Industry Advice for buying a hobby game store

[Rothe]

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

I think that is good advice. Given a choice I'm much more likely to purchase from an acutal physical store, a few pictures that lead me to believe it is a real store works wonders in confidence. Internet retailing and e-bay auction/buy it now (especially if you sell collectibles) seems like a good way to do things at inceremental cost. It might also provide an outlet if you are into older RPG materials but don't have shelf space for them and want to reach a wider audience.

 

[Rothe]

Pendragon67, do you have a business plan? If you don't write one, you'll likely need one for any business loan. That should tell you the tale. The current owner, if he is serious about selling, should let you look at his books and tax returns for the business so you can get an idea of the value. If you are not good at looking at such things get an accountant. Also get an attorney for the final deal to make sure you are not getting stuck with anything and also to look over your, lease etc.

 

[Imruphel]

DON'T.

That's really the best piece of advice anyone can give you. Really, how many successful FLGSs are there?

Three basic questions:

1. Why do you want to do this? Do you have an underlying plan or strategy or is this just an opportunity that you have spotted that you want to try and capitalise on?


Honestly answer the question: do you really have any idea about why you want to do this? Is this a business decision or just a piece of fantasy? (I'm not suggesting that you post your reply here!)

2. Do you have a job already? If so, why do you want to leave?


I'm not suggesting that you post your answer to this question: it's actually here as a strong suggestion that you seriously consider your options before you attempt to buy this "business".

3. Do you have any experience with running a retail business?


Honestly, retail businesses are difficult even if you really know what you are doing. If you have no retail business I would stay right away from any retail business opportunity (unless it's a franchise with good franchisee support). That goes doubly so for a hobby game store because it's not so much a business as a hobby.

 

[havoclad]

As several people have said, "Don't" is the best answer.

There was much other good advice, so I'll only hit a couple high points. I've co-owed a business for 13 years now, although I haven't been involved in the day to day for over half that time.

My biggest mistakes involved impulse inventory purchases. I couldn't resist buying another store's failing inventory for pennies on the dollar. I was still a game collector at heart. How could I turn down 800 new lead miniatures for $200? Be very careful with your money. If inventory isn't selling for you, get rid of it. Put it on eBay, or have a sale table. 25% off this week, 50% off next week. Keep going until you get something for it. Stuff over a year old will choke your shelves with worthless crap.

My best success was customer service. People came to my store on Saturdays to see me. I knew more about board games or D&D than any other retailer in town. I was willing to demo nearly any game to let folks try it out. I greeted most customers by name and knew if we had something new in stock that would interest them. After I left, average Saturday receipts dropped from $1500 to $300 for our small shop.

Why did I leave? I finally had to admit that it was a hobby and I needed to earn more money. It was still the most fun I've ever had working (by far) and I continually second guess my decision.

Good Luck!

--Pat

 

[eyebeams]

Use the pull list model (used in comic stores now) for most RPGs outside of D&D and one or two other lines. Unsold stock is a huge problem. Use Ebay to regularly offload anything that isn't moving.

Most importantly, compose a business plan good to your first year and get an accountant.

 

[Mistwell]

Do you have an attorney representing you for this transaction?

If not, I can give you some free advice (however I still suggest an attorney). For example, I could give you a list of some documents and answers you should have before deciding to buy this company.

 

[Andor]

Lots of fine advice here. If you haven't already, you should contact GAMA. Their retailer division has a mentoring program where they will find you a mentor (from another area, not a competitior) to help answer a lot of these questions, and others you haven't thought of.

 

[Chimera]

A clean, presentable store is a must.

Bingo! Like others have said, clean your restroom often. Keep a can of very strong air freshener sitting in there for general use when needed. A can of Lysol wouldn't hurt either.

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).

So have I. For one I can remember way back in the day, it didn't help that the guy was surly and sometimes would just not show up. After the second time I drove 20 miles to that store to buy something, only to find that it wasn't actually open during business hours, I went to great ends to find alternatives, then never went back to his store.

Employees should be friendly with the customers, but should not allow the customers that are friends to break the rules.

No, I will not sell you all your gaming materials at cost just because you are my friend.
(you would if you were my friend!)
And you wouldn't even ask if you were mine.

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.

QFT

 

[DonTadow]

Try to have a strong web component to your store, not neccessarily an online store, (though that would be great) but a strong online presence. Don't diss other hobby stores in the area. I've seen one store near me fail miserably after going after the big dog. Yet I've seen another store succeed tremendiously in working with the (now once) bigger store. If youre store is better, people will see that.

Don't mix gamers too much in your game area. The one store near me did something brillaint. They seperated their area into two rooms. One large room is for the card players, it smells and reeks of teenagers and kids all the time. The other room is a quieter room for RPG'n and board games. The crowd is older.

Be a good business person first, gamer second. Don't buy a lot of one obscure title because you like it. Buy what sells, special order for your customers what doesnt. Don't be afraid to clear the nventory of non sellers and make only a slight prophet on it.

 

[Steel_Wind]

First:

... don't.

Second:

Find your niche. Every hobby game store that survives has one. For example, locally, we have:

1- 401 Games: A local convenience store that turned into a CCG store by accident. . Their schtick? Cards, space to play, cheap mainstream RPGs. Lowest prices in town. It is always cheapest there. They depend on volume.

2-Hairy Tarantula: Traditional Hardcore RPG Game / Comics store. A comic shop that became more focused on games over the years. Their Schtick? Large RPG inventory including a lot of more obscure titles. Has lately been focusing more on boardgames though. Reason? That's where the money is.

It has not helped that their three seasonal sales are predictable enough and significant enough in savings that people find themselves not buying for two months to just wait for the 30%-40% off sale in two months time.

Sales are good. Regular predictable sales that come more than twice a year are a bad idea, imo.

3- Dueling Grounds: Card and Miniature Store. Lots of singles for sale. Their Schtick? Large brightly lit area emphasizing 800 sq, feet of on site play space. A *lot* of tournaments. Every week something new.

Another store cloned this model and offered painting areas (and paint!) emphasizing War Machine. Otherwise, a clone of the other. It's a big enough city and the stores are far enough apart that it works for them.

4- Gamerama: Miniatures and used DVDs and Computer Games. Their Schtick? Empty used games and DVD boxes accessible to customers. All packaged product behind a long counter running 60 foot length of entire store. They have virtually no losses due to theft.

Brisk used computer/video game business has a lot of product turnover with high margins. New games sold as they have to - but the money is in used games. Miniatures business is extensive GW as the profit margin is obscene.

I could tell you stories of the general hobby games stores too. They open from time to time. The problem is - they close just as often. It's a tough retail business to be in. Whatever you do - you need to find your niche to survive.

Third:

You are running a business. You need to sell products that sell well with reasonable return. Right now, that means: CCGs, Collectible Miniatures, Boardgames and toy figures.

RPGs, you see, are available online in pirated versions for free. That's a price you cannot ever meet. Others are sold online as well - at a price you cannot ever meet. While you can sell some of that product line, concentrate on WotC product lines and avoid stocking too many products that don't sell. The generalist hobby store / comic shop has not fared well under internet competition. Carrying too much D20 inventory is death.

Fourth:

Most of these ventures fail. Thinking yours will do better is probably dead wrong. Finding a reason why yours won't - and pursuing that vision with clarity and purpose is important. If you aren't where you want to be within two years - you probably won't ever get there. Get out while you can.

Establishing that niche when you are buying a failing game store will be very hard. You are buying *some* goodwill, yes. But it clearly does not have enough - that's why the owner is selling.

Buying all that inventory and leasing new space with a new name might be a better deal.