Merchandise, Space Requirements, and Cost
While developing your business model is not the time to get caught up in how many copies of an RPG x or ablister pack y you’ll be ordering. You need to make some rough decisions about which product categories you’ll carry and how deeply you’ll carry them. These are some of the basic decisions that affect how customers view your store, your fixture and space needs, and your investment amount.
The average amounts given for each category’s sales are somewhat deceiving, and here’s how to “un-deceive” them. Each category has a clear brand leader. For CCGs, it’s Magic: the Gathering. For miniatures, it’s Games Workshop’s two main brands. Customer spending for the industry leader is significantly greater than customer spending for other games. There’s no way a Kult RPG player will spend $240 per year for five years—there just isn’t that much Kult product. My average figures assume that the majority of your customers play the main game, and that some play other games, and that a few play both.
Accessories in General
Most of these major categories offer accessory opportunities. When possible, your margins on accessories should be greater than your margins on the items they promote. This greater margin compensates for the lower price of these items. A RPG book might be $30, while a set of dice might sell for $9, and a dice bag for $3.
If you carry the category, carry the accessories. I’m not asking. I’m not suggesting. I’m telling. Accessory sales are your key to a high average ticket price, provide you with a comfortable net profit margin, and give you a competitive edge against mass market stores and book stores.
A customer who has already made the shopping decision to drive to your store, pick up a game, and purchase it will not be deterred if the dice he needs cost $7.99 instead of $6.99, but your gross margin on that item goes from 47% to 54%. He’s not going to put back the $30 book he’s buying and drive across town to save that dollar. Underpricing your accessories can easily cost you $2,000 to $5,000 in annual revenue.
Role-playing games have the advantage of high volume with less work than the other two major categories. The downside is that the turn rate for this category is lower than the turn rate of your other two major categories.
RPGs display well on bookshelves, but they are heavy for most wall fixtures. For best sales you’d ideally place them all face out, but most stores make do with some combination of face out and spine out. One good medium is to place the core book face out so that browsers can find their favorite game, and then place other titles to the right of that core book. New books are also good candidates for secondary face out positioning, as are games purchased on sale or something that you wish to promote for special occasions.
The difference between the two methods of placement is substantial in both sales and storage space. The trick is to judge whether inventory or prominence is more important. Carrying $10,000 worth of inventory allows you to offer your customers twice as many titles as $5,000 worth of RPGs, but if the customers can’t find the game line they want or don’t see the specific book they need amid all the titles, you don’t gain the benefit of carrying all of those titles.
I recommend that a new retailer spend between $1,000 and $5,000 initially. $1,000 gets you a good selection of D&D titles and a select sampling of other core books titles. With $2,000, you can pick up the entire D&D line and a broader selection of several secondary titles. With $5,000, you can carry most titles for all of the top 10 product lines.
Along with the RPGs you offer, you’ll want to carry dice, dice bags, gaming software, vinyl battlemats, and miscellaneous other accessories. Of these, dice will be your primary revenue-generator—and your primary cost. You need to display dice in something; dice manufacturers offer various-sized plastic bins for this purpose. You can ask your distributor what’s available and appropriate for an order the size you’re placing.
Figure that most of your RPG accessories fit in or on a single glass display. If you carry a very large selection, you can dedicate more space to it, but a typical 4’ glass counter area is sufficient in most circumstances.
You can get a selection of dice cubes and dice bags for as little as about $250, or you can order one of the big displays, carry multiple brands of dice and order the high-end gemstone dice from Crystal Caste and spend up to $2,000. It might be a good idea to invest half as much in accessories as you do in the RPGs.
Collectible Card Games
CCGS or TCGs (tradable card games) offer the advantage of high turn rates with a small footprint. CCG customers spend more money on average than do customers of other games. Your best-selling space in your store is likely to be wherever you keep the open booster box of the latest Magic: the Gathering release. That single square foot could generate $10,000 or more annually.
If you carry CCGs, I recommend that you begin with a minimum of four games, for each of which you’ll want at least one starter box and two booster boxes. That’s a minimum of $750 to $1,000, depending on which games you order. On the high end of the scale, you could carry more booster boxes for the largest product lines and add the basics for additional games. Again, $5,000 is the uppermost I would recommend for a new retailer, but $2,500 is a more realistic maximum budget.
You can fit this inventory in a very small space. A single countertop will work, or a 4’ shelf on the wall. I’ve seen a very attractive display placed on slat wall shelving units, taking up a single section of slat.
Card sleeves, deck boxes, and cardboard boxes for storing a collection make up the primary accessories for this category, but they also include glass counters and the occasional dice. You can display sleeves in the boxes in which they often come by placing them on a countertop, but I personally had great success placing them on pegs on the wall. The visible display generated earned its space, resulting in triple the sales of the shelf position they occupied before I moved them to the wall.
CCG sleeves typically come in boxes of 15, and there are many colors, brand and line choices. For a starting collection, you might ask your distributor if you can buy individual pieces instead of having to buy a whole box. If so, you can devote as little as $250 to this category. For a broader selection, you can add more colors and deck boxes and spend $500, my recommended minimum amount. Do not spend more than $1,000 on this category without retail experience and knowledge of your customer base.
While this discussion is mostly about miniatures for wargames, this category also includes product lines like Reaper’s Dark Heaven line. Most of those buyers are painters buying the attractive figures for their hobby or D&D players looking for figures for use in their game. Few Reaper customers play their miniatures game.
Miniature game players spend more than RPG customers but typically less than CCG customers. Games Workshop identifies their average customer as spending $1,500 over an average period of 5 years in the hobby. Most of the spending comes early in the period.
The downside to this category is the space requirement. My store dedicated over 56 feet of wall space, top to bottom, to Games Workshop alone, plus almost 300 square feet of wall space to Reaper. Blisters require peg space on your walls or gondolas. A single 4’ section might support 100 blisters, depending on how high you place them and how large they are. Boxes and books require shelves or special racking for your wall fixtures.
A small selection of Reaper—say, their Top 100 product mix—plus a minimal investment in Games Workshop, Warmachine, and one other miniature game might run $4,000. If you plan to invest heavily in any of the main products or plan to offer a greater variety of miniature lines, you could spend up to $15,000.
Historical miniatures deserve a special note. You could spend $50,000 and the first day you’re open, somebody will walk out empty-handed because you don’t have a pack of left-handed Maccabean javelineers in 15 mm. The product selection available for this category is enormous, and the customer needs are specific. I would recommend a minimum of $4-5,000 if you know the product lines well and plan to support only a few particular games or concentrate on one era. The rest of my columns assume you’re not carrying historical miniatures.
Paints, brushes, knives, and other hobby accessories add substantial volume to your miniatures sales. Paints form the bulk of this category.
My minimum recommendation is one line of paints and brushes, plus a single brand of hobby supplies, each stocked in small numbers. You might need half a wall fixture for display and spend $500.
If you plan to concentrate on miniatures, you might buy up to three lines of paints, offer more supplies, and stock them more deeply. If you’re buying direct instead of through game distribution, you can often find some very attractive bulk discounts for hobby supplies, but it requires large purchases, and I don’t recommend it for new retailers. Expect up to three or even four wall sections, depending on how many terrain features you offer, and up to $4,000 in cost. Paints get expensive quickly, especially when you’re buying a full rack.
es are rare.
Board games are, in some respects, the worst category. Individual spending is low, the games are bulky, and a good selection is fairly expensive. On the other hand, they are easily recognizable by muggles and your product line of broadest appeal. I also include non-collectible card games in this category.
If space were critical, you could concentrate on the card game selection, carrying only a few staple board games like Settlers of Catan, and get by with about $250 worth of product on just a couple of shelves. Stocking an initial 30 or 40 board and card games costs about $500 and takes up 2 standard wall fixtures or a similar amount of gondola or shelf space. This represents my recommended initial investment for most stores. For stores in areas with high foot traffic or stores that plan to promote this category strongly, I recommend about 100 games, including several high-ticket items (there are a few in the $80 range) for a total investment of up to $2,000.
Board games have no meaningful accessory sales.
Using these figures for space and inventory investment gives you some idea of how much space you’ll need for your retail area and how much you can expect to spend on your initial order. Inventory is probably your largest single initial investment, and it’s definitely the largest expense you’ll have throughout your retail experience. Next week: suppliers.