Small Business Owners

[Cusefan]

Well me and my friend are going to finally do something we have been talking about for years, Open up a Video game store. Since we know that Gamestop is pretty much our only competition in the area, I feel like we could really succeed if we just can get our name out there and inform people that GameStop is a Complete RipOff and their Magazine GameInformer Is geared to help themselves sell more Used Games.

We Have a good location planned(Right next to two high Schools), We have a good business plan, and we have investors. Anyone out there with some good advice?

[Gotmadskillzson]

Re: Small Business Owners

Make a website, join all the social websites like myspace, facebook, myyearbook, etc with your company name. Hand out fliers to both high schools. At least a thousand at each school.

[Cusefan]

Re: Small Business Owners

Make a website, join all the social websites like myspace, facebook, myyearbook, etc with your company name. Hand out fliers to both high schools. At least a thousand at each school.

Awesome, Thanks man!

[Gotmadskillzson]

Re: Small Business Owners

Yeah having a website is key nowadays, being that is the 1st people look for when they move into a near area, they google stuff to find stuff. And kids love those social websites, a lot of companies be on there too.

Oh yeah, make a company spot for yourself on that online game Second Life. That thing is big bucks, all the fortune 500 companies have a shop on Second Life.

[techhokies]

Re: Small Business Owners

Try to incorporate it if you think it will succeed for sure for at least a couple years. That way incase anything happens, it doesn't fall on your shoulder. LLC's are good too, but I prefer S corp's even though all investors pay taxes on income instead of just on what was paid out. I would get an accountant to make out depreciation schedules and what not, because you can only pick those once and you're stuck w/ them so just be careful in the beginning.

And make sure you have everything down in writing, as in what your salary will be for managing the place and what the responsibilities are. Our first property gave us lots of hassle which all could have been solved had we been more anal about the details in the beginning.

[p_rushing]

Re: Small Business Owners

Yeah definitely get the legal stuff out of the way.

Its going to be hard to succeeded in this type of industry. Yes your only local competition is Gamestop, but you also are competing against the internet. You might want to take a look opening an online outlet on ebay. It would allow you to reach more people and make more sales. Hopefully you can get a competitive price from your suppliers. You also want to have more instore things (tournaments, etc) to get your customers in the store, which would help bring new people in.

[Trevytrev11]

Re: Small Business Owners

Well me and my friend are going to finally do something we have been talking about for years, Open up a Video game store. Since we know that Gamestop is pretty much our only competition in the area, I feel like we could really succeed if we just can get our name out there and inform people that GameStop is a Complete RipOff and their Magazine GameInformer Is geared to help themselves sell more Used Games.

We Have a good location planned(Right next to two high Schools), We have a good business plan, and we have investors. Anyone out there with some good advice?

How are you going to compete with Gamestop? I imagine that because they buy in such large bulk they are able to get a pretty good discount on their games and sell their games at a higher margin.

Typically when companies sell merchandise, they give discounts for larger orders and because Gamestop has over 5100 stores (per their website), I imagine that they will be able to get the games much cheaper then you would be able to and then make more of a profit when they sell them.

They may get a game for $30 and sell it for $60 and you may get that same game for $35 or $40.


You might find this interesting and it may set your expectations:

http://arstechnica.com/gaming/news/2006/06/4386.ars

It seems a big part of your business will come from buying and reselling used games. How will you compete with the other guys? If you buy back for more or sell for less (or both) how will you keep make money?

I don't know how video games work, but often times companies set the lowest retail price they allow stores to sell their products for and when and if you can offer discounts or specials. This is why every place sells the Wii for the exact same price and why you often see Best Buy and the former Circuit City offering the same specials on TV's at the same time. Because of this, you may be under contract with game companies which will prevent you from selling a game for $55 to undercut the competition. (Costco and Sam's are the only ones I am aware of that always sell games below the other guys retail prices).

If you can get around this, then you can undercut the competition by selling you games for less and make your money on volume and hopefully steal the other places customers.

The only other way around this also may be to offer promotions that kind of trick the system (Buy a game and get a $5 store credit to be used on a future purchase-then after the first game, each additional game will always be $5 off or something like that.

The real question is this: What will your store offer that will draw people away from the other guys?

Good Luck!!!

[The Chef]

Re: Small Business Owners

To address the post above mine. Game prices are not dictated by the manufacturer, the retailer is free to sell them for whatever they want, atleast thats how it used to be, consoles on the other hand are different and thats part of the reason you see all the retailers selling consoles for the same prices but offering differnt freebies thrown in, thats how they differentiate between themselves and other similar stores. I cant speak for the current gen of games but back when it was the PS2/Xbox the markup on new 49.99 games was approx. 8.00 dollars or so, meaning you could expect to pay approx. 40.00-44.00 per new game from a manufacturer and the size of the company or size of the order didnt change the per unit price. There is a reason Gamespot mentions trading in your games non stop, thats where they make all their profit, but thats also why they give you **** for trade-ins.

Be prepared to work your *** off as you and your friend are going to probably be the only people working there for awhile, maybe one other person, as you cant afford to have to pay employees right off the bat in most cases. Make sure you get the inventory, maybe run some sort of giveaway to the first "x" amount of customers that buy a used game from you etc. Come up with a discount card, I know people hate it but its the only way to attempt to guarantee repeat customers but I would give this card away for free in the beginning to get more foot traffic into the store. At Game Crazy it was an additional 10% on trade-ins but if your giving someone 25.00 for RE4 with the thought of selling it for 45.00 then dont hesitate to give those discount cards away in the beginning as its going to get you repeat customers without killing your bottom line either. Think about having an online store going as well so you can maximize your customer base. Thats about all I can think of now but if you have any questions that I might be able to answer then let me know. Just be ready because all those things people bitch about Gamestop for doing, you're going to be doing them as well if you want to be successful.

EDIT- One other idea but Im not sure how feasible it really is. Make sure your opening is a spectacle and draws as much attention as possible. Maybe see if you can get a home grown popular athlete to come down, pay him for his time and have fans play against him in the video game equivalent of whatever sport it is this person plays. For each customer that can beat him they get something for free, ie. game, controller etc. If that idea doesnt sit well then maybe just a meet and great with autograph signings, just something to really draw a crowd. Im just spit balling ideas now so if it doesnt interest you then thats fine but Im always of the idea that the bigger the spectacle the more people will remember you.

[techhokies]

Re: Small Business Owners

The biggest thing I've learned about openings is get the biggest sign possible. As in whatever is the sign size limit the City gives you, get the sign to exactly those propertions. Don't get a smaller sign because you can save a few bucks, signs are crucial and if you get a smaller sign and in the future you want to get a bigger sign the City will never let you upgrade even if they gave you permission for that size in the past.

[jake44np]

Re: Small Business Owners

Good luck starting a small business in this economy! Especially a small business that is going to be trying to get people to spend on "entertainment".
I find it odd that anyone would ask for advice on a website when they are starting a business. You should not need advice, you should already have everything in place. You must be pretty far along in the game since you have investers, when are you opening this business?

[Cusefan]

Re: Small Business Owners

Good luck starting a small business in this economy! Especially a small business that is going to be trying to get people to spend on "entertainment".
I find it odd that anyone would ask for advice on a website when they are starting a business. You should not need advice, you should already have everything in place. You must be pretty far along in the game since you have investers, when are you opening this business?

Every once and awhile you can come across something you have not heard or thought of before. Also, Used Video Games are still selling very well, they have a very good profit margin and people are looking to buy cheaper.

We have our investors, our Location, so our next step is to go to the bank and get the loan. We are looking for a late summer Opening, Just in time for school( our Location is right next to two High Schools)