Launching a board games store in Canada – Part 3

When we last left off this article, we had decided to launch the online side of the board game business first.

We came across a few major issues that had to be tackled at that time:

Banking. Who has the best deals? How supportive are they?

Board Game Distributors. More correctly, locating one that would sell to an online only company for the moment

Site Design & back-end software. Who would do it? What type of software would we use on the backend? Did we want something fully customizable or get an off-the-shelf solution? What about future growth? What were the costs?

Payment Gateways. Also known as – how do we get money from our customers?

We could easily write a full blog post on each of these issues and we will. For now, here’s the overview.

Banking

In the beginning, we needed the basic bank accounts up as soon as possible. As such, and since Alison has banked with them for a while, we went with Coast Capital Savings. They are a great credit union and we’re still working with them. In particular, they provide full online access at no additional charge along with a no monthly fee account. We only pay for payments out (not deposits!). That’ll be important later.

Board Game Distributors

With board game distributors, as any distributors out there, you will need to make sure you have all your administrative information on-hand and ready to go. That means tax numbers, business licenses and payment methods. If you’re a new business like us, you’ll also likely not be allowed to run an account with them.

Furthermore, board game distributors in Canada are not competitive in their pricing compared to US distributors. This was so even before the Loonie hit par, and now it’s even worst. I’m not sure why, but that is probably the reason why other board game stores in Canada are priced so high – it’s the base cost. We’ve been lucky because we were able to find a great US distributor in DC which we can then purchase directly from to reduce our costs. It is a high price in terms of time, but we find it’s still worth it to bring our costs for board games down. We hope you do too!

Site Design

We got lucky. Through personal contacts, we knew of Collins Harper who gave us a great quote and even better service. They have a lot of combined experience in e-commerce, which is always good. For Starlit Citadel, we use the base OS Commerce design with quite a few changes. Our developers are big proponents of it, and the flexibility to continue adding modules (either drawn from the public realm or hard coded by Shane) means that the site can continually updated and improved.

Perhaps the most important thing when you’re working with an external supplier, especially your IT guy, is to make sure they can communicate with you. You’ll find a lot of great developers who cannot either understand your points, or who cannot communicate theirs.

Payment Gateways

Oh do we “love” Moneris. They are the largest payment processor in Canada, and as such, the one almost everyone uses. The biggest problem with them is that set-up costs are high, on-going costs are high and they only work with HSBC or BMO. Moneris also ‘clears’ your account on a daily basis, depositing the sum that you made every day.

You’ll find that with most business accounts, especially HSBC, there’s a set number of activities that come with your package – and anything over that, you will be charged. This includes deposits.

Do we see the problem here? Add the fact that HSBC charges you for online access (a ridiculous fee that was in the $60 a month range for the basic package) and it just wasn’t worth it. So in the beginning, we opted to use PayPal only.

Those were all the major issues in the beginning, but more would crop up. Some of it, things we never considered. We’ll also go into more detail about each of these points, highlighting specific problems and things you need to look out for when starting your own business in Canada – in board games or not!

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