# Scare away the G gauge business



## Tom Parkins (Jan 2, 2008)

My local hobby shop is just over a mile away and they primarily cater to O gauge and have a very large online business. The store in a shopping center is mostly a warehouse for the online stock. The inside of the store has no eye appeal. They do have a small amount of HO and an even smaller amount of G gauge. In the outside window is an O gauge loop of track with a train running. The outside display window also has an odd assortment of trains sitting on top of their boxes. A Bachmann Mogul (I think) and Aristo Sante Fe smoothside coach. ($168). The box is so faded it looks just about white. And there is a G gauge Engine house (Pola? Piko? 2 bay) that is $295. 

I wonder if folks look at that engine house and say "You've got to be kidding, 300 bucks for a plastic building?" "That is one expensive hobby". Does that type of marketing scare off folks? Or does it really matter, because the casual person isn't going to get started in G scale because of something that they see in the window? 

IF I WERE KING.... I would have nice looking displays in the window, with very reasonably priced items. But perhaps walk in business from the casual shopper is so insignificant that it really doesn't matter. I would just like to see a better effort to help the hobby grow.

I suspect this is not a new thought, and that there have been threads on this before, I just didn't know what to search for. Sorry if it is a rehash of previous topics. 

Tom


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## Pete Thornton (Jan 2, 2008)

Ah, Marketing 302 - making sure that what you are trying to sell looks attractive to the prospective buyer. They obviously didn't get to that class. 

Tom - if you really care (and it's not clear why you should,) have a chat with the manager. Offer to make the window more attractive - or at least to call him when the boxes fade to white!


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## John J (Dec 29, 2007)

High Price tags does scare off a lot of potential rail roaders 

Sticker Shock clouds thier thining and they don't think.. " Start Small "


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## tacfoley (Jan 3, 2008)

A window full of starter-sets would be a good starter... 

tac 
www.ovgrs.org 
Supporter of the Cape Meares Lighthouse Restoration Fund


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## Randy Stone (Jan 2, 2008)

Humm, in this case, the online business is probably so good the owner doesn't really car about the walk in business except that it allows him to buy from the manufacturers at dealer cost. 
But in all to many busnisess today, you have degrees running the bussiness that know nothing about what is being sold. Selling cell phones or time shares isn't the same as selling after market automotive restoration parts or hobby related items. In bussiness I was in years ago, the repeat bussiness was a very important part. We were proud and honored to have a 80% repeat customer base and we worked hard to get there. Today, too many companies only look for the next sale and the next customer. Not a cozzy feeling type of situation for most hobbiest.


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## Gary Woolard (Jan 2, 2008)

A few years ago I saw an ad in the local paper from a 'crafts & things' shop that I'd never noticed before, even though the address was local. They were advertising a "G-Scale blowout", so I toodled right down there.

Turned out to be one of those "Victorian" boutiques that specializes in china dolls, miniature tea sets, doll houses & doll house supplies like furniture, scale lumber and lighting fixtures with 'invisible wiring' kits. If you've never seen this kind of stuff, it's absolutely exquisite, but it's usually 1/12th scale and VERY expensive. Makes our hobby look reasonable!

But along a side wall there were stacks of Piko & Pola kits, & some Bachmann Big Hauler sets. And everything, even for the 'blowout', was marked at full list retail! I asked if those were the correct prices & the proprietor said yes. She said that she had decided to enter the "toy train" market about a year before to expand into "G-Scale". But she was disappointed that sales were poor, so she was dumping it. I tried to explain, gently, that most stores in L.A. that carried this kind of stuff already discounted the prices 'a bit' -- I couldn't bring myself to say '50% or more.' And she (and her friend) looked at me as if I had just farted into their victorian lace. I left quickly.

The store moved about six months later. And six months after that it disappeared totally, as far as I can tell.

My point, I guess, is that there are a lot of folks who get into a retail niche before researching it fully, if at all. I don't really understand why they don't bother checking out the competition before investing their hard earned money, but there it is!


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## rmcintir (Apr 24, 2009)

Have to wonder who would pay "shopping center" rent when they really just require a warehouse.


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## cape cod Todd (Jan 3, 2008)

I have noticed that prices do scare people away from the large scale hobby. Taking a stroll through most hobby shops I am always shocked at how much items can be and I know personally that I would have never gotten into this hobby if it wasn't for Ebay, used items I have found at hobby shops, train forums and train shows. The preowned market can be a saving grace for many of us. There is a local store that sells trains amongst many other household and garden items and the prices WOW !! I'm sure they do move some starter sets around Christmas time and I have found a few small items that I couldn't wait for but for the most part I could never spend a premium on a product that I know I can get elsewhere much cheaper. 
There was a local garden center that tried to get into large scale and I didn't know about them until I saw a clearance sign. I bought afew items but most were still way over priced I had a nice chat with one of the owners and he had hoped it would have caught on better. I told him it was the prices and how I could buy the same item online Ridgeroadstation at the time and save myself about $80 bucks including the shipping. He was receptive but not much he could do. In some cases from some manufacturers it comes down to volume, move more items and you get a better deal when buying them which they can then pass on to the customer. 
I like the little hobby shops and try to buy from them when I can. I don't mind spending a few bucks more to help and support them but not when the prices are out of site. I too have been in a store where the LGB red box is slowly fading to pink and the sale price on the box is $80 and I know I can buy the same item all day long in a shiny new box for $40. Where is the common sense? 
Thank goodness there is the used market.


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## Spule 4 (Jan 2, 2008)

If you think G is high, I looked at some new Lionel and MTH three rail stuff while digging for some pre-war items for my collection. Oy Vey. LGB is dirt cheap by comparison!


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## vsmith (Jan 2, 2008)

I have run into the "full MSRP price" situation many times, mostly a few years ago when G growth was kinda hot, so they try to get on the bandwagon, end up buying stock from Walthers which means selling them at full MSRP to make a profit, end up getting hosed when no one buys them because nobody who knew anything about G then or now, would nver pay full MSRP and buy all their stuff online or at the discounters, leaving people like the doll house seller to complain and blame the entire G market for losing a whole bunch of their money..... 

Sadly if they had bothered to check out the actual price variations and where people already in the business were getting their stock from they could have made a go of it by offering stuff at competitive prices, instead they bought from the 600lb gorilla of distributers and to make back their investment had to hold out at that MSRP price until grim death took grip and were forced to liquidate thier stock at a loss. 

Quite frankly if I was starting out today from scratch and had a nice area to do even whats now considered a small outdoor layout, say 10' x 20' , I probably could NOT do G! ... or at least I'd be stuck doing pretty much what I'm was doing indoors now. I mean between the track prices spiking, the newest LGB being eye-watering expensive, Aristo's prices have gone up, and the general move to wider radius' required for most stuff, Bachmann's Indy or Lyn and HLW Macks are about the only thing I could afford today, and I feel its only getting worse as time goes on. Thank god for the second hand market, as I consider myself pretty much totally priced out of the mainstream of G. I've been buying old Marx collectable stuff in O and its way more affordable and accessable than G ever was, and they stopped manufacturing in 1974! 

As it is I've totally stopped buying in G for now, there is nothing out there that interests me anymore, its all gone too big, too wide, and sadly, way too expensive.


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## DennisB (Jan 2, 2008)

Sadly, not everyone that operates a business has taken basic courses on running a business. Many see it as a license to print money. Running a business is hard work and you have to be aware of what your competition is doing and charging for a service or product. That is why so many makers of model trains got into large scale. They saw LGB selling their products for a good price and wanted to take advantage of the extra money that could be made. Greed can be a terrible thing. Denni.


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## John J (Dec 29, 2007)

There use to be a 100 % G scale store here in Phoenix. I bought my first NW-2 there. But the guy had heart trouble and sold the store. It became a  All Scale store. Then a lot less G scale. I use to go there and buy rail clamps and some track. I have not been there in Years. I have not seen it in Garden Railways Mag the last time looked where they list stores by state.


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## jake3404 (Dec 3, 2010)

Dont be fooled by the MSRP lie. I run a business. And I compete with the Walmarts of the day everyday. I never mark any of my items at the MSRP, most are 30% off. 

First many of you have hit the nail on the head, research. I check the prices of my competators all the time. I make sure my prices are low as I can make it. I have streamlined my staff and make sure they work efficiently. I am usually cheaper than the "big box" stores because like many others of you have said, I work at it. 

The best advice I can give a small business owner is this, Dont get greedy. That means dropping the price to be competative. You amount you take home is less, but if you work your overhead then you get to take more home. Plus sell more. Volume has a double benefit, sell more means you can negotiate a better price with manufactors which also means you can take more home. The big stores have a LOT more overhead then you, if you streamline the process and make it efficient then you will be sucessful. AND ABOVE ALL THINGS, CUSTOMER SERVICE IS THE KEY TO ANY SUCCESSFUL SMALL BUSINESS!!! 

Its amazing how many small business that fail because of poor customer service. My solutions to the dollhouse business, poor desicision, you sell dollhouse supplies, not trains. Stick with what you know. And if your going to get into the train market, research and then market it. Most model railroaders had no idea they sold trains. And of course they scared the ones that did find out they had trains with their prices. They were doomed to fail before they got out of the gate. 

The poor display in the hobby store window, I see it so many times there also. It seems most hobby store owners get into the business because they are interested in it, but really dont know how to run a business. A hobby store is a very niche business and you cant afford to scare off potential buyers, especially the impulse ones with poor presentation. I also wonder why he would pay mall rent when he is just using it as the warehouse. Sorry to say it but that is a very poorly run business. I understand he needs to have a "brick and morter" business to get dealer prices. Most hobby manufactors require it. But if he is going to have the space, then use it. With just a little more effort he could have his great online business plus a little "gravy" from the walkin traffic. Oh well, another one will bite the dust eventually.


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## Mik (Jan 2, 2008)

Reality check #1 - Even at a huge discount, LS stuff is gonna give a LOT of folks sticker shock. -- Even (or maybe especially) those who've been in the hobby a while, but haven't bought much recently. Even those who understand the 'whys' of the price increases sometimes can't help but yelp, "Holy S--t!!!" when they turn a price tag over. 

Reality check #2 - When I had my biz I would be at a show, and hear a LOT of, "X has THAT for $Y!".... Like I existed just to gouge folks. I'd look both ways down the aisle then respond, "Are they here?" Usually the price difference under derisive review was less than the shipping would be, but folks didn't care. They wanted it for $Y. If they had tried negotiating without being insulting, they might have got it for that. But my prices were firm for jerks. 

Reality check #3 - How can you price 'competitively' when your competition decides to eliminate the competition? Case 1: A fellow in Germany was selling the entire line of Wilesco German made items on ebay for LESS than my wholesale cost (including shipping). Case 2: A pair of fellows were advertising new Sherline equipment for about $5 over wholesale. The 3% credit card fee on a $300 lathe is more than that, and I was stocking, not just drop shipping. Both of those were factors in my going OUT of business. 

Reality check #4 - Sometimes folks CAN get away with 'too high' prices at a brick and mortar shop. You really gonna mail order glue and paint? Or drive 30 miles to the next town with a hobby shop to save $4? How about when you only need a few sticks of Plastruct? Are you really gonna mailorder $50 worth of stuff to amortise the shipping cost if you only need $5 worth? Nope. you'll grumble, then buy it anyway.


Reality check #5 - I also dealt with a couple suppliers that required a MAP (minimum advertised price).... guess what? If you HAVE to advertise the same price as the manufacturer, then most folks will go direct, no matter HOW good your customer service is. (or how flexible the advertised price is)


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## blackburn49 (Jan 2, 2008)

Posted By rlvette on 23 Apr 2011 02:09 PM 
(the business) I was in years ago, the repeat business was a very important part. We were proud and honored to have a 80% repeat customer base and we worked hard to get there. _*Yes, but one would expect the coal business to have nothing but repeat customers. *_


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## Randy Stone (Jan 2, 2008)

Ah, actually I was refering to the over head crane business I worked in after I came to Florida. One big customer being Martin Maretta Corporation. 

The coal business was basiclly contracts with various power plants.


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## Tom Parkins (Jan 2, 2008)

Back to the original Hobby Shop. 

#1. They already do a great business in O scale. They have terrific prices of O gauge and a very large inventory. There is a good volume of drive in customers who will drive miles and miles to save money on O scale in addition to the internet business. They do have in store display cases full of O scale items. But even those are not all that nicely presented. 

#2. These guys know how to do business in O gauge. They are very successful at that. They may have decided that O gauge is their thing and that they will focus on it. It may be just to much to build up a G gauge business, so they don't have enough volume to put good prices on it. They do carry a lot of MTH G gauge.....Gee, what a coincidence. 


We all need to work to grow the hobby. Perhaps I will talk to the management about the observations here and see what we can do to grow the hobby besides spend my life's savings to help his business. 
*What constructive steps would you recommend I suggest to them?*

These are my ideas:

Currently the G gauge items are scattered through out the display windows. Put it all in one area of the display. Put some affordable items in the display window. Rotate the display. 


Put a sign with the display that reads _*These Trains Work Great in the Outdoor Garden. *_Then have some nice 8x10 or bigger photos with broad shots of local garden RRs among the G display items. 

Let us advertise Garden RR open houses in the outside window. Currently they are on an out of the way wall. 

In return when we have an open house we put up a sign that says *"Garden RR Trains are available at T&H Hobbies in Downtown Shopping Center. *Give us a coupon good for 10% off of G gauge purchase. 





There is already an O gauge train loop running in one of the 2 major display windows. I don't think a G gauge loop would be a good idea. 

We want to make this hobby grown. 

Tom


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