Im facing a pretty tough decision right now with my model railroading stuff, mainly with my rolling stock.
My family has a resale license in the State of California (my grandfather owns a jewelery store and has owned for 40+ years now) and he has suggested that i contact Walthers and so we could set up a resale account with them. As many of you may know, im out of a job right now, and im currently building and selling structures, both to private people who have contacted me and on ebay, and im not making much of anything on them. My grandfather and i were talking about this yesterday, and how i could make a little more if i could order wholesale direct from Walthers. So he and I put together an email and sent it off to Walthers to inquire about ordering from them at a wholesale or "dealer" discount. This would certainly help me alot right now and make it so i can at least get by right now and pay my bills and such, as well as support my girlfriend (which tomorrow is our 1 year anniversary lol)
Im waiting on a response from Walthers and keeping my fingers crossed that i will be able to order from them at the wholesale prices with my grandfathers re-sale license. I know there is going to be at least some kinda minimum first order, and probably a minimum additional order, thats okay with me, i just need to find the money to make my first order from them if i can infact order from them. This is where my tough decision comes into play here.
Im 19 years old, still live at home, no car, no job, and no money. I KNOW ITS SAD, but hey, i got a girlfriend that loves me and a loving family, plus a SWEET hobby, so what more can i ask for right now right? hehe So this means i cannot get even a small loan without any sort of collateral right?
To make the minimum order from Walthers, i have proposed to sell every single piece of rolling stock and possibly all my engines to raise money for this first order from them. I have a feeling there first minimum order is going to be at least $1500-$2000 but im not sure, im getting really anxious to hear back from them and hopefully set up an account with them for resale. This is going to be extremely tough for me to do, this is all my rolling stock that i have collected over the past 4 years, and i have ALOT of favorites in there. Its literally killing me inside, the thought of selling every thing i got so far. But on the other hand, if i do sell all my rolling stock and engines, i can slowly built up my fleet again (both rolling stock and engines) by ordering them from Walthers, and i can pretty much start over clean, get all nice new shinny rolling stock with metal wheels, start fresh and replace all couplers and wheel sets with Kadee #5's and Branchline code 80 metal wheels. This would mean no more rolling stock kits for me lol, and my engines would be all nice and new.
There is just something about this though, the though of selling everything i have gotten so far that is just holding me back. What is that called? lol. At first i was all over this idea and completely ready to start listing every single last thing i had to start over, but then i started thinking and looking at the stuff i have and it hit me, im really going to miss this stuff, so i just dont know what to do, i guess i really need to think this one over.
Id like to hear your guys opinions on selling everything and starting over slowly, good idea or bad? The whole reason i want to order wholesale from Walthers is to put a little extra money in my pocket, and i would also be willing to take orders from forum members on anything Walthers carries, and offer items at a discount over normal retail.
Comments, questions, suggestions are welcomed
Don't sell your stuff!
First off you have to look at this from another angle.
How many model shops are around you?
How much are you charging for 'ready built" houses/structures?
How many others actually do this? I mean I haven't seen anyone make custom houses from kits and sell them, so you might have a scheme here 8-)
I would say find another job for now, and get into some school courses that'll give you a better background for sales/marketing.
Walthers wants big orders from their dealers.
I asked last year when I opened my shop.
$1500.00 first order 1/2 to be in Walthers Branded product.
then minimum $500.00 per re-order.
I would say not to sell all your stuff just because it seems to me like your throwing money away. Your going to take a pretty heavy hit. Seems like there should be a better way.
tomustang Wrote:Don't sell your stuff!
First off you have to look at this from another angle.
How many model shops are around you?
How much are you charging for 'ready built" houses/structures?
How many others actually do this? I mean I haven't seen anyone make custom houses from kits and sell them, so you might have a scheme here 8-)
I would say find another job for now, and get into some school courses that'll give you a better background for sales/marketing.
Tom, thanks for the reply.
To answer your questions:
How many model shops are around you?
There are 3 hobby shops that are strictly trains, and 2 others that i know of that are RC and trains. I would not be only selling locally, i would be selling mostly on ebay from the stuff i would be getting from Walthers. I would most likely open a store on ebay....
How much are you charging for 'ready built" houses/structures?
So far, i have not been charging hourly, its just way to out of the question, and my structures would end up costing $400-$500 which is just not practical. I have usually just been charging full retail plus and extra "build" charge, as well as a "weathering" charge if they would like it weathered. Usually ill make between $20-40 a structure, depending on how much the kit costed me to get, and the fees that i get charged from PayPal. So ordering wholesale would almost double my profit on these structures i build and sell, because i would be getting them at wholseale prices and selling them for full retail if they are built + some extra for the "build" fee. I really should sit down and come up with a chart or something for the build fees. say a $40 kit would have a build fee of $30. I know this sounds like alot, but believe me, there are people out there willing to pay these prices for structures, based off personal experience.... I would not be persoanlly willing to pay that much, but others are, you just have to find them lol
How many others actually do this? I mean I haven't seen anyone make custom houses from kits and sell them, so you might have a scheme here 8-)
Ive noticed a few others doing this, buying wholesale (at least i think) and reselling on ebay. I have not noticed many people building structures and selling them however, and so far, ive done pretty good building and selling for the most part, so im keeping my hopes up lol
Will_Annand Wrote:Walthers wants big orders from their dealers.
I asked last year when I opened my shop.
$1500.00 first order 1/2 to be in Walthers Branded product.
then minimum $500.00 per re-order.
Will, thank you for your reply and the information!!
this is what i though, and this for me would not be a problem i dont think, most of the stuff i would be ordering would be Walthers product, and i really dont think that it would be that hard to put together orders of that value, especially when buying the Walthers rolling stock.
Are you currently ordering from Walthers Will?
TrainNut Wrote:I would say not to sell all your stuff just because it seems to me like your throwing money away. Your going to take a pretty heavy hit. Seems like there should be a better way.
Thanks for the reply TN. Im looking for other ways of getting money for a first order. i think once i establish a first order, i can get enough money after i sell some stuff from the order to keep placing orders of at least the minimum. Im going to talk to my dad and grandfather, and see if i cannot borrow some money from them and pay them back, but i dont know if i want to have that over my head, im not one that likes to borrow money, even if its from family lol. Its always harder to pay it back.... This is why i might need to consider selling all or at least most of my rolling stock. We will see how this progress's, hopefully i get a reply from Walthers soon and i can get this rolling lol
Trucklover Wrote:How many model shops are around you?
There are 3 hobby shops that are strictly trains, and 2 others that i know of that are RC and trains. I would not be only selling locally, i would be selling mostly on ebay from the stuff i would be getting from Walthers. I would most likely open a store on ebay....l
That can be one of your bases of operation. If you approach the owners of the shops and ask them to put up flyers for your 'work' for his customers buying kits they might just say yes.
tomustang Wrote:That can be one of your bases of operation. If you approach the owners of the shops and ask them to put up flyers for your 'work' for his customers buying kits they might just say yes.
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Hi Josh,
I agree with Tom here with the Flyers especially if you add a pic or two if possible of your work in the flyer.
It is a service that could bring more business his way as well and in return maybe he could offer you kits at a reduced rate, i worked in a LHS for 7 yrs and did commissions for people to be honest the rate they paid was standard and not on an hourly rate ... as you said it would work out too costly for them to pay you that so if i was you i would go for the flyer idea in all three of your LHS near you for a start and see how it goes ... dont sell up your collection think how hard you have worked for them and what they mean to you.
One thing i did find is to charge on a build the cost of paint and materials reasonably apart from the basic colours blacks/whites rattle cans of undercoat i costed the build with the colours i would need or the customer specified (i did a lot of cars/trucks) that way you generate sales for the LHS in sundries and build a stock of paint yourself none of my customers ever asked for the remaining paint when picking up their models.
If you need a tool or other add ons for a build these should be included as well ... the only way i could have made a living at this is to move down south to London which was out of the question .... as Tom said find a job and use this as an extra income to your life ...... sorry if it sounds hard but dont forget a customer will always ask for a kit you are out of stock of and so you will have to find more money and make up a minimum order for it around $500 as Will said ....... your LHS has other items he can sell to help make up an order and organise his money you wouldnt have.
I agree with the others - don't sell your stuff. There are better ways to get the money, and ones that will give you tax benefits and so on.
I think what you should do is write up a business plan. It would lay out your idea, and then put some (realistic) numbers to it to see if it makes sense. Having this will also help you with the bank, if it comes to that.
Here's an interesting US-based resource to get you going -> <!-- m --><a class="postlink" href="http://www.sba.gov/smallbusinessplanner/index.html">http://www.sba.gov/smallbusinessplanner/index.html</a><!-- m -->
EDIT - some other thoughts...
How far can you reasonably expand the scope of this business? Are your scratch-building skills good too? If yes, are there transportation advocacy groups looking for models? Local architectural firms? Museums looking for war-themed dioramas? Any other model or miniature building/customizing you can work into this? Are the local hobby shops looking for built-up/finished models? (I always thought that this would be a win-win for the hobby shops - you'd get paid to make up a diorama, and they'd get a way to show off what one could do if one would only buy X, Y, and Z products from them...
)
Are you willing to go into these other subject areas - military, aviation, non-rail? What about other scales? Are you willing to build entire layouts (carpentry, wiring, etc, etc)?
Anyway, just some thoughts that I hope help you with your plan.
Andrew
I wouldn't sell everything. You have quite the roster. I'd pick out the ones you want to keep, and sell the rest.
Never give up everything. Thats the mistake I made. I went from Ho, sold everything, to N, sold most of that, then went back to HO. I didn't save anything from the prior HO, so I had to buy everything all over again. Of course, I had no idea I would be going back to HO, when I was working in N,(I still have some N stuff left) and I doubt I would do the switch again.
Just a little personal experience.
Hi TruckLover,
The topic of opening your own Hobby Shop came up a while back on the old Gauge.
A lot of Hobby Shops have gone out of business or stopped carrying Model Trains.
There's just too much variety available and the overhead cost of stocking everything and then watching causual browsers look through the stock and not buy anything because the one item that they are looking for isn't there...
Having an on-line store helps to cut down on overhead and allows you to reach a bigger clientelle.
The on-line stores are putting the Local Hobby Shops out of business through selection and pricing.
Otherwise, open some other type of store and have the Model Trains as a side-line.
There is a Camera Shop that does this...
Dare I say, a serious business with a hobby side-line.
So, here's what I'm thinking...
It sounds like you don't want to go back to school.
1. Go work for your Grandfather at the family Jewelry Store.
2. Learn how to run a business from him.
3. Set up an Online Model Train Shop.
4. Set up a Model Train Co-Op Catalogue Store using a small space in the Jewelry Store for local customers.
Have your Co-Op members pay a membership fee of $10-$20 up front so that you have some start-up money. Place orders on their behalf in order to get discounted rates for what you buy wholesale.
Only stock the most popular items like flex track and a few turn-outs. Maybe a couple of train-sets during the holidays. What ever you can squeeze into a 10x10 space (or smaller, depending on how much space you can get in the Jewlery Store.). [Desk, Computer, Work-bench, Shelving for Regular stock and current custom work.]
Use the Walthers Catalogue and be open to ordering from other Whole-salers and Cottage Industries.
5. Build and sell models and Scratch Built items on Spec.
6. Be a value added reseller by upgrading couplers and wheel-sets, along with light weathering etc...
7. Run your business in the small spaces of time in between taking care of the Jewlery Store.
If you can come up with a big down-payment...
[attachment=1911]Cloverhous is for sale...
Tom, Nick, Andrew, Ed, and Tin Goat
THANK YOU Guys so much for all the replies, so much to think about and thats really what i need, so thanks alot guys, this is something serious and could be a life changing decision.
One thing i would like to point out however, is that i am not looking to open a hobby shop or anything like it. As Tin Goat mentioned, opening a small space hobby shop as a side business inside my grandfathers jewelery shop would not likely be possible either, its already a small space only large enough for his store and all of the tools and workbenches necessary to do onsite jewelery repairs, along with the massive safes and such.... On top of this, his business as well as just about every single other small business, and some larger ones, is struggling to start afloat and keep his doors open everyday. Jewelery, like many other things, has become an un-needed accessory at this time for many people.
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. For one i would get my stuff out there right away for TONS of people to see, and if i opened a hobby shop online site, it might take a long while for my name to get out there and people start ordering from me. The bad about the ebay store however would be paying all the fees to list all the stuff. This is why i was thinking i would list limited stuff, maybe stick to 150 auctions at a time. As i said earlier, i would offer at a discount off retail, and list starting a little over what it cost me to get so at least im making a profit on the stuff it sells.
I still have not received a reply from Walthers, and im hoping there working on responding to my email, but if i do order from them, i would be ordering mostly only there product. I would get less of a discount if i ordered other MRF's products from them, as Walthers is the middle man kinda if you want Kato Products from Walthers. They have to order from Kato, and you order from Walthers, therefore the wholsale price of Kato from Walthers goes up alot because they also have to make some money. With that said, i might also try contacting Athearn, Kato, and a few others after i establish the Walthers orders and have some extra money to place some orders with some other MRF's. But im thinking ebay is going to be the best way to go right now. I can open an online site too and make up a hobby shop of my own and run it strickly online, but as i said above, i have a feeling its going to take a long while for my name to get out there and for people to start placing orders from me. If i have both the ebay and online hobby shop up and running, then at least i will be making some money on ebay at the same time while my site name gets out there for others to see.
Now to your guys ideas to advertise in my LHS about building and weathering. Thats an excellent idea that has been mentioned to me more then once. I have not done it yet, but i want to, and i think it would be beneficial to both me and the LHS for exactly the reasons you guys said above, the hobby shop would be benefiting from the customer buying the structure from the Hobby Shop, and i would be benefiting from the customer who has bought the structure, seen my work in the Hobby Shop, and has contacted me to do a structure built and or weathering job on it. I really like the idea, and next time im in the shops, i will definitely be talking to the owners and running the ideas by them to see if they will bite. I also think if i can leave a few sample structures with them, as well as pictures of more structures that i have done, they would be more convinced and the people who see them might want to hire me to do there structures for them. This would be possible if i could get structures wholesale from Walthers, so im not paying retail for structures and just leaving them at the shops, and then being out $150 per shop in kits lol.
I need to read over some of your replies some more, i find it i always miss important things when i read the first time and always need to go back and reread lol. So thank you again for all of your replies, they have definitely helped me
Josh,
Take a look at this -> <!-- m --><a class="postlink" href="http://www.customtrains-canada.com/index.html">http://www.customtrains-canada.com/index.html</a><!-- m -->
Charls is a "custom work" guy who also has a very focussed train shop inventory out of his house. Of interest to you are the links to
Custom Models and
Painting. Check out his prices. From what I understand, he does very well. He's a member of the local "dinner club", which gives him exposure to members of almost every other club in our area.
This might be more of the model that you are looking for.
In terms of the hobby shop selling you kits at their cost to assemble and finish for customers, I am not sure they'd go for it. However, they may be happy to give you the referral once the custome has bought the kit at retail price. So you'd have to come up with a scheme like Charls' above for the assembly and painting/weathering of structures.
Andrew
PS - I hope you like his truck work...!