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Can a mom and pop store sell new console items?
Tranlin
Registered User new member
Registered User new member
I currently own a hobby game store. I have been considering expanding into the realm of new console game hardware and games, but I have had a hard time finding a distributor. After I thought about it, I cant really think of any mom and pop stores that sell new console items. Are console games a sphere that only the big boys like EB can play in? Does anyone know of any distributors for such items?
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It's not worth it and you won't make any significant money on it. High volume retailers don't even make their profits on that shit, it's just a way to get people into the store where they'll also pick up a second controller or a couple of games or a memory card because that's where the margins are.
CUZ THERE'S SOMETHING IN THE MIDDLE AND IT'S GIVING ME A RASH
Yup, what Pheezer said. Videogames aren't really worth your time, because margins are low and there is very high risk of overstocking. It's really hard to get rid off videogame overstock without taking heavy losses. You could, however, try DVDs. I know few hobby stores that have actually made money by selling movies that their customerbase is interested about (anime, hong kong stuff, etc.). Of course, even on that segment you couldn't compete with price.
CUZ THERE'S SOMETHING IN THE MIDDLE AND IT'S GIVING ME A RASH
You can usually import a bunch of games for about 45$ each, and can mark them up to 55$ and probably still sell them to the die hards. I'd also look into buying games off of eBay.
Most distributors charge around 52 dollars for 360 and ps3 games, and 42 for PS2 games. That means you usually have 8 dollars margin on your hands.
I don't think its really that feasible for three reasons. First of all, there isn't really that much demand for imports, because they require either modded console or some kind of bootdisk*. Secondly, final retail prices would be quite high after paying import taxes and other costs. And thirdly, reaching your target group (in this case, importers) wouldn't be that easy. No matter how geeky they are, they are still in still different customer group than your normal hobby store user.
* Only exception being handhelds and PS3. Videogameplus.ca has experimented with importing japanese DS and PSP games, but there has been only few titles that have sold decently.
Fixed.
https://steamcommunity.com/profiles/76561197970666737/
Then what's with the Best Buy Gamer's Gift Card $5 all games and accessories $19.99 and up coupon?
Also, I'm sure Best Buy gets games much cheaper than even the smaller national retailers. Circuit City, Best Buy, & Target frequently participate in mini price wars on new games. Target typically offers a popular game for $37.77 within a few weeks while everyone else is still charging $50. Citcuit City does this too (see Zelda TP for GC at launch). Best Buy's deals are usually in the realm of $5 off or $10 off older games ($39.99 titles get temporary $29.99 sales). Combined with the GGCC discount, it makes BB a comparable option.
I suspect that games are much higher profit margins for retailers than you'd expect. The dynamics force them to carry crap games that don't sell and they must pay these off with sales of the more profitable games. In the end, it probably is more like $45 for a $50 game thanks to these dragging them down. Once distributors stop forcing huge sales of unwanted product on retailers, I'd expect things to change. Unfortunately, that means there will also be many more rare games.
One of the local indepedant stores got shut down for installing modchips.
Well, it wouldn't make sense to install chips that allow piracy if you sell import games. With on the fly patching homebrew Wii mods, it's possible to make a imports-only Wii mod. Selling swap discs and Freeloaders should be legit too.
Since when is Best Buy a game store? Same with CC, Target, etc. They're not video game stores... they can sell the games and movies at lower price because you have to walk past the TVs and stereos, drooling. You see the sales in the fliers, they're called loss-leaders.. gets you in the store, to look at the profitable shit. TVs, cables, cell phone plans...
https://steamcommunity.com/profiles/76561197970666737/
And, in addition to that, the big chains have the negotiation power to get prices from wholesalers that are impossible to single stores.
Regardless, BB, CC, Wal-Mart, Target, and Gamestop are all getting them for the same prices, and getting the same (non-existant) profit return.
https://steamcommunity.com/profiles/76561197970666737/
So I have no idea what you're talking about.
Tell me this: We already know as a fact that retailers get bad margins on consoles.... So if, retailers are getting such bad margins on games... meaning they're making terrible money on the consoles AND the games you play on the consoles... then why the hell are they selling them in the first place? There's no incentive.
I'M A TWITTER SHITTER
If you're not already part of the GIN forums, might be a good idea to check there. The owner of Titan games is a frequent poster, and has some great ideas on how to run a used media oriented shop. PM me if you're unfamiliar.
New games and consoles are apparently extremely difficult to move; shit margins mean you need lots of volume... difficult if you don't have a high-profile place like the mall stores or big-box shops. Also, Microsoft has an X-box retail support line that can point you toward distributors; I don't remember the number offhand, so feel free to PM me about that as well.
Good luck!
edit:
Toys R Us has how many stores worldwide? It's all about volume. Buy 10 copies, a distributor will give you 5% off. Buy 10,000, you get 50%.
Same reaason as why groceries have vegetables. They aren't really that good when it comes to profit (low margin, high deficit rate), but people except that you have them. If you don't have them, customer will go to another grocery that has vegetables and does his business there. In nutshell, some products are used only to get customers in, nothing else. You must also remember that big boys do get discounts when they purchase games from distributor, but most independent and smaller chains don't. Here is list of reasons why DVD Empire, well respected DVD netstore, stopped selling games:
http://gamasutra.com/php-bin/news_index.php?story=12616
Why not sell the DS and PSP games? If you live in a densely populated city, they should sell. You could probably get away with selling boot discs for the PS2, if they exist.
The problem with DS and PSP games is that about 90 percent of good games are available normally in USA. And most great import titles are also quite quirky, meaning that they have very limited appeal outside certain group of customers. Of course, having demo units could help.
We concluded it's not possible without screwing over your customers. Since we wanted to do the exact opposite, we moved on.
It's possible if you have a lot of business sense, a tight wallet, and avoid the common "tournament center/clubhouse" mentality like the plague. In a good area with money and plenty of potential customers. And foot traffic. And no other game stores. And other non-game products.
There's a reason hobby stores tend to pop up and disappear within months.
Strangely, the most popular independent game store in L.A. (Game Dude) is in an industrial section of North Hollywood/Sun Valley, basically in the middle of nowhere with nothing around it, in a converted warehouse with no windows.
I should emphasize that we didn't just sit around and daydream about this; we actually did quite a bit of legwork and research for our area, crunched numbers, etc. Just couldn't get anything to come out of it in a way that made us happy and felt like we were offering a substantially better experience then EBStop, so we've moved onto other (hopefully more lucrative) ventures.
Toys R Us doesn't sell shit used though. Well, not anything current anyways.
I wonder if that has any impact on it whatsoever.
Well, of course TRU is getting them for $25-40. They're TRU. They place orders in the thousands, directly from the publisher. A mom & pop store orders, what? A case? From a third-party distributor.
At least as far as hobby games go, your research was spot on. It's just that there's enough people out there who love gaming enough to spend seventy or eighty hours a week running a store and live off of a few percent profits.
There are exceptions, but they're increasingly harder to find.