For those who own A hobby shop. or have tried

[Dubs Chops]

Guys I love doing everything Rc I am ate up with it, I can generally figure out just about anything i need to by studying up on it if I dont know. Which is what Brings me to my question.

I live near a colledge town with a population of about 18,000 there is A major highway that runs right through town, it is even considered main st. I am considering opening up A hobby shop here. Nothing big at first Just do cars truck supplies And some Basic easy to fly planes and heli's and maybe a few boats.

What I am wondering is your thoughts and inputs on if this sounds like a setup for sucess or disaster. I would only have to make about $40k to get by on. I would keep my overhead down by only having maybe one or two employee's other than myself.

Also, for you guys that have one or tried it are you glad you did? What was the hardest part of getting started?

Thanks in advance.

Brett

[DARKHORSE]

That would be awesome Brett, I would have to make a 2 hour drive everyday just to get parts..

[nitrojeff]

I don't have a hobby shop, but I do own a small buisiness, and the first thing to consider is promotion. You have to be constantly exposed to your buyers. I can say, the hobby shops I support, are active in with all the local r/c clubs.

[Dubs Chops]

I know exactly what you are saying jeff, I do want to hold local events and I was even considering having a test track out back so that people who came in and had no idea of what hobby grade rc's are like could test drive a demo model. I would like to have a demo version of everything I would sell. Within reason. I would also Like to have one of the indoor rock displays in a corner where customers could come in and try certain lines with new setups they were building. And People who havent driven crawlers could check one out Like A rtr ax10 or some demo like that.

Oh and darkhorse no need. I could priority them too you by the next day!

[MuddyOval]

Do the math in reverse. Start with the $40K you want, plus I assume insurance etc. Add the cost of employees (salary plus all the other expenses like workman's comp insurance, health insurance etc). Add the fixed costs of rent, utilities, phones etc to all of that. Then advertising, signage, store fixtures, web presence, cash register, security (highly suggest good cameras- people steal hobby stuff like crazy), and other start-up costs.
Just off the top of my head, I'd figure you'd have to do $500K gross sales to squeak by doing a full-time retail store. Can you sell that much stuff? Keep in mind the new consumer mind set where they'd rather order direct from China over the web to save a couple bucks.

[4xfloored]

I dont have any experience on opening up a hobby shop, but can tell you to make sure you got plenty of working capital as its a huge stain on you when sales dont cover the bills and you have to dig into your pocket to cover bills and payroll.... I wish you the best..

Milo

[kasper]

I have been working for my parents for 30 plus years we own a motorcycle dealership times are tough now everything goes in streaks if you have a good job i would keep it theres a whole lot more then just opening a door and selling stuff whole lot more is it fun yes at times but its also a big pain in the azz at times also good luck on your decision

[jetboat]

I looked into it last year... I had looked into taking over a Hobbytown (dropping the hobbytown and going ind.) I sat down with the owner and went over the books, the franchise had a recomended product stock for a new store, it came to about $50,000. Then the retail lease was $9500 a month (no I didnt misstype) 5 part time employees at $8-$10 an hr. The owner/manager hadnt seen a paycheck in 2yrs. Now given he didnt care about the place and was running it into the ground.

The bigest thing is to have product in stock at ALL times. You have to have repair parts and dont tell them "I can order it" they can order it and have it delivered to the door. If its a common part and you dont have it, dont order just 1, order a couple.
Give Club discounts, a 5-10% discount wont hurt you much and will really bring in people.
Keep your employees part time, in allot of states if they are full time you have to provide them insurance and pay different insurances (unemployment etc) by hiring 2 @ 25hrs each you end up saving money in most cases.
Hire old people that like to talk, yeah kids usually are thought of to be more in teh know but, allot of these old retired guys know their stuff and love to talk to customers.

[GaBronco]

Will you disclose your location? Seems like you could have potential customers right here on this forum that could provide insight on your decision.

[Greatscott]

Originally Posted by nitrojeff

You have to be constantly exposed to your buyers.

I'm not sure, but I think they'd lock you up for this...


One way to do it is to find a local hardware store, a beading shop with extra room, or some other small craft store you can be partners with. It would draw in more business because people would be coming there for other things, it would cut costs, and cheaper to get started. That is the way the a hobby shop in the town I just moved from got started. Now that shop has move to its own store front and has another location in a near by town.

[downtown]

I was a hobby store owner until recently.
Major things to consider---Other than the very well described hobbytown post....

The Internet is taking over the sale portion of this indusrty.
If you have a big enough market to support sales, service, and racing you MAY have shot..

I wish you the best of luck. One thing that I've heard from Several other track/store owners...'The best way to make a small pile of money in this hobby....Is to start with a large Pile'.. And we usually have a chuckle of agreement, Followed by 'Aint that the truth'..

Maybe consider an Online store.. they tend to have alot less overhead cost, and can be done out of your garage.. Ive seen several online operations that take very little space, and can be maintained by less employees.

[robvbro81]

I worked at a LHS for 5 years, I learned all the aspects of the business. As stated above my post "The Internet is taking over," that being said. If you have a good store front and OK Internet sales it could be a good thing. But I think it is a huge risk during the hard financial times. If you do it good luck and if you need any insight I might be able to help.

[Racer4Life]

Online is also killing the margin a LHS can get for items as well. If you need to make 40k for yourself, you will need to sell over $200,000.00 a year. Margins are typically low. 30% average.

A kit may cost you 200.00 and they sell online for $219.00.

If the town only has 18,000 people and its a college town. It doesn't sound like the best place. You need more people.

Just MO.

Good luck in what ever you do.

[psn]

I owned a motorcycle shop for six short years. Without service/repair revenue, I wouldn't have lasted 6 months. You can't live on parts sales!

[azxj91]

I dont have any business experience......but there was a new hobby shop that opened here. small shop, track in back and an internet site. seemed to be going good. then the county made them close the track because it wasnt permitted and the neighbors complained...... i went in several times trying to support a local business (just small parts so not much support) but not once did they have the motor wires, rod ends, tires etc. i was looking for. the internet site was ok, but most everything was cheaper at tower or others......long story short....they are gone now, only made it a year or two. not trying to be a downer, i think the track closing was a big thing so make sure you plan ahead and that your track/ noise is all good before you get started. and keep stock!.... good luck!!!!!

[CPE MT]

If you're going to open a physical store, you've got to have a track(s) to go along with it. Promote the track, and make sure you stock parts people are going to break while racing.

You're going to make more off of parts & service than you will by selling a kit. If you match online pricing, you won't make any profit. Unless I already had a storefront paid for, there's no way I'd venture into starting a hobby shop right now. All that also assumes that you're the nly employee. Adding employees skyrocketd your costs even further.

[rc-guy]

i am not a hobby shop owner.

i have read the post on here and as a person that buys r/c stuff online and local i have to say this is what most are looking for.

1. reasonable pricing . if you are worried about online sale make sure to compete with them and make sure that people buying from you are aware of shipping and other cost. in turn they would want to buy from you instead of online. i always give my local hobby shop a chance to sell me befor going online

2. availability. have stock and if you have local guys racing, crawling make sure to stock what they go through. they are your biggest buyers and supporters

3. start out small. run the business yourself with maybe one or two others.

4. customer service and knowledge. i have phone online places only to have some one that knows nothing about what is being sold try to take a order and when you ask a question they can not asnwer it. also i had something break and had a big time company not even return an e mail about the problem

lol i'm sure there are other thing to consider but i wanted to give a few points from a customers view.

th e other post are good info to

[doubledub]

I owned a hobby shop for a couple of years,it was the worst,low profit,time hogging thing that I have ever done!I was fortunate that we also own three other small retail stores in the same shopping center that share a potential customer.I had a very busy store but with every other person coming through the door saying"I can get that same thing for X amount online" I tried to price match most of the time,I did the math and figured that if I was lucky I was making between 5-20% profit margin while starting to hate my favorite hobby of the last 25 years I decided to close the doors.It was the best choice I could have made!While the internet is slowly creeping in the doors of our other stores,it is not having the effect that the hobby shop had encountered!DO NOT DO iT!You need to have at minimum $100k in hand to even think about half-assed stocking a decent hobby shop and you still will only have about 30% of what customers ask for in stock.My bitter LHS two cents!

[Greatscott]

Your LHS has to offer things you CAN'T get online, and those things are personal service, the convienence of being able to get what you want that day, the knowledge that the part you are getting is the right one, and the expert knowledge of the guy behind the counter.

"If can get the cheaper online."
How many times have you heard that at you LHS, but that guy is there to make sure that the thing that he is going to get cheaper online is the right one.

Service
There is a hobby shop here that I will not go back to, a couple of weeks ago I was looking for replacement axels for my AX10, I asked about Traxxas axels, the guy grabs a set of stub-shafts for a rustler and says those will work, I just walked out. I went to another hobby shop looking for the same thing and the guy threw out four different sets of axels, from stock to the MIPs and explained the pros and cons of each, this LHS is futher away than the first, but these are the guys I will go back to.

[MuddyOval]

The "brain rapists." They go to the LHS to look at things, ask a bajillion questions and take up a lot of time. Then they go order the stuff online to save a few bucks. Shame on them for using the service and not paying for it. Do you work for free? Shouldn't expect someone else to.
THAT'S the problem with customers these days. Everyone should try to be a good consumer and support those who support you instead of sending money straight to China or to some part-time basement shop who doesn't post business hours or a phone number if things go wrong.