RCU Forums - View Single Post - Hobby People going out of Business

01-16-2017, 06:01 PM

#20

LDM

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Join Date: May 2003

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Hobby People did a great job in virtual salesbut they lost their marketing edge with unique products, exciting stores andmodels that people had to have.
If you read the book Marketing Warfare, it’sabout the ability of the small guy to compete with the large guy. Wendy’s vsMcDonalds /Burger king when Dave was trying to simply compete. A brilliantstrategy on how to be different but be relevant!

Being a consultant in the CPG industry I wouldgive free advice to shops that I knew needed help, some listen and some just continuethe same path of destruction.
I have had the luxury of seeing what worksin this industry and what has failed by simply visiting enough stores.

Hobby stores fail from too much inventoryand too little inventory. The old “I can get that for you” in a “must have itnow world “does not cut it in 2017!
They also fail from a lack of a detailedcompetitive virtual network and the last point of failure is simply poorownership /customer service.

So, in simple terms this is some of theaspects that I have seen or suggested to successful hobby shops.

Carry, display and hang—sell - used quality functional models for sale from the local community. All the money stays in the shop for the purchase of new merchandise back to the owner of the model. Why? Its all EYE candy and the experience you have in the shop. Empty shops are no fun, and people love bargain shopping. Hobby shops need to be a constant source of a clean controlled swap meet. This also allows the owner to have inventory at no cost !
Carry parts, parts can be sold at higher margins then your typical ARF, Kit ect that are so price sensitive and price identifiable.
Have a friendly knowledgeable staff that knows (despite who owns the store,) you are there to service the customer, not to simply let them know you are the big boss Hoss.
Study trends, know the difference between Fad, Trend and Evergreen. This way you know when to invest in inventory and what type. A great example of this is the huge miss of Great Planes/Tower in EPO foam models. The segment of epo planes moved from Fad to trend and it was 4 years before Great Planes jumped into the segment. Now imagine the local hobby shops, most just entered the segment the last two years when its been flourishing for the past 6 years.
Eliminate your own personal interest as the reason to buy a segment. If you’re into cars, then your customer better be into cars if that is all you carry. You must know your local area and your ability to reach the virtual market when buying inventory.
Last and the most controversial of what I am about to say is you need to be a competitive virtual seller and know how to beat the MAP pricing regulations. Many shops can be very competitive online but are restricted by the parent distributor on MAP prices. However, some shops simply and constantly sell online under different names, different sellers and many have a huge export business. Trust me this is how the not only survive but they flourish.
Events at your shop for free PR, model building, contest, club discounts ect, and you must attend events.
Direct import -attend the Nuremberg show, look for line opportunities , minimum runs, exclusive brands. This is how VQ, ESM, CMP and Model Tech and other brands made it to the USA.

Add it all up and this is the formula for some of the bestshops in the USA that really perform! Please this is in the simplest terms for the sake of this thread but on the surface, these aspects are from some of the best shops in the USA.

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