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]

[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