Sunday, October 19, 2008

Our Fourth Year

We've had a successful first year in our new location, our fourth year in business. It has been a year of transitions. We've transitioned to a new location, with most of our customers successfully finding their way to our new store. We've transitioned our store model to one of open gaming and organized play, rather than straight retail. As much as I would like to run a pre-Internet, 80's era fantasy game store, the reality is that modern game stores must be broad and supportive with space for play. The store isn't just the old store with more space, we've transitioned our store to something very different than it was before, because other local game stores have made drastic transitions of their own.

Since we moved, we've seen Games Unlimited, Clayton Cards, Blondie's Comics, and Games Workshop Concord close their doors. All the local game stores. Other stores have popped up, but the vacuum these core stores created was filled by us. Being the last man standing was not my strategy a year ago, but I'm not complaining. Much of our in-store gaming community is a hodgepodge of refugees from other game stores. This has resulted in some very strong in-store gaming groups that didn't exist before.

Our Friday Night Magic group is our strongest with 15-30 people in attendance. Our Warmachine league is our most established group, with regulars showing up on Sunday like clockwork for years now. Our Warhammer 40K league has a smaller core of solid players with many more drop ins. Living Forgotten Realms is only a few weeks old, but they fill 2-3 tables of players on Thursday nights. Some of our fledgling new events include weekly Pokemon tournaments and (gasp) a return to Yu Gi Oh organized play with some clearer boundaries and better supervision. Game of Thrones inexplicably brings in large crowds, surprising for a game that we gave up as dead a year ago. Most large game stores would need to choose which kinds of games they would support, while we've been given the benefit of serving the entire game community. I want to point out that our open gaming "distributed" model rarely sees staff running events. Rather, it is up to enthusiastic volunteers to step up and use us as a resource. If we're not running an event you want, maybe you should be that guy.

The year hasn't been all easy. The same circumstances that have helped us have hindered us, as we re-define our place in the gaming community. We've had to adjust to new customers from departed stores, usually using it as an opportunity to serve them, but occasionally having to say no. Some of the things that make customers happy, especially in stocking a broad range of product, are the things that will sink a business if they're not careful. "Consider yes," the popular phrase from indie role-playing games, has been my motto for new products. At the same time, just because store X did things one way, doesn't mean I'll follow, especially when store X just went out of business. Still, I've got a big Ravensburger jigsaw puzzle order about to go out and I've continually tried to find a way to do Magic singles. Customers demand these things. We aim to please, but we also aim to thrive as a store.

Other challenges include a tremendous level of shoplifting compared to the old store. There's a certain percentage of "acceptable" losses and we've gone from the very low end of that spectrum to the very top. Since that level of shrink is considered a percentage of gross sales, it seems even larger since our sales are so much larger (to match our expenses). Staff training only went so far to prevent shrink, so we turned to technology with a closed circuit television system to watch trouble areas. I'll also be considering a tag and gate system. Being the last game store also means I inherited all the shoplifters from all those defunct businesses. Our first shoplifting catch will be made an example of. Stay tuned for the exciting drama.

Just when I thought I was done spending my tech money on expensive cameras, our four year old point-of-sale system started wheezing and coughing. I was hoping to limp through until January, when we might have some holiday money to fix it, but it wouldn't wait. We upgraded the CPU and version of the POS software along with our customer loyalty software package. It was not a well timed expense, but it was necessary. I'm hoping this lasts us another four years.

There were also a bunch of smaller tech changes behind the scene, such as going paperless in the office. It not only meant we could ditch all the paper and the room it was taking up, but we ditched the office! We still have the office space, but it's no longer needed for office tasks, which means we can use it for future business activities like the much promised (threatened) online store.

What About the Economy?
The housing crisis and resulting credit crunch has hit me too. Besides losing tremendous value in my own home, the loss of my home equity line of credit, the main credit source for the business, has me borrowing more short term expensive money from credit cards. This has put a crimp on expansion plans, but so far hasn't effected operations. We've never had a slow down in re-stocking the shelves and we've never missed payroll. Still, you'll find most businesses cautious to spend any money when you've got no financial slack. At the same time, it's almost inconceivable we'll see a well funded competitor pop up any time soon. Note to well funded competitors: If you've got money to burn, make me an offer.

Where we feel the poor economy the most is with missing customers. We've lost several good customers to unemployment and many others have pulled back their spending due to job insecurity or general concern over the economy. This is all "anecdotal evidence," stuff I learn talking to people but not something reflected in our overall sales numbers. Sales for us are strong and we've met our sales goals for the year. Would they have been better during a good economy? Perhaps, but perhaps not. We've gained a lot of new customers over the past few months, and some of that, experts argue, are people "nesting," relying on tried and true board games and hobby activities to distract them from hard times. The most popular American game is alas, not Settlers of Catan, but Monopoly, a game that came out of The Great Depression. Games were made for tough economic times.


  1. I have to say congrats Gary. If I was a "Well funded competitor" and lived in the bay area, and was really itching to get back into the game industry - yes, I would make you an offer.

    Congrats on 4 years. May you have many more.

  2. Regarding Magic singles - have you ever considered consignment? It seems like there's a lot of folks looking to liquidate their cards at any given moment, and taking just enough of a cut to make ends meet plus putting some ready singles at the player's hands might do the trick.

    No experience here, just a random thought while I read...

  3. Consignment sounds like a good idea, but my main concern with something like Magic cards is theft. We already have a tough time keeping track of our own cards, so I wouldn't be entirely comfortable with someone elses. It's an interesting idea though.

  4. We had our Magic Singles binder stolen off our counter one night. Since we weren't big into singles, it was maybe $200 cost worth of singles, but did wipe us out for a good long time of "good" stuff. We learned a lot from that.

  5. We put our binders in the back after it was clear to me it was a distraction that was allowing other customers to steal.

  6. If you're doing singles, you really need to have enough volume to justify having someone on staff to handle them. Pricing, trading, buying...
    It might be something that can happen with the online store - along with singles for other collectible games - since the customer base would be broader.