Originally Posted by Allan Miller:
We are in an era when long-time train stores, in particular, are going through this process. It's to be expected because one does reach a point in life, after many years of labors, when it's simply time to move on. It's particularly sad to see devoted and successful businesses close their doors, but folks also need to realize that even if a new owner was to take over the business, that does not necessarily mean it could continue for long. Sometimes--perhaps even often--the owners ARE the business.
The business environment today, too, often makes the decision to retire a whole lot easier, and in part we consumers are the blame for that, along with the officials we elected--at every level--who simply make it difficult for a small business to make a go of it.
One thing is certain: Every time a hobby shop closes it doors for the last time, we all are a little poorer for it, regardless of whether we live close by or a thousand miles away. Sure, you can buy stuff via the Internet, but just wait and see where that leaves us in another decade or so.
The hobby business isn't worth a darn, but that has nothing to do with the "business environment", or our elected officials. The hobby business is a lousy investment for most retailers because of policy and pricing decisions WITHIN the industry.
The business environment is rather immaterial when a small business is trying to operate on a minuscule gross margin, and that's exactly what most hobby dealers face when they are forced to discount product in order to be competitive. Add to that the fact that most dealers must buy through a distributor (even while they compete with retailers who can buy direct from the manufacturer), and it's a recipe for failure.
It may be fashionable on this forum to blame government for everything, but it simply isn't the case here. The hobby business stinks because the industry is structured to squeeze out small operators (or at the very least, to limit their success). This has been true for years and years, and modern developments such as the advent of internet sales and eBay have largely made the situation worse (although eBay can be a good alternative for a smart dealer who needs to generate cash from slow-moving inventory). One other factor must be mentioned--many retailers don't have the skill to run a successful business...and a low margin-low volume business like the hobby business is a very unforgiving business environment.
I was involved in the hobby business for a long time, as a retailer, and as a manufacturing consultant, so I have an understanding of the dynamics of this business.
Jeff C