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I just spent a good chuck of the afternoon writing an article for a blog about brick and mortar gaming stores and what they need to do to survive. I am sure, most people are like me and love the experience of shopping in the FLGS but sometimes the pricing online is just too good to ignore. I would love for people to read the article and let me know what their opinions are. I know its a wall of text, but your time is appreciated.

http://wargamingninjaturtles.blogspot.ca/2012/06/gaming-future-of-brick-and-mortar.html

Not to sound jerky and trying to discourage a new member, but this is a topic that has been talked about at length here and will most likely end in an argument and lock at some point.

I buy stuff online, but I always purchase something whenever I am at the store to play. My way of paying "rent" for the table.

FLGS have to provide me with something of worth. Just being a FLGS and having tables isnt enough. Been to stores that did that and they always turn on you in the end no matter how much support you give them.

Happened at least twice. Basement dweller now, and quite happy not to have to deal with FLGS BS. Playing with 6-12 different folks in someone's basement has given me alot in return that no FLGS has been able to duplicate thus far.

Doesnt mean I wouldnt in the future. But currently havent seen one worth its salt in my travels. There might be some given some of the ones here posting, but they arent by me.

Speaking as someone in the UK, I wish I was lucky enough to have an FLGS near me.

My nearest gaming store is GW York, but I would love to have a gaming shop that had a discount (maybe), sold varied ranges of models/tools/paints, and generally offered an experience different from GW.

I make most of my purchases online these days, but if I had a local store to support, I would.

Where I live (Atlantic Canada), the only GW store is near Halifax. We have a chain of FLGS style stores which offer no discount or really any other benefit other than space to play and decent customer service (well at my store anyway).

The store does good business, but the only real reason anyone buys stuff there is so that they dont feel bad about using their space all the time.

Im not saying that FLGS in general are in dire straits, but they do not have the margins to be giving discounts like an online retailer unless there is some sort of membership or points programme.

But then again my store has a monopoly in the region, its them or the internet....and they are getting less and less useful to me and my friends as we play more and more non GW games. (They only stock GW stuff for minis games)


edit

So basically cater to Gen Ys sense of entitlement and offer store breaking discounts and you will be successful, won't be able to put food on the table or afford a store bigger than a couple hundred square feet, but you can stay in business! Gotcha.

Must be great for all these people who live in a place with a ton of clubs ran out of houses, but us folks out here in the wide open southern states pretty much have to be supportive of people kind and gracious enough to run stores that offer space to game, or we just can't game.

SSDD, with a touch of not doing the research. The Warstore is primarily an internet seller. and that lets them offer a much steeper discount without cutting into their profits the way that a store that has to pay rent on storefront space and gets all their money at the register does. For new kits, ebay is not cheaper in any way, shape, or form.

Mr.Church13 wrote:So basically cater to Gen Ys sense of entitlement and offer store breaking discounts and you will be successful, won't be able to put food on the table or afford a store bigger than a couple hundred square feet, but you can stay in business! Gotcha.

Must be great for all these people who live in a place with a ton of clubs ran out of houses, but us folks out here in the wide open southern states pretty much have to be supportive of people kind and gracious enough to run stores that offer space to game, or we just can't game.

Actually, he said nothing of the kind. From an actual "How to run a business" standpoint, he's got pretty good ideas. Sales (events) to draw people in, Cash Flow (cards & comics), stock on hand, giving the customer what they want, and marketing. Nothing in there said that sales or discounts have to be run constantly or on the same items. The Warstore and other big online marketers have less overhead and survive discounting by cash flow and inventory turnover. This same strategy works very well for B&M stores as well. Discounting obviously works as a sales technique or you'd never see a sale ad or a coupon. You can tie discounts to things like minimum purchase size, club/membership, or a 5% cash discount. Having a sales staff that actually knows how to talk to people and sell is good rather than being annoyed by the customer because they are in the middle of a game or painting something. Stores that want to push only minis are going to struggle since there's no consistent cash flows like there is in comics and cards.

The problem is that you have gamers running stores, not people who know how to run a business. This is actually a decent primer for doing it right. To the OP, the only things I'd add is adding comics to supplement cash flows and being able to properly capitalize the store (equity, debt, investors, etc.) as opposed to running it on a shoestring budget is also pretty important. That ties back to your points about inventory, paying staff, and marketing but those things require capital.

We have a problem around here when it comes to adding in comics to supplement the game store. We started competing with the local comic book stores, who then started stocking board games etc. If it wasnt for the fact that the owners of the two stores are friends they probably would have put one of them out of business.

We have a great store locally he just relocated in town, to add 1/3 more square foot. And a struggling competitor also closed around the same time. He offers a small discount of 9% on all GW, which is nice. He has a few big sales a year. He's been around for 13 years and from a business point of view (I have a B.S. in it) he is awesome at everything but marketing and figures word of mouth and a nice signage and store front on the busiest road in town is good enough.

Since when are business decisions made based on what your competitors (who may or may not be friends) are doing? You are competing for the same dollar with in the same marketspace with the same clientele. That's a good way to put yourself out of business, not the other guy. Is the other guy going to help you stay in business if you can't increase cash flow?

Since when are business decisions made based on what your competitors (who may or may not be friends) are doing? You are competing for the same dollar with in the same marketspace with the same clientele. That's a good way to put yourself out of business, not the other guy. Is the other guy going to help you stay in business if you can't increase cash flow?

Perhaps I was misunderstood? What I thought I said was that if your competitors are doing something (speaking of brick and mortar competitors in the region) then you have to offer something similar. You cannot expect to be competitive in a market when the other guys are offering better deals/space/stocklevels/etc. I believe that's the definition of being competitive. Ideally you should be trying to offer something better than the other guy so that you grow your customer base, but that's not always possible.

So basically cater to Gen Ys sense of entitlement and offer store breaking discounts and you will be successful, won't be able to put food on the table or afford a store bigger than a couple hundred square feet, but you can stay in business! Gotcha.

No, do not offer store breaking discounts. In a market where 40% margin is pretty well expected you have some room to move to offer some kind of incentive program or rotating discounts. You have to entice customers to purchase. Kinda a "Yes you can get that online @ 30% off... or you can have it now and play with your new toy for 10% off" type of deal.

Also, I just want to say that I wasn't really looking for an argument. I never said I had the perfect plan to save gaming. I had some ideas and I wanted to discuss them like adults in a polite and reasonable fashion with a minimum of sarcasm. : ) Also, this wasn't intended to be a "FLGS vs the Internet, which do you think is better" thread.

Mr.Church13 wrote:So basically cater to Gen Ys sense of entitlement and offer store breaking discounts and you will be successful, won't be able to put food on the table or afford a store bigger than a couple hundred square feet, but you can stay in business! Gotcha.

Must be great for all these people who live in a place with a ton of clubs ran out of houses, but us folks out here in the wide open southern states pretty much have to be supportive of people kind and gracious enough to run stores that offer space to game, or we just can't game.

I think his point is that the discounts are not breaking anything but end up making you more money even if it is less per item.

You have to remember that your average (American) FLGS makes most of it's money off of three things: Magic: The Gathering, Comic Book sales, impulse wargaming buys. In that order.

I used to co-own a small cards/comics/games store, and if you think that seasoned veteran 40k players buying off ebay hurts the FLGS, you don't really understand what their true money makers are.

Do they appreciate it when the veteran wargamers buy from their store? Absolutely, but the best service veteran war gamers in your store provide is painted army advertising. I can't tell you how many times I sold a starter set and two or three kits to an eager newbie because two fully painted armies belonging to store regulars were going at it on table 1.

The war gaming newbie buys from the store because he doesn't know to look for ebay, he doesn't know about online discounters, or aftermarket model/bitz companies.

The other thing is, that war gaming in general (at my store at least) really only accounted for maybe 20% of our gross intake. Magic: The Gathering and Yu Gi Oh! are the powerhouses. Why? 12 year olds. 12 year olds have more money than any 25 year old, hands down, and they've been given it with the expressed purpose of spending it. Stores act like remaining competetive on booster packs is hard (and sometimes it can be when your local 5&10 suddenly starts selling "fell off a truck" packs for 2$ each) but M:TG has been a rock solid foundation for many FLGS for the last 15+ years.

The last thing is comic books. Comic book enthusiasts are like meth addicts. They will be there, Friday morning, 9am every week for their new release fix. If Storm Talons sold like World War Hulk did, then maybe wargaming would have a serious impact on the financial health of your average gaming store, but they don't. As comic book geeks come in for issue after issue, they slowly accrue more and more "must have" series they fall in love with. Before long they're in on release day and you have a box with their name on it, full of their stuff waiting for them.

All in all, the best war gaming purchases are impulse buys and newbies. War Gaming supplies are high dollar with mediocre to medium profit margins, and rarely require replacement/update (compared to Magic:The Gathering where the Meta shifts quarterly). If you run a gaming/hobby store and War Gaming is the backbone of your business, you need to diversify, because making money on War Gaming is pretty tough. Only the really big regional players (some of them are dakkanauts) are able to make War Gaming their primary money maker (i.e. Mini War Gaming) and most of them have a heavy web presence (i.e. Mini War Gaming... lol)

Anyway, that's my $1.99... (plus tax)

Fragjuice wrote:

Since when are business decisions made based on what your competitors (who may or may not be friends) are doing? You are competing for the same dollar with in the same marketspace with the same clientele. That's a good way to put yourself out of business, not the other guy. Is the other guy going to help you stay in business if you can't increase cash flow?

Perhaps I was misunderstood? What I thought I said was that if your competitors are doing something (speaking of brick and mortar competitors in the region) then you have to offer something similar. You cannot expect to be competitive in a market when the other guys are offering better deals/space/stocklevels/etc. I believe that's the definition of being competitive. Ideally you should be trying to offer something better than the other guy so that you grow your customer base, but that's not always possible.

You're fine. This was directed to the post about two stores where one started selling comics and the other started selling board games.

Some of the article is good, some isn't.

An online discounter with cheap warehouse space and no walk in traffic can and has to discount. Existing stores can't go to a landlord and have him knock the rent in half, because you want to become an online discounter.

Disount on regular GW product is 45%. Giving a 20% discount means you're giving away 4/9ths of your profit. The store needs to nearly double it's sale on GW products to keep profits even. If you have a local sales tax, it's even worse. Do you offer even more discount to account for the sales tax? Then you need even more sales. And more inventory on hand to make those sales.

Events, gaming space, inventory. Yes, those are all things that can drive sales in a FLGS. Inventory especially, can't sell what you don't have. Discounting is not necessarily the answer, and may just hasten the stores descent into a death spiral.

mikhaila wrote:Some of the article is good, some isn't.

An online discounter with cheap warehouse space and no walk in traffic can and has to discount. Existing stores can't go to a landlord and have him knock the rent in half, because you want to become an online discounter.

Disount on regular GW product is 45%. Giving a 20% discount means you're giving away 4/9ths of your profit. The store needs to nearly double it's sale on GW products to keep profits even. If you have a local sales tax, it's even worse. Do you offer even more discount to account for the sales tax? Then you need even more sales. And more inventory on hand to make those sales.

Events, gaming space, inventory. Yes, those are all things that can drive sales in a FLGS. Inventory especially, can't sell what you don't have. Discounting is not necessarily the answer, and may just hasten the stores descent into a death spiral.

Well said mikhaila. Listen to this man, he's one of the people I was referring to as far as nerdy game business success is concerned.

In the end, the FLGS and the online discounter are really only in indirect competition, since the FLGS has a slightly different target market than the online discounter. You're going to find most people talking about it online seem to prefer online discounters. Stand about in your FLGS, and you'll find the people there prefer to shop there, in general.

Mikhaila does seem to know what he's talking about.

The small town I live in is completing a huge shopping center project and so far maybe 3 out of nearly 20 spots has an occupant... Along with several older spots along main street. It's not just game stores that are a risky investment, it's any type of retail establishment.

I wonder if the trick is to turn from a retail store (that maybe offers some 'services' on the side (play space, snacks, etc.) to a 'service' location that does retail. Can stores find ways to make money off gaming space, hobby space, etc?

As I said, this isn't just a gaming industry problem. My other hobby, SCUBA, has similar problems as there's online retailers offering deep discounts but the industry needs shops as entry points and sources of information. So stores carry a lot less stock (especially of expensive items like regulators, BCDs, etc.) and are trying to increase their presence for training and organizing trips.

They're also similar in that they tend to be 'labor of love' businesses. (Game stores are generally run by gamers; Scuba shops by divers. Be concerned if a store isn't.)


I'm hopeful that retail will rebound, but will move to more small shops that offer services Amazon can't really compete with. I lvoe online shopping, but I also enjoy browsing for stuff I'd never think of looking for online sometimes.

If you play there, buy there. I was loyal to a shop for several years where I used to live and bought one army in full from him as well as a kit or two every month. More than worth the extra money to have a great place to play. I prefer to shake the hand of people I do business with whenever possible, even when buying toys. :-)

Good article, but everything is not so cut and dried, black and white. The subtlety of loyalty is hard to define but any good FLGS has the formula for loyalty for whatever their player base may be, an online shopping cart just makes your wallet feel good where being part of something as simple as a game shop makes you feel rewarded in many other ways. To each his own but I have always stuck by the "play here, buy here" motto in all the cities I have lived in.

In the area that I live now, we have several very good FLGS's.

One is almost to the point of McDonalds Successful, One is excellent, with a community that is not as good as it should be, and one that was once stocked, was top notch and is now living on borrowed time. THEN there is the several others that are almost there, but will never be top dog. I love them all, as only a gamer should.

I think your opinion might be based on your local market, not on mine.

As to what MY FLGS's could do to improve?


Thats easy-

One could open up a can of give a damn.

One could push a couple of tables together and open up some more minis gaming.

One could lighten up on the salesmenship, ever so slightly.

AND

One could get rid of the dead mouse, or whatever that was thats stinking up the place. (Your Reaper selection is top notch, but that dead mousling is distracting.)

I have a steller FLGS selection, and they all deserve some love, no matter how much of an unloved child they are.


Florida, I'm looking at YOU.

The small town I live in is completing a huge shopping center project and so far maybe 3 out of nearly 20 spots has an occupant... Along with several older spots along main street. It's not just game stores that are a risky investment, it's any type of retail establishment.

This. It is twice as hard to be in business, and stay in business, in the current economy. Too many people out of work, or trying to save money. All businesses having problems.

-Discounting isn't the answer, neither is selling online. For every Neal, there are 10 other wannabees that can't make their online business work.

No magic bullets, just hard work. And every day someone tells you how easy it is, if you'd just "Evolve or Die". Guess what happened to the first 100 small, tasty mammals that told a T-rex to evolve? Please don't say this to people working 80 hours a week to stay in business. We may have to evolve and learn new tricks. We don't have to evolve along the path someone tells us to.

Things that have helped me stay in business:
-Adapting advertising away from Yellow Pages and newspapers and into grass roots support for small local events (charities, schools, etc), and into social marketing such as Facebook.
-Finding a way to make money off the internet. Not moving my store online, but looking for other niche markets. Selling some used miniatures or old store armies on Ebay, Buying and reselling armies for customers, either directly or as an agent. Holding quarterly auctions for used games. Vastly expanding inventory. Running a large number of different events for different game systems. Diversifying into more hobby supplies, board games, and historical wargames. In many cases we sell these to the same customers we sold our minis and comic books too.

I think the long term value of any reseller with brick and mortal fixings is pretty grim. The except to this would be a place that could add additional value that's not available online..i.e. "Bulk" (Costco, Walmart), or "Necessity" (Grocery Stores, drug stores...places that you need things immediately).

Obviously places that make and sell their own stuff are going to fare better with physical addresses...Apple, Harley Davidson Stores, GW...because they have a ton of margin and lower overhead since they haven't already paid profit to a company to obtain stock.

By long term...I mean in the next 20 years.

I don't think most FLGS make too much money, most probably break even and some extra to pay for the owners mortage/car/food at best. Businesses get alot of tax breaks (I know, I'm a business owner), so it's all tax free money for the most part.
,
FLGS really don't offer too much unless they have a ton of tables or a ton of discounts, neither which really helps the bottom line all that much...just keeps traffic going.

Hobby shops....20 years of life expectancy at the outside I think. After that, America may go the way of Europe...gaming clubs where you pay a monthly fee and they have lockers and tables and walls of terrain.

Balance wrote:
I wonder if the trick is to turn from a retail store (that maybe offers some 'services' on the side (play space, snacks, etc.) to a 'service' location that does retail. Can stores find ways to make money off gaming space, hobby space, etc?

My guess is that making money off of gaming space / hobby space just won't work for most stores. It would be interesting however to see someone give this a serious try and see what it really takes to make this work. My guess is it would take a large urban area and some really nice gaming tables.

deggreg@yahoo.com wrote:

Hobby shops....20 years of life expectancy at the outside I think. After that, America may go the way of Europe...gaming clubs where you pay a monthly fee and they have lockers and tables and walls of terrain.

And just where in Europe are things like that?? I lived there for around 3 years, mingled quite abit with the locals, and never ONCE came across any sort of club that was as you described.

brettz123 wrote:

Balance wrote:
I wonder if the trick is to turn from a retail store (that maybe offers some 'services' on the side (play space, snacks, etc.) to a 'service' location that does retail. Can stores find ways to make money off gaming space, hobby space, etc?

My guess is that making money off of gaming space / hobby space just won't work for most stores. It would be interesting however to see someone give this a serious try and see what it really takes to make this work. My guess is it would take a large urban area and some really nice gaming tables.

I think you'd need to offer a complete afternoon service. Coffee and biscuits/cakes, a reading/lounge area, excellent terrain and tables, nice ambient music, etc. No unsupervised children, painting and modelling tutorials from experienced staff, etc, etc. There's plenty that would encourage me to spend money in a local store, but I don't know if I'm representative of the local player base or not.


Automatically Appended Next Post:

carmachu wrote:FLGS have to provide me with something of worth. Just being a FLGS and having tables isnt enough. Been to stores that did that and they always turn on you in the end no matter how much support you give them.

They 'turn' on you? What do you mean?

Mr.Church13 wrote:So basically cater to Gen Ys sense of entitlement and offer store breaking discounts and you will be successful, won't be able to put food on the table or afford a store bigger than a couple hundred square feet, but you can stay in business! Gotcha.

Must be great for all these people who live in a place with a ton of clubs ran out of houses, but us folks out here in the wide open southern states pretty much have to be supportive of people kind and gracious enough to run stores that offer space to game, or we just can't game.

Maybe the business model of a games-store is fundamentally flawed? In this day and age, it's ludicrous to attempt to make a living by selling a product, when that same product can be had significantly cheaper from another source.

You need to offer something else for peoples money.

mikhaila wrote:
Things that have helped me stay in business:
-Adapting advertising away from Yellow Pages and newspapers and into grass roots support for small local events (charities, schools, etc), and into social marketing such as Facebook.

This also seems like a way of dealing with what I call the "Android's Dungeon" cliche for game stores. By supporting local events, you're part of the community, not that weird shop over on the side of town.

Along with, of course, stores moving from dimly-lit basements with bare-bones hand-built shelves made from uncoated 2x4s and plywood to well-lit stores with professional looking, albeit cheap, shelving. I shopped in the former when I was in the 12-16 range, but I'm much happier that most game stores have upgraded a bit.

An online discounter with cheap warehouse space and no walk in traffic can and has to discount. Existing stores can't go to a landlord and have him knock the rent in half, because you want to become an online discounter.

Disount on regular GW product is 45%. Giving a 20% discount means you're giving away 4/9ths of your profit. The store needs to nearly double it's sale on GW products to keep profits even. If you have a local sales tax, it's even worse. Do you offer even more discount to account for the sales tax? Then you need even more sales. And more inventory on hand to make those sales.

Discounting is only an option depending on your overhead. One of our local gaming stores is run out of an underground warehouse. Obviously a store like that has less overhead in terms of rent than a store that in the middle of the city in high priced retail space. The type of discount is up to each store as is how they are offered. I only used 20% in my example as that's what the Warstore does. I still firmly believe that discounting/sales/a reward system has to be part of the solution. I never said it was total solution, just a part.

Since people seem to agree to disagree on the discounting aspect of what I wrote, lets look at the rest of the article. How does the rest of it look to you all?

Kaldor wrote:

brettz123 wrote:

Balance wrote:
I wonder if the trick is to turn from a retail store (that maybe offers some 'services' on the side (play space, snacks, etc.) to a 'service' location that does retail. Can stores find ways to make money off gaming space, hobby space, etc?

My guess is that making money off of gaming space / hobby space just won't work for most stores. It would be interesting however to see someone give this a serious try and see what it really takes to make this work. My guess is it would take a large urban area and some really nice gaming tables.

I think you'd need to offer a complete afternoon service. Coffee and biscuits/cakes, a reading/lounge area, excellent terrain and tables, nice ambient music, etc. No unsupervised children, painting and modelling tutorials from experienced staff, etc, etc. There's plenty that would encourage me to spend money in a local store, but I don't know if I'm representative of the local player base or not.

Unfortunately, if you offer those types of services for free you'll just end up with the smelly freeloader types of gamers taking up all the space who would just end up buying their stuff online anyways to save a few bucks. I love the hobby but there are some really disgusting (both physically and emotionally/mentally) people in it if my experiences at various FLGS and conventions like Gencon are any indication. If you wanted something like that to work, you'd have to charge some kind of event or spa type fee.. and I don't think the hobby is big enough in most metro areas to support that business model.

warboss wrote:Unfortunately, if you offer those types of services for free you'll just end up with the smelly freeloader types of gamers taking up all the space who would just end up buying their stuff online anyways to save a few bucks. I love the hobby but there are some really disgusting (both physically and emotionally/mentally) people in it if my experiences at various FLGS and conventions like Gencon are any indication. If you wanted something like that to work, you'd have to charge some kind of event or spa type fee.. and I don't think the hobby is big enough in most metro areas to support that business model.

Yeah, that's what I had in mind. You'd supplement your sales income with coffee and food, table rental, etc. I'd definitely go for it, but I don't know if enough people would.

mikhaila wrote:

Things that have helped me stay in business:
-Adapting advertising away from Yellow Pages and newspapers and into grass roots support for small local events (charities, schools, etc), and into social marketing such as Facebook.
-Finding a way to make money off the internet. Not moving my store online, but looking for other niche markets. Selling some used miniatures or old store armies on Ebay, Buying and reselling armies for customers, either directly or as an agent. Holding quarterly auctions for used games. Vastly expanding inventory. Running a large number of different events for different game systems. Diversifying into more hobby supplies, board games, and historical wargames. In many cases we sell these to the same customers we sold our minis and comic books too.

These are probably the two best ideas I've heard from a FLGS owner.

I tried advocating the social outreach approach at a now defunct FLGS years ago. I used to work at summer camps when I was doing my undergrad and experienced how much kids love games first hand. They don't read BGG and are completely uninformed about games but a kid who likes games will generally play anything that's put in front of them. They're basically waiting to be marketed to by someone and gaming provides a constructive activity that can be enjoyed either with friends or parents.

Selling online in a niche environment is an idea I hadn't considered myself. It's brilliant, it leverages the FLGS owner's contact with the community and ease of procuring used gaming goods to create a unique market. It's not something that can be easily duplicated by online stores and thus gives the advantage to the FLGS. Awesome!

edit: more substance

In terms of utilizing social media as a brick and mortar store, I think a lot of places I've looked at have the right idea but the wrong execution. My approach kinda spins off of the GW retail store idea of having people be able to come in and see games being played and want to participate themselves. I'd propose that brick and mortar stores should do more to cultivate hype about the activities going on at their store - pictures of games in action, session recaps, battle reports, modeling projects in the vein of "A Tale of 4 Gamers". Whatever the proprietor can do to make it look like super cool things are happening in the store every day gives them a leg up over online retailers. In existing communities this approach would breed camaraderie and incentivize further participation and ultimate purchasing.Potential customers would not only by enticed by the games themselves but also made aware of the schedule and what they can expect from the community, which would hopefully help to cement their decision to join. This idea also continues the theme of underscoring what a FLGS can provide that an online retailer or home gaming experience cannot.