how do FLGSs make money?

[Morrus]

90% of sales in the US might be direct, but that's misleading. That includes groceries, car tyres, beer, high end electronics, vehicles, snacks, sandwiches, coffees, newspapers, etc.

Relevant sales - hobby market sales - is a very different story.

 

[Gareman]

90% of sales in the US might be direct, but that's misleading. That includes groceries, car tyres, beer, high end electronics, vehicles, snacks, sandwiches, coffees, newspapers, etc.

Relevant sales - hobby market sales - is a very different story.

Yes, and that type of story would be a mystery. Nobody knows. What we don't know about the game trade is staggering and should make anyone who wants to get involved with it pause for a moment.

Nobody knows:
a) How many game stores there are (probably 2,500 to 3,000)
b) What even constitutes a game store, which would obviously effect A (game store owners don't agree).
b) How big the game trade pie actually is (I think it's about a billion dollars a year, with Magic about 25-30% of that).
c) What percentage of games are sold online (likely bigger than 10%, but nobody knows)

What we do know is the thousands of game stores out there now make their living selling hundreds of millions of dollars of games to brick and mortar customers rather than some form of business witch craft involving fizzy drinks and folding tables.

 

[Tanstaafl_au]

And if you go to five game shops, in 3-4 of them you will see most of those stereotypes in the flesh.

Most game stores I've been in don't make a lot of money. They're typically started by two or three people who love gaming and playing games, and they sometimes have some significant seed money from another source, or they have connections that get them the storefront dirt cheap, usually through a relative of some kind. They typically fold when the seed money runs out or one of other partners decides to do something else. Or they get caught hard by a trend they didn't see coming, like seeing your entire wall of 3E merchandise turn into junk overnight.

You might see one or two of those stereotypes, but I think it's confirmation bias if you are seeing them everywhere as the bulk of gamers.

 

[MBJwally]

It takes some deep pockets or a lot of loans, the mark up price for retail is also higher than most online retailers.

 

[evilbob]

Diamond Master: I've always wondered what that would be like, myself. I'd guessed it would be extremely difficult, but this thread and the linked blog above is enough to remind/convince me that I do not have the stomach for that much risk. Maybe when I win the lottery one day... (Is that a viable long-term business strategy?) But Gareman is right: it's even more daunting without more information about the trends and how the industry works. I've always suspected local shops were run by people high on optimism and hutzpah but low on experience and business knowledge...

Sidebar: Speaking of online sales vs. retail stores, especially in gaming, if it isn't too much to ask, [MENTION=1]Morrus[/MENTION], do you feel like EnWorld sort of straddles the line between being part of (and certainly supporting) a community that needs more localized gaming businesses vs. being an actual online retailer that potentially takes away from that local business? (This isn't meant to be loaded question!) I know your site promotes a lot of indie gaming development that probably wouldn't get carried in most FLGSs, so there's probably less direct competition, but gamer wallets are ultimately finite. At the same time, this is easily one of the biggest international sites I've seen for promoting gaming discussion and encouraging local gaming communities to come together. Anyway, just wondering what your perspective was, if that's not stepping over a line.

 

[Gareman]

Bottom line is it's brick and mortar retail. You have to embrace being a retailer and what that means for your business and your life. Retail is slow to change, resistant to progress, and resource poor. The money is bad and the hours long. It's often feast or famine (right now it's feast). Game retail is rife with whack-a-mole competitors, partners that compete directly with you for sales (publishers and distributors!), and a bar to entry so low that you could be selling games tomorrow with no minimum order. The majority of publishers in the game trade work from home, have day jobs, or otherwise act in a less than professional manner. The customers are fickle, incredibly price sensitive, not of particularly strong means, and new release driven. All the money is in CCGs, the most fickle customer base of all. It's a pretty hostile market.

It takes tremendous skill just to survive, yet luck can propel you forward or sink you like a rock. Very, very few game store owners start their business as retailers or wanting to be retailers. They start their business because they love games, which surprisingly, isn't even a requirement to succeed. It's often just an anchor that keeps you in the trade. And I'm told a lot of the skills are not transferable.

But it's kind of awesome anyway. You get to be your own boss, even though you work like a dog. You can get up late. You're surrounded by the coolest product ever and get to talk to people who share your interests all day long. If you like gaming, your vacations will likely be gaming vacations at GenCon and GTS. Taking home games is now "research." All your wage slave friends will be envious.

 

[Morrus]

Sidebar: Speaking of online sales vs. retail stores, especially in gaming, if it isn't too much to ask, @Morrus , do you feel like EnWorld sort of straddles the line between being part of (and certainly supporting) a community that needs more localized gaming businesses vs. being an actual online retailer that potentially takes away from that local business? (This isn't meant to be loaded question!) I know your site promotes a lot of indie gaming development that probably wouldn't get carried in most FLGSs, so there's probably less direct competition, but gamer wallets are ultimately finite. At the same time, this is easily one of the biggest international sites I've seen for promoting gaming discussion and encouraging local gaming communities to come together. Anyway, just wondering what your perspective was, if that's not stepping over a line.

I would try to answer the question, but I don't really understand what it is! EN World isn't an online retailer, though.

I don't have any desire or interest in supporting or not supporting FLGSs if that's what you mean. I've never had one (and have not suffered for that), so they're just a strange exotic foreign concept to me. Just not something that enters my brain.

 

[Diamond Master]

Tabletops can't exist without communities. That's my favorite part of this particular branch of retail.

 

[Olgar Shiverstone]

Tabletops can't exist without communities. That's my favorite part of this particular branch of retail.

Yet tabletop gaming communities can be healthy and vibrant without brick and mortar retail. 'Tis a strange conundrum.

 

[Naturafictor]

They don't make any appreciable amount of money. They really are an outdated/minimal value relic of retail, much like physical media and Best buys. There's no point to them anymore.