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I was wondering if there were any store owners (current and/or former) who could give me their input on what they think the market saturation point is for local game stores. One of these days I want to own a store of my own and it's a pretty big piece of the picture. For example, the town I live in has a population of about 50,000 and supports one game store pretty well. Could a town like this support two stores while allowing both to thrive? Any input would be welcome, really. I should note that my goal is not to replace the other store, nor drive it out of business. I'm just curious if a town like mine can support two stores without killing one or both.

 DMDaddy0 wrote:
Could a town like this support two stores while allowing both to thrive?

How long is a piece of string?


It's far less to do with the number of people and far more to do with the number of gamers, and how much they have to spend.

It all depends on what you have in the town. Is there are College, or how about a military bases? Is the town a destination for other communities in the area? There are quite a few different factors that you have to look at.

It also depends on what your store would carry & offer vs what the competition carries & offers. I get that you wouldn't be aiming to drive the other guys out of business, but they would still be the competition regardless.

 DMDaddy0 wrote:
I'm just curious if a town like mine can support two stores without killing one or both.

Insaniak beat me to 'the piece of string' question, but the other would be, what will you offer that the other store doesn't, in order to bring in the customers?

Well, I have the added benefit of living in a college town AND near a military base (albeit a small one). That's assuming I even open the store here. I've got at least 8 years to go before it would be a reality and who knows where I'll be by then. I was just curious what people's experience in the matter is. I've lived in Las Vegas, which only had two dedicated game stores (and a couple of HobbyTowns), and I've also lived in a couple of towns that only supported one. I just don't know if a small town can afford two stores.

Ask your town hall for any census and/or market data they have available. I just recently got a ton of basic info about the retail landscape of my town, growth projections, and lists of retail and services in demand. It was all free on the town website.

 Lockark wrote:
Ask your town hall for any census and/or market data they have available. I just recently got a ton of basic info about the retail landscape of my town, growth projections, and lists of retail and services in demand. It was all free on the town website.

I'll have to do that. Thanks for the suggestion!

How comfortable is the existing store?
Will they be there in 8 years?
Will you?
Will America be in a financial depression?
What will rents cost?
What will wages cost?
What will product cost?
What will services cost?
How many other stores will be open?
Will product be available?

8 years is just too far to look into the future to make any kind of business plan.

 Alex Kolodotschko wrote:
How comfortable is the existing store?
Will they be there in 8 years?
Will you?
Will America be in a financial depression?
What will rents cost?
What will wages cost?
What will product cost?
What will services cost?
How many other stores will be open?
Will product be available?

8 years is just too far to look into the future to make any kind of business plan.

Not really. Businesses regularly plan 5 or even 10 years in the future. As it is I'm working towards saving enough to make an initial investment in the business (my goal is $10K but if I could save upwards of $15 that would be better). It's not like I haven't done my research on businesses or what to do to start one. I'm also looking into business management/accounting classes to learn the specifics of running a business. Part of successfully managing your own store is to determine market saturation and so I asked my question. The specifics of my personal situation don't matter.

Maybe I should have asked this question instead:

How many FLGSs do you have in your town relative to the town's size? For example:

When I lived in Las Vegas there were three FLGS-type stores, but only two of them were convenient to my home. The third was a 45-minute drive across town. There were a couple of HobbyTowns but they didn't offer a lot in the way of open gaming so I'm not completely counting them.

Compare that to a smaller town like Fairbanks, AK (another town about 50,000 strong) where we had two stores (briefly). One store closed after about two years, but there were some circumstances beyond just "small town", so I'm not sure if it was wholly a saturation issue.

Compare also to Anchorage, AK which is closer to 250,000. Even with the larger population I'm only aware of one FLGS-type store there.

So business planning aside, how many stores are in your area that A) sell wargaming retail and B) offer open gaming for customers and how does that compare to the size of your town?

I'd forget the whole "size of town" thing, that matters little. What is the population of gamers in the town and the surrounding area is a more important question. If you have a town with 50000 and 1% of them are gamers, thats 500 people. if you have a city with 5000000 and 0.001% are gamers thats 50 people. The smaller town's store will thrive, the city's will die.
If there is already a large gaming culture in a given location, driven by clubs or existent strores, then even a small area could support multiple stores.
Whats the travel infrastructure like? Is your store next to a train or bus station? Is it easily accesible by road? Whats the parking situation like?
All these things will contribute to any potential footfall.

I live in a smallish town in England. There isnt a FLGS in town (we do have a toy shop that sells models and some gaming stuff, mostly FOW and GW).
There are two FLGS within 40 minutes drive, but both are owned by the same person so competition is nil.

Bristol, England: 437,500 Population

2xGW
1xDedicated Tabletop 20+ tables
1xTabletop and Board Game
1xComic, Board, Tabletop
1xComic
2xMovie Sci Collectable Comic. Some game crossover, no tabletop.

4 local clubs operating from pubs, village halls etc.

It's probably too many as I don't see any of the owners not working instore or driving Ferraris.

10-15,000 US doesn't sound like very much money, depending on what you're trying to do. It might cover the stock.

 Alex Kolodotschko wrote:
Bristol, England: 437,500 Population

2xGW
1xDedicated Tabletop 20+ tables
1xTabletop and Board Game
1xComic, Board, Tabletop
1xComic
2xMovie Sci Collectable Comic. Some game crossover, no tabletop.

4 local clubs operating from pubs, village halls etc.

It's probably too many as I don't see any of the owners not working instore or driving Ferraris.

10-15,000 US doesn't sound like very much money, depending on what you're trying to do. It might cover the stock.

And The Travelling Man closed down not so long ago, which was a damned shame as it was one of the better comic book/gaming/general nerd havens Ive been to.

 DMDaddy0 wrote:
[Not really. Businesses regularly plan 5 or even 10 years in the future.

Established businesses do but wargaming is a pretty fragile beast and too young to be able to predict trends that far into the future imo.
Save the money and take the courses, by all means, but I'd make the call in 7 years time.

I don't have much advice, Other then Good Luck.

Most of the Gaming stores in my state make their money off of Magic The Gathering. Then the investments in Miniatures and board games come as a special sell with low profit.

These stores make their money off of Pre-releases, Draft Days, and Card sales. So, find the money maker, what will your locals buy frequently?

(A set of four cards for $5 a piece is a lot easier to sell as a hobby then a single unit ranging $30+ and you still need glue, paint, primer, knife/tools.)

Typically your local Chamber of Commerce/Small Business Administration can give you a more precise market share breakdown of the demographics for your area.

Before opening a store, I highly recommend you look into this. It will have vital data for your business plan.

I recall seeing other threads on DAKKA regarding starting a game store. I suspect that they have some good information for the OP.

My experience has been that game stores do not thrive, regardless of the competition. They may look OK, then one day they just close up shop. There are certainly exceptions to this, but the life expectancy of game shops is not very long. Competition just makes things worse.

I live in a city with a metro area of 2.5 million people. There are roughly 5 large stores (10+ wargaming tables each) and at least 10 smaller stores.

It is my impression that the stores try to carve out their own niche, whether it be Attack Wing, Hero Clix, board games, etc. Even the very hard core wargaming stores sell magic the gathering. It seems difficult to stay in business without magic.

Bayreuth, Bavaria, the Wagner opera town, 72,000 citizens, one store, enough.
Bamberg, Bavaria, 75,000 citizens, no store. Players there come over to Bayreuth for friendly tournaments, 40 miles.
Two stores in a town with less than 200,000 citizens is probably too much.

If you don't mind me asking Alex, do you have any plans to open a store?

 Alex Kolodotschko wrote:
Bristol, England: 437,500 Population
1xDedicated Tabletop 20+ tables
1xTabletop and Board Game
1xComic, Board, Tabletop

Where are these three places? Didn't think there was anywhere in Bristol these days!

 Lockark wrote:
Ask your town hall for any census and/or market data they have available. I just recently got a ton of basic info about the retail landscape of my town, growth projections, and lists of retail and services in demand. It was all free on the town website.

 Easy E wrote:
Typically your local Chamber of Commerce/Small Business Administration can give you a more precise market share breakdown of the demographics for your area.

Before opening a store, I highly recommend you look into this. It will have vital data for your business plan.

These have been the most productive suggestions so far (no offense intended to everyone else, of course!). I took a look at the local Chamber and it turns out they have a Retail Site Assessment survey as recent as the last census (2010), and it's available for easy access on their website! I did check out a few other random cities and none of them had the same information, but I'm certain that I could find it if I gave them a call and asked. A word of caution for anyone else thinking about starting a business: There are companies out there that will sell you this information, when it should be free or cheep (one city I looked into had a $5 "processing fee"). Don't get scammed.

 Alex Kolodotschko wrote:

 DMDaddy0 wrote:
[Not really. Businesses regularly plan 5 or even 10 years in the future.

Established businesses do but wargaming is a pretty fragile beast and too young to be able to predict trends that far into the future imo.
Save the money and take the courses, by all means, but I'd make the call in 7 years time.

Give our hobby some credit; it's been around for a long time and won't go anywhere soon. Trends change and the market is certainly unpredictable, especially with independent new games hitting Kickstart all the time. That is arguably the most important job of a game store, to sell new games and get people to spend their money. Too often I see stores that are unwilling to pitch new product, instead relying on mainstays like Warhammer. The key is to encourage them to play all the games they buy so they don't feel like they wasted money on a different IP.

 Vanguard-13 wrote:
I don't have much advice, Other then Good Luck.

Most of the Gaming stores in my state make their money off of Magic The Gathering. Then the investments in Miniatures and board games come as a special sell with low profit.

These stores make their money off of Pre-releases, Draft Days, and Card sales. So, find the money maker, what will your locals buy frequently?

(A set of four cards for $5 a piece is a lot easier to sell as a hobby then a single unit ranging $30+ and you still need glue, paint, primer, knife/tools.)

My focus will be tabletop games, to include TCGs, miniatures games, board games and RPGs. I want to create a comfortable gaming environment akin to the coffee shops of the mid '90s. This will, of course, include Magic the Gathering.

 spaceelf wrote:
I recall seeing other threads on DAKKA regarding starting a game store. I suspect that they have some good information for the OP.

My experience has been that game stores do not thrive, regardless of the competition. They may look OK, then one day they just close up shop. There are certainly exceptions to this, but the life expectancy of game shops is not very long. Competition just makes things worse.

I live in a city with a metro area of 2.5 million people. There are roughly 5 large stores (10+ wargaming tables each) and at least 10 smaller stores.

It is my impression that the stores try to carve out their own niche, whether it be Attack Wing, Hero Clix, board games, etc. Even the very hard core wargaming stores sell magic the gathering. It seems difficult to stay in business without magic.

This is a risk that ALL small businesses face, not just game stores. Most will close within a few years, though not always from losing too much money - often the owners just burn out from running the store. Its all the stress of a crappy retail job, with the added stress of being owner, boss, manager, HR and security all at once. Why do I want to do this again? Maybe I'm just crazy.

Pacific wrote:If you don't mind me asking Alex, do you have any plans to open a store?
Where are these three places? Didn't think there was anywhere in Bristol these days!

I'm not going to be doing another store anytime soon but I have been considering a club of sorts with some events more recently.

BIG (Bristol Independent Gamers/Games?) in Brislington
Area 51 on Gloucester Rd have been around for ages.
Excelsior Comics have opened a Wargaming/Boardgames store a few doors from their existing store next to the Bear Pit.
GW on Vine St, near castle park.
GW, The Mall @ Cribbs Causeway

DMDaddy0 wrote: Give our hobby some credit; it's been around for a long time and won't go anywhere soon. Trends change and the market is certainly unpredictable,

Don't get me wrong, I love the hobby and I'm sure it will be around in some form, but it is hugely unpredictable, it won't be going anywhere but it is likely to change drastically in the timeframe that we are talking about.
Currently GW are up to some funny business at the moment, Kickstarter is going from strength to strength and negates the need for a middleman, 3D printing is becoming more affordable, 'geek culture, 'computer games and board games are still growing and becoming even more 'the norm' and there has been an explosion in smaller wargaming companies with little infrastructure and margins too small to pass on to the retailer.
This has all really kicked off in the last 3-4 years.
Who knows what will be going on in 8 years.

Edit times a million for messing up quotes.

(Sorry for hijacking you thread here DMDaddy0)

 Alex Kolodotschko wrote:

Pacific wrote:If you don't mind me asking Alex, do you have any plans to open a store?
Where are these three places? Didn't think there was anywhere in Bristol these days!

I'm not going to be doing another store anytime soon but I have been considering a club of sorts with some events more recently.

BIG (Bristol Independent Gamers/Games?) in Brislington
Area 51 on Gloucester Rd have been around for ages.
Excelsior Comics have opened a Wargaming/Boardgames store a few doors from their existing store next to the Bear Pit.
GW on Vine St, near castle park.
GW, The Mall @ Cribbs Causeway

Ah that's good to hear, thought it was a dreadful shame when Cut'N'Thrust went. And, these days its relegated everyone in South West to driving to Cardiff if they want a decent wargaming store!

Cheers for the heads up about the stores, will give them a shot.

I'm glad you are looking intothe Demographics as that will be vital for making a viable business plan.

Many cities/counties have Small Business Incubators. Your tax dollars pay for them and they have a ton of great information as well.

If you don;t have one of those, frequently the local Chamber will have professional business Mentor programs or just staff ready to help mentor a new business.

Finally, your state Dept. of Commerce will probably also have a "Starting a Business in XXX" booklet for free on their website or available by mail. These are also great resources as you are putting together your business plan.

It is good to get connections in the Chamber/Incubator early as they can hook you up with source sof funding besides yourself. Groups such as angel investors, gov't funding, grants, Small Business Administration Loans, and other local aid. Remember, the art of business is getting other people to pay for the risk while you take the profits!

I would also encourge you to save as much $$$ as possible as the number one reason businesses fail is a lack of cash reserves/flow.

 Easy E wrote:
I'm glad you are looking intothe Demographics as that will be vital for making a viable business plan.

Many cities/counties have Small Business Incubators. Your tax dollars pay for them and they have a ton of great information as well.

If you don;t have one of those, frequently the local Chamber will have professional business Mentor programs or just staff ready to help mentor a new business.

Finally, your state Dept. of Commerce will probably also have a "Starting a Business in XXX" booklet for free on their website or available by mail. These are also great resources as you are putting together your business plan.

It is good to get connections in the Chamber/Incubator early as they can hook you up with source sof funding besides yourself. Groups such as angel investors, gov't funding, grants, Small Business Administration Loans, and other local aid. Remember, the art of business is getting other people to pay for the risk while you take the profits!

I would also encourge you to save as much $$$ as possible as the number one reason businesses fail is a lack of cash reserves/flow.

Thanks again for the suggestions!

In the short term (4-5 years) my goal is to pay off as much debt as possible. I know a lot of "how-to" resources will tell you to be 100% debt-free but with home loans, etc that's pretty difficult. What I CAN do is pay off all my credit card debt, student loans and the like.

The long term goal is to save as much money as possible. I have a savings plan already that has been accruing interest for about three years. Last time I heard I have a little over $5K in the plan. In 10 odd years I should easily have between $10 and $15K. I will still likely need to rely on some loans, depending on if I buy a store or lease, and I can look into VA small business loans and local investors like you suggest to help cover initial costs like retail and equipment.

I had a friend open a store years ago and part of why I think it failed was that he and his partner jumped into the project almost on impulse. There was about 6 months of planning and then they opened. Bad location, stiff competition and a retail space that was WAY to big for them to afford. I'm trying to avoid that as much as possible. I know $15K might not be enough (in fact, probably won't) to cover all my start-up costs but it should be a good place to start. Currently I'm in the US military, which makes immediate planning difficult but I can start my business plan (which is already in progress, btw).

As stated before my big concern is competition. The way I see it, three things can happen:

1.) My store opens and successfully competes with established stores in the market. The other store(s) is/are bound to lose some business but not enough to impact things too much.
2.) The other store(s) are already well established and the market is saturated. My store closes because there is not enough demand to support a new store.
3.) The market becomes over-saturated by my new store and business drops at both locations. Because there is not enough demand to support the shops, both are forced to cut costs and possibly even close their doors.

My humble opinion? Unless you have some sort of plan beforehand, #2 is the most likely outcome. How are you going to compete? Why are customers going to go to you and not the store they have history with? Having the money to startup won't mean much if you're going to fold shortly after. Demographics are nice, but remember you're not just competing with the local business you're also competing with the internet.

 Torga_DW wrote:
My humble opinion? Unless you have some sort of plan beforehand, #2 is the most likely outcome. How are you going to compete? Why are customers going to go to you and not the store they have history with? Having the money to startup won't mean much if you're going to fold shortly after. Demographics are nice, but remember you're not just competing with the local business you're also competing with the internet.

Well, that's kinda my point and why I'm already in the planning stages, building my business plan. I'm well aware that competition is fierce online, but the thing a FLGS can provide is a place to hang out and play games. That's what I want my business to provide (#2 priority after sales). I've been to a lot of cities and seen a lot of gaming stores, and the busiest ones always put an emphasis on open gaming. Obviously there has to be balance, because space used for open gaming is space NOT used to sell stuff, but that's where salesmanship comes in.

Back to the main topic, market demographics are a lot more important that you realize. There are pages and pages of research just in my small town of 50,000. For kicks, I looked up Spokane, Washington and their market research was over 100 pages. Here locally my town has a saturation (3:1 surplus) of garden and farm supply stores (I live in the middle of American farmland). If I were to open up a garden supply store I would be in trouble. Likewise there is a smaller surplus (2:1) of hobby and book stores. You're correct that it's not the be-all-end-all indicator of success, but it does suggest that opening a store here would be a bad idea. Could I get around that by providing services that the other FLGS doesn't? Maybe? It's really hard to say with any certainty.

 DMDaddy0 wrote:

 Torga_DW wrote:
My humble opinion? Unless you have some sort of plan beforehand, #2 is the most likely outcome. How are you going to compete? Why are customers going to go to you and not the store they have history with? Having the money to startup won't mean much if you're going to fold shortly after. Demographics are nice, but remember you're not just competing with the local business you're also competing with the internet.

Well, that's kinda my point and why I'm already in the planning stages, building my business plan. I'm well aware that competition is fierce online, but the thing a FLGS can provide is a place to hang out and play games. That's what I want my business to provide (#2 priority after sales). I've been to a lot of cities and seen a lot of gaming stores, and the busiest ones always put an emphasis on open gaming. Obviously there has to be balance, because space used for open gaming is space NOT used to sell stuff, but that's where salesmanship comes in.

Quite frankly, planning eight years ahead, I wouldn't even begin to worry about potential competition right now. The odds dictate that at least one of those other hobby shops will fold in the meantime. And another one might replace it. Alternatively, it might not. The replacement could be a really bad store that drives away all of the customers, or the old one could be bought out by someone who turns it into an absolute mecca of gaming.

Maybe look at the local economy again in six years, after you have the money in the bank and are drawing up serious plans. Because right now, you're just wasting your time. Ground conditions change so fast with gaming shops that it's pointless to even begin to scope that far ahead at this stage.

Here is my thought on competition, don't worry about it. Instead, focus on what you are doing. There will always be competition, either physical or virtual. You can't control them. You can only control what your business is or is not doing.

I don't run a game store, but a bakery. If you have other general business questions PM me and I would be happy to help.

Isn't it risky to start just about any retail business that isn't "service based" these days?

I can't remember the last time I went into a game store to buy anything. It's not that I don't want to, they just never have what I need so I usually wind up buying it online anyway.

I thought that most retail stores (and game stores) were disappearing because of online sales.

Semi-off topic. But are there any hobby shops that will let a person "borrow" a unit or army in the store?

That might be a way to boost sales. If I suddenly get to try fielding 3x Broadsides in a Tau army. Find I love them, Then I'm going to invest in them. Hopefully through the store.
Or, Maybe I want to try IG, and the store has an available IG army for me to try.

I'm curious if anyone has ever seen this done.