Retailer Article on rpg.net

[Luke]

An article by Marcus King, owner of Titan Games and VP at GAMA.

http://www.rpg.net/news+reviews/columns/counter15dec05.html

What's fascinating about this article is how little Mr King claims to know about how games are bought and sold. His perspective from a retailer's perspective seems limited to the books coming to the store and leaving his hands -- with little insight beyond that.

It's worth reading just to see how a reasonably successful retailer thinks.
-L

[Josh Roby]

Point of clarification and genuine confusion: why is a retailer the VP of the Game Manufacturers Association?

[Adam]

GAMA's official mission supports the entire industry, not just manufacturers. From http://gama.org/about_us:

GAMA was formed in 1977 to protect the interests of the Origins Game Expo. It incorporated as a non-profit organization in 1982. Since then, it has expanded to become the premier trade association for the hobby games industry. Its mission is to promote the general interest of all persons engaged in the buying, selling, licensing, and manufacturing of hobby game products. To that end, GAMA provides member affinity programs such as handbooks, trade and consumer shows, and education programs.

The core of GAMA's mission is to advance the hobby games industry. We work to make doing business in this industry better and easier for all professionals. We execute this mission in a number of ways.

[LloydBrown]

It's worth reading just to see how a reasonably successful retailer thinks.

Just out of curiosity, if he's "reasonably successful", who's "successful"?  He buys 30-50 closing game stores per year.  He's *purchased* a million dollars in inventory in a single transaction.  His convention sales alone exceed the in-store sales volume of 98% of the game stores in the industry, not to mention his online sales and his b&m sales. 

I know of one store in the industry that *might* equal his sales, and they don't equal his gross profit margin by a long step.

[guildofblades]

Hi All,

I have known Marcus and the King family since before he owned Titan Games, back when Marcus owned a previous hobby store. I've been doing business with him that long and also consider him a friend. Being in Michigan, I have had the opportunity to visit Titan Games on numerous occassions.

Marucs has made Titan Games into a success through a lot of hard work, but more importantly, through a lot of creative business decision making. I think Titan Games is a great example for other retailers to look at. Not neccessarily to emulate hs business model,  since he has managed to cobble together a rather unique mix of business elements to arrive at the type of business he has today. But rather to follow Marcus' example and to really think outside of the box and explore those different business models and find those alternative ways of doing business that have, thus far been ingnored by so many retailers who, more or less,have been following a cookie cutter business model for game retailing that has seen little overall innovation for more than a decade.

As for who is more successful, I know about a dozen stores or so that probably gross more total revenues than Titan Games. Maybe a handful of them actually generate more total profits. But hey, if you are in the top 15 to 20 total retailers in the industry, then you most certainly are doing a lot of things right.

The reason he can be the VP of GAMA is Marcus and his wife also own a game magazine called Con Temporal, so they are also a publisher. Con Temporal is a monthly magazine that lists all sorts of information on game conventions being run all over the place each month. So yeah, Titan Games is a game retailer and publisher. But wait, you probably didn't know this, but they also sell, at wholesale, lots of liquidated game products as well, to other retailers. So they are sort of a distributor as well. And the game industry's largest liquidator. Oh, and a pawn shop. The nations largest convention vendor. Like I said, they've cobbled together a rather interesting mix of business elements to arriveat their business structure.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com

[Ron Edwards]

Hello,

I know Marcus too and respect what he's doing, to make game retail actually function.

However, this thread needs to stay focused on the topic. Luke has raised the issue of tracking sales for titles and companies, at retail stores. I have observed many retail game store owners to rely on gut feelings and biased reactions, as well as short-term order cycles, in evaluating "what sells."

The issue here is not whether Marcus is a good person or successful or whatever, but rather how tracking unit sales, by title and by company, may be a crucial issue. As I see it, if not doing so is "industry standard," then that "industry" is to be regarded very dubiously - perhaps not even as a real market of end-use customers, from the publisher's point of view. This is related to my claim that for many years, the market for RPG publishers has been the distributors, and primarily one distributor, Alliance.

I'm curious about whether Pandemonium, for instance, tracks unit sales more effectively.

One topic might need its own thread, which is to say, "publishing" in GAMA terms and in (for what it's worth) Forge terms. The latter is a merely site policy and therefore reflects only Clinton and me, but provides a good contrast. In GAMA terms, putting out a gaming magazine makes you a publisher. In my and Clinton's terms, we are talking about game publishing, period. Related to this point, although retailers are not voting GAMA members, distributors are, at least they were back in 2003 (the last time I was at GTS). But again, let's take that to another thread if anyone wants.

Let's stick here with tracking unit sales.

Best,
Ron

[Luke]

Just out of curiosity, if he's "reasonably successful", who's "successful"?  He buys 30-50 closing game stores per year.  He's *purchased* a million dollars in inventory in a single transaction.  His convention sales alone exceed the in-store sales volume of 98% of the game stores in the industry, not to mention his online sales and his b&m sales. 

I know of one store in the industry that *might* equal his sales, and they don't equal his gross profit margin by a long step.

Lloyd, did you read the article? Perhaps I'm not reading enough into Mr King's humility, but he seems to intimate in the article that he has had business troubles in the past and continues to struggle along. It's nice of you to toss around numbers, but I was basing my adverb on the content of Mr King's article.

And Ron, I'd like to keep this thread open to the discussion of a retailer's position in the "three tiers," as well. If anyone has any insight into why Mr King claims to know so little about the other arms of his industry -- from which he apparently makes a bizillion sales -- I'd love to hear it. The fact that the distributor side of the hobby industry would be occluded to a top retailer -- near distributor -- and VP of GAMA is fascinating to me.

Cool?

-Luke

[Ron Edwards]

Very cool. My take is that Marcus has effectively bypassed Alliance - in fact, that concept is the linchpin that holds together all the rest of his points/strategies, as I see it.

Best,
Ron

[guildofblades]

I do believe Marcus still has an account with Alliance, but they are not his primary distributor of choice. His favorite used to be Gameboard, then more recently I think it shifted to either ACD or Blackhawk. Though I think, maybe, he has accounts with Centurion and maybe a couple of others.

But...

The majority of what Titan Games sells is product found through alternative methods. Titan Games, from a time before when Marcus bought it, was a leading retailer of used and out of print games. Back then it was a mail order business only. Since that time, Marcus has diversified the business a lot. Now it consists of:

1) The orginal Titan Games business of buying and selling used games.
2) Buying and selling manufacturer and distributor closeouts. Liquidations.
3) Making bundles out of liquidations and reselling them cheap to other retailers.
4) Attending a lot of conventions with a major presence. He does $40K or more at Origins for instance.
5) Buying up the inventory from multiple failed retail stores around the country.
6) Buying lots of used games from consumers. If you go to the Titan Games website you will see it has a major focus on getting consumers to sell their unwanted gaming items.
7) A physical retail store in Battle Creek, MI that sell games, DVDs, CDs and other merchandise. Again, mostly resale items.
8) Leveraging his huge collection of liquidation products and selling them through most major online auction and resale sites.
9) ConTemporal Magazine. Which as far as I can tell, only really serves to let their business exist as a manufacturers as well as retailer, and they often bargain swap unsold ad space for merchandise they are able to repeated sell through their various channels.

Anyways, he usually has a couple other pokers in the fire as well, but I can't keep up with it all. But yeah, he gets the lions share of his product from liquidations and closeouts from manufacturers, distributors and failed retail shops, plus from buying lots from consumers. New game ordering is secondary to their business. But occassionally they champion a new product and realy push it, but they usually get some great terms by buying direct from the manufacturer. To the tune of, from one manufacturer they would by some new titles 72 units strong, but recieve a 70% discount. From another manufacturer I know they bought something like 400 units of a new RPG and while I do not know what the terms were, I would assume they were favorable.

My impression is...Titan Games would NEVER be dependant on any other single business in this market. Each and every distributor could crash and burn tomarrow and Titan Games would still find ways to get in all the product they needed to sell. Because they think outside of the box and will do the work neccessary to chase down product sources, and usually get a sweet deal in the process.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com

[LloydBrown]

Abzu,

Marcus has had many business troubles in the past.  Usually, they are the result of bad luck:  his truck catching on fire, theft, etc.  He has learned things as he has gone, and he has done an exceptional job of applying them.

One thing about Marcus is that he's not particularly ignorant about other people's jobs:  he just doesn't care.  He does have certain social no-nos, and if you commit one of those, you can kiss your business relationship with Marcus goodbye.  Otherwise, you do what you have to do to make money, and he'll do what he has to to make money, and he's fine with that.

...and here's the deal on distribution.  Marcus seems to be a huge supporter of distributors.  If a publisher offers a great deal, Marcus offers to take them up on it by calling his distributor.  If he runs out of something popular, he'll offer to buy x copies from the first distributor to call him.  I have seen him go out of his way to place an order with distributors rather than manufacturers.

But instead of me gabbing (well, I guess "in addition to me gabbing") about him, I am inviting him here to explain the method behind his madness himself. 

[TitanGames]

Thanks to Lloyd for inviting me here - nice site!  A few quick points, then some more detail:

Article in question is just my opinion, observations and experience.

I was elected the GAMA VP by the full voting members of GAMA - people are elected, not companies.

Thanks Lloyd for the nice words.  I always like hearing from you.  I have to say I think you are one of the friendliest retailers I have ever met.  And honest, forthright and cool. :)

Thanks to Ryan Johnson of Guild of Blades.  I have known Ryan for many years now, and enjoy his help, counsel, and the business relationship I have with Guild of Blades.  Ryan is very generous with his praise of me. :) 

I am a voting member of GAMA as the publisher of Contemporal Magazine - which is not really a GAME magazine, but a magazine dedicated to conventions of all "Pop Culture" stuff - like games and comics and science fiction, to name a few.  However, I am VP of GAMA, which I ran for, as a retailer - not a publisher, because I was elected to the position.  I am not the first retailer to be elected to the position, and others were also appointed to the position in the past.  I actually ran for president, and lost to Rick Loomis (Flying Buffalo), who asked me to be his VP.  It is an honor to represent so many talented people, and to feel that they wanted me to help run the greatest organization in our industry.  I plan to run for re-election in June/July, and barring that, will be just as happy returning to my duties as "GAMA Cheerleader".  I love GAMA, cause it was at GAMA 1999 that I actually finally LEARNED to be a retailer - prior to that, I was just floundering around. 

As for success: I grew up pretty poor - so success is not a destination for me, but a journey.  If my sales were 3 TIMES what they are now, I would still not consider my job done.  I want to grow my business to be the best retail store in the country - and notice I did not say best game retailer.  I make a living doing what I do.  However, I am not driving a new car every year, and that would be something that I would like to do.

To the point of the thread:  Tracking Sales.
I am having a Point of Sales system installed this week.  We are going to track things right.  For the past 19.75 years I have relied on my clerks to write every sale into a sales log.  Fortunately, this no longer works - because our sales clerks are too busy to take the time to write everything down.  So, we need the POS.  Finally.

However, my tracking of sales goes back to 1986.  I can tell you exactly how many new, used, or whatever copies of AD&D Players Handbook (or any other, of more than 10,000 titles)  we sold.  New or used, first or the second edition books.  Or 3rd, or 3.5.  Or how many we sold per month for any given month, etc.  It is an extensive database.  When I bought Titan Games, formerly owned by a fellow named Quincy, I merged his data with mine, so not all sales were made by MY company, but I felt they helped the datapool.  So, I merged them. 

Obviously, the POS will be a better system than writing things on a pad of paper.  :)

LUKE:  About Humility:  My articles are written from my perspective.  I am not a person who has a lot of humility - on the other hand, I ain't what you'd call stuck up, neither.  The business model I follow rewards hard work, aggressive marketing, constant purchasing and good customer service.  I grew up dirt poor - had a dirt FLOOR in one room of our house until I was 14.  So, perhaps I feel like I have worked to get where I am, and need less humility.  If that offends you, I apologize genuinely.  However, the articles are just my opinion and experiences.  I share them freely - both in the sense I don't get paid a cent to do them, and in the sense that I do so to try to educate others to what things look like from behind the retail counter.  :)  take them for what you feel they are worth, my friends. 

Ron:  I have not bypassed Alliance, in fact I do buy from them.  Most of my new products come from distributors (I buy from, in alphabetical order:  ABC, ACD, Alliance, Blackhawk, Centurion, Premier Distributors, Southern Hobby).  With one of those distributors I am my rep's largest account.  The rest are occasional orders, but fairly regular with two more outside my primary.  I love my distributors, and they provide a valued service:  Selection.  My primary rep also educates me on things.  He tells me what is selling for other retailers, what is in short supply, what is not worth ordering too many copies of.  I value his input, he makes me money.

My organization is fairly large.  I sell at cons, online, and in the retail store, as well as a few other methods.  Speaking ONLY of the retail store, most of what I sell is new products bought through distribution - though I do buy direct from several publishers.  Most of my retail profits are derived from DVD, Video Games and CD Music sales - all of which are used merchandise.  My markup on those items are between 300 & 800 %.  That means profits when you sell hundreds of each category each week.

Social No-No's.  Lloyd, thanks for mentioning this.  I don't take threats well - if someone says "lawyer" or "lawsuit" I stop talking to them immediately, and wait to hear from their lawyer - period.  If you insult my wife or family, or curse at any of my employee's in my presence - I kick your ass (or you kick mine).  No exceptions.  I don't take abuse or threats or intimidation well.  I also don't put up with gay-jokes, though this just earns my contempt and I stop dealing with the person.  This is because I have friends, and family, that are gay, and I don't take abuse of them well, either.

Now, beyond that, I am a fairly easy going guy.  You bought it from me, and want to return it for ANY reason:  Return it for full refund (not the S&H charges, mind you, but 100% of your purchase price) as long as it is in the same condition I sold it to you in.  If we shipped you the wrong item, I will fix that.  IF we sold you something that you are not happy with the condition of: I will fix that.  Have any complaint?  I want to hear it, and want to assist you - as long as you don't curse at me, threaten a lawsuit, or become abusive.

I do not run Burger King - literally: YOU do NOT get it YOUR way.  You take it my way, or you don't get it.  That is not how most business people operate, I understand that.  However, I have a large staff, and all are trained to be professional, helpful, knowledgeable and nice.  If we make a mistake we fix it.  If you have a special request, we can usually accommodate you.  If you curse at me, threaten me, or call me wife a bad name - well, that just is not acceptable.

I am indeed a supporter of Distribution "done right".  Right does not depend on the distributor, though - right depends on the REP.  My primary rep does not kiss my ass, or act like he owes me anything.  He is a professional, and has earned my respect and loyalty.  While I chose my primary distributor based on DISCOUNT - I chose my rep based on service and their ability to meet my needs.  I do not want to order online, I want to speak to a person.  I do not want to call them, I want them to call me.  I do not want to do pre-orders by fax or email, I want to go over the list with my rep.  I once had a distributor tell me they would not take my preorders on the phone, would not allow me to deal with the rep I wanted, and wanted to make me jump through their hoops.  I order from them now almost every year. :)

And, a bit more about me:
I am a 12 year army veteran.  Went into the service because, frankly, that was my only option coming from a fairly poor family.   I was in the Infantry, not a cook or clerk.    I earned some cool medals and stuff in the service - a "Soldeirs Medal" among them (saving a woman whose husband was trying to kill her with an axe).  I am a life member of the Veterans of Foreign Wars.  I am married (third time) to a wonderful, patient woman whom I met in an AOL chat room (heh, aol 2.0).  I have three children:  Tonya King who is 20 and a college student working on her law degree, Kattarina King - who is 17 and working on flunking biology (kidding honey)  and Max Keeney who is 10, and the center of my universe (well, Max is my step son, but you wouldn't know it to see us).  I have owned 11 businesses in my 19 years as a retailer.  Oil change shops, an Adult Foster Care Home, other things.  I love games, and I love the game Industry.  I want to help other retailers stay in business - and that is why I write the column on RPG.net, am the VP of GAMA and do seminars for retailers at the GAMA Trade Show in Las Vegas each year.

As to whether I run a good shop, a successful shop, am one of the better retailers: That would only be answerable by my customers, or perhaps the people whom I buy from, and who get paid by me, or perhaps my employee's who earn their living's from Titan Games.

Once, when we went through a bankruptcy, I had many times when my wife and I had to decide "shoes for the kids" or "Meat for the table".  After going through such things, I can say that I feel confident in my wife, and dedicated to my family.  As a note, I gave every creditor the option of getting paid "eventually" or being put on the bankruptcy.  I owed one distributor over $26,000 at the time, and they did get every cent - though it took 2 years.  I still order from them fairly regularly

I like what I do.  But, not everyone likes me.  But, honestly, as long as my kids are fed, and my employee's and creditors paid - I don't dwell on whether or not folks like me much.

In the final analysis:  It's business.  I do what makes a profit, and take care of those who work for me, sell to me, buy from me - and my family. I also try to give back to the industry with my input and participation.   My "Profits First" attitude does irritate some customers who feel games should be fun & that everyone online should sell at a big discount (which we don't).  I look at this as my vocation.  My Dentist is a great guy, but he doesn't compete on price, or sell to me his services at "cost".

Anyway, that's enough rambling on my part.  Thanks again Lloyd for asking me here. 

Marcus King
TitanGames - Owner
http://www.titangames.com
http://www.threefreegames.com
titangamesinc@aol.com
269-963-3773 shop phone

[Ron Edwards]

Hi Marcus, and welcome - you remember me, I'm sure.

I'll clarify my earlier statement, which I think is accurate. You have effectively bypassed Alliance, which is not the same thing as saying you don't deal with them, or ignore them. What I mean is that you do not depend on this single distributor in a subordinate way. As I see it, many retailers do depend on Alliance in such a way that they cannot make very effective, comparative business decisions. You work with them, of course, but you can call the shots which work the best for your store.

The issue of manufacturer vs. distributor is an interesting one. As I see it, there is no general right answer. Some of the publishers here have absolutely no reason to utilize distribution, and therefore recognize that they cannot be carried at stores which solely use distribution. Others here utilize it to a certain extent, me, for instance, but not as the primary sales method.

What matters to me is that you, in my experience with your store, have always taken a very strict look at what can be sold there, and ordered accordingly. As much as we'd all like to think this is Standard Ops Procedure for retailers, I think it's fairly rare, and valuable. When a retailer does that, then the current distribution model makes more sense.

However, you might interested to check out Pandemonium Books & Games for an alternate view, regarding a lot of the games published by folks who are active here. I'm not recommending their approach for you, but rather as a basis for comparison.

Best,
Ron

[TitanGames]

Hi Marcus, and welcome - you remember me, I'm sure.  Yikes!  Nope, can't say I do, Ron.  Having been through a period of deep depression and mania from late 2000 to early 2002, or so, I have met people whom I had done wrong, and when someone says "I'm sure you remember me" I wince just a bit, caust I am afraid you might be one of those people I treated poorly.  If so, and if we still have something to resolve, please contact me immediately at 877-542-6377 toll free.  If, on the other hand, we had good dealings, I will just say I am a face guy, I remember faces, but not names, and I apologize for that.  :) 

I'll clarify my earlier statement, which I think is accurate. You have effectively bypassed Alliance, which is not the same thing as saying you don't deal with them, or ignore them. What I mean is that you do not depend on this single distributor in a subordinate way. As I see it, many retailers do depend on Alliance in such a way that they cannot make very effective, comparative business decisions. You work with them, of course, but you can call the shots which work the best for your store.

  Ah, I understand better now.  Yes, I do deal with Alliance, and other distributors.  No, I am not dependant on them.  I also deal with Diamond, and am actually MORE dependant on Diamond than any other single company.  Diamond provides me with product I can NOT get elsewhere, or easily replace if I stop dealing with them.  That would be bad, in some instances, but luckily I get GREAT service from Diamond, and have only ever had one delivery issue with them (in 2 years) which was quickly fixed.  So, I am very comfortable with my dependant-relationship with Diamond.

What matters to me is that you, in my experience with your store, have always taken a very strict look at what can be sold there, and ordered accordingly. As much as we'd all like to think this is Standard Ops Procedure for retailers, I think it's fairly rare, and valuable. When a retailer does that, then the current distribution model makes more sense.  I am not certain what your and my experiences are with my store, I am sorry to say.  I now order a lot more product, and stock more broadly.  I still don't do much in the way of Miniatures, but I stock over 1000 RPG titles, and over 500 wargames, plus boxed and card games, etc. 

However, you might interested to check out Pandemonium Books & Games for an alternate view, regarding a lot of the games published by folks who are active here. I'm not recommending their approach for you, but rather as a basis for comparison.  I will look into them.  What, if I can ask, is the main differences between their operating model and mine?

ANyway, good talking to you.  :)

Marcus King

[Luke]

Pandemonium is a small traditional-style bookshop. They divide their space about evenly between rpgs and general fantasy/sf fiction. They have, in the past four years, been very open to ordering small press games from individual publishers.

-L