Behind the Counter
Introductionsby Marcus King
Behind the Counter
Introductionsby Marcus King
Behind the Counter
By Marcus King
This column, I hope, will be an ongoing affair of one retailers perspective of games, game retailing and the Game Industry as a whole. First a little about me: My name is Marcus King, and I have been retailing for 16 years. Some highs and lows along the way, to be sure, but I have been earning at least a portion of my income by selling games for the past 16 years. For the past 10 years, I have only self employed. Although I have owned several other businesses along the way (an advertising company, two quick lube shops, an adult foster care home, and other ventures) I have always considered myself a game retailer primarily. Prior to that I served in the US Army for 12 years (or just shy of it) as an infantryman, a drill sergeant, a squad leader and all around 11B for those of prior service background. I was honorably discharged in 1990 when my mother was ill, and needed my constant care, and assistance with her business.
Okay, enough about me. Lets talk about the game industry a bit.
Here is what I believe: I believe games are a wonderful way to spend some time with friends and enjoy their company. I think games are an important aspect of the human social psyche and site that games can be traced back to before the days of Christ. I think this industry can only grow larger in a healthy way in one way: More Retailers. More games retailers, more comics retailers selling games as more than a sideline, and more pure-games retailers. The problem, as I see it, is one of information.
See, I was once told by a representative of a large game distributor that the average length of business for a game shop retailer is 18 months. Ouch! And, the reason so many retailers fail is they don't know what they are doing. Face it: Nearly ever game-retailer got into selling games because they loved games, they were a gamer. And, seeing so many shops open and close before theirs, only encourages them to "Do it right". Naturally, everyone thinks they can do it better than the last guy. Problem is, the hurdles to being successful are not readily apparent and by the time you dive it, it is too late.
So: For the industry to grow in size, profit, popularity, acceptance by the non-gaming public, etc - this industry must create more retailers. Lets say double the number we now have. And, to do that, we have to quit leaking like a sieve! Currently, we may be getting as many new retailers as we are losing established ones, though I actually think we are closing 5 for every 4 new ones that come along. What we need to change is the rate at which retailers disappear.
For retailers to stay in business they have to be profitable. Face it, no matter how much you love your job, if you can't pay your bills on what you make, you have to change jobs. THAT is what MANY retailers face, every day. And, it is a tough way to make a living, having to answer that question every day.
So, retailers need to be more profitable. Uh huh, sounds good. How?
Well, in any business, there are only certain options open for making more profit: A. Reduce costs. B. Increase revenue. C. combination of A&B.
Reducing costs: This can be cutting overhead like utilities and rent, but that is more difficult. Another way to reduce costs is to order less product. Of course, that can backfire, so when ordering less product, you have to order less of the product that does not sell. Well, how are you going to know what doesn't sell to you get it into your store, right? Well, there are ways. Many ways, and I will discuss those at another time. Another way to reduce costs is to cut labor costs, decrease other non-fixed costs such as advertising and such.
Increase Revenue: Always a good thing, right? No. Not always. Sometimes increasing revenue can result in increasing your costs and that can actually hurt you. When I say "Increase Revenue" many retailers think: Discount! Discounting will kill a retailer, it just take time. I have seen retailers who were "just making it" slip out of business because they discounted. I will discuss the problems with discounting in another column. For now, lets say that increasing revenue means doing so WITHOUT increasing your % of costs. (in other words, you cannot discount 15% off and increase sales in that way, because you are also increasing your costs by making the % of your markup smaller) So, increasing revenues means attracting new customers, or making existing customers interested in and devoted to making new purchases.
Of course, an A&B combination works best at becoming more profitable.
The hurdles with this is: Retailers have, for many years, lived in a vacuum. They don't know where to go for advice (the local Chamber of Commerce probably cannot help them find another games retailer to "Mentor" them, nor can they offer assistance with more sources for merchandise).
"Information" is the key. And, surprisingly, only about 18% of independent games retailers have internet access in their store for their own use. Even those that do, don't always use it to their advantage. This past year, I bought out almost 20 other shops (in whole or in part) and of those, only two were using the internet to try to help them in staying in business. Often, the extent of that is a retailer selling on eBay.
If information is the barrier to success, then internet access can be the magical key to finding information. There are several sources for information on how to become a more successful retailer online, part of which is the Game Manufacturers Association (GAMA for short) which has a website with information, and a "Mentor" program to help new retailers. Another source for information is the Game Industry Forum, an line forum for game industry professionals only (which includes Manufacturers, Distributors and Retailers). The "Foundation" which is another forum for "Retailers Only". My own forum, TitanGames Insider, which is a forum for anyone interested in games, but also geared for the person thinking of becoming a games retailer.
Of course, the GAMA Trade Show, which is in Las Vegas in March, where many of this industries top manufacturing professionals meet and show their new wares to hundreds of retailers.
Information is the key to successfully running a retail store. There are sources for that information, which I will cover in detail in the weeks to come. I will also be talking about the pitfalls of discounting, and how online selling has effected game retailers in particular.
In my opinion,