Can a Mom & Pop store compete with GameStop?

[Anthony1]

Let's say that you live in a town that has quite a few GameStop stores. Could somebody open a mom and pop store anc actually hope to compete with places like GameStop?

How much money do you think it would be to launch a game store that would actually "attempt" to compete head to head with GameStop? I mean the main issue would appear to be the inventory issue. You would need to have a large selection of brand new retail games for the various systems to purchase, and then you would also need a large selection of used games to purchase, plus you would need to have a system set up to allow people to trade in their used systems and games for cash or store credit.


I think the most interesting fact to know would be, how much money in inventory do stores like GameStop and GameCrazy have? I would imagine that this would be the biggest issue, because you would have to spend a huge amount on inventory, to get the thing up and running. Plus you would need a huge amount of cash set aside to pay people for their trade ins.

[hezeuschrist]

I used to be a regular in the Gamestop in my hometown and the crazy guy behind the counter always gave up weird little details about his store.

On the issue of security after someone busted a window (but didn't steal anything) he mentioned he had 8 cameras in the store blah blah blah because he had over 2 million dollars worth of merchandise in the store.

Obvious horseshit, but it's going to be one hell of a number, you have 50 brand new consoles in stock and that's gonna be 15k right there (assuming the new systems go for $300 each), maybe 50 copies of halo 2 or some other large best selling top-teir title and thats another 2.5k, and then multiply that across all current top teir titles and systems and that alone is going to put you in balls deep.

Obviously you won't be paying retail for your stock, but these numbers get large really fast. But also, gamestop has the demand for that amount of stock, if you had up to 10 copies of any top teir game I think for a mom-and-pop shop you'd do fine, people don't tend to go to those for the brand new stuff.

[Anthony1]

Well, certainly, if somebody was going to open a mom and pop video game store, you would have to have a much smaller number of stock in brand new systems, and brand new games, but you would still need to have some on hand.

You would need to have at least 10 PS2's, 10 XBOX's, 10 GameCubes, 10 Nintendo DS systems, etc, etc. Somewhere in that range.

As for brand new titles, well I would imagine that you would have to focus on only the best games for the various systems, and have about 10 to 15 copies of each.


But the real inventory cost would come in all the used games that you would need. And used memory cards and controllers, etc, etc, etc.

To compete with a place like a GameStop or GameCrazy, you would need to have a pretty decent selection of used games for all the various sytems right off the bat.

That would get quite expensive I would imagine. Plus you would also have to have tons of accessories and all that other crap available for sale as well.

[sirgeoph]

We started as a tiny kiosk in a big mall with an EB 6 years ago. Gamestops were abundant in the area as well. We now have 7 locations in two states and are opening 2 more this year.

we barely have ps2s and xboxes in and have NEVER had brand new systems in since the release of the PS2. it's all about customer service and offering things the other guys dont: repairs, rentals, testing any game they want, tournaments, etc, etc.

[vintagegamecrazy]

Sean Kelly's store Video Games Etc. does great if not better than the above mentioned.

[chrisbid]

its fairly easy, offer better trade in prices, and offer lower prices on used games. Gamestop and EB's used game markup is huge, a mom n pop store could lower the markup, and still make a decent profit

[kevincure]

Eugene Oregon, a town with 200000 people in the Metro Area tops, has 3 EB/Gamestops, plus Game Crazy. Nonetheless, some guys opened a store downtown right after college, cared about videogames, provide great service and (by far the most important) understand business and finance - They've been in the black since their first year and one of the guys is partially retired after three. So yeah, it's doable.

[WanganRunner]

That's a pretty sweet gig.

When you say that they're not paying retail for their stuff, they're not doing much better than retail either.

Insomuch as I understand, the margin to be made on hardware is generally next to nothing, and the margin on brand new software isn't too great either.

Used games, on the otherhand, are a potential goldmine. The best thing about having a physical storefront and lots of shiny (if low margin) new merchandise is that it gives people an incentive to sell you their shit and not take too much $$$ for it.

I'd want to augment any physical operation with a healthy ebay presence (maximize exposure, reach diff. customers), but I'm sure it can be done. This becomes even more true if you deal with stuff that Gamestop/EB doesn't, i.e. imports.

[v1rich]

If you can't beat them, join them. You might consider a franchise if they offer them. Just a thought.

[jdc]

Been there, done it.....glad I'm out of it.

Yes, you CAN go toe to toe with the "big" stores. There is jack for profit margin in new consoles and games, and Walmart will ALWAYS sell for cheaper than you can, due to the fact that their entire electronics department is a loss-leader. They purposely LOSE money on everything in that area. Don't concentrate on new product....but be aware that you HAVE to have some, since new drives used business to a certain extent and certainly vice-versa.

Your weapon of defence is in the used and rental areas. But....it isn't as easy as most people would have you believe. Lets say that Grand Theft Auto San Andreas has been out for long enough to start seeing trade-in action. You want to give a higher trade-in value than your competition.....or do you? The answer is no. Here's where the trouble in giving a significantly higher trade-in value comes into being. So you give a $30 trade-in to that customer for a fairly new release. Over time the title becomes "cold"....and you have 10 copies in stock that you can't move because no-one wants it any more....and 10 copies that you CAN'T discount to move, because you PAID too much for them. This is why you go into game stores and say to yourself "they want $30 for THAT game? What a rip...it's two years old!!!"

Give enough trade-in value so that you could afford to move it quickly enough and be able to drop the retail over time and still make a profit if need be. You have to try and turn your inventory quickly.

It's not so much customer "service" that will win people over.....after all, how much "service" is there in the game industry? It's knowledge that will keep them coming back. Be up on all of the things like upcoming games and news etc.

It's no picnic. The hours are long and the endless repetetive demands will drive you insane. "My PS2 just crapped out....and I hardly use it!"...."I bought this game and it don't work"......"I bought this game last week and it's scratched"......"We didn't never rent that game, must have been someone else." Depending on the demographics of where you live, you may just end up buying yourself a job and that's it. In other words....you won't get rich. Generally...being in the retail video game industry sucks and I wouldn't wish it on my worst enemy! LOL

[Oobgarm]

Ways to have a successful game store and win over EB and GS customers:

1. Don't be a prick.

Many of the employees of the 2 big chains (Game Crazy and Game Rush don't count yet) are jaded fellows, forced to abide by company rules or desires. There are always occasions when people try to take advantage of a company's rules, like returning merchandise or other acts of deception. It frustrates a manager/employee when they know they're getting ripped off but has to stay by the company's rules. Of course, I understand that many managers don't do this, but it's still a reason for frustration. Don't knowingly push crappy product on people just to get it out the door. Also, having a corporation bear down on you is unpleasant, and sometimes it carries over to how you present yourself to the customer.

More often than not, complaints about the big stores are because the employees were callous, pompous, holier-than-thou assholes.

2. Make sure your employees know their shit.

And I mean really know it. Not some random guy who plays Madden with his buddies on weekends, or someone who only has a passing interest in the hobby. Get people who are avid and passionate. Their enthusiasm shows and wins over the trust of gamers. Kinda ties into my comment above about not pushing crappy product.

Lack of knowledgeable employees is another big complaint.

3. Give more, sell for less.

This one should be obvious, and many others have mentioned it before. Frequent the chains and find out what deals they've got going on. Gather up some research beforehand and come up with ways to one-up their promotions and trade in deals. Give an additional 20% for trading in games rather than the usual 10%. You'd be surprised how much difference a small figure like 10% makes in the eyes of a customer. Give more in trade on a normal basis and people will come back, which means more inventory for you. Don't insult customers by offering small amounts for current-gen games, like $1 or $2. Classic systems, you can probably get away with that. If the trade price is low, tell them the price you have in the system is low, but think they'd get more out of the game if they kept it. You'll accept it if they don't want it, you're just trying to help them out.

In turn, sell the popular games for less than everyone else. Make hot new titles $37.99 used, as opposed to $44.99 or $39.99 at chains. The customers will notice these small differences in price, and they'll go where it's cheaper.

4. Offer all systems and games.

Don't discriminate. You saw how upset people got when GS stopped carrying NES, SNES and Genny games.

Kinda in league with this, don't display a ton of the same title. It's better to have a more concise selection instead of a lot of sports titles mixed in.

5. Only dabble in new product.

It's going to take a corporate giant to knock GS and EB away from the stranglehold they have one the new games market. They have much more buying power. Only get a few of what's hot. The local mom and pop here in Cincinnati has an assload of new games they never sell, including numerous Halo 2 LEs.

6. Be like omnedon.

Learn how to(or find someone who can) fix things and advertise it as a service. If it can't be fixed, offer to buy it as parts. You'll have a healthy backstock of parts that way. I'm sure you're aware of the frequent system problems of this generation. There's always someone looking for a repair instead of spending full price on a new item, or since the one they have carries sentimental value (like an older system).

7. Advertise in the paper.

You'd be amazed at how much traffic is brought into a store based on one small ad in the Sunday paper. ;)

Those just my thoughts based on my past experiences at a game store, take them for what you will. If you're ever in Chicago, be sure to stop at Shawn Kelly's place. That's a good way to operate a store. I was there last weekend and I was blown away.

[Chainsaw_Charlie]

Yes it can if you carry older stuff like Snes Nes Genesis atari dreamcast etc

[mikeetler]

As someone who owned video game retail stores from 1991 to 2003 and a video game mail order business since 1995, I can tell you first hand that your best bet is not to think of Gamestops/EBs etc as your competition and specialize in your own thing. Unless you have over $100K to invest in new product that you will not see a return on for some time, you won't have a competitive selection anyway.

I don't know how far you've researched, but the margins are slimmer then any other industry. You can make $5-10 on consoles, but when there are supply shortages like this past December, wholesale jumps to $20 over retail and most distributors force additional game purchases on top of that.

Games are just as bad. Typically, a $50 retail game would run $42-45, a $40 retail around $34 and a typical PC/GH/PH title $16-18. The games that you see retail for $10 run an average of $8-9. Most accesories aren't any better.

Used is where the money's at, but you can't just call up a distributor and have him send you 20 used copies of Halo 2, you really have to rely on customers trading them in to you. While it's important to have an idea of what the Gamestops & EBs are selling used games for, using them to base your prices is a waste. Depending on your customer base, you'll find that you'll have a hard time moving a game at $35 that they have for $45 but you'll also find many games that could sell for $10-15 that they have for $5-7. Our customers knew that when they bought a game from us it was in excellent condition and 99.9% of the disc based games we sold were complete. We didn't bother with missing manuals, scratched discs, no inserts, etc, and quality does raise the price on lower end items.

I have a number of friends that still own game stores and after hearing how bad this past holiday season was, I'm glad I wound down when I did.

-Mike

[christianscott27]

a good practice is to traffic in some form of kiddie crack like "magic the gathering" cards or other such games. that brings a lot of foot traffic to your store and kids will happily trade in their old games to get their card fix.

[kainemaxwell]

Try to offer items the bigger stores can't or won't stock. Might just get some niche buyers who'll become regulars and maybe word-of-mouth will work. *shrug

[kiun]

Kind of off topic, but is there any mom & pop video game store in Madison, Wisconsin (beside Video Game Exchange)

[vincewy]

Also depends on the location and if you have some networks.

My buddy now runs a mom and pop (in fact opened another) that are in fairly affluent middle class area, the key is sales of used games, you bring in used games, trade like 2 games for another used game, the inventory grows exponentially over time.

Another key is having friends/contats helping you, I check for deals in Southern MN (like all the $3-$5 games at TRU) that are non-existant in Mpls/St Paul on a regular basis, with a few people like me pulling resources for him helps a lot. Those independent stores also carry old systems/games that major chains don't, you'd be surprised to see the number of people still interested in those games/systems.

Of course as a owner you have to be knowledgable and have passions for games, this is critical not only for enjoyment, but also on what deals/bargains to get when stores are clearing out games. Finally, be nice guy, don't be a prick that only wants to take advantage of others, I get a lot of good deals from him in return for my help, if he doesn't do that, I'd never want to help him.

IMHO, there's actually a need for specialized mom'n pop stores that carry not only new games/systems. but retro stuff, but finding owners/management to run such stores is nearly impossible, no one with such knowledge and ability wants to put up with stupid general public, there're better things to do with their time.

[The Plucky Little Ninja]

Eugene Oregon, a town with 200000 people in the Metro Area tops, has 3 EB/Gamestops, plus Game Crazy. Nonetheless, some guys opened a store downtown right after college, cared about videogames, provide great service and (by far the most important) understand business and finance - They've been in the black since their first year and one of the guys is partially retired after three. So yeah, it's doable.

I live in Portland and would love to check this place out. What's it called?

[spider-man]

I work at gamestop, and when ever anyone asks for an item we don't have in stock or no longer carry, I always recommend them to a local mom and pop store.

[Pantechnicon]

Great points from all. The only thing I would add is that in addition to videogames it's probably nice to have something else going on in the shop besides VG's. We have a few local shops, and the two that are doing the best are the ones who don't do just games. One guy by the University has a huge shop which is 1/3 comic books, 1/3 collectible toys and 1/3 games (all used, I might add). He's been in the area over a decade now and recently just moved in larger digs. So he's not just surviving but has expanded. The other shop doing really well is another mix of comics, games and toys. In addition to this, they have a full-fledged cafe inside selling Starbucks-type fare and Vietnamese food. Oddly, this combination works well. I go there a lot.

I guess the only drawback to this business strategy is if you aren't interested in things besides videogames. I imagine that selling comics or running a restaurant involve completely different types of business headaches, taking on all three at once has got to be a real challenge. Still, it puts you in a position to offer things that a cookie cutter like EB or Gamestop cannot.

[sirgeoph]

yeah, we deal with mage knight, hero clix, yugioh, and magic.. we've got dvd's as well... like everyone's said.. just offer stuff the big guys can't or won't.... and i can attest to the fact that gamestop and eb reccomend little stores to customers... all the gs and eb around our locations send customers to us, especially for repairs

[Kim Possible]

wow, its cool to see so many people optimistic about this. We had a guy open a little shop here, only one of its kind, dealing with new and classic games. He sank a lot of money into it, but ultimately could not compete. People were going to the "big guys" to get the new games, and flea markets to get the classic stuff. Maybe he didn't advertise enough, or something, but he went under in about 6 months. Sucks too, because he was a really cool guy, and he was doing a lot of the things you mention, try before you buy, walk in and play, etc.

Glad to see so many people proving that it can work!

Coolness :D

[ARK1]

I agree that used games are where the money's at. But don't just offer games for the "popular" systems like the NES, Genesis and SNES. Many people are interested in games for the less-popular systems, such as the Sega Master System and the Sega CD. Other people are interested in even older games, including the 2600 and Intellivision. So my adivce is to offer something for all the system. There are people who want them but not have to deal with eBay.

[vincewy]

wow, its cool to see so many people optimistic about this. We had a guy open a little shop here, only one of its kind, dealing with new and classic games. He sank a lot of money into it, but ultimately could not compete. People were going to the "big guys" to get the new games, and flea markets to get the classic stuff. Maybe he didn't advertise enough, or something, but he went under in about 6 months. Sucks too, because he was a really cool guy, and he was doing a lot of the things you mention, try before you buy, walk in and play, etc.

Glad to see so many people proving that it can work!

Coolness :D

I feel bad for him, what state/city is he in? It's also important to do research before you start, such as demographics. IN MPLS/St Paul, there're enough hardcore/classic gamers to keep this type of store afloat, in addition to hte mainstream mass market, another important source of clientele is e-commerce, put your store online, get some words of mouth, offer to ship nationwide.

If it's Southern MN, forget it! Even TRU has trouble selling certain games at $5, most people buying games are rednecks who's only interested in GTA, Madden, or anything with blood and guts. I seemed to be the only one hording Dreamcast games at TRU, (besides TRU, I horded 20+ copies of Marvel vs Capcom 2 Dreamcast [as well as other Capcom fighters] in the region in early 2002 at clearance w/o much difficulty IS an indication of the market here) so much so that the manager and most people working there know my first name.

[Funk Buddy]

You could look at someone like this:

http://www.kicks-hobby.com/component/option,com_contact/task,view/contact_id,1/Itemid,3/

A real small strip mall location. He doesn't keep tons of games in stock at one time, but has most of the new releases. They specialize in import games and toys with very few domestic toys and no games. While not quite what you are asking, it can be done. All the posts so far have had great advice. I kind of got to know some folks that ran a M&P store that rented and sold games. They had the slim margin for new like others had said, but the used was the cash cow along with rentals. Think about now where GS & EB don't have tons of older stuff, that could be the market that keeps you afloat. I have all but quit going to those stores because of that.

[Flack]

I don't think you could compete, and here are my reasons.

First off, on new games and systems ... no way. Margins are already tight on that stuff as it is. Any time Wal-Mart or anyone else has a big sale, you're going to be undercut. I remember our local Mom & Pop Game Shop (M&PGS) was selling Gamecubes for $149 when Wal-Mart was selling them for $129 -- and then, on black Friday, they dropped to $99. I asked the M&PGS what they were going to do and they said, "go to Wal-Mart and buy as many as we can, so that when they run out we can sell them for $149." Pretty shaky business model.

On used games ... I'm sure you can sell a few, but how many and for how long? What kind of profit would one make on $1, $2, or even $5 Atari games? How many would you have to sell every month to pay the rent?

To me, the market is too volitile to jump into. What happens when you've stocked up on $5 or $10 Dreamcast titles and GameStop starts selling them for a buck?

What kind of building are you planning on having? I'm guessing even a modest store would cost $1,000 a month (simply a guess). Is there that much of a profit margin in games and gaming systems to consistantly pull in that much profit each month? And that's just breaking even, assuming you're working at the place for free 70 hours a week.

Just food for thought.

[calthaer]

There is room, especially if you deal in NES games and other things that the big guys won't touch. If your guys are more knowledgeable and more friendly - especially to the "casual" people coming in looking for something for Johnny and are trained enough to be able to cross- and up-sell products without being pushy jerks...you could probably do it. Supplement it with a website that can make sales.

Lastly, read the book Guerilla Marketing by Jay Conrad Levinson and follow the advice therein.

[Icarus Moonsight]

Mom & Pop vs Corporate America?!?!

You have got to be kidding me... haven't you noticed that the huge monoliths to consumerism (ie Wal-Mart, Blockbuster and others) tend to eviscerate and consume all local small business they are in direct competition with? Hell, even non-direct competition isn't safe!

The "Mom & Pops" have all moved on to hawkin' their wares on da 'Bay (relatively zero overhead) or they are over at Wally World turning in an application. Sadly, I don't even think "The Art of War" would help Ma and Pa Kettle stay in biz. This is too much of a "imagine-if" scenario for me to continue on...

Thanks for the chuckles though... They were much needed. :)

Corporate America WINS! Flawless victory - Fatallity!

[Anthony1]

I don't think you could compete, and here are my reasons.

First off, on new games and systems ... no way. Margins are already tight on that stuff as it is. Any time Wal-Mart or anyone else has a big sale, you're going to be undercut. I remember our local Mom & Pop Game Shop (M&PGS) was selling Gamecubes for $149 when Wal-Mart was selling them for $129 -- and then, on black Friday, they dropped to $99. I asked the M&PGS what they were going to do and they said, "go to Wal-Mart and buy as many as we can, so that when they run out we can sell them for $149." Pretty shaky business model.

On used games ... I'm sure you can sell a few, but how many and for how long? What kind of profit would one make on $1, $2, or even $5 Atari games? How many would you have to sell every month to pay the rent?

To me, the market is too volitile to jump into. What happens when you've stocked up on $5 or $10 Dreamcast titles and GameStop starts selling them for a buck?

What kind of building are you planning on having? I'm guessing even a modest store would cost $1,000 a month (simply a guess). Is there that much of a profit margin in games and gaming systems to consistantly pull in that much profit each month? And that's just breaking even, assuming you're working at the place for free 70 hours a week.

Just food for thought.


Well, here is the thing, when it comes to brand new systems, I would only have about 5 of each in stock. We wouldn't make any money on new systems, so why have a ton of them in stock? Sure, have a few of them, and as soon as they sell try to replace them, but that's about it. No need to have a ton of new consoles for sale. As for the new games, again, I would do the same type of thing. I would have a limited selection of games, and the good news is that I would have the necessary savvy to pick the 20 best games for each system to carry.

I would definitely have to go to e3 and really pay attention to all the magazines and websites and demo disks, etc, to try to have a really good handle on predicting which games will sell consistently. But I could envision having 5 systems each of XBOX, Cube, PS2, DS, PSP, GBA SP, etc, etc. But that would be about it. Replace them as fast as they can after they sell, but no need to have any huge inventory of them. And as for the newest releases, I would just have a hot 20 for each system. I would pick which games are the most banging 20 games for that system, and I would have limited numbers of each copy in stock. Agan, replace as soon as they sell, and constantly shift which games are in the top 20. Constantly rotate the new and fresh in, and rotate the weakest links out.

The biggest issue would be the used games. How would one start off with a large used games collection for all the various systems? This would be one of the most difficult things. You would have to hit up every garage sale and thrift store and flea market and Ebay, etc, etc, trying to get the best buys you can on the used games, just so you have a decent collection to work with. That would be the hardest part. You would have to develop a huge inventory of used games for virtually every system out there. And you would especially need large collections of used games for the big 3 systems.

One of the hardest things would also be determining how much credit to give for the games. You would have to develop some type of computer system on it, and you would have determine how much something is likely to sell on Ebay, etc, etc, so that if you don't sell it at your actual retail location, you can easily sell it on Ebay.

But man, to have a decent selection of used XBOX games, Cube games, PS2 games, GBA SP games, etc, etc would cost a pretty freaking penny.

The one thing is that If I did have a actual retail store operation, I would sell everything. From Atari 2600 on up. You can best believe I will have Turbo's and Saturns and Sega CD's and NES systems and all that stuff for sale.

[classicb]

Eugene Oregon, a town with 200000 people in the Metro Area tops, has 3 EB/Gamestops, plus Game Crazy. Nonetheless, some guys opened a store downtown right after college, cared about videogames, provide great service and (by far the most important) understand business and finance - They've been in the black since their first year and one of the guys is partially retired after three. So yeah, it's doable.

Hey I'm originally from Eugene. I went to that store when I went home for the holidays. Great example of how to make a gamestore. The funny thing is they also did Anthony1's other idea of including a bunch of big screen tv's to play games like Halo on. I only was visiting but it looked like they have tournments and stuff there. They also made the whole store look like something out of a Science Fiction movie with TVs, cables, tubes and other stuff (hard to explain but it looks cool). They also made a decsion (that I didn't like) on inventory by not buying back old Sega console games. Another interesting thing they did was making all used games available for rent. They didn't just make another game store they made a game store that included everything that they wanted from a game store.

[Icarus Moonsight]

Hey, I was contemplating something. In regard to everyones ideas on "how to operate a successful Mom & Pop game store". Perhaps some enterprising DP member could derive as sound a business model as they could utilizing everyones ideas. Now here is where it gets interesting... take said business model to a bank and see if you can get your plan financed and backed by the bank. Usually if you bring an appealling business idea, that's well planned out and defined, banks are sometimes willing to front some capitol... especially if they get the faintest whiff of profitablity. The proof is in the pudding some say... if anyone can get their model backed by a bank, I'd be willing to admit that it is possible. Otherwise, I'm sticking with my original post. :P

[GarrettCRW]

Hey, I was contemplating something. In regard to everyones ideas on "how to operate a successful Mom & Pop game store". Perhaps some enterprising DP member could derive as sound a business model as they could utilizing everyones ideas. Now here is where it gets interesting... take said business model to a bank and see if you can get your plan financed and backed by the bank. Usually if you bring an appealling business idea, that's well planned out and defined, banks are sometimes willing to front some capitol... especially if they get the faintest whiff of profitablity. The proof is in the pudding some say... if anyone can get their model backed by a bank, I'd be willing to admit that it is possible. Otherwise, I'm sticking with my original post. :P

Or said person could just rip off Joe's business model. ;)

[jdc]

I'll say it once again.....unless you like working for anything from nothing to what the average low paying job would net you.....ther's no light at the end of the tunnel. The only reason to do it is A) you like video games enough to be surrounded by them for 12 hours a day, which wears really thin really fast......B) you have a spouse that can can float all of your household expenses while you bring home zero........C) you are really freaking desperate to be your own boss.

The hours are shit....the money is shit.....the competition is shit.....and the majority of the customer base is shit. I can't put it any more plainly than that.

You'd have to be nuts to do it at this stage in the industry's life. You should have thought about it back in the 16-bit days......before corporate America got their collective hooks into it.

[mikeetler]

I'll say it once again.....unless you like working for anything from nothing to what the average low paying job would net you.....ther's no light at the end of the tunnel. The only reason to do it is A) you like video games enough to be surrounded by them for 12 hours a day, which wears really thin really fast......B) you have a spouse that can can float all of your household expenses while you bring home zero........C) you are really freaking desperate to be your own boss.

The hours are shit....the money is shit.....the competition is shit.....and the majority of the customer base is shit. I can't put it any more plainly than that.

You'd have to be nuts to do it at this stage in the industry's life. You should have thought about it back in the 16-bit days......before corporate America got their collective hooks into it.

I'll agree with the hours somewhat, since that's why I ultimately left retail in '03, but a number of your other points don't hold water. My wife worked with me at the store until our first kids were born then was a stay at home mom. At one point, I had five full time and two part time employees and still had no problem supporting a family of five and buying a house. And one of my most profitable stores I spent almost no time in and was in a mall with a KB Toys down the hall from us and ten minutes from a Funco, Gamestop, EB, Toys R Us.

-Mike

[Anthony1]

I'll say it once again.....unless you like working for anything from nothing to what the average low paying job would net you.....ther's no light at the end of the tunnel. The only reason to do it is A) you like video games enough to be surrounded by them for 12 hours a day, which wears really thin really fast......B) you have a spouse that can can float all of your household expenses while you bring home zero........C) you are really freaking desperate to be your own boss.

The hours are shit....the money is shit.....the competition is shit.....and the majority of the customer base is shit. I can't put it any more plainly than that.

You'd have to be nuts to do it at this stage in the industry's life. You should have thought about it back in the 16-bit days......before corporate America got their collective hooks into it.



Wow, you seem to be extremely negative on the whole gamestore idea.


The bottom line is that GameStop is making money. They are constantly opening up new locations, and they are doing quite well. So there must be money to be made.


Now, I know what you are going to say...... The reason that GameStop is making money is because they have it down to a science, and they have tremendous buying power, and customer loyalty, and that gamers prefer to buy from a major company, that offers lots of locations, etc, etc.

But if somebody were to come along and create a store very similar to GameStop, but to offer alot of things that GameStop doesn't, I don't see why it couldn't be profitable.

Would it be easy? Hell no. But it's not like it's a total impossibility. If I was to open up a gaming retail store, I would add alot of extra things to it, to create a ambiance and feel that GameStop simply couldn't compete with. They key factor is that you would need to capture a certain number of gamers and have them become dedicated shoppers at "YOUR" store. You would have to have a certain number of customers that if they bought anything video game related, they would go to you. Whether it be a brand new system, or a brand new game or a old Saturn system and some Saturn games. They would take their games to you for trade in credit, and they would buy all their gaming accessories from you. You would have to totally capture their business and their loyalty.

Unfortunately, that would be a very difficult endeavor, but I'm sure that there are independent game stores that are doing this, and they are successfull at it. I really think the key would be to have a particular ambiance that would cause gamers to want to spend alot of time at your store. Besides offering all the same things that GameStop offers, you would have to go way above and beyond what GameStop is offering. GameStop has basically abandoned older systems and older games, so certainly, you would want to have a very nice selection of old school games and systems. You would have to hit up thrift stores and garage sales and Ebay, and you would have to get retro systems and games for cheap, so that you would mark them up a little bit, to make enough money off them, and to have a very nice selection, so that when somebody comes into your store, the entire history of video gaming would be on display before them.

I have a ton of other ideas, but I'm saving those for my own endeavor.

[Flack]

Here's why it wouldn't work -- because GameStop is going to have more games than you, and cheaper games than you. And after people come to your store once or twice and don't find what they're looking for and then go to GameStop and find it, they'll just skip over you.

I appreciate the notion of being able to "predict" what will be hot next year, but let's face it -- if you're buying five copies and Wal-Mart is buying a million, they will get a better deal than you, and they can sell it cheaper than you. That's what happened to my parents' computer store. Their distributor was selling them boxes of blank disks for $8 and my parents were selling them for $10. Then Wal-Mart started selling them for $5. In the end, all my parents could do is buy them at Wal-Mart for $5 like everyone else and then sell them for $7.

I think the idea of hitting garage sales and buying lots on eBay seems much more romantic than it really would be. What happens when you hit a dry week? Nothing new in your store? And who's going to be running the store while you're out hitting garage sales?

Please remember that I am just making these statements to make you think, they're not personal jabs so please don't take them as such.

What *I* would do is spend an entire month or two and do a "pretend" business on paper. Figure out how much rent and utilities are going to run you. Then figure up what you're going to spend on stock. Don't just guess, find places to buy from and figure up prices. Then, spend every weekend driving around to garage sales and thrift stores, looking for stuff to sell. Now there's no real way to "guess" how many things you would sell, but at least from all that you will know how much you would have to sell to break even (don't forget about paying somebody to watch the store while you're driving around town, and the gas money spent while shopping!).

Man, if there's a way to do it, more power to you. I'd love to own an arcade and make it a killer place for kids to come hang out at and spend time and money at, but I've talked to one too many failed arcade owners to keep dreaming about it.

[DaBargainHunta]

I would have a limited selection of games, and the good news is that I would have the necessary savvy to pick the 20 best games for each system to carry.
I'm hardly an expert, but this sounds shaky to me. You could probably reasonably discern the top 20 easily enough (though you'd likely stumble along the way a few times and stock some overhyped piece of crap for a little bit, as anyone is bound to do), but who says people would go to YOUR niche store for THOSE games? They'd be available EVERYWHERE else, and probably for cheaper. And what happens when you DON'T have a certain game in stock? That's always a turnoff to a customer, especially for a mom & pop store. You could always promise to order it, but then what happens if the customer never shows up for it or gets it somewhere else because it wants it NOW? (Fat chance getting him to pre-pay.) You end up losing moolah on dud stock you can't sell.

Now, my post is not meant to be an opinion on mom & pop stores in general - I wish you all the best there. I'm just giving my thoughts on that one specific comment of yours.

EDIT:


They key factor is that you would need to capture a certain number of gamers and have them become dedicated shoppers at "YOUR" store. You would have to have a certain number of customers that if they bought anything video game related, they would go to you.
I hate to rain on your parade, but the days of store loyalty are dead - mainly because of the internet. I used to be loyal to only EB, but online shopping changed everything for me. Now it's all about where I can get the best deal. Usually that's online, but if I go the B&M route, same thing - whoever has the best price. It doesn't help that EB began selling opened games, returned games as new, and used to overprice their games by $5 (something they no longer do at my location), etc. - but even if they had never started doing any of that, my shopping habits would've changed. The world has evolved.

[yoursisterspretty]

What I always wondered is how you would force yourself not to keep games for yourself. Like if there was a rare game that came in, how can you just mark it and put it out on the shelf, especially if you really wanted it for your own collection.

I always thought running your own store would be kick ass, but only if I won the lottery and didn't have to worry about all the bullshit. ;)

[vincewy]

As I said earlier, no one with such knowledge, abilities, and dedications wants to put up with trash competitors, trash customers (most people suck as we all know).

Another major problem you'll have to contend with, theft, not just from break-ins, but from employees. Games To Go of Richfield MN closed because one manager was stealing inventory worth tens of thousands of dollars, he and another culprit was putting those items on eBay, another small toy/game/sports card chains in MPLS/St Paul (will update with name), the owner finally gave up his business because he couldn't find anyone trustworthy, the employees would turn off surveillance cameras, during those periods, 0 sales, but lots of inventories dissappeared.

I don't care how bad the economy is, finding someone trustworthy is almost impossible, my buddy and his boss (owner) each manages a single store, with their close family members watching the store if they're not working, both are knowledgeable and helpful, finding combination of this kind of business venture is nonexistant nowadays.

If an EB/Gamestop store gets robbed, they simply close the store or replenish the stock.

[16-bit]

eBay and Amazon.com are bigger threats to M&P, but that is just my opinion.

I think one could make a good living reselling/refurbishing classic arcade games for game rooms. Gamestop, Walmart ain't gonna touch that market, and buying them online can be challenging/intimidating. Plus you have the additional income of servicing them.

[ianoid]

Videogames, ETC is a successfully run store, with a Gamestop 2 blocks away. But it isn't easy, as I understand it. I think that you have to recognize that staying in business is a triumph in itself.

If you do take trade ins, you have to adjust what you pay with how much you have in stock. I think that a detailed pricing and inventory control system is very helpful in staying in business. Once the 15 year olds you pay minimum to work there start pricing things at their whim, you're sunk.

I agree with the diversified approach- it's safe to have off-season fall-backs. It depends somewhat on the cost of space.

And starting a business requires months of capitol to stay afloat- I would say that in this business, if you can't operate for 6 months without a sale (and only trade-ins), don't even bother jumping in. It can be a very seasonal business, so you need something to keep people there off-season. Network gaming, card trading, whatever.

And getting new games is just too expensive for most mom and pops. If folks want new games, they can go to Gamestop. It's nice to have some new titles, but with the deluge of new titles every month, it's tough to carry them all- or guess which ones will sell.

[Anthony1]

So far, it appears that the takes are all focused on the fact that it would be suicide to try to sell new games and systems.



Well, no shit Sherlock, is what I have to say to that.


DUH.


Now, you have to have new systems, and new games and new accessories, but it can simply be a form of window dressing. You have a few copies each, of what you really need to have, and that's about it.

But you have to have them there, just for the sake of the image of the store. You carefully select the titles that you think are going to be solid sellers, and you have a few copies each. No more no less. As soon as you think the title might head south, if you still have stock, you immediately put it up on Ebay before the price falls to fast. I can't tell you how many times I've seen people bidding on games higher than they need to be. A $49.99 game might be $34.99 at Target on sale, but for some reason, people might still big that game up to like $48.

So as soon as you get a whiff that a title might take a drastick plunge in price, you have to move the few copies that you would have. But it really wouldn't be that big of an issue.

[retroman]

i live in Baltimore Md...and we have a store hear called PowerGamer...its awsome...much better than eb or Gamestop....Powergamer sells any retro system and has games for them to..pluse they have all the latest stuff to, and sell import stuff. i love it..

[retroman]

i live in Baltimore Md...and we have a store hear called PowerGamer...its awsome...much better than eb or Gamestop....Powergamer sells any retro system and has games for them to..pluse they have all the latest stuff to, and sell import stuff. i love it..