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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?"
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.
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."
First read the Acts of Gord. Then really consider if you want to run a game store.
...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.
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.
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.