Business Idea: Sell Brand New Videogames (Xbox 360/PS3) For $49.99!!

[Baasha]

Retailers sell games for $59.99. Customers get bent over. Especially when you try to sell a used game back (ie GameStop gives you $1, $2 if you're lucky)!!

So, I'm starting an e-store for Videogames and selling them for $49.99 each BRAND NEW. Profit margin is abysmally low but volume will help me make $$$. And, buybacks of used games (in good condition with manual/case intact) will be $19.99 and used games will be sold for $29.99.

1.) Will GameStop etc. put a bounty on my head?
2.) I don't give a $hit.
3.) What are the cons, if any, of this idea/plan?

Stay tuned for the impending launch of "Baasha's Videogames".

Who's in?

 

[Turin39789]

lolio

 

[Malak]

You may find that this is impossible.

 

[IonBlade]

Not trying to rain on the parade, but it's been tried and a number of problems in the distribution channel that favor the big companies over small guys in terms of first shipments, as well as slim profit margin on games (new games cost the chains 52 bucks, so at 10 off, you'll be losing on each game) drove the guy out of business. The site used to be called Lion Games.

The guy's closing letter was posted here. He describes all the problems that led to its downfall: http://www.gamerswithjobs.com/node/43776

 

[Lifted]

I'm in!!! How much start up capital do you need? I have $1.73 on my dresser I was looking to invest.

 

[Gibson486]

I think there are some games (like madden) that have a fixed price on new releases....

 

[PottedMeat]

at >$10 loss per game, why don't you just buy them brand new and give them to us for free? then you can declare bankruptcy or whatever, we don't care.

 

[zinfamous]

YetAnotherFailedBusinessIdeaFromIndia?

sorry, could not resist!

GL to you, sir.

 

[Imp]

Best Buy usually sells stuff opening day for $10 off or $50. If I miss it, I cheap out and wait for the bargain bin or for it to go on sale.

 

[Jeff7]

Seven. Minute. Abs.

 

[iGas]

Not trying to rain on the parade, but it's been tried and a number of problems in the distribution channel that favor the big companies over small guys in terms of first shipments, as well as slim profit margin on games (new games cost the chains 52 bucks, so at 10 off, you'll be losing on each game) drove the guy out of business. The site used to be called Lion Games.

The guy's closing letter was posted here. He describes all the problems that led to its downfall: http://www.gamerswithjobs.com/node/43776

Excellent post.

As said the OP can't compete with big box stores chain because they have volume discount that a small company could never get.

I don't think the OP would stay in business for long even if the OP can sells the new games at cost to compete with the box stores, and resells used games to make a profit.

IMHO, it would tie up a large sum of capital to keep an inventory of new & used games for the first 2~4 years before the OP can draw a salary. And, how the OP going to live during the start up period, unless he/she have a very large amount of capital.

That said, the OP shouldn't quit his/her day job, because the plan is full of holes.

 

[ChAoTiCpInOy]

Don't distributors sell games to retailers for ~$60?

 

[Sa7aN]

if you wanna make money at video game sales, give more that gamestop for used games and sell them for less, thats gamestops major cash flow

 

[QueBert]

When the Dreamcast was new I use to stand in Gamestop and when people would come in to sell Dreamcast games, if they had any I wanted I'd offer them $5 more than GS was. I got kicked out the store for doing this at least 5 times. But each time the person would head outside and we'd make a transaction. I ended up getting about 20 games for $10-15 each. I like your idea too OP. Games cost too damn much.

 

[silverpig]

There's a reason why they operate at a current margin: It's what is needed in order to make a living. You could undercut them, but you'd be working 60 hours a week at about $1/hr.

 

[Baasha]

Not trying to rain on the parade, but it's been tried and a number of problems in the distribution channel that favor the big companies over small guys in terms of first shipments, as well as slim profit margin on games (new games cost the chains 52 bucks, so at 10 off, you'll be losing on each game) drove the guy out of business. The site used to be called Lion Games.

The guy's closing letter was posted here. He describes all the problems that led to its downfall: http://www.gamerswithjobs.com/node/43776

Thanks for the informative post.

Well, the way I see it, we are at least bouncing ideas to make the business idea watertight so to speak.

First and foremost, what is your source for the $52/game (wholesale price)? I have done some research on this and it is actually just south of $50/game.

This would only work through word of mouth; aka customers going gaga for games and buying like crazy while telling everyone and their mother about it. I mean, if stores are selling games for $59.99 and I'm selling them for $10 off, the inner jew in all of us will be awakened and everyone will buy at "Baasha's Videogames". :awe:

"Baasha's Videgames love me long time!"

Of course, the retailers must have some sort of distribution contracts with certain game companies (EA etc.) but if one were to start small, say Bay Area , and then grow, it could be plausible. I am not planning on shipping games to Antartica until I get a minimum number of orders from there.

Shipping & handling costs will be pushed to the customer and making the buyback policy really good, people will keep coming back for more.

The concern is the fulfillment of orders from customer -> Baasha's Videogames -> Game company (as I'm not planning to store the games in a warehouse at this point) -> shipped to customer.

Maybe I should start the business as "Videogames cum Burritos" (don't get any funny ideas! ) and deliver the games with a mega burrito for $8 each; of course, with special sauce. LOL... j/k about the burritos.

Seriously, if the wholesale price is what I believe it is (and my research supports this), there is a really good chance of making this a success.

And, to those who think retailers are "hurting" by selling the games for $59.99 are on crack. Pharmas make pills for <$1 with child slavery from China/Pakistan and sell them here for $80 each. I guess it's a hard knock life for the big-pharma execs.

Profit is the motive, yet I'm not avaricious. If I can make money by helping others (save $$ in this case), that makes me satisfied. My site will have videogame reviews, picture galleries, videos, and discussion of the latest and greatest games. It'll be a "store" like you've never seen before.

Get your wallets ready gentlemen.

 

[HelloWorl]

Thanks for the informative post.

Well, the way I see it, we are at least bouncing ideas to make the business idea watertight so to speak.

First and foremost, what is your source for the $52/game (wholesale price)? I have done some research on this and it is actually just south of $50/game.

This would only work through word of mouth; aka customers going gaga for games and buying like crazy while telling everyone and their mother about it. I mean, if stores are selling games for $59.99 and I'm selling them for $10 off, the inner jew in all of us will be awakened and everyone will buy at "Baasha's Videogames". :awe:

"Baasha's Videgames love me long time!"

Of course, the retailers must have some sort of distribution contracts with certain game companies (EA etc.) but if one were to start small, say Bay Area , and then grow, it could be plausible. I am not planning on shipping games to Antartica until I get a minimum number of orders from there.

Shipping & handling costs will be pushed to the customer and making the buyback policy really good, people will keep coming back for more.

The concern is the fulfillment of orders from customer -> Baasha's Videogames -> Game company (as I'm not planning to store the games in a warehouse at this point) -> shipped to customer.

Maybe I should start the business as "Videogames cum Burritos" (don't get any funny ideas! ) and deliver the games with a mega burrito for $8 each; of course, with special sauce. LOL... j/k about the burritos.

Seriously, if the wholesale price is what I believe it is (and my research supports this), there is a really good chance of making this a success.

And, to those who think retailers are "hurting" by selling the games for $59.99 are on crack. Pharmas make pills for <$1 with child slavery from China/Pakistan and sell them here for $80 each. I guess it's a hard knock life for the big-pharma execs.

Profit is the motive, yet I'm not avaricious. If I can make money by helping others (save $$ in this case), that makes me satisfied. My site will have videogame reviews, picture galleries, videos, and discussion of the latest and greatest games. It'll be a "store" like you've never seen before.

Get your wallets ready gentlemen.

You are retarded.

 

[Sinsear]

So full of fail.

 

[dfuze]

Don't forget that whatever price you are hearing those stores buy the games at, it is at a much higher volume discount than a small operation like you would be able to get. On top of that, I personally think the industry has collusion going on, why else would everyone else be forced to sell the consoles and games at the exact same price and have to differentiate by using their own store gift cards???

 

[LTC8K6]

at >$10 loss per game, why don't you just buy them brand new and give them to us for free? then you can declare bankruptcy or whatever, we don't care.

Do you work for the US Gov't?

 

[ebaycj]

cum Burritos

These two words should never be in this order in the same sentence.

However, in this case, they do sum up the contents of the thread nicely...

 

[mb]

These two words should never be in this order in the same sentence.

However, in this case, they do sum up the contents of the thread nicely...

D:

 

[DrunkenSano]

Amazon and Walmart have been selling new games for $40 instead of $60 though the difference comes in the form of a gift card. But it's pretty much the same and the gimmick will keep you shopping there. So they already have a step up in price on you and a step up in recognition.

 

[lupi]

That letter describes him selling for ~40. While I don't know specifics for the video game industry, and decent assumption standard is that manufacturers sell for 40-60 percent msrp to distributors who then tack on a certain percent for their touching of the product and they deliver it to the retailer. So if he was selling 20 below MSRP, then he was really undeerrcutting himself, wonder why he didn't stick to something closer to his distributor price point.

What really needs to happen to help the consumer, which means outside of a massive paradigm shift in the market it's highly unlikely, is for some of these larger stores that already have well developed shipping networks is to buy directly from the producer and skip the distributor bogus mark up.

 

[yllus]

Maximizing volume over margin won't help when you have shipping/handling fees to deal with. If you could somehow get a discount rate on games sold in electronic form (Xbox Live Arcade, WiiWare, DSWare) and resell them with a profit you might have something, but there's no way Microsoft/Sony/Nintendo are going to let you in on their action.