by Tina Manzer
Thirty-five years ago, when he was still in high school, Rex Simpson started a business with his older brother Lee. Their passion was radio-controlled vehicles, and their hobby of buying used RC cars and fixing them up for sale soon generated a following around Portage, MI.
“We had a little store in our parents’ basement and sold mostly to our friends,” Simpson explained. “Two months before I graduated, we moved to a 1,400-square-foot storefront and then a year and a half later, we relocated to what became Hobby-Sports’ permanent home.”
At 9,000 square feet, it was a lot of space to fill, “but someone else rented part of the building for the first few years so we were able to grow into it,” said Simpson. “We own the property, which has been critical to the growth and longevity of our business. It has really helped us do what we wanted to do as a hobby store.”
What they did turned their small enterprise into an exciting retail destination for fans of radio control, model trains, slot cars, rockets and more. Today it’s a busy hub for customers looking for the latest and hottest vehicles and even repairs and upgrades for their current vehicles. With an in-store train layout with HO and O gauge trains, HO slot car and 1/18 scale rock-crawling course, and a dirt off-road track and rock-crawling course outside, Hobby-Sports.com exemplifies experiential retail.
Hobby-Sports makes sure its customers feel appreciated. Twice a year, the store holds a customer appreciation week. This event has free food, DJ, magician, demos, raffle prizes and a variety of activities.
In addition to brick-and-mortar sales, the store has a thriving online business. “Our website is powered by Shopify – the best thing we ever did – and we sell our parts on Amazon and eBay,” Simpson stated. “Twenty-five percent of what we sell is sold online.”
Sales at Hobby-Sports.com reached a high-water mark in 2021. “Today sales are slower, but they’re still higher than they were in 2018,” reported Simpson. “I look at it this way: In 2021 we sold three times as much product as we did in 2018. Now we’re selling twice as much as we did in 2018.”
Approaching an intersection
Independently owned hobby stores have much in common with specialty toy stores. Both offer consumers a mix of playthings that are high-end (more durable, better designed, often more expensive, etc.) compared to other stores in their general category. In some cases, products in hobby and specialty toy stores overlap.
Like specialty toy stores, hobby stores’ roots run deep in their communities – many began years ago as mom-and-pop businesses to meet the play-product needs of local shoppers. Always crucial to their businesses’ success has been a staff of service-oriented people who love to share their passion for play and product knowledge. Owners of both hobby stores and specialty toy stores work hard to keep their merchandise new, exciting and unique to differentiate their stores within their market.
“There is a lot to the toy industry and it’s very interesting to me,” said Simpson, who attended ASTRA Marketplace, his first toy trade show, last June. “I think in the future, hobby stores and toy stores are going to be sticking together more, even though now it may feel like they’re two separate and different business types.
“I loved ASTRA Marketplace – not only for the diversity of the products it presented, but also because it’s like one big family,” he continued. “Everyone is willing to share ideas and talk with you.”
A longtime member of the National Retail Hobby Stores Association (NRHSA.org), Simpson was in Cleveland scouting out toys to add to his mix. “Half of our 4,000 square feet of selling space is RC-related. In the other half we sell Gundam models, slot cars, plastic models, puzzles, metal detectors, science products, rock tumblers, trains, rockets and LEGO,” he explained. “LEGO generates about $25,000 in sales for us each year.
“Most of our shoppers are guys ages 20 to 40,” he added. “When they come in with their families to buy a $400 RC truck for themselves, we need to have something here for their kids. LEGO fits the bill, but I’d like to have more toys. Many of my friends in the hobby industry are diversifying that way, too.”
Negotiating the curves
In addition to the difference in customer demographics compared to toy stores, hobby stores have a unique range of product price points and a large number of SKUs. Simpson’s store carries about 10,000 unique products and prices range from a 42-cent piece of Basswood to $1,400 for a massive 1/5 scale, four-wheel-drive Losi Gas Buggy.
Simpson reported that his average sale is around $130. “Our busiest time is Christmas, which accounts for about 20 percent of our business each year. Our second busiest is during tax season when people come in with their refunds.”
Best sellers at Hobby-Sports.com include vehicles from Traxxas, a radio-control model manufacturer based in McKinney, TX; and from Horizon Hobby, an Illinois-based international distributor of RC vehicles and manufacturer of the Arrma RC brand. “Horizon Hobby’s radio-control motorcycle was the hottest product of 2023,” explained Simpson. “The technology is amazing.”
Products from Traxxas are innovative and reliable and their technology is state-of the art, he noted. “They also do a good job of marketing and pushing people into our stores. Sometimes the biggest challenge for us is knowing what’s going on with new products before consumers do. Traxxas gives brick-and-mortar stores three weeks to sell new products before the item is sold online. They give brick-and-mortar stores the support they need to succeed.”
At NRHSA’s tradeshow in Las Vegas each September, hobby store owners can experience and purchase new products in person. The show includes an outside area for RC car demonstrations plus a trip to a flying field to demo airplanes. Simpson says there is always an operating a train layout, “and some years we do rocket demos, garden railroad tours and have a pool party.”
The show is small – about one-quarter of the size of ASTRA Marketplace – and Simpson is concerned about the dwindling number of hobby stores. “The industry has half as many stores as when we started. With less stores, families have a lesser chance to get exposed to the hobbies we sell. It’s a trend in every independent retail niche and I’m sure it’s affected specialty toys.
“My goal is to see my store stick around another 35 years,” Simpson said. “How can we accomplish that? What can we improve and change? Answering those questions is my mission.”