The Games Journal | A Magazine About Boardgames

Opening a Games Store

Ward Batty

March, 2005

So you dream of opening a games store? So did I. And I even did it. Batty's Best Comics & Games opened in August, 2003. It was the culmination of not only my prior retail experience (I co-owned Dr. No's Comics & Games for 19 years, although I was actively involved only for the first 6-7 years) and 40 years of life experience. I built what most everyone who was ever in it seemed to agree was a beautiful store that was a nice place to shop and play in. Unfortunately I probably picked a poor time to open in terms of the overall economy and the cycle the game business went through (downturn as Yu-Gi-Oh! and d20s petered out and nothing much to replace them) and definitely picked a poor location (no street visibility, no signage visible from the street, and too-high rent for the traffic we got). In the end, what I did wrong mattered more than what I did right and we were forced to close the store in January, 2005.

During the time that business was dropping off month by month, one thing I heard repeatedly from my fellow gamers was to keep my head up because I was "living the dream." I really can not count the number of gamers who confided to me that it was their dream to open a game store someday.

OK, dreamers. I'm going to lay on you not only the hard lessons I have from my retailing experience, but also advice from other retailers who, ahem, still have stores. A lot of you dreamers won't be by the end of this, so proceed with caution.

Is Owning a Game Shop Really The Business For You?

The first thing you need to know is this is retail. You happen to be selling games, but retail is retail. The problem with "the public" is that it includes everyone.

John Kaufeld, self-described Chief Elf at More Than Games, Fort Wayne, Indiana says "My overall advice to a hobbyist wanting to open a game store is simple: Don't do it. Being a store owner means being a business-human first and gamer second, and most gamers don't want to do that. Owning a store is a tough row to hoe, as my dad used to say."

"That being said, owning a store is also a marvelous life for the right person. I dearly love my store and my customers (even the obnoxious ones). I enjoy hearing the lock click and turning on the OPEN sign. It's a blast."

Heather Barnhorst, Retailer Consultant and Manager/Buyer Attactix, adds this bit of wake-up: "About once a month, we have someone wander into the store who claims that he wants to open a game store (interestingly enough, no women ever do this). Sometimes, if he thinks he is being sneaky he tells us that he is asking for a friend. This latter person we rarely give the time of day to. The former, though, we will sit down with and give some general advice."

"Here are some things I tend to ask him:"

  1. What kind of salary do you expect to make? Usually they skew way too optimistic and I tell them what the average game store owner makes. Most of them don't even continue after this slice of reality. Same goes when I ask about benefits.
  2. What kind of hours do you want? Do you want vacation time? When I tell him the reality that most of us face, he begins to see that running any retail operation is time-consuming. It is kind of like having a baby, his schedule will not be his own for some time.
  3. Why do you want to open a game store? If he answers me that he loves games and wants to play games more I immediately categorize him as a fan boy and take a different tack with him. I explain to him that in some ways I "love" games less. They have less romance and seem like less fun sometimes. They are now a business. If he doesn't want to look at his hobby from this angle, then he shouldn't open a game store.
  4. Have you started a business plan? If yes, then I refer him to my employer for specific numbers, etc. Not that I don't understand them, but it isn't within my rights to give out my employer's proprietary information. If no, I start telling him about all the little expenses he might not have considered.
  5. Do you understand that a lot of job will be bill-paying, vacuuming, cleaning toilets, etc? 

"That is always a nice wake-up call."

What Should a Game Player Who Wants to Become a Game Retailer Do?

Mike Webb, Director of Customer Service from Alliance Game Distributors, replies: "Have his head examined?"

"OK, not seriously, but they should take inventory of the reasons they want to run a store. Is it because 'it would be heli-kewl', or it is because they have analyzed the area and believe it to be a worthwhile business investment to do so. As you know, even with that analysis it can be tough to gain a foothold—but the odds of failure go up the more it is a hobbyist decision than a business one."

Kaufeld suggests: "First, they need to spend at least a year working in an existing retail store like Radio Shack, Suncoast Video, or (preferably) The Sharper Image. If the thought chills them to the bone, then they shouldn't open a store. If they come out of that year energized and excited about the prospects of dealing with the public every day, then they at least have a fighting chance."

"Next, they need to pick a game that they don't enjoy playing and try selling it to a friend or family member. If you can only sell games that you love, then don't open a store."

"Finally, they need realistic expectations about retail profits. Talk to the local SCORE chapter. Talk to existing game stores in other cities. Read Dave Wallace's books. Game Manufacturers Association Join Brian Guenther's Game Store Resource Forum. Join GAMA (Game Manufacturers Association) and attend the GAMA Trade Show. If they spend a couple thousand dollars on preparation and research, but discover that they don't want to open a store, they're way ahead on the money. If they spend the same money and decide that they want to press ahead, they're way ahead on the money. It's a win/win situation."

Andy Gipe, manager of Compleat Games & Hobbies in Colorado Springs, Colorado, adds: "I recommend that the person have several years of retail management experience, some familiarity with the operations and financials of running a small retail business. Also, have an exit strategy in case things go bad, this includes knowing your lease. Remember, if you bet your life, you'd better be prepared to lose it!"

I absolutely agree that some sort of prior retail experience is essential. But for discussion's sake, let's say you taken all the above advice and you want to proceed to open your dream game store. What next? First, because it is the easiest of all the steps, buy a copy of Why We Buy by Paco Underhill. Don't design your store layout without reading it. Especially if you ever want women customers. It is also an enjoyable read. You should also get and read Specialty Retailers Handbook by Dave Wallace (available at Roleplayer.com if not elsewhere) which is basically indispensable.

What should a prospective retailer do? "Go to the GAMA Trade Show, talk to every retailer they can find, take everything with a grain of salt. If they can't do that, find a town about 100 miles or more away with a game store that has been around for a few years, call up that owner and ask if hey will talk, and then go visit (don't forget the saltshaker). Repeat 100 miles away in another direction. Most game store owners seem more than willing to talk about the business." advises Tennant Tranchin from Game Chest, Dallas.

Taking the Plunge

If you decide to go for it, you will be faced with many decisions. The most-important and, to my mind, elusive task (since I did such a poor job in this regard) is finding the right location.

What to look for, "If they decide to open a full line hobby game store, then my comments about location would be one clearly visible from the street and a place that people can be directed to in 10-15 words or less." says Tranchin.

Batty's Best Comics & Games

Which is better, prominent space with high rent or an obscure spot with cheap rent? Brian P. Guenther of Diversified Games and the GAMA Mentor Program Manager says: "Prominent space with cheap rent would be the best alternative. Good luck finding it however. To a point, game stores are destination stores and that can allow a store a less prominent space. However, remember that the further from the people you are, the less of that main stream money you'll be able to tap into. Visibility equals people coming into your store who might not otherwise. Getting those people to spend money in your store however is not a guaranteed thing. There reaches a point where the dollar figure just doesn't translate into sufficient additional sales to warrant the space."

Mike Webb adds: "Depends. Truly. If there is an established gamer community, a 'destination store' can survive. But it limits your growth potential to word of mouth, and makes it difficult to attract new players. During down cycles in the industry however, this may be the wisest or most affordable route to take."

"During an up-cycle, or when a hit breaks out into the wider market, a prominent space will reap the most benefit from it. Often though it will take a hit to sustain the costs of such a location, and those come and go."

"I think a middle of the road solution is best—you don't have to have a highway exit to your doorstep, but a location that is visible by the 'muggles' and a place that a new gamer (who is not plugged into the local community already) can stumble upon is preferable. The less visible you are, the more effort you must spend on outreach."

Marcus King, owner of Titan Games & Music, says: "Look at odd duck locations—old banks, ex-churches, grocery stores, etc. I learned this lesson from Troll & Toad who bought an old church. We found an old bank, and it was cheap and on the main road."

Says John Kaufeld: "It depends on your customer base. If you plan to sell mainly to gamers, then you can go just about anywhere because they'll find you. If you plan to reach a broad audience, you need a more visible location. Be patient—don't rush a decision. You can find a great space if you look for it."

How much will the initial stock cost?

"That really comes down to what they plan to do. And what they need to do in regards to sales to survive. Just the decision to carry Games Workshop full line is a $10,000+ swing in your investment. I've seen stores open with a total inventory investment under $15,000. Realistically though I think that's a rather low number. If a store can afford it, more is better. At least to a point (Spending money on product nobody in the area wants is a waste. Open with a more minimal amount of inventory, but an inventory-budget reserve, figure out what people want... then stock it)." says Brian P. Guenther.

Marcus King says: "$35K to have a good selection. Nearly nobody does this, but we were never really profitable until we reached a certain point of having enough selection."

John Kaufeld adds: "We stocked a small store (1250sf total space, but only 600sf retail sales floor) for about $15,000. Don't forget the fixtures! Most newbies have no clue how much retail fixtures cost or how to shop for them. One fellow I spoke with thought that all retail spaces included fixtures as part of the lease. He figured that he'd buy a cash register from Office Depot and be ready to go. (For the record, I talked him out of starting a store.)"

Adds Mike Webb: "Depends entirely on the store space, product mix, etc. For a full line game store, I have seen reasonable orders vary from $10-30K. But it is way more important to keep some flexible reserve cash as above than to push for a higher startup inventory."

What are the biggest "rookie" mistakes?

Tennant says: "Undercapitalized to start with, no reserves once opened, and unreasonable revenue expectations."

Marcus adds: "Biggest Rookie Mistake—nearly universal in my experience—signing a lease you don't understand. Too long, too one sided, no out clause, other things that make it hard to get profitable."

Kaufeld warns: "Watch your inventory like a hawk. If you think you should buy six of something, buy one and reorder when it sells. If it sells consistently and you find yourself reordering frequently, buy two next time. If you think you might sell just one of something, make a poster of the product and offer to special-order it."

Says Mike Webb: "Assuming that because you like a game or a category that everyone else will. Running a store allows you some degree of latitude in deciding a product mix that you personally believe in, but many stores have made the error of excluding a profitable category, or including a money-sink product or category that they could not afford to. As the saying goes, principles are nice if you can afford them."

"Tied on my list was spending all the money on fixtures, build out, and opening inventory, and not having a backup supply of cash for buying hit products as they reveal themselves or covering unanticipated slumps. Cash reserves are very important, and I have seen them make the difference in a startup surviving and a startup failing."

Jim Crocker from Modern Myths in Northampton, Massachusetts sums it up thusly: "Bottom line: No matter how much planning you do, you'll find it wasn't enough. So do as much and put together as much data as you can, and keep aside as big a 'reserve fund' as you can manage."

Can a boardgame-only store succeed?

Since this is The Games Journal, I'm assuming that your particular dream may be opening a boardgame-only store. There are a very few successful ones, but there also seems to be a consensus among most in the business carrying only boardgames makes success much more difficult.

Tennant Tranchin says: "No, a boardgame-only store will not work."

"If you sift through the forums threads, the most common post about boardgames is 'they don't do well for me.' As a category they are considerably weaker than Collectible Card Games (CCGs) or Role Playing Games (RPGs). While players buy bunches of packs of each new CCG release or a number of core and source books for their favorite RPGs, most boardgames are one-shot sales. There is just not enough board game volume to solely support a store, it just slices the niche too thin. I know some of the distributors publish best seller lists. How many boardgames are in the top 100 products?"

Batty's Best Comics & GamesI carried a wide selection of boardgames, the most of any shop in town, at Batty's Best. But I also carried some CCGs (any that sold) as well as the plastic pre-painted Collectible Miniature Games (CMGs) and some RPGs. I also carried comics. CCGs, in particular are a hard line not to carry. They take up very little space for the business they can generate. We did between 10% and 40% of our overall business from the CCGs that were in one display case.

Andy Gipe adds: "Boardgames alone are hard, and will work in some circumstances, but I would recommend a breadth of product lines. Don't focus too much on one thing. Especially if it's your one thing just because you like it. Most of the failings I see are stores with all their eggs in one volatile basket. Dangerous!"

John Kaufeld has a more complicated opinion: "I completely agree that a boardgame-only store aimed at a traditional adventure gaming clientele won't work. Hard-core gamers can't and won't support such a store, although they'll gleefully eat free food and play in your game room. Regardless of the local population, it just wont happen. You might as well take your start-up money to Vegas and hit the tables, because you'll probably get a better return there."

"Conversely, a boardgame-only store targeting the other 99% of the population can succeed, and we're living proof of it."

"More Than Games turned two on November 11, 2004. The store lives in a city of about 200,000 that contains four traditional hobby game stores (including a new one that's just opening), plus two comic shops that carry a lot of hobby games and run some events. We turned a profit in 2004, paid three part-time people to run the store all year, and repaid over half of the loan that started up the store. Best of all, we broke our all-time sales record three times in December 2004. It was a good year."

"It takes a lot of effort to make a boardgame-only store happen with our customer base, but it's very possible and very profitable. It takes a lot of customer education and product promotion. Most of our customers didn't know that our products—or even our entire industry—existed before they found us. That's a bit of a problem, but it's also a huge opportunity. Our product enchant them, and they love us for expanding their world, and giving them a reason to turn off the TV and enjoy time with their family and friends."

"Maybe 5% of our sales are to hard-core gamers, if that much. Typical gamers don't really register on my sales radar at all. Almost all of our customers are normal people who shop with us because they heard about us from friends or on the radio. They thought the world of board games began and ended in the toy aisles of Wal-Mart. They think that d20 is an oil additive or a pesticide. They know that D&D exists, but it's irrelevant to them and their lives."

"Honestly, I'd say that it's easier to work my model than it is to create a successful full-line adventure game store these days. My regular customers don't price shop, show a fiercely loyalty, promote the store to their friends, and spend very well all year long. You can't say the same about most gamers."

Andy Gipe adds: "I think boardgames that appeal to general consumers are a much more stable product line than collectible games or lines that rely on a returning customer base. We do very well with boardgames and they account for more than a third of our sales. It's the most consistent in the sense that it appeals to almost everyone and anyone who would come into our store."

So can a boardgame-only store succeed? Mike Webb of Alliance says: "Yes. Perhaps. But I've not seen it happen often."

"I've seen several hybrids work. Fact is that board games are not a repeat purchase model, and most games contain enough entertainment value per dollar that they don't create enough reason to buy more. You can buy Settlers and enjoy the game for months before buying Seafarers—and the Settlers dynasty is the best repeat purchase board game out there."

"A boardgame-only store would have to have enough foot traffic to bring new buyers in frequently—frequently enough to overcome the lack of repeat purchases. Board games are a great line, and can provide a baseline business level. But eschewing the CCGs, CMGs, and RPGs and minis that provide frequent purchase and upgrade opportunities limits the cash flow per customer."

To this Michael Cox, President of Centurion Hobby Distributors Inc., replies: "I think John is spot on with the building the perception of he is the place to get these cool games. The 'muggles' he is appealing to are not constantly trolling the internet to get the latest fad at just over cost. They want unique entertainment and will pay a premium when it is presented to them."

Mike Webb adds: "But the challenge there becomes getting the general consumer into the store. I think stores like More Than Games have managed that well, leveraging word of mouth and radio spots. I also think that things like the Poker craze have helped more 'non-collectable' stores get notice in the mass consciousness. Sadly, we can't count on those each year though."

"I may have to rectify my statement in the future as more and more mass sources for games disappear (Toys 'R' Us, etc.) and the sections in Wal-Mart and Target shrink. I hope that day comes—I'd love to have Board/Family games stores in every town."

So there you have it. Retailing requires a number of different skills and is a lot of work. It can be very rewarding and, as you can see from all the retailers who contributed to this article, the art of retailing is something they care a lot about and is something about which they give a lot of thought. If you are still interested, I hope to see you at the next GAMA Trade Show. I'll be the happy-looking chap with the badge that says "press".

- Ward Batty

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