Want to open a hobby/video game store

[ffried89]

Good day SBF! This being my first post I'd like to introduce myself, my name is Frank I'm currently in the military and looking at getting out and, you guessed it, start a business. I'm 24 years old, been in quite a few positions that put me in the leadership role so I have no problem in that area, I've got a small amount of business experience, and worked in retail for about 2 years before the Military and out sold many of my other coworkers. Any way on to my post.

I've been looking around the internet and while I have found quite a few articles on opening a hobby/game store and there is a lot of good information, one cannot have to much info

Being in the Military I'll have my GI bill to cover the opening costs of the business, I've looked around my current city and can see a need for a video game and hobby store and with this being a military town can see it doing well if advertised right.

So far what I have in mind for my business is to carry a wide range of things from tabletop rpgs, tabletop war games, board games, new and used video games, retro systems and games, trading card games, anime, manga, comics, etc. I would also have a gaming room for customers to come in and use for pretty much whatever they would like hobby/game wise, I would sell snacks and drinks and have tournaments with prizes to help drive customers into the business.

I'm very enthusiastic when it comes to nerdy things like this, but I don't want to open one of these stores so I can play more video games or anything like that, I want to provide a service I see a need for and like any one starting a business want to provide for myself and be my own boss.

So what am I asking? Give me any information, guidance, cautions or advice you would have for me. If you have experience in this field that would be great, but any thing would be helpful.

Thank you everyone for at least reading this!

[Brandscribe]

I honestly think Bricks and Mortar retail is a dying industry. The power of the internet means people will come into your store, look at your stock, and then price match online using their smartphones. Unless you're in a part of the world where shipping is a PITA, I do think you would struggle to remain profitable. Have you considered removing the overhead of a store, and also widening your customer base, by operating online? If you find the right niche end of gaming and hobbies I'm sure you could access people not just in your town, but across the country (if not worldwide) with your products.

Best of luck

[Patrysha]

IMO, this niche is not about the product, but about the environment...kind of like a restaurant.

The local games shop here with the product line described by the OP is run as a non-profit now in our small town. The money they were making wasn't enough to meet all the bills, so now they can fund raise to cover the difference...the premise behind the non-profit status is that it is a valuable no-bully zone - plus they were finding they were always providing meals and snacks to many of the kids so the fundraising helps defray the costs of that too...

[Freelancier]

Bricks and Mortar retail is a dying industry

Brick and Mortar stores are sooooo not dying. We look around here at all the new shopping spaces being created and know that there's still a place for it.

Physical stores work well when you have either a captive audience or your audience needs something RIGHT NOW (e.g., food, toiletries) or your audience would hesitate to buy it online (e.g., mattresses, some clothing) and so on. Virtual stores offer decent pricing, sometimes no sales tax, a wider array of choices, but you can't touch it, taste it, smell it, try it on, take it back (as easily). So there's a place for both. Best Buy struggles because electronics are electronics... but Wal-Mart and Home Depot don't struggle because they offer things people want RIGHT NOW.

So think about your audience. Who will come into your store and will they want to buy RIGHT NOW or will they be ok waiting 3-5 days for delivery? You can make this work, but you have to capture your audience and make them more likely to buy from you instead of looking online, because what you're offering -- for the most part unless it's a last-minute gift -- can usually wait to be received with no real consequences.

So you have to make your store a place for people to want to buy stuff from you instead of going online. It's going to require being a bit creative.

[LGCG]

IMO, this niche is not about the product, but about the environment...kind of like a restaurant.

Yes. As a frequenter of comic book stores, the reason I don't just order them all online is because I like the experience of going in to the store and looking around, plus chatting with the cashier. It's all about the experience.

[huggytree]

a specialty store idea may work or it may not...I think it depends on your town....you will have to charge decent $ to survive....I can go to amazon.com or Walmart and buy my video games...I see no advantage to buying Wii games from a specialty store that will most likely be more expensive....

focus on things that Walmart and Amazon.com don't sell.....sounds like your trying to make your store into an experience by having a gaming room...great idea

[TXanalyst]

Retail can definitely work, but it's got to be well planned. Only thorough market research will tell you whether this is a good idea or not for your particular city. First, you'll need to get a hold of a thorough profile of this particular niche of the hobby industry. This will tell you how big it is and, moreover, what the typical and target customer looks like.

A fast search online tells me that the toy/hobby industry overall in the US is a roughly $20 billion dollar industry. That's big. Your particular hobby/game niche will comprise some portion of that. Once you find out how big that portion is, and whether it's growing or shrinking, who the major competitors are (online and brick & mortar), consumer shopping preferences, and again what your customers look like... you're then ready to begin examining the dynamics of your local marketplace.

There are services out there (like VentureArmor.com) that can take this basic industry research, and combine it with demographic and other data from your local marketplace to produce rough estimates of how much you'll likely make in sales from various proposed locations around town. When this information is bounced up against your known cost structure for each of these locations, you'll have a pretty good idea of which location is best, and how much money you'll likely make (i.e. profit in your pocket at the end of the day).

The profit projections for these brick and mortar sites can also be compared to profit forecasts that are put together for various online launching options (i.e. online-only stores). This will tell you which will likely be the more profitable path forward. Brick and Mortar might turn out to be the winner. Alternately, online only might turn out to be the best option.

Hope this helps

[KristineS]

I think there is still room for game stores like you describe, particularly if you offer space in the shop where people can meet and play games. There's a show on YouTube called Tabletop which is all about introducing people to new games to play. They have what I believe was called an "International Tabletop Day" designed to get people to visit their local games stores and get to know other gamers in their communities. It drove lots of traffic to local shops and helped create gaming communities.

Especially in a military community meeting somewhere to play games would be a way to meet people with a common interest when you're in a new city. There would always be an influx of new people, and your shop, since you have military connections could serve as a place for people to meet and interact. Of course, I don't know the particular market you're thinking of, but I don't think the local game shop is dead. It just needs to be marketed properly.

[phanio]

Nobody really knows what may happen and what may not. My suggestion is to start small - say find another business in your area that may have some empty space in their store or run it out of your house or on your own property if you can. Set up in that area and see what happens (market it well). You can offer some of your revenues to the other business for use of that space - but, your business can drive traffic to them and their business can drive traffic to yours. See how it goes - work out the bugs and then when you have it down - go out on your own.
My question is this: When I ETSed 20 years ago, the GI Bill was only for education expenses. Is that not the same or do you have it wrong?

[Harold Mansfield]

I'm the kind of person that only goes to a brick and mortar store for things that I cannot buy online or need to try on....and these days that's pretty much limited to pants or a suit.


I suspect there are going to be more and more people like me into the future. Not less.

So, with that in mind, the only way I'd open a brick and mortar is if the need was so great in the area, I had a killer location, or sold specialty products that people want to see and feel first. Other than that, it's an expensive risk opening a store full of things that people can just get online. And probably cheaper.

Without a killer marketing plan to keep the foot traffic coming in, or a great location, it's not a good plan.
You'll never be able to complete on price on the games (and they are changing that model to subscription based plans, and downloads anyway), and I can't think of any hobby supplies that can't be purchased online or by a big name store for less.

So how exactly do you plan on making enough money to cover operating expenses?
What's your plan to compete with Ecommerce?

The last time I went to a video game store, I used to go just to play the games and see if I liked them, and then I'd go online and order it for less .
That's what all brick and mortar stores are going through today.
How do you combat that?

[Jeff_B]

You can never be too cautious when opening up a business especially one with the expenses that go along with brick and mortar.

That being said the most important aspect of your business will be location and the type of environment you are willing to provide. Locally we have a company popping around called 2nd and Charles, they're buying up all of the old borders stores ( they are very similar to borders) and are seeing only growth.

Their model is of the understanding that competing with Ecommerce is nearly impossible since you can't have anywhere near the buying power of Wal-Mart or BestBuy. What they do differently is about 50% of what they sell is second hand, they'll buy a game for $15.00 when Gamestop will only pay $3-$5, and sell it for $20.00 ( when GameStop will sell it for 30 +). What this does is corner the market on used games/books while keeping their prices lower then their E-commerce competition when you start to factor in shipping. While this drives traffic and gives the customer an influx of their own cash ( from selling), and up the door to impulse buys of new products.

The stores are very comfortable to your standard 20 something gamer, which is a category that I fit into, as it has all of the fittings of a border with all of the products I'm interested in purchasing.

Hopefully that helps.

-Jeff_B

[mrrodosmith]

I agree with the folks on this post that state the brick and mortar business is NOT dying. Especially in this industry. Yes, people will say LOCATION LOCATION LOCATION is very important. But also, it's vital to find a need and satisfy it. Or create a need people weren't aware of and supply.

Most of the successful, long term hobby/comic book/video game sore type places I visit in my town have one thing in common - a place for people to table top rpg's, or book based rpg's (D&D, Palladium, Magic, etc.). Granted, some of these can be played out online. But there is something about coming in and playing from dusk til dawn "in person".

I'm not sure how this would work, by maybe consider a reserved area of your building where folks can play fopr maybe an hourly fee or flat based fee or something.

I hope this helps.

[Original Hosting]

I like your idea, sounds good.

Rather than doing just physical or just online why not do both? You can still sell on Amazon, Ebay, on your own online shop and in store. Plus you can advertise your online shop in store and maybe make use of some sort of loyalty scheme so people will keep their custom with you. A good idea could be to do contests on certain games in your "Games Room" with the local community for charity or similar as this would be a great way to benefit others, shed good light on your business and also recognition along with some free endorsement.

[kimoonyx]

Hi,

Retail video game stores can be very successful. I have been in the industry now for six years. It is my bread and butter. I also needed to integrate back to the private sector upon exiting from the Military. I know about your perspective. I know how you feel...After serving it is very different and even somewhat challenging to work for those who haven't experienced some of the events that we have. For me it was difficult any way.... My very best successes came after I went entrepreneurial, and I did it with video games.

I own a business that specifically provides a video game store set up service.

[Edited]

In any event Good luck!

Michael Elliott, Owner of GameStart Stores.

[ryand83]

Ok first of all, the only way to have a competitive hobby gaming shop is to use Wizards of the Coast and other gaming companies of the sort as a distributor (they don't cater to just on-line shops) you get 65% off on WotC's products as brick & mortar. I would check out what other hobby gaming shops are doing to find a niche in what they don't do and market that. If they don't have a specific format in say Magic: The Gathering cater to that specific format along with FNM operate at various times (I believe WotC doesn't say when FNM has to start) so if a shop starts it at 5 or 6 PM start your's at around 10. If you don't have competition then don't worry about what time you start at.

I just started school not long ago for business administration so I can ultimately do the same. I also wanted to get into a field that I could find various outlets and such, not just operate a small business just incase my idea doesn't come to be.

Anyways, another thing to look at from my stand point is location, I'm very heavy into hobby gaming as a whole and the main thing I see from a mass amount of shops is this issue. Shop owners seem to think imo that "out of the way" "word of mouth" is the way to go for hobby gaming, they're dead wrong, you might pay $5k a month on rent but if you have a solid location and obviously niched in a wide array of games you shouldn't have an issue generating a mass income. Do $5 video game tournies for store credit or $5 casual tournaments and you'd be surprised at how many people will flock to your store. Also discounts really help hype your store up when you spend $1.75 on a pack of magic cards and resell 3 for $10 not only will people buy them you'll be out of boosters before you know it.

Another thing is marketing, you rarely see gaming shops marketing in newspapers so that may be another route to go I believe that can get pricey but you'd be surprised at how many retired folks read the newspaper and would be interested in playing games as a hobby. Facebook is a definite.

Find a nice niche that other shops don't have and what the surrounding area wants. The shop I want to open would be right across the University of Southern Mississippi. So no doubt I will have a small café area with homemade potato chips, smoothies, coffee, soft drinks, and if I can get help from friends I may delve into homemade pizza as well all with superhero/fantasy/sci-fi themes.

Various contests work too. Once a month I would throw a contest where customers can submit ideas for the store and gain store credit if their idea is picked, this idea would not only help you as the owner make it better but show the customers that you care. Costume, drawing, painting, and karaoke contests would work too.

Make sure that you don't spend yourself to death, there was a card shop here in Mobile that recently shut down and they sunk about $60k into the shop because they spent too much on décor. While décor is nice and all it won't save a shop if you don't have enough starting inventory to make profit right away. Expect to be spending around $30k on start up inventory.

I'm not exactly sure what your money is like, but I would not go with a bank...while Investors are risky they can be rather useful, Angel Investors do not interfere with the management of the store so I'm tempted on going that route. I think $100k overall would be a solid start but as you earn profit you'll want to upgrade. Bargain shopping would be solid too for tables and such.

I'm working on my business plan for a project in my intro to business class, and if it looks solid to my teacher and classmates I may use it when I can make that leap.