Not so Bizarro

[C.W.Richeson]

What's disturbing to me is the number of shops that I have encountered that have been guilty of these problems. I hate to say it, but some of them are why I very rarely go to game stores anymore.

#1 - I've definitely encountered this, though for me it's been a matter of utter disinterest when I'm asking about products the store doesn't carry. I remember one occasion, in particular, where I was left with the distinct impression the store owner (not just an employee) wanted me to go away rather than deal with me. Ugh.

#2 - This is a frustrating one. I understand that most stores can't pay high wages, but even so many seem to hire folk for reasons that completely escape me. One local store hired a very pretty girl who, as near as I could tell, didn't actually know anything about any of the stock. Another store I briefly purchased from hired an employee who would wander outside, leaving the store unattended (that is, when the employee wasn't playing World of Warcraft). Most recently I was chatting with a friend when the employee at bat, a friend of the owner, wanted to argue about GURPS being the best RPG out there. Since we were discussing World of Darkness and purchasing some CCG materials it was a little bit of a put off. Combined with the owner's active disinterest in us we took our future business elsewhere.

#4 - This is a quick sign to me that there's something wrong. When I see early GURPS 3rd edition products on the shelf, in tatters from years of shelf wear, at full price I question the business sense of the owner. A simple markdown section would tempt me away from eBay and help clear out some of those old, old copies.

[fmitchell]

#4 is a big problem with my FLGS. On the shelves, for full price, they have Buck Rogers, old Deadlands books, 3rd Edition GURPS, Lord of the Rings (movie tie-in, not the original), ... the list goes on. I ignore 75% of what's on the shelves (including the solid wall of D&D and WoD, strategically arranged at the back of the row).

Maybe he's waiting for all that stuff to be collectors items. Maybe he doesn't know what to buy anymore with all the choices. Maybe he figures jigsaw puzzles and family games make far more money than RPGs or wargames (similarly sparse and antiquated), so it's just not worth his time. I have no idea.

[LBrownIII]

"#2 - This is a frustrating one. I understand that most stores can't pay high wages"

Oddly enough, on this topic, I like to think back to the first edition DMG, in the discussion of followers. It discusses a strong leader and weak lieutenants, etc. It says that "high pay is not considered the sign of a strong leader", or something very similar.

I remember it because it's true.

You don't always need to pay top dollar to get good people. Yes, in some circumstances you do. A truly outstanding manager can get good results out of mediocre or weak salespeople. Game store owners often hire gamers because, frankly, some of them would work for free, as long as they got a discount on games. They're attracted to the cheapness of the labor and the high degree of loyalty they think they're getting.

It would be better to pay a real salesperson an extra $1-2 an hour if that salesperson generates an additional $100/week. That's only about 2.5 game books, a few blister packs, or a box of cards. That's not hard.

[Harmast]

It would be better to pay a real salesperson an extra $1-2 an hour if that salesperson generates an additional $100/week. That's only about 2.5 game books, a few blister packs, or a box of cards. That's not hard.

And he might not be worth it, depending on his hours of work.

I know fast food, not retail, but if anything we had higher acceptable labor costs as a percentage of sales. My target in my years running a Dominos was 25% wage costs versus sales (actual labor costs were higher, closer to 35-40%).

So, lets assume a wage/revenue percentage of 25% provides reasonable profit for the store owner (5-10% of total sales as profit). To give an employee a $1/hour raise she needs to produce $4 more sales per hour. That means an increase of $100/week is worth a $1 a hour only at 25 hours/week. Given the employee is much more likely to close a new sale on a lower cost item we're probably talking 10-15 items or about one sale generated by the employee every two hours. Not too unreasonable.

To get to $2/hr the employee needs to be able to generate the sale of bigger ticket items at the same rate (hardback game books or complete boxed games) or smaller items at twice the rate.

From my experience in what it takes to upset sides (even if you can get the customer some coupon or deal if they add them so the increased costs is only a dollar or two) this isn't easy.

[LBrownIII]

I have many years of experience at Domino's, too. In fact, I'm negotiating to buy a franchise right now.

(I'd love to have a 30% product cost in a gaming store, btw. I'd pay 25% labor to get that.)

A game retailer should look for 20-25% labor figures for most business models--closer to the low end for mature stores.

My own records from several thousand transactions show that my average ticket price is about 20% higher than my store's average. I don't consider myself that good. I'm just consistent. I've seen better salespeople who, if they are as consistent as I am, outsell me 2-1 on targeted items.

Consistency is the key to upselling. You can't teach your crew to increase their personal charisma, but you can train for consistency.

Take your 25 hour/week employee example and look at the store's current sales volume. If you're doing $4,000/week and you schedule your high-cost, high-expectation sales employee during the busiest times only (because you're running the dead shifts or have less valuable employees working those shifts), that employee should be able to interact with $2,000 worth of customers.

With an average sale of $40, that's 50 customers per week. With an average sale of $20, that's 100 customers per week. Your employee should be able to manage an upsell rate of anywhere from 5% to 15%, depending on the price point of the item(s) you're promoting and personal skill. This figure drops during busy times as the employee forgets or rushes things.

With a 10% upsell rate and interacting with an average of 75 customers per week, your better-than-average person sells 7-8 items. Even if we're just talking about a $4 pack of sleeves, he's paid for himself.

In the case of a 40k starter set, though, that employee should be able to routinely add $50 to $70 worth of add-ons.

Also, if you sell the *right* items, your gross profit margin goes up much higher, and your better employee earns you more profit. I always offered my 70% margin dice before I suggested my 47% margin dice.

[LBrownIII]

Also, your figure of 25 hours/week should read "25 hours or less." If that person can earn $100 in sales in four hours, so much the better.

If you have you high-sales employee work the day of the 40k tournament or the Magic booster draft or the game day, it's very possible to generate sales far in exceess of $100.

Ideally, of course, your salesperson will be both a gamer and a brilliant salesperson.

The trick either way is to plan your path, track your results and fine-tune as you go.

[Harmast]

Also, your figure of 25 hours/week should read "25 hours or less." If that person can earn $100 in sales in four hours, so much the better.

True...I was trying to push ceilings...

The trick either way is to plan your path, track your results and fine-tune as you go.

Yes...I'm always amazed in this day in age that very few stores I visit have computerized POS systems and inventory control. The I did deal with that had it seemed to used it not at all.

[Harmast]

I have many years of experience at Domino's, too. In fact, I'm negotiating to buy a franchise right now.

(I'd love to have a 30% product cost in a gaming store, btw. I'd pay 25% labor to get that.)

Yeah, that was something I was thinking but didn't bother to mention, which is one reason I assume specialty retail has a lower labor target than I'm used to.

I managed with an eye to franchise, but when I looked at things like sales growth with the franchise I was in, potential income, and the cost of living where I lived I opted out with a return to the computer industry (not to say I don't miss it, but there was no way to make the numbers work on a timeline I thought was reasonable...although having changed parts of the country I'm in the temptation to go back and see if they'll work here is huge).


My own records from several thousand transactions show that my average ticket price is about 20% higher than my store's average. I don't consider myself that good. I'm just consistent. I've seen better salespeople who, if they are as consistent as I am, outsell me 2-1 on targeted items.

Where did you find your employees...I had a hard time finding people worth the state minimum wage where I was at and given I had very little to give them beyond minimum wage once somebody got a strong track record (and thus a good reference) from me they were gone.

I never understood how hard good people are to find until my two years as a manager. Again, from talking to other people, I suspect I had very franchise and location specific issues.

Consistency is the key to upselling. You can't teach your crew to increase their personal charisma, but you can train for consistency.

No doubt...the handful I got that would just follow the scripts we had right by the phone showed much better sales than the ones who wouldn't. It's amazing how easily just a little effort every time pays off.

With a 10% upsell rate and interacting with an average of 75 customers per week, your better-than-average person sells 7-8 items. Even if we're just talking about a $4 pack of sleeves, he's paid for himself.

Not quite...8*$4=$32. Assuming you're hitting the top discount you're still paying at least $16 for those items. So, revenue after cost of good sold is $16. If you've upped the employee $1/hr for 25 hours based on this you're paying them $25 with a total cost of employment of about $30...so they're just over twice.

Looking at it on median numbers:

75 customers with an average ticket of $20 an overall upset rate of 10% will bring in $2/sale or $150...now the employee is making the wage.

I think, however, you'd be better off working on minimum plus commission than pay raises. You could run the system on something as simple as set a wage target and pay the employee that percent of sales with a minimum each pay period of minimum wage.

[LBrownIII]

Not quite...8*$4=$32. Assuming you're hitting the top discount you're still paying at least $16 for those items. So, revenue after cost of good sold is $16. If you've upped the employee $1/hr for 25 hours based on this you're paying them $25 with a total cost of employment of about $30...so they're just over twice.

Ah, I get it. Normally, I talk about gross profits when I engage in these discussions, but I was just thinking about immediate cash-flow with this train of thought. Sorry, I was short on time.

The point of accessory items is higher margin in exchange for less total dollars. Whenever possible, I upsold items in the 60-70% range, and I recommend that others do that, too. If you don't have such an item, get one or make one that price.