Anybody have advice on starting my own store?

[kengou]

My friend and I are planning on starting our own (brick-and-mortar) gaming shop. Videogames, magic, maybe other stuff on the side. We've never done anything like this before and know very little about it. Of course we're doing our own research and scouting out locations and all that. We are planning to buy/sell used cards/games as well, and sell online additionally. We also hope to run local tournaments if interest exists.

I'm sure we have plenty of people in the business, on here. So tell me, experienced retailers, what do I need to know? What advice do you have for somebody just starting out?

[DJ Incompetent]

I'm not in the business or anything.

I feel this is a very dangerous time to be starting a straight-up videogame store. How I observed the market trends, is the disc-seeking gamers are increasingly gravitating toward the top 20 titles of the year while people who want to stray off the mainstream path are learning better to move to the download scene to find their new experiences. The only gray area is the 'flavor of the week' which is basically just the most hyped disc game coming out any particular tuesday unhindered by gigaton releases the week or two before. Gamestop and big budget retailers already hold all the cards toward outpricing the competition, so you would have to find something huge to differentiate yourself from the many convenient outlets. I've seen many independent game stores appear in my area over the years who will try to establish a sense of community loyalty by hosting public tables, screens, and tournaments. Every one of them has gone out of business. The last independent gaming store I know about specializes in old-olllld used equipment. In my area, a new gamestop-ish chain called Game Headz sprung up everywhere specializing in that and 'rallying community' with minor tournaments 'n such. There really isn't any room for a straight-up competitor unless you have a unique trick up your sleeve like open modding or some other unheard trade you couldn't find in a brick 'n mortar store.


However, not since the old-style arcade, nobody has really found a way to take videogames and turn them into a lifestyle type of service. There are a few pay-to-play PC areas still tucked away in certain cities. Since basically you can reduce the size of your game store to that of a mall kiosk in order to take advantage of the only profitable titles, you should consider trying to combine a small game store with another service like a bar or a coffee shop. If you can combine the atmosphere of either with the social nature of game players, you could stand to make some bank.

Austrailia gets it. You should jump on dat.

[kengou]

The way we're attempting to stand out is carrying more types of 'games' than just 'videogames'. Magic cards, perhaps board games, stuff like that. Perhaps comics too. Seems like the demographics overlap a lot with these, and there aren't really stores that carry more than just one or the other. We intend to have play tables and things like that too. Other than that, it seems to me (I may be wrong of course) that if we find a solid location without much competition nearby, we ought to do ok. We're putting a lot of effort into finding a good location.

[Obiwanshinobi]

One games shop (console games, consoles, accessories) in my town changed the location for a bigger and better exposed one last year, so they must be doing something right. No idea what it is, but I bought a sealed PS2 memory card (Sony) and Viewtiful Joe (unsealed, but seemingly brand new) super cheap from them recently. From their previous place I bought Ico, SotC and Valkyrie Profile 2 for reasonable prices. Behind the counter, there's usually a bloke who looks like a nerd (i.e. like "the society" seems to be picturing a nerd rather than people I know for sure to be nerds look like) and doesn't seem to care an awful lot. Of course they trade online as well.
It would be cool if there was a place where you can play local multiplayer games, and not just stuff you can play online on your 360 or whatever, but say, Saturn Bomberman on a CRT with RGB or component input. Or if there was an arcade cab with something flashy running in a store. Heck, if you had something along those lines to attract the customers, I'd feel bad about not giving you any business. (I know it takes place and sounds risky if you don't intend to run a coffee shop indeed.)

[CIT]

A friend of mine runs a videogame store (both ooff- and online) and he's doing very well. He says 80% of his turnover comes from the new "hype" releases, but he makes the most profit on used games. If you wanna be successful it's a lot of work though, because you gotta be really organized and do a lot of marketing and are basically working 6 or 7 days a week. He doesn't play games anymore, cuz now he's too busy selling them.

[ST Dragon]

My friend and I are planning on starting our own (brick-and-mortar) gaming shop. Videogames, magic, maybe other stuff on the side. We've never done anything like this before and know very little about it. Of course we're doing our own research and scouting out locations and all that. We are planning to buy/sell used cards/games as well, and sell online additionally. We also hope to run local tournaments if interest exists.

I'm sure we have plenty of people in the business, on here. So tell me, experienced retailers, what do I need to know? What advice do you have for somebody just starting out?

I wouldn't even bother with the gaming industry if I were you. All the major large retailers that also sell video games, their store shelves are full and no one buys them because everybody just downloads them for free. Also all the smaller video game stores unofficially end up selling pirated games to stay in business, as no one will pay 50$ for a 5-hour super linear interactive scripted movie like Duke Nukem Forever and the majority of video games are like that now a days. Also no one buys multilayer games, as all the COD fan boys prefer to play them at internet cafes (or in the privacy of their home), who in turn have installed pirated versions of those games and so on...

So I would say a small video game shop is a no go and doomed to fail, miserably, same as video-club stores will all die out sooner or later.

[Skykid]

One of the big factors for success in any bricks n' mortar business is location, location, location.

Have you scouted areas, identified a need for the product and done any surveys? What's the competition like?

[CMoon]

Man, I don't mean to be a total downer, but my best advice would be DON'T DO IT! It isn't just that its the wrong economy for it, or that most brick and mortar stores are getting destroyed by online stores, but more important, all mediums are moving toward download only. At this point in time I think most people would rather still have a physical game, but that may change. Whether through downloading or even cloud-gaming, the idea of buying physical games may soon become antiquated.

At this point, good criteria for starting a physical business should be: 1) Can't be bought at Amazon, 2) Cannot be copied or transmitted over the internet.

Food, alcohol, entertainment (live), and prostitution are still fantastic business opportunities!

[Daigohji]

Frankly, I think you'd stand a better chance of success if you ran a straight card and board game shop, and dropped the videogames altogether. If you dilute the theme of your stock too much, you won't have enough shelf space to hold a competitive range in any one of them. With piracy taking such a huge chunk out of sales and the major franchises syphoning the remainder into selling that week's releases and used games, it would be almost impossible for an unestablished independent to gain a solid foothold. You'd need to find a magic blindspot on the map that has a lot of foot traffic, but has been overlooked by the franchises, and even then it would be almost impossible to stay in business.

If you absolutely must set up a videogames shop, forget about competing on new releases. If you sell used games, differentiate yourself by repairing discs before sale. The only niche I can think of that might work is if you specialised in peripherals. The major retailers tend to stock the same few things, as peripherals take up a lot of shelf space. If you're very imaginative with your inventory layout, maybe you could stock a wider selection of steering wheels, arcade sticks, waggle attachments, rhythm game instruments, etc. You could specialise in refurbishing and reselling peripherals.

It really is a terrible sector to try and break into at this point.

[neorichieb1971]

The best bet is do everything.

Get a alcohol license and sell beer and coffee and even sandwiches. Organize the place in such a way that people are attracted to your outlet even though they might not be wanting to buy games.

Make it a service provider. Internet cafe, arcade games etc.

I would not do magic.

If your bread and butter is selling disc based games. Expect to be pouring more money into it than your making.

Minimum starting investment $50k for gear, $50k for rent and 1st years wages. If you make it through month 13 your doing alright.


Don't base your business strategy on hard to get items. Because they will be hard to get. Since your B+M don't expect to convert internet buyers because they will not budge.

Oh, and get some girls to serve that are pretty. Sex sells, beer sells, coffee sells. Games will sell if the aforementioned 3 things are in place.

[kengou]

Interesting perspectives, thanks all.

To those saying physical game discs don't sell anymore and everything is going digital:
In a very long-term view I agree. However I don't see that happening for a number of years (for console games - obviously PC is pretty much all digital nowadays). It's the direction the industry is headed but I'm confident it won't be for at least one or two more console generations. That might mean this type of business won't be sustainable in the long-term, but perhaps it will be enough to get our foot in the door for purely online retailing? I don't know - it's an interesting concern I'll think more on.

To those saying everybody pirates everything or plays in internet cafes, so physical discs won't sell:
I wonder if this might be a regional thing. Here in the US, I don't believe this is really true, for console games. Console piracy exists but I don't exactly see it killing the physical disc industry anytime soon. If anybody has evidence to the contrary I'd like to see it. From what I've been seeing, the game industry is doing quite well and growing. Do you guys know how much CoD sells every few months it's recycled? (it's a lot)

To those saying the industry is creatively stagnating, it's all people buying new hyped releases each week:
Of course I agree. The question is whether there's a profit to be made if we always have to buy new copies of the "new release of the week". I'd be interested to figure this out - it's something we'll be looking into.

Locations and competition is something we're looking into very carefully. That seems to be the most important factor for success.

[CMoon]

I'd like to see evidence that a physical store will over the course of 10 years return more profit than putting the money into stocks. Given that you will lose money up front, and probably not even start making money until what, like year three? So now we're asking if physical copies of video games are going to be valid in 2014. I dunno. I sunk all my money into running a record label and watched the whole thing crash around me. I'd have done a lot better financially just investing the money into the normal things people invest their money into. Of course, being part of an active music scene changed my life--so you can make some argument there for what your money is going to, but on a financial level, it was the worst decision I could have made.

I don't mean to piss all over your enthusiasm, but starting a business is almost always a bad decision if you're doing it to make money. Plan on losing LOTS and LOTS of money. Now if you were planning on selling tacos from a truck, I'd say go for it!

Edit: Just keep in mind how fast things can change. CDs as a viable music medium went from THE SHIT to just plain old shit over the course of 4 years. Ipods have gone from being a 'gotta have' item to an antiquated term in about the same amount of time. In a very quickly changing (and fickle) market, investing in an already aging technology just doesn't sound smart to me, but on the other hand, that's what I did in 2002, and LOST MY ASS!

[neorichieb1971]

It is a regional thing. The US has considerably crappy internet in most places (outside of cities).

I used a shop in St Louis quite a lot. Game trader. He had imports and 1000's of games and a few cabs in there. He told me most of his business was done with trades. The shop itself was beat up and things were just piled up. He allowed smoking inside the shop because he smoked himself.

In the UK, by 1995-6 it was impossible to start a new shop selling videogames. I remember Dave Cox (Producer of Castlevania on PS3 and 360) had a shop in Bedford, UK called Select consoles. He told me even then he couldn't buy games for what EB was selling them new. Therefore the "new" games market was impossible to make a living off. In 94 he had good business out of the 3DO as it was region free and most of the main shops didn't sell it. Before that he had the Genesis and SNES market for imports. After 95 he went out of business and shortly after that became Bedfords EB manager. He then went to Konami as a localization guy. I bought my day 1 JP PS1 from him for £700, but only 3 people in Bedford did that. The import market is now dead outside of buying from playasia.com.

In Evansville Indiana there is a couple of indy shops still going I think. But again they are established, have lots of stock and quite a few rare items.

The best bet to sell videogames is to start online. Especially if you can establish exporting to the UK and other countries. Quite a few people want US goods. I made a small fortune selling to the UK from the US and I was buying the stuff from Best buy. My deal was to use a credit card that got me Best buy vouchers. I then bought a Best buy discount card. In conjunction of using both at the same time I managed to sell 50k worth of stuff and made 65k back. I had to work as well obviously. My best seller was animal crossing on the Gamecube as it was not sold in the UK for 2 years. I could tell you some stories of sending my whole family to shops in Evansville buying up all the PSP's in the town. Good memories lol. I also sold about 15 D-VHS decks, a few nuon players+ games. The Nuon was actually how I started up, since nobody exported it and games retailers did not stock it.

[Chacranajxy]

My friend and I are planning on starting our own (brick-and-mortar) gaming shop. Videogames, magic, maybe other stuff on the side. We've never done anything like this before and know very little about it. Of course we're doing our own research and scouting out locations and all that. We are planning to buy/sell used cards/games as well, and sell online additionally. We also hope to run local tournaments if interest exists.

I'm sure we have plenty of people in the business, on here. So tell me, experienced retailers, what do I need to know? What advice do you have for somebody just starting out?

Okay, here's the most important thing for you to keep in mind: focus.

If you're going to have a store, just make a video game store. Don't dabble in cards. Don't maybe sometimes deal in Magic or Warhammer either. If you don't have a solid, focused vision for your store, it will fail.

I'd also really consider having some sort of internet presence, even if it's something as crude as having an Ebay storefront. It's a way for people to find out about your retail store and a good outlet for selling existing stock that you can't move locally.

[BryanM]

Don't invest what you can't afford to lose.

Now if you were planning on selling tacos from a truck, I'd say go for it!

Fuck those things are delicious but those bastards sell the things for a 600% markup. BAD TACO TRUCK.

[psy]

I guess it depends on what you're capable of stocking. If you could sell more collectable / rarer items like NES, SNES, Megadrive etc. games as well as a bit of merchandise like figurines and tshirts alongside a few more modern games (maybe imports or special editions?)

The location would depend a lot on what you want to sell. If you plan on catering to the slightly more niche market of what I mentioned above, for example, you'd probably want it to be in more of a populated city area that has a lot of consumer attractions like arcades, other shops for niche markets, theatres etc.

If you want to be more conventional and appealing to your average guy that wants a shoot 'em up for his PS3 or something? I'd not bother and just leave it to the big franchises.

[CMoon]

Don't invest what you can't afford to lose.

Now if you were planning on selling tacos from a truck, I'd say go for it!

Fuck those things are delicious but those bastards sell the things for a 600% markup. BAD TACO TRUCK.

You gotta go to the right Taco truck. I got one in the neighborhood that tastes amazing and I can wrangle a huge meal out of them for $6. Still, I've seen the pricey ones. Given your not paying any overhead or even for staff, WTF??!!

[Siren2011]

I know of two independent game stores and one chain/retail store that carry Famicom-360 era stuff, sometimes even import games and systems. They're all doing very well.

Video Game Headquarters is a great place for used games (even cheap jewel cased/cardboard boxed PC games of the 90s!). They are located in Springfield, OR and always have plenty of customers. Plus, the store smells good. So you can't go wrong. They have BUTTLOADS of original Xbox/PS2/Gamecube games, some of which I've never even heard of prior to visiting. I have a lot of great memories from this place. For one, I bought both Bayonetta and Killer 7 from here. They're also very clean and professional looking, unlike Gamestop which is tacky and smells weird like someone blasted their seminal fluid all over the place. In other words, they have standards, which is very rare for gaming outlets. The guys who run it are geniuses. Go here for pics of the store from the inside: http://www.hs.facebook.com/media/set/?s ... 4368729875

Big City Gaming is a Eugene Oregon based game and movie trading store. They are more successful than the Gamestop over in the mall (they get more people getting things inside on a regular basis, while Gamestop goes through spells where no one is present in the store except for the clerks.) This is of course a rare scenario. When Game Crazy goes out of business because everyone is congregating at BCG instead (they have many HD and CRT T.V.s set up in the back and charge 6 dollars an hour to play with friends or online, which is where most of their revenue comes from. Just grab a game off of the shelf and try her out), you know they're doing something right. Plus a dollar rental for movies (new or old) and games (except 360/PS3. They're $3 each for three days). Like VGH, they carry Saturn, Famicom, Super Famicom, Mega Drive, and other types of games, all in original boxes. They even have a House of the Dead cab (which I suggested they buy this particular model, after I decided I wasn't going to buy it). Maybe you should consider getting a cab for your store as well. It attracts quite a large group of people when someone is blastin' heads in the middle of the store. http://www.bigcitygamin.com/

And lastly (though I do know of one more successful independently owned game store, but I'm sick of typing), there is Movie Trading Company. They more or less have all of the above (except the TVs and one dollar rentals), and are a thriving Texas chain. I've seen them carry shit from the Japanese version of Robot Alchemic Drive, to Steel Battalion, to a freakin' portable screen for original Xbox and PS2. They also carry a wide selection of anime titles, new and old, and CDs (The latter a hell of a lot more expansive than Barnes and Noble's narrow CD selection. Many used, of course.) They even have videogame and anime soundtracks, many brand spankin' new.

So yes, it is very possible to run a successful used game store. Just make sure that your main focus isn't just games, don't be afraid to please both hardcore and softcore gamers, and as Skykid said, "Location, location, location." Eugene/Springfield is a small region, and gamers are desperate for their fix. They're getting much more than they hoped for. You could have all of the things described above in your store, but if you don't chose your store location wisely (demographic obviously varies from area to area), then all of the money invested into buying stock would not only be wasted, but you could lose money, as CMoon said.

I hope this gave you some good ideas, and don't be discouraged if you are really passionate about doing this.

[Blackbird]

Most big chains only sell games, and just the present generation of games at that.

I kind of wish there was a store somewhere that sold old games/consoles that none of the big chains carry anymore. There isn't anywhere you can really go to look at a shelf full of Genesis games any more. It might even be interesting if there was a "gaming memorabilia" type store where not only games were sold, but also collectibles related to them like posters, soundtracks, and figurines.

Of course, I am in the minority in that opinion. Most people think that new games are the only ones with value. I imagine it would be impossible to construct a successful business on that model.

I, for one, never want to see games on physical media (carts, disk, w/e) go away, but it looks inevitable at this point. Money (stingyness) will prevail.

[KindGrind]

There is a lot of money to be made in MTG right now. The game is getting very popular again and selling singles (and buying them) can be a very lucrative business.

I buy stuff left and right and sell here and there. I've made quite a bit of money. Granted, I don't pay for a store or anything, this is just my hobby, but still, I notice a trend in Magic. More old players are coming back, and they now have a bankroll and don't care about paying top dollar for top cards.

A few examples on so called "staple" cards, off the top of my head... Just look at the graphs for historical prices... You'll see quite impressive jumps on these.

http://findmagiccards.com/Cards/TP/Wasteland.html
http://findmagiccards.com/Cards/RV/Underground_Sea.html
http://findmagiccards.com/Cards/US/Show_and_Tell.html
http://findmagiccards.com/Cards/AL/Force_of_Will.html
http://findmagiccards.com/Cards/VI/Natural_Order.html
http://findmagiccards.com/Cards/LG/Moat.html

I mean, pretty much anything good spiked like crazy, and there's no indication it's going down. Of course many people now speculate on Magic cards, which drives the prices up a bit. Many believe such prices on cards are unsustainable, but people have complained for years and yet the cards still continue to raise. People have always thought the duals lands, for example (like Underground Sea) were overpriced at 20-ish$, but they're now at 120-140$, and while people still complain, they buy them.

I would sell packs, too. Obviously the return on that is interesting, and they sell like hot cakes. Aggressive marketing from WOTC helps for that, too.

[PC Engine Fan X!]

In Davis, CA, there's an indy comic book/used video game store/arcade called "The Gauntlet" (where the owner has a mixture of dedicated space selling both new & used comics/graphic novels, trading card games, and in the back room area, a bunch of old classic arcade cabinet uprights + some pinball machines all set on "Free Play" -- charges a dollar for 15 minutes of gameplay or $5.00 per hour -- quite reasonable rates IMO).

Given that Davis is a college town with the UC Davis campus situated there, it's still in business despite a local Gamestop franchise in town. Inside the indy gaming/comic book store, there's a curio glass display case filled with a bunch of classic video game consoles ranging from the 1977 faux wood grained Atari VCS (aka the Atari 2600 console) all the way to the PS2, Xbox, Saturn, Gamecube consoles & related accessories + games for all the systems -- trades & buying them used is encouraged/accepted.

Granted there's a lot of foot traffic, especially on the weekends, location is what makes or breaks your business from day one of "Grand Opening." It's been said that if your business can survive the first five "pivotal" years in business, you're on solid ground. Be prepared to kiss vacation time goodbye if said business upstart will be a very time consuming venture/endeavor. I've talked to some indy business owners whom have admitted that they haven't taken a vacation ever since their business opened up shop -- ten to fifteen years (or even twenty) of no R&R is hard on the body and will subject said person to "burn-out syndrome."

PC Engine Fan X! ^_~

[BryanM]

Yeah, Magic is back on a bit of a upswing, with that thar XBox game finding some new prey. I wouldn't be surprised if the new commander decks have sold out already.

Given your not paying any overhead or even for staff, WTF??!!

In San Antonio they gave four measly tacos for six bucks. I'm sure they have to pay for being able to set up shop, hauling the trailers out there every night, getting their nephew to cook teh tacos, etc... nothing is free after all.

Also I don't think Taco Bells are open at night. Not that that theory really makes any sense: any taco connoisseur would just as soon eat his own turd wrapped in paper than eat anything from a taco bell.

[MR_Soren]

I find this discussion very interesting as I have been considering starting a Magic Card / Board Game type of shop.

Some conclusions I've come to:

1. As much as I hate it, I have to forget about trying to sell video games. GameStop has made that pretty much impossible. Likewise, people who want expensive joysticks and wheels are already accustomed to buying them online, so there isn't really a market for these in a brick and mortar store.

2. People are cheap. They won't pay extra to support a local business, so internet prices must be matched to sell anything. If that is not possible, the business plan is faulty.

The more research I do, the less like it seems that a business like that could succeed.

[neorichieb1971]

The only things that sell in B+M are coffee, beer, sex, food and Apple Iphones/Ipads.

Otherwise you definitely need some kind of exclusive deal on something.

[BryanM]

Sell tacos and Magic cards?

See, we're already making progress!