The Story of Makin’ Tracks!

I am John Scott Geare, “JSGeare” or “Scott,” for short. I’m the guy on the left in the picture. My partner Mike Militello is on the right.

I live near Crozet, VA where I tend my property in idyllic central Virginia, grow vegetables in season, build web sites, do graphic design, work on my HO model train layout, write articles on various aspects of model railroading, and as of mid 2009, started selling HO scale rail modeling products. Mike is a senior public servant in the fire and rescue services of Prince William County, Virginia. While he is a “senior” vocationally, he is by no means a “senior” otherwise.

I retired from the technology and insurance fields, an odd vocational combination that possibly explains why I retired early. Mike was a customer of mine whose enthusiasm for the hobby, modeling skills, encyclopedic knowledge of the prototype and impeccable ethics impressed me. Consequently, as my business grew, and I knew I needed help, I turned to him. There has been no looking back.

I have revised this page on numerous occasions and up until this revision have maintained it as a kind of chronological journal or diary. But now, I’ll change to a Question and Answer format which will cover some of the history and goes on to explain our mission, how we do business, and answers many of the questions people ask us. So – let’s get started.

How did you get into the hobby?

Like many, I was introduced to model railroading when I was a kid. My Dad set up a Christmas layout when I was about 3, and in the ensuing years I adopted it as a hobby interest of my own, graduating from American Flyer “S” Scale to HO. In the fetid days of my misspent teen years, I turned my attention to other interests -sports, girls- and the hobby interest lay dormant. Yet, in all those decades I always imagined having a “real” layout one day. And that day came during my retirement. And so, at the tender age of 60-something, I returned to the hobby.

So. . .  do you have an actual layout?

You bet! See some pictures here.


What had changed about the hobby between the fetid days of your adolescence and now?

A lot! I had imagined that rail modeling might adopt the same kind of radio remote control as is used in cars, planes and boats. And, in a way, it had done that, with DCC. But DCC sends signals not through the air, but rather through the tracks. Nonetheless, the independent control of trains had been accomplished and with that, the basic wiring became much simpler. Thus I opted for DCC from the get-go.

Two other things changed: prices seemed to be much higher, and the models, generally, are much better now than they were then. Better looking, better performing, and more choices. But on the other hand, some things have been devolved. In my day, the Athearn Blue Box trucks had actual springs in them – but not anymore (most of the time). Today’s flex track is better than before – more realistic looking, and track actually flexes – it doesn’t just bend.

Yet, some things have NOT changed. Many of the same structures are the same now as then; many of the freight cars are also decorated now, as then; especially among the lower cost lines.

How did you become a dealer?

Strictly by accident. After my first few visits to the local hobby shop (in 2006), I realized I had spent a lot of money. So I turned to eBay and Craig’s list as markets for what I needed. I usually found what I sought, but it was often accompanied by much I did not want.  So, in time, I had a substantial inventory of things I did not really need, and I turned to eBay to sell them. This effort was very successful, so I seized upon it as a way to finance my layout. It didn’t pay for everything I needed, but it was a great help.

It so happens that it is in my nature to be as helpful as I can, so I joined Yahoo HO groups, and started writing articles and instructions and answering such questions as I could. Before too long, I developed an active correspondence with other modelers, many of whom were customers.

Eventually, I knew I needed a selling venue that allowed me to communicate more closely and directly with customers. This I found at bonanza.com, where I “set up shop.” At the same time, I converted my own web site to an HO model railroading venue where I could house and distribute my various articles, offer items for sale, and also offer space to other sellers – for free.

But, the hand writing was on the wall. I could see that I needed more than just the material I “lucked” on to, but also conventional channels of supply. Consequently I contacted various manufacturers and distributors, some of who very graciously accepted me as a “dealer.” At the same time, I applied for a business license and to collect state sales tax. I built an actual train store on my property. In for a penny, in for a pound, as the saying goes.

Meanwhile, Mike and I embarked on selling at Train Shows, where, to my great surprise and delight, many customers there told me they were ALREADY my customers, having purchased from the web site, read the newsletters, or downloaded our articles. Very clearly, we were in business.

Today, sales continue to come are from theInternet, But the store traffic and local sales are also moving along nicely. We still maintain a presence on Bonanza, and occasionally, Mike and I use eBay as well.
 

Some of your “deals” are really quite exceptional. How is it, for example, you sell kits for $6.50 when they retail for $15.95 or more, if they can be found at all? Did you get this product legally?

We have actually heard, at a Train Show, the accusation that we “steal” stuff. But let us reassure you, everything is strictly legal. Fact is, most of this product comes through distribution. The manufacturers and distributor strike a “deal” on what the manufacturer wants to unload.  And the deal is often pennies on the dollar. The distributor shoots an email to its dealers, in which the product is offered at a truly excellent price. However, there are usually conditions attached.  For example, dealers must buy from 3 to 12 units of each item offered, to get the best price. And that is exactly what we do.

Now, with perhaps 200 to 500 or more items on hand, we price it to sell quickly, exactly as you have noticed. All – perfectly legal.
 

But what about the “everyday” products such as Atlas flex track, metal wheels, Tortoise Motors and KD couplers? How do you manage to sell those so cheap?

Basically, we grab every opportunity to buy at low cost, and to keep our cost of operation low. Just to name a few techniques:

  • If a distributor has a truly special deal, we jump on it. Sometimes they also offer free shipping. When they do, we also load up, because shipping is a huge part of our cost. If can eliminate that cost, we can keep our prices competitive.

  • We don’t borrow money.

  • We don’t deploy expensive technology, such as third party “e-commerce” solutions for the web site. We roll our own. This web site is an example.

  • We buy used products -everything from a few locomotives to entire layouts. We test, repair and refurbish the used items. Earnings from these helps us lower the cost of new merchandise, and is a good deal for the customer.

  • We help build layouts locally, and do custom paint and decorating work.

  • We waste as little as possible. We save and re-use shipping containers, save old newspapers for packing, and print sales documents on the unprinted side of sales flyers or other paperwork.

  • We find the least cost ways to ship product. Why use priority mail at $5.00 or more, when first class at $1.50 works just as well?

  • We show customers lower cost alternatives to purchasing something ready made. For example, why buy a new coal car when an older “toy” type car can be converted at low cost?

  • We buy product in large volume, but offer it in smaller quantities. The customer gets the benefit of the volume pricing, and we get a sale we might not otherwise have earned.

  • We make it easy to buy; for example, by including shipping in the cost of an item whenever possible.

  • We spend as little on advertising as we can possibly get away with.

  • We keep it simple.

Your shipping prices seem very low compared to other places. How do you do that?

It is more an art than a science, but basically we offer product in quantities which cost less to ship, and we use packaging that is appropriate to the item. Why add to the cost of shipping by sending 3 rail cars in a box that would hold 10?  Why use a flat rate box when the cost of regular mail would be less? Why use priority when first class or parcel post will cost less?

Sometimes, the cost of shipping across country can be expensive; we end up with a very small profit, or even a small loss. But sometimes we ship to nearby zip codes, and the shipping is so cheap we can refund some money. But we don’t need to make the exact same margin on everything, we just need to make “something.”

The idea is to include shipping in the price as often as possible so the customer can see their delivered cost without worrying about a big hit at the end of the transaction.
 

The ordering and payment format on your web site seems a bit quaint. We order, wait for an invoice, then pay. And then you finally ship. Seems like a lot of unecessary time and effort. Why not take payment at the same time the customer orders?

You’re right. It IS quaint. And facially, it seems like a lot more time than ordering from a fully automated web site. However, as previously explained, there is a cost for that automated convenience, and that cost will be passed to the customer. Perhaps at some point the flow of business will be great enough to absorb the added expense of the automation.

But that leaves other issues. For example, the automation does not know if any particular order can be discounted owing to the size of the order, shipping cost, and customer ordering history. Nor can it know that splitting a shipment so that some goes by first class, and some by priority, may create a savings.

There are also security issues. By sending invoices separately, we keep customer payment data OUT of our own system, so, if we are ever “hacked,” the hacker won’t find any credit card numbers or other personal data that can be abused.

Our system also allows the customer to change an order; nothing is locked in until the invoice is paid. It is more forgiving and flexible than the automated alternatives.

While our method involves an extra step for the invoicing, the total time taken may be less than the other way. On our ordering page, simply enter quantity desired, your email address, and click to send. At our end, your order becomes a pick list, enabling us to pull stock and then send you an invoice. We, personally, are directly involved in all phases of order fulfillment – and that’s a good thing. The amount of time elapsed from the moment you send an order to receipt of an invoice is typically less than an hour -often a matter of minutes.  Thus, orders usually ship same day paid or next day post office is open. Your order arrives at your door as quickly, or more quickly, than it would elsewhere.

The principal concern for us is customer cost. We’re always looking at new and better ways to handle the flow of business, but we won’t make any changes for the sake of efficiency which require us to raise prices significantly.
 

OK, so what’s up with “PayPal?” Why not take credit cards directly? A lot of people don’t like PayPal, or do not have PayPal accounts.

Fair enough. I can’t say as we are especially fond of PayPal, ourselves. But let’s be realistic, here.

First of all, a customer CAN use their credit card directly to pay a PayPal invoice, same as anywhere else. You don’t need a PayPal account. We pay a fee for this, of course, but it is the same or less than the fees we would pay a credit card company.

Second of all, the actual payment processing is handled by a third party, so we never see a credit card number or any other payment data. All we see is that we’ve been paid and where to send the order. PayPal itself may be vulnerable to security violations (“hacking”) but who isn’t?

Third, the PayPal service is integrated with a shipping module which captures your address information. Thus it is a very efficient and speedy way to process your order. We simply enter the package weight and dimensions, and print the shipping label -at a lower cost then doing the same at the post office.

All of the above serves to keep our costs as low as they can be, while providing the customer with the speed and convenience of credit card payments, same as they would have anywhere else.

There is only one area in which a buyer may experience a problem with PayPal, and this applies only to those who pay us directly from their PayPal account balance, when that balance is less than the amount of the payment. If your account has two TWO sources of funding (a bank AND a credit card) the payment will be processed immediately. But, if it has only ONE funding source (bank OR credit card) then PayPal will wait until that funding source has forwarded sufficient funds to PayPal before making the funds “good.” At our end, we see payment by “e-check” but we receive no actual funds until PayPal itself has received them and posted them to our account. This situation comes up now and then. Typically it occurs when the credit card source has expired, and the renewal card information has not yet been sent to PayPal.  Of course, for those who use a credit card to pay our invoice, PayPal’s only involvement is as a payment processor, which is why the customer doesn’t even need to have a PayPal account at all to pay by credit card.

All that said, we are happy to receive payment in any form you like, including personal check. It’s really up to you.

So, what’s your store like?

Not like many stores you’ve seen, and not like many hobby shops, for that matter. We’re all about HO trains, period. No RC cars or copters, no games, no scrap booking section, no fancy glass display cases. It is not a place to hang out or go window shopping. It is not a fun place for small children.

But it is a wonderful place for those who know what they want, or those who wish to learn (of any age). There is a test track powered by both DC and DCC, a substantial work bench, shelves over-flowing with product, and bins brimming with parts. You can remove product from boxes, look at it, and run it. We WANT you to do that. And the coffee is free (we use the Dunkin’ Donuts beans). The store is purpose-built to support this kind of retail exposure. It might be favorably compared to the workshop of a jewelry store.

The posted store hours are basically 9-5 M-F, but we’ll gladly open up on a Saturday or Sunday afternoon, and phone calls are welcome at any time (434-823-4809).
 

On your home page you claim “Mike and I hope to prosper NOT by CHARGING AS MUCH possible, but rather, by CHARGING AS LITTLE as possible.” That seems a bit counter-intuitive for a business. Isn’t the idea to make as much profit as you can?

Note that we hope to CHARGE as little as possible; we did NOT say we hope to MAKE as little as possible. I’m not trying to be catty, here, but there really is a big difference.  In the simplist terms, we do believe that attractively priced product is an incentive to buy, all other things (quality, service, etc.) being equal. We operate in an intensly competitive field. The big players with huge Internet sites and/or substantial physical stores will often loudly trumpet their big discounts, “free shipping” sales and similar “come-ons.” If you’ve been at this hobby even for just a few months, you will, typically, see your email inbox jammed with this sort of thing. And let’s be honest, here – the claim of superior pricing appears everywhere from the grocery store to the auto dealer; it is by no means the exclusive domain of hobby dealers. And the claim is made so often, it lacks credibility.

Mike and I both insist that we won’t make any claim that we can’t actually support, and the feedback from our customers suggests they agree that our prices are at least competitive and our service is unmatched by others. By taking advantage of bulk pricing, blending in decent used product, keeping the overhead low and by other means, we’ve managed to keep our costs low, so YOUR cost is low, as well. But the proof is in the pudding – just compare us to others.

Price is one thing, knowledge and service another. The value of these is very much a matter for the customer to decide, but these are areas in which we can and do excel because our approach is direct and personal. 

We make our prices “budget friendly” to eliminate or reduce cost as an issue. A purchase decision is made, however, on a value proposition. The customer must have some assurance of being treated fairly and honestly, of receiving actionable, valid information. A faceless, automated web site doesn’t provide such assurance, nor does a hobby shop whose staff knows little about trains and is unable to “make a deal.” But someone who is accessible, will open the store on a Sunday afternoon for you, who can find additional savings for you and who is also an enthusiast- now THAT’S us.
 

And that’s why your slogan is “Supporting the hobby by supporting the hobbyist?”

Exactly. There’s lots of talk about “supporting” the hobby, but the truth is that everyone from a Mom and Pop operation to the largest national dealer knows, or should know, that if the hobbyist is discouraged by high costs, conflictng information, or an indifferent attitude, they won’t be attending to their hobby interest, and won’t be purchasing much, either. Therefore, we’ve defined our mission in terms of the hobbyist. And while this means reasonable pricing, it also means much more. We therefore write articles, take calls and counsel people, especially beginners, on how to accomplish their goals at the least possible cost. Let’s face it, if there were no hobbyists, there would be no hobby. It just makes sense to us focus FIRST on the end user and customer, which is exactly what we attempt to do.
 

So, how’s that working for you?

It’s outta control. And we intend to keep it that way.

By user