Looking into starting an online business

[edowney]

Hi,

I've always had a dream of running my own game store (board games, role playing games, etc) since I was young but I ended up in the computer industry working as a programmer. After living through, and completely missing out on, the start of the PC revolution of the late 70's and the internet boom of the 90's I still think about starting my own (online) game store. One of the problems I keep running into is that distributors want to see a brick and mortar store before they'll sign you up as a client. Does anyone have an idea on how to get around that (legally - I know I could photoshop a sign on a faux retail store and viola)? Or do it really inexpensively? Thanx!

[Wozcreative]

Are you trying to be a wholesaler or sell directly to the consumer?

[edowney]

I'd like to sell to consumers...

[Harold Mansfield]

Hi,

I've always had a dream of running my own game store (board games, role playing games, etc) since I was young but I ended up in the computer industry working as a programmer. After living through, and completely missing out on, the start of the PC revolution of the late 70's and the internet boom of the 90's I still think about starting my own (online) game store. One of the problems I keep running into is that distributors want to see a brick and mortar store before they'll sign you up as a client. Does anyone have an idea on how to get around that (legally - I know I could photoshop a sign on a faux retail store and viola)? Or do it really inexpensively? Thanx!

Don't focus on actually holding inventory, selling and shipping other people's products. See if you can set up an affiliate deal where you can sell the products through your website for a percentage of the sale. Many probably already have affiliate programs.

Then you can mix and match what you offer on your site with products that you are actually shipping, add your own products in, and products that are being drop shipped.

[billbenson]

I'd like to sell to consumers...
-------------------------
why?

[edowney]

The problem with affiliate programs is that I'm forced to sell at full price. In order to compete I really need to sell at below MSRP.

[Harold Mansfield]

The problem with affiliate programs is that I'm forced to sell at full price. In order to compete I really need to sell at below MSRP.

Even retailers are just glorified affiliates. They have rules to follow too.

That's a really highly competitive market. HIGHLY competitive. And very territorial.

I don't know much about retail, but I would assume that you would need to buy in bulk to be able to pull it off. Not trying to be a naysayer, but how would you buy at the same level or better as the big chains that are already selling games? Working from home? How big is your garage?

And will game makers let you sell for below what they are selling for via their own marketplaces?
How are you going to get lower than Walmart? They're pretty ruthless. They'll lose money on items just to run you out of business.

I'm not sure the play here is to try and be cheaper. I think it's to try and be better or to capitolize on something that the others are missing.

[JamesTallon]

This is one of the most cut throat markets in the business world today, as a previous post stated Walmart will loose money to put you out of business. I would honestly suggest looking at doing research before you make any plans and fall into your dream, but if you are set on doing this you need to find a nitch, and not compete on price because once you begin to compete on price your business will never work!

One thing you could look at is finding some professional consulting services that offer free consulting or low cost consulting. They will have all the data that you don't have and can really help you shape your dream into something that will work.

[billbenson]

The problem with affiliate programs is that I'm forced to sell at full price. In order to compete I really need to sell at below MSRP.

Again, WHY? There are plenty of niches where you can sell above MSRP. It sounds like you are trying to sell a product you can't make money at and complaining that you can't. Find a different product!

[Harold Mansfield]

Again, WHY? There are plenty of niches where you can sell above MSRP. It sounds like you are trying to sell a product you can't make money at and complaining that you can't. Find a different product!

I have to agree here. Your first time out and your margins are going to be slivers? Even experienced businesses have trouble pulling that off. Especially being that this will be your only product.
Does not sound like a good plan to me.

[Brian Altenhofel]

once you begin to compete on price your business will never work!

Unless you're big enough. It takes a *very* large volume to compete on price. You have certain costs that stay constant per sale, and you have other costs that shrink at different rates per sale. (As an example, accounting is one cost that shrinks per sale.)

That said, some drop shipping programs can be fairly lucrative. I've seen some where the gross margin at the average street/Internet price was 40%+, which is actually extremely high for retail. And then I've seen others where unless you were moving $100K+ worth of product per month, you'd be lucky to have 5% at MSRP. The great thing about drop shipping is it removes the need for space to hold inventory (which, by the way, many small businesses hold too much of) as well as the need to insure that inventory.

If the focus is competing on price, then you're setting yourself up for failure. Believe it or not, there are people who are willing to pay for service.

[PayForWords]

If you want to do this just to do this (I know some people here are saying don't do it), do it as a hobby. Find the board games etc that you are wanting to sell at flea markets, yard sales, pawn shops, wherever and flip them. Set up a small, online store or even an eBay store and sell!