So, I was asked to write something that has to do with opening a game store, as it seems to be the latest craze. Since I am about to open my 3rd in my small chain it seems that I might qualify as someone who might know a thing or two about doing it. I run CCGPrime and I opened my main store in May of 2021, then added #2 in Dec of 2021 and the third should be open by May of 2022.
This isn’t my first rodeo either, I had a store in NC from 2007 to 2012, a second for 2 years and was a partner in one in SC. I learned a lot from that first experiment and have applied it to my second outing as a game store owner. To be clear from the start though, my first set of stores didn’t fail in the business sense, they still paid for themselves, I was just tired of running them. It was too much like a real job and I wasn’t excited to do them anymore, so I sold them off and moved on.
This new adventure is something totally new and I am approaching it different. With all of that said I want to start right out with the best advice about opening your own store, don’t.
I’m not a hypocrite for saying that. 75% of game stores fail within the first couple of years, even if run by people who know a thing or two. I will go over some of the reasons that they fail, but needless to say I am an outlier when it comes to opening store. A lot of my stuff doesn’t apply to 99% of other owners, and thus I have an advantage that most don’t.
If you are still thinking of opening a store, still don’t. There is an adage about game stores: How do you make a small fortune from running a game store? Start with a large one.
This business has tight margins, you don’t make a lot of money, and even those that make a descent amount have a lot of other things that have to come out of pocket, like insurance (for US based stores), and taking time off for yourself is a huge risk, as not being open can hurt the bottom line.
Back to me, cause why not? I am a retired veteran so I have a steady income, I have health coverage from the VA, and I can walk away from my stores whenever I want as I am pretty much debt free. I have a degree in business, I am the sole owner, and I have my nose up the industry’s butt to sniff stuff out. I also have been lucky enough to open my places where there is little or no competition. If you want to start a shop within 20 minutes of any other shop, then just stop right now. Established stores (5+ years) know what they are doing and won’t worry about you.
Most people that start a store are inexperienced, underfunded, are usually set on what their store will carry and have a way that they are going to run it. You have to KNOW a lot of things to open a store, and I mean a lot more than how to run a register and order stuff. You are going to have a lot of expenses you didn’t know about or realize, and it piles up.
If you run your store like a gamer, collector, or a clubhouse, then just keep dreaming and save your money. I think one of the main reasons stores do fail is that they are run my gamers. What I mean by that is that people will run the store and still have a gamer mentality. I am still a huge nerd and act as such when I can, but when it comes to the business, that is how I treat it. Most gamers don’t know when to switch hats and that ruins them.
Yes, this article will be nothing but me telling you not to do it. Because it is hard and most fail, and the lucky ones will fail and just go on with their lives, the majority will be financially ruined, and maybe more depending on how they got their funding.
Don’t get a loan from a bank, you’ll be lucky if you do to start with, no one understands how this business works, especially those in finance, heck most new store owners don’t know either. The key is research, research, and more research. Then when you think you know enough, stop and do 2x more research.
You need to know the market you are in, the demographics, market research, which is hard because there isn’t much that’s done in this industry. Think being next to a college will be good? Maybe, but students are always broke. You’ll need 10x the normal number of customers if you were in a descent suburb.
This endeavor is a money sink. One of the common reasons of someone getting ruined is that they don’t know when to stop. The sunk cost fallacy: The Sunk Cost Fallacy describes our tendency to follow through on an endeavor if we have already invested time, effort, or money into it, whether or not the current costs outweigh the benefits. People think that if they put in just a little bit more, stay open a little bit longer, or do one more thing that everything will be okay.
Well, most of the time it won’t. You have to know when to walk away. There is a reason that most other owners tell new owners that they might be profitable within 2-3 years, it’s a slow process. There is also a lot of terminology you’ll have to know. If you don’t know about turnover, turn rates, cost of goods, wholesale, SRP, MAT, and about 500 other terms, then you have a lot of work to do and that is just to be ready to start doing the actual research.
If you haven’t lived in the area you want to open and haven’t been part of the local nerd herd for a couple of years or more, then stop and move on with your life, especially if there are other stores there already. Be ready to quit your job and go all in or be sturdy enough to do 40-50 hours at a regular job and then at least 60+ more at the game store. If you have a someone that can help you, cool, but you better trust them with your money. And don’t tell me you trust them with your life, I have trusted lots of people with my life before, but I wouldn’t leave a dollar alone with them.
It comes down to putting in the work before hand, having a plan to start, the funds to start, and the will to succeed. And not being an idiot helps too. Those are topics I will cover later in this series. But for now, the best I can tell you is to NOT DO IT!!!!!!