Running an Independent Game Store - #CUPodcast

damn you help run a couple of independent game stores to Luna video game locations one in Chula Vista I want to let Mesa don't you yes I do just open about what it takes to run an independent game store quite often on the show since we have some experience with it so polygons published an article and I going to hit on some just some points here you really should read this article if you really want to know this is a great article it was written by hold on it was it was written by Matt Leone I was published on July 17th so just yesterday and it's it's a long article it's worth reading all the way through I can't get into all of it because it would take forever but what I love about this article is it validates and verifies every single thing I've ever talked about running an independent game store on this podcast um like literally down to numbers I've quoted okay so what it talks about is a lot of this talks about the the financial what goes into financially running one of these things the problems that people face in modern times of running these and and so on and so forth the interesting thing about this article that does stray a bit from what I talked about in this article I talked about on this podcast is this does seem to be a bit more focused on a store that focuses more on newer games okay okay so this article seems to me to focus more on new game sales for newer systems and use games for newer system for newer systems not necessarily retro games right but it does it does cover some so one of the biggest problems with running a modern game store is um the delicate balance of bringing in brand-new games and the wholesale cost that you that a game store pays versus the profit that you make on it and how fast these games drop in price the fact that wholesalers don't really give a about independent game stores and that things like Amazon are almost the better way to buy you know some of these new games right now someone in this article and this is such a huge article that if I can't quote everyone properly I'm going to feel horrible but someone said that in this article that when you run an independent game store you're not really running a game store you're running a store wholesalers don't view you as a game store they don't give you the discounts that they give other stores that they give the big chains we bought you regular college it or Watergate Walmart BestBuy Game Stop you know there's a quote that back in the the 80s in 90s you used to be able to buy a game wholesale like an NES game say for 25 bucks or a PlayStation game for 30 okay and these games were sold for 49.99 or something like so you make a hundred percent profit so you would make a great amount of profit for a wholesale that's a good amount yeah hundred percent about respect a bit that's fantastic nowadays I think it's funny because I have I've stated these prices wholesalers will charge you 49 to $55 for a new game you've stated in the low 50s I think below at least yeah yeah I mean I and I've even said 49 because that's the cheapest we've ever gotten a wholesale game for and so that's a maximum of $11 profit before you take into account shipping shipping taxes on that you're paying as a business and whatever overhead you're you have running the store right that's not enough and sign up so what they talk about is now you have to with with with Amazon people doing Amazon because with Prime you get these great discounts and things like that is it worth getting these games in are you actually going to get your shipment on time if you get your shipment at 3:00 in the afternoon as opposed to the day before so that you can have that game on your shelf on street date the morning up are you even going to sell it there's a talk about a guy in here who has an entire showcase of games on eBay here's a quote right I have a whole showcase full of games we're selling online right now of games I probably paid $52 for and I'm selling for $15 in twelve twelve to fifteen dollars oh he's taking a huge bath on these games I guess he couldn't sell quickly enough and the value like you said plummets on these new games you walk into Luna you will see single copies of games along the back wall sealed brand-new that we are taking baths on set you feel yes you that we probably paid fifty to fifty five dollars for that we are now trying to sell new for $29 or you know or whatever the current new prices or $19.99 or even $9.99 so from your perspective then why would you continue to do that we don't use given up on new games we up for the most part we've given up on new games and in this article you will see a lot of these game stores that have I saw something that was very interesting in this article and that is easy there was a guy who will pre-order one copy of every new game off of Amazon through Prime forget at a discount with 20% save 20% and that gives him a longer window of time to try to sell this game sure that makes sense that makes sense and you know that way he doesn't take such a hit if it doesn't sell and his problem ours will be the same if he buys a $60 game of $48 that's you're saying that's a cheap as you can get it from a distributor anyways so the profit margin is the same what I think is probably the best idea honestly for the ultra term pigeon zone the Amazon I don't believe so but what I think is any better idea now that I'm just freewheeling here in my head is you buy the games that you or your employees might want you put them on a shelf and if they don't sell them then you've got a guaranteed sale somewhere anyway that's a great that's a great point about I think Best Buy does a percentage off Club to on new releases Amazon does they're there so about before is that when do that then maybe you only buy three or four if you're forcing the wholesaler to buy ten or twenty then that's a bigger risk versus it's buying three or four that you make a little profit on you can have it in your store you say oh yeah I have the new release here you can buy two here if you want and there's less like you said it's less risk involved at that point too and the other problem is you get you've got these into the stores that want to play it by the book and then you get the stores that break street date which also makes it nearly impossible to sell these new games when you've got the stores the break street date um so you've got that issue as digital affected digital I think has and I think digital has greatly affected things on the west coast especially and the main reason digital is and I did mention this in a pretty much can combine earlier you can buy it earlier I can buy for instance I get impatient a you know a game that I might really want physically I've got Tuesday off and I'm sitting there Monday and I really want Wipeout Omega collection and I know that I can stay up all night playing it you know it's really tempting to buy it at nine o'clock on Monday so I can set up all night in sort of way to you know waking up at 11:00 on Tuesday and going and buying it physically so I think digital is affected it too so there is that the other thing that I found interesting besides and I'm glad I saw that because I thought it was just us I thought we just had shitty distributors it's interesting to see that the distribution problems for independent game stores don't sure are the same everywhere yeah your small potatoes compared to a big box store like why would they care about it's left tomorrow right you know I mean and the thing was you know I would love to know a lot of you know there are some of these people have been doing this a long time but um some of these people are newer at this I I wonder if some of these people have been doing this longer I've seen the change that we've seen because in 2006 we used to be able to get our games two days early we used to be able to get them almost always that like the the 45 to $49 price point which was still not I would say more 45 is a little low I would say but we used to always be able to get them like at the 48 49 price right and we've always be able to get them a day early so we would have them or two days early so we would always have them for street date and that that that slowly became never the case and now we can't find a distributor who can maybe even get them to us on street date well it's on time so yeah you got order or gonna hit you that day um other things that I found interesting the costs are basic like when when done so that that guy who who you said something about his face is this a muscleman space that john soccer i think his name was john soccer a guy who opened that cool store somewhere the guy who here is jasmine sakura owner of gamers anonymous in Albuquerque New Mexico the guy who found all those who found all those oh no I met him III oh you did yeah yeah oh yes I say it looks like it still makes all the week I was going all the interview tickets well he lasted all the night wraps um what was I going to say in regards to him because he made he made it interesting Oh looking over like his at because he opened his books okay and his books look very similar to Luna so it's cool to see that these these things lost include a misnomer thermical people ya $3,400 for payroll $800 for rent almost a thousand grand it seems low but that's he's a New Mexico not San Diego so 800 for rent 250 a thousand four times 250 for most miscellaneous bucket or minor expenses like cleaning supplies from Walmart 200 for our point-of-sale system when trying to get Luna was 55 for credit card processing which is a decent amount remember they take between two and four pills yeah 150 for electricity 150 for insurance on your 50 return phone 150 for an accountant actually okay I'm going to lie he hundred for advertising he's got a really actually I'm sorry his books are real lucky 100 four five stars customer rewards programming to do some like that $30 forget $6 for web hosting we actually pay a lot more but still I mean it's cool to see this and be able to compare it so this house why is marks been so this is why when people go hey Pat what why do you care what you know why don't you get on the brick-and-mortar stores for how much they charge because they have a hell of a lot more overhead than some on eBay or someone at a Swami write in able to protect themselves a lot more it's in this in Jonathan here this is not a small monthly amount that he's paying out okay and he's in New Mexico where's where hidden thousand dollars a month where where he's paying less probably because of location now you probably look at now and I'm not going to get into our stuff but we're paying more in rent and I pay I just because of the amount of trade ins we do okay so to stock shelves he says he pays about 1,500 month on new games and peripherals and about a thousand five hundred by youth gift we I would say the new games in pref reals maybe a little bit more on preference probably about right we pay a lot more on the used games because we have a lot more coming in but was originally he says on average they sell just under 1000 on the store's 4,500 games each month so okay so we're selling more than that so the whole point is that you always have to have more than what you're selling yes so people are interested in what product you have but you also have to buy something you can turn stuff away anyway what would I want to get into really the long and short of it is I appreciate Jonathan putting this all out here again in Arizona that would be cool and I'd love to talk shop so the numbers are different but I think what I really appreciate him putting this out here for is that I want people to understand that this is why we have to charge what we do for games at a retail store we're not out trying to people over we have overhead that people on Craigslist selling games don't have even people so in their collection and convention yeah you know that's why when I go to a convention I can cut a really good deal on the games coming out of my personal collection but we can't cut that kind of deal at Luna this is why yes you know people always get mad when I say no I'm not haggling at Luna I can't afford we can't afford to haggle at Luna now if you come in and you're nice and you're buying stuff yeah - III will cut discounts but you know you can't just ask for that stuff sure I still have to do all credit by the way yeah I don't have been a new store yet um you have to do five more I don't need to invite you to the new store it says if you come visit me and I so I miss you visiting you hear you so there is something that I have noticed that a lot of these places so there is talk on this about them saying 5 to 10 years of what of physical store presence they think left I I think we've reached the peak and it's already we're going to see a decline I don't want to get to this you skipped over this what more is more of retro in general well it's hard you get you almost can't run as independents or without retro games this is yet this is where I was I slipped over it for a reason I wonder I am getting back I'm not revin looking at right are getting to it right now well I think I am let me let me get to this and if I missing something you're talking about then jump in so they're talking about how they think there's a physical presence of these types of stores for maybe fight the lifespan is maybe five to ten more years I think that that is probably true for stores that are focusing more on new games this article seems to now I know there are some stores in here that are dealing in retro but I I think that that's not necessarily true if your main focus is on retro I also think that because there is some of there are some stores in here that are talking about it where they talk about how they have to branch out to stay alive I think that was like trinkets and lieu shrinkage and and magic cards and toys I think that's more for stores that are dealing in newer games I think if you're dealing in retro which is doing if you're dealing in retro I think that's very dangerous actually but it's also dangerous to stick entirely with retro games if we've reached a peak of not just the interest in retro game but also the pricing true which is why some place like Luna covers everything but you have to have a healthy selection oh sure of everything it's also how many stores are in your area you can write it you can't have you can't have you can't just you can't focus mostly on new games and have a Polish free selection of retro there's a point you can't focus entirely on retro but skip out on ps2 360 ps3 ps4 and Xbox one sure this is a semi advertisement for my conversation with John Hancock super clicker John Hancock on not suck on Pocket so we spoke about the state of retro game collecting for a chunk of that including where we are with Richard gaming stores and he in his own estimate said in five to ten years independence article a lot of these retro game stores are going to be gone and I do not disagree we've gotten a huge influx of them in the past probably five six years and in terms of prices we have reached a peak and at least for NES I'm not sure about other ones but I looked them up on the spot talking to him we've reached sort of the peak I think in terms of what you can get on a lot of these common or even slightly uncommon games we looked up a game like contra where in the peak the peak was $48 on price charting summer last year now it's a $30 game $28 game um I think you're weak to pull back the curtain again we talked about this a little bit I think you're right on NES I don't think you're right on other systems but we're going to get to the end of what's a retro what's a retro game we are not going to have people going out and buying ps3 games in 20 years Melody's doing with NES Super Nintendo you're not going to see that happening for a variety of reasons I won't get into I think you're speculating too much on that okay I'll make that bet that you're not going to have a bunch of ps3 collectors the same way you're not seeing a huge amount of ps2 collectors right now and you're not going to see many people go I'm trying to get a full ps1 sec you're just not going to see it it's going to be subsets I think for collect neat system but you're not gonna have the general interest as it is for the cartridge based system in general when I started at Luna I never thought I'd see people scrambling for GameCube games sure are they getting every single one how many are doing that when is that going to disability oh but this is well need every single but that's the thing lots of people are leaving behind full set collecting I'm still generating money hand-over-fist on GameCube games here's the point you're in an area you're the king of retro games in Southern California what if you are and you're digital press in cliff in New Jersey and they get right this is no I thought your hover over the past three three years he's seen five retro game stores open within 30 minutes of him here's the prop but here's the good news for digital press and here's the bad news for the other guys yes this digital press open a long time ago yes digital press has the rotating stock yes digital press reservation has the reputation just like Luna video games we opened when it was cheap weight when it was financially viable to do it digital press is well into turning a profit Luna's well into turning a profit y-you got overly defensive when I talk about all these game stores that may not be around because you're you're in a lucky spot there's a lot of slow cases now where there are multiple retro game stores are competing against each other and there's not only not going to be enough stock in the future tutorial stores none profit to go around but not enough interest in general ok retrograde own take it is defensive this international a just there's a huge difference and we've talked about this on the podcast before to people who are opening retro game stores now uphill battle the Gateway it's a huge uphill battle by the time they could conceivably start turning a profit there you always said if you have to start right now you need a huge collection you need a huge amount of money you know over money to burn to keep full until you start rotating but also you gotta be like a huge collector like it's like if I wanted to get into it I'd have a shot because I have a huge amount of my lightly start with and then hopefully have people come in gradually and gradually and you need five years of patience to make a profit you think so at this point like yes even if you're not semi competitive area you need a bunch of times you're in a non semi competitive a if you're in a non competitive area at least three but I mean that's I guess that's my thing I don't I don't think a place like digital press has to worry because they'll stick around and I don't wish ill will um the game started open around them I don't know those places are going to close yes the price will stay that's when I say the majority will close the majority will close because the majority opens in the past five years right like ask majority I get that to open a to open a retro game store now you need a time machine yes again for the reasons we've all spoke about there so this is a great article check it out on a polygon who who wrote this it's a once again that was Matt Leone it's a it's a kudos to you did this is water this is a fantastic article a lot of research here in effect I need to tell him it's a fantastic on he's that me oh nice its opposite talk about hidden costs the store breakdown cost we talked that from good old Jonathan Sakura who well I'll probably see a game on Expo and you know there's a lot there's a lot going on now with interest in physical media whether it's going to die out with a client going to die out but yeah listen to that listen to that not so common progress with me and John Hancock which because we actually talk about some of these issues with that there

Channel: Pat the NES Punk

Views: 122,540

Rating: 4.8246083 out of 5

Keywords: independent game stores, polygon, retro game store

Id: DAUp-BR6nsY

Length: 22min 7sec (1327 seconds)

Published: Mon Jul 24 2017