Sunday, September 18, 2011

Business of Gaming Retail #48: Making Money at Gaming ...

Sell, Sell, Sell

What sells?

Different sells. The same old stuff people see every day can sell, but people like to see the unique and different at a con. Clearance goods do well. Cold soft drinks sell, as can candy or other snacks.

Things that people forget sell. Sell 7-die sets to people who forgot their dice or weren't planning on playing in a role-playing game. Block of d6s sell to Games Workshop players. Tape measures are popular.

My best personal experience from my store was clearance goods. Product leftovers, discontinued items, and crap that didn't sell when new all did well at aggressive discounts. People like bin prices?everything in this tub is $1, everything in that box is $2. They enjoy digging for deals.

For new games, check out the game schedule. Look at what people are playing and stock that. If someone tries a new game and wants to get it, be the store who can sell it to him.

The trick?especially in a crowded room?is to get attention. This weekend I saw a great trick. A vendor wore a hat with an exclamation point on it. People saw it, approached, and asked, ?Are you a quest-giver?? He replied, ?Yes, I am? and handed the gamer a little scroll tied with a ribbon. It had gold-colored paper with a brief quest on it. The person had to bring back some ketchup or salt, or a program book. Sometimes they involved other vendors (with permission).

This move was brilliant for several reasons. First, it encouraged the gamer to initiate conversation instead of the vendor. That's much more comfortable for striking up a dialogue. Second, after a few solo quests, it ?went viral?, and people started bringing their friends. Lastly, the quests required the gamer to return to the table to get their reward. ?Second-level? quests encouraged the gamer to come back for more visits.

Review

After the convention, review what sold and what you brought back. Why are you bringing it back? Was there other competition for the same products? Did you not bring enough? Did you not display it well? Were there too many vendors competing for the finite dollars at the con?

Did you sell out of anything? Did customers ask for something that you didn't have? Did you run out of change?

Integrate your changes into the next show and continue to fine-tune the procedure over time. At my first convention as a retailer, I only earned about $250 in sales. I tried bringing that week's new releases, some evergreen titles, and some miscellaneous stuff like dice. Only the dice did well. When I started separating my store inventory into ?shelf? and ?conventions?, my con performance improved. In a year or so, I wouldn't be happy with less than $1,000?at the same convention and with about the same number of attendees. Plan on a learning curve.

Okay, Show Me the Money

Mini-cons, or one-day events, might draw 50-200 people?usually less than 100. Avoid these unless they have virtually no cost. They typically only feature games. They don't typically have dealer tables, but if you have a good relationship with the host, you might get some space. If they have no table fees, no travel fee, and they take place nearby, they might be good for a bit of bonus sales.

Small local cons number their guests in the hundreds and take place over 2 or sometimes 3 days. Table fees tend to be $100 or less. They have games, but they might have another feature or two?concert, party, costume contest, or a panel or two. They might have a couple of guests.

If you have to throw in $300+ worth of hotel and travel fees to attend one of these conventions, they're hard to make profitable. If they're local, saving you that travel time, fuel, hotel, and other costs can make the difference. They usually have up to a dozen dealer tables, maybe a few more at the upper end of the range, and maybe half that for the smallest cons.

Medium-sized cons, or cons with a regional draw, attract 1,000 or more attendees. They can run for 3 or 4 days. They almost always feature guests, a large vendor area, and other attractions. Depending on their focus, they might not have much more gaming than a small con, or the gaming might grow proportionally.

Starting somewhere in this range, the vendor room becomes an attraction rather than a sideline. People will come to the con to check out what's available. If there are unique vendors, like game publishers, all the better.

Vendor spaces at these cons can be up to about $500 per space. Expect that Wi-fi will not be free if it's in one of the better hotels. You definitely need extra staff.

Big cons draw tens of thousands. These cons run non-stop for 4 days and fill multiple hotels or convention centers. They have thousands of events of all kinds. Most major gaming publishers are there, as are representatives from overlapping industries like book publishers. The advantage they have is that the vendor space is not open for 16 hours, like some smaller cons. You work hard for 10 hours or so and get a break.

Vendor space can be $1,000 per booth, and the additional expenses can add up to quite a bit.

Planning and running a space at a big con can be intense. I've heard publishers say they take as much effort as putting out a supplement. If you fly there, you have to ship your stuff. If you drive there, it takes longer and can cost just as much as flying.

Cost Worksheet

  • Booth fee
  • Electricity surcharge
  • Porters
  • Wi-fi
  • Parking
  • Program book ad
  • Labor
  • Fuel
  • Hotel rooms
  • Meals

Sales Estimates

Making estimates of how much you'll earn is really stupid of me. They depend on a) con attendance, b) attendee suitability, c) your merchandising skill, d) competition, e) vendor room setup and placement, f) weather, g) date of the convention, h) part of the country, i) how much inventory you bring, j) your personal sales ability, and k) a hundred smaller factors. I cannot account for all of these things.

I can offer ranges.

Mini-con: Minimum $50. This event has a high minimum because there is some social pressure to support a single retailer who invests time and money on an event that is usually a club activity. Best-guess: $50 to $100. Best-case: $400.

You'll need a least $400 or $500 worth of inventory, and $1,000 to $2,000 might work under certain circumstances (like for a Magic-based event).

Local con: Minimum $20. Best-guess: $200 - $400. Best-case: $1,500.

Take at least $500 to $1,000 worth of inventory, and ideally $3,000 or more. I've seen abysmal failure on the part of one store because a neighboring retailer was selling new inventory at aggressive discounts.

Regional Con: Minimum $100. The usual region for failure is a complete misunderstanding about the nature of the con and who's going to show up. Best-guess: $300 to $1,000. Best-case: $10,000.

You need at least $5,000 worth of merchandise to make this worthwhile.

Big Con: Minimum $1,000. Best-guess: $5,000 to $15,000. Best-case: $50,000?

Plan to bring $20,000 or more in merchandise?presumably much more if you want to hit the winning numbers. Costs alone can easily break $5,000 just counting booth space and travel. These events are not for amateurs or small stores.

These figures are for retailers, of course. A new game publisher might hit GenCon and not see $200 in sales because his product offering is much narrower. It's hard to miss your target audience completely when you have a broad diversity of product (it's likewise much harder to sell out completely).

Source: http://www.rpg.net/columns/businessofgamingretail/businessofgamingretail48.phtml

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