Tough Decision....

[doctorwayne]

Wow! Based on those prices for painting and weathering, I've got over $4,000.00 worth of "labour" sitting on my workbench right now, and that doesn't include the price of the cars or the added detail work. Maybe it's time to get back into the custom-painting business.

Wayne

[Will_Annand]

Are you currently ordering from Walthers Will?

No, I opted out of Walthers plan. being in Canada, I have found a Canadian distributor who carries several lines directly.

When it comes to Walthers branded product, some of the Cornerstone kits are nice, but the rolling stock can be had from other manufacturers at better quality and price.

Walthers is not the "be-all-and-end-all" that they were 15-20 years ago.

Of course I tend to stick with just the structures, autos, figures and detail parts.
In the shop I carry a couple of lines of scenery and will special order locos and rolling stock for people.

I don't deal with Walthers or Horizon. There are enough others out there that I am not worried.

[Will_Annand]

Otherwise, open some other type of store and have the Model Trains as a side-line.

That is what I have done Goat.

My main business is computer sales and service.
The model trains is a sideline.

I go to 5 local weekend shows a year and make about $1000.00 on average per show.
The rest would not make it worth my while yet, and I have been at it 2 years.
Never fails a customer comes in and wants something you don't have, then you have to place an order...
$500.00 wholesale order so you can get the customer that $49.99 kit he wants.

Trucklover, I think the best idea is to go into the family business for now and maybe see if Grandpa can spare 4-6 feet for model railroad stuff... maybe a back room or something.

[Will_Annand]

What i am looking to do however is buy wholsesale from Walthers and sell online. I am considering opening my own retail hobby shop online, and operating it out of my house. The other option would be to open a store on ebay and sell there, which might come with some ups and downs.

Sorry to say this, but it won't happen from either Walthers or Horizon.

They want to see photos of your shop, plus your retail sales license and copies of building ownership or a copy of your lease for the shop.

They refuse to sell to online or ebay only shops.

[upnick]

What i am looking to do however is buy wholsesale from Walthers and sell online. I am considering opening my own retail hobby shop online, and operating it out of my house.

Hi Josh,

Of course i dont know how things are dealt with over there but if you operate a business out of home in the U.K. the County wants more Poll tax from you which is expensive and would add more to your overheads ......... your Grandfathers license may cover selling out of his premises not your home .... there could be repercussions for him and his license, i could be wrong as i said i dont know how things are dealt with there ...... you need to check it out.

[Brakie]

Josh,I would think long and hard before selling my models since you are still living with your parents...

As far as getting into the business..

First its a dog eat dog world where the meanest dog wins.I was a part time train show dealer and did ok but,didn't get rich..Some shows I made lots of money while other shows I barely broke even.You are facing 3 establish model train shops plus the e-tailers...Count those other 2 shops as competitors as well.

As far as your custom buildings..Will any of those shops take consignments? If so,sell them there..The price should be reasonable but,not cheap..Cover your cost plus some labor.

Can you weather? There seems to be a limited demand for weathered cars especially on E-bay.

[Trucklover]

Hi guys, thanks for all the replies

Got some good news. After talking with a guy at Wathers today, he said i could open an account, as long as i can provide 2 pictures, one of the retail storefront and one of the inside of the retail store. I talked to my grandfather, he owns his jewelery store and his agreed to set up a small section of a couple shelfs for train products from Walthers. Chances are the stuff wont sell, since hes a jeweler. I also told this to the guy i was talking to at Walthers, and he said that would be just fine and that counts as a retail location. So im all aboard in this. He sent me an application for resale with Walthers, going to fill it out with my grandfather and provide the pictures they are asking for, and then ill be able to order soon when it is approved. This will be a small account with Walthers, and its called an Industrial Account, its for "professional modelers" or those that do custom work for others. This is the type of account i am setting up. It still requires a legit re-sale license.....

Anyways, i just thought i would update you guys on the situation, and i am going to be going through with this, despite all the advise saying to turn the other way lol. My grandfather seemed exited to display trains in his store as well, and is behind me on this. Ill also be displaying a couple custom buildings in his store, as well as contacting and talking to my LHS to see about displaying custom built and weathered structures in there shops, offering custom building services if the structures are bought from there stores.

So, we will see how this all goes. I am listing 80% of my rolling stock for sale. I have gone through all of them, picking and choosing the ones that i just could not let go, so those will stay, the rest will go. the ones i kept were some of my recent weatherings and some of my better rolling stock like some of my intermodal well cars, woodchip hoppers, and come coal porters, as well as a couple boxcars lol. Ill be posting a list shortly of what im selling. most of the prices i listed at 25-30% off retail and some of the stuff is not available any more and has been discontinued from the MFR's

Again, i thank you all for your replies. I am not by any means ignoring what you have all said, and i very much appreciate all the replies

[Trucklover]

Trucklover, I think the best idea is to go into the family business for now and maybe see if Grandpa can spare 4-6 feet for model railroad stuff... maybe a back room or something.

Will, this is exactly what i did, he has given me a few shelves in his shop in the showroom to sell model trains off of from Walthers. I told the guy i was talking to @ Walthers and he said that is just fine, as long as im selling out of the shop too....

[doctorwayne]

Josh, have you checked into the possibility of getting a small business loan using your trains as collateral? If it's possible, you should then be able to use the cost of borrowing as a deduction from your gross profits, at least saving you something on taxes. There may be other benefits, too. They always say, why risk your own money when you can use someone else's?

Wayne

[Trucklover]

Josh, have you checked into the possibility of getting a small business loan using your trains as collateral? If it's possible, you should then be able to use the cost of borrowing as a deduction from your gross profits, at least saving you something on taxes. There may be other benefits, too. They always say, why risk your own money when you can use someone else's?

Wayne

Wayne, this could be something to look into. Not necessarily with my trains, but with my other expensive electronics and such, and maybe some of my trains. I have quite a few expensive electronics.... Thanks for the suggestion

[MasonJar]

If you are going to seek a start-up loan, you will need a business plan. It sounds like you have the elements here in this thread, and in your head, so I strongly urge you to put them on paper.

Andrew

[doctorwayne]

Andrew is right: if you're well-organised when you approach a prospective source of funds, they're more likely to view your application favourably.

Wayne

[Russ Bellinis]

Josh, one thing to consider is what will $1500.00 buy, and can you sell $1500.00 worth of stuff in a reasonable amount of time with a decent profit? You may not be able to make a decent hourly wage, but you have to make enough to pay for the product and support your lifestyle. You might find yourself selling all of your stuff, buying 1500.00 worth of product that you can't sell in a timely manner. Before I retired, the parts manager at the Carrier-Transicold dealership I worked for figured that he needed to turn his entire parts inventory 3-4 times a year. The problem for a while was that you can't turn every single part that often, but some may turn 5 or even 6 times a year. He would want to discontinue any parts that didn't turn the requisite 3-4 times per year. Then when a customer brought in a trailer loaded with ice cream that needed one of those parts that he didn't want to stock, we had to cannibalize a new unit to get the part, or if the trailer was not loaded, we had to air freight the parts in to get the customer's unit running. We generally had a $30,000.00 per month air freight bill, and if the unit was under warranty, the dealership had to eat the air freight bill! The point of all of this rambling is presuming a 20% markup, can you sell $5400.00 gross each year, or can you sell $1800.00 in 3 months? If you can't do that sort of product sales, you probably can't afford to buy Walthers' minimum.

[Green_Elite_Cab]

Yeah, i don't think i would have sold all my stuff either. On the other hand it is hard to find a job, but i think I'd save up some money first to start up the business, rather than selling off all the models you've built. These sorts of endeavors take time. I'm not sure how long you've been planning this, but it sounds like you are heading into this pretty fast. I'd hunt down some sort of job first, at least until the models can start paying some of the bills.