I Want to Start a Gaming Shop [Archive]

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Starwind Amada

07-02-2014, 11:28 PM

Harold Mansfield

07-03-2014, 05:58 PM

I would like to open a small game shop in Bethlehem, Pennsylvania. Here's the deal. There is already one store in the immediate area that has a lot of business. Therefore, I don't want to just do the same thing. I would like my store to do more than just sell games. Here are my ideas:

focus on retro games, but also carry modern ones
offer repair and cleaning services for broken consoles, old and new
have great trade offers

The existing shop does all that. Here's what we would do differently:

print covers for games when the owner doesn't have the packaging (we will have a supply of DVD/DS cases for all games; cartridge games will go in pre-made cardboard boxes based on measurements of the original ones); printing fee covers cost of supplies (paper, ink, etc.)
print custom cover art by a commissioned artist
carry a selection of board and card games
hold gaming tournaments
carry a selection of plastic model kits (probably just Gundam)
demo indie games
give discounts for frequent purchases
have a small gaming-themed snack bar
have a small arcade
allow customers to try out games before buying

I would like the store to be located in downtown Bethlehem.

Sounds like a nice idea, but I wouldn't open a brick and mortar store for this for many reasons:

One town is not enough of a market.
You don't have any money, and no bank will loan it to you without collateral or co-signer.
There are already established stores in the area that likely have enough resources to just adjust to your ideas and keep you from becoming successful
Other than kids without money, very few people go to video game stores anymore and the number is getting even lower.
One big box store can put you out of business
The markup on new games is low, especially if you can't do a lot of volume.
Newer consoles download games. I don't need to leave the house to buy a new game anymore.
Older games is a really, really niche market.

I'm speaking as a tech buff and occasional gamer with an XBOX One who is probably 20 years older than you.

I would however, give it a shot online. Everything you are saying sounds like a great online store that will allow you to target customers all over the world, instead of just one small town.

You also don't have the money, and you're going to need inventory. Nothing worse than a new store with bare shelves.

I know people keep saying that video game stores aren't dead, but the 3 that were in my area are closed now. Even Gamestop only has 3 locations in the entire city now, where as when I purchased my original XBOX years ago, there were 2 just in my immediate area.

Times have changed.

Now as I am a broke college graduate, how would I go about getting a loan? What's a reasonable amount? Should I ask my father for help (I don't know if he'd agree to it, but he can sure as hell loan me some cash). What about a Kickstarter campaign, and discounts for anyone who donates? I am reading up on business plans, but I could use some expertise.

By the way, the store will be called Krazy Kickback Games.

If you have parents that you can borrow from, that's probably going to be your best bet. I don't see a bank loan happening, and Kickstarter is hit or miss. Causes and Inventions do better, and your business idea isn't that original.

vangogh

07-09-2014, 10:14 PM

I agree with everything Harold said. I'm not a gamer by any means, but I have to agree brick and mortar gaming stores might have a limited lifespan. I do think you have some good ideas though. I think board games are making a come back. The idea of holding tournaments can get people in the doors too. I wouldn't absolutely say don't try to open the store. More that you should be cautious and really investigate everything you can before you do.

As far as a loan is concerned, it's unlikely a bank would give you a loan. Banks loan money as an investment. They're calculating the risk in lending you money and prefer proof you can pay them back. That's why so many people will say to get a loan you have to prove you don't need a loan. It doesn't mean with a good business plan and a little collateral you can't get a loan, but more likely you'd get a loan to expand an existing business with a history of making profit. For something you want to start up new you'll probably need to ask family.

Patrysha

07-09-2014, 11:58 PM

The key to getting financing is doing your market research and putting together a kick butt business plan. I'm not sure if they have programs like the one I work for down in the States, but if they do an SBA office should have the information.

huggytree

07-10-2014, 05:49 PM

by gaming do you mean you will sell video games or is it physical games like dungeons and dragons type stuff??

if its video games id say NO....who will want to pay extra for what they can buy on Amazon.com

kimoonyx

07-10-2014, 10:50 PM

Hi Starwind,

GREAT IDEA!!! I am the lone forum voice of opposition on this topic lol. I am here to tell you - With HANDS ON EXPERIENCE backing me up - That if it is done right, game stores are NOT dead. I have successful operating clients that are proof, one of which is a contributing member to this forum. The biggest reason they are viable, and have not died is the very reason this subject keeps popping up in this forum, and I have to defend it time and time again lol - Games are cool! I bet you don't know anybody that does not either play games or watch movies...You can see with your own eyes that the need is there, so why not capitalize on it right? The market is huge, its viable and just because some stores get it wrong, does not mean all of them do.

I hear the arguments all day so let me go ahead and speak to them... but what about Blockbuster Video dood?!? Hollywood video ?!? and the other big name stores? Blockbuster sucks... they did not adapt, game stores that did...are making a killing... I do not speak in vague terms so let me define them.. the margins are there, you just have to know how to hone in on them and not spend your money on crap that wont move... Blockbuster was a DVD rental store with games as a side show. Blockbuster never steered the ship correctly even to the end. It should have become a game store when DVD's hit average internet pricing of 3 bucks. And people proved that hey would line up in the rain or cold at little kiosks browsing one at a time for dollar rentals... it is DVDs that died.

Games hold their value better then videos. If you cultivate the hot titles and stay away from bombs you will be one of the lucky ones that gets to survive in this market You have to be all over your inventory to determine exactly what moves and what dont. And you have to be responsive. Most independents that fail do so because they dont have the proper tools and support to prevent them from buying the wrong games, and they do not reprice for price drops and do not leverage the risk of price drops. The reason they do this is because they dont have an adequate POS in place to help them, nor support. If your POS can not determine when a games price has dropped, you have to go over your inventory with a fine tooth comb everyday searching online for pricing to correct drops and for most that isn't feasible. You absolutely need a POS that does pricing, the support structure of buyers assistance, and suppliers that give price protection... to further elaborate..If you have a pos that can tell you what to buy and sell games for and that updates pricing in real time, then you are ahead of many independents (including those that fail) I mentioned leveraging price drops...If you are with the right people... you can also benefit from price protection which is when a supplier gives you credit on your order for new merchandise based on the difference between what a game sells for now, and what it sold for when they sold it to you. Again... You have to know what you are doing to take advantage of this and the reporting for it can be daunting..IF.. you do not have the right tools.

Next one I hear all of the time... WHAT ABOUT DIGITAL? ITS GONNA KILL THE MARKET! No....its not... not in the immediate, the new consoles just released supporting disks... now we ride the wave home for the immediate future... my next point to this is what you mentioned... spread the love around between categories...GAME store is that... a GAME store... notice I didnt say video game. Currently I advertise open a video game store because low and behold There are video games in there for now... for sure... but also trading card games like magic the gathering, table top games, board games... all of which are coming back in a major way.

You see Starwind, Many of the folks replying here are jacked in until the day they die, most of them that contribute regularly, are freelance webdesigners, seo gurus, copywriters... granted theres a plummer in here who is a cool cat, that makes me laugh because of how blunt he is... and.. he will rip me a new one here because i'm capping (respectfully) on his friends... anyway... these internet genius' are focused on the electronic... they have to be.. they make a living at it and its admirable. many times they advise against printed media, check the forum..its all through it.. they are very busy being cutting edge, but what they miss is that everything is cyclical...Often "cool" is the opposite of what has been before (thats a 6 year MBA talking..I know my marketing) There is a new gen that is craving retro... they are going to stationary shops, they long for the permanence of print because all of THEIR life computers have been the norm... and print is the novelty item. for games, Big production 1st person shooters and the like games have been the norm, and its the cool, simplistic yet complex indie puzzle games that get their attention. You can service these customers all day long with retro if you stock the right titles.

Some folks that are jacked in on the perm, could never perceive why someone such as yourself, or me for that matter, would rather sit around a board game and throw magic cards with your friends instead of jacking in to your xbox one over the cloud. Successful video game stores capitalize on the entire gaming universe. video games are only a part, a big part... a very big part, but they co-exists with the other categories, some of which you mentioned. Regarding the loan... the advise that it wont happen... is not cool... Quentin Tarantino says it best in Four Rooms... He who refrains from making definitive statements is less apt to look foolish in retrospect. I am one of those...if you want it you can make it happen type of dudes. Thats all. Go get it bro... LIVE WHAT YOU LOVE!!!

Harold Mansfield

07-11-2014, 09:36 AM

Michael I was hoping you'd chime in. I knew you'd have a different perspective, but I do have a few questions.

Over the years I've had Pong, Atari 2600, Intellevision, Sega's, Nintendo's, Playstation's, XBOX, and now XBOX One. 30+ years of gaming. I've been playing John Madden Football since "1" (we're on 25 now). Whenever I see an old Pacman, Defender, Stargate, Donkey Kong, or Galaga you've lost me for a few hours.

Never got into the wizards and magic cards, but I do remember when it was really popular and have heard that people are playing them again.

So I'm not asking them as "an internet genius' who is focused on the electronic", I'm asking as a person who takes my Home Entertainment seriously, and has been playing video and electronic games since there were "A-Team" and "Welcome Back Kotter" pinball machines.

Next one I hear all of the time... WHAT ABOUT DIGITAL? ITS GONNA KILL THE MARKET! No....its not... not in the immediate, the new consoles just released supporting disks... now we ride the wave home for the immediate future... my next point to this is what you mentioned... spread the love around between categories...GAME store is that... a GAME store... notice I didnt say video game. Currently I advertise open a video game store because low and behold There are video games in there for now... for sure... but also trading card games like magic the gathering, table top games, board games... all of which are coming back in a major way.

You skipped over this part pretty quick without addressing the future. What is the immediate future? At the moment, I can't see any reason for me to visit a store to buy a game or any accessories. I may be an anomaly in that the only things I go to an actual store for these days are clothes and groceries. I have no new CD's or DVD's. I haven't purchased anything on a disk in at least 3 years.

I run a music blog, even promoters don't send me CD's for review anymore. They send a password protected download link.

How do you get a guy like me in your store? Or am I a lost cause and you target the people who are left who need to physically feel the box?

Also, speaking just in terms of video games what is the future? 2 years? 3 years? 5 years from now? Do you honestly think there will still be a big enough market of people who need to physically buy a disk, and want to physically buy it from a brick and mortar store?

Will there even be game disks anymore? How does a video game store sell games when the only option from console makers is digital downloads?
It's apparent to me that the console makers are trying to kill the middle man and be in complete control of the market.

How does a game store survive in that reality?

You see Starwind, Many of the folks replying here are jacked in until the day they die, most of them that contribute regularly, are freelance webdesigners, seo gurus, copywriters... granted theres a plummer in here who is a cool cat, that makes me laugh because of how blunt he is... and.. he will rip me a new one here because i'm capping (respectfully) on his friends... anyway... these internet genius' are focused on the electronic... they have to be.. they make a living at it and its admirable. many times they advise against printed media, check the forum..its all through it.. they are very busy being cutting edge, but what they miss is that everything is cyclical...Often "cool" is the opposite of what has been before (thats a 6 year MBA talking..I know my marketing) There is a new gen that is craving retro... they are going to stationary shops, they long for the permanence of print because all of THEIR life computers have been the norm... and print is the novelty item. for games, Big production 1st person shooters and the like games have been the norm, and its the cool, simplistic yet complex indie puzzle games that get their attention. You can service these customers all day long with retro if you stock the right titles.

I think you are a little cynical and being unfair to the web professionals on this forum. We're also people who shop. You would be wise to listen to what some of us have to say because we see trends, and advances in technology that will kill a business before most other business owners know it even exists.

I don't doubt what you say about a resurgence of "retro stuff". It happens frequently with one thing or another. I've seen more "retro" trends than I care to admit. And I know there is a market of people who like to relive the old days with old technology. I don't happen to be one of them, but I've seen a TV show or two that mentions these kinds of collectors.

But such trends are usually short lived within small targeted groups and then people move on to the next one. Hence my suggestion to be available to everyone, not just one neighborhood. I'm not against a brick and mortar store, but I think ignoring the web is a huge mistake that limits your chances of survival and kills your chances of any growth.

Some folks that are jacked in on the perm, could never perceive why someone such as yourself, or me for that matter, would rather sit around a board game and throw magic cards with your friends instead of jacking in to your xbox one over the cloud. Successful video game stores capitalize on the entire gaming universe. video games are only a part, a big part... a very big part, but they co-exists with the other categories, some of which you mentioned. Regarding the loan... the advise that it wont happen... is not cool... Quentin Tarantino says it best in Four Rooms... He who refrains from making definitive statements is less apt to look foolish in retrospect. I am one of those...if you want it you can make it happen type of dudes. Thats all. Go get it bro... LIVE WHAT YOU LOVE!!!

I can agree with this. Diversity. I do think it's interesting that you make sweeping generalizations about others on this forum having tunnel vision because of our profession, while you have tunnel vision about yours. Not that there's anything wrong with it, but I've never heard you address that ecommerce is something to be concerned about.

My contention is that there are very few brick and mortar stores that can compete with the kind of selection and inventory choices that you can find online. You can't carry everything in a store, but I can find anything online. So how do you compete with that with a store dependent on walk ins?

I also understand that game stores can be a social thing. Where like minded people meet and discus the latest, try new things, or even like to have a person to talk to. Again, I'm not that person, nor do I know anyone like that, but I have friends with kids who may see that as cool. Personally I'm fine reading reviews, watching game play videos, trailers, and discussing on forums in a matter of minutes, over getting in my car to drive somewhere to get less of that.

I'm also less social, impatient and want my information quick and easy. So I'm not a hang at the game store kind of guy.

I also understand the console repair thing. Great idea. But are there enough people in one town to support that kind of business long term? How many people in one small town have old consoles that need repair?

Your attitude seems to be that it's all a fad and soon people will see that and come back to "Old school" ways. Am I reading you wrong?
What is your advice to someone about how to market and survive with a brick and mortar in an ecommerce world?

kimoonyx

07-11-2014, 02:06 PM

Hi Harold,

First up.... I apologize. I have said many times on here that I respect all of you guys, which is why I take the time to contribute, interact here. I put the jabs to specific folks because I am proud that I have been here long enough to know specifics about you all, I feel like i'm a part of the forum and hopefully have the right to have fun with you folks... I was careful to mention, that you guys make your living online, your very good at it, and it is admirable.
You said yourself you were hoping to hear from me, and I suspect that one of the reasons for your adamant denial that a video game store brick and mortar can do so well, is that you were setting me up to come in and explain my side and I appreciate that. Maybe like a devils advocate kind of thing? Olive branch? lol. My perspective is hands on... just as yours is with web design, just as furmans is with copywriting, just as huggy's is with plumming... you guys know your stuff.

Well I know the video game market not from the sideline, but I am elbows deep in it... I know brick and mortar retail also by way of opening video game stores, Setting them up involves amongst many other things ordering from vendors, I know the types of orders my clients make... the volume is there... the beauty of it is... I have a full perspective because my stores are not localized to one area. I have opened stores in texas (multiple) florida (multiple) ohio, south carolina, kentucky, and missouri (multiple) so I have at least one in every US time zone. I also always defend the loan thing because I have been able to help some of my clients get loans. Granted... It is way harder to get it done now... in 2010 it was easier. but it can and DOES happen. And i'm not living in the past... my latest setup was just last month... its in the paper... check out the missourian, search Gamers Empire, Shelly thanks her consultant right there in the press...thats me Michael Elliott. I negotiated her lease, helped her get the loan, set her up, and support her. I submit this info to you because when you guys speak so definitively that games are deceased, but I know different by virtue of my own current operational experience. My latest store did 1400.00 day one...Day One! now that is a verifiable fact, her number is right there in the article.
Let me get to some of your points/questions... is it all a fad... I think you are referring to eCommerce.. absolutley not. ecommerce is here to stay... but ecommerce and brick and mortar stores will always share the market place. I dont think either will totally replace the other. There are some markets that are better served by eCommerce and vice versa. BTW if all you do at brick and mortar is buy clothes, and eat, then yes,you are for sure an anomaly lol. People still shop... shopping malls still exist... strip malls too, if no one ever shopped they wouldnt.

You said you have seen me say we should be concerned about ecommerce... i may have...but i dont ever think I said it shouldn’t exist. The reason for my coming as strong about a bit of bias towards all things electronic (which keep in mind video games are electronic) coming from this forum is because routinely statements are made...and you just made it... that brick and mortar is dead now...when clearly... it isnt. I need to also suggest this... when you have made the investment in a brick and mortar store, with big beautiful signage, in a well traveled location, your return...if you run your store right, i.e. keep it clean, and stocked, replace your cost of goods sold regularly to maintain inventory that is selling and expand product lines based on good sold... you can make way more, and expand way quicker as a matter of routine, than an online only presence...at least in my industry.. My customers use ecommerce but they do so through sites that are already existing. Amazon, ebay ect... you see ... and I know i'm not telling you anything you dont know... online... when you just run a .com and a retail customer searches for your game...they get these big players first. not your site... to not use em you gotta invest lots of time and energy just to get to a respectable listing on google.

Guess what... Google gives priority to brick and mortar... Local shops! what do you think google places is all about? For free a brick and mortar shop owner can have his location added to navigation with google maps, and bump his website up in local searches all the way to the top.. the shop contacts google, they send a little post card to his physical address with a code on it and boom... SEO completed When you are selling a service... and when you are consulting for a service (which is what I do) you have to see the big picture...you cant base everything off of what you enjoy, because marketing is not about what you enjoy... your not after you...your after THEM! Never did I say to ignore the web bro.... I only said dont ignore brick and mortar. My very offering is online... My website pulls three leads a day it is how I do what I do...they work hand in hand.
OK OK... the digital thing... i'm gonna revisit it... I think there was another post in here somewhere where I went over it in extreme detail but i'm gonna do so again... I apoligize...sometimes I gotta pick my spots when I post because (i risk a lot of eye rolling when I say this) but I am a busy guy..lol

The Digital thing in application to games It is not a fad... it is coming...nay...its HERE, but again, not as a complete replacement, because there is a need for offline play. Folks on this forum, myself included (by nature of the fact that we post here) are most all probably in a decent situation when it comes to access to online media...
I have two ipads, and my wife has two ipads, she has the galaxy s5, I have the galaxy note III, she has an ipad shuffle and is about to buy a classic, i'm typing on a macbook, and we have a hp laptop, a little acer, and a compaq Q I have the samsung gear 2 watch. when calls come in I see them on my wrist first.. I have the xbox 360 (didnt buy the xbox one out of principle lol) and i am jacked in to the ether with a t5 connection with time warners highest speed. we consume LOTS of online media. I have lots of video game downloads on my xbox now because they started giving away two a month, and i have downloaded all of them... but other than the game risk (which they dont have a disk version of) I have the disk to every other console game i play..in fact i bought gta 5 from a client not too long ago.... now...its not about me. I am as jacked in as anybody can be... but...there are those that are not. and this is only one small portion of the argument, but why is it, that you believe gaming companies would want to cut out their rural markets?

There are folks in the us that buy property in the sticks because you can get sooo much of it...it is a common occurrence...and these people dont generally have traditional connections, they use cellular connections which are great for checking email, chatting, and facebooking, and the occasional video, but cellular internet tends to be expensive for the most part and these people arent connecting an xbox one. Even the big cable companies are beginning to intro broad band caps because they see dollar signs with DRM... but it wont progress that far, it never has. it was tried with the PSP GO... Flop.... steam is rolling now and thats good...by the way my clients sell steam cards in their stores... we make money off of it.
Steam is good for indie, and older titles, but they don't have the big production new releases. and wont be able to because the producers need to make their money back. Look at what happened to xbox one. these new consoles have been out for a while now... our biggest catagories right now are xbox360 and ps3, and this is the longest timeframe that new consoles have taken to saturate....they will saturate, and sales are trending up for them... again i am talking from hands on experience..clients that had only one or two rack of each now have 5 or 6 and when they get to the level of playstation 3 and xbox 360 they will have 20.
The reason for the slow take though is not because game disks have stopped selling because they are for 360 and ps3...XBOX would have you believe that people want DRM and are flocking to it…but they aren’t selling..infact the opposite is true, sales are spiking for 360 and ps3. the new systems are not being bought up because of the fear of drm (the digital thing). Of the two new systems, guess which one sells the most? PS4... why? because xbox ones camera is fixed and they had no quams about coming out and saying in e3 that they were gonna try for straight DRM...then they reversed themselves because of the outcry on our friend..the internet (because yes people want the disks) and they released a disk capable machine... the damage is done...sales... all of my clients have a few preowned xbox ones in stock and at least one new... no preowned ps4's and if they get a new one.. it goes. Also xbox has dropped its price to 399.00 because they have boned themselves... and this is what happens to gaming companies that try to go to DRM only.

again everything I say here is based off of stores in existence... the distribution market reports, and what I know of the industry, and my knowledge is robust….its real... you guys know my site. video testimonials all over the place.
To answer your last question... to survive ecommerce with brick and mortar you use them both...hand in hand (and you could prolly survive one without the other but i will let you decide which one that is because I love my peeps in this forum too much!!! lol.

Harold Mansfield

07-11-2014, 02:33 PM

OK, so you sort of answered my question. That this does better in rural markets where there is more offline play. I never said brick and mortar was dead. I asked what your advice is for a brick and mortar to survive in what is quickly becoming an all download industry.

Think Blockbuster. Record stores.

Is it as simple as , "as soon as your market gets affordable high speed internet access, it's over"? Is it all dependent on ISP's limiting access and preventing people from consistent high speeds.
Your points are about right this second. But what about tomorrow? You seem to be admitting that it's coming, so what's the answer?

Again, I'm speaking as a consumer. I don't know anything about running a game store. I'm just trying to understand what the future holds for these types of businesses and you are probably the only person here who can speak to that for the OP.

And by the way, I don't think XBOX boned themselves on anything. Xbox One and Playstation 4 aren't the same thing at all. PlayStation plays games. Xbox is an entertainment portal and that's how they are marketing it. The $399 price is without Kenect, which to me defeats the purpose of even buying one. But to each his own. I didn't buy the Xbox solely for gaming. It was actually all of the other things that sold me.

To be honest, there isn't much difference between $399 and $499 for something like a game console. Both are still high. But if you're buying a game console in the first place that additional $100 isn't going to be the real issue. It's not like it's a refrigerator...something you need.

kimoonyx

07-11-2014, 02:58 PM

complete and total edit.. my last response was too passionate..lol...sorry
Blockbuster failed because rental with margins failed...our stores dont rent... Yes the future is bright for these types of stores...the biggest reason is that what we do is not duplicatable by the big box...we are more personal... there are sitting areas in our stores...games are played there.... magic and games are played there... we hold events... and we are well focused on retail... we are well balanced...lots of indie stores fail because they dnt have some of the tools that are in my secret sauce..that stuff I cant give away on here coz I gotta make money... I will leave it at that for now..I lost alot of time here in the forum today I gotta get ready for friday night magic!! I'll post some more later bro...nothing but love

Harold Mansfield

07-11-2014, 03:33 PM

I know I'm different than most people. And I'm not attacking you or your industry or questioning your information and numbers to date.

I'm interested in how a business, this business in particular, keeps up with changing times that are making it obsolete for a growing section of the market. The game store industry has lost market share over the last 5 years. This industry is changing very, very quickly. This is probably the most crucial time in it.

Again, you keep telling me about now. Right this second. And what you've done and what is still around. You're not telling me about industry growth, you're telling me what is still holding on.

I have to say, this...

Portability, non revocable ownership, they can outlast online support when new systems come out and old systems are done away with, physical collect-ablity, novelty, better storage option, than current technology provides for storage, the list goes on and on.

... is the same thing I used to say about CD's, Software, and DVD's. You know what? It wasn't true. Digital storage is reliable, holds the quality better, and takes up less space and more storage is cheap ( $69 for a terabyte of portable storage). You don't need disks (or cassettes) to store music, movies, games or software anymore. You can't tell me games are so much different from software that they will use disks forever. That hasn't been true of any medium or any form of storage.

Yes, Gamestop still exists. But there used to be 20 of them in Vegas, now there are 3. Things changed. And they changed very quickly. What didn't they do to keep up and stay relevant? Or was it unavoidable?

I foresee a day when fewer people will need me anymore. Site builders and drag and drop solutions are only going to get better and better and a larger percentage of the market will settle for that over a custom built solution. Site builders have already eaten into a small percentage of market share because before you HAD to hire people like me. Now Web.com and others are slicing into what used to be a freelancers market.

What I'm doing now, or did in the past won't stop the future that I see screaming at me. 2, 3,5 years from now things won't be the same.
I know it's coming one day. I can admit it. It's right in front of my face. I have to evolve to survive.

What's the evolution of the game store?
How will video game stores do what video rental and record stores couldn't?

I don't need a 10k character answer. A simple answer, list of ideas, or news about upcoming opportunities that will keep store owners in the game (no pun intended) will suffice.

You seem to be defending yourself, and I'm not attacking you. I'm asking for your thoughts as an expert in the industry. If I was a prospect thinking about doing business with you to open a store and these were my concerns, what would you tell me?

Patrysha

07-11-2014, 04:37 PM

Regarding the loan... the advise that it wont happen... is not cool...

Pretty sure I said "you need to do your market research and create a kick butt business plan" not that a loan wouldn't happen.

Harold Mansfield

07-11-2014, 04:58 PM

I'll say it. You also need collateral and/or a co-signer. Banks don't lend broke people money based on ideas like they make it seem in the TV commercials, I don't care how good your business plan is...unless of course your parents know the bank President. Other than that you may as well be walking in there with an "I promise", cause it's just as good.

Private lending or private investors is another story. I'm just talking about banks and business loans.

If you have a history with a bank, and decent personal credit score, you may have a chance at a line of credit. It really depends on how much.
Just walking in expecting a loan for $100k armed with an idea, just really doesn't happen anymore.

It's easier to take back a home and sell it than it is to liquidate a business that may or may not have any assets that are worth anything.
Of course I'm no banker, but I've sat in front of enough of them. Ideas area dime a dozen.

"You want $400k for a home? No problem. You want $50k for a business? What kind of collateral do you have? The home? No problem."

Patrysha

07-11-2014, 06:32 PM

Just walking in expecting a loan for $100k armed with an idea, just really doesn't happen anymore. "

I don't think that ever happened...did it?

I'm not on the lending side here, just the advice side so I don't know yet what all is required of the people getting loans here - it's only a bit more lenient in qualifications than a bank. It's not free or easy money by any stretch of the imagination.

Harold Mansfield

07-11-2014, 06:59 PM

I don't think that ever happened...did it?

It does in the commercials.

Voice Over: "My aunt made the best peanut brittle, so we went to visit Tom at Bank of America and now all of our dreams have come true".

*Show scene of brand new, professionally designed and interior decorated store, full of new equipment, in great expensive neighborhood, 'Grand Opening' sign in the background, with a line of smiling corporate looking customers wearing suits, with business owner holding tablet (appearing to check inventory), while wearing a $5k Chanel suit and diamond earrings."

Just go see Tom at B of A. They're in the business of making dreams come true.

I hate bank and credit card commercials.

samfisher

07-16-2014, 04:34 PM

Dan Furman

07-17-2014, 12:30 AM

I'm like Harold in that I am a long time gamer from the days of Pong and pinball machines. Right now, I have an Xbox 360, an Xbox One, and a PS4. And the game that's currently taking my time is Divinity Original Sin, on PC. I can look to my right and see my 30 year-old DnD stuff. I am hardcore.

I would not invest in a gaming store right now that relied heavily on videogames - it's very clear there's little to no future there. All you need to do here is look to computer games at the hard copy level - it's done. Yes yes, there's retro stuff. But nobody is keeping a store afloat having to rely on selling a bunch of Sega Genesis stuff. You need to sell a ton of $4.99 NHL 94's to make the rent.

What I'm saying is, the end is in sight for hard copy video games. Anyone can see this.

But I do see where you are going here - the Magic stuff, having tournaments, board games, etc... I do see potential there. But the one near me is run by a dude who won lotto, so that's probably not a fair example - it's a hobby business in a literal sense. I am not privy to the inner workings of this type of business model, so maybe Michael can answer - when there are tournaments and the like, what's the income potential? And when you say game store, are you also talking Warhammer, and other things that make up nerd nirvana (like graphic novels, figures, etc) In other words, what's the plan beyond videogames?

Dan Furman

07-17-2014, 12:35 AM

As a Gamer who is also a digital marketer by profession, please allow me to break it down into simpler analysis

1) What does your store gives that is alluring enough for me to take the pain and visit you when I can buy a game online? Why would I do that when I can get the game delivered on my doorstep? What do you have to offer?

Ans : EXPERIENCE

I would love to try and play watchdogs somewhere before I buy it because video reviews are not just enough. The game may have a rating of 10/10 on IGN or Gamespot but what if I don't like it?
Gimme an option to play a few minutes in your store and I can decide easily if I need to buy the game. This can be tricky. Consumers always do their research online so you need to be sure that your pricing is competitive enough and getting pre-booking orders should be an excellent idea which was a tide turner with games like GTAV.

Problem there is plenty of games offer demos. But yea, there' some merit there. But you need to have an open copy of just about every single game then. And how many demo consoles? I could see that not being enticing - all I need to do is go once and get shut out of using the one demo console by the five kids ahead of me to make me say "not worth it".

The issue with pre-orders is you have to compete with Gamestop / Best Buy / Amazon on pre-order bonuses. You get xyz perk by pre-ordering. Street price is likely non-negotiable on new games - they are $59.99 everywhere. Even Walmart. Can an independent offer preorder bonuses? I honestly don't know the answer to that one.

Harold Mansfield

07-17-2014, 10:14 AM

I would love to try and play watchdogs somewhere before I buy it because video reviews are not just enough. The game may have a rating of 10/10 on IGN or Gamespot but what if I don't like it?
Gimme an option to play a few minutes in your store and I can decide easily if I need to buy the game. This can be tricky. Consumers always do their research online so you need to be sure that your pricing is competitive enough and getting pre-booking orders should be an excellent idea which was a tide turner with games like GTAV.

FYI, I just finished Watchdogs and I loved it. I'm still actually playing side missions that I skipped over so that I could finish the story line. The online feature of sneaking around hacking other players is probably my favorite aspect of the game.

As far as buying games...look, the average game at the highest price point is $59.99. Of course I don't want to buy a crappy game, but I rarely have. I watched E3 all day last month and the demos were enough for me to make a decision of what I want to play. Between reviews, demo and game play videos that's enough for me to make a decision.

I'm also an adult and paid for my own game system with my own money. At $599 for a luxury entertainment item, I'm not going to do a whole lot of balking trying to nickle and dime every purchase. You buy the games and ultimately take a chance. I'm not so hardcore that I nit pick every pixel, and aspect of the every story line. I just want to shoot stuff, drive fast cars, get touchdowns, or dunk over Tim Duncan.

When I was a kid, sure I wanted to play the game in store because usually my Mom would only let me get one at a time so I had to choose wisely. Most times I wasn't buying anything I was just playing the game for free because the demo was there. But I'm a grow up now. If I'm not into a game, I buy something else and come back to it later. Eventually I'll play them all.

My point is, as an adult there are some things that you just don't buy if you are going to nickle and dime the cost to enjoy them. I know there are plenty of people more hard core than me, but the convenience of downloading a game instantly far outweighs the hassle of going to a game store to purchase the disk. I can get more info about the game at home from a variety of sources than I can get at the store.

Do people still actually window shop games in stores? And if they do, wouldn't you have the same problem as other retailers? People window shopping and then going home and buying it online for cheaper? Or using their XBOX Gold Discount? Even if you can offer things cheaper, it's not going to be much and I'm not going across town to a store to save $5.

I guess it all depends on who your market is. There are far more adults into games than ever, and they are the ones with the money. Kids don't have any money, so I'd be leery about that being my target market. It's not the old days where you could make a living off of kids spending their lunch money quarters in pin ball machines, and running a "cool place to hang out" doesn't pay the bills.

As many others have pointed out, your ideas sound nice, but are they profitable? There are many things I'd love to have or start up, and for many there is a need...but they don't make any money. That's what it comes down to. Every good idea is not profitable. And just because you'd personally enjoy something, doesn't mean other people will pay for it.

Edited

Last point: Your friends who are not in the business or any business, are not a reliable source of whether an idea is good or not. If I had a nickle for every bar owner that I've worked for who thought their friends and associates would be steady, money spending customers, and constant free advertising...only to find out after grand opening that they actually have to market to the real world, I'd have my own bar by now.

DeniseTaylor

07-17-2014, 11:39 AM

I see there are a lot of passionate and knowledgeable gamers on this thread.

This comment resonated with me:

I would however, give it a shot online. Everything you are saying sounds like a great online store that will allow you to target customers all over the world, instead of just one small town.

Here's why:

Do you know if your ideas are solid?
Do you know that's what customers want?
There was discussion regarding competition and recent closing of similar stores. Do you know there is enough demand in your area to support what you want to do?

I also agree with the comment to approach your parents for a loan - if they can afford it. It may be be your best bet.

Good luck1

kimoonyx

07-17-2014, 07:45 PM

Dan Furman

07-17-2014, 10:41 PM

Hi Patrysha... I was referring to Harold's quote in the first reply that no bank would give the poster a loan without a co-signer or collateral... I have no problem with what u said.. I agree that they must have a kick ass business plan too.

But it doesn't happen. Not in the context of the OP. Which is what we are talking about.

Remember - No cosigner. No collateral. No money. And he wants a bank loan for a game store, not a working prototype of a better mousetrap.

Sorry, there's zero chance of a bank loan happening there unless a relative owns the bank or some other family relationship comes into play. Or it's the back alley bank of Sledgehammer McNulty.

I do like you, Michael - you're enthusiastic, knowledgeable, and I'll bet you're a kickass salesperson. But man, sometimes that "yea, you can do it - never mind those pesky details" is a little much. I get where you're coming from, too. I really do. I've told many a person who thought they knew better to go @#$% themselves. But I'm a little more reserved these days - there's too much mediocrity out there for the motivational poster mindset to manifest itself. My .02 anyway.

Cheers.

kimoonyx

07-18-2014, 02:58 PM

LMAO You guys are unbelievable sometimes. Sometimes its like the name of this forum is incorrect. it should be online-business.net Online doesn't work as an exclusive option in my industry because of trades... Trades are your life's blood in my stores... You need a store front to get em in the most efficient manner. imagine paying for or having a customer pay to ship in a used console before you have tested it... consider the back and forth that is needed to buy in a console for store creds and then you tell me.. which way do you go? website or storefront?

For the record. I take slight offense to the connotation that I am a salesman who says "you can do it - dont worry about the pesky details" because I am all about the details. Dont cry for me...I'm loving life and will get over it...but I need to respond Details, I answer support calls from 8am to 12 midnight. Details, when I set up a store, i'm onsite, cutting and hanging slatwall, scrubbing floors, cleaning toilets, training, inventorying, mentoring. Here's a little detail example for you. When the latest systems released my old clients had resurfacers that wouldnt work because they didnt do blu ray. Before the new release console media was all cd and dvd based. So with my next deal I bought the new ones at 1.5k a pop and offered them to my clients at a zero percent loan...they pay 130 a month for 12 months, only enough overage there to take care of merch services fees. I PROVIDED THIS SERVICE TO TAKE CARE OF THE DETAILS AT MY OWN EXPENSE. My clients receive world class service and support, because of it, they run their stores correctly, and do WELL... SMALL BUSINESS THAT ARE RUN WELL... DO WELL.

Harold... I "forsee" a day when there will be changes to the landscape of any business. But that doesn't mean I am gonna turn may back blindly to what makes money today and for the "forseeable" few years. (more than likely way longer) You keep requesting further definition of my terms...my latest store averages $500 dollar days during the week and $850 - $1000 days on the weekends. This store has only been opened since the 6th of june and will likely grow from here...these are CURRENT NUMBERS I can back it up all day long. if your a skeptic please pm me - I can get you zee proof.

Loans still happen... and they have happened recently, based on credit worthiness, a 3 year proforma projection, a business plan, existing client financial, and a whole lot of explanation and supporting documentation. June 6th Gamers Empire opened based on just that.

Game Stores Work - video games, board games, trading card games, comics, and collectibles bring my clients - MONEY

Some of the conjecture on this forum to the opposite is just plain BS. I know because I live it.

So... to the world... brick and mortar stores still exist....no I swear... take a drive...they are everywhere! There ARE people that leave there homes and do more then stare at a screen all day... and banks... well.... they are actually still out there too! They haven't started serving burgers at the teller windows yet...they are still serving up loans. And if...in your travels...out in the real world you happen to pass an independent game store... remember your boy.

Oh Fuhrman... I like you too ;)

Harold Mansfield

07-18-2014, 03:08 PM

All we're doing ( at least what I'm doing) is trying to understand what the future holds for this business given current and emerging technologies. Being the only person here with direct expertise in this industry, you are in the unique position of being able to answer those questions. I would think you would welcome the opportunity to discuss it's future, instead of getting mad at the people asking.

You are no different than any other brick and mortar store that has to deal with the reality and challenges that eCommerce presents, with the exception that your main product can be purchased digitally from the couch. How do you compensate for that and keep people coming in the store? We're not making any points or asking any questions that we don't put to everyone on the forum who wants opinions on starting up a particular business. You have to be able to answer the hard questions.

Change is constant. I'm sure Blockbuster and Barnes and Noble had the same attitude. "Things are great now and we foresee them being great in the future. (That's what every company says by the way. Lehman Brothers said that up until the last day.)".
And back then everyone was saying "That's great. How? Amazon and Netflix are on your ass. What are you going to do about it?". And there was silence. Now it's really quiet.

if you owned a bookstore, I'd be asking you how you are going to compete now that Amazon is offering unlimited access to over 650k books for $9.99 a month. No brick and mortar can even hold 650k books. What do you do? Specialize in collectables? Niche books? First editions? What's the plan?

If you ask me what the future holds for my business, and what I need to do to survive..I can tell you right now. I think about it everyday.
I'm in the web business and other web businesses are aggressively coming after my market share. That's something I need to address and prepare for.

We all have to worry about changes to our perspective industries. The OP is asking about going into business for himself. We don't sugarcoat dreams around here, because it's not Candyland out there. It's a big, expensive, scary risk. We ask the hard questions because they need to be addressed.

You're the expert here in this thread, so we're asking you. Not a whole lot of times on this forum where everyone defers to one person for answers. Capitalize on it.

Dan Furman

07-18-2014, 06:23 PM

Dan Furman

07-18-2014, 06:25 PM

For the record. I take slight offense to the connotation that I am a salesman who says "you can do it - dont worry about the pesky details" because I am all about the details. Dont cry for me...I'm loving life and will get over it

You kind of missed my point (it was not meant to be derogatory or paint you in any way), but maybe I should have stated it better, too. No offense meant.

Dan Furman

07-18-2014, 06:38 PM

Loans still happen... and they have happened recently, based on credit worthiness, a 3 year proforma projection, a business plan, existing client financial

AND THE OP HAS NONE OF THIS!!!! Which is what we based reservations on (that you then objected to).

Stay in context. It counts for a lot. (btw, these are an example of the "details" I was referring to - you're clearly ignoring the details of the OP's situation and jumping all over the people here who say a loan isn't feasible for *him*. Then you cite examples that have nothing to do with the OP to back your claim - a claim nobody was refuting in the first place.)

Of course "loans still happen". Nobody said they didn't. But that wasn't the discussion.