Mr. Muffin’s Trains of Atlanta, Ind., is a family-owned business that literally takes a family to keep the retail company going and growing — both in-store and online. Stephen and Liz Nelson (Mr. and Mrs. Muffins themselves) give us the scoop in this Q&A interview with Trains.com Staff Writer Lucas Iverson.
Stay tuned for an extensive video of this interview on Trains.com Video
Q: For those who may not be familiar with your business, what are the types of services you provide to customers?
Stephen: We are principally an O gauge store, though we’ve expanded into HO now. We provide retail (both in-store and online), sales, and support for those product lines. We answer a lot of questions about the product as I’m one of the few dealers you can call and actually get someone on the phone.
We also do a lot of social media. I host an open-mic office hours on Fridays, and about 150 guys log in to that. We also do a “Chat with the Muffins” session on Facebook and YouTube on Wednesday nights. And then we run trains at the layout on Saturdays at 2:00 p.m.
Q: How did Mr. Muffin’s Trains get its start?
Stephen: As an executive in the technology field, I had to get away from working. I started in HO back in 1988, built a layout, and had a big collection. Then, I got a little frustrated with keeping the trains on the track, and decided to sell all my HO stuff to get out of model railroading.
There was a thing called eBay, you might have heard of, and we decided to sell there. My middle son, Jeff, told me that I couldn’t use my real name as the handle and had to use something else. When the kids were little, I used to make bedtime stories about the muffins. So, he thought it would be really cool to make my eBay handle “MrMuffinsTrains.”
In 2000, I decided to get back into model railroading with O gauge. But then I thought, ‘Maybe I didn’t want to do that either.’ I took the layout down, put everything in storage, and got ready to sell it all. Then I met Liz, 12 years ago, who saw the storage and asked, ‘Do you want to build a layout?’ She rented an 1,800-square-foot building in Carmel, Ind., and we built a public layout. It was crazy popular and beautiful. But it was a pretty small space.
Liz then rented a 5,400-square-foot building nearby, with an escalating lease on it. We built the second public layout, but one day I asked her, ‘How are we going to pay for this? This building cost more than our mortgage.’
I talked to Andy Edleman of MTH about this and he suggested, ‘Why don’t you become an O gauge dealer?’ Liz and I like to say that we are reluctant retailers. But, it was a way to support the public layout and gave us a chance to promote model railroading for families.
But the City of Carmel decided to tear our second building down. The good news was it got us out of the rent. The bad news was we had to move. So we found three vacant buildings up here in Atlanta and bought them all. Now we’re in our fourth building.
Q: Looking back, what have you both found to be the key takeaways in the business’ success and growth?
Stephen: One of the things we like to say is we’re hobbyists first. We build and operate a layout, and we use the electronics. I started working in a toy and hobby shop when I was 12 years old, so I’ve been around the hobby a long time. I think that’s the difference. And when you’re talking to us, you’re talking to people that are in the hobby and have the same experiences and needs.
Liz: What’s been really interesting is I talk to the wives and daughters who are looking at the [current layout’s] scenery and are like, ‘I can do this.’ We really enjoyed that aspect of watching families come together over it. It’s been really great because when we started out with just our layout, it was just to promote the hobby, and I think we’ve really achieved that. People still come into the store and want to get started, themselves.
Q: How did you get into the business of custom runs, and what is the process of choosing a model and road name to be offered?
Stephen: When we first started, I called MTH and said, ‘You guys don’t make much stuff in Monon [which is Indiana’s railroad], and I got a lot of Monon customers. What about making some just for me and them?’
They worked with us and made the passenger train set, Thoroughbred, that ran from Chicago to Louisville. MTH did a lot of work to get the artwork correct. We sold 110 preorders with David Letterman buying two. That was a real success.
We then started asking MTH to make more stuff for us, and later having the same conversations with Atlas and Lionel. If you look at MTH’s business model, half their volume now is custom runs for all the different dealers. Both Atlas and Lionel are a very small portion of their businesses, but I think it’s a great portion.
The process is the manufacturers decide what they want to manufacture. They’re not manufacturing anything unique for us as we are participating with an announced run. We’re then looking online to find different road names, or we’ll get suggestions from customers.
It’s interesting because in the old days, the manufacturers put out two catalogs a year, so the custom run activity was very focused. Lionel still produces two catalogs, but everybody else is usually doing announcements monthly. In some cases, MTH is announcing a new product every week. Now the business has taken on a life of its own.
It’s an enormous amount of work because as soon as a manufacturer gets a product in their schedule, we have to figure out if we can do anything with it. But it’s still really satisfying.
Q: Could you provide some background regarding your current store layout and what the public can expect when visiting it?
Stephen: The main layout is 60 feet by 40 feet. This is our third public layout and the largest. Liz and I built it ourselves and we pretty much had trains running in four months. It’s all Legacy and Digital Command System with 13 independent loop tracks. Normally on a Saturday, we’ll run 20 trains, though we can run up to 50. The second layout is 100 feet by 20 feet, again with both Legacy and DCS.
Liz: The interesting thing is that people who visit frequently will come up and say, ‘Oh, this is new.’ And actually, it’s not. They just find something new every time they come.
We only run the layouts on Saturday, but we’ll also open it by appointment. We’ve had a lot of interesting groups through here, and it’s really fascinating to watch them.
And then we get families that also come through. A lot of times, grandparents point to an engine or train and we will overhear them say, ‘I rode the Emerald Crescent when I was a child. That’s how we traveled.’ The kids are just in awe when listening to every word. The next thing we know, grandpa is back here with the grandkids, and they’re also building a layout.
Q: In a world of owning a traditional brick-and-mortar hobby store that specializes in model trains, what are the challenges you combat on a regular basis to keep the doors open?
Stephen: I think in our world, the store is really gravy. The online sales and preorders are the bread and butter. That’s what’s paying everybody’s salary. The fact that we have a retail store is a good thing. We have good days in there and sell a bunch of stuff. But, we’re not relying on the store to carry the enterprise.
Liz: But there’s also still a need for it. We have a lot of customers that will make a detour in their trip just to come to the store. So there is some impulse purchasing going on. But I think it’s really good because it gives people an idea of what they can do and what’s out there. They just really enjoy that aspect.
Q: What does the future hold for Mr. Muffin’s Trains?
Stephen: I think we’re going to continue to grow.
HO is going to grow. Obviously, it’s a bigger market than O. If we can get a handle on it, that’ll be good. We’re going to start doing social media around HO, which we don’t do now. But, we’re starting to do custom runs for the scale.
We got a local guy that is 3D printing buildings and we are retailing those for him, both online and in-store. There’s a gentleman in Canada, who retired 15 years ago, that we convinced to let us make his kits again. We can support the hobby by helping other people get their products to market. Or if they really want to retire, we can pick up their backlog and inventory, and let them ride off into the sunset.
Obviously, we have family here that are invested in the business, and it’s going to carry on beyond us. So I’m pretty confident it’ll all keep going.
