Thinking of opening electronics store in Chicago...

[AndyJ]

Hi all! A question for anyone from Chicago!

I do electronics for a living and hobby, like many of you. I'm thinking of opening an electronics store to cater to the hobbyist and student markets in Chicago. Would you make use of it, even for "oh crap!" deadline stuff?

Lets say it had:

 

•     Fully stocked walls of passives, priced by the inch of tape.
•     Very reasonable prices (Ain't nobody want to pay $5 for 5 resistors!)
•     Full stock of Raspberry Pis, Arduinos, ICs, programmers, etc.
•     On-site laser cutting/engraving
•     Classes/meetups and contests

How often would you visit? How much might you spend? Just trying to gauge! Thanks.

[EEVblog]

I don't know anything about Chicago of course, but how would you compete with the big catalog distributors like Digikey and Mouser?
Presumably in the US you can get parts from them for same or next day like you can here in Oz with Element 14 and RS.

Here in Oz, the retail electronics stores cannot stay open by just selling electronics components. They have to sell all the retail farting novelty gadgets to the general public.

I've always been of the opinion that a bricks and mortar retail store is a mugs game, and has been for a long time now.
Take Adafruit for example, doing awesome business selling bits and bobs. But they don't have a retail shop front, even though they could easily do so being based in New York city.

Dave.

[AndyJ]

Hi Dave. Big fan!

Your response is exactly what I'm looking for. Indeed, I can't hope to compete with Mouser or Digi--but I don't aim to. What led me to this idea was how many times over the past few years I've had an idea or needed something quickly, and just not been able too due to not having parts locally.

When you're down to calling the local TV repair place to ask if they have solder paste, things get frustrating, and for someone like myself next-day (or god forbid, same day) shipping is too expensive. Maybe not for a large company, but enough to make a small one think twice.

To me the brick and mortar store represents more then just a place to get your parts. You can come in, chat, ask questions about your design, meet up, show off, and get second opinions. I wish I had a place like that by me when I was starting out, and it's what led me to this idea!

[Mcfly]

Well, personally i would give you all my money if you had one based near my house      (im 16 years of age)
The only electronics store that i had growing up was radioshack.  And we all know how that is!   
The employees stick their heads up your ass if you so much as glance at the phones and "audiophile grade" cables

The only thing that we have is a surplus store.  They arent even stocked as advertised with anything more than a 2n2222...   
They get their income selling huge ass caps, cores, relays, and ham antennas.. 
You may want to give yourself a wider niche, so you don't have to resort to selling phones and fart toys.

If you do choose to do it, make sure you also become an electronics counselor for the boy scouts in your area.  Because that would be totally awesome

[EEVblog]

Your response is exactly what I'm looking for. Indeed, I can't hope to compete with Mouser or Digi--but I don't aim to. What led me to this idea was how many times over the past few years I've had an idea or needed something quickly, and just not been able too due to not having parts locally.

Sure, I'm in the same position sometimes and drop by my local Jaycar store down the road for some parts.
But here is where you have to do the math...
My Jaycar store is a few minutes away, walking distance if it came to that.
The other stores are Altronics and the Element 14 trade counter, both about a 45 min round trip at least.
Any further than an hour round trip and I wouldn't bother at all.
I go to those less frequently than Jaycar, and Jaycar is not very frequent to begin with!
I'd spend an average of $10-$20 at most on each visit.

So, you have to ask, how many potential customers are within a hours drive?
And how many of those would you need per month on an average spend to at least break even after all expenses?

Not saying it's not doable, but I thin kif you do the math, you'll find that it most likely not viable 

To me the brick and mortar store represents more then just a place to get your parts. You can come in, chat, ask questions about your design, meet up, show off, and get second opinions. I wish I had a place like that by me when I was starting out, and it's what led me to this idea!

Indeed, but that may not pay the rent 

Have you thought about putting your enthusiasm into a Hackerspace instead?
Maybe one that also sells some parts as well?

Dave.

[AndyJ]

You bring up very good points. I really can't answer how many people would be within "acceptable" distance of the store, but I've contacted the main Hackerspace up here so I'm hoping to get a good idea. Chicago itself has many people and many electronics schools, which I had planned to contact.

[FenderBender]

Okay I edited it a bit to organize my thoughts.

I think we need more electronics stores. However, I can see it being difficult to survive because electronics is still a pretty niche market, though it is pretty popular. Making a business out of it may be tough, but I think you can do it.

Here are a couple of things that came to mind:

1.) Location. I've seen great stores (not necessarily electronics) die because they weren't easy to access or were barely noticeable. Now of course, trying to get a building on a main street in busy Chicago will surely not be cheap, but it may be your answer. A large volume of traffic can mean more people dipping into your store.

2.) Sell it. If someone was to glance at your store for 3 seconds as they walked by, you'd want them to say "Wow that looks interesting. Maybe I should go inside". In the same manner, there have been great stores that look like shit on the inside and outside and they are very uninviting. Even if you think engineers are not the flower types, put some nice plants outside. Keep the windows clean.  Make people have no option but to come in because it looks so nice. Examine current stores as models. Take the Apple store for example. They are very clean and elegant. Or I like the idea of a Starbucks-like or Barnes&Noble-like electronics store: A store that I want to go in...and stay in! Perhaps a lounge area, smooth jazz music in the background while brewing coffee. Thinking a bit wildly here but that would make me want to shop there. Good lighting is very important. Make people feel at home.

3.) Service. Why do I hate Radioshack? Because they don't care about you! There's only one guy there (kind of looks like Jim Williams) who actually knows what he's talking about. The other workers are just plain nimrods. And they want to steal your money with "protection plans".  If you choose to hire people,  it would be helpful to hire perhaps EE students or people that actually have a solid foundation with electronics. I think that is very important. The Apple workers might not know everything but they are generally very helpful.

4.) Good products and well organized. Of course if the products are garbage, then everything else is a waste. Don't be like Radioshack and stock parts from unknown suppliers made in Nowhereville, China. Equally as important is organization. I have actually been to a few "real" electronics supplier shops and my biggest complaint is that it was impossible to sort through the parts because of lack of organization.

I think you should have the main section of the store dedicated to "standard" parts. That means all the passives you could ever want, op-amps, comparators, logic, some microcontrollers, voltage regulators, transistors, etc. And then another small section with "cutting edge" parts. These would probably be mostly chips. Keep a small supply of these. These would be things that people could buy and tinker with if they wanted to. But the stock would be due to change.

In this "lounge" area I talked about, you should have a few reference books that people can look at if they want. A copy or two of the ARrt of Electronics. Some other design books. Have the latest subscriptions to some EE magazines or Make: or whatever. Perhaps they can drink some coffee while they do this.


5.) Specialize. I don't know what exactly this would be but classes or a "club" would be awesome. Perhaps Monday: Beginner-intermediate classes, Wednesday- advanced classes, Thursday- Show off your projects day.

I think you should try to develop some sort of curriculum. I know you would be a business not a school so you'll have to balance this one yourself.  After you teach the class, provide the people with some material on how they can do it at home. All the parts and equipment needed would be available at your store. A few weeks into the course and they'll be dying to buy an oscilloscope from you. Hehe.

[c4757p]

You need to specialize in some way. Provide a service that someone else does not. Not sure what that would be. Perhaps some sort of education.

Hell yes. Electronics stores should have classes like the craft stores do. At all different levels - you'll turn a lot of people off if it's just "how to flash an LED". Some "how to repair" classes would be nice too.

[AndyJ]

Having classes would be the goal, along with simple meetups and contests. Basically, we'd want to be part of the community!

[c4757p]

It's a shame there aren't many decent electronics stores around anymore. Mouser/DigiKey might be cheaper but I miss the experience of the physical store once in a while. There's a little electronics store an hour away and I went there and felt like I was a kid again.

I'd probably be a frequent customer at your store if I lived in Chicago. Sadly I live in the armpit of New York State instead, upstate...

[AndyJ]

It's a shame there aren't many decent electronics stores around anymore. Mouser/DigiKey might be cheaper but I miss the experience of the physical store once in a while. There's a little electronics store an hour away and I went there and felt like I was a kid again.

I'd probably be a frequent customer at your store if I lived in Chicago. Sadly I live in the armpit of New York State instead, upstate...

What a coincidence, our first satellite branch was going to be in "Armpit, NY!"

But I appreciate your comment. Those feelings of being in a store are exactly why I wanted to open it. Nothing quite like it.

[FenderBender]

Indeed. Electronics can be bewildering. Human interaction is what people crave, assuming the store owner hasa grip on all things electronics which I'm sure you do with an endevour like this! 

[Conrad Hoffman]

No, failure in the making- run! I've seen people do exactly what you're talking about and they quickly go out of business even with good location and good stuff. You can't sell at a price anybody will pay because you can't support the brick and mortar store front. The percentage of people interested at this level isn't high enough in any one area to make a go of it. The margins aren't high enough. You'll have the same problem as the people teaching knitting classes and other crafts. Basically the audience is cheap and unless you want to eat noodles and make $1.50 an hour, the economics don't work. Even our local surplus place went out of business. All the hobby stores have gone out of business. Oddly, we do have a vintage audio and turntable shop that seems to be making a go of it- you have to ride a wave and know when to exit.

[EEVblog]

Ok so that's just one example but there are heaps of others gone by the wayside I could name and a trip through old electronics magazines would show how the world has changed.

That reminds me. I have 40+ years of electronics magazines sitting beside me that are begging for videos...

Dave.

[AndyC_772]

If I need components for a project, I can put in an order with Farnell and have them delivered free the next day. I might consider buying them from a retailer instead, but unless you have every single part I need sitting on the shelf, I still need to mail order the rest - and then I might just as well mail order the whole lot and save myself a trip. You'll never compete with the major catalogue companies on range, and that's a deal breaker IMHO.

Much as it pains me to admit it, electronic components aren't a type of product that really needs to be available retail at all. There's no value in being able to pick up and handle a transistor before taking it home; everything I could possibly need to know about it is right there on the data sheet, and the actual product is exactly the same regardless of where I buy it. You have just the same problem as a music & video retailer - you just can't differentiate yourself from the competition when you're selling the exact same branded product as everyone else.

There are some things you could try, though. Tools immediately spring to mind; I'd like to be able to see a range of good quality pliers, cutters, soldering irons and so on, because it's difficult to judge quality or even size from a photo in a catalogue. Cable and wire fall into this category too, along with enclosures. Maybe switches and connectors too... stuff that's available in a range of physical sizes, where being able to see it up close & personal helps in the design process.

These are small ticket items, though, and you're only going to make pocket change selling them. If you sell higher value products (scopes, power supplies, signal generators and the like), you'll need to be price competitive with online resellers, and that means narrow margins. I'm not going to buy a $5000 scope from you if it's $4000 delivered in a week from somewhere else. I might buy a $400 scope from you, but you're not going to be making much on that either.

Here in the UK we have a chain of electronics retailers called Maplin, who have been around for years. They started out doing mail order, and their catalogue used to be a treasure trove of all manner of components and other cool stuff. It was also an invaluable reference book - it included copies of the pinout and other data for all the ICs they sold.

Over time, rather than growing the mail order business, they opened more retail stores, yet relegated electronic components to a small counter at the back. Nowadays they mostly sell computer parts and accessories. I sometimes pop in if I need, say, a type of wire or connector which I don't have in stock, but that's about it. The highest value item I've bought from them all year is a can of compressed air, and even that was only because I needed it in a hurry.

Personally I'd run a mile if I were you. Much as I'd love to see a retailer offering components, professional quality tools, test equipment and so on, I wouldn't expect to ever actually spend much there. Sorry.

[mikeselectricstuff]

What led me to this idea was how many times over the past few years I've had an idea or needed something quickly, and just not been able too due to not having parts locally.

Needed or wanted?  While the  idea of being able to nip down to the shop is nice, how often can you not wait a day for mail-order?
I often do work projects on insane timescales (e.g. forty SMD boards each with 200 parts designed and built in less than a week), and I can only think of maybe 2-3 of times in the last couple of years where it would have been very useful to have got some parts same day - generally when I've missed a part off a Farnell order or received the wrong part pr package (e.g. 500 SOT-23 PICs supplied loose in a bag instead of tape). 
However the huge variety of electronic parts available nowadays means it isn't realistic to stock a good enough range or volume to be worth doing. The hobbyist market is just too small to ever be the  viable business it was 20-30 years ago, and the professional market is usually organised enough to not need it, or can pay for stuff to be biked over if necessary.
I have an RS trade counter a 30 min round-trip away but rarely use it - OK they don't stock much electronics stuff but even if they did I doubt I'd use it more often.  Less so now they don't open Sat mornings.
I also have Rapid Electronics about a 3hr round trip away but have never been there - a couple of times I might have if I could have sent someone else. 

General retail electronic components will never be viable other than as a counter on the side of a mail-order warehouse.

There is a small potential market for Arduino type stuff as a sideline to a bigger shop - I know someone who is doing this with some success, and this is combined with classes. 

[mikeselectricstuff]

That reminds me. I have 40+ years of electronics magazines sitting beside me that are begging for videos...

Dave.

And that further reminds me. We in Australia were pretty well set for electronics magazines. Especially given the population here. We had Electronics Today International, Australian Electronics Monthly Silicon Chip and Electronics Australia and a few magazines that appeared sporadically.  Electronics Australia in various guises ran for over 75 years. The Wikipedia entry can be seen here. http://en.wikipedia.org/wiki/Electronics_Australia

Only Silicon Chip survives. To me that pretty much sums up the state of play.

And on the subject of old magazines. Dave, I would like to see that.

Ditto in the UK, I believe the last surviving title which over the years absorbed Practical Electronics, Everyday Electronics and ETI is no longer going, leaving Elektor as the  only remaining paper magazine.

[steve30]

I'd welcome a decent electronics shop in my area, but I've really no idea if there would be much demand for one. But I am many thousands of miles away from Chicago so can't comment on that area.

There are at least 5 Maplin stores in my county. I do use them now and again, but they are hardly worth it for components. They are too expensive, very little choice, and very little stock. Unless I'm passing and need something which they happen to stock, then its not worth the bus fare to go there.

Here in South Yorkshire, we do have a great little independant shop called Bardwell's, which has been around for donkeys years, and there prices are probably better than Maplin, but again, unless I'm going past, its not worth the bus fare, when I can get stuff shipped for the cost of a postage stamp or even less.

If you are confident that you can get the customers and can either stock (or have the ability to easily order) parts that everyone wants, then it might be worthwhile. If it was local to me I would certainly visit. But do remember that mail order has most of the market.

[steve30]

That reminds me. I have 40+ years of electronics magazines sitting beside me that are begging for videos...

Dave.

And that further reminds me. We in Australia were pretty well set for electronics magazines. Especially given the population here. We had Electronics Today International, Australian Electronics Monthly Silicon Chip and Electronics Australia and a few magazines that appeared sporadically.  Electronics Australia in various guises ran for over 75 years. The Wikipedia entry can be seen here. http://en.wikipedia.org/wiki/Electronics_Australia

Only Silicon Chip survives. To me that pretty much sums up the state of play.

And on the subject of old magazines. Dave, I would like to see that.

Ditto in the UK, I believe the last surviving title which over the years absorbed Practical Electronics, Everyday Electronics and ETI is no longer going, leaving Elektor as the  only remaining paper magazine.

There's still Everyday Practical Electronics. I've read through a few recent issues which are in my college's library. Seems pretty decent, though many of the constructional projects are reproduced from Silicon Chip.

I've recently started buying Elektor. For some reason I never bothered with electronics magazines until recently.

[JuKu]

I get Element14 next day delivery directly to my door. I don't bother to go downtown much for standard parts. Very seldom would I go there for resistors and such to get them the same day - and nobody is going to make a living selling 0.01$ resistors anyway! But there are things I prefer to buy from a real store:

- All my tools, unless it is a very specific tool. I want to get a feel for it and see if it "looks good".
- Wires and cables: All catalog pictures look the same, but again, I'fd like to get a feel
- Enclosures
- Odd items, that I didn't know existed before seeing them in a store (in other words, you want to keep an eye for sites like GoodLuckBuy, eBay and such)

Still, electronics is not that popular hobby and competition from web stores is brutal. Average customer spending 50$ (to be generous) leaves you $10 (again, being generous). You need awful lot of traffic to make a living...

[Psi]

•     Very reasonable prices (Ain't nobody want to pay $5 for 5 resistors!)

This maybe tricky because you do need to make money.

However, you could price them so it's obvious that buying a single resistor isn't value for money by also selling larger packs for cheap.

If they want to pay $1 for one resistors they can.
Or they can buy 10 for $1.30   or 100 for $5  etc..

It's only the hobbyists who begrudge paying $1 for one resistor. Mum/Dad/ or the general public don't care, they just want one resistor and $1 is cheap to them.
A hobbyist is happy to buy 10 or 100 resistors even when they only need 1 for a project.

And before you ask, yes, you do get people with little-to-no electronics knowledge buying components. Don't ask me why, but it happens more than you think.
I see it all the time when at the local electronic store here. So you might as well take the money if they want to pay $1 for one resistor

[ptricks]

An electronics parts store can work but you cannot run it like it would have been run 10 years ago. Companies like Mouser make it hard for a local company to compete. You cannot undercut the big guys in price so you are going to have to get the customers by offering a local service that does something they cannot.

One option to consider it to keep low stock levels but tell customers you will order whatever they want and you can have it either the next day or two days later. Why wouldn't customers just order it themselves ? Because a lot of places have a minimum order , or charge a lot for shipping and I have run into the problem of the shipping costing more than the parts several times. If you can get enough routine customers, you can charge a slightly higher price for the parts and do orders for multiple customers combined into one order.  This is especially true if ordering parts from China suppliers. There are a lot of boards and modules available on ebay really cheap but a lot of people do not want to pay extra shipping cost and without the extra shipping it can take 2 weeks+ to get an order. Combine a bunch of customer orders and get the stuff in 2 days and you will have a lot of people wanting to order things.

Something else you can consider offering is a pcb service where you gather up multiple orders and ship them to a be made in bulk . I know some will say they can just do that themselves, but even with all the online  stuff , some people still prefer to work with someone face to face.


 

[Psi]

Yeah.

You could also stock electronic stuff from hobbyking.

Their stuff is real cheap to start with so adding your markup wont make the stuff overpriced.
It would be very convenient to have somewhere local where people can buy hobbyking electronics from without any shipping delay.
(As long as your markup isn't crazy).

It's a good idea because in the world of RC heli/planes/quadcopters you often break stuff and need replacement motors/batteries/ESCs right away. Waiting 2 weeks is really annoying.

[SeanB]

Locally I had ( 20 years ago) Hamrad, A1 Radio, Ron Tomlin and Basic Electronics. Only survivors are A1 and Ron Tomlin, and even so they are struggling, only surviving because they have paid for premises, and a still loyal customer base. I buy from them when I can, as they are the only local suppliers left, the alternative for most being RS, who are still around, though they did close the trade counter locally because it was not viable ( and I did support it because they did have the look and touch, it did make me buy tools and such, especially random components that they had in the shelves, even at the then high prices) to keep it for the volume. the biggest problem of retail is the twin evils of having good staff ( not cheap and good ones are hard to keep, they will be poached by your competition) and paying for the shop and all the associated costs like power, water, rates and other services and the associated overheads like security and insurance.

[Mechatrommer]

this is from my observation and having opened a small retail (other stuff) for a short period. when you want to open up a retail...
1) you dont think of yourself or what you like or "think" other people will like from your small room in your house.
2) you need to establish and have a figure on who and how many your target customers will be. how? go out, look around ask people, as many as you can get.
3) you are going to sacrifice you time for that. you dont expect you open it up and have your workers run it for you. the more time you spend for it the more success rate it should be.
4) you are going "professional" way, it means you have to do anything to survive even if its what you dont like.
5) not just "professional" way, but your are going "entrepreneurshit" meaning you will be pouring money out of your pocket and your bank's debt. so think twice, thrice of even 10th times, mistake is not an option, esp if its "one way trip".
6) above all. you must be "selfless", i mean in other word... you dont expect to get what you want. relying on few local hoobiests is simply delusional imho.

btw my retail seems to go down very steep, i think because i violate rule #3. i think i spent too much time foruming. !@$%$#%^#$ but since its not a "one way full blast" trip and only small'ish investment, "pulling up" will not lose me an arm and leg. fwiw, my bros too they are in auto car accessories business but since that business is quite hot, so they are not running out of business and customers up until now.

back to local ee shop. i need to pray to santa claus if i want to find the simple LM324 opamp in our local shop, let alone the arduino. they got all the fancy mosfets and stuffs that i figured out later to be usually used by other ee repair shops or in many products in local market. they got fans, lamps, and other gadgets for home ee improvement stuffs other than the mentioned "farting toys", even the coax cable is only for our local tv decoder unit 75ohm white fat type, you will need to pray to unicorn if you want the 50ohm coax big or small regardless, let alone coax used by rigol probe. so those who survived are the one who look around and find out whats the "demands" are. and where "MEAN" is the mostly used stuff in techical engineering, thats not going to work in business. business works with "MOD" the largest group. if you use a rare car you are going to have a hard time looking for parts, whats piling up around me are parts for our local "national" crap products. cant really blame the retailers et al, they need to survive btw, so i'm "the special kind" is on my own

edit: one of my bro is a car audiophool sound blast maniac, if he has to rely on it alone i think he will spend most of his shop time sitting watching the dust fly away, inevitably he has to sell car tinting service, dumb accessories and car's fart toys. otoh my other bro is doing car's sticker and just that, he still survive so go figure. i believe its his sidejob for doing signboard contract jobs (using stickers) thats helping to pay.