NintendoAge http://nintendoage.com/forum/ -Sqooner A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-20T15:35:08 -05.00 TN 13
Don't discount the power of selling paper. One of the secrets to the success of computer stores pre-internet was strategy guides, and they still do well after gamefaqs.com was populated. "paper" has a full markup and a low price point compared to new software. Back in the day (late 80's, early 90's - the days of Sierra games) one of the big selling points to stores like Electronics Boutique for new software was the difficulty level of the game would require assistance at some point to complete - meaning the customer would need to come back and buy the hint book

Nowadays it's magazine subscriptions (and they're not doing so well), but for involved games like the multi-disc RPG's of today, the full-color magazine-quality strat. guides still do very well.

Be sure you have a good POS (point of sale) system, a computer/cash register to keep track of stock, prices and trade-in quantities and values. I used quickbooks POS for my store, which stocked 8,000 individual Magic: the Gathering cards and kept track of on-hand quantity, trade-in values and was able to generate a list of out-of-stock games (and their offered trade-in price) automatically, on-demand. Although you'll of course want to take collections in bulk, being able to offer increased trade-in credit for games you're out of will keep them coming back to you, instead of eBaying their stuff.

I am not a fan of price clubs, and know nothing of their profitability...but it seems GameCrazy swears by theirs, and it's a major measure of their individual store success. I always resented having to buy a card just to get the best deal, and usually bring my business elsewhere when there's two price-tags on something. I look at it as a form of discrimination, and I think it presents an icky feeling to many people who actually stop to think about it. That said, not many customers really do stop to think, so I think that's why it's been a successful tactic for so long. Really, if they stopped to think about their video game purchases (they're usually more of an impulse buy in a storefront) they'd just go online most of the time hehe.

The other big idea I can give to potential startups is gather information to do direct mailings and advertise for events, and at the events gather more information (like offering 50% entry cost if you bring a friend that's never given their info to the store) and continue building your customer base that way. Entry fees for events should only ever be $1 or $2. Period. Big prizes reach a point where they DRIVE AWAY business becuase people thing the big fish will eliminate any chance they have of winning. Remember, the traffic events bring in, combined with the FREE CUSTOMER INFORMATION you'll accumulate is much more valuable than awarding a copy of Guitar Hero III or whatthefuckever you give away...and also it's your cost, not theirs. Also, awarding random door prizes is a great thank-you to younger participants. Food is cheap as a prize, and everyone likes candy...but not everyone has the same taste in games. Just go to your local supermarket the morning-of and get a little something for at least half of your planned participants. Don't separate by age group, just make sure everyone gets their money's worth (double-elimination brackets are great, in case someone "messes up" or "gets screwed" they can't complain as much if it happened twice) and ALWAYS have the next event planned and announced (and flyers handed out) at the current event. Keep a month's worth of events planned, and run at least one each week. Saturday afternoons are great but not the only time to run them. And control round length by time. eg. If you're doing Halo 3, don't do it by kills, do it by time. There's really no need to make later rounds longer...Even in an 8-person double-elim bracket, the two final competitors will have competed in 4 rounds and will start to tire of the same game.

Good events: Smash Bros Melee, Halo x, Guitar Hero
Bad events: DDR, (random fighting game), (random classic game)

Go with what's hot and popular, games that require some level of practiced skill, and games that are entertaining to watch. I've seen sports game tournaments but they're VERY long and VERY boring to watch and have always avoided them.

more laters... ]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-19T20:05:32 -05.00 TN 13 ]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-19T16:00:48 -05.00 TN 13

If my wife Marie wasn't there by my side helping to second-guess all of my boneheaded ideas my store wouldn't have lasted the 4 years it did. Even if it's not a full partner, there's no substitute for having a level-headed confidant that you can work thoughts and plans out with.

The biggest recipe for disaster is two like-minded individuals who get along perfectly trying to go into business with each other. Yings: find your yang.

]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-18T00:38:11 -05.00 TN 13
]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-17T20:38:17 -05.00 TN 13 Very interesting post dangevin.

Online stores are the way to go, people in their underwear buying from people in their underwear is the wave of the future.

Haha funny but true.

I wish there were more decent second hand game stores where I live... worst i've seen was $20 AUD for a lose SMB1 cart, just plain stupid!

]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-17T20:37:18 -05.00 TN 13
Al ]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-17T14:21:55 -05.00 TN 13 A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-17T12:31:38 -05.00 TN 13 ~~NGD ]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-17T11:04:29 -05.00 TN 13 Originally posted by: dangevin Vintage game sales from a retail storefront imo is suicide unless you do a lot of other stuff to "boost up" your bottom line. Take a note from GameStop. They have nice large stores, dense merchandising to maximize product-per-square-footage, and they still couldn't keep their vintage game stock profitable enough to warrant even one small display. Online stores are the way to go, people in their underwear buying from people in their underwear is the wave of the future. Even people who haul their at-home game stock around to trade shows are having a hard time justifying it anymore. The commons just don't sell (we've known this since Atari 2600 cart bargain bins started showing up at computer expos circa 1984) and the rares just aren't available at the prices you can snag them for on eBay if you're patient. It's a matter of the sheer mass of it. 3 NES games weigh about a pound. Even if you brought one of each of the 500 most prolific games you're lugging over 150 pounds of stuff, the mass equivalent of a dead gamer with a volume of over 500 cubic feet (a block of plastic 8 feet on each side, or 2 1/2 stories tall stacked one upon another). On the chance that someone will think 3 for $5 is a good deal a few times over? Very few people come to these shows for the commons. This is why more and more I see "bottom-500" games going for $3 apiece minimum. At this price you'll find that very few commons move from shows but it's at least a little more worthwhile to have wheeled in the space equivalent of a hall closet. It's been said before many times that if you can get NES games for under $2 each you're doing well. Think of it this way. Retail stores pay their rent by the square foot. When I had mine I was paying $15 sq/ft after all other maintenance charges were figured in, before overhead and cost of goods sold. In order to maximize my sales I need to cram as much into that space as possible. Here's the baby steps for you non-business people: The minimum size store you'd need to sell games effectively is 500 sq ft. This is a veritable closet in terms of stores, with no back room, 25 feet on a side. This is the size of some Electronics Boutique sales floors (not including back room space) so it's logical. $15 / sq ft = $7500, $625 per month. Overhead charges can range depending on the storefront. Let's say you're running the cheapest possible (and most common) type of independant game store, a "sole proprietorship" (non-franchised, one owner, your profit = your salary) with no employees; you're there most days of the week open and selling your own wares. So the only overhead is utilities... $500 / month for electric (gotta keep it well-lit), business phone, water/sewer. -$1125 per month rent+overhead Cost of goods sold to cover this, if you make an average 200% markup (buying at half-price and selling at full-price all items) is an additional $1125 per month, making your final cost per month: $2250. Let's figure out if selling NES games can support this. For each square foot of merchandise, you need a square foot of empty "walkway" space. So immediately, that cuts in half the usable sales floor space. 250 sq/ft of merchandizable space $2250 goal sales / 250 sq ft = $9 per sq ft per month = goal sales per sq ft Dealing with the most common games as I'd mentioned abobe, at $3 apiece, this means 3 games per square foot per month need to sell. Let's say on a rack that rises to 5 feet tall and sits on one square foot can effectively merchandize (without having things on the floor, labels all out and visible) 100 games. This means your store can merchandize 25,000 games (obviously you'll need to stock more than just NES!) and you'll need to sell 750 games per month at an average price of $3; 9,000 games per year. Over the course of the year, at this pace, you'll have sold through a third of your stock to break even. Keep in mind this isn't paying yourself or any employees. Not too bad? Let's add something simple in, like profit. What if you wanted an anemic $10/hour (wages for an assistant manager of burger-flippers)? 6 days a week = 60 hours = $600/week = $31,000/yr = 20,000 extra games sold (10,000 to cover your wages, and 10,000 more to cover the cost of the first 10,000 you bought to re-sell at 200% markup). Now you're turning your entire stock in a year and then some, almost 30,000 games in a year. This is 116 games per square foot, meaning you need to turn your entire stock and then some just to maintian your current level. How did you get all these games in the first place? Probably needed a business loan. Even at an average cost of $1.50 per game (reasonable for large lots) you'd need $37,500 just to initially stock your store to generate these numbers we've figured out. Add in the cost of customized racks to stock your games on, maybe a little carpeting or tile so your customers aren't shopping on a concrete slab, and you will need 50,000 in startup capital. For an average three-year loan at 10% you will be repaying about $1,600 per month. Crunch the numbers: almost $20k per year, meaning you need to sell another 12,800 games to cover your initial stock for the first three years. Now we're up to selling abour 42 thousand games per year...bringing it down to basics, around 3500 games per month, just about 15 games per square foot per month... Let's break it down further...that's about 100 games per day, an average of 10 games per hour of operation. Is this a reasonable number for vintage games? Maybe...I'm sure some of the top eBay sellers with stock levels approaching 25,000 games on hand might be pulling these numbers. To a global marketplace, mind you. Your storefront caters to a 50-mile radius. EBGames ditched classic games because even though the markup on a brand-new Wii or PS3 or 360 game is around 110%, it still means more money in their pocket. If a $50 game only nets you $5 you're still making more than three times the amount you do on an average $1.50 markup on a classic game. And new games sell a hell of a lot better than classic games. Mostly because they're advertised and "hot" but also because they're not available elsewhere. Classic games are all "free" if you cheat and use emulation, or even stoopid-cheap if you get an NOAC clone and play your 50-in-1 famicom multicart till your thumbs bleed. Yes, EBGames still sells classic Game Boy games. Why? The game boy is portable, and emulation defeats the purpose - if you want to play a game boy game on the go, you need the cartridge (Although now with affordable handheld computers running full OS software that can support emulation, even GB sales are finally dying off). So long story short - the number of games you'd need to sell isn't outrageous...but doing it with classic games is by-and-large "the hard way" and it becomes a statistical improbability when realizing you're drawing from, even in the most dense of cities, a very small market. How do you get more customers? Advertise. What does that cost? Money. How do you generate it? Sell MORE games? ...

You just painted the perfect picture for me. I guess it's a good thing I didn't open up a store when I was thinking of it, otherwise I'd be something worse than broke right now. ]]> A visit to my local used game store http://nintendoage.com/forum/messageview.cfm?catid=10&threadid=1486 2007-07-17T10:46:59 -05.00 TN 13
Online stores are the way to go, people in their underwear buying from people in their underwear is the wave of the future.

Even people who haul their at-home game stock around to trade shows are having a hard time justifying it anymore. The commons just don't sell (we've known this since Atari 2600 cart bargain bins started showing up at computer expos circa 1984) and the rares just aren't available at the prices you can snag them for on eBay if you're patient.

It's a matter of the sheer mass of it. 3 NES games weigh about a pound. Even if you brought one of each of the 500 most prolific games you're lugging over 150 pounds of stuff, the mass equivalent of a dead gamer with a volume of over 500 cubic feet (a block of plastic 8 feet on each side, or 2 1/2 stories tall stacked one upon another).

On the chance that someone will think 3 for $5 is a good deal a few times over? Very few people come to these shows for the commons. This is why more and more I see "bottom-500" games going for $3 apiece minimum. At this price you'll find that very few commons move from shows but it's at least a little more worthwhile to have wheeled in the space equivalent of a hall closet.

It's been said before many times that if you can get NES games for under $2 each you're doing well. Think of it this way. Retail stores pay their rent by the square foot. When I had mine I was paying $15 sq/ft after all other maintenance charges were figured in, before overhead and cost of goods sold. In order to maximize my sales I need to cram as much into that space as possible. Here's the baby steps for you non-business people:

The minimum size store you'd need to sell games effectively is 500 sq ft. This is a veritable closet in terms of stores, with no back room, 25 feet on a side. This is the size of some Electronics Boutique sales floors (not including back room space) so it's logical.

$15 / sq ft = $7500, $625 per month.

Overhead charges can range depending on the storefront. Let's say you're running the cheapest possible (and most common) type of independant game store, a "sole proprietorship" (non-franchised, one owner, your profit = your salary) with no employees; you're there most days of the week open and selling your own wares. So the only overhead is utilities...

$500 / month for electric (gotta keep it well-lit), business phone, water/sewer.
-$1125 per month rent+overhead

Cost of goods sold to cover this, if you make an average 200% markup (buying at half-price and selling at full-price all items) is an additional $1125 per month, making your final cost per month:

$2250.

Let's figure out if selling NES games can support this.

For each square foot of merchandise, you need a square foot of empty "walkway" space. So immediately, that cuts in half the usable sales floor space.

250 sq/ft of merchandizable space

$2250 goal sales / 250 sq ft = $9 per sq ft per month = goal sales per sq ft

Dealing with the most common games as I'd mentioned abobe, at $3 apiece, this means 3 games per square foot per month need to sell. Let's say on a rack that rises to 5 feet tall and sits on one square foot can effectively merchandize (without having things on the floor, labels all out and visible) 100 games. This means your store can merchandize 25,000 games (obviously you'll need to stock more than just NES!) and you'll need to sell 750 games per month at an average price of $3; 9,000 games per year.

Over the course of the year, at this pace, you'll have sold through a third of your stock to break even. Keep in mind this isn't paying yourself or any employees. Not too bad? Let's add something simple in, like profit.

What if you wanted an anemic $10/hour (wages for an assistant manager of burger-flippers)? 6 days a week = 60 hours = $600/week = $31,000/yr = 20,000 extra games sold (10,000 to cover your wages, and 10,000 more to cover the cost of the first 10,000 you bought to re-sell at 200% markup). Now you're turning your entire stock in a year and then some, almost 30,000 games in a year. This is 116 games per square foot, meaning you need to turn your entire stock and then some just to maintian your current level.

How did you get all these games in the first place? Probably needed a business loan. Even at an average cost of $1.50 per game (reasonable for large lots) you'd need $37,500 just to initially stock your store to generate these numbers we've figured out. Add in the cost of customized racks to stock your games on, maybe a little carpeting or tile so your customers aren't shopping on a concrete slab, and you will need 50,000 in startup capital.

For an average three-year loan at 10% you will be repaying about $1,600 per month. Crunch the numbers: almost $20k per year, meaning you need to sell another 12,800 games to cover your initial stock for the first three years. Now we're up to selling abour 42 thousand games per year...bringing it down to basics, around 3500 games per month, just about 15 games per square foot per month...

Let's break it down further...that's about 100 games per day, an average of 10 games per hour of operation.

Is this a reasonable number for vintage games? Maybe...I'm sure some of the top eBay sellers with stock levels approaching 25,000 games on hand might be pulling these numbers.

To a global marketplace, mind you.

Your storefront caters to a 50-mile radius.

EBGames ditched classic games because even though the markup on a brand-new Wii or PS3 or 360 game is around 110%, it still means more money in their pocket. If a $50 game only nets you $5 you're still making more than three times the amount you do on an average $1.50 markup on a classic game.

And new games sell a hell of a lot better than classic games. Mostly because they're advertised and "hot" but also because they're not available elsewhere. Classic games are all "free" if you cheat and use emulation, or even stoopid-cheap if you get an NOAC clone and play your 50-in-1 famicom multicart till your thumbs bleed.

Yes, EBGames still sells classic Game Boy games. Why? The game boy is portable, and emulation defeats the purpose - if you want to play a game boy game on the go, you need the cartridge (Although now with affordable handheld computers running full OS software that can support emulation, even GB sales are finally dying off).

So long story short - the number of games you'd need to sell isn't outrageous...but doing it with classic games is by-and-large "the hard way" and it becomes a statistical improbability when realizing you're drawing from, even in the most dense of cities, a very small market.

How do you get more customers? Advertise. What does that cost? Money. How do you generate it? Sell MORE games? ]]>