View Full Version : help with a business.
10-12-2009, 11:08 PM
okay. My dad, put simply hates his job. However we're not going to go into that here. He wants to start his own business that his family will continue to use so I suggested one dealing with gaming. 4 out of his 5 children (including me. maybe I have a personal agenda?) love gaming of different sorts. the 5th has never joined us in a game of MTG or anything and tends to think other gaming isn't much fun. The main thing she likes is clothes. I don't think any of us besides her would enjoy that business. especially not me. I wear pretty much the same thing every day. Gaming however is something I know and can do pretty well.
okay. After my long Rant here's the crux of the issue. I want to help my dad make a profit like any good business. I'm wondering currently what the most popular gaming supplies is right now. Or at least the most viable for selling.
TL;DR version. my dad is thinking of opening a gaming store. I want to help him.
10-12-2009, 11:40 PM
What you need to know:
1. 50% of businesses fail in the first year. 95% fail in five years. This is all businesses. My father was extremely successful for a small businessman and still failed in the first 3 ventures he attempted.
2. Small business is hard. It requires you to have multiple, often disparate skill-sets. A gaming store is actually a decent idea in this regard, you don't need any special skills to sell the stuff and you already game.
3. Starting a luxury business (which a game store is) of any kind in this economy (assuming you're American) is going to be even harder than usual. Which is to say darn near impossible. Just so you know.
Here's a book you need to read: The e-Myth Revisited (http://www.amazon.com/E-Myth-Revisited-Small-Businesses-About/dp/0887307280). It could make the difference for you.
10-13-2009, 12:00 AM
Here's a book you need to read: The e-Myth Revisited (http://www.amazon.com/E-Myth-Revisited-Small-Businesses-About/dp/0887307280). It could make the difference for you.
yay for the Library!:smallbiggrin:
10-13-2009, 01:04 AM
I'm wondering currently what the most popular gaming supplies is right now.
mountain dew and chips, if i had to guess.
gaming is a tough business, in part because the product is non-perishable. someone buys the 4E books and you may never see them again. consider selling gaming space and in all seriousness junk food.
10-13-2009, 01:32 AM
I have known three people who have tried to start a gaming store and all have failed. My dream is to one say open a gaming store so I can kinda say I have experience(hours and hours of research).
1.) You need to draw in the kids. Get em while they're young, The teenagers may be somewhat poor but there are alot of them and they will all throw down for a booster pack or two a week.
2.) Online sales- Unless you are in a very populated area you're not going to do too well without online sales.
3.) Customer involvement- Make it not just a shop but a place to hang out. Get some tables set up for people to play, plan weekly tournaments, have a bullion board for local gaming groups to advertise, host LAN parties, ect. A Decent sized shop with room for tables and extra space will make for a better store.
4.) Cover all aspects of geekyness- Provide Roleplaying games,board games, Trading card games, Video games(most likely used only), and possibly anime.
5.) Snacks-You will be surprised how much money you will start making by having snacks available for hungry gamers. If this tactic is paired closely with number three you will have a happy store.
6.) Watch for shoplifters-Not a real tip, but your customers are going to be mostly kids and they will try to steal your things.
10-13-2009, 02:31 AM
One of the key thing I've noticed with any niche store is the extreme importance of location. The area needs to be populated enough that there's a customer base, since <1% of a given population is going to include gamers. This percentage increases greatly in college towns, but college towns without an established game store are few and far between. Don't try to go up against an established store, gamers are a loyal bunch and you won't be able to undercut their prices when you first start up.
One thing I've noticed a lot of successful gaming stores do is dealing in used books, video games and DVDs. This gives you product that you can sell at a huge profit margin, since you can buy it for less than 1/4 cover price and sell it for 1/2, and appeals to often short-on-funds teens and twenty-somethings that frequent the store.
Don't neglect "civilian" games, from Monopoly to Settlers of Catan to Apples to Apples. They give clueless parents something they might consider buying when they bring in kids to buy (insert whatever CCG kids are playing now). They can also bring in people off the street (keep them in view of the window) and sell like crazy during the Christmas season.
That's something else to keep in mind in niche retail: a lot of stores operate in the red until the Christmas season. Make sure people know about you when that time rolls around.
The initial startup on a game store is quite high, since the items in question are often not produced in such large numbers that economy of scale *really* kicks in like it does with, say, video games or DVDs. However, if you stock well to begin with (but don't overstock, or you'll be holding on to unpopular items until you have to sell them on closeout. This is one of the toughest parts about Comic shops, trying to judge how much of any given item to buy.)
Be prepare to jump through a lot of hoops with WoTC, apparently their distribution is a PITA.
Snacks and gaming time are a good idea, as they are almost pure profit, but the gross revenue is not especially high.
10-13-2009, 09:32 AM
Also make sure you understand business licensing, taxes, and ordinances. I see a lot of businesses that have good ideas and hard working owners but fail because the owners don't understand the paperwork that is required and get buried under red tape, fines, and penalties for not doing the paperwork right. Perhaps take some kind of running a small business night class or check with your local government to see if they have free training seminars or make sure you have a CPA you know and can trust.
Another aspect where I see gaming stores have a hard time is estimating demand of materials to have on hand. Lots of stores seem to end up with a surplus of gaming books after they go out of style (especially with things like D&D when they change editions on everyone and suddenly the demand for all your stock in the old edition dries up. I'm not sure what a good solution is for this, other than making the store as diverse as possible so you have other materials to support you when one aspect fails. RPG, Miniatures, Computers, Traditional Board Games, CCGs, novelty games, etc.
I'd make sure to have some open areas in the store that can be configured to 'events' This will allow the various gaming communities to use your store as a gathering place, reserving various nights for their use and setting things up how they need it (have a supply of folding banquet tables and chairs). This will bring in a bunch of people who will buy lots of snacks and probably a far amount of merchandise.
I'd agree also with the online aspect. Website yourself and allow orders online.
Another possibility, especially if several members of the family are old enough to be employed... send family members who are going to be involved in the store out to work for other, similar stores. Learn from experience what seems to work or doesn't for them before starting your own. At the very least talk with other store owners (that you won't be competing against) or previous owners (of failed/closed stores) and ask them for their experiences and advise. There are several websites out there where prior store owners have posted about their experience. Learn from others successes/failures if you can.
Make sure you know the common reasons a business fails and plan against them:
1) under capitalization - trying to start with a small amount of stock, in a suboptimal location, and without sufficient backup money to deal with unexpected costs and setbacks.
2) lack of a system/experience - The cases you hear of where someone is very successful now but failed several times before hand is this. If you are wandering into unfamiliar territory without a guide its likely you will fail but if you learn from the failure and try again you will figure it out.
3) no mentor - related to #2. Try to find someone that is trustworthy and knows the ins and outs to help you navigate them. Do not go to your competitors for help in how to run your business.
4) poor vision - dooms the idea from the very beginning. Asking for help on the forums shows that your checking to make sure your vision is a good one. You need to make sure you idea will work, that you offer the right products to the right people, that the market it ripe for the idea and that the demand in your area can support your idea.
5) location, location, location - e-commerce can help a bit with this but it is still a huge issue. Do you locate in a mall with high overhead (lease costs, etc) but a larger market or in a stripmall with less overhead but less of a market. How close are other competitors. Will you be able to out compete other competitors already in the area or that move in near you after you are already invested into a location.
6) poor marketing - getting your name out there is important. Here the gaming community is actually one of the better aids as the local groups and meet-ups need space to play... space you can provide. Providing a location for gamers to congregate will do much of your advertising for you.
7) lack of ambition - there are plenty of gaming stores in my area... and few that I go to, because the employees seem to be stuck in a low gear. Customer service is poor, the bathrooms are filthy, the owners are more interested in playing their own games than running a store. If you do it DO IT!.
8) failure to educate yourself - before you even begin you've got to start learning... learning about taxes, learning about marketing, learning about investors. And it has to stay a vital part of your business plan. As soon as you stop actively learning more about as much of running a business as you can then you will slip into lack of ambition. The process of learning is a great motivational tool for a business owner.
9) lack of a business plan - plan the whole thing out. Find out how much building leases cost for the areas your interested in. How big will your initial inventory be, how much will that cost? What are the licenses and taxes going to be? How much income should you be reasonably expecting and how did you come up with those figures. See your business before you start it. You will also need to be able to show other people your business before you start it if they are going to invest in you or give you a start-up loan.
10) not knowing your product or not knowing your customer - to be a true businessman you need to know what you have and what your customer wants... and connect the two in your customer's minds. This links with education as well. The gaming community is continually evolving. RPGs became hot them MMORPGs started to take over the nitch. CCGs started with Magic the Gathering, which is still one of the strongest of the games, while others have come, sold really well, and then died away. WotC continually changes editions on their RPGs and CCGs. You need to learn and stay current on what is going on in the industry and in the gaming community. You will hurt yourself badly if you frequently place orders for materials just before the edition becomes obsolete, or if something new comes out that has seized the communities attention away from what they were doing before.
10-13-2009, 09:51 AM
Has your dad ever worked in retail? In particular, has he been a manager of a retail place?
If the answer is no, he may want to rethink. Not that it's not a noble pursuit, but you need to be able to run the type of business you're doing. My parents had a fairly successful graphics arts company back in the day. It got bought out and my dad ended up not liking the new management, so quit.
My parents second business venture was what I call "finish construction". We installed shower doors, bathroom hardware, mirrors, and closet shelves. We could also etch designs into glass, metal, and rock/ceramic. To sum up alot, my parents were too much of perfectionists, construction slowed, and we're still paying a second mortgage on a $100,000 dollar machine.
If your dad hasn't had to run a business before, there's a much larger chance that it'll fail. This isn't a guarantee, just like if your dad had been a manager of a very successful store he wouldn't necessarily succeed.
Beyond that, I don't know what to give advice on. I can sell groceries and stock shelves, that's the extent of my retail knowledge.
10-13-2009, 10:01 AM
The trouble with the gaming industry is that it's a natural oligopoly in high population areas, and a monopoly in lower ones. I live in Perth which has a population of about 1.6 million, but I'd say there's only 2-3 shops which stock RPG's like D&D and stuff that I know of, I'd estimate about 5-6 if you count ones that are more focused on card-games or stock stuff like D&D as an afterthought. My local one is in a basement, and they seem to be doing pretty well, despite the fact they're down a flight of stairs with no indication that they're there. They have a few long tables for gamers to play their game of choice, and they stock a metric tonne of gaming stuff, from Warhammer to MtG to D&D.
10-13-2009, 10:02 AM
if you're going into gaming, you're going into a niche market, so people will travel on the following conditions:
1) they know that you're there - so ADVERTISE. get the word out
2) your store has appeal - be it either cheap prices, or a friendly manner. People don't mind paying a few bucks extra for a personal service.
3) the local market isn't already saturated
4) they get what they want
games to stock:
MTG - its crack in card form
GURPS - the dnd/gurps communities don't usually interact on the same websites, but trust me, they're strong
steve jackson games (very loyal following)
hero clix (covers both catagories)
mech warrior dark ages
it may also be worth stocking some GW stuff on the side, depending on how far you are from the nearest GW store. GW = crack in model format
another no-brainer which many stores have missed out on:
regular customers... treat them with the respect they're due. ie: treat them the same as every other customer. If they think they diserve special praise because they've come back a few times (ESPECIALLY If it involves being rude to other customers), bring them back down to earth sharply and publicly. You may lose that repeat customer, but the new customer will remember that you've gone out of your way to treat them nicely and will tell their friends... and get you new customers in the process.
10-13-2009, 11:23 AM
My brother has been looking into this a lot recently. It has been hard to find wholesale price numbers to figure out profit margins. What we've found from talking to people and researching is that most model games, 40k, Warhammer Fantasy, Battletech, Warmachine, have a lot of long term players but most of their expenditures come in clumps and the amount the spend drops off fairly quickly over time. They are good for customers but not all that great for the bottom line. RPGs generally fall into the same category. CCGs and comics tend to be the biggest money makers because they are always being updated and have new products all the time, and in the case of CCGs there are always more to buy.
Most people love a place to play, but a lot of the model based hobbies are expensive enough that people will go online over local if it means saving a fair amount. With places like TheWarStore that just about everyone knows about selling with decent discounts and flat shipping you are going to have to sell under MSRP to move many products, you don't necessarily have to match the lowest online price, but you can't be too much more.
Anecdotal evidence from some shop owners also says that consumables like pop and snacks and food can easily bring in as much or more money as an entire store full of hobby goods. At least so long as you have places for people to play so they are staying there for hours at a time. You run into more complications with license to sell food though, so it makes things more complicated and what you can sell with what level of license changes from one place to the next.
You have to know the market well. If the area has no Battletech players then spending the money on products and shelf space is not going to pay for itself. For instance where I am now we have a very large number of 40k players but the only Battletech players we have are ones I just got into the game and no one plays Fantasy (though I'm working on that too).
However, we have no idea what the CCG scene is around here so at this point it would be a stab in the dark trying to guess the local market here.
The owner of a store has a big impact on what the customers think of the store. It doesn't look good if they don't know the products they are selling. You need to know the games to give people demos, to answer rule question and help get people interested in the games. It is very bad if they are condescending to players, especially new and learning players. It is bad if the owners show favoritism to customers, its fine if you give your loyal customers a little bit more of a discount, but it isn't if you set up special rules in a tournament to play to the advantages of one person's army. I know people here that say they will never go to one game store in another town because the owner insists on playing in his own tournaments and rules very inconsistently on issues that come up in games.
If people don't get along with the owner things aren't going to go well.
The biggest issue my brother ran into was the cost of commercial real estate. We didn't check everywhere, but the places we could find prices for online ended up with the cost per month in the $3000+ range if you got something with enough floor space to put in a few gaming tables. I know there are some cheaper areas where we live, just not with prices we could easily find. At that sort of cost you would have to be moving $6000 of product a month just to pay for the building and assuming you had a 50% profit on all your products (likely for some but definitely not all), which is a lot.
The overhead for a game store is fairly high too. My brother found a brochure from GW with startup package prices and you were looking at $5-7k for a basic set of boxes from them and somewhere in the $50-60k range for their full line of products. Thats just products for 3 games from 1 company. People are not willing to wait for you to order products for them either unless they can't find it themselves online, and how often is that going to happen? Why pay someone more to get the same product when you still have to wait for shipping times? You loose impulse buys too when you don't have the products on your shelf because thats what makes them impulse buys.
Unless your dad is also an avid gamer I wouldn't even think about it because it will be really obvious as soon as people come into the store that the owner isn't someone they are going to easily relate to and want to support. If he doesn't know the games it makes it hard to sell them. If he doesn't follow gaming it makes it impossible to follow the trends and know what is coming and what is being discontinued.
If he does have a specific interest and a sort of store he would rather run though it would be possible to split the store to some extent and have a limited supply of products you know people are interested in and having tables for people to play at and letting you kids expand and control that area while you learn the local market.
10-13-2009, 12:00 PM
I would recommend:
Selling Card games like Pokemon: No brainer, kids, unlike adults, don't need to buy food or pay for electricity.
Selling card games like MTG: All ages play this as far as I know, and it recently got a major update
Selling D&D books: Defiantly a no-brainer, Practically a requirement for a gaming shop, just be sure to always grab the latest books for your stock, I saw some cool books on amazon coming in 2010.
Selling D&D minis: Wait, do they even still make these? :smallconfused:
Snacks: Potato chips, candy, maaaaaaaaaaaybe microwavable foods.
Warhammer: Lots of people play this, and minis will get you a nice profit, just be sure to always have them on sale( Have you SEEN the latest prices on their website?????)
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