Business of Gaming Retail
This time, I want to discuss the other business plan—the one that you use as an internal document describing what you want to do and how to do it. It’s a good exercise if you already have a store, too. Identifying where your focus lies provides you with a meter to judge whether or not individual policies, products, and programs are really helping you reach your goals or are just cluttering things up.
This plan can skip a few things that you’d use to describe the business to an outsider. You can omit the description of the industry, for example. You know that WotC and Games Workshop are industry leaders. You don’t need to explain RPGs. Likewise, you don’t need your own resume. You know who you are.
Where will you sell?
A brick and mortar store? The Internet? Conventions only? Most of this column’s discussion assumes B&M, but that’s not the only option. Also, the choices aren’t mutually exclusive. If you have a retail store, you should probably sell at conventions and online also. Usually.
What do you sell?
Just pick the broad brush strokes for now: product categories. You don’t need to decide if you’re going to carry GURPS or Savage Worlds. Just decide whether or not to carry RPGs. With most business models, carrying accessories for a line is standard if you carry the line. Sell minis, sell paints. Carry D&D, sell dice.
Game room or not?
If you have a retail store, you have to consider this big factor from the beginning. As I’ve mentioned before, neither choice is a no-brainer. There are reasons for having and not having, and both have merit. I’ve seen successful stores that follow both models.
These two factors—major product lines and the presence or absence of a game room—largely determine how much space you need. If you plan to carry CCGs and a single shelf of RPGs, with no minis or game room, you only need about 200 square feet. If you want to carry everything in the Alliance catalog and have enough room for a Magic World Championship qualifier, you need a gymnasium.
How will you compete?
Will you try to be the cheapest? Offer the broadest selection? The best service? If you plan to compete on service, how do you define that broad term? Does it mean that you have the shortest line at checkout? A personalized system of product suggestions? How will you measure your performance along these lines?
To better identify this question, phrase it another way: “Why would customers choose us over one of their other purchasing options?” If the answer is “my shining personality”, you can expect a couple of things. First, you better plan yourself on the sales floor. Second, unless you make hiring people like you a core part of your business model, it’s not scalable. It’ll never grow beyond your ability to interact with your customers.
I’m only being half serious with that “shining personality” bit, but that means that half of it IS serious. I know a store owner whose weekly e-mails are works of art. His graphics are beautiful without being too cumbersome, and his sense of humor gets me to open the e-mail every time, even though I’m 1000 miles away and never likely to enter his store. I’ve heard it said that humor is the hardest thing to write, and if you can be funny consistently, you have an edge.
How will you get new customers?
You’ll find that a certain selection of aggressive game veterans will find you as soon as you open. These are connected gamers with ties to the community or who are alert to exactly this sort of thing. Some of them will find you and word will spread to their gaming groups. They might find you if you hide in a secret members-only clubhouse and require a secret handshake to get in.
I’m not talking about those guys.
I mean the other 90% of your customers—the ones who will make your business viable. Once open, regardless of how successful you are at retaining your customers, you will lose customers over time. You must constantly make new customers to reach your break-even initially and then to stay above it once you get there.
That means you need a medium by which you deliver your marketing message to your customers. Potential media include newspaper ads, television, radio, flyers, signs, billboards, movie theatre ads, direct mail, a guy in a costume on the side of the road, Internet banner ads, etc. You might end up experimenting with several ad media until you find what works for you, but you need to plan on doing something on a regular basis. You can’t ever stop bringing in new customers.
What tasks will you do?
You can almost certainly expect “counter duty”, almost regardless of the details of the plan. Every dollar you spend is a dollar right out of your pocket. If you’re open 100 hours per week and pay somebody federal minimum wage for all that time, you’re reducing your income by over $32,000 a year. At best, you can expect to share that counter duty with at least one other person.
What else will you do? Marketing and advertising? Probably most of that. Repair, maintenance, cleaning? Ditto for those? Accounting? At some point, you have to decide what tasks you can’t do, for reasons of skill or time or desire, and hire those out. It’s better to farm out the cheap tasks than the expensive ones, but the cheap ones are the ones you’re likely to already know. Floor sweepers are cheaper than accountants. Try to tackle the expensive duties yourself, even if it involves a learning curve.
What edge do you bring?
Maybe you can hedge your bet by finding a way to improve on an industry assumption. For example, I assume that it’s in your best interest to place your orders with distributors instead of ordering directly from manufacturers (I can explain why in the forum if you like). If you can tweak my figures so that you can improve the equation on the side of direct ordering, this might be an edge for you. All things being equal, greater margins are useful.
A benefit like this could provide more direct profit for you, or you could reinvest your gains in an area normally too indulgent for casual consideration, translating your operational edge into a competitive edge. You might spend this gain promoting a game convention, expanding your inventory, or something unique that makes your business model entirely your own.
