So You Want To Open A Video Game Store!

Well first off you will need a lot of good timing, some financial help, and a good amount of what I call natural luck. Before getting into all the details let me first talk a little about me. I?ve been the owner (one of 2) of Nexwave Video Games in Edmonton for the past 5 years now. I made my start in a flea market with a single table, a handful of games from my personal collection, and a dream. After a year of "fun" in the flea market I was able to get some capital together to open my first store along with some help from a business partner. It started out small with just a single showcase, a little wall space, and I?d say no more then 200 different titles total. But every week we grew, bought more stock, found some good deals (and some bad ones) and now 5 years later we have 2 stores with well over 20,000+ games in each store.

How do I start?

First and foremost a love for the business is essential, as that is what will get you through some of the darker days ahead, because not every day is a happy one. You?ll also need to have a plan. A business plan and a long-term goal plan. Like a six month, twelve month, two year and five year plan. Think about where you want to be as a business in that amount of time and try to make it as realistic as possible. Put every goal down no matter how small (e.g. I want to have 100 different NES titles within 6 months). As for a business plan, this would be a good idea to go over with someone you trust. They don?t have to be an expert finacal planner (but that couldn?t hurt), but someone who you trust who?s generally good with money or is what you would consider successful. Figure out a budget of what you would need as starting capital, and what you think your monthly and weekly expenses would be.

Do I need a huge Bank Roll or Starting Capital?

This is the main reason why most people don?t bother even trying to start their own store. They look at stores and say man here must be a million dollars worth of games in here so why should I even try. If you do have a large bank roll or capital it will help for sure but it?s not imposable to do it on a tighter budget. You have to build it around what you can afford. The one thing you need to learn if you don?t have capital is that things will happen they will just take longer and will not happen over night. You don?t need to have a huge store with 1000?s of games on day one its something you can grow into.

Franchise Vs Independent

There are a few places now that offer franchises. And there are both positives and negatives to this. The first negative is initial costs (most want anywhere from 50,000 to $100,000 as an initial investment) the second is a loss of some of your freedoms, how much really depends on what franchise you pick. Also every month (sometimes weekly) you will need to pay fees to the franchise or they will take a cut of your gross (total earnings). But let me not only talk about the bad there is positives. First you get a larger name behind you (Microplay, Play N Trade). And that can be a huge help in the start, plus you also get there team of advertisers, wholesalers as well as store designs and location help. As well as give you a working price list and software to handle buys and trades, as well as a system for rentals (we shall get into rentals later). Also most have other owners or a help line you can call anytime if you have questions. This can be a huge help in the start. With an independent store you do have advantages as well to, the biggest being the freedom to do anything you wish. As well as not having any of your sales taking away from you. Most of the wholesalers (more so in Canada) are very easy to track down and you don?t get really any worse or better deal then what you would get if you were a franchise. If you have a strong mind and can think things out clearly then an independent is better for you.

New/Sealed Games

This is a huge decestion , but one you will have to make early. There is many positive and some negatives to stocking brand new sealed games. The positives first, you will have new stock coming in weekly, and have all he newest titles. With having the newest titles in the day they come out means that you will get some traders in of older titles from people who don?t want to pay full retail for the game. Now for some of the disadvantages, the big on is the cost and the minimal amount of profit that is generated from new games, a lot of titles will have a whole buy price of $52.99 and a suggested retail price of $64.99 (already not much of a mark up). But the 800 lbs gorilla called Wal-Mart or Real Canadian Super Store decides to price the same game at $55.00 or even maybe $49.99. Why? Games are not there bread and butter they use them to draw people into the store in hopes that they will also buy other things while there. So you would either be forced to price match or leave your price as is and have the customer walk out and buy it from Wal-Mart This is not final there is still a way to counter this, the first is that some people will buy from you and pay a bit more just due to the better advice and knowledgeable staff. Also the fact that they can trade in games is another advantage over the major stores (other then EB/ Gamestop but we shall talk more about them). It is a major investment of capital to have a stock of new titles but the best way to control this is to stock games that places like Wal-Mart and so just wouldn?t carry, Like the Dance Dancer Revolution games or the Newest RPG put out by Atlus.

Used Games

Used games are where you will make the most money for you bisness if not all the money for it, and the margins can be as high as you wish. If you are part of a franchise then you should get software that would give you an idea or a certain price point you will buy and sell the titles for. If you are an independent then this is something you will need to figure out more on your own. But if you know the game market much and have been a collector or fanboy for any time you should be able to pick up prices very quickly. Just ask yourself what would I pay for this title if it was a game you ware after.

The classic era are also another advantage you can have over larger chain stores (even EB/ Gamestop recently said they were going to stop carrying them) This is a small but growing market for the classic that im sure I don?t need to tell any reader of this about. Let?s just say it?s an area you can really build up and make a good profit on. And that brings us to?.

Know your market

This is not something that will happen over night its something that you will have to tweak and fiddle with everyday. Knowing your market is gauging what some of your customer base is after. At the start you would have to try to have a bit of everything (NES SNES , N64 , Genesis , Dreamcast , Atari , Coleco) but as time passes and you see your sales you should see a pattern of what people are buying and what you are getting asked for. Then you can invest more money into that or bring in certain titles you are always getting asked for.

Another thing as well to, deals in pricing, knowing your market on this is something huge and can make or break you. Some games you might be able to price higher then the norm as they are titles that people are after and are willing to pay a bit of a higher price to get the game. It something you will have to keep a very close eye on and be able to change on the fly. The biggest thing to remember (im sorry I can?t recall who said it first) it?s a lot easier to price things down then to price things up. So in other words if you really are unsure price a game a bit higher as you can always drop your price later if you are not selling it or getting a lot of resistance on it.

Stock (Used Games)

Unlike new games there is no magical wholesaler you can call up who will send you used stock. Most places will sell only what they get traded in or sold to them by customers walking in. This is a huge mistake in my mind. You are letting the best stuff pass you by and mostly only getting the lesser titles that guys don?t play any more. What a store (independent) needs to do is to do what you have always been doing since day 1 and that is hunt. Garage sales, newspaper ads pawn shops flea markets whatever and where ever you need to go to find games. Never leave any stone unturned in your hunt as ?in the wild? can generally be the place where you find your best stock. Another source that can be used is online forums and auction sites. Both of theses can also help as well to and came be done from home or work (incase you do not have the employees)

And Then there Was E-bay

Online sites like E-bay are a great sores for find and selling items but that is something that you will have to make another chose about. First buying you will be paying a bit more then if you found it in the wild or had someone bring it in , but this could be a game you just never see and have some good customers wanting to buy it. So for this you can for sure use eBay and other sites like it to find those harder to come by games. As for selling on eBay again this is something you personally will have to decide. As what generally gets the highest prices are the harder or rarer games. So if you decide to sell your rare stock then your store can lose some of the reasons why people shop there. How many sore can you just walk into and see a copy of Shining force 3 for sale. This can add a lot to the feel and attitude of the store having rare titles in stock. But as you are also a business and a business that has its own expenses that need to be paid you will have to juggle what is best for cash flow and what?s best for stock.


Game and DVD rentals can be an addition sores of income for a store as well to. Again its knowing your market as there is positives (the money mostly) as well as negatives. Rental involve setting up a rental system , getting the rental stock and making sure things are returned in the shape they were rented in and back by the time when they need to be. I?ve never been a big fan of rentals and ill tell you why. A store I know does rentals and I was told by the owner that every morning his employees will phone customers for at least 2 hours a day (in my mind a huge headache). Another is something a friend of mine told me, Say Person A rents a game from you he is a good customer, buys used games from time to time, time comes to return said game by person A but brings it back a few days late. Normally ok but now customer A may if even for a second not come into your store to look around because of said late fees. All just take a read throw the site and you will also see (funny as it maybe) most problems revolve around the rentals.

General Thoughts

Make your store a fun place to go being a collector you know what you are always looking for in a store so try to make your store that way.

A dream store

If you are an independent make your store different from the other store around like all the EB games or Microplay?s , Have a nice display for snes games or genesis games , or both , carry some of the harder to find titles that no one else has.

Location is one of the hardest thing to figure out, you don?t want to go high-class well of due to the fact upper class people will not normally buy 2nd hand stuff. or lower class as then your will be in a more rundown area of town that might not be safe for you or make some of your customers feel safe. So a good middle class area is perfect for that. You can normally get some stats from your local city office to give you an idea.

A store dealing in only 2nd hand games and staying totally away from new can work. It just means that you will have to hunt for games as you will lose some of the games you would have gotten in from jimmy trading in his 3 games towards the newest GTA.

To be continued..........