Last week, BushCraft talked about a daydream of owning a game store someday.
I thought I'd talk about the reality of owning a store, point by point.
BushCraft says:
Well retirement's still about 11 years out...I'd be 42, so it's a viable option for me to dedicate years to as a job/hobby. Don't need to turn a huge profit, just break even.
Let’s break down what it really costs to operate a store. We’ll use imaginary- but possible- costs to help illustrate the point of how a retail business can run, and what it takes to break even.
Estimated general operating cost of store: $2000/mo.
That estimate is based on very reasonable rent, utilities, insurance and bare bones supplies. $2000 is the absolute minimum per month cost in this imaginary scenario, but it is definitely possible to pay this amount in real life. A breakdown of costs would look like this:
Rent- 1000
Power- 400
Water -100
Trash- 50
Cable/phone- 125
Insurance- 50
Office supplies- 50
(paper, pens, tape, staplers, toner/ink, receipt paper etc)
Maintenance supplies- 50
(paper towels, toilet paper, cleaning supplies, trash bags)
Soda/candy/snacks- 125
Misc expenses (licensing, parking, bank fees, local ordinance fees- you never know)- 50
Note that I put soda and candy into operating expenses and not under merchandise or stock. I do this with the assumption or idea that the intent is to be a FLGS and not just a place to buy stuff. The soda and candy is an important part of the inviting aspect to a FLGS. Opening a soda and hanging out while drinking it, or sitting and eating a candy bar while “wasting time” is an essential part of the FLGS experience- at least to me. You may think differently and put these costs into your stock costs, and that’s ok. I would still expect your minimum operating costs to be in the $1500-$2000 range unless you have some spectacular cost of living and/or real advantage I’m not considering.
These are operating costs- startup is going to be much higher. Starting up will require a deposit for almost all of these services- expect at least a month’s worth, if not higher. Purchasing tables, chairs, shelves, displays, cash registers, bags, signs and anything else you may need to open the doors are additional expenses to consider for startup as well.
All of this has to be covered and paid for regardless of customers, sales and actual business. Most commercial leases are no less than 2 years, and almost all service agreements for utilities are on similar terms. You may never have a customer walk through your door, but you’ll be on the hook for many of these expenses for a few years. I wasn’t kidding when I suggested that you have no less than 6 months’ rent in reserve in case you don’t have any customers.
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| This is not what you want to see. |
All of these are costs borne by the operator before a single item of stock is purchased. Stock costs vary according to discount levels with various distributors- but consider the following example:
“Entry level” with Distributor A: $400 order minimum for free shipping, with a discount of 40%. That means you pay 60% of MSRP for your items. You order $400 of stuff to get free shipping. The MSRP of those items will work out to be $667. That gives you $267 “profit” that needs to be directed towards operating costs.
Obviously, this example shows that a single minimum order isn’t enough to cover expenses- not by a long shot. I “cheated” by making the discount very low- MOST distributors have a higher discount, even for entry level customers. As you do more business with a distributor, you can “earn” higher discounts by promising to order certain dollar amounts with that distributor in each quarter; but most starting FLGS cannot afford the levels of commitment required to gain a higher discount right away. Every distributor’s discount structure is different, even among product lines, and comparing costs and margins for orders becomes an incredibly important part of the business. Here’s an example of why:
Distributor B: $350 order minimum for free shipping, with 45% discount on all product lines except Product Line Y. Product line Y is offered at 43% discount.
Distributor M: $400 order minimum for free shipping, with 45 % discount on entire product line.
It becomes up to the person ordering and responsible for the money to decide if the extra 2% discount on ANY product line will “pay” for the higher required order amount, and if Product Line Y sells well enough in their “meta” to order through Distributor M instead of Distributor B in order to get a better discount.
It takes a minimum of $2000 in sales of product at MSRP per month to break even, using the above numbers as our example. That’s roughly $500 a week, or $72 per day.
That may not seem like very much to need to sell to an outsider, and it’s not always that tough. The big issue is how you do it. Most of the folks on this site are miniatures players, and in it for hobby. Selling miniatures and hobby accessories is fine and dandy- if there are a LOT of miniatures players in your area and the meta will support buying miniatures, paints, modeling tools, glue, primer, basing materials, foam, bags and other accessories to the tune of $2000 a month.
It’s my experience that miniatures will sell, but it sells in cycles, and not reliably enough to support a store as a sole business line month in and month out. That's why we have other product lines-to help support the business, and the community as well.
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| Wal-Mart sells more than pens, right? |
My pension pays the bills, my wife's job stacks with that. Maybe sell a child or two to wipe out the mortgage (i kid! I kid!) and as long as the store keeps itself afloat I'd be good.
The mention of kids and a wife is what makes the reality of a store much tougher.
The numbers I gave above are all imaginary- but possible- and I never once mentioned labor. These numbers presume that YOU are working the store, and you aren’t paying yourself. The hours a store needs to be open to make the minimum to keep afloat are mainly evening and weekend hours. When you’re a family man with a wife, working those hours is going to do serious damage to your family coherency. Working those hours for no pay for at least three years will destroy almost any family, especially if the wife or kids aren’t “on board”.
Which leads us to the next part of BushCraft’s question:
I doubt anyone gets filthy rich in the nerd business (at least not the mom and pop stuff) but that's not what I want. It'd be for love. Do you and Mr. Gopher find time to enjoy yourselves or is it 100% all about keeping the business running? That's really my biggest concern.
For no less than three years of the business being in operation, it was 100% all about keeping the business running. I've mentioned before that we only close 3 days a year, but a lot of people don’t catch on to what that really means: no time off. Mr. Gopher (mostly referred to here as TheDude) worked the store until 11pm every day, for pretty much 3 years straight. We didn't go on vacation. We didn't go to parties. We didn't go to movies. We didn't have people over. We ran the business.
It was either TheDude or I working at the store every day. Our kids had birthday parties and did homework there. Their Christmas presents were from the store. Our son worked at our store (and still does). We were the store at all times. There was no real family time or separation from the store. It wasn't until our fourth year of operation that we were able to hire someone. It wasn't until after several months of training the employee that TheDude felt comfortable enough to leave the store and let our employee handle things, because TheDude has control issues.
It’s only been in the past year that we've had any real opportunity to have dates, to enjoy birthdays, to go to movies and go on vacation. TheDude, who has serious control issues, took a vacation! We’re planning on going to GenCon as a family this year.
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| We will of course get an updated map. |
It took us five years to get here, and it was a ton of sacrifice. Our family decided (for better or worse) that we were behind the store, and we were willing to make choices that other families probably wouldn't make.
So what about the alternative?
Alternate to that would be to build a gaming hall on my property and start a club with negligible membership/drop-in fees to have a slush fund for stuff like terrain building. My concern there (besides the logistics) would be that I might inadvertently take business away from stores by drawing away customers who would otherwise be gaming at the store. I was thinking (which explains the ozone smell in here) that I could offset this with free advertising or satellite sales displays. That sort of formalized club thing is big overseas but not something I've ever seen here in the states. What's your take on this as a store owner?
Believe it or not, this is not a concern or issue at all for a store owner- not in the long run. After five years in the business and 30 or more years gaming, there’s a fact we can’t get around. People game at home, in their buddy’s garage, or the basement. The fact that they game elsewhere doesn't change the fact that they game, and we sell what they like to buy.
Clubs and gaming garages with small/negligible fees designed to purchase terrain and other gaming supplies are pretty chill in respects to our store. Usually, the guys that play in garages and basements come to our place and buy models or things to play with at their clubhouse. They take them back and play with them, and all is well. There are a few guys that strictly buy on the internet and play at home, but we rarely hear about those guys because they generally don’t come to our store.
In the late 90’s, early 2000’s, there was this upswing of the kind of thing you’re mentioning- the “home store” or “club store”.
The idea behind these was that a group of guys would all sign up as a “store” and promise to spend so many dollars a month to get a discount on games. Based on the numbers from before, if you got 4 guys splitting a minimum order of $400, that’s $100 each every time they ordered. The big drawback on these club stores was that invariably one of two things would happen: at least one of the guys in the club would flake, or a distributor would figure out the club wasn't an actual business and would yank their account.
The fad kind of petered out after a few years of every club I’ve heard of disbanding due to the reasons mentioned above, and it’s become much less of a concern for actual brick and mortar stores than you fear.
And that’s what it ultimately comes to- we’re a business.
And SnaleKing’s comments are worth addressing, too.
Honestly, I hadn't even thought about it until you brought it up. Now I'm thinking a mile a minute. Work where you love, never work a day in your life. Even min wage, it just sounds so fun.
If none of the above was any kind of clue as to what a FLGS owner goes through, let me put it right out there: it’s a fucking lot of work. It’s certainly in an environment where you are surrounded with things you love and are passionate about, but you work every damn day.
The work that goes into waiting on customers can’t be overstated. Most of the time, transactions with customers are wonderful and we truly enjoy them. But the fact remains, it takes a lot of work to give every customer the attention they deserve. Customers can and do require a level of patience that a lot of nerds just don’t possess. From stories about their character, to list discussion, tactical dissertations, requests for painting advice, to general pop culture observations; customers invariably want to talk about any and all of these.
Without fail, they want to talk about these topics at incredibly inconvenient times. Just as you think you've given them adequate attention and move on to side work, your customer will pipe up with something else he wants to say. Many times, they aren't even talking TO you; you just happen to be the person in the room that they are directing their jabber towards. They just want to be heard, and you’re the nearest set of ears.
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| We hear this kind of stuff all the time. WTF? |
These interruptions take place whether you’re busy or absolutely dead- and there are customers that are notorious about doing this sort of thing. I have a specific customer that NEVER wants anything when I am at the counter, facing him. It’s not until I’m dealing with someone or something else that he finally decides he wants a soda- and he doesn’t nod his head or say anything to get my attention. He just stands at the register, waiting. Of course I have to interrupt whatever I was working on or whomever I was helping, and his track record of doing this has lead me to ask “hey, do you want to grab anything before I [do X] ?”. It helps, but it’s frustrating to have to remember to do it with that guy. It’s frustrating to feel like I can’t get anything done because of customers and their need for attention. Being interrupted a lot will do that to you.
We have customers that call to see if we have a product- which we generally appreciate. It saves them time and gives us a better sense of what customers want. We ask if the customer wants us to hold it for them, so that they don’t drive over for something that might be sold. We enjoy these conversations a ton and encourage them. It’s the customers that want us to look for an entire deck’s worth of Magic cards over the phone that are more than infuriating. There are other kinds of inconsiderate behavior that make us want to scream, but the ultimate thing we have to keep in mind is that these folks pay our bills.
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| I have moments like this. |
Honestly, it is guys like you that think that what we do isn’t work that makes us insane at times. We don’t just open the doors and wait for customers. There’s so much more to do- from receiving, pricing, labeling and stocking shipments to cleaning the bathroom (used by dozens of gamers every day of the year) and everything in between that there are times when we don’t see the trees for the forest.
A prime example of “too much work, not enough time” can be seen behind our cash register/display case at the entrance to the store. For us, it’s where we stick a million random things “for just a minute”. Our best intentions are that those things will be put away where they really belong; but we get distracted and those million things stay on the table right behind the counter stay there for a whole lot longer than we intend.
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| It's clean in this picture- shocker! |
This kind of situation might be why so many FLGS look less than tidy. We do try our very best to keep the stock and customer areas super clean. We clean tables, sweep floors, take out trash and spot clean pretty much every day, with a deeper clean once a week. It's a lot of work cleaning up after guys who sit less than five feet from a trash can but leave their crap all over, and not going crazy doing it.
I hope this gave you guys a look at what it's really like at the FLGS without crushing your dreams too badly. It's incredible and rewarding, but it's work.
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