I have been involved in model trains since I was about 8 years old when my dad brought home a whole bunch of trains he had purchased from his boss and set them up in the basement. Rather than just a single circle of track and one train set, I had 3 locomotives and a fleet of cars and a bunch of accessories! I thought this was great and my love of trains was born!
However, at eight-years-old I was obviously more interested in running them into each other and into tin cans than just running them around the track and my dad wasn’t keen on me “playing” with them my way. So, instead he took the time and showed me to play with them properly. That was fun for a while, but after a few years (like most kids’ first loves), I lost interest. Since I wasn’t as interested in trains and my grandfather was retiring, he thought model railroading would be a great retirement hobby. So he asked my Dad about it and my Dad said, sure you can have them, Scott never plays with them anymore. I realized I really didn't like that! So, I did what any kid would do: I hid my favorite piece, the big, black ZW transformer. Fast forward to when my grandfather came to take the trains and they couldn't find it. After looking through everything, my dad finally asked me, "Where's the transformer? I don't see it," and sadly, I had to give that up, too.
Logically, now that my dad had given all my trains away and I was train-less, I decided to get back into the hobby. Since HO Scale trains were the cheapest for me to buy at the time, I resolved that this would be the scale for me. So, I started buying HO trains from Woolworths to cobble together a new layout in my basement and even built a little oil refinery.
When I was 13, I decided to take a correspondence course from the National Radio Institute. I found the ad in the back of Popular Mechanics, and for $99 plus the completion of 20 workbooks, I could learn about servicing small appliances. How it worked back then was you would complete the course work, take the test at the end of the workbook, and then mail it to them. Someone far away would grade your test, and if you passed, they would send you the next workbook. About two years later, I made it through all the workbooks and at the ripe old age of 15, I finally, proudly, received this great big diploma. Right about this same time, my grandfather announced he was planning to get married and move to Atlanta. Luckily for me, he noticed my renewed interest in the hobby and decided to give me back all of the trains. That was great!
Buoyed by my successful course completion and the return of my Lionel trains, it was time to go into business! It was in 1975, I was a junior in high school, and I had endless possibilities. Of course, nothing felt more right than when I connected with a man in Toledo by the given name of Harry Train who ran “Train's Hospital for Trains”, a Lionel Service Station, but was selling his trains and train parts. Given his advanced age, (he was about eighty years old at that time) and the fact he no longer could get up and down the basement steps to his workshop, he advertised that was selling the Lionel portion for $2,000 as well as the American Flyer portion for an additional $3,000. While I didn't know anything about American Flyer, I knew enough about Lionel and from my small appliances servicing diploma that I talked my parents into co-signing a loan for $2,000 to buy the Lionel portion of Mr. Train’s business. After going to the bank, signing the paperwork, and getting the money, I now needed to figure out how to bring the trains home. Good news: my father had a pickup truck; bad news: I was only 15 and couldn't drive yet. Luckily a buddy of mine was 16 and had his driver's license, and we were in business! Now as Harry Train was eighty-years-old, couldn’t get down his basement steps, and he had to be down there to coordinate what went and what stayed, I remember we had to do a fireman's carry to bring him down to the basement. That is something I will never forget! So, in just one trip, we hauled out all the stuff I had bought, loaded it into the back of my dad’s pickup, and brought it back to my parent’s garage. From that day, when I was a junior in high school, until I was a senior in college, I occupied one-and-a-half bays of my dad's two-and-a-half car garage where the walls were lined with train-related equipment. Below is 18-ish year old me in my garage “showroom” in my parent's garage around 1978.
Somewhere along the way, I acquired this magnificent parts cabinet that at the time was painted the worst olive green. My mom painstakingly striped it down to its original oak finish and I loved it. Then I also lost it along the way in my bankruptcy, when Legacy Station bought the inventory from The Train Works. So a big “Thank You” to Brian Sheffield at Legacy Station for selling it back to me a few years ago!
A few years ago, I ran across one of my old bookkeeping records from when I bought ZW transformers for $25, reconditioned them, and sold them for $35. It was simpler times and I thought I was on top of the world. To make it all work, I would run classified ads to buy trains and went to train shows where I bought trains that were broken or needed parts and then reconditioned and sold them.
I was fortunate enough to have met my wife, Milinda, when I was a senior in high school. I would only call her on Wednesday nights and see her on Sundays, and if there was a train show somewhere in Ohio or Michigan, she would go with me on Saturdays and sometimes on Sundays. We dated all through college and somehow, she stuck around and decided she would put up with this craziness.
In my college years after high school, I studied Electrical Engineering at the University of Toledo. I maintained my train business, “S&G Electric Train and Appliance Service”, while commuting fifteen miles daily to school from my parents' house in Maumee. Some nights and most Saturdays, I had a good friend who came over to help me fix trains as well as one or two part-time kids, “my elves”, that were about 13 or 14 years old and they cleaned and did minor repairs on the trains. All through college I built up my business by running classified ads in small newspapers during the fall, winter, and spring months. In the summers I had other jobs, and closed the business. College summer jobs included working as a Supervisor at CraftMaster where they packaged up the Lionel Power-Passers race car sets, a crop duster chemical mixer, and an engineering intern at General Mills, just to keep it interesting. Also, during my time in college, I built up my personal collection of Lionel trains, and bought the parts inventory of both Luelf's hardware in Toledo, as well as Model's Hobby in Detroit. To change things up, my last year of college, I placed small, classified ads in all the newspapers within 30 miles of Toledo inviting folks to come down to S&G Electric Trains and Appliance Service to buy trains or get them repaired. I had more business that winter than ever before and it was terrible! I had definitely bitten off more than I could chew and one Saturday I was so busy that I couldn’t even get to a customer who wanted to buy a train from me so he just up and left!
In the middle of my Junior year in college, I asked Milinda to marry me. I had this bright idea that we would get married and get an apartment in Toledo where on nights and weekends I would continue fixing trains in my parent's garage like I had been. Somehow the realization came to me that it wasn't going to work. It must have been my dad that helped me realize that she wasn't going to put up with that for too long. And so, I had to make a big decision: the new wife or the trains. As luck would have it, I had enough forethought to make the right decision and I went with the new, amazing wife!
As I wound down my college years and looked to the future I started thinking of the next “job”. Up until that point, I only considered companies based in Toledo. After making the wife decision, I completely changed my strategy and only interviewed with companies that were not in Toledo knowing that if I stayed, I would definitely get sucked back into repairing and selling model trains. I just knew too many people in the Toledo area train circuit.
My resume was formidable, at least I thought so, and one day an interviewer from General Electric thought so too. It was just one line on the bottom of my resume that stated "Owned & operated small appliance and model train business for the past five years", that caught the interviewer's attention. He said, "Tell me more about this business." So, I explained how I had built it from the ground up and his questioning immediately turned to my interest in management. So, I laid out my plan to him to be an engineer, play with robots, do engineering for a few years, and then go into management. He excitedly explained GE's Manufacturing Management Program in which they gave you four different assignments within the company that encompassed engineering, quality control, production control, and supervision to provide the opportunity to experience and understand the different kinds of functions of manufacturing. The first year of your assignments would be at one GE location and the second year is at another different GE location. The interviewer pulled out the list of GE plants that participated and he went over the assignment locations with me and one of the locations was Erie, Pennsylvania, where they manufactured locomotives. I thought, "Wow!", but I hadn't known that GE made locomotives because Lionel never marked their trains with GE, and then my next thought was, "Man, that's where I want to work."
Although General Electric only accepted two hundred graduates from across the country to participate in this management training program, in May they offered me a position starting at $20,000 dollars a year. The catch: they couldn't tell me when or where I would start. I accepted it anyway and it was my first job after graduating. Then I decided I would sell the train inventory from S&G Electric Trains. I dropped the Appliance service along the way, but I would keep my personal collection and all the parts that I had bought from Harry Train, Luelf’s Hardware, and the other train stores along the way. Postwar train parts were hard to find and if I ever wanted to fix trains again, mine or anyone else’s, I would have to keep those. The thought process was that I would keep all my own stuff and parts so when I retired I could get back into it. That April of my senior year in college, my dad accompanied me to the big York TCA show where I took my remaining inventory that I put on sale and stuff sold like crazy. We went to a number of other train shows where we sold most of the rest of it. A man from Lima, Ohio bought everything else that was left. My parents were nice enough to let me bring the parts back down into their basement where they would ostensibly stay until I retired.
The silver lining to selling off my self-built business piece by piece was that I paid all the money back that my parents had lent me interest-free, and even after that I had $10,000 in the bank.
I married Milinda, my high school sweetheart, the weekend after I graduated from college. For our honeymoon, we spent a month touring the country in the black Chevy van that we used to go to train shows that I had completely carpeted. On our big trip we avoided interstates and instead meandered around the country using only US and state routes. During our trip, I had to keep calling a woman in Schenectady, New York to find out where GE was going to send me. We were at Old Faithful the day I learned that I was going to start at the locomotive plant on August 17. We were both very excited. And so, we moved into a townhouse in Erie, Pennsylvania, and I worked at the GE locomotive plant, and it was great! After about six months had passed, one of our former customers called and said he wanted to sell his train collection. We discussed buying it and since we both missed the trains that had been our mutual hobby for five years, we bought the collection and decided to convert our spare bedroom into a workshop. Then I retrieved the parts out of my parents' basement and hauled them back to Erie, and once again, I was buying trains, fixing trains, and then selling them at train shows.
Time passed and GE decided that my next assignment would be in Portsmouth, VA where they had their TV plant. My first assignment was as a foreman of the two monochrome TV lines and in that position we shut down the last two black and white television production lines in the US.
I finished GE’s MMP program and accepted a position with GE Computer service. This moved us to Cincinnati, and from Cincinnati we moved to Louisville, and from Louisville back to Cincinnati, and from there we moved to Atlanta. And we really like it down here and have stayed here ever since.
We were moving along in life and still going to train shows, but it was difficult to make much money moving trains that way. It seemed like we could make a living doing it, but I wanted to do more than just buy and sell at train shows. Then a new indoor flea market, on Jimmy Carter Boulevard and I-85, just down the street from my GE office, was opening! They were open from Thursday to Sunday, and I talked Milinda into working at our rented booth for those four days, so we had an inexpensive way to start our train store. We had the flea market booth for nine months and then it seems we were more half-pregnant with the business than ever before. There were days when Milinda would sit in that flea market all day and not sell anything, bless her heart. On Saturdays, I stayed home and fixed trains, when we were not at train shows, and on Sundays after church I worked at the booth with her. That was a tough time, and it was not really working. The flea market space was only 100 square feet and there was tons of stuff crammed into that tiny space. Then every time there was a train show to go to, we had to pack all the trains from the booth and then Milinda would reset it all back up on Wednesdays. I decided we really needed to find a regular retail space. Even though all the other train stores were closer to the center of Atlanta, I thought as Lawrenceville was in the center of the county and there were a lot of new homes being built in that area, it would be a good place to open up shop. So, on the days she was off, Milinda went looking for and found a reasonably priced, 2,000 square foot space in Lawrenceville. We leased the space, and we moved our train operation to the new location and called it “The Train Works”. With Milinda as the only part-time employee, we were only open Thursdays through Sundays.
I continued working for General Electric for some time after opening the store and somewhere down the line we hired extra help and were finally open 7 days a week. Then in 1990 or so, we bought the assets of “The Train Connection” that was located in Roswell from the bankruptcy trustee, and we expanded the store to 2,800 square feet. In the middle of all of this in 1991, along came our son, Mitch. Here are a couple pictures of Mitch at his first train show and the store 1991. Besides the clothes and baby Mitch, you can tell it was 1991 from the Santa Fe 11711 set on the counter.
Then in 1992 we expanded into half the basement, then later in 1993 we took the whole basement for a total of 5,600 square feet. The train store was chugging along okay, but it was a constant struggle to keep up with the cash flow demand and balance the growth. We expanded again when we worked out a deal to buy “Southeastern Hobby Depot” in Atlanta in 1994, then remodeled it in 1995 to include a K-Line superstore. Below is a picture of that:
Through the acquisitions, expansions, and remodels cash flow was still tough and making money was difficult even though our sales increased at a tremendous rate. We would have made the Inc. 500 list in 1995, but the magazine changed its rules. Every year before 1995, a company’s revenues only had to be $100,000, and our first year of sales was $187,000, but Inc. 500 changed the requirements in 1995 for the first-year revenue to be greater than $200,000, causing us to lose out on that recognition. Unfortunately, even with all that incredible growth, the income just wasn't there as the overhead was just too high. Between normal expenses and the interest on all the money that I borrowed to enable all that growth; it was just too much. I was still working for GE about six months after we bought Southeastern Hobby Depot, When I decided that two stores with annual revenues over $1M was a bit much for a hobby business with a full-time job. So, after 13 years, I finally left GE for greener pastures. Now a full-time business owner, and foolishly thinking that the solution was more, we continued to grow, and I opened a third store in Roswell. Yet despite the growth, something was wrong, and I was constantly struggling in cash-flow hell.
One day, I received a phone call from a telemarketer who offered to send out a business consultant at no charge. I said, "Send him out!" The consultant came out and recommended their business turnaround guy. He would come in here, analyze everything we've got going on, and turn the business around to make it work. I signed up with them and the turnaround consultant spent a lot of time with us and analyzed how we could do a better job of running the business and to make it work. We were attacking the train market on all fronts; three retail stores, mail order with full page train magazine ads, 800 numbers, direct mail, train shows, and starting in 1996 we even had lists of products displayed for sale on the internet. Should I close two stores and just work out of one? Should we stop train shows, expand the Internet? Get out of the Lionel pre-order business? I had everything going on and I thought I was going to hit this on every angle to make it work. Money was coming in and we were selling trains like crazy, but the infrastructure and cost to do all that just didn't leave anything left over. One of the first things he had me do was take inventory. I really hadn't done one previously. It took too much time, was too expensive, and the stuff should be here anyway. He didn't buy that. He finally convinced me to take an inventory of just the things that were $20 or more. We took an inventory and found that I had an enormous $350,000 inventory shortage. It was at that point that the consultant told me I couldn't recover from this. I was on credit hold with several companies and couldn't get any product in and things were a real mess.
Looking back on my life, I realize I was spending almost twenty-four hours a day, seven days a week at the business. I would work all day at GE and go to Waffle House for dinner. Then go to the store and work all night. I'd get home around 12:00 am and see my son sleeping in bed, thinking I was a good Dad because I saw my son every day, and then I would wake up my poor wife long enough to say good night. The next day, I would do it all over again. Every two weeks I was going to train shows hoping I could sell enough stuff at the show to keep the darn thing running. The consultant told me that if I could figure out how to make $50,000 a year for seven years, I would have a business that's worth nothing. After working for seven years, I would be back at the beginning. I realized that my life was a mess, way out of balance, and I had to throw in the towel. That was bad because the suppliers I was working with were counting on me; they had extended me huge lines of credit. I had talked several friends of mine into loaning me $100,000 each. Even my parents were invested in it for tens of thousands of dollars. I had a pretty big SBA loan and had to figure out how to liquidate the inventory to pay back the bank loan and as many people and vendors as possible. Since the bank had the first claim to the money, all the other investors were subordinate to them. Fortunately, the bank agreed to continue to pay me and one of the other guys that worked for me, which was a miracle because I still had the keys to all the stores. I could have tried to take the inventory and stash it somewhere and the bank would have been completely hung out to dry. But, of course, I wouldn't. I wanted to get as many people paid off as possible.
We let everybody else go, papered up the windows of the stores, and put up a note that we were closed for inventory. We left the phones on voicemail and continued to fulfill mail order business while we tried to figure out how to sell what we had. We tried to figure out how to have an auction to sell everything but couldn’t even find a venue big enough to do it. Then one day, I received a phone call from some people in Atlanta who were interested in buying the Brookhaven store. I set up an appointment to meet with them. It was time for me to do the sales pitch of my life. I was certainly honest about it because I felt that there was really an opportunity for it to really succeed, especially if you didn't have to deal with a debt of an extra $350K for merchandise that simply wasn't there like I did. If I didn't have to pay the interest on that, I would have probably been fine. They liked the idea. They didn't seem to like the jobs they had and appeared ready for a change. The bank arranged an auction to sell the entire inventory in one shot. We advertised in newspapers and trade magazines and sent out a notice to all the train stores in a four-state area. On the auction day, we had the auction in The Train Works store up in Lawrenceville. The people interested in buying the store were there, five or six men who owned train stores in Atlanta were there, and a guy flew in from Canada. They all had lists broken down by manufacturer with the cost of inventory. I remember the auctioneer said, "Who will start the bidding?" One guy says, "ten thousand dollars." The next guy, "Fifteen thousand!" Then the man from the bank said, "295,000!"-which of course, is what I owed the bank. The local guys were shocked. The folks interested in the store said, "$297,000." And that's what it sold for, which was a great deal for the buyers. The new owners kept me on the payroll as the store manager and I worked with those folks for about six months and through the first Christmas. After Christmas, out of the goodness of their heart, they gave me a two-week severance package.
Lo and behold, one of the guys I had borrowed a bunch of money from worked at Digital Equipment Corporation and he knew of a situation there where one of the clients was a help desk and they needed some help in getting that working better. I had done a lot of help desk work at GE. He set up a telephone interview, and I convinced the hiring manager (Thanks, Jesse) over the phone-to hire me. We negotiated a salary that was double what I had been paying myself at the train store.
Amazingly, through this whole debacle, I was never without a paycheck. I had been a Christian for many years, and I see how God was truly working in my life. I thought God was with me when I was building the train business up and it was going great, but looking back on it, I was a terrible husband. I don't know how my wife put up with me. I was a terrible father because I was never around. I was always climbing the mountain, thinking that I'm almost at the top and when I reach the top, it will be smooth sailing and the money will start rolling in. The way I look at it is that God put this $350,000 chasm of missing inventory in front of me and said, "Scott, let me see you jump over that." Because anything else that was put in front of me, I'd find another rich friend to get me through it. But God carried me through that whole thing. I know that He brought the buyers to me that bought the train store, and helped my bank go along with my plan that I could sell the business for more money than the bank could while they continued to pay me and left me with keys to the store and that entire inventory. I know that God softened the heart of the investor friend of mine, and he was the one that found me a job that paid me almost twice what I was making before!
Then I went through a personal bankruptcy and started with Digital Equipment which was bought by Compaq which was bought by Hewlett Packard. That ended the train hobby for a little while, since I just didn't want to deal with trains anymore. But that didn’t last very long. I think about two weeks.
I had heard about eBay before the bankruptcy from another one of my investors, but the thought of taking pictures and shipping everything was just too daunting – it is a lot easier if you just come to the store and buy it! I had a small personal train collection left since I had taken all the expensive stuff and put it into the business long ago. Since I was so broke, I decided to sell some of that stuff on eBay. I knew what trains were worth and I began studying what trains sold for on eBay and that was eye-opening. Once again, I started going to train shows and buying items that I felt would do pretty well on eBay.
When I made my first sale on eBay in 1997, I didn't know all the rules. A guy emailed me and said he would buy a Christmas car I had listed for $35, but only if I would end the auction now. I thought, “hey, that's cool”, so I ended the auction and sold it to him. Unfortunately as I was inexperienced, I didn't end the auction right and did so without canceling the bids. The high bidder at the time was very upset with how everything happened and left me negative feedback. So, for my very first eBay sale, I received negative feedback! It felt like a disaster. Then I remember my second sale was a Girls Set that I bought at a retail store in Dallas, Georgia. When I saw that set up on the shelf, it had been there for three or four years (since it was brand new), and they were selling it for five hundred bucks. I remembered seeing the same set sell for seven hundred and fifty dollars on eBay. Milinda was with me at that time and I talked her into spending our house payment money (because we didn't have any other money). I bought that set for five hundred dollars, put it on eBay and just hoped it would work. Thank goodness, it did. It was only my second sale on eBay, and these nice folks in Texas bought it for exactly what I thought: seven hundred and fifty dollars. I talked with them about why my feedback rating was a negative one (-1) and explained what had happened (that I hadn't known the rules), and they were understanding and they sent the check. After I made $250 from my second sale on eBay, and I now knew all the rules, I was and still am very careful to follow them.
Catapulted by my eBay success, Milinda and I sold most of the rest of my personal collection and I again started buying trains here and there, as funds would allow, but this time to sell on eBay. This was again our side hustle to my full-time job and we eventually grew enough to hire some friends from church to work part-time in our basement “operations center” creating listings. So, every day after seven in the evening I would edit the listings and launch as many as I could before ten the same night so the eBay auctions would end during that time seven days later. After the auctions ended, Milinda would pack all the boxes and then lug them to the post office. Eventually, we got UPS set up to stop at the house for pick-ups, but she still had to tote all the boxes up to the porch every day.
After a year or so of the basement eBay business, I reconnected with Tommy Feldman. Tommy worked with me starting at sixteen years old, back when we were in the flea market era, and throughout all the development at the physical train stores. He left for a couple years, moved to Washington, DC, and worked in the world of politics for Senator Paul Coverdell. However, after the Senator's untimely death, I convinced Tommy to come back to work with me in my basement again, starting out part-time, while he looked for a "real job”.
Around this time and as I continued to pay eBay more and more in fees, I got the bright idea that I should create my own “train marketplace”. A website site that would allow anyone to buy and sell trains and train related items, and sellers could list their stuff for free. The idea was that sellers could set their own asking price, and it wouldn’t cost them anything until it sold, which was when we would collect a small listing fee. This is also when I met Ken Cummings, who not only helped get that project off the ground, but also developed all our business and ecommerce software. While the Trainz Marketplace site lasted for several years, it never really caught the fire we were hoping for and we finally decided to retire it.
With Tommy on board part-time and business growing all the while, we again made the decision to expand the operation in my basement. This expansion continued until we had grown to 5 part-time employees and the budding enterprise engulfed the whole basement, the garage, the dining room, and every other place in our house where we could store stuff. Then came the leap of faith to lease 2,500 square feet of space. The contract for the office/warehouse space was set for a term of three years, and we hoped this would all work out, but then after being there for only about six months, we ran out of space again and doubled our footprint to a whopping 5,000 square feet. Once the lease concluded, we made a bigger bet on our success by moving out and buying not one, but two buildings that had a total of 17,000 total square feet! We were fortunate that there were already two tenants who occupied 7,000 square feet while we used the remaining 10,000 square feet.
In 2006 we made two significant hires: the Forth sisters – Stephanie and Cindy. Stephanie started in the warehouse with shipping and did such a phenomenal job transforming that I asked her one day if she had a twin sister, and she said not a twin, but yes, a sister. Her sister, Cindy, who was tired of running a high-end shoe store at the mall and wanted regular hours to spend with her young family, became our first full-time check-in person and is now our production manager.
In April 2007, we were up to 17 full-time employees and again needed more room. So, we took over one of the tenants’ spaces next to our main building and now had 13,000 square feet of working space between the two buildings.
Fast forward to about 2014 when we decided that floor space just wasn’t cutting it anymore and we built a 500 square foot wood mezzanine in the larger of our two buildings. Then approximately two years after that, our ever-expanding parts department needed extra space too so we forged ahead with creating it in our other building by building out another 800 square foot mezzanine.
Wait, what!? Yes, you read the headline correctly, but let me explain. In 2005, with things now running pretty smoothly at Trainz and me with an ever-optimistic outlook, it looked like a great way to make some easy money. A good friend of mine at the time was opening a BBQ franchise business, and I thought this would be a great opportunity and the way Milinda and I would be able to buy a house on Lake Lanier. So, despite Milinda’s strong protests, I signed up to open a franchise on Hamilton Mill Road near I-85 in Buford. Of course, I thought “I am the business guy in the family, and this is going to be great!”. So unfortunately, I ignored her and used the 2 buildings we bought earlier as collateral and got a loan. These buildings were also the collateral I was planning to use to buy more trains and expand the train business, and of course the whole thing promptly turned into an unmitigated disaster. After never making a profit in any month, we ended up losing about $750,000 over the course of seven years, and this “great idea” restaurant faux pas almost caused me to go bankrupt a second time. It was really only by the grace of God, and more rich friends, that I got through that debacle. Thanks Al, Eric, Mark, Tim, KJ, Jim, Bill, Marty, Royce, Jerry, John, Tom, and some of those lending companies too like Kabbage, Lending Club, PayPal, and probably more.
A big thing that started in the early 2000’s was the concept of selling literally everywhere on multiple marketplaces. What a great idea, let’s do that! So, instead of just selling on eBay, the thought was we should try other marketplaces as well, and we did. We started selling new trains on Amazon and I believe we became the top seller of model trains there, even if it was just for a relatively short while. We got our sales up to almost $1,000,000, and then between our data matching errors, quickly diminishing profits due to new competitors, and ultimately Amazon themselves coming into the model train market as sellers, our top seller status was destroyed and we stopped selling there. Then there was Rakuten (that never took off at all), then Sears, then Walmart, and finally back to just good old eBay.
Then in 2011 I got a cold call from Bill Jones, the owner of a new start up “Collector-Dash”, where his business model was to build marketplaces for collectible items. Bill found me on eBay, and he felt model trains were a good fit for Collector-Dash. This seemed like a win-win for Trainz. Since I had already tried the fixed-price marketplace idea where in addition to us selling trains there we would recruit other sellers as an alternative to eBay years before, and it didn’t work out so well, my new and improved idea was that if I had my own auction platform, that might be the ticket to reduce the ever-mounting eBay fees. After much back and forth, the Collector-Dash agreement included a great perk: they were going to create all the software to run the auctions per my specifications and I would simply pay them a fee (although I did give them a minimum guarantee). At that time, I had a customer list of over 50,000 names and figured if we have the trains that collectors want, and the platform was built out the way I wanted, why wouldn’t they just buy them off of Collector-Dash instead of eBay? Collector-Dash did pretty well for us for a few years, but after a good run we ended up shutting it down in 2020.
Well, we were almost always expanding except for the 5-year stretch from 2009 to 2014 where we hit the $5,000,000 mark in sales, but just couldn’t get to $6,000,000. Even by this time I had read a lot of business books and knew that the $5,000,000 mark in sales is a very common business plateau. Typically, to move past this plateau, companies have to do things differently than they had to in the past to continue to grow. However common, the root problem is always the same, it’s the leader, and the leader must change in order for the company to flourish. However, I am a slow learner.
In addition to sales stagnation, we also didn’t make any profit during this time, what a mess, yet again. Then I found out about and joined a Christian CEO group called Convene in 2009. Our chairman Steve Tucker became familiar with my predicament and said I needed more help than he or the group could give me, so he called on a friend that had just started his own consulting agency, Alan Lowe. When Alan first started working with me in 2010, it was two full days a week in my office reviewing everything, soup to nuts. During this time I pretty much felt like a moron and couldn’t seem to make any correct decisions so I pretty much delegated the decision making to Alan and my management team. Then Alan slowly, but surely, helped me kill all my sacred cows and looked at everything with a keen financial eye. I changed a lot and in turn, we changed a lot. Then over the course of a few years and less and less time with Alan, in 2012 I finally decided it was time to part ways with Alan and I retook control of my company. Toward the end of the Alan era we came up with a new strategy to move to selling at fixed prices instead of auctions, so in 2016 we built our new improved website on Shopify with the help of an external agency. Then in late 2016 things really started to click. Soon after getting our new website up and running we shut down Collector-Dash, I bit the bullet and finally hired our long-time on and off contract software developer, Ken Cummings, as our full-time IT person (who is now our CTO). Then, after several long months of software enhancements, we shifted to selling trains at fixed prices with markdowns instead of on eBay utilizing $.99 auctions with no reserve, and we FINALLY started generating respectable profits. After transitioning to selling at fixed prices we implemented several key software innovations – listing everything on eBay and our website simultaneously, markdowns, a new buying system, our Private Car program, and tons more.
Then again, with all of our inventory no longer turning over every seven days, we really needed more room. To fix the higher inventory and less space issue, we eventually had our one remaining tenant move out, took over the last part of the other building and added shelving to every nook and cranny available to the point that no more would fit. In our small building we double-stacked the shelves so we could go up 14 feet and bought rolling ladders to access the inventory on the top.
But the fun didn’t stop, after we exhausted all the space from the two main buildings, we leased another 7,000 square foot building across the street, then filled that up with the Lindy’s business, parts triage, parts repair, pallet unboxing, and mail-in receiving. Once that was full, we leased another 8,000 square foot building a few miles away that has turned into our pallet warehouse, Dwarvin assembly, and more parts identification space plus extra storage. Somewhere along the way we bought a 26-foot truck to move pallets and inventory from one warehouse to the next to be processed.
Just to keep it interesting, we are now here, in the middle of 2024, and we now operate Trainz out of four separate buildings with over 32,000 square feet of combined space, 85 on-site team members, and we are jammed to the gills again with more inventory and people than anyone could have ever imagined!
So, what’s next, you ask? Of course, it must be the monumental “New Building”. It has been years in the making, finding the land, getting the financing, finding a contractor, and designing the space. It is now under construction, all 73,000 square feet of it, and that’s bigger than the Orange Hall at York! We are so looking forward to moving into it and getting everything, and everyone, under one roof by the end of 2024. In addition to just more space, I know the team is really looking forward to more bathrooms and parking spaces!
My wife Milinda has been amazingly supportive throughout all of this, all the years, and has been my most supportive partner who puts up with me, helps me, and is just an all-around great wife and mother. I don't know how she has put up with me all these years, but we recently celebrated our 44th anniversary, so that is saying something.
So, that's the story from when I started at eight-years-old to where I am now.
I still really enjoy trains. I thoroughly enjoy the business aspect of Trainz, and I genuinely delight in bringing happy train memories to new generations.
Thanks for reading and I hope you enjoy model trains as much as I do, since I absolutely love it!
