Retail Gaming Store Economics [LONG]

[Sam]

Re: My take on it

Not once to my knowledge do I remember the owner saying " you know I see you come in here all the time. What's your name?" When I've come into the store the owner is playing a game with a freind or is talking gaming stuff with a buddy. No one ever looks up and acknowledges my presence. Rarly am I thanked for my purchases. If I ask a question I get a reply that is drawn out as if it's killing them to talk to me.

This kills me. How do guys like that stay in business?

I KNOW that people have options, that they can order online, that they can get the stuff at a slight discount at the major chains. I KNOW that you have to provide a product that will make them want to spend the money in my store. That product is customer service, a knowledgeable staff, a good selection with current releases, and a clean, inviting place to play.

I've mentioned earlier that effective use of a point-of-sale system requires capturing data on the customer. I'd be upset of me and/or my partner didn't know every one of our (proposed) "regular" customers by name and gaming preference.

Again, knowing that people have options, you need to give them reasons to come to your store.

--Sam

 

[Sam]

Beginning Inventory?

Still really fuzzy on what a reasonable level of starting inventory would be. To reiterate, I'd be looking at stocking the following products:

• RPG Books/Games (Primarily d20, D&D & White Wolf)
• Mage Knight/Hero Clix/Mech Warrior product
• Games Workshop (probably start with just Warhammer & 40K)
• CCGs (Magic, Yu-Gi-Oh, etc)
• Comic Books
• Gaming Accessories (dice, minis, cases, paints, etc)

I'm still trying to figure out what the startup costs would be, and my biggest information gap is in the cost of inventory. If anyone who has or had a store can help shed some light on this, I'd be really grateful. If you don't want to post here, email me at sschuste (at) optonline (dot) net.

Thanks,
--Sam

 

[ced1106]

Re: Beginning Inventory?

Still really fuzzy on what a reasonable level of starting inventory would be. To reiterate, I'd be looking at stocking the following products:

Y'know, I bet the answer is "it depends on your area". The FLGS has a good handle on local demand (even knowing which individual Yu-Gi-Oh cards to stock!) and she still has discounted titles.

One thought, which electronics and retail stores do all the time, is to check out other LGS's in the area and see what stock they carry and sell. Hopefully, they'll even talk to you about what games sell and don't sell. One thought is to ask the manager what projects they'd like to have (eg. MK leagues) but don't have the resources for. You both could then work together to offer it.


Cedric.
aka. Washu! ^O^

 

[Pramas]

Re: Beginning Inventory?

I'm still trying to figure out what the startup costs would be, and my biggest information gap is in the cost of inventory. If anyone who has or had a store can help shed some light on this, I'd be really grateful. If you don't want to post here, email me at sschuste (at) optonline (dot) net.

There is a Retailer Division of GAMA (the Game Manufacturers Association, the only trade org for our industry). They have started a Mentorship Program for people such as yourself. Basically, you can hooked up with an experienced retailer who can give you advice on what works and what doesn't. For more info, go here:

http://www.gama.org/index.cfm?fuseaction=sub&contentID=296&nodeID=5

The same group offers a whole string of seminars on retailing at the GAMA Trade Show (every March, in Vegas). If you are serious about this, I'd suggest attending. You can learn a lot.

Click here for more info on GTS:
http://www.gama.org/tradeshows/index.cfm?fuseaction=home&nodeID=4&action=Add

Good luck!

 

[Gamersrealm]

Could I do it any better? I’m an avid gamer, but I think of myself as a business-oriented person first. I’ve got an MBA and have 11 years of corporate experience.

I have literally grown up in this industry. My parents own a very large hobbystore (11,000 sq. ft) for 28 years, and I have owned and operated The Gamer's Realm, Inc. for the last 6 years.

In my experience, the MBA will mean little to you, other than some of the accounting lessons you may have learned. The corporate world experience will help in that it will give you insights on how to make your store "look" more professional than many other game stores. After all, when you walk into ANY store in your local mall, the fixtures are not homemade, the sign is lit and professionally built, etc. The biggest asset you need to have in ANY hobby-style retail business is an uncanny ability to relate to your customers... of all ages, races, sexes, and interests.

Now, I'm not in a position to leave my day job. I make a good living and support three kids, a wife and a mortgage that is way too large to leave the income solely to a new venture. If I hit the $50mm lottery ticket that’s in my pocket, I’d do it in a heartbeat (now that I said that, I’ve just jinxed my chances). I think that I can get some money together (personal and some investors) to open a store, and I’ve got someone in mind (a hardcore gamer and bright guy) to run it.

Ouch. Absentee management to start the business is a SCARY way to begin. No matter who the person is, and how good they are, they will not have the same level of motivation, dedication, and drive as you, the owner. Furthermore, you have to PAY that person to run your business... after all, they aren't going to work for free. I assume you also want to draw some sort of monies from the business to recoup your initial investment... a further drain on the business.

What I don’t have a very good feel for are the economics of running a store. If any of the ENWorld community that has experience in running a gaming store could help shed some light on this, I would be highly grateful. I’ve got a bunch of questions that I’ll list below. If people with experience could help out, either here, or if you’re uncomfortable posting “trade information” on a public forum, you can email me directly at sschuste (at) optonline (dot) net.

First, I will tell you to purchase my friend Dave Wallace's book "Specialty Retailer's Handbook." Dave owns a chain of seven comic/game stores in St. Louis for the past 20 years, and he covers EVERYTHING you will want to know regarding Bottom Line, Lease Negotiations, Customer Service, etc. Yes, as a shameless plug, we do stock it all the time. It will be the best $21.95 you can spend in this business.

Second, I am always willing to share numbers and data, even here on the 'net. You are also welcome to e-mail me or call me directly.

Background: I expect that (and would gear up for) the strong sellers/draws for a store would be the following products:

• Dungeons & Dragons / d20 Materials, books, minis, etc
• Games Workshop tabletop games (Warhammer, Warhammer 40k, etc)
• Magic: The Gathering (and other CCGs)

Correct... but do not let that blind you if some of those products do NOT sell well, while other products begin to shine instead. Remember, this is now your BUSINESS, so the games YOU like are less relevant than those that your CUSTOMERS like. Granted, if you and your employees like a product, it tends to sell better, but that is not always the case.

Questions:

• What are typical profit margins?

• 
  
  A typical store will get a 45% off MSRP on GW, and also on TSR/WotC products (unless ordering direct, which we do not do... for reasons I can go into later). On most other products, you should be able to get between 47%-47.5% off MSRP. There are also many accessory products where your margin may go as high as 70% or so, but those are generally small ticket items.
  
  [*]What would a normal week of sales look like?
  
  That depends on the volume you are doing. My first store does over $500k per year, with an average Friday and Saturday being around $2k, Sundays around $1500, and weekdays around $1k or so. Our second store has not yet quite gotten on track, and only does around $100k per year... with notably lower sales numbers per day. The dollar amount, however, is not as important as the costs involved, and where those costs are coming from, as I will go into in a later post.
  
  [*]Are there seasonal trends that I need to be aware of? Does the December Holiday shopping season have a significant impact on business?
  
  The December Holiday Season definitely has an impact on sales, but not as much as in some other industries... your mileage may vary. We typically do an additional 40% in sales during the 4th Quarter than any other quarter. Sometimes I wish it was a higher peak, but then again, I'm glad my company is not as reliant upon a single time of the year to maintain profitability.
  
  [*]How important is running organized play/leagues?
  
  Not as important as you might think. Tournaments and leagues do certainly drive sales of those products, IF you can get the leagues going with a relative minimal amount of effort. My recommendation is to get one of your customers to run the event(s) for you if at all possible. Many of them will do so for free, because the manufacturers throw them all kinds of perks. However, there are many products where, despite our best efforts to run events, we simply could not get a critical mass of players to show regularly, and yet the product still sells VERY well. HeroClix, MechWarriorark Ages, and Mage Knight currently fill that list, and the Warlord CCG also did at one point. We have tried and tried to run large events, and we barely get 4-6 people to show up, if that. Yet the product still sells. Remember, in the long run, what matters is money in the bank... if it is selling without running events... that equates to less labor costs for you.
  
  [*]How much space do you have/require for open/organized play?
  
  Zero. I know of many successful game/comic/hobby stores that have ZERO game space, and sell over $300k per year in games. Dave Wallace has at least one, and my mother's hobby store, Hobbymasters, also fits that description. Remember, the game space does not make you money DIRECTLY, i.e. there is no product there, and yet you pay rent for it. If you can generate enough ADDITIONAL sales from tournaments, leagues, and demoes, to justify the added expense of the empty space, then go for it. However, you will find that less than 10% of your customers actually ever use your game space. The vast majority of them, including many of your regulars, simply come in, shop, perhaps chat, and then leave... playing their games elsewhere.
  
  [*]Do you sell only gaming merchandise, or do you have other products (comic books, models, apparel)?
  
  We are predominantly a game store only... thus the name. We sold Gundam Wing kits while they were hot, and we do stock a few of the Toy Vault plush dolls for Holy Grail and Cthulhu. However, our ventures into jewelry and clothing were all failures, and we have no interest in comics outside of Dork Tower, KoDT, Nodwick, and a select few other gaming-related comics.
  
  [*]What is a realistic level of starting merchandise?
  
  Again... depends upon the store, and your target audience. Are you just a neighborhood game store, catering predominantly to the hobby gamer, or do you plan on stocking some of the more mass-market friendly products, and locate yourself in an area where more of Americana can find you? To give you an idea... we opened our second store with a $35,000 investment, of which some $20,000 was inventory. Granted, we had quite a bit accumulated over time in our first store, and some of it is, in hindsight, products we could have let this store grow into instead of start with. However, IMHO, a starting inventory of $15,000 wholesale will get you a WELL-STOCKED game store with a wide selection, and a minimal depth. Can it be done for less? Absolutely!
  
  [*]What am I not thinking of?
  
  HUGE LIST! HUGE! Insurance Costs. Rent costs. Location. Your monetary draw, and when you will begin taking it. Local Sign Ordinances. Advertising expenses. What type of business: S-Corp, C-Corp, LLC, Partnership, Sole Proprietorship? We can go on a long time.
  
  [*]Am I just fantasizing about a crazy concept, and is the reason that game stores are closing all over the place because it is not a profitable venture?
  

I draw a salary of $36k per year in NJ, plus have a company car (a 1997 Sebring LXi), and a cell-phone. I get to travel to Las Vegas once per year for the GAMA Trade Show, into NYC for the International Toy Fair, and often can be found attending Origins and/or GenCon, all as perks of ownership. Granted, I made significantly more when I was a computer programmer (back in the mid-late 80's), but I was much more miserable. I never have to worry about being laid off, and I am in control of my own destiny with regards to my success or failure at work.

The key to being successful in ANY hobby-type industry is to be able to separate your HOBBY from your BUSINESS. I rarely play any games anymore... due partially to a lack of time, and partially due to the fact that I am playing the ultimate in challenging games... "Run Your Own Business!" I truly enjoy the challenge of it.

I will try to post some numeric examples in a later post, or you may feel free to contact me directly for more detailed information.

Hope this helped, and good luck!

 

[Gamersrealm]

Some more thoughts for you, based on many of the other comments here... many of which are very useful.

Special Orders: Absolutely. Never turn down a special order. After all, this is a customer who WANTS to give you money, and may even have FRIENDS who are in to the same game. Use your judgement, but sometimes it is worth it to order a SECOND copy of the item at the same time... but be careful... it is too easy to get stuck with excess inventory.

Discounting: No way... don't do it. You cannot afford it. Period. I'll do some Bottom Line numbers in my next post to show you why. Now, this does not mean you cannot do some occasional sales and discounts here and there. We always run a Pre-Thanksgiving Weekend Sale and a Spring Clearance Sale... and try to use those to move some of our older, dead inventory.

The problem with a Frequent Buyer Program of some sort is this... by definition, these customers are already FREQUENT BUYERS. That means they are already spending money with you, and all you are doing is giving some of that money back. If you are going to offer an incentive plan based on discounting, at least find a way to do it that does one of two things:

1.) Encourages your existing customers to increase the amount they spend per visit, over and aboe the amount of the discount.
OR
2.) Encourages NEW CUSTOMERS to shop in your store, thus generating new income.

Having a Clearance Bin is a useful way to get rid of old, worn, or excess inventory, without discounting your regular stock. You'd be surprised how many people will happily take what you thought was "dead product" off your hands if it is at a 50% Clearance Price. We never go below 50%, since anything less than that, we are losing too much money. Any discount below 50%, you are better off donating the items, or throwing them out, and taking the tax-write off. Be careful not to be too quick to place items on your Clearance Shelf. You do not want your customers to get in the habit of "wait one month, and it will be on clearance". Make sure the items are legitimately dead.

However, I'll go over the Bottom Line information in another post, and you will see why regular discounting will kill you.

GAMA Trade Show: Attend it. Period. If you cannot afford the simple expenses of attending a trade show, then you cannot afford to be in business... end of statement. You will learn more there by networking with other retailers, manufacturers, and distributors than any other place or time. http://www.gama.org

Point-of-Sale System: Useful, but not necessary. Data mining is a wonderful corporate catch-phrase for "getting to know your customers". However, in today's world of Internet and Mail Order purchasing, Data Mining is simply a way to transform your customer into a series of numbers and data points. You are in a RETAIL BUSINESS and you will be facing the customers FACE-TO-FACE. Get to know them personally. You and your employees should know their likes and dislikes WITHOUT having to go to the computer to see what they bought last time.

Use the POS as an inventory control tool... but uise it as a tool... noyt a crutch. When a customer asks if you have something in stock, don't just look at your POS, and say "Yep, it's right over there." Take the customer to the product... find it, ask if there is anything else they need, or suggest other related items. If the item is supposed to be there, but is not, understand that you may have something as simple as a human error problem, to something as serious as a theft problem, and become more alert to it. However, neither Hobbymasters ($1.5M annual sales) nor Fantasy Shop (seven stores, over $2.5M in sales) have POS systems.

Nice to have? Yes. Necessary? No.

If you do go with one... my recommendation, and a growing one for the game industry, is Quicksell2000. http://www.tarsuspos.com

Advertising: Do lots of it in the beginning... local school newspapers, perhaps a story in the Entertainment section of one or more local papers, Yellow Pages, and a website. We've never had much success with ANY kind of print ads other than the Yellow Pages, and they can be expensive. Yellow Pages will NOT negotiate, no matter how many ads you take in how many books. Our website generates just as much NEW LOCAL business for us as our Yellow Pages do, and at about 1/10th the cost. TV ads can be pricey, and we've had zero success with the various Clipper Magazine or Coupon Mail-Pak things. However, in talking to many other stores around the country... your mileage may vary.

Atmosphere: CLEAN and FRIENDLY!!! Check with your township... find out their sign ordinances, and then get the biggest sign they will allow, and you can afford (in that order). A good, back-lit should cost around $1200-$1500 or so, and amortized over five years, is a minimal expense. Dunkin' Donuts does not have cheap signs, nor does Exxon, nor Burger King. Consumers expect professionalism, and there is no reason why a game store can't exude the same.

Keep your mass-market friendly items towards the front of the store. In other words... Pokemon, Yu-Gi-Oh, Star Wars, Monopoly, Scrabble, Bumper Stickers, Risk, etc. These are all items that Mom and Dad Americana know, understand, and do not FEAR. Your regular, and even your less-than regular hobby gamers who are looking for Warhammer 40k, D&D, Magic, and Vampire will all either find it on their own, know where it is in your store, or ask you specifically. However, the last thing Mom and Dad Americana want to see are Demons, Devils, Magic, and Vampires... despite their affinity towards Harry Potter and Lord of the Rings.

Buy new fixtures... or if you buy used, make sure they are in GREAT condition... and MATCH.

Slatwall... Slatwall... Slatwall. Need I say more?

Bright white lighting. Period

Aisles that are at least 3 feet wide... preferably 4 feet. This is not just for handicap-accessibility issues... the store LOOKS nicer. Your customers will appreciate the ability to pass by each other comfortably.

Snacks: If you have a gaming area, by all means, have a soda machine and a snack machine. We have a service who takes care of the machines for us... they own them, we set the prices based on the costs he tells us, and once a month, we get a check for the profit. Sure, I might be able to make a higher profit on the snacks and candy, but we do ZERO work, and get a check each month for it. Further, we also allow the kids to bring their own food and drink into the gaming area. Some stores do, some do not. Your call.

Computer LAN: Our first store has a very successful LAN of 8 computers, generating some $2k-$3k per month in revenue, with little expense. In our second store, we just got rid of the LAN in favor of more gaming space, since it was hardly generating any income at all. Again, I know some stores these work for, and some they do not... your mileage may vary.

I think for now, this is a lot for you to digest. Once again, I hope it helps.

 

[Sam]

Re: Re: Beginning Inventory?

There is a Retailer Division of GAMA (the Game Manufacturers Association, the only trade org for our industry). They have started a Mentorship Program for people such as yourself. Basically, you can hooked up with an experienced retailer who can give you advice on what works and what doesn't. For more info, go here:

Saw that on the GAMA website. The only problem is you have to be a member of GAMA and already have a retail gaming store to qualify! I've sent an email asking if there's any other assistance/information that they can offer, but haven't heard anything. That was only 3 or 4 days ago. Not sure how quick they are to respond.

I've been toying with the Las Vegas show. I don't have any vacation scheduled for around that time though. I'll have to think about that more.

Thanks for the info.

--Sam

 

[Sam]

Rob, wow! Thanks for taking the time with so much great info! It answers the questions that have been bouncing around in my head.

First, I will tell you to purchase my friend Dave Wallace's book "Specialty Retailer's Handbook."

Already ordered. Heard about it on the RPG.net boards. Haven't gotten it yet, but I'm anxiously awaiting it.

Second, I am always willing to share numbers and data, even here on the 'net. You are also welcome to e-mail me or call me directly.

Well, since you offered, I'm going to take you up on that. Thanks.

How important is running organized play/leagues?

Not as important as you might think.

Interesting. I'd like to have space for people to play. I'd like to have things going on all the time and people playing all the time. I don't want to do it to lose money though. Most of the gaming stores in this area have some places for people to play. I'm going to do some market research tomorrow; visiting other stores on Long Island. I'll have to see how important having tables are for them.

However, IMHO, a starting inventory of $15,000 wholesale will get you a WELL-STOCKED game store with a wide selection, and a minimal depth. Can it be done for less? Absolutely!

Wow! I don't know why, but I had a MUCH higher starting number in mind. North of $30k. This really changes the initial startup picture.

Special Orders: Absolutely. Never turn down a special order.

I just can't understand why retailers WOULDN'T want to do special orders. Seems like basic common sense. You get an order with no inventory. I suppose if you get burned alot it will hurt, but if that starts to happen, you can require a 10% or 20% deposit to order some high ticket item (like a Warhammer army or a full Master Maze set).

Discounting: No way... don't do it. You cannot afford it.

Already leaning heavily towards this. The people that are going to order online, will.

Having a Clearance Bin is a useful way to get rid of old, worn, or excess inventory, without discounting your regular stock.

Great point. How long do you normally wait on an in-stock inventory item before putting it into the bin?

GAMA Trade Show: Attend it. Period.

You're the second person today who has been adamant about that. I hadn't planned on attending (at least not this year) but I think that I'm going to have to revisit that decision. Perhaps I'll see you there and you'll let me buy you a drink to thank you for all this great info.

Point-of-Sale System: Useful, but not necessary.
If you do go with one... my recommendation, and a growing one for the game industry, is Quicksell2000. http://www.tarsuspos.com

I'm going to check that one out. Thanks. Since I'm not going to be the full time manager, I'm going to rely heavily on the POS system for trends, hot items, stale inventory, etc. Things that I'm sure I would know more intuitively if I was in the store all the time.

The rest of your points are great too. I am making sure that I save all this information to use as a reference. If you don't mind, I'd like to give you a call or shoot you an email if/when more specific questions come up.

Where is your store. Perhaps I could stop by one day if I'm in the area?

Thanks again,
--Sam

 

[Gamersrealm]

I'd like to have space for people to play. I'd like to have things going on all the time and people playing all the time. I don't want to do it to lose money though. Most of the gaming stores in this area have some places for people to play. I'm going to do some market research tomorrow; visiting other stores on Long Island. I'll have to see how important having tables are for them.

Again... what you will find is that MOST of your customers, even your regulars, will NEVER use your game space... less than 10% of them ever will. However, game space, when properly utilized, can do worlds of good for your bottom line.

Wow! I don't know why, but I had a MUCH higher starting number in mind. North of $30k. This really changes the initial startup picture.

You can spend quite a bit more... and I would almost recommend doing so. However, you must remember that all of your initial inventory purchases are based on ASSUMPTIONS of what your customer base will buy, not hard data. It is better that you only order ONE of any item, and if you sell out, re-order it, than to order two, and be stuck with them. Remember, product on the wall does NOT equate to money in the bank! You can make a game store LOOK very full by face-out displays with $15k in inventory. I would think $20-$25k is a better number, but you will build your inventory levels over the first three years based on what your customers ask for... remember... Special Orders = Data Mining!!!


I just can't understand why retailers WOULDN'T want to do special orders. Seems like basic common sense. You get an order with no inventory. I suppose if you get burned alot it will hurt, but if that starts to happen, you can require a 10% or 20% deposit to order some high ticket item (like a Warhammer army or a full Master Maze set).

I don't either. We rarely get burnt on any of them, either. When we do, we generally do not worry about it... simply put the item on the shelf for sale. We only require deposits for extremely unique items we would not otherwise stock (50% down), or on exceptionally large orders ($200 plus... 20% down generally). Granted, even I've screwed up a few special orders in my times... lost them, forgot to order it... I am human, and I kick myself when I do things like that. However, in most cases, the customer places the order, we get the item, a sale is made, and a customer is happy. There is no better way to make a new regular customer than to be able to acquire that item they have been searching desperately for.

Re: Not Discounting. Already leaning heavily towards this. The people that are going to order online, will.

Correct. The fact is that discounting is here to stay. If you offer 10% off, I can offer 15% off. Some guy onm the 'net can decide to offer 20% off, and some kid who just inherited thousands can offer 30% off... it is a no-win situation. The customer who is only interested in price is not your customer, and never will be. You need to cater to the customers who will appreciate your store for the service, selection, knowledge, and friendliness of the business... not the price point. Obviously, we are on the Internet while writing this, so I expect to get flamed tremendously now.

Great point. How long do you normally wait on an in-stock inventory item before putting it into the bin?

Hard to say. It's more of a "play it by ear" thing. D20 products are arriving faster than rabbits multiply, so I am a lot faster with the Clearance Trigger on those. Plus, we order less and less of the smaller and newer D20 company products for regular stock... they simply do not sell well enough. Other items may take 6 months or more... it's more of a shelf-space issue for me than anything else. If I have nothig else to put in the Dead Item's space, then I do not worry about it... but as soon as I need the shelf/wall space for something better... poof... the Dead Items are Clearanced, Donated, or Trashed.

You're the second person today who has been adamant about that. I hadn't planned on attending (at least not this year) but I think that I'm going to have to revisit that decision. Perhaps I'll see you there and you'll let me buy you a drink to thank you for all this great info.

I was adamant because I met Dave Wallace there, and learned more from him in that one meeting than all my 20 years in this business had taught me. Further, I am a firm believer that if anyone is SERIOUS about being in business, then the expenditure of airfare and a few hotel room nights should NOT be a major expense, nor a deterrent. Keep in mind, all the food functions are paid for by the manufacturers, and you can easily walk away from the show with enough freebie product to more than make up for your travel and room costs!

I'm going to check that one out. Thanks. Since I'm not going to be the full time manager, I'm going to rely heavily on the POS system for trends, hot items, stale inventory, etc. Things that I'm sure I would know more intuitively if I was in the store all the time.

Shoot me an e-mail, at Rob@gamersrealm.com, and I will send you the PDF files of their manual and reference guide for the program. While you willnot have the program to work with, it will give you some good insights into its capabilities.

The rest of your points are great too. I am making sure that I save all this information to use as a reference. If you don't mind, I'd like to give you a call or shoot you an email if/when more specific questions come up.

You can reach me this evening in my Cinnaminson store (856) 829-2900, and when I am not there, I am in my West Windsor store (609) 426-9339. Feel free to call me at either store, at any time.

Where is your store. Perhaps I could stop by one day if I'm in the area?

We get lots of customers that come down from the Long Island area. Feel free to stop by. The West Windsor store is just off Exit 8 on the NJ Turnpike... just east of Princeton.

2025 Old Trenton Road
West Windsor, NJ 08550

Feel free to keep asking questions!

 

[JohnNephew]

Listen to Rob.

Attend the GAMA Trade Show.

I don't have the retail experience Rob does, but I'll reinforce this point, from years of visiting game stores worldwide: Every one is different. Take a light shotgun approach on your initial inventory (lots of core rulebooks, stand-alone games, few esoteric supplements and adventures), and hold back your reinforcement capital to invest in the direction that your customers take you. Games that are hot in one town are dead in the next. Word of mouth is the strongest advertising force in this industry, and that means that popularity is driven chiefly by local player networks (or internet-centered player/fan networks and communities, like ENWorld and RPG.net), not by nationwide or regional ad campaigns. In fact, the value of advertising for manufacturers is typically pretty lousy. Anyhow, it would suck to blow your capital on an initial inventory and then not be ready to react immediately as your customer trends become apparent.

Another thought: Maintain a healthy selection of the kind of games that gamers can buy for "non-gamers" (e.g., Apples to Apples for parties, Once Upon A Time...Gother Than Thou as a gift for the goth crowd, Survival of the Witless as a light-hearted gift for academics...), especially in the holiday season.

If you attend the GAMA trade show, ask each manufacturer, "Suppose I am opening a store, and I can only afford to stock # of your products before the doors open. Which should they be?" "#" depends on the size of the manufacturer, and how many products they have. For instance, Atlas Games has something well past 100 different titles in print, but to a starting store I could probably find 10 or 12 that would really make sense to start out with. With those "fishing lines" in the water, you'd be able to choose where to go deeper. (If someone comes in and says, "Hey, I love this RPG! Do you have any of the supplements?" that tells you where you might toss some follow-on inventory dollars.)

-John Nephew
President, Atlas Games