Death of the LGS

[jdrakeh]

A store that resembles a poorly run porno shop is a fast way to lose patrons.

Oooo. . . that reminds me. . . I have no idea if it's still open, but there was once a comic/game store in Wichita, KS called "The Shadow Sanctum" that fit this bill. It was a creepy place that reeked of desperation and failure.

 

[Dannyalcatraz]

What these stores are doing is offering the exact same product as the larger chains for a 40% markup, and are considerably less convenient to the average consumer.

Again, its not a markup. Most of the price differential is due to bulk discounts, economies of scale, and in some cases, cross-subsidies with other products- often, they're selling the product for less than most LGSs' can purchase them.

In some markets, I wouldn't be surprised if there wasn't even a bit of predatory pricing...but that's tough to prove.

How does that arguement work for Wallmart that does have thousands of storefronts and people?

Wal-Mart generally owns its buildings and the land its on, whereas most LGSs rent their space. That has definite accounting impacts upon the bottom line and profitability.

Wal-Mart operates like a lot of other megabusinesses do. As mentioned above, their size gets them certain economies of scale, and they can demand and get bulk purchase discounts. That, along with the ability to cross-subsidize with other products (with higher profit margins), means that they can often sell a product cheaper than their smaller competitors can acquire it.

Wal-Mart has been through and is also currently under multiple investigations for predatory pricing and unfair labor practices which result in underpayment of employees...which further affects their ability to compete, if true.

Then there are more subtle practices, like exercise of monopsony/oligopsony power.

Like GM and the big auto manufacturers, Wal-Mart is in such a strong position in the economy that they can get those bulk discount purchases on credit...then pay late. When they do so, they often pay less than the amount agreed upon because the small suppliers (with very little economic leverage) have bills of their own to pay, and ANY payment they get helps them avoid going under. There are documented cases (in the auto industry, at least) of large companies paying as little as 30% of the cost of the products they order when things like the time-value of money are factored in.

IOW, big companies get a discount, pay late (sometimes months late), then pay less than their agreed upon discounted amount, and get away with it because the sellers can't survive without them.

This, like everything else above, further enhances their ability to charge lower than LGS game store prices and still profit.

 

[Corjay]

A small business needs to actually offer something above and beyond the large businesses. I'm not sure where you've pulled "burger joints" from - restaurants do well because they offer service and food that's above and beyond "burger joint" fare. Same deal with small butchers and food stores - they offer something higher-quality (or they should) to justify their higher prices.

What these stores are doing is offering the exact same product as the larger chains for a 40% markup, and are considerably less convenient to the average consumer. There's nothing there for me. I don't actually want to roleplay in a store with random people - I'd rather do it at home with friends. I wasn't introduced to gaming at a shop, I learnt it from a friend. I don't owe these guys anything.

I don't know where you got this nightmare scenario of no jobs and nothing but burger joints from - we already went through this stuff when supermarkets appeared. I for one am glad I don't have to go to a dozen different shops just to get my groceries, and it's not like the economy collapsed over it. Were you there to smash automatic looms when those were invented as well?

What I said is a very real scenario that economists have been very concerned with since the advent of online sales, and even more so now as the internet revolution is in full swing and the public is becoming increasingly more internet savvy and young computer users turn into adult computer users. The change is happening very fast and small businesses are collapsing at ever increasing and alarming rates.

When I said "burger joints", what I meant is the service industry. And people that have posted saying that FLGS need to become more service oriented if they want to survive is right on the money. With the advent of the internet, the service industry and malls are all that's going to be left on the street in 20 years.

No jobs comes from the fact that you don't need a whole heck of a lot of people to run a wearhouse or computer orders. With the collapse of small businesses (the major source of employment in any country), you get rid of employment opportunities and unemployment numbers skyrocket. The economy is fragile, and small businesses have already taken hit after hit since Bush took office. The question is when does the small business industry fall through. Since the internet has been the biggest economic competitor to small businesses, the attitude to prices is exactly what is threatening to collapse the small business industry.

We could turn this thread into an economic debate, but this subject severely diverts from both the subject of this thread and the purpose of this site, so let's just ignore the particulars of economics and just focus on the effect on FLGS. It's my fault for diverting this to the larger subject of economics, but I'd like to abandon that subject to get back to the main subject of this thread.

 

[Dannyalcatraz]

...let's just ignore the particulars of economics and just focus on the effect on FLGS.

Well, its not as if economics was irrelevant.

It's my fault for diverting this to the larger subject of economics, but I'd like to abandon that subject to get back to the main subject of this thread.

I think I'm at least partly to blame as well.

 

[DemonKing]

I used to try and support my FLGS (Napoleon's in Brisbane, Australia) and every time I visted I made a point of buying something, but it got to the stage that their selection was so poor, and their prices so high in comparison to online vendors even after a discount, I just couldn't be bothered any more.

Yes it's sad that businesses are going under because Amazon is undercutting everyone but as a consumer, if I'd bought the 4th edition slipcase here I would have paid $AUS120 or more, whereas getting it from Amazon only set me back $AUS69 delivered to my door! That's a pretty amazing saving.

To be honest, I don't need what the FLGS used to offer any more - with a young family to support I need value for money and convenience these days, not a place to hang out and chat about games in.

 

[Korgoth]

Discount limits should be put in place.

Yes, and let's also round up and arrest grandmas holding yard sales because they're undercutting local merchants.

This is the most bizarre, anti-consumer idea I think I've ever heard. Do you own a game store, by chance?

 

[Philotomy Jurament]

After all my talk about how prices are so much better online, I ended up going to the FLGS, yesterday, with my wife and two of the kids, and dropping $180 on various stuff (even some stuff I could've got cheaper online). I guess the lesson, there, is "get them in the shop..."

Amusingly, the whole reason we went to the FLGS was this thread. I mentioned it to my wife, and she said, "Hey, we should go to our game store..."

The store we go to is well-lit, clean and pretty well-supplied (especially considering its size -- it's not large). The owner is friendly and attentive, which is nice. (His wife -- I think -- gave my kids each a free comic book that was perfect for their respective ages.) There isn't much room for in-store gaming, though, and every time I've been in, the gaming table has been occupied by people playing a miniatures game (probably Warhammer). I hadn't noticed anything on previous visits, but this time there was a distinctive "funky" body odor smell; my wife commented on it (to me) when we left.

We looked for, but did not find, the latest expansion for Arkham Horror (i.e. "Kingsport"). We also looked for, but did not find Power Grid. We'll probably buy those online.

I have to admit that I did find some interesting stuff I hadn't heard about online, like Faery's Tale (deluxe), which I bought to run for my daughters and one of their cousins, who love faeries. I also got Zombie Fluxx (we have Fluxx, but the zombie thing will go over well with my older kids, especially my eldest son) and Blokus (to play with the whole family). I was looking at Hey, That's My Fish, but decided to wait on that. My wife tried to convince me to get Runebound, but we've got several games in that vein, so I demurred. For me, I picked up several of the C&C Castle Zagyg town modules, and the Mongoose edition of Traveller (which looks pretty similar to the original, which is why I bought it). And a new dice bag. And my wife bought a new set of dice. And my youngest son got a couple of DC lego-style "action figures." And we scored some leftovers from Free RPG Day (and those comics from Free Comic Book day).

All-in-all, I think it was a worthwhile trip.

 

[Storyteller01]

Speaking as a customer, and not a store owner, you may be looking at the situation backwards, Gamersgambit.

The gaming space you provide, the demos you run, the shelf layout that showcases cool stuff better than the Big Box stores do...that's the stuff that keeps your customers coming to you in the first place. You don't want to say "I'm losing out on retail space, and can't afford to do this stuff"...you can't afford NOT to do that stuff, or what reason to gamers have to come in and support you?

It sounds like you run a great place, and I wish there was one like yours near me. My own FLGS closed up shop when they raised the rent on them (by an obscene amount), and they couldn't keep up. Now my options are a 15-20 minute drive to one of several comic shops with crummy RPG selection, Borders, or Amazon.com. So, now I go with whatever's cheapest, but it's a sad loss.

Is there any way to make your gaming space help to pay for itself? Maybe some spiffy pre-gridded, whiteboard-topped game tables, maybe with internet access to get to DDI/whatever, or a projector for maps...get a really great game table set-up, and then charge an hourly fee to use it? Would that work at all, do you think, or would people just ignore it?

This is really not true. I'm an employee of my FLGS, and having a gaming area does not bring in customers. Discounting our product lower than the competition does. We regularly have customers come to us for a product, then go back to another place for the tables. Even though the other place was selling said product.

Amazon sold the core books at over 50% off of retail, blatantly doing so before official release dates. In an industry where those who sell first get the business, this kills the LGS. This is made worse when people in our store for conversation or atmosphere, not buying anything moind you, tell customers 'dude, you can get that at (kaza, amazon, etc) cheaper'. Or worse yet, 'I have a copy on PDF. Give me your e-mail and I'll send you a copy'. This among other things is causing us to rethink selling rpgs. We make nearly 10 times as much with other games.

People want cheap. No amount of atmosphere or gaming space will change this. Eventually it'll kill the game. With only on line sites selling, only word of mouth will get word out.

 

[Corjay]

Yes, and let's also round up and arrest grandmas holding yard sales because they're undercutting local merchants.

This is the most bizarre, anti-consumer idea I think I've ever heard. Do you own a game store, by chance?

ROFL. OMG!!! How do you go from putting a cap to online discounts to arresting grandmas? Give me a break, dude. Let's keep in the realm of realism, shall we? We weren't talking about arrests. We're talking about price control, which, as Bill Clinton showed, is not only within the realm of government's power and rights, but is a healthy practice for the economy. (EDIT: Which, I might add, Bush has refused to add caps to anything in any area and has even lifted caps, contributing to damage to small businesses just as we're discussing as well as to rises in inflation.)

Dude. You should read a little or at least turn the channel to CNN from time to time.

 

[PaulofCthulhu]

Yes, they will. And that's why game stores need to get heavily into selling drinks and snacks. Also, pencils, paper, dice . . . all of the extras that someone may forget at home.

From experience, I believe there is truth in this.

Our last local games store did actually make more money selling snacks, stationery and related accessories than actual games. Not enough to keep it open, but perhaps it points the way to a possible future.

In such a future, games 'stores' will be primarily for playing games in, with any games orders as special or mail orders.

If that's never going to be a viable model, I don't know what else can help the local games store in the long run, alas.