The Great Glut of Gaming Guides at "Go away" prices...

[Jefe Bergenstein]

Of course, if they're smart and they watch eBay prices, this might never happen. Certain books are only going to become more valuable as time goes on. It might be a long-term investment that won't help in the next couple of years, but if they keep an eye out for what's hot and what's not, they could possibly make a killing.

Not really. Look at the 2nd edition stuff... what sells for more than its cover price? Planescape stuff and... umm... drawin a blank here. 1st edition? The vast majority of it is dirt cheap.

 

[amethal]

I think you have to pay taxes on inventory anyway.

**** Apallingly simplistic example coming up ****

Dunno about other places, but in the UK your profit is calculated by taking your sales, knocking off the cost of the books your bought, knocking off the cost of the stock/inventory you started with and adding on lower of the cost / the sale value of the stock/inventory you have left.

So effectively you are paying tax on your closing stock.

Writing down your closing stock from its cost to its retail value is perfectly acceptable, nay required, if you aren't going to get back what you paid for it. Lying about it obviously isn't!

 

[Banshee16]

*sigh*

I've said this so many times, but the FLGS does not have the ability to deep discount those books. For most of them, the price generally reflects what they truly paid for it. Paid. Money is gone. The books can't be returned for credit and reissued to them as remainders. If they mark the books down, it's money out of their pockets. And if the customers don't want them now, they aren't losing anything. Someday, someone will buy them.

Someone like me, digging through bins for 2Edition books.

They can wait a long, long time with those books taking up valuable shelf space, waiting for that diamond in the rough willing to pay full price for them. Sometimes it's better to take a small loss than a bigger loss.

Banshee

 

[bento]

I don't get this "just sit on it until it sells for MSRP" stuff.

Say I'm a store owner and I buy four copies of a $40 title for 75% of MSRP from my distributor, for a cost of $120. I sell two copies at MSRP for a total of $80, I still loose $40 if those two copies never sell.

But if I sell those two copies a year later for 50% off, I'm at least breaking even. Then I have money I can use to invest in merchandise that will sell through, maybe at a better discount.

Locking up my capital in merchandise HOPING I'll sell it one day for MSRP is a long and nasty way to go bankrupt. Customers have too many ways to buy the same stuff at better discounts than MSRP. As a retailer it benefits me to get all my merchandise sold quickly at the best price, even if I end up losing a little on the slow stuff.

 

[Tetsubo]

I don't get this "just sit on it until it sells for MSRP" stuff.

Say I'm a store owner and I buy four copies of a $40 title for 75% of MSRP from my distributor, for a cost of $120. I sell two copies at MSRP for a total of $80, I still loose $40 if those two copies never sell.

But if I sell those two copies a year later for 50% off, I'm at least breaking even. Then I have money I can use to invest in merchandise that will sell through, maybe at a better discount.

Locking up my capital in merchandise HOPING I'll sell it one day for MSRP is a long and nasty way to go bankrupt. Customers have too many ways to buy the same stuff at better discounts than MSRP. As a retailer it benefits me to get all my merchandise sold quickly at the best price, even if I end up losing a little on the slow stuff.

Congrads! You are smarter than many GS owners... I know of one store that is a farking museum... items have been at his place for seeming decades...

 

[TheAuldGrump]

I'm not a lawyer, but I was under the impression that reducing prices on backstock inventory to reduce the tax was considered a tax dodge, and not allowed.

Errr, the point of reducing the price before tax time is to get it out of inventory for tax time - not a reduction in apparent value (which is indeed a dodge, at least if you mark it back up after tax time) but an inventory reduction - it gets taxed on what was actually paid.

The Auld Grump
*EDIT* And cash flow is a killer - I have seen seen more game stores killed by that than I care for. And one get shut down by the Feds... something to do with a big sign in their window saying 'We Sell Bootleg Tapes And Videos!' - for some reason they were convinced it was legal, even when others told them no, it wasn't....

 

[JoeGKushner]

I don't get this "just sit on it until it sells for MSRP" stuff.

Say I'm a store owner and I buy four copies of a $40 title for 75% of MSRP from my distributor, for a cost of $120. I sell two copies at MSRP for a total of $80, I still loose $40 if those two copies never sell.

But if I sell those two copies a year later for 50% off, I'm at least breaking even. Then I have money I can use to invest in merchandise that will sell through, maybe at a better discount.

Locking up my capital in merchandise HOPING I'll sell it one day for MSRP is a long and nasty way to go bankrupt. Customers have too many ways to buy the same stuff at better discounts than MSRP. As a retailer it benefits me to get all my merchandise sold quickly at the best price, even if I end up losing a little on the slow stuff.

I don't think that most store owners get 75% off. (Note I could be way off base here.) But based on that huge a percentage off, sure, they should do that.

 

[Crothian]

Congrads! You are smarter than many GS owners... I know of one store that is a farking museum... items have been at his place for seeming decades...

I know what you mean. There is a store around here that has like a dozen 3.0 PHBs at full price ($30).

 

[bento]

I don't think that most store owners get 75% off. (Note I could be way off base here.) But based on that huge a percentage off, sure, they should do that.

No - my assumption is the retailer pays 75% of what it costs MSRP, so they get 25% off.

I think in real life it's really about 40% discount, but I wanted the math to be easier.

BTW, went by a HPB on the way home and saw the glut of Eberron and other WoTC 3.5 books on their shelves that other posters talked about, and I still couldn't bring myself to buy any of them.

I must really have all the 3.5 books I want.

 

[DreadPirateMurphy]

In the United States, at least, I don't think you pay taxes on inventory, per se. You pay taxes on the income generated from its sale, and you pay property taxes on the land where it is kept (either directly or indirectly through rent). I could be mistaken...

The real cost is the opportunity cost of not using your shelf space for something that makes you a profit. Every square inch of your store is an investment, and your goal should be to maximize the return on that investment.