Friday, November 5, 2010

Peanut allergy.

Leitmotiv asks me what I think of the new Game Quest store on Highway 20. (Is this a second store? More?)

Anyway, let me first say that video games are completely out of my area of expertise. You get next to no margin on new games, you get it later than the mass market who have piles and piles of games as loss leaders. So, I do believe, most independent video game retailers make their nut on used games.

They are also a vastly larger market. Video games are Pro Football, and comics are High School Football in comparison. Well, maybe a small college conference.

We carry new books because, like comics and graphic novels, there is a decent Suggested Retail Price. Not that the big boys abide by that S.R.P., but it gives us a target to shoot for. Toys, cards, and video games have horrible margins -- which are further subverted by the big boys. The bigger the product, the more likely it will be sold as a loss leader.

But....dealing in the secondary market, that I do know something about. The buying and trading of used video games entails a large element of wheeling and dealing, which I've slowly but surely exorcised from my own business. Not that there is anything wrong with it. There is an actual need for a secondary market -- a good way for people to unload unwanted material and for others to pick it up cheaper.

I think there are ways to do this with integrity and honor. And there are lots of ways to do it with....shall I say, less than integrity and honor? Think used car salesmen.

I'll tell you what, when I realized that I was being regarded and treated as if I was a used CARD salesman, I wanted nothing more than to get out of that business. I didn't have the rhinoceros hide I needed to brush off the rough Kalahari trading terrain. Really, who needs it? Life is short.

But there are people who actually enjoy the process of wheeling and dealing and who are good at it, and they fill a necessary niche.

Me? I don't trade or buy anything off the street anymore.

Not that it wouldn't be beneficial if I could see my way to doing it. I did it for about half my career, even though I wasn't very good at it. I gave way too much in money and trade credit for what I got; and, of course, the irony that finally drove me out of doing it was being accused of the opposite. Of bleeding red ink, but being accused of being a profiteer. Thanks, but no thanks.

So I get good product from wholesalers, mark it up to retail, and try to run a straightforward business.

But here's how I think you can make it work: like I said, assuming you have a rhinoceros hide and can convince your customers that you are being fair with them.

You have the customer on one side, who has a product he no longer wants or cares about.

You have the buyer on the other side, who has a market for that unwanted product.

If you can buy that product for say -- 10% of what you are going to sell it for if it's really slow moving product; 25% of what you are going to sell it for if it's good selling product; and 35% of what you're going to sell it for if it's smoking hot product -- then it makes all kinds of sense.

BUT....and this is to me the biggest BUTT; you have to realize the psychology of the seller is that -- wait a minute, I paid full price and you're offering me 10% (never mind that the seller has no use for it anymore.) Or worse -- you are going to charge five times would you gave them?!!!

Well, yeah.

Hey, why would I pay 40 or 50% when I can buy BRAND NEW STUFF -- untouched, great looking product for that? Sometimes, if I'm opportunistic, I can buy BRAND NEW STUFF for even less!

So, my buying your used material only makes sense -- wait for it now --- if I get a DEAL.

Like I said, I got tired of doing it. I got tired of seeing desperate people selling stuff, and me only being able to offer a pittance....

I liken it to suddenly getting a peanut allergy halfway through my life -- I used to eat peanuts, I liked peanuts, and now -- suddenly -- if I eat another peanut I'll fall over and die.

What about used books? you may well ask.

First of all, we don't buy cash, where the most misunderstandings happen. We send people elsewhere.

Secondly, we have a set trade value. If the customer thinks they have a more valuable book, we send them elsewhere. We cater to the reading crowd. (No doubt there have been Book Scouts in our store who have chortled on their way out the door: "Fools! They sold me a 1st edition for nothing!! HAH!)

To which I say, whatever -- if we had it, we traded for it at regular price, and a golden peanut is still a peanut.

Thirdly, Linda is in charge, and she doesn't have a peanut allergy. There have been times when I've been in her store and overheard a conversation and felt peanut hives rising, but I left the room....

As far a video games stores, well, I wonder if they aren't going to face the exact same pressures of Blockbuster and Hollywood -- rentals and downloads would seem to be the future.

1 comment:

Leitmotiv said...

Game Quest opened its second store on E Hwy 20 by Cibelli's.

I thought it was overkill. GameCrazy bailed from their store a half year ago or more. With all the pawn shops, GameStop, and the other Game Quest, I would think it's too much.

Redmond would have made more sense. Just a little.