Thursday, August 4

Local Store Closes: Business discussion

I just heard yesterday that a local store is going out of Business.  It isn't my FLGS, but the community feels the pain none-the-less.  Today I wanted to talk about "How should a store be run."  And like the GW discussion, I don't want it to be a bunch of gamers with an axe to grind, I want to hear business ideas.

I don't know all the details of why this local store went under, but I do know that it has to do with cash flow.  Essentially, they couldn't afford to purchase new inventory and thus their sales went down and they couldn't meet their debt obligations and had to close (Afaik). It is a sad loss, but it gives us an interesting opportunity for discussion.

Instead of talking about what this store may or may not have done wrong lets pretend you are the store owner and you have enough cash to make the decisions you need to (stocking, etc.) but that you don't have so much that you can be 'willy-nilly' (Yes, 'willy-nilly,' is a financial term).

One thing we gamers know is that nobody is becoming a millionaire off of running a gaming store.  But there is profit to be made, how do we do it?  Well, here are a few of my suggestions.

1. Hobbyists becoming store owners = Disaster!
  By all means you should be involved in your business, you should love the products you sell, but you should be a business person first and a hobbyist second.  What does this mean?  This means that if I love 40k and own a store that is fine, but I shouldn't be ignorant to Magic products and board game products.  I have seen too many store owners who have a ton of knowledge in one or two game systems but have no idea about other products they sell.  In my world I deal with mostly stock investments, but if I have a client ask me about MLP's Im not going to tell them "I don't know about that, but Ill take your money,"  I am the professional and I should know about everything that is available to my clients (At least a working knowledge.) Long story short, as a store owner you should know your business. At any given time you should be able to know or know how to find where your financials are at. If it takes you longer that 10 min to get a good idea of where your financial matters are you are likely acting more like a hobbyist who owns a store than a business person who is a hobbyist.

2. Be creative!
A good friend of mine was a long time GW store manager and currently has taken an independent retailer from almost no miniatures sales to one of it's hottest products (second to RC). Why? He is creative! He does weird things that encourage people to buy things. For example he did a "battle box," tournament where battle boxes were 20% off and they had a building and painting day. The tourney ws weighted 80% to painting/converting and only 20% on battle points score (we know those battle boxes aren't balanced). If I was at his store I probably would have gotten a Dark elder battle box, that likely means I would be building a new army right now, which would be adding to that bottom line.

3. Info, info, info
Rule number one in retail is "location, location, location," the less known number 2 is "info info info." Examples of this in action are: gathering email info for email blasts, social networking and staying on top of the news in your industry. You need to be able to communicate to your customer base what is new and hot as well as any deals or events you have coming up. Wthout this you rely heavily on word of mouth. Don't get me wrong, word of mouth is excellent, but doing a little more will generally raise sales.

4. Be ye therefore organized.

Don't lose order forms, know who owes you what and who you owe. You know if your business is organized if it can be ran for a month. Without you there or on the phone.

I don't want to rant forever, I really want to know what you all think. How should a store be run?



  1. I can't agree more regarding number 4. I really want to support my local game store as I love having a central location to meet and socialize with other gamers that have similar interests.
    My local game store owner has been somewhat unreliable of late however and it's encouraging me to seek alternate sources for my gaming supplies. There's nothing worse than calling in to the shop on his order day to see if he has what you asked him to get, only to hear "oh crap, man I completely forgot to pick that up for you. I can get it next week if you still need it." It's happened 3 of the last 5 orders I've put in with him and it's causing him to lose business.

  2. Here, here! I have had that happen a few times and though I am a very loyal patron, It is very frustrating.


  3. * adding to my previous comment *

    Thought we know it is frustrating, what systems of organization can store owners use to avoid that error? Remember, we are trying to have the business running smoothly while the owner is gone for a month (so it needs to be an organized system and not overly complicated)


  4. Thanks for a well thought out blog. I work part time at a video store that doubles as a comic/gaming store. You have inspired me to know my product better as an employee. I am also trying to brainstorm what I can do to be creative to boost sales. It is kind of hard to do because management is slow to implement changes in the store.

  5. @Anon: IMHO, if you make small changes that are successful then mgmt should fall into line, though some mgmt people are very dogmatic and stubborn to new ideas.

    I'm glad you like the blob post. Careful though, I may post something useless tomorrow, lol.


  6. Yep, it's a pretty big deal. I want to support my LGS, but when it takes over a month to get a full-priced mini, I start to run out of patience. Lots of times I need a mini so that I can paint it up for a tournament that will *happen* in a month.

    My LGS is awful at getting me what I want. Seriously- they could make a *ton* more money, even just from me, if they were more reliable in getting me stuff as quickly as possible and not waiting until they don't have to pay as much for shipping, or somesuch.

  7. I'm a spreadsheet junkie, or so my wife tells me.
    If there's something I need to track, or be more organized with, I make a spreadsheet. Something simple like:
    Item | Company | Qty | Customer
    can be a way to keep organized.
    We've got a store message board, and they have a facebook page as well. Facebook might not be the best of mediums for organizing ordering info, but both are definitely ways for customers to submit orders.
    With a message board, a thread could be started for each ordering period.
    The main point though, with any attempt at organization, is consistency. Whatever system you end up using, make sure that you stick to it. Make yourself a cheatsheet if needed.

  8. Great point! Consistency is paramount in organization. I do think that some systems are easier to be consistent with than others though. For example, it is easier to be consistent (for me) with a computer program (excel) than a pen and paper system.


  9. If I may make so bold, it comes down to your point about being a business.

    When you open your store, open it with a commercial Point of Sale and financials software package at that time. There are quite literaly thousands available with simply masses of them targetted at tier three enterprises such as a FLGS. These systems not only keep you payables and receivables organised but manage inventory and backorders and most will automatically spit out a list of what you have to purchase in order to restock and meet backorders. They cost a few thousand dollars to buy and set up, but so does the initial lease payment on a storefront, the shopfitting, the stock and everything else. If you can't afford to do it right don't be suprised when it doesn't work right.

    If these terms don't make sense to you then you either shouldn't be running a business or more realistically you shouldn't be doing it without professional advice. Hire a business mentor, network with others running similar but non-competing stores (sewing-style craft stores leap to mind, as do other FLGS outside of your region).

    I see local small businesses go bust time and again and it usually comes down to a mixture of not being experienced enough in business, not having enough capital up-front to do it right and survive until the business stabilises or simply the old standby of location.

  10. I know what the "Anonymous" means about not having the capital. Currently by FLGS has a roof that leaks in about 5 or six places directly over his merchandise. Every time it rains really hard he has to put buckets down and stay with the store until the rain lets up (regardless of whether it is the middle of the night).

    Also, as far as having enough capital starting out, small businesses generally are not going to have a profit until about 3 years. So not only do you need enough money to start, but quite a bit more than that to survive.

  11. Not to duck your stated question entirely, but I fear I'll soon find myself in this situation. I've been going to my FLGS since it opened 15+ years ago and things have taken a turn for the worse over the last year. While the easy money days of the Magic boom are long gone, it has still been a good place to find a game or a mini. Recently I find less stock on the shelves, less new products coming in, less ability to get what I'm after. I've been checking in a couple times a week since Wrath came out with no luck. Apparently their supplier couldn't get them stock? I went in this last weekend for the new White Dwarf (against my better judgement) only to hear the same thing, no stock available for them. There were some battle engines on my last visit, which was a pleasant surprise, but they're often out of what I would consider core stock. While I'd write this off in part to PP's issues keeping their customers stocked up, I couldn't get a simple box of Assault Marines for a few weeks in a row. The online discounts are too good to ignore, but I still buy singles, books, hobby supplies, stuff like that at the FLGS to support my store. When they lack not only the things I would normally buy there, but also the things that I would rather get online, then I'm left little choice but to look elsewhere. Whenever I'm in the store I have the urge to grab the owner and say "Your store is dying around your ears, you have to do something" but that's a bit presumptuous.

    To your point I'd make sure to offer some sort of discount, even if it's a small one, even if it's just to regulars or people who sign up for a mailing list or somesuch. I'd encourage gamers to play in the store with tournaments and beginner/intro games. Tracking sales and stocking popular items seems like a given, but it's important all the same. The last, and most important piece, is staff. Neckbeards who can't stop telling me about their D&D campaign long enough to sell me something and douches who are in danger of falling over from looking so far down their nose at their customers are far too common in game stores. Targeting children is well and good, but if you're catering to so much that your staff's antics drive away people with money to spend (I'm looking at you GW) then you're selling yourself well short.

    In the end I'm left with a bad choice. Do I throw all my business at my FLGS to support them, knowing that they don't have what I want all, or even most, of the time? Or do I take my money where I can get what I want and get good service while doing so, but let my local store dry up and blow away? I'm a firm believer in supporting local businesses, but should that belief extend to keeping a poorly-run business afloat? I'm not sure that it should.

  12. LOL @ "Neckbeards who can't stop telling me about their D&D campaign long enough to sell me something..." sooooo true!


  13. Cash is king in all business, so you have to maintain that cash flow. You could be making a solid profit and still failing as a company, and understanding the hows and whys of that is crucial to a small business operating.

    That being said, I think one of the problems with many FLGS is an inability to diversify. Either because, as you mentioned, they're run by gamers instead of businessmen and therefore they aren't willing to jump into lucrative products (Pokemon and such), or due to retail space.

    Also, I think it comes down to putting in work. Your big box chains spend bajillions in researching exactly where to put which product in their store, because they know that more time in the store usually = more money spent. a FLGS owner probably doesn't have a bajillion dollars, but they need to keep track of which products sell well, which don't, and adjust their layouts accordingly.