Industry Advice for buying a hobby game store

[Michael_R_Proteau]

The number one cause for small business failure in any industry, let alone the hobby industry is cash flow. Make sure you have enough cash flow to pay all operating expenses for several months without needing to use current income. Without that kind of cushion, you will run into cash flow problems, which in turn will limit your ability to acquire merchandise to sell to generate the income you need to solve your cash flow problem. This will create a vicious circle and the end of the spiral will be a failed business.

The only thing brick and mortar stores have to offer over discount online retailers is a place to play and customer service. You will likely not be able to match them in selection or price, so make sure your customer service is top notch to give every customer a reason to return to your store.

Make sure you know all the local statutes regarding zoning, insurance, serving food and beverages, etc. if you are going to offer a place to play. Some localities require much higher levels of insurance if you are going to allow minors to play without parental supervision to cover liability. This in turn means you need to spend more on insurance, increasing your operating expenses. Others require separate licesnes to have vending machines or to serve food and drink on premises. Also be aware of health codes and the standards required to serve food and drink on the premises.

Know the strengths and weaknesses of your location. Is there plenty of free parking available? If you want to run events there, people need to be able to park easily and cheaply or they will not attend. Are there limits to your operating hours in a certain location? A mall location brings high traffic, but you have to set hours by their standards as a trade off, so events can be difficult to schedule. What are foot and car traffic patterns in your area?

Have a storefront that is appealing to the casual customer. Most hardcore gamers will come regardless, but if you want to increase your customer base and thus increase sales and profitability, you need ot attract new customers and turn them into repeat customers.

Track your inventory closely. Know what you have, how many units you brought in, how many units moved etc. so you can determine sales pattern and set your ordering patterns accordingly. It also aids in loss prevention and tax preparation.

Stock impulse sale items near your check out, clearly visible and accessible.

Make sure that when you work at the store, you are working and providing customer service not indulging your interests and playing games. If you hire employees, make sure they understand this is expected of them as well. Providing demos in one thing, ignoring customers to play World of Warcraft during operating hours or to play a skirmish with some buddies will only cause you hardship and difficulties in the long run.

Know your merchandise so you can answer customer questions. Make sure your employees can do this as well.

Before you decide, create a business plan (or commision one if you do not have the skills) and if you decide to acquire the store, implement it, do not ignore it. It may be a hobby store, but it is your business and your source of making ends meet unless you intend to keep your ay job as well as run the store.

Advertise effectively and efficiently. This requires knowing where you might be able to find potential new customers. An ad in a local college newspaper will likely be less expensive and more effective than a similar ad in the regular local newspaper. One local store has had great luck in advertising through the local cable company on the Sci-Fi channel and on GAC. Never underestimate the power of a yellow pages ad and getting on a store locator list via Diamond/Alliance etc. An up to date web presence and a yahoo group or something similar that allows customers to network and find fellow gamers are also effective tools at building a larger customer base and building customer loyalty.

Offer an incentive program for regular customers. You might want to model it after comic book store pull systems. When a book or a series comes out, you put aside a copy for customers who request it. This allows you to gauge number of units that are guaranteed sales and to gauge better how many you will need for in store shelf copies for casual buyer sales. This also helps you as you track inventory. A regular customer who buys all the Goodman DCC's or all the WOtC books knows the product will be there for them. You know they will sell and offer a discount on those items for the guarantee. It allows you to reward regular custmers and gives an incentive for customers to let you know ahead of time which products they will definitely buy. Again, building customer loyalty helps retain your customer base and gives you grist to compete against discount online sellers. Items that have a fast turnover keep the cashflow liquid. Tying up too much of your capital in product that is not moving is a death sentence for your business. Encourage high turnover sales so that you can afford to stock some slower moving items and keep a decent level of selection in store.

-M

 

[joshhg]

First off: Get a basic understanding of microeconomics. I’ve never run a store, but that class has taught me a lot already.

Go ahead and plan how much you want to make off the store ahead of time. Go ahead and count this as a cost, the same way that you would count a employee a cost. It is money you must make to pay off an employee: you. But don’t expect to make that exactly the first year, but don’t expect to make too low either.

Don’t be afraid of getting rid of merchandise that doesn’t sell. Don’t clutter up shelf space with a book that wasn’t popular a year ago. Sell it online for a bit and buy something new and more popular. Not doing this is a common mistake I’ve seen.
Yes, you may lose some money, but you can’t make money off a book that doesn’t sell.

A idea: Let your customers order books. As in, they ask for it, and you buy it off line. This is something a used bookstore does around here, and they just add on a little bit onto the price if it’s a new book. Even if you don’t make money off of it, you make a customer feel better about buying at your shop.

 

[Pendragon67]

THANK YOU EVERYONE for your thoughtful comments!!! The store already does sell candy and non-alcoholic beverages, is well lit and clean and has 4 computers loaded with games and online for rent by the hour. I have been advised not to expect much/any profit right away, but want to make a serious push to improve sales. I was curious if anyone had any suggestions on which way the industry was going ??

 

[EditorBFG]

I was the main employee/assistant manager of a store that failed, so I have some insight.

#1 - Try to make a small profit, but know there is no way you will make a large one. Just over enough to stay in business is a success store. And be prepared to operate at a loss your first year (both in actuality and for tax purposes), putting all money back into the business. Honestly, a game store is a rotten investment; this is a labor of love.

That said, don't act like you hate money.

Have lots of food or drink available. Most local authorities don't seem to mind selling sodas or candy out of a fridge. Allow outside food (unless you're gonna sell pizza) but not outside beverages except maybe water-- you should not have to compete with 7-11 to make money from the "hang out all day" people. Also, enforce strict rules about where food and beverage can be consumed-- pepperoni grease is not a selling point for the glossy color pages of $39.95 hardcover.

Run it like a bookstore, not a comic book stoe. Let folks browse as much as they want, but also remind them you haven't forgotten they are there. Have exactly one clock, behind the counter, which brings people into your line of sight to check it.

Make the gaming area and the browsing area as separate as possible. Demos are a little different, as you want people to get caught up, but for the most part games should not be played where people who may or may not enjoy interacting with strangers are shopping.

You'll make money on minis and cards, not gamebooks, but carry enough gamebooks to make you the place people come to when they want to order something no one has locally. Competition will make this more complex. Also, for gamebooks, it is a good idea to have some kind preferred customer card that gives them a discount to compete with Internet prices. This card should probably cost money, and maybe come with some other cool bennie, but should probably not cost more than 10 bucks.

Board game interest is hard to gauge, so you need to assess your local market.

Be firm about the not letting kids in during school hours thing. Kids playing hooky are not good customers.

For employees, have uniforms (not degrading ones) if you can help it. They should not be hard-selling customers, since some will be put off by social interaction of any kind, but they should make it clear they are there to answer questions, not sit behind the counter reading The Book of Erotic Fantasy. Enforce some kind of grooming standard-- you can't outlaw facial hair and beards, because this is a game store, but no employee should obviously not have showered that day (if they can skip a shower every so often without looking or smelling like a carny, that's okay). Deodorant should be mandatory for folks who work for you-- you might even want to have a spray can on the premises. I'm only half joking on that.

Theft is a constant problem. Keep items likely to be stolen in easily watched places. Have a key for the restroom, and if possible have it near a workstation to let people in and out yourself-- much shoplifting is accomplished by sneaking the book into the bathroom, then moving it to a less conspicuous hiding place.

If you can maintain the inventory, we found renting and selling anime profitable, with a lot of customer crossover.

Cleaning the restroom will suck. Do so often anyway.

The most successful game store I have ever seen is Endgame in Oakland, CA. They wear uniforms and operate a clean, well-lighted store with a memorable color scheme that enforces a strong brand identity. If you are not in the area (and therefore not a competitor) contacting them might not be a bad idea, they seem like nice folks. And unlike me, they might have a little bit of up-to-date market data.

 

[thedungeondelver]

THANK YOU EVERYONE for your thoughtful comments!!! The store already does sell candy and non-alcoholic beverages, is well lit and clean and has 4 computers loaded with games and online for rent by the hour. I have been advised not to expect much/any profit right away, but want to make a serious push to improve sales. I was curious if anyone had any suggestions on which way the industry was going ??

In response to your first question: don't. That's my advice. With a caveat: if by "game store" you mean pokemon, magic, click-base games and whatever other Flavor of the Week game, yeah, you might squeak by.

If on the other hand you mean "D&D store" then...no, don't.

If you absolutely positively MUST do so, then please buy a copy of A SPECIALTY RETAILER'S HANDBOOK: GAMES AND COMICS by David and Kelli Wallace. Read it cover to cover and then ask yourself if you still really want to do it.

 

[Queen_Dopplepopolis]

A clean, presentable store is a must.

Knowing your product - ALL OF YOUR PRODUCT - is also a must. When I worked at Wizards, I spent weeks reading the rules of essentially all games. On slow days, I'd crack open something that I had never played and grab a few customers to learn with me. More often than not, they bought the game AND I learned how to play it so I could recommend it later.

Owning a game store is hard because there is a fine line between an awesome game store and a niche shop that is doomed to failure... and, far too often, game store owners end up on the "niche shop" side of things and have no appeal to the non-gamer. I suggest carrying a variety of board and party games in order to avoid being too cut off from the typical consumer.

The uniform is a great suggestion. A nice polo with your store's name/logo on it is fantastic. Be sure that all of your employees have at least two - if not more - of them to prevent people from come in in dirty work clothes.

As for the way the industry is going... geez. It's hard to say. FLGSs are floundering because you can buy your products for SO MUCH cheaper at Amazon. You need to give your shoppers a reason to buy... and a reason to keep coming back. With each purchase of $50, give your shoppers a 10% discount of their next $50 purchase - so long as it is made in the next 30 days. Give away computer-game time for a purchase of so much.

Promote your events! Put fliers in every bag. Have signs up that advertise. Don't make the next 40k tourney information for those "in the know."

Demo! Demo! Demo! The "next big thing" will only be "the next big thing" if people get a chance to play it. Always have a nice, neat demo table ready to go... and change the game often!

Always greet your customers, but don't be forceful. "Hi and welcome! My name is [insert name here] - is there anything I can help you find?" is all you need... if they say "Yes!" Help them find it! If they say "No!" let them know that you'll be happy to help if they need it and let them go about their business.

Have good hours. That means being open in the evening. Sucks, but if you're open banker's hours, no one is going to come (you laugh, but I've seen a store do just that).

Employees should be friendly with the customers, but should not allow the customers that are friends to break the rules. Professionalism is essential. This means, if there's a no eatting at the computers rule, that rule needs to be followed regardless of your relationship with the person working at that time. If there's no holding of new releases, there's no holding of new releases despite the fact that you're BFF with an employee. (that really pushes my buttons!)

Also - if you hire your friends to work the store - make sure they can handle shifting in and out of their professional roles with you. Don't hire friends that will make crappy employees/won't respect you as a boss. That only causes trouble.

And I'm done rambling for now.

 

[Kunimatyu]

Be a FLGS that also happens to be a discount Internet gaming retailer. It's the only actually profitable model in existence right now.

 

[00Machado]

Things I've seen that I like
*Space for gaming, either inside the store somewhere, or in an adjunct area. From a customer perspective, I think having somewhere I can game without foot traffic is optimal. From a business perspective, I think having games (especially board games, card games, miniatures games, and terrain dioramas where customers can see them lends itself to people wanting to buy more stuff. Cool terrain equals people wanting to game with that setup)
*Know how to play games, how to teach games, and recommend things you're customers will like based on your knowledge of their preferences - then introduce them and others to it so that they're likely to pick up the game together.
*Invite spectators to play, to watch, and kind of explain what you're doing and why even if they don't join in. Maybe even let them demo the game when you're done. Fast resolution games are especially good for this.
*Web sites of scheduled activities in and related to the store.
*Friendly employees - good with adults, friendly to kinds, outgoing without being pushy.

Things that I've seen that I haven't liked.
*Poor selection
*Prices more expensive than I can get online/elsewhere. I'd suggest giving your regulars a price break that makes it attractive to shop at your store. One play I used to spend $100 - $200 a month at gave me a discount of 30%.
*Cramped, dirty, dark, poor air circulation.
*Employees who aren't the types of people you want to hang out with. Pick your favorite social turn off: weird, unshowered, new agey, pushy, ignores customers and reads their game books behind the counter, YMMV, but you get the idea. Hire people that are pleasant your people of all ages to talk to.

And good luck. A good game store is a boon to the industry.

 

[Varianor Abroad]

One minor, geeky, but important customer service tip. Don't ask customers any variation on "Can I help you?" One easy answer is "No!" Use "How can I help you?" Makes a world of difference.

 

[William drake]

Hello. I was hoping for some input. I am considering buying a hobby gaming brick and mortar store that is for sale in my neighborhood. I have done some industry research and in addition, wanted to run this by the rest of you. Has anyone out there ever owned/owns a hobby games store and would you have any advice for someone just getting into it? There is an established customer base here with the local high school and they have regular scheduled promo nights (like Magic the Gathering). Would you suggest any other marketing/sales tactics or any other lessons that you have learned from your own experiences and knowledge of the industry? Thanks!!!

Well, best of luck.

Now, for a bit of the advice: in my area there have been three gaming/comic stores and I'm sorry to say that they've all gone under, the gaming stores sooner than the comic store.

Fist: I would advise no instore computer games: linked for multi play or othewise. Reason: everyone has the internet, and every one plays the same game you can offer but with a larger crowd, faster speed, and cheeper a the end of the day.

Second: if have warhammer games or other terrain table-top games, don't make it free. Don't allow for these quality tables, with trees and water, and everything be played upon by people who bring in theirown armies, use your table and pay nothing. A few dollars an hour, for these great pre-made terrain tables isn't to much to ask, and most gamers wouldn't mind paying if that means that their game shop, the place where they spend time for their hobbie, will be kept up and running.

third: offer as much as you can for anything you run. If people play warehammer, offer the novels. If people play D&D offer the magizines and other reading materials for the hobbie. Offer the paint and brushes for all the minnies that you'r selling. Just offer, don't tell them you can get it online, becuse if you can get it online, than they can, which means that they dont need you.

fourth: run games....run them, make sure that everyone knows that you can do Mage, WOD, Rifts, Shadowrun or anything else that they want. Do gaming nights, find DM's. Keep the gamers coming to your shop, if you don't they'll go else where and buy elsewhere.

fith: keep everything that can be tied to another hobbie in the shop: comics, movies, books, posters...anything, you don't have to buy alot of them, cost is a point and extra space being taken up with this inventory, but keep some. Buy enough so that customers see that you have it, and buy more only as the need demands.

sixth: advertise!!!!!!!!!!!! You've got to spend money to make money, go to all the places where you'd know gamers to be, and use the net; talk up your story on every local site you can find.

seventh: food, drinks and are things are good, but only sell them for as long as you make money back, not just enough to keep restocking them.

eighth: nothing is free, but don't try and oversell things so that your making more back then you should. Everyone knows your out to make money, but you're not the oil companies, we don't need games or comics, we can do without or go else where, you dont have the monopoly. Remember this, and charge so that your customers know that your giving them a good deal, while keeping a few bucks for yourself. You're after return customers, and word of mouth sales...that wouldn't happen if people feel cheated.


That is about it.

Remember, you're getting into a store where your not going to make alot, but, if done right, you can live off of it and perhaps grow. A

A short story, the gaming store just up the street from me, was opened for the owner and his few gammers friends. (they all worked it, owned it, or both) in truth, at the end of the day, they took upon themselves the store for a place to game, it wasn't a job and that's what made it fail. Ofcourse you want to have fun, and enjoy what you do, and be involved in the hobbie and comics and everything, but you're running a store and that must be kept in mind first and foremost.

Keep posting, I love these shops, and wish more would make it.

Game On