[quote name='ferant316']Hey, I've been doing pretty much the same thing I sell video games, movies, comics and toys I started with just online sales as well as flea markets (flea markets are essential when you're starting I'll get to that later.) Now I'm in 6 different group shops, which are stores that subdivide and rent out space in their store for different sellers. You pay them X (normally between $3 and $6 sq/ft where I am) a month and in turn receive your space as well as the employees processing all your transactions.
Things like group shops and flea markets are great things when you're starting out as a small one-man operation as group shops you can have physical retail locations without tying up your time being there, considerably cheaper, and better for inventory constraints as it is unlikely you'll start off with enough inventory to fill a full store. Flea markets are a great way to meet customers, get information about your business out and even buy merchandise. From my experience most video game sellers either price everything far too high, or price everything the same price.
A seller at the flea market I go to in the winter prices NES games $10 each, SNES and N64 $5, PS1, PS2, Xbox and Gamecube $3 each. I go to her booth before setting up mine every week and grabbed everything worth more than those prices to a.) have desirable inventory for my own booth/ eBay store and b.) leave her void of deals helping customers come to me rather than her. I'm sure that may seem cold/unfair to people but she doesn't take the time to properly research her inventory and if I didn't do it someone else would, its truly a dog eat dog world out there with small businesses struggling and at all the flea markets I go to there are about 5-10 game store owners that do the same thing.
Anyways, onto your actual questions:
1. I would not start out focusing on new games, I have contacted distributors and unless you order a very large quantity you get them for basically retail - with the deals you can get on new releases in various stores/websites for small quantities you can do better buying new games from other stores than a distributor. Used games are where the profit is anyways. Lowest cost I could find for less than 100 copies of a new release game was $49.20/ea.
2. Have a catchy name, logo, etc. Over 15% of all my eBay business (16.2% today) is repeat customers. This was 4.8% before I trademarked a business name, incorporated, had a logo designed etc. and has been steadily climbing since. Repeat customers are the bread and butter of any small business.
3. Prepare yourself. Physically, mentally and financially. Given that an eBay store is a lot less costly than a store you'll still go through slow months, and depending on what your living expenses are one slow month can mess you up for a considerable time if you are not prepared. If you don't have cash in the bank for at least 6 months of living expenses, I would put it the idea on hold until you do. I would not recommend taking out a business loan, unless you're buying and taking over an existing successful game company.
Typically January, February and March are difficult months, April begins to pick up as people get tax returns back. Then May - August while people are out of school things really pick up, then September and October are tough again. November and December are truly where your bread and butter comes from. We're 14 days into November and I have sold more so far this month than twice my combined sales in September and October.
Why I bring this up is budgeting is a challenge that takes considerable restraint. My first priority is always the essential bills (mortgage, health/car/home insurance, internet, cell phone, food, etc.) next is inventory, then unessential bills (TV, Netflix, etc.), then if I have extra money after that I refill my 6 month savings if I had to take money out for any reasons. If there is still money left over after that I try to find ways to expand, purchase more inventory, supplies, etc.
Nowhere is there an allowance for spending money on your self, which isn't to say I don't but I buy takeout or a cheap game and then feel guilty as hell for days afterwards. If you truly want to start a small business you are making the choice to put your business at a higher importance than your lifestyle. Even if you see a pile of money in your bank/safe/mattress wherever you keep it and your friends won't stop talking about the newest games you have to restrain yourself, but luckily this site and what we're about makes this considerably easier.
I get so strict and specific about this because this summer, when I was looking at opening a store after success on eBay/flea markets, a friend said "well if you're having luck with it than I should do it too!" and quit his full time job to sell video games. I gave him most of this advice, but wasn't as stern about the don't spend money on yourself rule. Well he would drop $800 on a lot of CIB NES games, and then pick out every game he didn't have for his collection as well as swap out any that were in better shape than his own. Now 6 months later, he doesn't have money to go looking for new inventory, or gas to go to flea markets to sell his existing inventory. He lists as much as he can (mostly his own collection) on eBay just to pay as much of his bills as he can.
Another important thing to mention is it is in no way a 9-5 40 hour a week job. If I actually took the time to calculate what I make an hour I would probably be back at a regular job. It is very time intensive, especially when you're getting started. When I was first getting serious with it I made a rule for every item I sold I had to list 5 items.
Anyways, that should be enough to give you some ideas. I haven't proofread this and went back and reworded a bunch of it so I apologize if some is rambling/doesn't make sense, etc. Also just so you don't think this is just some random person giving opinions, most of this was taught to me by a local collectibles store that has been around for 20+ years who has been helping me grow and get going, as well as my parents who have been antique dealers for 30+ years and are now one of the largest eBay sellers of 18th and 19th century antiques.[/QUOTE]
What is your pricing scheme? Selling online, eBay and PayPal fees have gotten ridiculous. Do you factor in those fees (and shipping) then price at a certain percentage above that based on what you paid for the item? Or do you just try make a sale so you price at whatever the market is currently going for, even if it means taking a net loss?
Hopefully I didn't come off as harsh - I just hate seeing people taking the leap too fast when they are not prepared. It is a great feeling answering to no one but yourself (well and bills) and that makes it worth it every day to me.