Is a game store viable business?

[Aeson]

I am a small business owner. I just bought the business. I would like at some time in the near future rent one of the spaces next door and open a game store. We are still waiting to see if we can make this business more profitable so it should be some time before we can start another. Should I bother?

 

[dragonhead]

Of course. There arnt enough game stores out there in the first place. Try to stock CCGs, RPGs, CMGs, and borad games

 

[bento]

Do Your Homework!

Always depends and that's usually why you put together a business case to answer those unseen questions. Game stores and any retail outlets require a considerable sum of cash up front for merchandise, so it's best to do your home work. The last thing you'd ever want to do is put $40k into a new business and find out there's no business around.

I would first seek out a copy of "Business Plans Kit for Dummies" which helps you find out what the most important questions are and how to start answering some of them.

Probably the most important questions to ask are:
* Are there enough customers to support my business?
* What products should I carry?
* How much money do I need?
* When can I expect to make a profit

To find out about customers I would suggest putting together a survey and taking a poll at an upcoming local Sci-Fi/Gaming/Comic/Media convention. I did this when I was considering opening a comic book store, and I got a lot of great input on where people shop today and what they purchase. You'll need to contact the convention promoter to find out about cost of table and other considerations. The survey will help you answer the first two questions.

Also knowing your local area's retailers will help. Is the market saturated? Do the local retailers provide good service or complete product lines?

Joining or getting to know GAMA - Game Manufacturers Association, the trade association most directly involved in game retailing, is a great source of information. If I recall, they run workshops a couple of times a year for retailers and may do one for people thinking about getting in the business.

Subscribing to Comics & Games Retailer, another top source of information on things like contracts, dealing with wholesales, lists of top selling games, leads on new merchandise, and other tidbits.

Reading blogs of game store owners like Behind the Counter on the RPGnet site gives great insight on what it takes to run a shop.

Most of all, give yourself time to answer a lot of questions before you jump in, maybe selling at a few local conventions before you open your store to get a feel for the business. You might consider starting a mailorder business first to build a customer base while not dealing with the overhead of paying rent. Finally when you do open your shop you'll have customers the first day.

When I did my projections on starting the comic store costs ran well over $80k the first year and I didn't see any black (profit) until the middle of the second year. Can you wait that long (or longer?) is an important question you'll also have to ask yourself.

 

[Aeson]

Thank you Bento. That is very helpful. A lot more info than I expected. It gives me much to think about.


What about Anime? Should it have a place in the store? It seems to be more mainsteam these days.

Also space for gaming. Many stores have it others do not.

 

[grimwell]

What about Anime? Should it have a place in the store? It seems to be more mainsteam these days.

The answer really depends on your individual market. Is there a local audience? How big is it? How much product will you need to stock to satisfy their needs? Does anyone else already serve this audience (who's the competition)? When considering any line of product, ask yourself if you have, or can acquire customers who would be interested in it. In strict retail terms, you should only offer a new line of products if you can see an eventual return and gain on that investment.

Also space for gaming. Many stores have it others do not.

Business answer: If I provide space for gaming in my store, will the lost shelf space (you can't stock product in the game space) yield higher loyalty from my customers (and thus more sales per customer, and more customers period)? If putting a few tables out drives more customers into your store and then to your register with product in hand than having a few extra shelves of product, go for it. Just understand that you are reducing the overall space you will have to stock product, and the game space should yield a higher potential investment than stocking product in that space would.

I won't pretend to have all the answers, but I used to manage for a big box electronics retailer, and the big boys all work from that angle. They don't stock something if they don't expect to sell it at some gain (even if it's just 1%). You don't create loss leaders (items that sell for less than they cost, or spaces that chew up product space like a gaming area) unless those loss leaders are going to drive sales somewhere else in the store (and result in profit).

Most friendly local gaming stores fail because they are run by hobbyists and not professionals. It's OK to LOVE gaming and have fun running a gaming store, but you aren't doing your customers a favor if you can't pay the bills and keep the store open. Stay focused on paying the bills and making a business return to you (the business man) that is comfortable to your needs. Since you already have a business that is working, you have the skills to apply to the new venture, and the experience to have learned a few hard lessons. If you want to run a store on the side, can handle the investment up front, and are OK with smaller returns on the gaming product and the business overall, go for it. Just do your homework first, and keep mindful that it's a business and not an extended campaign.

 

[bento]

Thank you Bento. That is very helpful. A lot more info than I expected. It gives me much to think about.

I'm a business librarian - getting answers comes with the profession. Speaking of which - you should also check with your local public library. They'll have lots of resources for local businesses such as statistics and property costs.

What about Anime? Should it have a place in the store? It seems to be more mainsteam these days.

There's two branches - manga (comics) and anime (videos).

Manga - I'd be very careful before getting into that. Most general bookstore carry shelves and shelves of it and you really have to know your audience and find a niche to succeed. They also negotiate very favorable rates, so they might be able to dump them on the market quickly and at less of a loss than what you might have to.

Anime - Most people I know who collect anime today download pirated copies off of YouTube and other online sources. Otherwise they buy it from established online retailers.

You should thoroughly investigate any product line you'd consider carrying because of the very large up-front costs and the time it takes to get the word out that you carry the stuff.

Also space for gaming. Many stores have it others do not.

As grimwell noted, space for gaming has to compete with product space. Another thing to note is many people are turned off by stores that allow gaming. Some local stores (DFW) allow gamers to actually play in the aisles, cutting off parts of their stores to shoppers. Others provide space in the backroom, a potential theft rist.

Also - how much money will these gamers spend? You'll probably find those that spend the most time in your store playing spend very little on product. If they're too cheap to have their own place, why do you think they'd pay full price for your products? If you consider a space for gamers, try to devote it to cash intensive products such as cards (Magic or Yu-Gi-Oh) or minis like Hero Clix or Warhammer.

 

[Aeson]

This should help in future plans. The business I own is a pack/ship store. So mail order is a good start off point. I have easy access to USPS and Fedex shipping. They both come 6 days a week.

It could be a win/win for both businesses. I can sell from one and ship from the other. making money both ways.

 

[Templetroll]

Here's the best FLGS I know of, and I am bummed that I am not local to it currently.

Days of Knights

Note the calendar of events. This was a case of businesspeople who were gamers and worked hard to make it a success.

 

[Olaf the Stout]

Like many people in this thread have said, look before you leap. Doing your homework beforehand will give you an indication as to whether such a business is wanted/needed in the area and a much better chance at success. Also remember that hanging on if business does go bad, hoping that some miracle turns everything around usually just results in you losing even more money.

Best of luck if you do decide to go ahead with it though.

Olaf the Stout

 

[WayneLigon]

What about Anime? Should it have a place in the store? It seems to be more mainsteam these days.

Yes, it is. Which is actually a problem for you. Five or ten years ago, I'd have given a cautious 'yes' to that question. Anime was pretty hard to find outside the largest of cities. Now, though, it's in every Suncoast and Best Buy from coast to coast - large, decently stocked and well-represented sections. You probably don't have a hope of meeting their prices and selection.

Your only hope would be special order on Japanese import titles. Unless you have a large, active, anime club in the area that doesn't already have a source for such things, I'd give it a pass.

Same with manga. The local Barnes and Nobles has four or five whole racks devoted to it.