rcfunflyer

My Feedback: (72)

Does anyone have any "real" numbers on costs, sales, etc... I could use in my business plan on starting up a hobby shop? Any advice on how to get started?
I've contacted the big distributors and they want pictures of your storefront, lease aggrement, yellow page ad, bank references, ect...... before they will even talk to you- tough to get if you're in the planning stages. So without their help, I can't get wholesale price lists to figure my break even and profits. Kind of a catch 22. They do this because they want you to be a real brick and mortar store, even though Tower started out as a guy selling kits from his apartment- in the Tower Apartment Buliding-thus the name!
I just want to have as many ducks in a row as I can before I up and quit my job! Gotta convince my wife we won't lose our shirt too. Anyone got a hobby shop going out of business that wants to sell their inventory? Any comments would be appreciated, and if you're a hobby shop owner in a different part of the country(so I wouldn't be competing with you) I'd sure appreciate your help.

Live Wire

A man sitting on a corner selling pencils for a Dime A Discount store selling every thing but pencils is giving them away to all paying customers free. Where will You buy!!!!!!
Been There Done that . It takes big money to buck heads with competition.

Taildrager-inactive

My Feedback: (11)

Our LHS has been hanging on by a thread for years, thanks to a good business selling model trains, antiques, he does not stock many planes, and sells mostly glue, wood, & paint, he gets buy. He sure isn't driving a new BMW, and I don't know how he makes it, good pension I suppose. Buy 100 planes or engines at wholesale prices and sell them out of your basement, till you decide if the hobby business is for you. Don't quit your day job.

BRYAN01601

My Feedback: (48)

try a franchise like hobbytown they have good info on franchises and will help with location and set up. [url]

www.hobbytown.com

Live Wire

Make sure this is what you want to do It Is Not Getting started in a hobby ! You have to sell what you buy and make a profit. You need a store front ,advertisement, Line of credit And references. Not trying to discuridge you but it is a hard row to how as the old farmer said.

rustyrivet

My Feedback: (6)

Stuff from Tower can be bought dirt cheap. What you can't get from Tower can be found in the RC magazine ads, or at other website dealers. How many folks like to pay list price on $200, $300 or $400 items PLUS sales tax. The sales tax on a JR 8103 radio, or a G-62 can alone run a customer another $25-$30 !!!

The owners of the Hobby Shops go shopping at Walmart, Home Depot or Target themselves trying to save some money. Their wife goes clipping coupons for the Supermarket. Yet they expect you to pay full list price? Sure, I'll pay list price.... for the $10 or $20 items! You better keep your shelves full of little stuff.


LUCK TO YOU.

Rforce1

We have 3 successful LHS's and one new one. All of them do quite well, their prices are close or the same as mail order on most things. For me great friendly service is a must, and that is where it is possible to win some business. Even when they can't match mail order prices I don't mind paying a few dollars more to support their entrepreneurship.

I do hear of a lot of hobby shops barley making it though, so good luck, just look into every option. Seems like its going to be tough to get started if no one is willing to help you out. Keep us posted if you decide to go on with it. You could also set up a web shop, and sell you products on-line in addition to a store front.

Anyway best of luck.

William Robison

My Feedback: (3)

Step one: Look in the yellow pages for Psychiatric help.
Step two: If desire remains, go to step one.

I've seen it done, but planes were not what kept them going. Debbie's R/C World, in Virginia Beach, Virginia, is operated successfully by Les and Debbie Modlin. But my guess is 80% is cars, not planes.

As posted earlier, don't qut your day job.

Bill.

sideshow

My Feedback: (11)

A hobby shop with a business plan....horrors!

Good for you, it always does my heart good when I see people who want to start their own business with both eyes wide open. The best thing my wife ever did was start her own practice. It was (is) lots of hard work, but easily worth it.

Don't take for granted that people will spend their hobby dollars there because you sell hobby crap. Provide service, selection and a fair price and you will do alright. Most everyone who says you are crazy is just jealous. STICK WITH YOUR BUSINESS PLAN.

In fact I will place an order the instant you begin business.....just let me know.

Bob

ben flyn

Why? Your going to deal with the tightest people there are. Sometimes I don't blame them, wanting the best price, but you see, that's all that matter to them. They will come in to your store look at your prices, then figure your retail taxes, and say to themselves, hmmm.... I can get free shipping at Tower (same as Great Planes) and still save 5 bucks. Then when they have problems with there Tower purchase they will come to you to see if you can fix it. They never what to pay for service. Then Tower (Great Planes) will sell YOU a product, then advertise it in Tower for less than you paid for it. Or..... They will sell a product in Tower and never offer it to you. Such as the Koas 40. Then your customer will wonder why you can't get it. You see, I support my LHS. I have NEVER bought anything on-line for this hobby. I know my LHS is having a hard time making it; and soon I will have to buy on-line because we have tight people who only look at prices and think Wal-mart is the greatest! I wonder what people pay for Power Master fuel on-line per gallon?

nascarjoe

I've recently opened a small hobby shop here in Upstate NY. I started with a 12x12 building because where I live rent is outrageous. I'm also working with a independent marketing consultant who more or less does it has a hobby. He has worked with several very successful hobby shops in the area, including a HobbyTown USA franchise.

What he does is offer the public a free chance to fly either/or airplane or helicopter to bring people in the door. He will be training me to do the same, therefore, I don't have to depend on clubs to do the in-the-field marketing for me. Also, I won't have to try to match mail-order prices as all of my business will be newcomers to the hobby, who will understand that I cannot grow unless they pay a reasonable higher price than mail-order.
If you are able to bring in at least a couple of $500 fixed wing or $1000 heli sales daily, (do the math) there is a good chance that you will succeed. Not taking anything away from the clubs, but they are not in the "business" of selling the hobby for your business.

If you are really serious about opening a hobby shop, I would suggest that if finanically possible for you, to spend a week here learning how to safely and very successfully do your own in-the-field hands-on marketing.

nascarjoe
Lighthouse Hobbies
Olcott, NY

RC Extreme power

My Feedback: (24)

I have been in the hobby for since 1978 and seen a lot of hobby shop come and go, It is a hard business to make a profit in. The average mark up is about 15% on big ticket items and 20 to 30% on the small items. Some of the large ARFS will make a few more bucks but a lot of money to inventory. Do some math, Take your total overhead and divide by 1.15 and see what your sales will have to be before you can take a nickle. There is a hobby shop that I deal with that does well but his yearly sells are about $750,00.00
Milton

Goinstraightup

My Feedback: (26)

Do a search here on RCU for Hobby Shop. A few months ago this very same topic was addressed in quite a long thread. There was quite a lot of good info on it.

I like to support my LHS. He will match all the big mail order places prices.

Our LHS has donated a lot of stuff to our events (even though he's not making a lot off of us). Also, over half of our new club members are coming to us because they found out about us at his store. Our LHS / Club relationship is turning out to be a win win situation.

FLYBOY

My Feedback: (11)

Here is a plan that will put you out of business in very short order. If you bring in a new customer and charge them a higher price because they do not know what is going on in the hobby, they will never be back. Selling a couple $1000 helis a day, thats a good one!

If you are serious about starting a hobby shop, you can do a good one. You will have to match mail order prices on a lot of things to sell them, or get really close. I had a hobby shop for years when I was in high school and college. It was very successfull and I sold to everyone in our town. Not a lot of guys went mail order. I kept bugging the hobby shop in town to let me work for them and help them stock the right stuff, but they said a 15 year old knows nothing. My boss and I flew together and he suggested we put a shop in the back of the store. The other shop was out of business in less than a year.

There are ways it can be done right, and ways that will put you out of business. Getting good customers is a priorty, keeping them is a bigger one. Price is the biggest factor in this hobby because there are a lot of choices. People don't care if you are there to help them, if your price is $5 higher, they won't buy from you 9 times out of ten.

What you have to do is match the mail order price on the larger stuff, and like them, sell the rest at retail. Your discount is generally 40% on the small stuff, and you might make $5 to $10 on a kit or an engine. You need to sell other stuff to make it so you have a high volume. Cars are big sellers too. You also need to know the products. You can't have someone selling RC that doesn't know what they are doing. Unless the customer knows exactly what he or she wants, you need someone that knows. There are some very good hobby stores out there and the owners do well, but they don't limit themselves to just RC. It is a very small part of their inventory most of the time.

good luck if you decide to take the challenge. It is a blast.

nascarjoe

Flyboy,
Yes, many times I've heard the same thing you just said, but so far, even though I just opened, I am doing very well and although my prices are higher than mail-order, I am still getting return business. You would be very surprised at how many people are ready to buy RC helicopters.

We know this because we insist that people fly our store's helis along with our trainers.
This is where we are doing something that I believe that no one else has done so far, if they have, I imagine they would be as successful as we are doing. BTW, it does help a lot that we have a flying field not far from the shop.

If there are any hobbyshops who offer fly before you buy, I would like to hear about them and how well or bad they are doing.
I've discovered that one has to do something much different than
everyone else. Think of it like auto dealers offer test drives along with that new car smell, which is a killer.

nascarjoe

Backwing

My Feedback: (3)

It's great that you are working on a business plan. It's incredible how many people have no idea what that is, or consists of.

Is there a need for a hobby shop? Are there people in your area that you talk to that say, "man if only we had a shop here that we could get our stuff at"?
How big is the need?
It's hard to start a business for somewhat of a niche hobby, and try to get people interested in it to create a customer base.

Your success is what you make of it, your there and are able to see if there is a need, and we are only able to give anecdotal experience.

Just my $.02

Rforce1

nascarjoe,

I, for one, am super glad that you opened your shop. There have been more than a few times when I was out flying and ran low on fuel, broke that last prop, or needed an extra glow plug. I think you should sell an extraordinary amount of the "small stuff" and hopefully the big stuff as well. I think your definitely on the right track with the fly before you buy deal, and you have one of the best instructors/promoters helping you out, so I think you'll do just fine ( he taught me how to fly in no time!!)

Best of luck!!!


( Now if it would ever warm up...... :disappoin)

Nitro Blast

My Feedback: (2)

My views on our success here at Radio Control Specialties in San Diego...

One thing I wanted to do for a very long time was open a hobby shop. I also wanted to have my OWN product on the market.
Lucliky I was able to do both.

BUT, things I will say that helped me more than anything was going with the "Big BoyToys" theme more than just RC. I also have a RC Car track, and host races. Scooters and Motorsports are big right now and have helped my bottom line tremendiously.

We also have a portable track system that brings all the cars so corporate clients, parties, fairs, etc are profit makers for us.

Consider doing something that your competition isnt doing in your area. Open a field, host a fun fly etc. Those really help.

SDR-Hammer

Some good input from people that have, been there done that.

One little thing I would like to add to this discussion is years ago when I was young and dumb and still in college I wanted to open a hobby shop. I did get the info you talking about and one thing I remember was that I would have been able to buy a 4 channel Futaba cheaper from Tower than I could have wholesale.

Sdr

Backwing

My Feedback: (3)

How about a moblie hobby shop.
After what gixxer said, I got an idea.
You could go to fields, meets, etc... And have a supply of some of the more needed things such as props, plugs, fuel, servos, wheels, batteries, pop, candy, etc... Al you'd need as an enclosed trailer with some rack/shelves. No property tax, no were near the insurance cost.
Just an idea.
"FunFlyer's Mobile Hobbies"

clively

Just my $0.02 as an educated buyer.

First thing to do is know your customers. If you don't know what your customers want, go to the local race tracks, flying fields, etc and ask.

Next thing, stock up on those items. Then stock up on possible alternatives. Nothing makes me walk out of a LHS quicker than someone trying to sell me more items that I don't want to compensate for their lack of inventory. For example I recently needed a chnl 56 crystal for a receiver. Upon expressing this to the LHS they informed me that they didn't have one and tried to get me to buy both a chnl 46 receiver AND transmitter crystal... The real answer should have been to order it for me.

Third, SELECTION. If you are going to carry electric motors, carry graupner, gws, GP, hacker, etc. make sure you have brushed and brushless. Make sure you have what it takes to do complete electric power systems.

Fourth, Knowledge. Going with the electric idea, make sure you know that a GWS ICS-50 speed controller won't work with a Graupner Speed 400 turning a 9x6 prop. Along with knowledge, comes information. The best thing about Tower is that they give detailed information on a lot of their products. Enough so that I can make intelligent decisions. If you can't build an information base like that don't be afraid to use someone elses. On a recent trip to the LHS I used their computer to look up product data on a competitors website for an electric motor on THEIR shelf that NO one knew whether it was a Speed 280, 300, 400...

Fourth, be flexible. If you want to be an airplane shop and your locality isn't geared towards airplanes then realize this and switch to what your constituency wants.

Fifth, like someone else said, if you're into cars, build a race track and hold events. You'll at least get people to buy spare parts, gas, motors, batteries, etc while on site. If you like airplanes, try to open as close to a flying field as possible. Or better yet, build one in the back of your shop. Again, when people are out using their equipment is when breakages occur and they need replacements. Think of this as the Golf Pro shop being on the Golf Course...

If you can't do this, then have some staff routinely going onsite to these places with some common necessities (gas, control linkages, etc) to sell for a reasonable price. If that isn't cheap advertising to gain their business I don't know what is. And, online can't compete with that level of service. You might even offer delivery services to these places... I used to race cars (real ones) and there was always one or two trailers with people selling everything from tires, gas, oil, to helmets, gloves, etc. Guess where some of my money went.

Sixth, think about having some type of classes for model builders, or even offer repair services. Some possible classes could include flying instruction, battery building, intro to electric systems, intro to Glow motors, etc. You could even involve the local hobby groups in this as instructors (or students). As an example, my wife is getting into some serious sewing and we recently made a $2k purchase at a local shop because they provide some advanced training... This is one area that an online provider such as Tower would never be able to compete with you on.

Okay, I'll stop there. This ended up being a little longer than expected. Good Luck!


Chris.