More Issues on Our Hobby, from the UK

Thanks for including the MSN link, since the Telegraph article is behind a paywall.

I didn't realize that the Warley exhibition is no more (not sure how I missed that).  I had hoped to go someday - just a reminder to do things while we can.

Based on what I read in Railway Modeller, it seems like the hobby is still very vibrant - far more retailers exist in the UK than here.  Digital control is just beginning to take hold over there - lots of room for growth.  I'm still curious about the real story with Hatton's - it seems like their significant online presence would put them in a relatively good position.  The article hinted at that by mentioning that the son of the founder died not long ago.

One big challenge posed by the aging of the hobby, which wasn't covered in the article, is staffing for heritage railways - the lack of defined-benefit pensions means that there are fewer early retirees who can participate. 

For some insights into the retail marketplace (in this case HO and N primarily), listen to A Modeler's Life podcast, episode 231 entitled "Retail Wars" which discusses current trends and some history.  I suspect it's relevant to our own niche in the hobby, as it addresses hobby shop issues in general, minimum advertised prices, etc.  The two hobby shop owners being interviewed were optimistic and said their own operations were successful, but that the evolving demographic and logistic changes in society were changing the way hobby shops functioned.

https://www.amodelerslife.com/

@Landsteiner posted:

For some insights into the retail marketplace (in this case HO and N primarily), listen to A Modeler's Life podcast, episode 231 entitled "Retail Wars" which discusses current trends and some history.  I suspect it's relevant to our own niche in the hobby, as it addresses hobby shop issues in general, minimum advertised prices, etc.  The two hobby shop owners being interviewed were optimistic and said their own operations were successful, but that the evolving demographic and logistic changes in society were changing the way hobby shops functioned.

https://www.amodelerslife.com/

While I appreciate the post, I'm wondering if you could post your high point takeaways. 

Sorry to be negative about it, but I tried listening to that podcast - nearly two hours of listening to a bunch of strangers laughing at their own inside jokes about stuff I'm not familiar with is a really hard slog.  I stayed with it for about 10 minutes then skipped ahead a few times - my brain hurts.

It's not the only problem as we have no Lionel or MTH service stations after Tennents trains stopped doing repairs.Slowly my locos are becomming shelf queens as the shipping costs to the States & europe is so expensive.  Parts are the same in some cases the postage is higher than the item. I want to buy a williams sound plus unit & the postage varies between $50- $70 for a $70 unit

James

"nearly two hours of listening to a bunch of strangers laughing at their own inside jokes"

Yes, I get that feeling frequently when listening to Lionel and his friends.  Below is the summary from their website. The bottom line is that, as we pretty much all know now, a hobby shop without a strong social media and internet presence is not going to sell enough product at reasonable yet profitable volumes to stay in business.  These businesses, like most retail, are capital intensive, so one either needs deep pockets and strong desire to own such a business or investor(s) that do.  These are small family owned businesses with rare exception.  Manufacturers vary in their policies, and some refuse to deal with hobby shops and prefer direct sales (Scale Trains is mentioned prominently in this regard).  Minimum advertised prices are controversial because while they "defend the brand" they also distort free market forces.  Some dealers routinely either intentionally or accidentally violate MAPs, get their knuckles rapped, but then continue to do as they please. Most sales of new products occur in the first few weeks after delivery, so MAPs basically do not work with dealers who want to and can afford to sell at their own target prices.

The hobby is healthy, but changing.  The small local hobby shop in small cities and towns, unless there are deep pocketed and committed owners with a national reach through Facebook etc., a great website, rapid shipping and dedicated staff, is probably a thing of the past.  Consolidation within the industry, both of manufacturers and retailers, is probably going to continue.  No one is going to get rich starting up a new hobby shop in most cases.  The owners of many successful operations are going to be folks who made their capital elsewhere or inherited successful businesses from family.  Of course, there are exceptions, as always.  Most train stores are also going to cater to other hobbies, such as crafts, static models, radio control cars and airplanes.

"The model railroad industry lives and dies on the ability to appeal to the buying public, it seems easy to us consumers that merely have to check out what’s in stock and part with our hard-earned dollars. We take a peek behind the curtain to find out what’s it actually like to own a store dedicated to this great hobby, what to offer, dealing with wholesalers, consumers who just can’t seem to be satisfied no matter the problem and everything in between.

Stephen Atwell owns Midwest Model Railroad in Independence, Missouri a successful retail shop that’s becoming a destination, with a large selection of products and a great team ready to help. Lorne James owns Otter Valley Railroad in Tillsonburg, Ontario another wonderful store with an excellent selection of products and some of there own manufactured cars. It’s a great podcast with lots of great info from these leaders in the hobby. Enjoy!!"

@Landsteiner posted:

"nearly two hours of listening to a bunch of strangers laughing at their own inside jokes"

Yes, I get that feeling frequently when listening to Lionel and his friends.  Below is the summary from their website. The bottom line is that, as we pretty much all know now, a hobby shop without a strong social media and internet presence is not going to sell enough product at reasonable yet profitable volumes to stay in business.  These businesses, like most retail, are capital intensive, so one either needs deep pockets and strong desire to own such a business or investor(s) that do.  These are small family owned businesses with rare exception.  Manufacturers vary in their policies, and some refuse to deal with hobby shops and prefer direct sales (Scale Trains is mentioned prominently in this regard).  Minimum advertised prices are controversial because while they "defend the brand" they also distort free market forces.  Some dealers routinely either intentionally or accidentally violate MAPs, get their knuckles rapped, but then continue to do as they please. Most sales of new products occur in the first few weeks after delivery, so MAPs basically do not work with dealers who want to and can afford to sell at their own target prices.

The hobby is healthy, but changing.  The small local hobby shop in small cities and towns, unless there are deep pocketed and committed owners with a national reach through Facebook etc., a great website, rapid shipping and dedicated staff, is probably a thing of the past.  Consolidation within the industry, both of manufacturers and retailers, is probably going to continue.  No one is going to get rich starting up a new hobby shop in most cases.  The owners of many successful operations are going to be folks who made their capital elsewhere or inherited successful businesses from family.  Of course, there are exceptions, as always.  Most train stores are also going to cater to other hobbies, such as crafts, static models, radio control cars and airplanes.

...

Thanks for taking the time to post the details, and congrats for surviving that podcast.  Saved me (and possibly many others) from losing two hours of our lives to their blathering.

I have mixed feelings about MAP.  On one hand, I think the concept is anti-competitive, un-American, and should probably be illegal.  OTOH, it offers some protection to smaller retailers, as the margins on train items are often thinner than on many other consumer retail goods.  But as you noted, train retailers know how to circumvent MAPs.

Keeping a current online inventory, managing a website, and maintaining a social media presence, all while dealing with customers and deciding what to stock is a huge task for a mom-and-pop business - you couldn't pay me enough to do it, and I have a lot of respect for those who do.

@Mallard4468 posted:

While I appreciate the post, I'm wondering if you could post your high point takeaways.

Sorry to be negative about it, but I tried listening to that podcast - nearly two hours of listening to a bunch of strangers laughing at their own inside jokes about stuff I'm not familiar with is a really hard slog.  I stayed with it for about 10 minutes then skipped ahead a few times - my brain hurts.

Essentially all the podcasts, on any subject, that I have attempted to listen to, have hit me in the same way. I no longer attempt to listen to any of them. I am sure that there are exceptions, but I have found each and every one of them to be useless, or, useless AND annoying.

That is not limited to the RR variety.

>>> Alert: Acronym illiteracy ahead...

What is a "MAP"?

Andre

MAP = minimum advertised price

Gunny

A friend sent me a link to a UK online show that featured a discussion with a representative of Hatton's. 

https://www.youtube.com/live/-8-s75oYcBM?si=iEXa_UiH8Gd5wXeU

The entire show is over 2 hours - don't ask me how it ends.    The Hatton's discussion starts around the 15 minute mark and runs for about 50 minutes.  I skipped around for bits and pieces. 

It sounds like Hatton's has been approached by people who are interested in buying parts of the business, but they're afraid of being stuck with only the unprofitable bits.  There was also discussion about the surge in sales as people were stuck at home during the pandemic - the belief is that a lot of future business was compressed into a couple of years, which may lead to lean times for the next few years. 

They seem committed to tying up loose ends.  One thing I found interesting was the discussion about Hatton's online archive of model railway information (I didn't even know they had one).  Apparently it gets a lot of use, and Hatton's is hoping that someone will step forward to maintain it and pay for hosting.  My editorial comment is that this is why I'm reluctant to rely on online storage of reference information - one never knows when it can vanish - I prefer to have it on a storage device that I can control.

Scale Trains (HO and N mostly) is changing their business model a bit.   May also explain about why they've been slow to start making S scale from their purchased MTH tooling. Here's a podcast with Tony Cook from White River Productions (publishers, amongst others, of Railroad Model Craftsman).

https://www.spreaker.com/episo...ane-wilson--58314926

@Mallard4468 I found your most recent post interesting. Especially, this part of your post was something that I had not thought of, but seems entirely valid:

"There was also discussion about the surge in sales as people were stuck at home during the pandemic - the belief is that a lot of future business was compressed into a couple of years, which may lead to lean times for the next few years."

I'm not sure that is entirely true in my situation, but I guess it could be a concern of those in the hobby shop business. In my case, COVID and the time I was able to work from home and partially work from home (as a hybrid mix) all blurred together as my pre-retirement anxiety/planing then kicked in. If someone was trying to study me and my buying patterns, good luck! 👍

Thanks for summarizing.

Tom

We can only hope that Hatton’s finds interest in one particular part of their business holdings: Model Train Stuff, a.k.a, M.B. Klein. There is still no definitive word on what Hatton’s will do with the American online dealer, which Hatton’s acquired last fall.

https://www.modeltrainstuff.com

This may offer some insight.

@PRRMike posted:

https://www.modeltrainstuff.com

This may offer some insight.

Essentially, in the same holding pattern as Hatton’s. In fact, it mirrors Hatton’s closely enough that it’s clear who posted the information and FAQs, which say so little.

@PRRMike posted:

https://www.modeltrainstuff.com

This may offer some insight.

I hope we don't loose them too. Doesn't look promising to me.

@feet posted:

I hope we don't loose them too. Doesn't look promising to me.

It looks like Model Train Stuff (aka M.B. Klein) is officially out of business also. Link

They made a Facebook post also. Very sad to see that. I have spent plenty of money with them over the years.

Yes, Model train stuff is gone too. I had a feeling this would happen.

Agreed. What a strange five months, starting with Hatton’s relatively quiet acquisition of M.B. Klein (with no public announcement at that time) and ending with its sudden closure today. So many questions left unanswered.

The announcement is at the top of the Model Train Stuff home page, for those who haven’t seen it. Here’s the link again:

https://www.modeltrainstuff.com

I thought it was odd that that acquisition had been so quiet. I didn't know about that until December.

This really angers me. MB Kline has been a staple in the model railroad industry my entire life and I'm pretty darn old. This makes no sense to me.

I’m upset, too. I still dabble in N scale in addition to O gauge (my primary interest) and had just ordered a Walthers N scale building from Model Train Stuff in December. And I was an M.B. Klein customer dating back to the 1980s for the mail order end of the business. So I’m already feeling the loss.

I am thank full the two orders I had with MTS  got shipped! They did not advertise here so I was leery and now they fold.

There is an 'elephant in the room' reason that can be universally attributed to the decline of the hobby biz, and every other leisure time activity, and it is not cell phones, video games, or politics,  but since OGR does not have a category for open discussion, best to not kick that tire.