Used games, etc.

[Matt C.]

How well do you all think this model (Shoestring) would work by also offering a used game section? I think that could be an possible revenue component here.

[Broken]

Around here, at least, the days of used games sections seems to have passed. I blame the internet.

No, really. Tanga's beat the crap out of the market for boardgames (why buy new unless you want to get it the moment it comes out? Wait a year and buy it for $5 plus shipping).

Ebay has destroyed the OOP RPG market, and it seems that most used bookstores around here are very leery about buying used games. They can't mark them up enough to justify having cash tied up in them, particularly with the worthlessness of the US dollar. I can buy a new game for the US price, so why would I spend almost that on a used game that's going to be priced on the Canadian price?

Worst of all, for a shoestring shop, is the inability to keep good product in, using the used market. People want to trade away their crap and buy neat stuff, so pretty quickly the selection has been cherry-picked and the store's stuck with a shelf full of beat up oWod splats and 3rd party D20 books.

[Matt C.]

Worst of all, for a shoestring shop, is the inability to keep good product in, using the used market. People want to trade away their crap and buy neat stuff, so pretty quickly the selection has been cherry-picked and the store's stuck with a shelf full of beat up oWod splats and 3rd party D20 books.

I've seen that at used bookstores around here as well. But given a savvy owner that can tell gold from crap I would think a used game section, carefully cultivated, could be a value to a small scale op like that.

[LBrownIII]

I think it works best on a used model, actually. Used products seem to have the liability of having a "cap" on sales. It's hard to do over a certain sales threshold with second-hand merchandise (exactly where that cap lies depends on a lot of things). But if we're looking at a shoestring model anyway, who cares? Your goal isn't to generate $200,000/year in sales. You're not leaving the hard-to-track used games in the hands of a potentially dishonest employee. You don't need to create detailed, condition-dependent price guides because you do all of the buying yourself.

For example, I know Magic players who could meet the bills in this store's financials out of their trade binders. They can maintain their "game store" with a table and 8 chairs. D&D minis would do extremely well. Painted Warhammer/40k armies would be profitable if they were priced at the right meeting of profit & velocity.

The trick in this case is to brand yourself as the place that *buys* used games so that you constantly have inventory on hand.

[smascrns]

I think it works best on a used model, actually. Used products seem to have the liability of having a "cap" on sales. It's hard to do over a certain sales threshold with second-hand merchandise (exactly where that cap lies depends on a lot of things). But if we're looking at a shoestring model anyway, who cares? Your goal isn't to generate $200,000/year in sales. You're not leaving the hard-to-track used games in the hands of a potentially dishonest employee. You don't need to create detailed, condition-dependent price guides because you do all of the buying yourself.
(...)
The trick in this case is to brand yourself as the place that *buys* used games so that you constantly have inventory on hand.
On the other hand, what you are describing is more of a brokerage service than a store. In art, used cars, capital markets, etc., you always find this kind of person. Yes, it can work but just don't make the mistake that you are operating as a store, a place where stuff is stored waiting for someone to come in an buy it.

[Immunis]

The effective used game in store model that I have seen works as follows.

Person brings in stuff to sell.
Shop agrees to sell those item that they can, they do not pay anything upfront.
Shop bags and prices items, puts them on display, sellers account is reduced by a small bagging fee. The seller does not need to put any money upfront for bagging, a negative account is allowed as long as the stock is in the store.
When an item sells, the full sale price is put onto the sellers account.
The account can only be used to buy new products in the shop.

There is minimal upfront cost to the shop and most account money tends to be used on impluse or extra purchases. I don't know why but it seems to work this way.

[Broken]

The effective used game in store model that I have seen works as follows.

Person brings in stuff to sell.
Shop agrees to sell those item that they can, they do not pay anything upfront.
Shop bags and prices items, puts them on display, sellers account is reduced by a small bagging fee. The seller does not need to put any money upfront for bagging, a negative account is allowed as long as the stock is in the store.
When an item sells, the full sale price is put onto the sellers account.
The account can only be used to buy new products in the shop.

There is minimal upfront cost to the shop and most account money tends to be used on impluse or extra purchases. I don't know why but it seems to work this way.

Actually, I kind of like that. I would shop at a store like that, I think...if, of course, their used stuff was stuff that appealed to me.

[LBrownIII]

The effective used game in store model that I have seen works as follows.

What you're describing is a version of consignment sales. I've seen it and done some of it myself. I didn't like it.

Advantages for the store
1. Cash flow goes in the right direction. You receive money before you buy the product.

Disadvantages for the store.
1. Selection is limited. Many people would rather just sell it outright.
2. Liability. What if an accident damages or destroys the product? What if someone steals it? The seller might take you to small claims court even if you had him sign a waiver.
3. Small margins. Amateurs don't know how to price their product and might not agree to a reasonable sale price, leaving you with less than ideal profit.
4. Record-keeping. Even if you have technology to track it easily, if you sell enough items, it can be cumbersome.
5. Obligation to the seller. What if you want to remove it from its high-visibility display in the front to a dark corner in the back? What if you want it removed from the shelf entirely because it's not selling. It'll affect the sales price or the likelihood of selling.
6. Loss of contact. After how long can you treat property as abandoned? What if that person comes in a month after you've decided to keep the money or the goods?
7. Laws. Obscure local laws might not agree with your consignment plan.
8. Margin. If you take only a small commission (like 10%), it's not worth your time. If you offer a larger commission (40% or so), you deter a larger number of sellers, which complicates issue #1.
9. Competition with product you own. If a customer buys a $250 consignment item instead of your $275 item, you might have lost $100 or more in profit.

[Immunis]

I hope the following helps you understand the model.
I'm surprised that you dismissed it so easily when it is a proven method of increasing turnover and footfall at no cost bar a bit of shelf space.
In the low cost startup model, shelf space is your cheapest asset, product to fill it is your problem.


1. Selection is limited. Many people would rather just sell it outright.

Up to them, if you offer product and enough people use it, you get a momentum. If you never offer the product, you will never know.


2. Liability. What if an accident damages or destroys the product? What if someone steals it? The seller might take you to small claims court even if you had him sign a waiver.

If fire went through the shop, I'd be more worried that we would lose the best FLGS for miles rather than my stock. To me then they are dead items that may bring a bonus rather than relying on them to bring in money for games.


3. Small margins. Amateurs don't know how to price their product and might not agree to a reasonable sale price, leaving you with less than ideal profit.

People that don't agree to the shop price can walk away, no cost to either side.


4. Record-keeping. Even if you have technology to track it easily, if you sell enough items, it can be cumbersome.

You priced the cost of a PC to your model, open office is free and has a spreadsheet function. Problem solved.


5. Obligation to the seller. What if you want to remove it from its high-visibility display in the front to a dark corner in the back? What if you want it removed from the shelf entirely because it's not selling. It'll affect the sales price or the likelihood of selling.

The example shop I know uses about 5% of their sales area for this sort of trade, they do move stuff in and out of display, mainly to keep good sellers on display. If you ask for an item then they will know if they have it out back though.


6. Loss of contact. After how long can you treat property as abandoned? What if that person comes in a month after you've decided to keep the money or the goods?

In the shop I know, the money is held in a separate account until used by the seller, then it is moved to the main account. That sellers account still nets interest.


7. Laws. Obscure local laws might not agree with your consignment plan.

I suppose in the US you actually have to give a damm, the rest of the world can run with a bit of common sense. 2nd hand goods often have much looser sales laws than new stuff.


8. Margin. If you take only a small commission (like 10%), it's not worth your time. If you offer a larger commission (40% or so), you deter a larger number of sellers, which complicates issue #1.

The margin is not made on the bagging, the margin is made on the capture of funds for turnover of the main stock.


9. Competition with product you own. If a customer buys a $250 consignment item instead of your $275 item, you might have lost $100 or more in profit.
If they buy a $250 consignment, then the seller now has $250 credit that will be used in the shop. As I also stated the money gained on these credits, tends to be
spent on impulse buys not planed buys.

[LBrownIII]

I understand the model entirely.

Listing *more* liabilities than benefits doesn't mean it's automatically a bad idea. Each item on the list--both good and bad--has a weight. If the benefit of low cash expenditure outweighs the liabilities in your specific situation, then it's a good idea. If not, then it isn't. I listed the pros and cons so that anyone else considering it has a whole analysis of the situation.

My quote
Competition with product you own. If a customer buys a $250 consignment item instead of your $275 item, you might have lost $100 or more in profit.

Your reply
If they buy a $250 consignment, then the seller now has $250 credit that will be used in the shop.

Right. Instead of the $110 gross profit you would have made from the cash-paying customer, now you're giving that item away to satisfy a credit. No cash goes into your pocket. All you get in exchange is your negotiated share of the original, lower-dollar sale. It's still less cash flow AND less profit.