Thread: Discussion R/C Stores Gone By the Wayside
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Old Jan 29, 2009, 08:23 AM
fishingdan is offline
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Norfolk, MA
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The era of singe channel retailers is over. To be a successful retailer, one must sell through multiple channels and one of those must be eCommerce. This obviously doesn't affect only hobby shops. It is critical to the survival of all retail businesses and manufacturers that are selling products to the stores. It is simple economics. For example, a well known clothing brand normally develops or acquires a new brand and then starts building retail stores for that brand. It has traditionally been a successful strategy. To do that, they need to open 200+ stores with the hopes that 50 of them will be highly successful. The cost of opening up one of these stores is between $600,000 and $1,000,000. There new strategy is to develop the brand in the ecommerce channel first, refine it there, and then develop a select number of brick and mortar stores. Done right, it is a powerful combination. The cost of developing and launching a new ecommerce brand is a fraction of the cost of the old strategy.

There is a LHS in my area that is having some success. They have one store that is nicely stocked with plane, heli and car products/parts. They have a productive website (they could be much better at this), a good staff that is available via email/phone/walk-in and they have found that the bulk of their money is made in parts, repairs and upgrades. Are they getting rich? I doubt it, but they are doing better than surviving and learning how to be effective in the new economy.
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