Behind the Counter
How To Open Your Own Game Storeby Marcus King
Behind the Counter
How To Open Your Own Game Storeby Marcus King
How To Open Your Own Game Store
I have gotten several email requests that I describe the method by which a budding entrepreneur can start their own game retail store. And, I have decided to share some of what I have learned in 18 years (will be 19 in March) business.
Currently, there is a strong push by many manufacturers, and organizations, to weed-out, if you will, internet discounters who are seen as predatory in nature. So, if you want to operate a profitable brick and mortar (B&M) shop, you will be welcomed - if you want to be another internet discounter, well - best of luck.
The first think you will need is a business plan. Most communities have a Chamber of Commerce, and they can be helpful in getting you in contact with the right agency to assist you with a business plan. A business plan will be important if you are going to find investors, and will assist you with negotiations with potential landlords.
Now: You need money. Buckets of it if at all possible. Don't ask me how to procure financing. I have no idea - I pay as I go, and started with a loan from my Father. If I were to open a new store from scratch - I would not try without $50,000 to spend on inventory, and another $30K to spend on fixtures, lease and have some "working" capital. Seen a LOT of game stores go out of business over the years who had inventory, but no working capital, so couldn't make the rent, got evicted, etc. Not pretty. If you don't have that kind of money, you should probably go back to what you are doing for income, and stick with it. However, you can start up slowly. I bought display cases, racks, fixtures and such LONG before I opened my doors, so that when I opened, I had plenty of fixtures - though to be truthful, they were not GOOD fixtures, and I have since upgraded everything and thrown most of the old stuff away, sold it, or given it to Good Will Industries.
Also, if I were going to start a new game shop, I would want it in a community of 200,000+ as the smallest possible size - and when I say community, I mean "within the city limits" (not within 50 miles). "Most" gamers will not drive more than 20 miles to a game store, and even more will not drive more than 5 miles to a game store. So: Open your shop in a largely populated area. I have seen shops open in rural area's and try to draw from 2 different metropolitan areas, saying "We're convenient, we are right in the middle!" One lasted 13 months, the other not that long.
So, you got money and know what city you want to open in. Now, location-location-location baby! I got lucky and got a corner building where we have done quite well. Traffic flow, parking, lighting in the parking lot, city ordnance on how big your sign can be, will the city require special licenses to have "In Store Gaming" or, how late you can stay open (some strip mall owners require specific hours, others only limit how late you can be open, etc). All of this goes into selecting your location, and one small error can mean you cannot hit your profitability, making yours a losing proposition right out of the gate.
Also, be aware of lease things like "Triple Net" (which means you pay the Lease, you pay the Taxes, you pay the Maintenance), if you are going into a strip mall, be aware of "exclusives" of other tenants, and what your "Cams" is (Common Area Maintenance Fee) and how it can increase. I once owned a business where the building owner upgraded the roof, painted the building, re-paved the parking lot, and handed ME the bill for $28,000.00. Ouch! Maybe you want to sell games, but another guy already sells video games, and has exclusive rights to that. No big deal to you? Okay - but I pay my entire rent with used video games sales. Don't give away the profits, make sure what you are entitled to do. Leases are important, and so is how you can get OUT of your lease. Make sure you have a clause that lets you out with minimal penalty, just in case.
Now, lets say you have your location all picked out, and everything is fine, and you have buckets of money to spend. Now, what do you sell, and where do you get it from? And, will you have a website, too?
I, of course, feel a website adds a lot to your company. (heck out my own at http://www.titangames.com for my example - but be nice, I am computer illiterate, and I hire out someone to run it for me - which I highly recommend.
Next: Join GAMA!
GAMA (The Game Manufacturers Association) has a list of distributors (about 20+ I would say off the top of my head) who wholesale games. If you were going to start a game store, you should JOIN GAMA (http://www.gama.org). GAMA has good events, and you get a couple spiffs for joining as a retailer - they hold the GAMA Trade Show in Las Vegas each March, and nearly every manufacturer and distributor attend and showcase their products and services - simply attending one GTS back in 1999 made my company triple it's sales the next year - I highly recommend both GAMA and GTS. I believe that GAMA dues for 1 year for a retailer is only $75 and it comes with a badge to GTS, and one to Origins, too (I think).
So, lets say you joined GAMA and got the info you need about distributors, got a subscription to Comics & Games Retailer Magazine (free to any brick & mortar store), and a copy of Games Quarterly (which shows every product you will ever want to know about!!). Now you should be set to begin planning your actual store.
You will need fixtures. Display cases, slat wall, grid wall, shelving, book cases, cabinets, counters - the works. I buy most of my stuff from Specialty Store Services (a Google search will locate them, I think). They have nearly everything you will need - get the catalog first, much easier than browsing the website - but also watch their website for specials - you can find some incredible deals.
You will also need lots of odds and ends: Price-Label guns, tape guys, cash register, POS System, the supplies will be endless. I could write an entire column on POS Systems, alone. Suffice it to say you will need a computerized inventory control system to prevent inventory creep (that thing where you keep buying stuff you just know will sell, but it doesn't) and to help track theft.
As for the actual inventory: You should ask your distributors (you should have at least three accounts open with different distributors) what is the top 100 products they sell - compare those lists and anything that is on all three lists should be stocked - most of the stuff that is on two lists should be stocked. That may be a good starting point, plus carry something you love - you will sell what you KNOW the best.
If you thought I was going to tell you what to stock - you're half right. I will share with anyone what I think about any products - but I do that on a Game Industry forum called the GIN (Game Industry Network). There, over 300 retailers, over 100 manufacturers, and many others join to discuss business and trends. To qualify for membership you need a business license and tax ID number (federal), and a sales tax id for you state (where it is required). Members of the GIN have a great history of sharing ideas, techniques and secrets with each other to help each retailer be the best retailer they can.
Well, boys and girls, that's all I can bang out tonight. If you want a follow up on this next month EMAIL me your requests with RPG.NET COLUMN in the subject line, and I will answer questions next month.
Marcus King - email@example.com