Calling all Steel Modelers

[Trucklover]

Some of you may know that i was pursuing becoming a Walthers dealer, well Im officially a Walthers dealer now lol. I have a small section in my grandfather's jewelery store where i will be selling trains out of, as well as online through my ebay retail store. "Mader's Custom Trains" will officially be open for business as soon as the first order from Walthers arrives hehe :mistht:

Among the many things i will be getting on my first order is the Walthers Steel Series. This includes all the NEW kits that are released to this date (Blast Furnace, Rolling Mill, Coke Oven Kit, Blower Engine House and Blower Piping Kit)

Full retail for 1 of each of these kits is $719.90, a good chunk of change lol. My question is, how many of you Steel Modelers would prefer to buy the kits separately and how many of you would prefer to buy all of them in a package deal with Free Shipping in the US? I have not yet decided on how much the package deal will be, but dont get too exited, it wont be anything crazy for obvious reasons lol

Im also debating on building some of these kits and offering them built-up. But unlike the other structures i build and sell curently, these are HUGE and would be a HUGE issue to ship, especially cross-country. So im debating this too, i guess i need to find out just how large of a box say the Blast Furnace would require to ship safely with "cushion" room all around it lol

Im welcoming any opinions on this from you steel modelers and other forums members. You all have been so helpful in the past, and i really appreciate it!!

Im going to go ahead and make this a poll question too, so please vote and feel free to reply with any information you can provide about this subject :mistht:

And, Thank you in advance to all who reply and vote

 

[stationmaster]

Josh, I think that the steel mill is a salty investment. I am giving serious thought to building a mill scene for my layout. A "package deal" would be nice. But, to buy it all at once would definitely cramp the "monthly train budget". I will probably buy my kits a piece or two at a time.

I think that if I were you, I'd just special order those kits as warranted and concentrate on fast selling products to raise my capital. Cars, engines, and smaller structures move faster. The steel mill may sit on the"shelves" longer and just be investment wasted until sold. Whereas a nice Proto 2000 AC4400 or Athearn Blue Box or RTR box cars could be sold within a week.

Being able to stay viable in business is all about "turns", return on investment. How fast you can sell something to realize a return on your investment. Think with your head, not your heart. I'd rather sell 100 items for a $1 in a week than a $100 dollar item in a month. Which do you think is the more achievable? Set "mini goals" to achieve the big one.

Again, if you start and think small in the beginning, keeping the dream of growing, you will be much more successful. I think that the system I am referring to is called "baby steps". You have to learn to crawl before you walk, and learn walk before you run.

Just a bit of additional insight. I worked in retail and the customer service business for 35 years. We had peaks and valleys in our sales and customer counts. Be prepared for those. Model railroading, for me at least, is a seasonal hobby. I mainly work with the trains in the colder months. I prefer to be fishing, boating, and motorcycle riding in the nicer weather. I do more "playing" with the trains in the warmer months and less building, especially the rainy days. Be prepared for those peaks and valleys. Holidays like Father's day and Christmas, will see a spike in sales. Make sure you keep those in mind and are prepared.

You are starting up your business in one of the "trough/valley" times, IMO. Sales are going to be tough. Maybe eBay can carry you, but I doubt it. The economy is slow. Money is tight. Perseverance will be the key. And so will the cash reserve. I do think that getting high dollar items, such as the steel mill, would be a mistake. Go for lower priced items, and more of them. They will sell faster, building up much needed cash to reinvest. Keep the cash flow moving in a positive direction rather than a negative. You are going to find that, in the beginning, you will not be making money, but reinvesting it into your inventory. Missed meals will happen. And bills will be paid late.

Remember, too, who pays you. The customer. Customer service is as much a key as pricing and inventory. The customer pays the bills, puts food on the table and provides the roof over your head. Although they are not always right, you must treat them with courtesy, respect, dignity, and keep them coming back. The occasional buyer, while sometimes making the BIG purchase, is nice. It will be the return customers that keep you going and growing. These customers become "clients", and you must form a relationship with them.

Enough rambling and advice from an old sage. Good luck.

Bob

 

[IronBeltKen]

I wish you had a 3rd option, "Both". But customers appreciate flexibility. If I already have a few rolling mills for example, I might not want to spend money on an extra one that will only be collecting dust on my shelf.

When WKW first announced the Coke Ovens kit with the larry car and quench car, those were only available as part of the kit. Enough modelers complained and wrote to Walthers, now they're also offering the quench and larry cars separately.

You might offer an additional discount if somebody buys the "whole enchilada"...

 

[Trucklover]

Bob,

Thank you so much for the reply and the helpful suggestions and insight

You are absolutely right, i would much rather sell a bunch of lower dollar items and keep them stocked rather then a few high dollar items and sell them occasionally. Ive given myself $500 for the steel series on my order from Walthers, i think ill stick to this for now and see how they sell. If it takes me a while to dump them, then ill most likely be doing special orders only on them. I have managed to get alot of smaller dollar items on the first order, with 3/4 of the order being Walthers Gold Line rolling stock, along with a few random structures and some more of the ADM grain elevators since i can build and sell them pretty fast for good profit.

I know i can sell these Steel Mill kits, im just not sure how long they will sit before someone bits on them lol. I think what i need to do is sit down and crunch some numbers, see how much i could offer the package deal and offer the individual kits while still making a good profit on them.

Again Bob, thank you for all the helpful information

 

[Trucklover]

I wish you had a 3rd option, "Both". But customers appreciate flexibility. If I already have a few rolling mills for example, I might not want to spend money on an extra one that will only be collecting dust on my shelf.

When WKW first announced the Coke Ovens kit with the larry car and quench car, those were only available as part of the kit. Enough modelers complained and wrote to Walthers, now they're also offering the quench and larry cars separately.

You might offer an additional discount if somebody buys the "whole enchilada"...

Ken, ill go ahead and edit a 3rd option in there for both lol

I like what you said about offering both and then having the package deal at a deeper discount. It is definitely something to think about and try out.

I noticed those Quencher & Larry Car kits too, they are releasing 2 others as well for the rolling mill and the blast furnace details. Those would be good to carry, especially since alot of people have the older kits and might want to upgrade them.

Thanks for the reply

 

[Trucklover]

Can one of the mods please add a 3rd option to the poll and label it "Both"? thanks

 

[stationmaster]

Josh, you may want to PM the Mods.

Bob

 

[Larry]

Josh, I don't want to rock your boat as far as making a new business of model railroading. How are you going to compete w/all of the on-line hobby dealers that give deep discounts? Are you selling a lot of your assembled buildings yet to support the new business?
I was a warehose distributor for many years for van & 4wd pickup parts & also owned a thriving speed shop. Back then there were no online shops or computers(vice-versa).
There were many other speed shops & i did a lot of outside sales for myself that countered the other dealers low discounts. I also sold parts at a local dragstrip for 4 years. So, what I'm asking-How are you going to get out & sell all of this stuff you are buying? Just by internet only? What if the economy gets a lot worse than it already is?
I was self employed for many years(35) & my business was totally seasonal & the economy was really bad in the late 70's & early 80's, not as bad then as it is now.
I hope you really do well, but, I had to ask these questions.

 

[stationmaster]

Larry, that was a bit of the tone I wanted to express. The peaks and valleys of retail sales are steep and slippery. One could lose one's derriere or make a living, but never get rich. One has to be extremely alert, think with ones head and not the heart, keep a finger on the pulse of the market and the hobby, have extreme patience and perseverance..........Success is slow and hard to find. And it may never be found. The best one can hope for, usually, is not to end up in the poor house.

Railroad modeling is a very small niche market, too. And I mean VERY SMALL. The hobby comes after paying the bills, putting food on the table, and a roof over your head. Only then can you buy trains. I would tend to think that starting business in that category might be good to support one's habit, but not to make a living. I do wish him luck.

Hopefully, his granddad is not charging rent or utilities. At least he won't have those expenses.

Bob

 

[Trucklover]

Larry, thanks bud for your concerns Now to answer your questions

How are you going to compete w/all of the on-line hobby dealers that give deep discounts? Are you selling a lot of your assembled buildings yet to support the new business?

From what i have seen, most hobby internet retails offer discounts between 20-25% discounts off retail and i have seen a couple that offer about 30% discounts off retail, unless of coarse they are clearing house and offering closeout prices on stuff. My intentions are to offer items at the same discounts, of 20-30% off retail depending on what the items are. If there more popular items, then the discount would be slightly less then an item that is less popular....

I am still building and selling structures, and yes this is bringing in some money, and i will be able to make a even a little more by getting them at wholesale prices.... Im currently working on a large Mill.... Im also order 4-6 ADM grain kits on my first order to build them, as well as a few other structures to build and sell.

I have also started looking for a job again, i really got motivated by my dad the other day when he said man wouldnt it be great to have this business as sorta a second income and something to do when your not working a normal job? Well that did it, im now looking for another job again too.... lol

So, what I'm asking-How are you going to get out & sell all of this stuff you are buying? Just by internet only? What if the economy gets a lot worse than it already is?

Internet will certainly play a big role with me selling. I would obviously be selling out of my grandfathers jewelery store too, but i dont expect to do alot of sales there, as lets face it, its not a hobby shop, its a jewelery shop. We are however going to advertise the hobby stuff with the ads that he runs for the store, so who knows, some sales might come out of it too....

Once i get things rolling here, and can develop my own website to sell off of, ill do that too. But right now, for the time being, ill be selling out of the retail jewelery shop and a ebay store ill be creating.

The hard part is going to be getting my name out there for others to see.....

 

[Trucklover]

Larry, that was a bit of the tone I wanted to express. The peaks and valleys of retail sales are steep and slippery. One could lose one's derriere or make a living, but never get rich. One has to be extremely alert, think with ones head and not the heart, keep a finger on the pulse of the market and the hobby, have extreme patience and perseverance..........Success is slow and hard to find. And it may never be found. The best one can hope for, usually, is not to end up in the poor house.

Railroad modeling is a very small niche market, too. And I mean VERY SMALL. The hobby comes after paying the bills, putting food on the table, and a roof over your head. Only then can you buy trains. I would tend to think that starting business in that category might be good to support one's habit, but not to make a living. I do wish him luck.

Hopefully, his granddad is not charging rent or utilities. At least he won't have those expenses.

Bob

Bob, thanks for adding to what Larry had to say. I understand that this might not be easy to get rolling, but you gotta start somewhere right? hehe

I know what you mean about the hobby coming last to just about everyone too, and believe me, its the same for me, especially in these hard times. And to answer your question, no my grandfather is not charging me rent or utilities, so i will not have those things to worry about, at least not at this time.... lol

 

[stationmaster]

Josh

Advertising ain't cheap. If you had some dioramas to place in the shop window? Hobby shops are now out as advertising. You are now the "competition".

Attend a few local flea markets. Maybe even set up a small table with a few dioramas. Leave a few business cardfor the takings. Getting started is hard but staying in business is even harder.

Be a vendor at train shows. Hook up with a train club or clubs. Give them a discount of something like cost plus 10-15%. Have them put in an advertisement in their bulletin, if they have one, for the discount. Work out a deal with them. If the club displays at train show, hook up with them. Have them do some of the advertising for you.

Business cards are a cheap thing too. You can actually design your own and print them up on your computer. Staples has deals from time to time on them if you wish to take that route. While you're at it, get a decal program. A nice bit of a niche there, too. Print them as they are ordered, that will help keep inventory and costs down.

You've got a BIG learning experience ahead of you. We are pulling for you, rest assured.

Bob

 

[bigford]

josh

dont forget (N)ormal scale. we like a deal too

 

[DirtyD79]

I wish you had a 3rd option, "Both". But customers appreciate flexibility. If I already have a few rolling mills for example, I might not want to spend money on an extra one that will only be collecting dust on my shelf.

When WKW first announced the Coke Ovens kit with the larry car and quench car, those were only available as part of the kit. Enough modelers complained and wrote to Walthers, now they're also offering the quench and larry cars separately.

You might offer an additional discount if somebody buys the "whole enchilada"...

I agree I'd really rather buy the pieces I need on certain stuff plus it just makes more sense as many customers simply may not have the money to buy everything all at once. That's the way I bought the stuff from The Works series as at the time a 320-400 dollar expenditure on models just wasn't in the cards for me.

 

[UP2CSX]

Josh, you've gotten lots of great advice here from guys with many long years of experience. I was also in retail (my wife, really, but I had to help out). We had a florist shop and not only did I face all the problems you face, my inventory died if I didn't sell it. As Bob said, maximizing your inventory turn should be your top priority. Even though your inventory won't die, it will get "stale" if you buy too many things that appeal to only a small number of modelers. Does Walthers have a service for dealers that tells them the top selling items for the last month or the last quarter? If so, I'd be ordering a bunch of the top 20 or 30 and maybe one steel mill kit. If you can turn those top sellers every month, you've got the money to start stocking some of the less popular items. Don't let your own interests sway you in terms of stocking. You want to make a profit, not sit and stare at stock because you happen to like it.