How to start?

[H19841]

Hi all, I run a webshop selling wargames. Now i've been looking into possibly moving into bricks and mortar type of shop.

My local town has nothing similar, and most gamers go to either the nearest city or order online for their stuff, so I think i'd have regular customers and having a local store means I can run events, competitions etc and also have access to other ranges - some of which are the most popular ones so would see another set of customers to those I supply now.

Looking at the figures and my profit margins I would need approximately 130 customer to buy £30 of product each week to pay costs and make a good living - these are really rough as i'm not pinning this down to one retail outlet as yet just using averages

My main query is how I would ascertain if this is a stupid number or not. As there is nothing similar locally it's tricky to do headcounts. There is another shop in the neighboring town doing roughly the same type of thing and they're packed out every day, especially after school.

Anyway, I'm not looking to rush into anything as I would be giving up a stable job so the next step needs to be very well planned. I do have an accountant I can speak to regarding business plans but these obviously cost money and i'd rather have a melting pot for ideas (i.e. this forum) before committing to anything

 

[Mayor]

I'm sorry, I really hate to be negative, I would like so much to be able to tell you that you'd be on a winner, but I'm afraid that I don't think taking nearly £4000 per week is going to be possible. Some of your biggest competitors will be your own suppliers who will sell direct to the public at prices you will not be able to compete with; Gamers tend to be internet & smartphone savvy who will have no qualms about buying on-line to save a penny; When this lot gather together to talk products/tactics/etc etc, they can carry on for hours without feeling the need to delve into their wallets. Packed shops may look impressive but if you have 1 person spending £15 with 5 mates discussing the purchase at length, you are not going to be drowning the noise with the sound of your till. As you may have guessed, we found this out for real when we got involved with this in our shop. We only started to make proper sales when we sold everything off at half price to make way for product lines that were sustainable.

 

[H19841]

oh don't worry at all, cheaper to be wrong now that later

The thing is, the suppliers sell at RRP, I sell at 15% below, so suppliers really don't undercut people like me as people will still use the direct route.

With the internet side of things, people will most definitely go online for purchases, and buy from people like me at the moment - as I am cheaper that most shops.

As for competition there really isn't anything within 30 miles and the place is crying out for it (I attend various local clubs and sell to them on games nights)

I'm not saying you're wrong in the slightest just pointing out the local situation. I agree though £4k a week sounded alot to me, however there is a shop that everyone currently goes to (sells a few products from the popular range) and it's lease is up at the moment and they're showing £225,000 annual turnover so wondered if it was a realistic figure to expect really.

 

[Mayor]

We have found that ALL of our suppliers with a brand, sell to retail now. They all state that is is all at RRP, they all state that they wish to support their retail network, yet every single day I find items being advertised at prices less than I pay (oh - it's just a one off), items being supplied that we were told there was no stock (oh - it went to allocation, there isn't much), Items being offered that were "exclusive to certain markets" (supermarket stock), and it has mean't that we now look very carefully at big ticket items to see whether we want to stock them at all now. Games Workshop priced us out of the market completely - they changed their paint colour range and pricing structure so much, that we just threw in the towel, it wasn't worth it. I hope you do better. One thing that became apparent to us that was obvious in hindsight, is that there is often a limited window of interest with some of these products. Avid 15 year old gamers often dropped off the radar the second they got themselves a girl/boyfriend or a job! Must be said however, that they were in the minority...

Anyway - good luck with your research - keep asking the questions - knowledge is power !

 

[H19841]

yeah GW have really screwed alot of people up. and to be honest, I can't see how they're going to maintain their sales levels by killing off smaller trade outlets.

tbh I don't see many 15 year olds lol, most people I seem to sell to are older gamers with kids of their own.

Definitely food for thought though. I think I'm just hating the day job so much I want to get out and do my own thing....Just want it to be practical lol

 

[leohanks7]

The selling of war hope games are interesting
you should sell that
......................

 

[LTEntertainment]

I have an important question...
Do you stock Testors Dullcote 1260T Spray?
If so, how much do you want for all the cans you have?

 

[H19841]

Hi there, i'm sorry but I don't.

Managed to work a deal with a local comic store, they will sell my stock for 15% commission, this means I have access to another couple of lines and brings in different clientele for them. Just means that in store I have to sell at full retail rather that discounted but being as it's the only place to buy within 35 miles that's not a bad thing.

Here's to 2014 the day job may yet be replaced lol

 

[fairdealworld]

May sound like a mad suggestion but could you charge a small fee for entry to the shop, the fee to be subtracted from the cost of purchases for those who make them. That way you get a bit of 'rent' from those who don't buy while motivating people to buy in order to get their 'rent' returned?

Hasten to add I am not into gaming at all but on the way home from my own shop every day I used to go past the sort of shop you are proposing to open. It always seemed so full of people so I was a bit surprised when it closed but it was easy to work out that plenty of people interacting in the shop might have no relationship to cash through the till.

 

[Mayor]

Yup, it's a mad suggestion, but I see where you're coming from. It would possibly be better received if you were to devise a way to relieve the "hangers on" of their hard earned, by another route - coffee machines ? vending machines ? Something which they don't necessarily feel that they are "shopping" there, but where they would at least contribute to their presence ?

 

[H19841]

it's not such a mad suggestion, however it would mean a "gaming centre" these are becomming the new trend with this type of thing, places where you pay a nominal fee and can play for as long as you like - they also sell models, so they have a captive audience.

These seem to be working as my local club pay £100 a month for their weekly space, and that's one club that would move in immediately, add extra days to this for outside club night gaming and you soon start to earn rent from gamers.

It's more a case of figuring out what cost I would have to expect, I've struggled to find an example cost for a suitable unit, I mean needs are pretty low; toilets, space for shelves and lots of space for tables. it's the rates etc that i'm pretty clueless on so can't really work out if it's feasible or not.

 

[Root 66 Woodshop]

First thing to check out if you do take on a B&M Shop would be whether or not you would be covered for "Sub-letting" the shop to customers.

I'm not overly sure on how it would work, but should be a consideration I think... you don't want to take on a rental to get caught out doing something you shouldn't be doing and potentially losing the property but still having the rent to pay based upon contractual agreements.

I'm not a "gamer" myself as such, although I did use to love the original COD & COD United Offensive games - I'm more into Path of Exiles now... but I can see the potential for local gamers who have formed "clans/Guilds" etc for War Games... although teamspeak etc I'm sure would be best suited for such "events".