Opening a Game Store UPDATE!

[Gzilla23]

You should definately do some internet sales. I would buy from you just cause I know the pricing would be fair and the merch would be quality. I'm sure a lot of DP people would do the same and that could help you in the beggining stages of getting the store up and running. Cash flow is always a good thing. Good luck and keep us all posted

[Fuyukaze]

I want to say you will do perfect. I want to say you have all the knoledge needed to survive the initial strugles of gaining a solid customer base. These are things I want to say. I want to say these things but find it hard to. I think you have a better shot at it then most people do though as I believe you know enough about the market to know what will move, what wont, and what will simply be stared at. Good luck. If you do pull the trigger, I hope the best. Also, I hope you get a web page up and running as well.

[Ed Oscuro]

If you have arcade machines, be sure to get a Neo Geo in there. You'll get more bang for you buck as far as store space goes if you have a 4-slot in it. Beats having just one game per machine. :)

Or a CPS-2...*cough*

Anyhow, here's the contingency plan for the Guide users: Set up a topic on DP and ask us to price it in absentia LOL

Uh, so maybe that wouldn't work so well. Hmm, just set up a system where you give trade-ins and mark-downs. I think a good place to take a look would be at the Neo-Geo.com site, find that ratio and go from there...though you'd want to adjust your ratio for certain titles. If it's an R1, you'd want your buy and sell price farther apart than for rarer titles, I'm guessing.

[dojosky]

Yes I'd say Do It !!!!! that has been one of my long time Dreams to do this here in California myself it's been several years maybe 10+ since I always wanted to do this so badly myself... a few years ago I almost opened one up but decided to wait but nowadays I've been thinking of doing the same thing so I say DO IT !! you will succeed and do Fine hope your dreams and goals comes TRUE ! that'd be very COOL !!! keep us posted on your new store and bet you would call it digital press video games !!! unless I am dead wrong ...but just do it follow your heart and mind !!

[lendelin]

Great news. It is exciting to try something new. I'm sure it will work out because of your insider knowledge about games and what retro-gamers want.

What you need is probably more hands-on practical advice what goes in a store and doesn't and how to run it.

One very general rule: diversify as much as possible, and try to avoid getting labeled.

A book section would be indeed great, and I think also profitable!

[digitalpress]

Wow, you people are great. Thanks so much for the support and advice! I'm sure that if time permits I'd operate product sales via the web as well but that will depend on resources, and from what I've seen from others doing this it may take some time before those resources are available. A "brick and mortar" DP is more what I'm shooting for.

Game on, brothers and sisters.

[Sylentwulf]

Theres a GREAT shopping center about 15 minutes from me, not a videogame store of ANY kind otehr than wal-mart for THIRTY-FIVE MILES. I've considered it many many times considering I already have a full store worth of stock available to me.

The problem?

Simple, I don't want to work that much. Realsitically for at least the first few years, you're talking 60-80 hours per week EASY. Plus the fact the you HAVE to hire some other people, and trust THEM not to steal or screw things up. I have big problems with both of those things. With 5 years of retail work, and 4-5 years of owning my own online business, I know just how thieving people can be, and can't imagine hiring some misc. person to entrust my entire store to.

And working 60-80 hours per week with the risk of not making any money/losing money/going out of business just doesn't appeal enough to me. Wish I wasn't so lazy though, because the location is BEGGING for a store...

[digitalpress]

Simple, I don't want to work that much. Realsitically for at least the first few years, you're talking 60-80 hours per week EASY.

I'm well aware of that. Sean still puts in 60 hour weeks and his store is established. I'm really ALL FOR THAT. I enjoy working, and would feel much more productive in a field that I enjoy as well.

Plus the fact the you HAVE to hire some other people, and trust THEM not to steal or screw things up. I have big problems with both of those things. With 5 years of retail work, and 4-5 years of owning my own online business, I know just how thieving people can be, and can't imagine hiring some misc. person to entrust my entire store to.

I hear that! The good news is that a) my wife is an automatic full-time employee and b) I have lots of trusted friends in my area.

Thanks for the input. I'd much rather hear about the various pitfalls and be prepared than to walk into a disastrous situation. As I've said, I have some close friends who have been through this and am getting some valuable guidance and tactics.

[Flack]

The pitfall my parents ran in to was Wal-Mart. Their computer store (Yukon Software) was open for one year and specialized in C64, Apple, and IBM software. They also sold things like blank disks and a little bit of hardware.

Their store opening in the summer of 1985 and was open for one year. They only made a profit one month, and that was the month they managed to sell two computer systems. They took a loss the other 11 months, mainly because the only thing they focused on was new software, which had an average mark up of $3-$5 bucks per title.

The last few months their store was open, Wal-Mart began selling software for cheaper than my parents could buy it. I remember specifically one of the Bard's Tale games. My parents could buy it through their sources for $35 and sell it for $40 and Wal-Mart had it for $29.95. So my parents did what anyone else would do, they bought stuff from Wal-Mart and then marked it up a little, but that's a pretty doomed business plan when your store is 5 minutes from said Wal-Mart.

I don't know what rent is up that way, but it will take a lot of Atari carts to pay rent. Make sure you have something with a bigger profit margin, like consoles and stuff. Also, charging for LAN games, that's straight profit and a great idea.

[anagrama]

Wow, fantastic! All those recent references to 'giving up the day job' make sense now
Is the store likely to be called Digital Press then? Or have you got someting else planned?

[digitalpress]

Wow, fantastic! All those recent references to 'giving up the day job' make sense now
Is the store likely to be called Digital Press then? Or have you got someting else planned?

I'm pretty sure "Digital Press" would be in there somewhere, unless I can't come up with something that makes sense with that in the title.

[The-Bavis]

Sounds like a great idea! Although I have not taken a risk as big as this concerning a job, I did leave a job I was pretty happy with to move to a field I was more interested in. Turns out, I didn't like it so much and have pretty much moved back to my old job which I now have a big appreciation for. I have no regrets about taking the chance, though. I'm glad I tried it and now I know. If your store doesn't make it, you will know you tried and did all you could. If anyone can make it, I'm sure it's you.

As far as suggestions go, I like the arcade and LAN ideas. I don't like the snack bar because food has a horrible profit margin and you have lots more regulations and just plain mess to deal with. If you think food is a good idea, when you have big events, just have a caterer/hot dog trailer come to the event and give you a cut of the profits. I really like the half-store new stuff, half-store old stuff idea.

Also, I agree with whoever said not to tack up plywood shelves and stuff. You'll have to pony up the dough and make the place snazzy and nice to make people feel like they are at a real business and not the pawn shop.

Last comment - when you open, you really need to play up your industry knowledge and respect. Respect amongst the collectors, that is. Make it known that your publication is THE source for the video game collector and that you are the person to be trusted. When you open, call all the local papers and local interest magazines. If you tell them your story, it's sure to intrigue the human interest article writer at a few of them to give you free advertising in the form or an article. That's how most of those articles start, with a phone call from someone involved. It's not a time to be sheepish since it's your cash and dream on the line!

[GrandAmChandler]

There should be an opening event where only DP members are invited before the store opens! Like on a Friday night or Saturday or something. It would be awesome.

[kevincure]

Good luck Joe!

I know one local gameshop that has been making money since it opened with a few simple ideas. One: they won't take scratched discs as trade-in (which leaves them with much less bad inventory). Two: they have 42" HDTV's (4) LAN'ed which you can play for a few bucks an hour. Any game in their used inventory can be played. They make more from this than they make from their game sales. Why? Comfortable couches, snack food, and TVs better than what most people have at home.

If I have any other advise, it's to know your business. That's much more important than knowing videogames. Liking videogames has never made anyone a dime. Knowing how to secure good, honest distributors, how to price correctly, how to manage inventory and security (and taxes), that's how to make money.

Good luck!

[s1lence]

The pitfall my parents ran in to was Wal-Mart. Their computer store (Yukon Software) was open for one year and specialized in C64, Apple, and IBM software. They also sold things like blank disks and a little bit of hardware.

Their store opening in the summer of 1985 and was open for one year. They only made a profit one month, and that was the month they managed to sell two computer systems. They took a loss the other 11 months, mainly because the only thing they focused on was new software, which had an average mark up of $3-$5 bucks per title.

The last few months their store was open, Wal-Mart began selling software for cheaper than my parents could buy it. I remember specifically one of the Bard's Tale games. My parents could buy it through their sources for $35 and sell it for $40 and Wal-Mart had it for $29.95. So my parents did what anyone else would do, they bought stuff from Wal-Mart and then marked it up a little, but that's a pretty doomed business plan when your store is 5 minutes from said Wal-Mart.

I don't know what rent is up that way, but it will take a lot of Atari carts to pay rent. Make sure you have something with a bigger profit margin, like consoles and stuff. Also, charging for LAN games, that's straight profit and a great idea.

Wal-Mart is evil!!! I've heard of them doing that to many smaller local businesses. A friend of mine had a business is a smaller minnesota town and had a visit from a wal-mart rep. The guy actually was told that do not attempt to underprice wal-mart because we will guarantee that our prices will be lower, even if it means you are put out of business. A local store can be a great niche business an idea I have had as well, I just need to find a good supplier which seems to be my roadblock. Joe you have some of the most valuable video game knowledge around so I know you can make it fly. Make sure you have a good amount of capital in order to keep it open even if it is a losing business for a couple years, it takes most companies awhile to get out of the red, ie Amazon.com. I hope I can follow suit and open my own soon as well. Its a volatile market so the best of luck and efforts to you.

[Flack]

Wal-Mart isn't inherently evil, but if you go head to head with them you will lose. If there's one nearby, you will need to make sure your business model is different than theirs. If you are both, say, trying to sell new games for the cheapest price, then yes you will lose. But if you are buying/selling used games, classic systems, arcade games, and having LAN play, etc, then you shouldn't have any problems (and might even benefit from their traffic!).

Hey DP, someone said you were teaming up with Anthony1 and his Xbox lan center, is that the case?

[Promophile]

Used games are where the biggest profit margins are. There's a reason every gamestop/EBgames commerical you hear is about trading games in. I'm suprised walmart doesn't take used games.

[FantasiaWHT]

Go the video game title way with your store...

"Digital Press Presents: The Store!"

hehe

or maybe "DP: Brick and Mortar". "DP: Cart and Cartridge"?

Or really confuse people with "DP Games"

*old, slightly deaf man walks in "Is this EB Games"? "No sir, this is DP Games" "That's what I said!"*

And yeah, Walmart isn't evil, they're just extremely good at giving the customer what they want- the lowest prices- by any means.

Also things have changed now- there's all sorts of industry self-regulation on the prices of brand new games. Basically everyone has to sell the games at the same price (with the exception of special sales, not exactly sure how that works) to avoid places like Walmart and Target using games as loss-leaders like they do for DVDs.

But regardless, staying away from competing with them or any similar stores on the same level is an exercise in futility. Take a different route.

And I still haven't heard word on franchises

[s1lence]

Ok, so evil may be a bit extreme, they do run a business very well. I just don't like the tactics that they use to do it. For sure used is where the money is at, much greater profit margins are avalible there, as long as you have a good supplier/supply.

[WanganRunner]

Used Games are indeed the biggest money-maker.

Honestly, the best use of your storefront is as a place to BUY games. Take trade-ins, and unlike EB and Gamestop, take trade-ins on EVERYTHING, EVERY system, every accessory, etc..., and pay fairly well for them. Then don't sell a damned single bit of it in your store....sell it ALL on ebay (bigger customer range = more $$$). Keep enough new stuff on shelves to keep people coming in the door, offer a HUGE store credit vs cash incentive so they'll come in, trade loads, and walk off with 1 or 2 shiny new games. Advertise everywhere about how you take trade-ins, become THE local place for everyone to sell their games.

Buy Wholesale lots of games on ebay. Those lots are priced so that if resold on ebay, they'd bring only a tiny margin, but at higher brich-and-mortar prices (no built-in shipping expense = higher prices) you can make a ton of cash selling them. Same for wholesale lots of generic peripherals, USB gamepads are a good bet.

Mod and Repair systems. You can charge an arm and a leg for this and it'll still be less than Sony or Nintendo charges because of the shipping expenses. You'll be offering the customers a deal, but still making a killing.

I'm sure your collection is enormous, so display a bunch of it in the store. It'll motivate people to buy more stuff.

As a store, you'll get E3 tickets. Give them to customers, but not at random. Do a promotion like "whoever spends the most here in April gets to go to E3 in May with one of our tickets", etc...

Try to get your own refurbished hardware biz going. EB/Gamestop make a ton off this. If people consider your refurbushed hardware to be as good as new, they'll buy that instead, and you'll make a better a margin than you would off a piece of new hardware.

Damn, I want to run a game store.