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Message: <blockquote data-quote="Dannyalcatraz" data-source="post: 2394451" data-attributes="member: 19675">The 50% markup rule doesn't apply in competitive fields of business.  To have a 50% markup, you have to have significant bargaining power combined with a lack of reasonable substitutes.  The more expensive the product, the more a potential customer will balk by 1) not purchasing, 2) buying a substitute, 3) invest time in doing market research to find the same product for less...and this is only compounded by the internet.Exceptions to that include goods for which there is no substitute- custom- made/rare goods or necessities.The game store industry is much more competitive, especially in the internet age.The nature of the product it sells is:Appeals to a small market:  Gamers are a small % of the total population, probably ≤ 1%.  For a city the size of Dallas, that's about 11,800 gamers.  I'd guess that supports 2-3 dedicated game shops.  Add another 20000 for Fort Worth and all the suburbs.  Lone Star Comics has 6 locations, and is as much a comic book store as games, Gen X and Game Chest have 1 apiece- there may be others that I don't know about.  Borders and B&N blanket this area, and places like Target, Wal-Mart and K-Mart are making inroads into selling RPG/CCGs- and that doesn't include the online retailers and used book stores.  A LGS in the Dallas/FW area probably has less than 1000 regular customers.Many substitute products in the market: if you don't like the price of D&D books, there's lots of other fantasy games out there to try...  Add to that Music, Sports, regular entertainment reading, TV, video games, porn, online MMRPGs, etc, and you have something that has a LOT of competition.  From personal experience, I'd guess that the average gamer has AT LEAST 2 of the things I listed as competitors for his time and money, and probably some I didn't list.Its a "luxury item" (entertainment), so it has low price elasticity.  If the price is too high, sales drop off dramatically, and no retailer has a monopoly on selling the product.  However, the largest retailers have significant market power and can dictate contractual terms to their suppliers (read discounted price to acquire product) and can cross-subsidize (lower price to consumer).  Price differentials you percieve from location to location probably have more to do with discounts and cross subsidy than with markups.As for sales staff...I just concluded a study that included an interview with a small sole proprietorship (not a game store).  He had hired people within the hobby his store serviced as salesmen.  He found over 20 years that he was better off with people who had people skills and knew how to sell- he could always train them to sell his product- as opposed to fellow hobbyists.Compare to a typical game store- usually staffed by hobbyists under 20, with little or no sales experience.  And do we REALLY need to discuss the stereotypical gamer's people skills?Sales staff- knowledgeable, personable, and polite- are ANY business' #1 asset after having a great product.</blockquote>

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