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Advice on Running a Successful Videogame Store?
xlilacx asks: "The video game industry is worth $25 billion, and predicted to rival the global music industry in the next 10 years. Even Grandma is joining in on the fun. My husband and I bought three video game retail stores two months ago, and so far sales are dismal (down 25% from last year's sales), which seems to be an industry trend. I've noticed a few things that are contibuting to our lack of profits: the people who weren't able to get an XBox 360 have decided they will wait to get one (which most likely will be after Christmas), and they will not buy any games for their old systems in the meantime; people are automatically conditioned to go to the EB-Games and GameStop stores at the malls, even if they give less in trade-ins and have horrible customer servicr; lastly, kids come in with piles of junk games (Madden 2001, etc..), and get enough store credit to buy the latest greatest game that we only mark up like 5%-10%. I'd like to ask Slashdot readers if these observations are a good reflection of the mentality of video-game buyers everywhere, and what suggestions they have for a small ma-and-pa video game store. With all the huge retailers in the video-game market and the EB/GameStop merger, is there a place left for the local game store?"
I've been a gamer my whole life, I haven't been to a store to buy games in years. In the UK we have Play.com which 99% of the time is much cheaper than any store, and has free delivery which is pretty fast too.
Last time I went inside a game store was to waste 10 mins while waiting to something else.
Good luck competing with Amazon, Best Boy, Circuit City, Gamestop/EBGames, BlockBuster and so on.
What you need is time to get game buyers to use your store, and start telling their friends.
If you can have better customer service, and provide better monetary value (be it trade-ins, slightly lower price than the local chain store, etc) the numbers should increase over time.
Have a local staff that is knowledgable about games. They should be able to tell a prospective buyer the good and the bad about a particular game, and how it compares to other games in the genre.
Perhaps post ratings from various game sites, so buyers can see the ratings and the reviews about various games in your store.
One thing a local mom-pop shop does is have a little event when a huge game is released. They will have pop and some snacks leading up to when they are allowed to sell the game, may even have it playable on a few systems so people can get their fix before they can take it home. They did this for Halo2, and I am sure other games. They also let you return a game within the first week or so if you don't like it, or you finish it for a full store credit. You get a brand-new hot title back, and can put it back on the shelf at a slightly lower price (providing the condition is good), and make two customers happy in the process.
You can also run contests, etc to get people into the store. Buy X new games, get a free used title. My advice, don't pressure then to buy. Provide an environment that provides the service, but do perks, make it a good place to hang out.
In my area, the only Mom & Pop game stores left are the ones that specialize in used games, typically the NES-era through about 2000ish, but a few current generation games pop in on occasion. Of course they also offer the used books/cds/dvds/etc. which can't hurt (especially since they want $100 for Chrono Trigger with or without the box).
http://crummysocks.com
First off, fuck new releases. You only make 5-10% on them. Have pre-order programs for them, but otherwise carry minimal stock on them. If your store is so low on those sales anyways, why carry it?
Impose maximums. If people want to bring in a sports game, make sure you only take in this year or last year's sports games, and have a max # per store (5 for last year's, for example). It can take a long time. Give almost nothing for last year's title, and give a bit more than nothing for this year. Give them 20% markup.
Do not take Madden 2001.
Be smart: used is where you live. From the SEC filings, it's obvious that EB likes to keep a mix of 20% used sales out of their gross sales, and they have 50% markup on used. Look at how that mix works in a spreadsheet. It's how they survive (that, and their terrible corporpate policies). You can easily out-do them in the used space. If you have 3 stores, you can guarantee your used better than new, and you can mark up enough to make it worth your while, but not so much that you're charging people 5$ less for a used copy of a game. That'll get the savy shoppers to you.
Reward your customers. Hardcore gamers can carry a store. When I had the time and money, I would spend 50$-100$ a week at a game store. Get these people to your store. EB's terrible customer service will drive them to you. The fact that you can employ people who know about games, and you offer more than minimum wage, will help this.
Hire ex-EB/Gamestop employees. Anyone who has worked there and is a decent person will know exactly what's wrong with the company. They'll probably know more about games than random people off the street. Use this.
There are a lot of great books about running a small business. You're working in a vertical market. The key to success is having good customer service, and a reason to go to your store. Unlike EB/Gamestop, where the majority are seasonal shoppers, you can offer a whole lot more. Have launch parties for popular games, where people are invited to play them in the store. Have people who know about customer service and games, and aren't going to tell the customers to fuck off. Be a friendly face. If you can get a community going around your store, people will come there before others.
Also, think about rentals. Renting out games costs you almost nothing. 5$ for 5 days -- how many days of renting each new release until they've paid you the same profit as 1 person buying that game? If you have a regular rental business for those who don't want to buy all the time, you can keep more of your casual customers there. Heck, if they rent a lot from you, you can offer them discounts on buying new and used from you (and you can make those used discounts even bigger since you have more markup). EB/Gamestop can't compete with you there. They simply are too big, and lack the focus.
There is so much you can do. This is just my own set of ideas. I've worked at game stores in the past, and know how the models work. Hire people like me, and you'll do fine.
Have you ever heard of Funcoland? (they were bought up by GameStop I think...) They had a thriving business. They did several things right:
:)
1. They dealt with used as well as new games. Sounds like you're doing that so you're already on good ground there. One of the reasons I liked shopping there was that it was easy to say "Well, I've only got $10, I wonder what Funcoland has today."
2. They had a wonderful warranty system. If you bought a cleaning kit for the system, you got a one year warranty regardless of if it was new or used. I honestly would never have cared for that until Sony hit the market. As a plus, the cleaning kit was great to have around. (as opposed to just handing over some cash just for a piece of paper with 'warranty' written on it.)
3. Funcoland also had a club card. I think this is fairly common these days. Buy the card for $10, get 10% off every used game you buy for a year. Plus it came with a subscription to a magazine. It was definitely a good deal for the customers because it didn't take long to make that $10 back. Again, that encouraged me to come.
4. Funco also had stations set up so people could try the game before they buy them.
5. I don't know if you can pull this off, but I'll mention it anyway: Funco had a number of stores, so it was usually possible to get what you want. They'd make calls for you to find and hold what you're looking for so you can go pick it up. This seems unlikely for you for now, so I have an alternative suggestion: Are there other ma and pop stores nearby? If you are willing to call them and say "do you have this game I don't have?" for the customer, you'll encourage them to make your place the one-stop shop. I know it seems funny to send business other people's way, but customer service is a big bonus. The Funco I frequented had friends over at the local E.B. They'd send business back and forth between them. I liked both those stores a lot because the people were willing to help.
The only thing I'd really ding Funco for was making it hard to tell what games they had in stock. I can't say it was necessarily their fault, but they often had most of their games in drawers. If you can do something to display what you've got, bonus.
Good luck.
"Derp de derp."
I don't usually buy from the local game stores or the local computer stores in my area because their prices are way too high. On the rare even that I do buy something locally it's because I need it *now*, either to replace a broken part or if I only have two days off to buy and play a game. When something is only a few dollars more locally I will buy it here in town, but in the example of computer parts, newegg.com is usually 20% cheaper! I have talked with many of the local computer store owners and they have explained to me that they do watch online prices, but their own "wholesale" prices (from IngramMicro, for example) are often already 5% higher than NewEgg's retail price. Much of what they have in their stores already comes from online retail shops such as NewEgg and ZipZoomFly (because that's the cheapest place they can find inventory!), and then they of course have to add a profit markup on top of that to pay for their own expenses (salary, store rental, shipping, return allowances, theft allowances, insurance, etc).
In this day and age, if you want to have a competitive brick and mortar store, your prices are going to have to be low enough / close enough to the online prices to be somewhat competitive. That said, I have no idea how you are going to do that when online retail stores often charge less than what you will be able to buy your inventory wholesale. And I really doubt you'll be able to buy more than 10 - 20 copies of each game, whereas the online giants buy hundreds of thousands of copies.
Good luck! *sigh* I wish you the best, I miss the good mom-and-pop stores, but my money is tight too.
Personally, I would love to see a store that allowed me to try out any game they had before I bought it. I have a very limited budget and I can't stomache the idea of dropping $60, $50, $40, or even $30 on a game I'm not going to play for more than an hour or so (if that). I know, I know, there are demos, especially for PC games, but I live in the sticks and don't have access to broadband. Half a gig on dial up isn't going to happen. It would take some monitoring to keep something like this from being abused though.
I don't care what youre doing so much as the idiotic way you're doing it.
There is a mom-and-pop video game store near my apartment and they have seemed to create a successful counter to all the big name brick and mortar and on-line video game stores. Along with providing the requisite games as well as informative and helpful clerks, this store in my neighborhood installed various coin-operated arcade machines such as Street Fighter as well as coin-op console systems. The store is as much an informal club attracting a wide variety of video game fans as it is a video game selling store. The other afternoon, I saw a mohawk adorned punk playing Marvel vs. Capcom against a 12 year-old Hispanic boy. This store reflects the wide demographic that make up the video game fan base that one doesn't generally see at other stores and moreover, there is a tremendous amount of loyalty to this store as a result. When Halo 2's release was anticipated, it wasn't Gamespot, etc that got our attention and money, but this small video game store.
I recommend you think outside of the box in order to make your store competitive. Fostering a community that doesn't treat kids, particularly non-white kids as unwanted annoyances is something that is lacking at mainstream video game stores.
It seems to me like this is the typical problem with big business; big businesses can afford to buy tons of copies at once and ensure cheap prices, while small businesses get stuck with higher prices. In this case, the big businesses are the online game suppliers--it's tough to compete when they're buying it really, really cheap and don't have as much labor costs, no expensive rent, and can make up for the shipping cost by not paying tax (Correct me if I'm wrong, but when someone buys online from out of state, the government gets zero taxes right - none from consumer, none from business?) Unless there's some way to get a distinct advantage over the online/big business, you're running a losing race. Like someone mentioned with Funcoland, the only things you're really got to your advantage are environment and community: and those didn't stop people from going to Walmart instead of the mom 'n' pop stores that got run out of business. In reference to the junk games traded in for new games, you could always restrict trade-ins to used games--group games by 'value' and let them trade in within the same 'value' for nearly free, or pay money to upgrade up. A store where you could essentially buy one game, then trade it in a huge amount of time at very little cost would be appealing. In conclusiong...umm...good luck?
First read the Acts of Gord. Then really consider if you want to run a game store.
A small point regarding:
"so far sales are dismal (down 25% from last year's sales"
I kind of think last year was a bit special as far big name releases. You had Half Life 2, Doom 3, WoW, Metroid Prime 2, GTA San Andreas, Halo 2, and perhaps Rome Total War so I think all of those maybe contributed to 2004 being a stellar year for game sales.
(Say what you want about the actual games themselves but they were all hugely anticipated...)
Internet allows me to sit at home, order a game, get the lowest price (or close to it).
Having said that, there are people that still go to stores and don't shop online. Chances are, if they're is a major gaming store next to a 'mom & pop' they'll go there on the pretence of greater variety; they'd probably be right.
So the conclusion I would draw is that Mom & Pop stores, more and more, will be come locals for last-restort purchases; if the game can't be found anywhere, or it is needed immediately.
Of course there will still be people that buy from local small retailers, but as trends have shown that number is continually decreasing.
...the only non-corporate stores that seem to be doing anything are the "vintage" type stores. They generally have a decent selection of newer games, but it's obvious they rely solely on trade-ins for them.
Given what kind of prices and built-in customer base the chains have, I really think this is your best bet. A lot of us 30+ gamers are out there thinking it would be great fun to go pick up a used NES and play some Dragon Warrior or what not.
#1. Host LAN events, sponsor LAN events, or somehow get your name on the ticket on some big multiplayer party. Maybe donate some gift certificates as prizes for tourneys. Not games, gift cards. Make it so they have to go to your store to pick up their prize. Most likely player #1 will bring along some friends who will also buy games (whenever my friend drags me to the local game store I buy something anyways).
#2. Sell energy supplies. Bawls, red bull, jolt, you name it. Hardcore gamers will flock to your storefront to stock up on supplies for the next lan party. And once they're addicted to caffene they have to keep coming back to get their fix heh heh heh...
#3. Enforce parental controls. If someone wants to buy GTA, card them. This won't make you terribly popular with the younger generation, but the parents will love you and lets face it, who do you think buys all these 13 year olds doom 3? Yep, the parents. Its also good principal to have, because little kids really shouldn't be playing those games unless their parents feel they are mature enough, but thats just my 1.5 cents.
#4. Connect with gamers. I would recommend a website with an E-zine, a gaming blog, countdowns to major releases, and discussion forums with weekly prizes and discount giveaways. Games above all are about having fun. So give them the tools they need to connect with others, while at the same time promoting your store front. Let them know you are as passionate about games as they are. Those are just my ideas. Good luck with the storefront.
Behold, another webcomic!
You could do other contest type things too. Pac-Man high-score board on the wall (bring in a picture of your score to get placed) or something. You could do it with any game that has something you can easily rank like that. Speed records for various games. Whatever.
Offering expertise (like a sign in the window: "We'll help you pick out what your kids will want") could help you a lot during this season too. While people at Best Buy or GameStop may be able to do that (usually depends on the employee), if you make it obvious that you can do that that may help.
Best advice besides the above? You need word of mouth. Tell your friends and get them to buy there (probably not a problem). Ask them to tell their friends, etc. Offer a discount card (someone already suggested one on used games like Funcoland used to have) and offer to give them $5 credit if they get someone to come in and buy something and say they were recommended to come by the person with the card.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
Have a website for your stores that lists exactly the inventory of each of the three stores. Allow people to select which stores they want to search/browse the inventory of. Allow them to construct wishlists of new used games that they want at your website. Allow them to keep them hidden, visible only to friends, or visible to anyone. Have message boards. Sell to anyone online. Allow them to specify how much they are willing to pay for a used game, and then you can look for games in multiples of wishlists in bundles on e-bay, and if you think you can make a good deal reselling them bid for the e-bay bundles and notify the wishlist makers that you have the game when you are successful.
Have blacklists of used games you will not buy.
Encourage people to take multiple copies of any printed materials you generate to give to their friends. (Pricelists, blacklists, whatnot)
Allow people to play any used game for free for say an hour a day in-store.
Try not to think of yourself as a mom-and-pop. Remember Microsoft and Apple started small.
Well somewhat,
Screw over the local EB or whatever by getting in people and advertising that you will have these people at your store. Talk to your distributor and see what you can do about getting "The team of experts from xyz in" "Ask your hardest questions, they know the answers" or otherwise seeing if you can get your local game developers in and get them talking to people.
Make it look like your the best thing since sliced bread.
Ma and Pa stores still exist in the music industry because they can market their way out of any situation. One good sale and good customer service can mean a lifelong customer, you I am sure know this already.
The figures you are providing are just a term of endearment when it comes to business (My parents own a jewellery store in a country where we don't refer to people as ma and pa) and what you are describing just sounds like cold feet.
Yes, business can suck at times, when the whole industry is down 25% that can mean having another mortgage or losing your house, and I don't want to discount that point.
At the same time, take a look at what other people are doing, a friend of mine in another country referred me to Barry Bull
Might be worth looking at. He does have some good points.
Curiosity was framed; ignorance killed the cat. -- Author unknown
1) Are you a gamer? If not, hire some intelligent diehard gamers to help you get what gamers want. You'll probably know a few from your repeat customers.
2) Junk Games: There comes a saturation point where you simply cannot accept any more of a particular title. If you've got 10 copies on hand, don't accept any more, or reduce the trade credit value to something trivial. A sliding scale on trade credit value is more fair, but also more confusing to customers ("But just 5 minutes ago, you gave that guy $2.00 for this game!") and more trouble to keep updated.
3) Big system releases are always rough on the secondhand stores. If you can't get 360 systems, focus on what you can get. Offer specials and deals for the holidays. Offer packages of similar games (All Sonic the Hedgehog games for the Sega Genesis in one pack). Toss in a free game or two from a small selection with the purchase of other systems. Try to keep the discount in the 10-15% range.
4) Keep some items on hand for novelty sake. Understand that you won't necessarily sell them, but that they will function more as museum pieces to attract customers. NES Power Pads are cheap, and make interesting wall decorations. Power Gloves and ROBs can also be had reasonbly, and are similarly eye-catching.
5) If you don't already have any, set up some systems for customers to try games in store. Allow customers to request games ("Can I try this game?"). Only enforce any kind of time limit if there are other customers waiting to try games, or if the customer has been playing for an hour or more. Remember that sales counter duties take precedence over demo system duties (as in, finish ringing up customers before taking care of the kid wanting to switch games... again.)
6) Gather up all the merchandise you'd rather never see again, and are potentially willing to lose completely. Put it in a "$5.00 or less!" bin. Toss in a few higher quality "acceptable losses."
7) Watch flea markets, garage sales, even eBay for an affordable, functioning arcade cabinet. Alternatively, rent one from your local "amusement machines" dealer. Make sure it's something older, from the late 80s or early 90s. Put it on free play on the weekends.
Happiness is relative, Based upon the way we live.
Here's what I'd suggest. Note that this is purely from a customer's perspective, so it may not jibe with best business practices.
1. Have a clean, uncramped, well-ventilated store. Walk into a chain store in a mall these days and it's so overpacked that you can barely move when you're in there. This really shouldn't be happening when you can use mostly wall space and some sanely placed racks for your product. And ventilation is more important than you might think -- many mom & pop shops have sent me packing because they've consistently smelled like rotting B.O.
2. Have an engaged, knowledgeable, and non-disgusting work force. Hire people with an active interest in games across multiple systems who actually pay attention to what's out and what's coming up, and who can make meaningful recommendations to people. No hypemongers or rabid single-system fanboys, please. And no planetoids with poor hygiene, either. As I mentioned above, if visiting the store becomes an assault on the senses, people won't come back.
3. Don't give me the hard sell. No, I don't want the fucking strategy guide. And don't argue with me when I say I want a new copy instead of a used one. If I come up to the counter and ask for something, just sell it to me without the extra push.
4. Let me try before I buy. Have multiple kiosks for each system and let people try out any game in the store. Have the latest demo discs available too, so people can try out upcoming games.
5. Sell new releases as soon as possible. I don't know the mechanics of this, but occasionally the chain stores will let pre-orderers pick up their game a day early, or they'll sell a huge new release at midnight the night before it would usually be on sale. Most hardcore gamers like to get their new stuff as soon as they can, and whoever can get it in their hands first at a fair price will get their business.
6. Have review information available in-store. This could be as simple as having a public web kiosk that points to Metacritic.com or something similar. You might even be able to convince them to contribute some money toward the kiosk since you'd be driving traffic to their site. Anyway, I mention this because I'll often spot an obscure title in a store and have no way of knowing if it's any good or not. The store employees usually aren't much help (and even good employees can't be familiar with every game out there), so having on-site access to a range of reviews for every game could help close a sale that might not otherwise happen.
7. Have a frequent buyer program with real benefits. Reward loyalty with periodic unrestricted discounts and game-related goodies (e.g. that promotional Prince Of Persia soundtrack CD that came with preorders of POP:T2T at some stores). And give people a one-time discount when they refer a friend to your store.
8. Keep your prices reasonable. Most people understand that mom & pop shops need to bump up their margin a little compared to chain stores, but if you're more than about 5% above the competition you probably won't keep any customers. And even the people who are willing to pay a little extra are only going to do it if they're getting added value from shopping at your store instead of a chain.
You might also consider hosting and/or sponsoring gaming events to get your name out there and build up good will. Even hosting a little weekly Madden tournament in your store with a $20 store credit purse would draw in a decent number of younger customers.
Good luck...
Is there room for the local gaming store?
My answer: "...sales are dismal (down 25% from last year's sales), which seems to be an industry trend..."
Seriously, sell now while you can still get something out of it, if this isn't a hobby. If you're in business for real, you're going to be slaughtered.
This isn't cynicism, this is realism. The industry is growing leaps and bounds, sure, but the brick retail market is not going to grow with it, and will probably continue to decline. (Note how it's already started to.)
Most of the advice I saw before I started writing this is that it boils down to "Cater to the hard core gamer". But the reason there aren't stores that already "cater to the hard core gamer" is that there isn't enough money in it, period, end of line. That's not an option, really.
Sell the stores to one of the people who think catering to hard core gamers will save the business, let them eat the losses.
Tournaments, anyone?
You've got to give people a reason to go to you rather than EB or Best Buy. Good staff is probably a good idea. Know your audience - use the same tactics that make good comic book stores, indie book stores, and good board game stores succeed. What does that mean? Cater to the hardcore gamer who will hang out in your store all day talking about games with the staff. Build a community that way - people will spend $5 more on a game if they LIKE your store and feel like they're "helping the local store." Be local and quirky. Organize games by type of game (RPG, FPS, etc.) rather than title. Inexplicably have a Dreamcast area. Sell stuff that you know will sell to hardcore gamers - such as the Penny Arcade book when that comes out in January.
How to draw people in? Why not a Ms. Pacman machine that runs for free? Probably cheaper than setting up an XBox 360 station, and you never have to change it. Non-gamers dragged into the store would recognize the game and play it, hardcore gamers will dig it as old school. After all, you can't compete with Best Buy's big leather chairs, so don't try to.
If you have room, you can do tournaments. But why not try to do a deal with a local arcade (if there is one) - any game purchase you get $1 in tokens free or something like that. Think of things like that, where you can work with other hotspots for geeks in your specific neighborhood to get coupons for games or in other ways draw them in and let them know you exist.
More importantly, I would avoid getting sucked into competing head to head with the big game stores. Don't take trade-ins that lose you money. Don't do anything that loses you money - you can win customers in other ways. You don't need to get every gamer in the area to make money - remember you need to be profitable, so make smart decisions to differentiate yourself rather than battle the big guys on every front.
How about you work behind the counter dressed as you are in this picture?
http://www.geekgorgeous.com/lilac.htm#/
Yeah. Two words: "Bikini Friday".
And do exactly the opposite. Make your store clean and attractive. Make sure that your staff don't look like slobs. You want a store that people aren't embarrased to enter. A window covered in faded promo posters makes the place look a hair shy in sleaziness from a porn shop.
Along with most everything everyone else has mentioned, read e-myth revisited by Michael E. Gerber (I'm not affiliated with them or the company). It doesn't matter what you do if you don't have good business sense.
Do things that chains don't, like supporting charities by hosting lan parties and donating door fees to them, etc.
Don't blame me, I voted for Kodos
There used to be a very successful game store not too far from my house. They just closed down a few months ago to go to a bigger building in a better location (the old place was in a building back behind a liquor store- not very inviting for parents who would drop their kids off there and completely invisible unless you knew it was there).
Anyway, this place did a pretty good job of staying busy dispite it's abysmal location. Here are a few things they did that might help you.
First, instead of those crappy displays with the 10" televisions to try games on, they had a 52" bigscreen with a very nice couch situated in front of it, in a little corner, with surround sound. If there was a console game you were itching to try you could play it on the nice screen for as long as you wanted (unless someone was waiting behind you, then it was a 20minute time limit).
The shop also did not focus exclusively on console video games. They had small LAN area set up where people could pay $10 for an hour on the computers playing a very large selection of games.
To cater to the PC gamers, they kept a few things in stock like mice, mousepads, etc. They even offered a service to recommend and order parts for gamers and would install them into their PCs. They also had LAN tournements about once a month.
To round off the gaming trinity, they also dice, figurines, D&D books, etc. The store had a couple of tables set up in the back for groups to come and roleplay, with a soda and snack machine of course.
It also helped that the people who worked at the shop where honest. If someone asked for a game that sucked, the most common answer would be "We didn't order any of that game because it's terrible, but if you reaaally want it, we can order it for you. You might like $game better though".
Anyway, the point is that they did a lot of things to encourage gamers to hang out. In the end it felt less like a shop, and more like a place for gamers to hang out that just handily happened to sell stuff too.
Anyway, here are a few other tips that are not specific to that game shop.
A lot of people who come to trade games in get pissed. I have a friend who works at gamestop and tells me that at least 3 or 4 times a day, someone will come in with an old version of Madden or something from like the SNES or Genesis days, and want to trade it for the latest and greatest version. When they find out it doesnt work like that, they get PISSED.
Gamestop, at least, has stopped dealing in older and less popular systems like the SNES or the Saturn. You could probably get some business just by dealing with systems dropped by the larger chains.
Friend of mine who works at Gamestop says they have gotten a lot of repeat customers in parents buying games for their kids because they have a policy of politely letting parents know about content in games. Not that they refuse to sell it, but if someone walks in with a 12 year old and buys the latest Grand Theft Auto, they make it a point of pointing out the ESRB ratings anyway. (dons asbestos suit for inevitable flamewar about parents, kids, stores, and game ratings)(I think this is a store policy, not a "all teh gamestops evar" policy).
Lastly, it would be really nice to have a website where customers could search to see if you have a specific game in stock, or reserve things online. Don't know of any local stores that do this, but it seems like it would be convienent if available.
Famous Last Words: "hmm...wikipedia says it's edible"
Running a video game store was hard work even for Gord Himself
One line blog. I hear that they're called Twitters now.
First of all you'll be lucky to survive on just games, you'd need to carry other products as well to draw in othe types of customers. Next is you'll be competing with wal-mart and past titles when after 3-6 months the prices drop on near used prices or below used prices (19-25 bucks from 50-60) for fairly new titles.
Your next problems is increasing consumer savvy and users who sell their old games on ebay or other such sites for maximum profit. I wouldn't think a game store is a good idea unless you have lots of money already and know how to extract profits.
As a game store owner, my business faces ruin. Game sales have dropped through the floor. People aren't buying half as many games as they did just a year ago. Revenue is down and costs are up. My store has survived for years, but I now face the prospect of bankruptcy. Every day I ask myself why this is happening.
I bought the store about 12 years ago. It was one of those boutique game stores that sell obscure, import releases that no-one plays, not even the people that buy them. I decided that to grow the business I'd need to aim for a different demographic, the family market. My store specialised in party games - stuff that the whole family could play. I don't sell sick stuff like GTA or Resident Evil, and I'm proud to have one of the most extensive edutainment sections that I know of.
The business strategy worked. People flocked to my store, knowing that they (and their children) could safely purchase games without profanity or violence. Over the years I expanded the business and took on more clean-cut and friendly employees. It took hard work and long hours but I had achieved my dream - owning a profitable business that I had built with my own hands, from the ground up. But now, this dream is turning into a nightmare.
Every day, fewer and fewer customers enter my store to buy fewer and fewer games. Why is no one buying games? Are people not interested in playing? Do people prefer to watch TV, see films, read books? I don't know. But there is one, inescapable truth - Internet piracy is mostly to blame. The statistics speak for themselves - one in three games world wide is a pirate. On The Internet, you can find and download hundreds of dollars worth of games in just minutes. It has the potential to destroy the game industry, from programmers, to softwarehouses, to stores like my own. Before you point to the supposed "economic downturn", I'll note that the book store just across from my store is doing great business. Unlike games, it's harder to copy books over The Internet.
A week ago, an unpleasant experience with pirates gave me an idea. In my store, I overheard a teenage patron talking to his friend.
"Dude, I'm going to put this game on the Internet right away."
"Yeah, dude, that's really lete [sic], you'll get lots of respect."
I was fuming. So they were out to destroy the game industry from right under my nose? Fat chance. When they came to the counter to make their purchase, I grabbed the little shit by his shirt. "So...you're going to copy this to your friends over The Internet, punk?" I asked him in my best Clint Eastwood/Dirty Harry voice.
"Uh y-yeh." He mumbled, shocked.
"That's it. What's your name? You're blacklisted. Now take yourself and your little bitch friend out of my store - and don't come back." I barked. Cravenly, they complied and scampered off.
So that's my idea - a national blacklist of pirates. If somebody cannot obey the basic rules of society, then they should be excluded from society. If pirates want to steal from the game industry, then the game industry should exclude them. It's that simple. One strike, and you're out - no reputable record store will allow you to buy another game. If the pirates can't buy the games to begin with, then they won't be able to copy them over The Internet, will they? It's no different to doctors blacklisting drug dealers from buying prescription medicine.
I have just written a letter to the BSA outlining my proposal. Suing pirates one by one isn't going far enough. Not to mention pirates use the fact that they're being sued to unfairly portray themselves as victims. A national register of pirates would make the problem far easier to deal with. People would be encouraged to give the names of suspected pirates to a hotline, similar to TIPS. Once we know the size of the problem, the police and other law enforcement agencies will be forced to take piracy seriously. They have fought the War on Drugs with skill, so why not the War on Piracy?
This evening, my daughters asked me. "Why d
Circumcision is child abuse.
I spent several years in video game retail. Given that was all back in the 1990s, but aside from Microsoft coming into the picture, things haven't changed much. Right of the bat, the best advice I have is to get the hell out before you lose your shirt. Video game profit margins are pathetic - most big retailers treat games as the would any other loss leader, picking up their profits on items like generic controllers and memory cards that sell at a 500% to 900% markup, and if a big game actually sells well enough for them to profit from the cost of keeping it in the store, it's a fluke.
That said, if you really want to make money, here are some tips:
1. Don't try to make profits selling games. Sell acessories, like new controllers and memory cards. Don't let a single customer leave without pushing him or her to buy a memory card or strategy guide. The easiest people to sell to are people who play sports and racing games, because they build up collections of saved games for every year of their favorite EA games as well as replays for racing games.
2. Jump on the used game bandwagon. There's a lot of profit to be made buying a game for $5.00 and selling it for $15.00, especially since you aren't even paying distributors to ship them. If a game sits around too long, dump it on eBay for a tiny profit and charge the sucker who buys it $5.00 for shipping, mail it media mail for under $2.00 and keep the other $3.00.
3. Sell niche items. Keep weird stuff like Playstation-to-Dreamcast adapters, everything-to-USB adapters, and high-end joysticks from Hori and MAS Systems in stock. When you aren't busy with customers, sell these items on eBay.
4. If there is a local market, start importing hot Japanese releases.
5. Try to build up a business selling board games, RPGs, and CCGs. Just be careful not to invest too much money up front, because you don't want to get stuck with a backstock.
Again, good luck. There's little place left for independent game retailers, so if you plan to survive, find a niche, start expanding, and hope to get bought out by Gamestop or a similar company that just doesn't want to bother competing to wipe you out, because that's really the only good option an independent retailer has anymore.
LAN Parties are something that a Gamestop or EB (usually in Malls) can't do, but lots of people love to go to them. You can charge entry to play the hottest new games in a giant LAN party and sell snacks alongside. What you'll be selling is the experience of playing the hottest XYZ multiplayer game in 'wild' 32-64 player matchups.
Of course, you'll need the hardware and a good server. You'll have to run the numbers to see if it's worth it (ie. how much you need to charge to cover the hardware costs and if people will pay it). I would keep the entry cost low, but sell a wide selection of tasty snacks/sodas at large markup prices.
It's worth investigating, though.
Favorite
Of course, this depends on the market that you're in, but here in Baton Rouge, there is a local game store called GameWare in the Mall of Louisiana. Some items that set it apart from the EB upstairs are:
1) An arcade, including DDR. It also has some machines like Guitar Freaks (I think that's the name of the game).
2) All the current consoles (PS2, GameCube, XBox and XBox 360), handhelds (GBA/Micro, DS, PSP) and PC have some space in the store.
3) Preowned games, systems and accessories for older generations, including NES, SNES, N64, PS, Dreamcast, Genesis.
4) Possibly most importantly, the ability to buy items imported from Japan. Want a pink DS? They've got it. White PSP? No problem. Jump Superstars? Walk in and buy it. Anime stuff? Sure. Imported CDs of video game music? Got that too. Not only do they have all of this in stock, but they also are modestly priced. The pink DS is only $10 more, which in my opinion is a convience charge for being able to pick it up instead of ordering from Lik-Sang and the like. So, in my opinion, yes there is room for the locally owned game store. You just need to differentiate yourself from the big-market competition. And, in case you're wondering, it gets all the games and systems at the same time the big stores do.
Just so your comment retains it's context once I change my sig...
This was my sig:
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not trying to be a jerk, but it seems like this would be a question that you would ask before starting a business, not after.
It was a pen and paper game store mind, and it didn't last, but the most important thing you can possibly do is to create a community.
This means embracing your customer base, and getting them involved in the success of your enterprise. When you find that you have a customer who is enthisiastic about a certain genre, get him or her involved in organizing tournaments or leagues. Offer prizes. Give people a reason to keep coming back. New games cost the same pretty much everywhere you go. Even large chain stores won't undercut you much. If you want to add value, you need people to come back over and over again for a reason. Put some playable machines out there. Let people play. Remember, just because they're not buying something from you today doesn't mean that they won't tomorrow.
Also, try to appeal to niche markets. Simply having a few imports, for example, gives people the idea that your store is a little more exclusive. You might not sell much, and if you do you might not make much money out of it, but people will appreciate the fact that you have something other stores don't and come back over ad over to see what's new.
In short, I think the only way that a small, independant store can survive is by appealing to the people who are outside of the mainstream. Offer at least something other people don't offer, give your customers reasons to keep coming back, and do your best to make casual customers into enthusiasts. Ad mos importantly, be persistant. If you start organizing gaming nights, for example, tomorrow, it could be months before you start seeing any R.O.I. Don't misinterpret a lack of immediate success as an immediate failure.
I want the fire back.
I ran a mom and pop game store about 6 years ago. I was the manager, and the original owner sold it when her husband was transferred (it was moderately profitable at the time). The store ultimately went under in '01, about a year after I left. Here are some of the things I could point to:
1) We were in a decent location in Houston, TX, so we certainly couldn't blame the area. There were a couple of competitors around; Funco had a store about 5 miles up the street from us, and a Gamestop or EB was in the mall across the street from that Funco. Location is a major point, but I'd expect that you'd already be aware of that. Make sure that the clientele in your area represent a decent mix of wealth - truly rich people (or their kids) don't tend to trade or buy used, and lower income people will try to avoid new products.
2) Ignore suggestions by other people to host tournaments, as these rarely work. We tried that multiple times, with and without modest entry fees to keep people from flaking. Ultimately, we saw no major change in business either way, but we did spend more money on prizes and the like.
3) Those chain stores are succesful because they sell random add-ons and trinkets. You've probably already figured this out, but there's no profit margin in new games. Accessories, used titles, and toys/shirts/strategy guides are where the profit is made. Making a living on used games requires a crap-load of volume, so it's best to try and combine it with those other sidelines.
4) Get it online! Setup an ebay account and start ebaying used titles, especially older titles. You'll be really surprised, but there is a market out there for random PS1 games released in 1997. $5 is still $5, and you can probably pad it with another $1 or so on handling.
5) Get the niche market. If your area can support it, you can make some decent money as the "import" store or the "mod chip place." A simple afternoon practicing with the soldering iron can set you up for charging $200 for a mod chip + 160GB drive install. Try to sell this service online as well, if it starts to work out for you. One of our sister stores used to do a huge volume in PS1 modding back when that was popular, and it set them up as a big import shop once they'd done so. Import game players tend to be heavy, heavy gamers, which means big money.
6) Pre-orders work, provided you've got decent distributors. You'd be surprised how many people eagerly dropped $10 for the Gold Zelda 64 pre-order back in the day, and each one of those pre-orders represents a guaranteed sale.
7) Finally, you have to know the business. Part of the reason we went from being profitable to not was that the new owners placed their daughter in charge of the store. She was a wonderful person, and had a decent business sense, but she didn't know the business. Prices need to be updated frequently, orders need to be guaged carefully, and inventory is a very delicate balance. A few over-orders on dud games will leave you with $2,000 or $3,000 in new games that probably won't ever sell. Get subscriptions to some reputable game-mags (I favored EGM and the Official Playstation magazines back in the day) and read them non-stop. Get knowledgable staff - if you can find honest teenagers they'll work for minimum wage plus discounts. Emphasize used stuff; we were way more successful when we stocked a few high selling titles than a bunch of middle of the road ones. If people get used to coming to you for used stuff, that's a good place to be - it's your higher margin stuff anyway.
To the title of my post: I hate to say this, but there's a reason the big chains are succesful. I'm not sure that the gaming world is ready for a happy fun lounge-around comic book store environment yet. People might take advantage of it, but I don't think it would drive profits. The big stores are succesful because they push the high margin items and emphasize their profit areas, just like any profitable business.
Finally, if you can't turn things aro
Lots of people who grew up playing NES don't play any more because of the dreaded "blinking" problem near all NES systems experienced. What most people didn't realize what it had little to do with dust and dirt, and more to do with faulty contacts in the NES system itself. New contacts can be had for $6. Buy a few dozen new contacts and set up a service where you will "repair" someone's NES for $20 (or some reasonable price, once you do it a few times, as I have, it really only takes 10 minutes to "fix" an NES system so it works like the day it was taken out of the box) If you can get in on the retro gaming ticket you stand to make some decent money. If you can get NES systems working like new again, people may come to you to fix their systems so they can re-live all the classics, and then they may leave your store with a few more games for that NES that they meant to pick up as kids but never did (there is more than half a dozen mega-man games, for example)
This can also be done with other systems. SNES, game boy. Although the problem is much less of an issue with other systems, replacement contacts can be purchased for them. See if you can figure out how to repair other systems and do it realatively cheap (I.E. don't charge the same price as a new system to rapair the old). Most "broken" systems only have something simple wrong with them and can be repaired. Hell I figured out how to fix an N64 controller's analog stick that had that "sloppy stick" problem that was so common with 20 minutes of my time and a small piece of shrink tube.
If comeone comes in with a problem with a system you have not experienced yet. Tell them you will do the repair for free (but they have to pay for parts, if any) so you can spend some time looking the problem up with your good friend google, or just tinkering with it. If you fix it, then the customer is happy and you now know how to fix another problem. If you can't then oh well the customer couldn't use it anyway (but specify when you take it that you have not encountered this problem before, and it may not be fixable)
I suspect that kind of stuff will bring you SOME business, at least.
Me as a consumer:
For new games I used to always wait for the once a year buy 2 get one free for any games at toysrus(33% off), and even now, whenever I get an email from the local gamestop advertising their sales I'm in their store the next day (bought ~150$ of used games on their 3 for 2 deal on the day after thanksgiving), so emailing customers works (I gave my email when I signed up for the gs card, but you could probably ask at the checkout "would you like it if we emailed you whenever we have a promotion?" or something). And nowadays, when I buy a game, I buy it used(except for big ones that I'm expecting like RE4 or SotC), after first browsing ebay to see how much it's selling for, and since the gamestop has very few old ps1 games, ebay is usually the first stop. But ebay can be a hassle trying to buy the game for the low price, but not having someone snipe it at the last second when I happen to be asleep.
On really old games: might not be as profitable, since Nintendo is releasing/selling their back-library directly to customers, and other companies(ie Sega) are rumored to be "very" interested in that. (not to mention the fact that the dreamcast, xbox, and most pcs have emulators.
On tournaments. They might be nice, but you'd have to advertise, especially on forums, but as more and more games are all online(read the new smash bros and the fact that most fps are already), might not be viable. (if only schools had gaming teams), speaking of schools many schools have a local "gradnight" for graduating seniors(so they don't go out to drunk parties), and if you set up tournaments to that(with coupon prizes) it might be a good way for promotion, I know I would have liked to play some games against some of my friends...
and not all gamers like certain games(I would love a smash bros tourny or an armored core one, but detest fps), so catering to the "hardcore gamer" depends on the type of games specific gamers like, but maybe people would like to have an old Goldfinger tourny, or multiple games at the same tournament, if that's feasable, for multiple systems (since not everyone can play at the same time anyways).
And now I'm just rambling, but one thing that my local gamestop doesn't do is offer to get games they don't have in stock for me (I asked if they has super monkey ball 1 for the gamecube almost everytime I went in, and finally bought it new off of ebay). They do have the benefit of having a massive stock since they are a big chain(or is each one franchised?), so maybe that's not feasible either.
One thing that was mentioned earlier that I thought was good was the "we'll help you pick the games your kids want" sign idea, or maybe a decently designed ad in your local paper, I don't know how much paper ads are, but many people look at the sunday ads, and if you appeal to parents in that one (or uncles or grandparents etc) it might set you apart from the gamestop/ebay ads that 1)cannot be local, since they're nationwide and 2) try to appeal to "hardcore gamers" (most of whom probably get their news online anyway).
Our local video game store supports our lan group by donating lots of prizes and sponsering our events. Definitaly worth it as many times when i need a game I go there even if it may be a little higher priced, just because I know that they support us, and I know that they get lots of business because they sponser us.
Why not setup an arcade cabinet - a neo geo cabinet with the KOF games like 2002-2003 or Metal Slug 3-5 with the ports for PS2 and Xbox right next to it would really give your store some hardcore gamer credibility - charge a quarter per play and the machine will pay for itself.
:) - www.neo-geo.com can help you find a cheap cabinet and the games to run on it.
And set it up to show blood
A TV screen with a different fighting game each week would also bring in people to play against each other - would really bring in the hardcore gamers who would spread word like wildfire.
I can offer three bits of advice:
1. There's no point in competing on price - the big players and internet stores can and will outdo you, and they survive through volume of sales and lower cost prices through bulk purchasing. Focus instead on customer service and support, building rapport and loyalty, and the other intangibles that keep people coming back. I can buy a digital camera dirt cheap on the internet, but I would rather buy from a local dealer because I know I can go there for buying advice, servicing, returns and exchanges, etc.
2. If you can differentiate yourself by playing in a niche market, then all the better. Not sure exactly what this means for the video games industry, but in bookstore world you could focus on the science fiction genre, technical books, etc.
3. The money's in the accessories - a friend has an ipod store, but does he make money on ipods? Heck no... but he makes a killing on the skins, screen protectors, headphones, cases, especially those he can source as cheap asian imports.
Anyway, good luck!
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How about a monthly news letter? There's a local game store (board games, but still similar people) that sends out an email once a month. It talks about that latest this and the greatest that. It's got a trvia question, and the first responder gets a $10 gift certificate. If a person reads the news letter and goes off in search of the answer to the question, they've got your store on their mind. People have been conditioned to think of the EBs and Gamestops when they want a game. You've got to get them to think of you too. The only way to get them to do that is to remind them you're there.
Could I buy board games cheaper online? Of course. Why do I buy them from my local store (25minutes away too, and I don't like in the middle of nowhere!)? Because the staff is made up of knowlegable, nice people. They clearly care about what they're doing/selling. It's pleasant experience to go to the store and buy from them. If you can make your customers walk out of the store smiling, they'll come back!
sell M/AO games to kids at 1.5 the price!
Well you've already identified a need (lack of demos in the console market) which the PC market has already solved, by download, and the inclusion of demo CDs in gaming magazines. Looks like you need to convince makers of console games to put demos on CD's.
My son works in a mom & pop game store and they do terrific business, mainly because they are continuously hosting LAN parties and XBOX Live tournaments. They have a 'Hall of Fame', which seems to draw in the most hardcore gamers from the area. They also serve coffee and snacks, and they provide very cheap (75 cents per hour) internet usage on their machines. Even during off seasons, that place is standing room only. In short, you have to do more than just sell games...that's why internet stores or Gamestop could never generate the traffic this shop does.
Horrible EB/Gamestop customer service? This jackass will never get into the business if he's going to shove bullshit down his own throat. The only reason that EB/Gamestop/Funcoland exists is because of our excellent customer service. My customers know me and they trust my opinion. They know that I won't just tell them what review some magazine gave a game - I'll tell them about how it plays. I'll tell them what's good and bad about the game.
And if you think that you can create a business that undercuts our trade-in values then you're seriously mistaken. We have a local videogame/movie store that takes trade-ins and the locals know that if they want store credit we always give more. If you were to give customers more credit then you'd have to raise prices.
Before you enter this business keep in mind that Gamestop has better distribution deals then anyone except probably Wal-Mart, we give more trade-in credit than any other specialty retailer, we hire high-school kids for non-managerment and pay them doodly-squat, and our underpaid high school laborors know more about video games then you could ever hope to. Then there are us managers who know a larger percentage of our customers by name.
You have no idea how successful Gamestop is and you're a fool to criticize our business model. If you want to set up your own shop get ready to specialize in NES, SNES, Genesis, and all the other crap we just don't sell. That's what our locally owned specialty retailer does, I even refer people to him when they bring in old systems. You'll have to rip people off to turn over a profit though. You'll have to buy games like Yoshi's Island for $5 and sell them for $30.
Something I haven't seen anyone else mention...
One thing that would get me to come to your store would be if it had a good selection of GameCube games, which many stores seem to be scaling back on. Ditto Game Boy Advance, and to a lesser extent classic PS2 titles.
EB and the like seem to be laser focused on the stuff that came out in the last 6 months. If you want to find a copy of Ico, on the other hand, good luck. They might have a used copy, but that's it.
Generally speaking, the "we're only interested in the very latest releases" trend is worse for Nintendo systems. I'm not sure why, but nobody stocks classic GBA games. For instance, try finding a copy of "Advance Wars" anywhere, or a copy of "Eternal Darkness" for GameCube, or "Rayman 3" for any system. Perhaps it's not so bad for PS2 because most of the good classic titles that I'm actually interested in end up re-released in the Greatest Hits series. Anyhow, I'd suggest that if it got a green rating on Metacritic, you should try to keep 1 copy in stock.
I'd also echo the suggestion other people have posted about making ratings available. If nothing else, put the metacritic %ge on a sticker on the game. Often I'll see something interesting in a store, but I'm not gonna buy it there because I want to check metacritic first to make sure it's not a piece of junk. I've ended up carrying around printouts of metacritic score lists sometimes.
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
lastly, kids come in with piles of junk games (Madden 2001, etc..), and get enough store credit to buy the latest greatest game that we only mark up like 5%-10%.
It sounds like you have two incompatible ideologies here:
You pretty much have two choices when running a business. You can do things the way you think they "should" be - even if those ethics cost you money and may make the business tank - or you can study the economics of the situation and do things the way that are most profitable - and hopefully get rich by doing it.
It's a mistake that people see big business as unethical. That implies a deliberate desire to do evil. Big business generally isn't like that. What it is is completely removed from ethics either way - aethical if you will. If doing "evil" will make them richer, they do evil - but they're just as willing to do "good" if that'll turn a profit too.
EB and GameStop have analyzed the market. They've looked at what price points will get them the best rate of trade ins that still give the best markups to ensure the best profitability. It's a complex balance - ensuring enough titles come in to support that business but still keeping their prices low enough that they can make a reasonable markup without overcharging for those resales to the point where no one buys them or they occupy shelf space for months.
The big boys may be wrong. Body Shop made its fortune by identifying another angle at the same cosmetics market - realising people will pay more for a sense of earthy goodness. It may be the gaming industry has such an angle too - or maybe not.
The point is, you have two options:
A) If you want to run a successful business, do a business analysis. Look at where the profit margins lie. Look at whether there really is a market for "the ethical game store" that you can turn in to a profit or whether the profitable segment is in ripping off selfish kids who'll happily rip you off if they can get away with it while the few percent who'd like a nice ethical store won't really fund it. If the answer is genuinely positive, great, you've found an angle no one else has exploited and you'll get rich. If the cold hard numbers are negative, it sounds like you need to go the way of EB and GameStop... or you choose option B.
B) Accept that your feeling good about yourself and your business' fluffiness is more important to you than making money. It's great that there are people like you around. I'll happily buy from you, getting great deals and a great environment at your expense. But understand that, if it doesn't meet any business model, you are personally buying each and every one of those ethics.
Right now, it sounds like you're in B but in denial. If you really want denial, cool, go with it. But it does tend to lead to exactly the frustration you're describing - where you can't grasp why what "should" work doesn't.
every thing you wrote is so true my father and I went into this industry two years ago, I have to believe that the now jaded video game enthusiast(via B&K aka game/ebstop) will make full circle back to legacy stores as there main source for games. Poor service and low return on thier purchases will eventualy send them back in droves, example... last month several customers came in with trade-ins vowing not to return to EBstop.. a father came into me with 17 xbox games he purchased(all recent titles,which he paid 50bucks for) from EBstop and they offered less than $20.00 for all of them....this scenario plays out for a couple of weeks then they'll offer a great trade in deal like they are currently. the customer see's this as generous, then they turn the trade deal and sell it at 70 to 80% mark-up this happens all the time people will eventualy realize that there being taken to the cleaners and they can come to us and get the value, service, and expertise... that they deserve.... opps better get of this soap box and give someone else a chance :)
thanks for reading this
D
Im Afraid I have to agree. I run a store as part of a canadian chain that is not one of the indusrty big dogs. In canada software is bought 1/ EB, 2/ Futureshop, 3/ The rest of us. There are two main thrusts we fight against. Kids partially live in the mall, so EB has a natural advantage. They offer trade ins, so you can get some money back for old stuff and trade up to new. ( I think EB is reconcidering that in PC Games. they are begining to collect a lot of rubbish that will never sell anymore. )
Then the futureshop has a campain of "Get it First" (The FutureShop is owned by Best Buy) The get it first campain works for the day one junkies. Its hard to compete against those two major factors.
No matter what any survey company tells you that customers now a days decry a lack of custmoer service, its bull. your customer base will sell you out in a second for 1.00 off. Pepole will drive somehwere and burn up $5.00 in gas just to save a buck or get it a day sooner.
Your only hope is to offer great customer service. Not good, but Great. Tell the truth, if games are not getting good reviews, let clients know. Have abulliten board where you can post some of the good reviews, and some of the bad. Dont let your supplier stick you with crap games. A bad product mix will kill you as much as not enough clients. And if you have concerns about product returns from questionable customers deal with it fast. People that keep bringing back games, slam the lid on them and stop selling to them. Track your customers and know the bad ones. The amount of them is very small, but they can eat that small margin into nothing. If 2% of your clients keep bringing back games because they are copying them, there goes your profit as you clear out a used game.
You may have to concider the last option in this day of Wall Mart. Close. Wall Mart will be the death of the small community. Local lift will be erased, so unless your local city coucil gather up the courage to tell WallMart no, you may just be run over by the Big Dogs. You may have to something else.
1. Good luck. You're probably better off getting your stores big enough so you can SELL OUT to another major chain, and get them to keep you employed there.
2. As others have said, learn how to make money via the used games business. Buy them cheap and re-sell them for 50% over.
3. You say "lastly, kids come in with piles of junk games (Madden 2001, etc..), and get enough store credit to buy the latest greatest game that we only mark up like 5%-10%". Well, there you go; you're giving too much credit for those junk games. If they're really junk, then don't take them for credit. If they're something you can re-sell at 50% over, then do that; that'll pay for itself in the long run.
4. Promotions - These are only effective if they are cheap. An old retailer I knew used to use the "beer and a t-shirt rule". He claimed he could vastly increase store traffic simply by offering a beer and a t-shirt to every customer, so any promotion that cost more than that was probably not cost-effective.
5. Since you can't compete with the big stores on price, you have to have some sort of differentiator that make people come to your store instead. Arcades might be a solution, I dunno. I actually think the idea of an "Adults Only" section is worth a try; you can stock it with a bunch of Japanese adult "dating sim" titles and charge high prices for them.
Bruce
Your biggest problem is that electronic distributio is now a matter of "when" and not "if." All the majors are going to cut out the middlemen and start selling games music and movies direct via broadband. Sony has already said that this is an important part of it's strategy for years to come, nd nintendo has promised it in THIS generation of games.
Your next problem is that the bit retailers have better profit margins and vendor relations. If the distributor has to choose between you getting your new Xboxes and Best buy getting them, you WILL lose.
Is it all bleak? Certainly not. Consider value-added services. Cyber-cafes make money, lots of it. You have people come in and use computers/games for $???/hr and you have a "pro shop" where they can buy their own to take home. Make it something akin to a bar where people can hang out and spend money, paying for the "ambiance." Retail is hard, and getting harder. Best of luck
People who think they know everything really piss off those of us that actually do.
"I was fuming. So they were out to destroy the game industry from right under my nose? Fat chance. When they came to the counter to make their purchase, I grabbed the little shit by his shirt. "So...you're going to copy this to your friends over The Internet, punk?" I asked him in my best Clint Eastwood/Dirty Harry voice.
"Uh y-yeh." He mumbled, shocked.
"That's it. What's your name? You're blacklisted. Now take yourself and your little bitch friend out of my store - and don't come back." I barked. Cravenly, they complied and scampered off."
You physically assault a child and call another on a bitch and you are worried about selling games that are violent and contain profanity?
You should really think about getting into a different business. It is not the pirates that causing your grief. There have been pirates since the C64 days. The problem is the games just aren't that good and you can rent them at your local Blockbuster. So why should I blow $60 on a game that probably sucks?
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
We all know mundane parents are going ballistic about "violent video games" and it's a big "Issue" with noobs, who are running around with their hair on fire.
Here's an idea:
Create a backroom section with a clerk sitting outside ready to check ID. Put a big sign above the backroom saying "18+ ONLY". Stash all of the good stuff back there, and all of the kiddie stuff up front. Then put a statue of Master Chief (or whatever) out front with a big sign, "Don't forget to check the back room".
Hype up your store as "family friendly". Make sure you have long heartfelt conversations with the parents who come in about how much you care about their problems, and how you're there to help them.
Then let word of mouth take care of you. It's a differentiator -- parents can let their kids wander around your store all day without worrying about anything, but the older set can shop for Doom and Quake 4 without stepping on little kids every two minutes. It's win-win.
Just a thought. Oh, and DEFINITELY trade in used games. We love you guys for that.
Farewell! It's been a fine buncha years!
Find out what else gamers want and provide it all in one place. For instance, anime (DVDs, toys, T-shirts)? Maybe comics(comic books, toys, posters, graphic novels)? Other assorted Japanese type items (t-shirts, accesories, stickers). Card games, Pokemon, etc. Collectible toys like McFarlane figures or maybe old Transformers or Robotech stuff. What are gamers interested in? Do they like a certain type of music? Have a local band perform in store once a month.
Rentals are also an excellent idea.
...but is it art?
Well you've already identified a need (lack of demos in the console market) which the PC market has already solved, by download
No it hasn't. If you have dial-up Internet access because real estate in a geographic area that can get residential broadband is too expensive, you can't just go to a publisher's web site and order a demo disc of the publisher's products of the past few months. (Or can you?)
A family-oriented video game store is going to be in a tighter position as the gamer demographic ages.
You've probably fallen for the stereotype that gamers don't "get any". Some gamers do in fact have kids; I would suspect that they would appreciate a family-friendly store.
The only thing I can think of to differentiate yourself from the majors right now is to stock imports and the means to play them. In this way you will have things that the big chains mostly don't have. When I was contracting in Virginia I loved to drive out to this one non-chain store that carried imports. Ideas can be had from NCS and Lik Sang. Get a few Messiah NEX systems, and some old NES games for them to appeal to the nostalgic market.
There was one rap group that used a Beats of Rage mod to advertise themselves, though I have no idea how that worked out for them.
The biggest problem though is getting people actually to the store. If you could get people to come once a week, for some kind of competitive game night, they might buy or at least come back.
I thought this article about Animenation was interesting:
Right hobby, right time
Of course, they built their online business first and the retail store came later.
"MIT betrayed all of its basic principles."
I think the biggest point here that is being missed is simple ... gamers like to play games! Make a store and let gamers play games together! A lot of posts have covered the Small Business 101 already with profesional staff, clean floor layouts, etc. What you need to get a mom and pop store up and running is by offering more than a store.
You want advertising? If you are located in a good area throw a projector up in the back of a pickup and set up an Xbox running Halo 2 on it. Grab some of your buds or local gamers and throw the image on the side of your store. People driving by will have no choice but to stop and LOOK. While this example is extreme you get the idea about how you need to project your store.
The greatest game store I ever visited dealt in not only video games, but also Tabletop, Pen and Paper, and etc. These are hobbies that require hobby stores to support them. Offering space to play card games, pen and paper games, and tabletop games can get gamers in on a consistent basis. Maybe they will just so happen to pick up that latest title when they stop by for their D&D friday.
I'm no business super star, but I know a mom and pop game store isn't going to survive in this day of Wal Mart (because honestly that is your MAIN competition) without some POP and FLARE.
I can offer some suggestions based on what my father discovered running his successful shop. The shop failed soon after he sold it off, due to the lack of imagination of the new owners. This is a fishmongers in the UK, but a lot of the advice is universal:
1) Publicity: get your shop noticed. Run wacky competitions, do promotions on holidays. Try to get in local press/TV news/radio. Example - my dad paid someone to dress up as a mermaid and sit on the counter welcoming customers and giving out prizes for a competition one holiday, which got a picture in the local paper, the kind of advertising you can't buy.
2) Offer service beyond what your competitors can. Become an expert in games, offer advice. My father would give out cooking ideas and advice, which helped boost return custom.
3) Sell add-ons and related goods. For fish it was white wine, Japanese seaweed etc, I'm sure there are equivalents in gaming.
4) Decor: Make the store stand out so that it's clearly not an EB. Install model castles, make the game racks look like giant consoles, whatever, but differentiate yourself.
You could probably find a gamer who does this to their PCs, or knows somebody who does. Maybe you could pay to have two cases "tricked out" - perhaps a PS2 or XBOX, and a PC as well. Set up an area and invite comments on whether customers would like such a system made for them. On the PC side, you might even go the route of doing this to the 9's, by building from a list of parts custom gaming rigs, from the bottom up to the paint job. Don't go cheap on it, and do it well - think the difference between auto detailing and run-of-the-mill carwash - have your modder take the time and care to do each machine "just right" - and charge the end user rightly for this.
I think such an angle could easily make you stand out - my only reservation is the fact that I haven't seen such a service anywhere before (and nobody seems to do case modding of consoles - or at least I haven't seen any).
A couple of other things: if your case-modder is good enough, maybe he could "custom integrate" the PC and "console of user's choice" into the same case (?). This is a difficult thing to do most of the time, but not impossible (I have seen a PS1 "integrated" into a PC case before). Another "case mod"-type service would be to offer custom silk-screen painted game discs - the customer can bring in their own discs (non-pirated - have them sign a statement to this effect), or perhaps purchase new ones - but they would have to sign something that they realize they can't bring the disc back for refund (unless it is due to the paintjob, but the discs should be tested prior to sale).
Hope these ideas help, and as always, it would be wise to run them by a lawyer to make sure they can be done legally (and implemented right so you don't end up with possible legal loopholes that can allow someone to sue you or otherwise - all of the ideas I have listed sound perfectly legal to me, but in today's time it seems you can be thrown in prison for sneezing wrong)...
Good luck!
Reason is the Path to God - Anon
One word - rentals.
I've worked for both a mom and pop video rental shop as well as a franchised videogame store. All of the slashdotters' suggestions about creating a warm, friendly, fun place (staffed with knowledgeable folks) to congregate was right on the mark. That helps in spades, with getting people in the store.
The snack/coffee bar is not a bad idea either. Although during busy periods, you'll need to staff someone just for that task. There's nothing worse than running around filling a parent's xmas wishlist while manning the phones and making mochas and muffins... xmas is busy enough.
Ah yes, digressing to my original point - rentals. Believe it or not, the lackluster video shops of the world still don't have this marked covered. Sure, they'll have 50 bajillion copies of the AAA titles, but those hardcore RPG fans, (a key customer of mom and pop shops) can seldom find what they're looking for there.
You can be more flexible than big chains as well, in that you can set up rental incentives such as bundles, (5 games, 5 days, 5 bucks) or aging game discounts. Plus, rentals keep you in a steady churn of used copies of games to sell, which have already made all of their dollar value back, (or more, generally speaking).
Because you're a series of small shops, it's not too difficult to drum up good word of mouth. When you open your doors and have a comfy zone for folks to come in and play for free, you're bound to gain a core group of hangabouts. These are folks who may be 'experts' but don't really buy all that often. Believe it or not, these are some of your most valuable assets. Recruit the cleaner of these folks to be expert gamer staff, and nurture the rest. These are the folks grandma asks where to go when she's spending 5k on her brood in electronics this xmas.
Good luck, and happy gaming!
maybe check into consignment vs. trade-in. In other words let people sell their games in your store for store credit. Yes, many people will use that money in turn to buy other games on consignment but eventually they will use it to buy new games as well. Something to think about atleast. You could use it as a loss leader but its not really a loss in the end.
You bought three stores, but you didn't mention where. One thing I have noticed that helps is location. Are your stores located conventiently for people to find (main drag, near shopping malls, etc.)? Bigger cities of course you will have more competition. If you are located near other vg stores, there is good and bad. Usually I will scope all (including the local mom/pop shops) for the best deal. But you might find it better to move to an area that doesn't have a vg store in the area. Example, EB Games, Gamestop, Best Buy, etc. are all located in larger metropolitans. Now since VG is increasing, you might want to move those stores to the outlining areas with lower population and is a drive to get to the larger stores. Example, I live in the sticks in Wisconsin, we have a local grocery store that over charges for everything, but they do very well because it is a 30 minutes drive to get to a major grocery store. The owner just built a HUGE house which I am guessing from the profits. Our town wouldn't be big enough to have a video game store since we are about 1000 for population. But maybe something under 10,000 would be pretty good. Best Buy, EB/Gamestop, other chains usually won't even touch those places. You might have a Wal-mart, but they don't deal with used. Next, on Best Buy, they have announced they will start dealing with used games. This will take a bite out of that area also. This just leans you towards getting out of larger areas again. Less competition, the better for you. Corey
Brick retail will always have a place in the industry. Most the gamers I know, when they get the money to buy a game they're excited about, they're playing it by the end of the day. In fact, the only time my friends and I buy games online is when there's some rare game on Ebay that we really want.
The reason for the decrease in sales, as stated, was because people are holding back on game purchases until the new consol is actually available. That makes sense, thats what pleanty of people are duing and I can see that easily causing a 25% drop in sales.
Dumping the business would be a sad loss of one of the few privately owned game stores still around, and I'm not convinced the reasons for doing so are sound.
The customer who brings in 10 useless games to rtade had to have gotten them from somewhere, yes?
y'all have lost. y'all have a nice day, hear?