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Old 07-30-2010, 11:38 AM   #16
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Originally Posted by hookem34 View Post
LOL...I love all the pesimistic optimism guys. Would you say that the profit margins on the business are less than 5-10%? Is there really not a way to devlop relationships with manufacturer reps to obtain product directly from them?

I certainly am not looking to lose my small fortune() on this or my investors money for that matter. I am thankful for all the feedback thus far. I love talking business, especially the business of a hobby I enjoy so much.

-Dan
I have owned several very sucessful businesses for 22 years.
Its not pessimistic optimism, its reality The hobby business is VERY tough, which is why the vast majority fail.
If I didnt have a spare office suite not in use (low overhead), there would be no way I could afford to have a hobby store, and sell at prices lower than amain.
Yes we can and do buy direct from Manufacturers.
However to get decent pricing we have to place a LARGE order. So generally we prefer to buy from Distributors, so they can make the LARGE purchases necessary to get decent pricing from the Manufacturer, and pass it on to us.
If you do the math, and examine distributor pricing for dealers, and then look at the markup that you can sell it for, and then the added cost of data entry, website, store, staff, overhead, etc. It will answer your questions about how lucrative/profitable a business venture it is.
The Local Hobby shop that sells for near MSRP on stuff is almost non existant with the coming of the internet age, and the capability to see online prices from large discount hobby stores.
All you have to do is look and see how many relatively strong hobby stores folded in the last 2 years.
There are almost no more LHS to support anymore!
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Old 07-30-2010, 11:57 AM   #17
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I have owned several very sucessful businesses for 22 years.
Its not pessimistic optimism, its reality The hobby business is VERY tough, which is why the vast majority fail.
If I didnt have a spare office suite not in use (low overhead), there would be no way I could afford to have a hobby store, and sell at prices lower than amain.
Yes we can and do buy direct from Manufacturers.
However to get decent pricing we have to place a LARGE order. So generally we prefer to buy from Distributors, so they can make the LARGE purchases necessary to get decent pricing from the Manufacturer, and pass it on to us.
If you do the math, and examine distributor pricing for dealers, and then look at the markup that you can sell it for, and then the added cost of data entry, website, store, staff, overhead, etc. It will answer your questions about how lucrative/profitable a business venture it is.
The Local Hobby shop that sells for near MSRP on stuff is almost non existant with the coming of the internet age, and the capability to see online prices from large discount hobby stores.
All you have to do is look and see how many relatively strong hobby stores folded in the last 2 years.
There are almost no more LHS to support anymore!







i see your point but there is, a hobby shop thats in nj thats been open for 15 years and there prices are close to tower at least. and there service is good
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Old 07-30-2010, 01:49 PM   #18
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Its possible to make some money, but for the first 3-4 years your proabably going to be losing money. if you offer really good customer service people will come back, i know i continue to buy from people/manufactures/lhs where i have recieved great customer service.
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Old 07-30-2010, 01:58 PM   #19
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i see your point but there is, a hobby shop thats in nj thats been open for 15 years and there prices are close to tower at least. and there service is good
Hence my "almost"
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Old 07-30-2010, 02:03 PM   #20
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build a nice off road track and they will come
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Old 07-30-2010, 02:18 PM   #21
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I would concentrate more on the track facility than I would the retail side of it. Get setup with the distributors with the bare minimum allowed, then build a first class track and promote and run it as such. Then as you start to build a customer base you will know what to stock. Obviously you want to spend your money where it will benefit the most, and bunches of stuff on the shelves and wall thats not moving isnt it. I think the key is to have a shop that people can come and enjoy their products, stuff like a flying room for small helis, maybe a carpet track, a 1/10 scale track, and bigger track for the 1/8 scale stuff. Once you get the folks in there on a regular basis then you can let the retail side push you, but dont push it, especially not this day and time.
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Old 07-30-2010, 02:28 PM   #22
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build a nice off road track and they will come
Most distributors will help you out on pricing if you have a track as well.

I know that is the case with my friends track. They cut the minimum buy in by more than half when he said he had a track.
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Old 07-30-2010, 09:45 PM   #23
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to be honest, the best ways is to start by losing money, "the track" is what will start it. try and put on a HUGE EVENT.

yes it will cost a considerable amount of money. but with a good track/pit/stand, and even advice etc people will see it has potential.

buy manufacturers banners for the track(a huge must), dont favour brands.

sell all brands of cars/planes/boats etc. tell people the difference and let them decide. once the popular ones show. you may cut down on the not so popular ones.

anther thing with the track is to run a class like 1/10 SC electric. 2wd or 4wd that people can pay to enter and USE YOUR cars. this allows you to make money off enjoyment. the odd broken part wont cost much but this will bring profit.(i've seen this in use, brings $100+ a meet)(SC's are the best truck to use as they are solid and easy to drive.)

even the 1/8 scale boys like myself love the fun of SC after lunch to get away from the screaming nitro and have a laugh.

just from what i've seen happen.
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Old 07-30-2010, 10:18 PM   #24
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sell all brands of cars/planes/boats etc. tell people the difference and let them decide. once the popular ones show. you may cut down on the not so popular ones.
That doesn't work in the LHS case. Excess inventory will crush the operation.
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Old 07-30-2010, 10:25 PM   #25
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That doesn't work in the LHS case. Excess inventory will crush the operation.
seems fine here.
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Old 07-31-2010, 02:10 PM   #26
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I would concentrate more on the track facility than I would the retail side of it. Get setup with the distributors with the bare minimum allowed, then build a first class track and promote and run it as such. Then as you start to build a customer base you will know what to stock. Obviously you want to spend your money where it will benefit the most, and bunches of stuff on the shelves and wall thats not moving isnt it. I think the key is to have a shop that people can come and enjoy their products, stuff like a flying room for small helis, maybe a carpet track, a 1/10 scale track, and bigger track for the 1/8 scale stuff. Once you get the folks in there on a regular basis then you can let the retail side push you, but dont push it, especially not this day and time.
Better listen to this guy, he's dead on.

Having a track is where it's at.
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Old 07-31-2010, 05:00 PM   #27
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I'm sure there are plenty of online shoppers with a bit of a leftist mentality that prefer buying from a smaller, less corporate outlet than A-Main.
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Old 07-31-2010, 05:04 PM   #28
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I'm sure there are plenty of online shoppers with a bit of a leftist mentality that prefer buying from a smaller, less corporate outlet than A-Main.



that would be me i shop at smaller online stores

1. there cheaper than amain
2. the shipping is about $2 to $3 cheaper than amain.
3. the bad thing about smaller online stores, is the consumer service isnt as good an sometimes they send your things out late.
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Old 07-31-2010, 05:09 PM   #29
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That doesn't work in the LHS case. Excess inventory will crush the operation.

i cant say i disagree with you on that one ! espially with kyosho xray coming out with, a million new things each other 3 month or so.
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Old 07-31-2010, 05:09 PM   #30
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If I had a LHS with a track, I would support it. I would buy from it before I would the internet even if it meant paying alittle more for something. Atleast I get it right then and not have to wait for it to be shipped to me. Also by supporting the LHS you save money by not having to drive 45min-1hr to a different place. That right there would save money over the course of a season. That is just me though.
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