It's just a different business model he is undertaking and one that will probably see his business survive, rather than fail. In fact, I think this will increasingly be the business model of choice for hobby shops in teh future, as it allows the proprieter to keep overheads low.
I think the industry is changing and as such, retail outlets will need to change the way they do business.
Village Hobbies in Keilor has been operating quite successfully using this model for quite some time. I hope Snowy's goes on to prosper using this approach as well.