Hello to everyone,
I have been recently working on market research involving opening a military model shop in Houston TX. It would include everything Military from ships, airplanes, helecopters, and armored vehicles. Included would be a comprehensive array of modeling supplies geared around military models. This idea came to me when I was attempting to purchase a specific armor model and found that most hobby shops have a small amount of military models with large numbers of car models. Give me some feed back and suggestions...

Opening a model shop is a huge investment. If you do it right you can be successful. While I have no experience in running a hobby shop, you can take my advise with a grain of salt.

I would trade for a higher volume of sales verses a higher profit per item. Your main competition will not be the hobby shop on the other side of town, but online retailers. So you will need to set your prices accordingly. Depending on what kind of markup you can live with I would go with the smallest tolerable. Meaning do not overprice your merchandise in the hopes that it will sell one day.

One of the things that hobby shops fail to realize is that overpriced merchandise will continue to sit on the shelves and continue you cost you money. It is better to have a cash flow than to have all your money tied up in a costly inventory. For example, one of my local hobby shops has the 1/350 Tamiya Big E for $295 and the Battleships for $78 to $89 a piece. Does anyone think that these will ever sell when you can get them online for 1/3 or 1/2 that price?

The best example of a Hobby shop paying attention to its inventory was a Hobbytown USA in Macon, GA. If a model sat in ther shop over nine months it was put on sale, and they would have some great 25% and 50% off sales (It is one of the few times I ever bought from a retail store). They were moving their inventory. They would always have the newest stuff because they had the cash flow and available space. The converse of this is many hobby shops that would charge full retail or higher had the same inventory every time I went into the store to buy paint. I would only buy paint because no one would pay for full retail when you can get it online for much cheaper.

So to sum up my ramblings 1) have reasonably priced models (because we are a notoriously cheap bunch). 2) have on online component to really churn out the sales.

makes sense to me nimitzfan, my two cents though, i dont build an7ything other than military but it might be an idea to stock some comercial every day type models if for no other reason than to draw people in. Just turn the tables i suppose concentrate on military but have a few comercial items and i think that any new business should certainly think very hard about starting up with (or just around the corner) a small internet/ mail order side.
Thats what i would do.

Thanks for the info and suggestions!

One thing I might add. I was in our local HobbyTown the other day. The manager was pricing some items. She asked another guy what a kit sold for on ebay. He told her and she priced it about a $1 more. I thought that made a LOT of sense.

hmmm...beside selling of models, equipments and other acessories, perhaps you can also conduct lessons such "Amatuer building models" "Guide to finishes", basically just conduct lessons to teach people how to model. and you could actually hold competition within the neighbourhood where everyone who buys your model is able to participate.

regarding the internet part, selling of your item online is great, you offer to oversea sellers as well. beside having your own website for selling your items, you can also make your website a forum for the local modellers. and you can also post your item on ebay auction as well. those are just few of my ideas. hope it helps.