunch of stuff that came with the one or two pieces in the lot I actually wanted.  Also, I had a lot of PW Lionel and American Flyer trains that my dad had picked up at yard and garage sales over the years that held no particular interest to me, so I started selling at York to get rid of the excess I was accumulating.  Over time, I started bidding on lots that other bidders were showing little to no interest in, and occasionally winning them at prices that allowed me to flip them at York for a profit.  I even sold once at an outdoor Ft. Pitt TCA meet, as it was close enough to home to warrant the effort.

This model essentially pays for my York trip expenses, some goodies to bring home, and a little extra cash to go in the pre-orders jar for upcoming purchases.  A couple of Yorks were so good I was able to treat myself to a Millhouse River turntable.

The only down side to this model for me is trying to get away from my tables at York to do some shopping for myself.  Fortunately, I have friends with tables in the same area that can watch over my tables so I can get out and shop a little.

Andy

It’s my understanding that the mention of a certain auction internet site is a violation the the Terms on OGR.

It has been mentioned twice so far so why have those posts not been deleted.

@WaynePa posted:

It’s my understanding that the mention of a certain auction internet site is a violation the the Terms on OGR.

It has been mentioned twice so far so why have those posts not been deleted.

That is not correct. As was just discussed here recently, the mere mention of eBay is not a violation, per se. What is a violation is posting links to the site or otherwise using the forum to promote sales on that site.

@WaynePa posted:

It’s my understanding that the mention of a certain auction internet site is a violation the the Terms on OGR.

Probably because that not actually true and just misunderstanding

Yes. In the past I have:

* Assembled/painted/weathered structures for clients.

* Modified/painted/lettered/weathered locomotives and rolling stock for clients.

* Designed and installed custom layouts/etc for clients.

Lesson learned:

Turning my hobby into a business essentially ruined the hobby for me after a few years. I was so burned out that even after shutting down all of the above, I didn't touch my own model trains for over a year.

Never again.

Andre

As many know, I consult on behalf of Sunset / Golden Gate Depot / 3rd Rail.  I find it very enjoyable as I have learned more about the railroads I don't model and I have met some great people along the way.

Do I make money doing it?  That is a loaded question.   The short answer is yes, but I could make a whole lot more doing other things.  I do it because I have a passion for quality products, have the eye for detail, love the research, and most importantly value the friendships that have come out of doing this work.  While many have stated it has hurt their interest in the hobby, I have found it stimulating and an extension of the hobby I love so much.

@johnstrains posted:

That is not correct. As was just discussed here recently, the mere mention of eBay is not a violation, per se. What is a violation is posting links to the site or otherwise using the forum to promote sales on that site.

Well,  I think you may be wrong.  There is a guy looking for a certain K-Line reefer on the Want to Buy section of the OGR forum.  I posted a reply suggesting he list his request on that auction site.

It got immediately flagged and I received an e-mail from OGR specifically that mentioning that auction site is a violation.

I did not post a link and it was not on the For Sale or Trade section.

Also another member who found the reefer on that site and bought it posted on the WTB board that he just got one as a Buy it Now.

@poconotrain posted:

I bought and sold for awhile when the market was really good. I was involved with a train shop and helped at shows. Sold on eBay and did manage to make some money. When the market started to decline people started to get cheap. Prices started to go down and that’s when it was time to stop. I was at a show and I had a person (No customer I might add) offer me $15 on a NEW Tank car that was Marked $50. When I said No his reply was this I can get on EBay or go to a Flea Market and get it. That’s when it was time to get out. I stopped selling on eBay and stopped selling at shows. I still deal with my buddy at the store to get wholesale prices but that’s it. Did I make money yes some. Would I do it again NO. Now I have fun (Again) and I strongly advise people not to turn a hobby into a business. I leave the buying and selling to the real train stores. Have fun in the hobby, that’s what it’s about.

Very true poconotrain.

Just about every item I've sold over the past year was either break even or at a small loss. BUT, that is OK as I needed space for other items and (hopefully) the new owner will will enjoy playing with them.

My only "profit" from involvement in the train hobby is the priceless satisfaction of gifting a train or RR memorabilia to a hobbyist/friend or a train-related club or organization. Years ago, I collected RR artwork and posters based on the Rock Island Railroad. I had them  professionally framed and installed them in my train room. When I decided to down-size,  I arranged a donation of nearly all of the remaining items to a small Rock Island-oriented museum in Chillicothe, IL (near my hometown of Peoria).

I "second the motion" of many contributors to this thread who affirmed by experience that changing from a hobbyist with a pastime to a hobby-based business owner can be a slippery slope -- downhill.  I know that transformation isn't for me! However, some hobbyists/businessmen have emerged as exemplars of that positive transition and are enthusiastic ambassadors for the hobby. Thank goodness for them!

Mike Mottler    LCCA 12394

I glean from some of the responses so far, that we have some very talented model railroaders who have great skill, such that they can provide a valuable services or products that enable them to make good money at the hobby.

Although I have no such great talent or skill at model railroading, I salute those of us who do. As a result, you talented ones can well afford the top of the line trains.

Then, we have doctors, some lawyers (not me), captains of industry, and other high income earners at their careers and professions, who make big incomes or otherwise are affluent and have great financial resources. You folks can also well afford the top of the line train products.

You might say I'm more of a LionChief Plus or Railking kind of guy (and grateful for it) who loves all my trains, and I'm not a Visionline or Premier kind of guy.

Personally, I think it's great that there still are some middle economic class model train products.

Arnold

@Lionelski posted:

I've been lucky enough to have purchased large and small post & pre war collections at great prices over the years. Kept what I wanted and sold off the rest, usually at train shows, at a profit. Those profits are what I've used to support my addiction.

One of my most interesting purchases was about 15 years ago. I went to have my new SUV pinstriped and, at that time, my plate said "TOYTRNS". The pinstriper asked if I like trains, I said I did, and he brought me into the back room of his shop. There was a huge (and I mean huge - around the size of 3 ping pong tables) table of trains from 3 generations: his grandfather's Standard gauge, his father's pre-war Flyer O gauge and his post war Lionels.

He asked me if I would be interested in buying them and threw out a $1,000 price. I jumped on the deal. I went to the bank and then to grocery and liquor stores for every box I could find to carry them. Filled up my SUV with the back seat folded down. The stacked boxes covered the back window and the front passenger seat.

Mrs. 'Ski went nuts when she saw me carrying box after box into the basement.

I kept some of the Standard gauge, cherry picked the Lionels and sold the rest over a year or so (after cleaning, lubing and repairing) making about a $2,000 profit. That bought a lot of trains for Warrenville and paid for another collection purchase a year or so later, a lot of that was worked on and then sold at a profit too.

This luck happened to me only one other time since. All of these times it was dumb luck that I was in the right place at the right time.

Congratulations, John, you and the other successful wheeler and dealers in model trains are like the American Pickers of model trains.

Thanks Arnold.

Three or so deals since I started "accumulating" and operating in 1983 does not exactly make me a Wheeler dealer, but I'll take the moniker.

Whatever happened to having fun with trains?  Isn't that why we're in this hobby, most of us as kids, now adults?  I have no problem with anyone making a profit from it, but I sure don't hope that becomes a prime objective of collecting trains.  It isn't important to me, "I just wanna have fun".

John

@Steam Crazy posted:

Whatever happened to having fun with trains?  Isn't that why we're in this hobby, most of us as kids, now adults?  I have no problem with anyone making a profit from it, but I sure don't hope that becomes a prime objective of collecting trains.  It isn't important to me, "I just wanna have fun".

John

I largely agree with you, John, but I admire those of us who make money in the hobby and still have a great time with their trains.

I felt the same way about the great songwriter, Irving Berlin, who I also admire. I learned when I read his biography, And the Band Played On, that he made a lot of money, writing many hits, including White Christmas, the Easter Parade, and the musical, Annie Get Yoyr Gun. He worked very hard at it and loved it, especially for the 1st 50 years of his life (he lived to be 105 years old).

He also wrote God Bless America, but gifted that tremendous hit to the Boy Scouts of America, which he regretted afterwards because he missed it on all the royalties for that song.

I tend to think that if one is great at something, loves doing it, and makes a lot of money doing it, that is a form of heaven on earth.

Quick, somebody, anybody answer this question:

How can one wind up with a million dollars dealing in model trains?  edited for clarity

@Tom Tee posted:

Quick, somebody, anybody answer this question:

How can one make a million dollars dealing in model trains?

You can't.  It's like my full time profession of architecture.  When my mentor once was asked what he would do if he won the lottery he said, "Practice architecture until is was all gone."  Rang true when I started in 1992 and still does. 

All my financial gains from this hobby have been "reinvested" into said hobby.

Jonathon, thank you but wrong answer, think lighter.

Don't buy them in the first place and put it into a retirement fund that actually doubles in value approximately every 8 years?  Where's the fun in that!

I would like to say im making money from it but i am not.... i wish, it is something i like to do, but i just enjoy helping others and seeing good results.

Tom Tee ---  Sell $100,000,000 dollars worth of trains (new or used) and at 1% profit that would be $1,000,000. Of course that assumes all relevant taxes and costs have been paid.

Of course if you had $100,000,000 to invest in the inventory, you might be better off putting that money to work somewhere else.

On the other hand if you could auction off 500 RR items at an average lot price of $200 - that grosses $100,000 with your share of 30% seller fee and 15% buyer fee nets $45,000.  23 successful auctions puts you over the top.  Of course that assumes you have the network and resources to find, acquire, catalogue and run the auction.

Maybe writing a very popular railroading song would get you there through royalties.

Or maybe better - invent a flavor based on a RR theme and then can or bottle the beverage. Specialty drinks with an Amtrak Logo for sale in the club car and other outlets. Recreate the classic beverages served back in the club car lounges in the heyday of passenger rail. And we could put the 48 Club logo on each can to help support the forum.