Business of Gaming Retail
Snacks
I did about $5,000 to $10,000 a year in snacks & drinks. That category should have been at least $20,000/year, given the traffic count I had. I should have expanded the offering, added energy drinks and imported Japanese drinks, and offered a more substantial food selection.
Collectible Prices for Collectible Items
When Pokemon was huge (on a scale you can't imagine if you weren't around then), I held to SRP, thinking that I would be building loyalty for later.
None of those customers stayed after the Pokemon fad slowed. I gave up probably $50,000 to $100,000 in potential profits for no gain whatsoever. This was probably my worst mistake.
I should have sold them for market price, which was up to $9/booster. I should have been buying them up on the secondary market and advertising that I always had them in stock. Nobody else did. I would have built my customer loyalty by doing what retailers are supposed to do: having the goods. The price would have metered how much people bought, not artificial factors like limits per day on the number of boosters a customer could buy.
Likewise, I sold many used categories at half cover rather than pricing them individually according to demand. I did fix this problem after about a year, but fixing it sooner would have been better.
Not Expanding
I had the opportunity to increase my 2700 square foot location by taking over the suite next door, adding about another 3500 square feet. This area was a corner space, and had full-length windows wrapping partway around the side. It would have been great for moving my game space into. I could have torn down the dividing wall currently separating my retail area from my game area, and expanded my retail area into the full original suite.
Even with 2700 square feet, I had space issues often. Tripling my game space would have fixed all of those problems.
It would have been relatively expensive (an extra $1,400/month, plus the cost of new inventory and fixtures), but with the Pokemon money to cover it, I would have been fine.
Likewise, I had a couple of opportunities to expand into multiple locations. I did not pursue those aggressively enough. One of them was the central store for a retailer who largely created the gaming community in Jacksonville. He was moving and his last store closed just a month or two before I bought my store. I could have moved into there for almost nothing, recovered a large fraction of his customers, and increased company sales—and brand strength—with much reduced risk.
One competitor later tried to sell his store. I got to see his sales records, and they showed a steady decline while I was growing. I was clearly taking some of his customers (which I knew from talking to them, but seeing it in print cemented it for me). Buying that store out and repairing the problems that were costing him sales would have meant a larger and healthier gaming community.
Image
I cleaned and fixed up the store when I took it over, but I didn't go far enough with it. I should have replaced my carpet, which was old and dingy. I should have repainted the entire store instead of just the worst parts of it. Repainting my game tables would have been an easy fix.
There's a difference between why people say they shop at your store and why they really shop at your store. People don't believe that things like clean light fixtures affect their shopping decisions, but their spending habits reveal exactly that. This image upgrade would have increased my sales. At the time, I didn't appreciate that impact enough. Now I know better.
Keeping a Thief
I suspected internal loss, but I didn't have “proof.” Getting that proof took months, during which time I have no way to calculate my loss. You do not need the level of proof required for a conviction in court to fire somebody—especially in Florida. It's very easy to avoid paying unemployment claims if you're careful here. Just let him go.
More Good Stuff
My inventory level did not grow enough to accommodate higher sales. I should have made a planned growth part of the overall plan. Specifically, I made a common mistake: I supported lines I liked over lines that sold. I didn't realize until late in the game that my store sold a relatively huge amount of Battletech. Paying more attention to that line would have paid off in sales.
Less Bad Stuff
I inherited a lot of dead stock. I tried to support the old wargamers who “supported” the store, but sales records showed that their support was a figment of their imagination. I should have sold that stuff off immediately and recovered that space for more productive goods.
Store Layout
I tried to keep my intrusion as non-intrusive as possible to avoid losing customers. I kept a bad store layout. I now know that the gain from the new layout would have more than offset anything I lost by upsetting the existing customer base.
I actually made this mistake twice. When I moved, I kept the inefficient layout for the same reason. When I sold my store, the buyer made that change right away.
You don't want to lose customers, but you also don't want to damage your ability to make new customers.
More
Everybody makes mistakes. I made way too many to list in detail here. This list describes only the most damaging.
Hopefully, these articles will prevent you from making some costly errors of your own.
Lloyd Brown
www.lloydwrites.com
