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Subject: 5 Unseen Costs That Threaten Game Stores rss

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Steve S
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An interesting blog article that discusses many cost factors in running a game/hobby shop that apparently a lot of owners don't think about when planning finances.

http://www.gamehead.com/article/1930/5-unseen-costs-threaten...

I know "rotting inventory" has been an issue in almost every hobby shop I've been in that sells games - the owners just absolutely refuse to sell product at a loss, and as a result I've seen the same boxes sitting on the shelf for years in hopes that eventually, some decade from now, somebody will buy it.
Mark it down and get rid of it. If nobody buys it even when it's marked down (which I also see a lot), friggin' donate it to Goodwill and write it off (even large companies like Target do this), and try to use that space to display products people actually care about. Having dozens of dust-covered boxes that have been sitting around since 1993 is doing nothing for your image.
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But it is fun finding that copy of Merchant of Venus from 1998 in Ye Ole Game store.
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Andrew Brannan
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"rotting inventory" is a huge issue at my LGS. They've got tons of early printing Pokemon decks sitting there, several boxes of 1995-ers CCGs, and entire anime section that's sat so long it's become sun-faded, and more. The store does clear out some stuff from time to time, but for some reason they refuse/don't bother to free up this dead money. Yet in spite of this they seem to be holding on just fine.
 
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Justin Fitzgerald
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I still remember the time where I found about 30 copies of MoV at a clearance store. I bought one copy for $1, read the rules, and didn't think it sounded so good for 2 players, then sold it on EBay for maybe $5.

The weird thing is, I cleaned this store out on soooooo much stuff like this just for resale. Why didn't I buy the MoV stack? lol...
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Rich Shipley
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Shadoglare wrote:
Having dozens of dust-covered boxes that have been sitting around since 1993 is doing nothing for your image.


I love those kind of stores.
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James Hébert
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Once saw a copy of the 150th Anniversary Edition of Battle Cry priced at $79. Unless it was mispriced, that seemed pretty darned high.

To be fair, their prices on other titles were about what I anticipated, since this was not a small store, but that one really stood out.

Probably worthwhile for every store to go through the inventory and double-check prices, I guess.

 
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Mike Kollross
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What it shows is a complete lack of inventory control. Maybe a side effect of being more of a gamer than a businessman?
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Jason Arnold
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MK-Ultra71 wrote:
What it shows is a complete lack of inventory control. Maybe a side effect of being more of a gamer than a businessman?


I thought being a businessman WAS like playing a game. But the money is real.
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David Sant
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My LGS has a sun-faded box of Puerto Rico that has been sitting in the same window spot for at least a year now. One of the box corners is crushed. They have thoughtfully marked it down for clearance, though - $43.95.
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David Thornton
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Nice read, thanks!

Michael Bahr wrote:
No customer is going to walk out the door with a copy of Ascension: Shuffling of the Thousand under his shirt,


laugh
 
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reaching out from the in-between spaces...
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Great read.

jorune
 
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Andrew Brannan
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Pear Annoyed wrote:
Nice read, thanks!

Michael Bahr wrote:
No customer is going to walk out the door with a copy of Ascension: Shuffling of the Thousand under his shirt,


laugh


Actually, at the store I used to work at, someone did successfully get out with a Games Workshop big-box game (can't remember if it was Space Hulk or Space Marine (epic)). The thing is, the register is literally 5 feet away from the door.
 
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Pete Lane
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abrannan wrote:
Pear Annoyed wrote:
Nice read, thanks!

Michael Bahr wrote:
No customer is going to walk out the door with a copy of Ascension: Shuffling of the Thousand under his shirt,


laugh


Actually, at the store I used to work at, someone did successfully get out with a Games Workshop big-box game (can't remember if it was Space Hulk or Space Marine (epic)). The thing is, the register is literally 5 feet away from the door.


I've seen theft from game shops as well, but yes, it's usually the CCG games where the kid feels like they need to buy the high dollar cards to beat his lunch time rival and can't afford it.
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Marshall LaFleur
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I've actually been very lucky on the theft side of things, as far as I've been able to tell nothing has been stolen from my store in 2 years. If it has it could only be some single dice, that I don't keep on my books anyway, or 1 or 2 at the most Citadel paints or glues. Then I also have very little CCG here. It is about 75% mini's, 10% board games, 5% non-ccg's, 5% CCG's, and 5% non-games. Both the theft and cost of employment are easily solved by... not employing anyone! I think my business could easily double before I would be too busy to do most of it myself. I let volunteers run events because that is something they are going to want to do anyway. I just reward them with a larger discount while I do the mundane work. There are times when it is busy enough that you would want 2 people working the counter, but hat is rare and even at the busiest times people haven't had to wait half the time that one would wait at Walmart. Plus if it is busier there are more gamers for people to talk to and often that can bring more sales than me just talking to them.

The freight and merchant fees are all big ones but at least ones that can be partially conrolled if you know to expect them. The worst thing is when you get with a credit card company that turns out to be a scam and have to cancel it, like I did. It was a nice boost in sales when I had they stole a bunch of money from me and cost me a lot. It turns out I'm better off having half the sales at cash only. Stay away from any company that falls under the umbrella of First American Payment systems. They are all scams. The one in particular that scammed me was Transtec
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The Mad Hatter
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"Pete Proprietor, owner of the fictitious Rocky Mountain Gamesters (RMG) in remote northeastern Arizona, is an intelligent game store owner who came to town with a thick bankroll and a great business plan."

If his business plan was "great," then three of the five items on the list - merchant fees, labor costs, and freight charges - should have been accurately estimated and included in the first two years' cash flow projections. You could get a to-the-dollar accurate assessment of the labor costs, because you can look up online how much you're paying state and federal government (payroll taxes, unemployment taxes, etc.) if your employee works X number of hours per week. Anyone who thinks you're just paying the kid down the street only eight bucks an hour to work in your store (and who doesn't have an an accurate perspective of everything else you have to pay on top of that) is a fool.

The merchant fees and the freight charges, though a little nebulous and influenced by a variety of factors, can still be projected if your research is sound and you're realistic about where ebbs and flows might be. If you go into business and don't realize that you need to include estimates on shipping or that your bank is going to ding you right and left on fees (cash deposit fees if you exceed a certain threshold, transaction limit fees, merchant service fees, etc.) then your business plan isn't as "great" as you thought it was...

There's a lot more to it than the old Judy Garland and Mickey Rooney mentality of "hey there's a free barn, let's put on a show!" in opening any sort of business.
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Paul Nowak
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I think it really comes down to getting surprised by #5.Unless your store has a significant online sales presence, you can't keep on top of OOP game fluctuations. And most games LOSE value, not gain value.

There's a current case study I know of where the store is full of board games but is turning out to be more of a collectibles store. But the owner will absolutely not part with anything for less than 75% of list price, or in the case of singles, 75% of the online singles seller's prices. Which means even ebay is out for him to liquidate the stagnant stock.

And he is coming up short on cash for Heroclix and MtG releases. But his name is not Pete.

When I managed a store, I actually learned a great deal from an awesome Games Workshop regional manager who taught me about stock turnovers. Dave Wallace's Specialty Retailer Handbook was another source that was very educational - but neither of those were used by the store's owner, and we closed.
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Caleb
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abrannan wrote:
"rotting inventory" is a huge issue at my LGS. They've got tons of early printing Pokemon decks sitting there, several boxes of 1995-ers CCGs, and entire anime section that's sat so long it's become sun-faded, and more. The store does clear out some stuff from time to time, but for some reason they refuse/don't bother to free up this dead money. Yet in spite of this they seem to be holding on just fine.


There was a military model store in my town (might still be there; I don't go over that way very often) with an in-shrink copy of Maharaja by Avalon Hill from 1994 on the shelf for $25.

I thought of offering them $10 for it but I'm certain they would've given me a dirty look and told me to get lost.
 
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Marshall LaFleur
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Well, there are plus and negative sides of having non-moving products on the shelf. I still don't buy that it is better to sell for a loss than not to sell at all. At least having it on the shelves makes the store look better. Unless you are really hurting on space, having more product makes the store look nicer (as long as it is clean) and you never know when that person will come in looking for the hard to find game that went out of print 5 years ago. I'm all for discounting overstocked or unwanted product though. I have a clearance section that starts at 15% off and goes down from there combined with membership discounts that can add up. Still it seems I don't sell much of the clearance, then if they were good movers they wouldn't be there in the first place.

Something that I think is perhaps a better move is to use the hard to move items as prize support in games. Charge a small fee for the event, the product moves, you got some money, and the customer is happy.
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Cyborgsgaming wrote:
Something that I think is perhaps a better move is to use the hard to move items as prize support in games. Charge a small fee for the event, the product moves, you got some money, and the customer is happy.


This is actually quite effective, and if done properly with enough turnout, sometimes you can still turn a tiny profit, or at least escape any kind of serious loss on those items.

They also make great door prizes when holding anniversary events, which if properly advertised, can increase future traffic and sales, thus negating the loss and turning it into a future gain.
 
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Brian Hoier
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Sometimes having a local store that refuses to clear out old stock is beneficial.

Just this past Christmas I finally got my hands on DOOM The Board Game. My local store had a new, in shrink copy of the even HARDER to find expansion for $35. He couldn't sell it because anyone who wanted it first had to luck out and get the base game.

Same store still has Pirate's Cove and Vegas Showdown. Unfortunately they are both being reprinted in the coming weeks.
 
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madhatter106 wrote:
If his business plan was "great," then three of the five items on the list - merchant fees, labor costs, and freight charges - should have been accurately estimated and included in the first two years' cash flow projections. You could get a to-the-dollar accurate assessment of the labor costs, because you can look up online how much you're paying state and federal government (payroll taxes, unemployment taxes, etc.) if your employee works X number of hours per week. Anyone who thinks you're just paying the kid down the street only eight bucks an hour to work in your store (and who doesn't have an an accurate perspective of everything else you have to pay on top of that) is a fool.


I have trouble believing in an adult, running their own store, who doesn't know there are more costs to hiring people than gross pay.

benevolentweasl wrote:
Sometimes having a local store that refuses to clear out old stock is beneficial.


It can be great for the customer. Terrible for the store though. Which can later be bad for the customer when they close.

In my home town, the (F?)LGS has started piling up old stock. They have something like 15 copies of Dreadfleet in the window, sunbleached and getting paler every time I go past, priced at €80...
 
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Conor Hickey
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old_gamer wrote:

In my home town, the (F?)LGS has started piling up old stock. They have something like 15 copies of Dreadfleet in the window, sunbleached and getting paler every time I go past, priced at €80...


When I read this I had to check to see if you were in Dublin as the place on Jervis St here is exactly the same - they have had about a dozen copies of Dreadfleet in the window for a year now, price is closer to €100 I think, and they are now bleached by what little natural sunlight we get here in Dublin.

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TwoShedsJackson wrote:
old_gamer wrote:

In my home town, the (F?)LGS has started piling up old stock. They have something like 15 copies of Dreadfleet in the window, sunbleached and getting paler every time I go past, priced at €80...


When I read this I had to check to see if you were in Dublin as the place on Jervis St here is exactly the same - they have had about a dozen copies of Dreadfleet in the window for a year now, price is closer to €100 I think, and they are now bleached by what little natural sunlight we get here in Dublin.


I'm not in Dublin, but I'm from there, and that's the store I was talking about. I obviously remembered the price wrong, but that's even worse!

It amuses me (and makes me a little sad) that Gamer's World is now identifiable from that fact alone.
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Conor Hickey
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old_gamer wrote:

I'm not in Dublin, but I'm from there, and that's the store I was talking about. I obviously remembered the price wrong, but that's even worse!

It amuses me (and makes me a little sad) that Gamer's World is now identifiable from that fact alone.


Hah, ok I must check the price when I go past tomorrow on my way in to work.

It's not a bad old shop but I have no interest in miniatures or MTG-type games so I only go in every couple of months to check for new GMT releases and the like, did get 1989: Dawn of Freedom in there at as good a price as I would have paid online so was happy with that.

They would not be at all quick to mark down stock I would think, the Dreadfleet things proves that, plus some of the indoor stock has clearly been there a while at high prices.

 
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TwoShedsJackson wrote:
It's not a bad old shop but I have no interest in miniatures or MTG-type games so I only go in every couple of months to check for new GMT releases and the like, did get 1989: Dawn of Freedom in there at as good a price as I would have paid online so was happy with that.

They would not be at all quick to mark down stock I would think, the Dreadfleet things proves that, plus some of the indoor stock has clearly been there a while at high prices.


Yeah, it's not bad, but it used to be great. My wife and I used to go in there on occasional afternoons, rent a boardgame for (I think) €2, always felt very friendly and they weren't shy about putting something in the clearance bin (I strongly considered getting back into Warhammer Fantasy when the new edition came out and they marked all the old stuff down).

It doesn't feel as welcoming these days...
 
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