After months of quiet work, we’ve finally confirmed and received our business license from the City of Vancouver. We can now inform everyone that we’ll still be in the general vicinity of our current location but we will be operating as a full retail store. Here’s a map to our new location as of (tentatively) March 1st, 2017.
This new location is a basement location right under the existing Rollergirl.ca store.
The current plan is to shut down operations late February and move and complete set-up before March 1st. At that point, we’ll host a soft opening while we iron out the details of running both a physical store and an online store. The current expected hours of operation will be 10am to 9pm 7 days a week, with adjustments made as we work out traffic at the location.
We currently believe that there will be space for demo and gaming tables to be included in the store. If that holds true, we have every intention of hosting regular game nights at the store. However, we can’t promise this will happen until we finally move in and check how much space we will have used.
Photos of the location will show up once we actually move-in and potentially a longer post with pictures of the before & after. Let me know if you have any questions!
We are coming up on our end of the lease fast and while we’ve made the decision that we will be moving to a new location as our rents have now increased to a point that we no longer think it’s worthwhile to stay, the question we are still working our way through is whether to go full retail or stay as an online store.
Continuing to run a warehouse makes a lot of sense in many ways. There are some major pros including:
- well optimised polices and procedures
- ability to take on more and larger Kickstarter projects
- potentially branching into other non-related product lines in ways that don’t create confusion among our customers (e.g. selling sporting equipment on a new website)
- lower cost (we can get warehouse spaces for cheaper than what we are paying right now, so we’d actually drop our cost!)
The Cons though are somewhat more nebulous
- new location likely to be less central significantly
- growth has to come from new categories as our gaming category has slowed
- potentially being locked out further by publishers
- it’s boring…
Going with the retail store, things get a bit more interesting for the future, with some of the pro’s including:
- new revenue streams from snacks & drinks & events
- ability to access and run events / games likes Magic the Gathering and miniature games
- increase in sales to casual drop-in’s and potential increase in sales from impulse buying of our geek products
- significantly more options for PR and social media outreach
However, there are some major cons:
- significantly higher lease cost (we’re looking at least another $4,000 a month at a minimum, more likely $5-7k).
- new staff and staffing hours would be required. Approximately $3k more in terms of staffing cost per month
- loss of revenue from Kickstarter projects. We probably could handle the smaller projects still, but the larger projects would be difficult (i.e. we couldn’t quote on projects over a few hundred games just due to lack of storage areas for them)
- new capital requirements for shelving, gondolas, POS systems, etc. At least another 5 – 10k depending on how nice we want to go.
- potentially sub-par location. We need a minimum of 2,500 sq ft and are probably looking at 3,000 up to 5,000 sq ft. There just aren’t that many locations of that size in Vancouver, especially in retail and for the prices we can afford which would raise the total rent even higher
- too close locations are another major issue as there are so many game stores right now, finding a location that isn’t too close to an existing store is another problem.
There’s also a rather concerning trend in real estate pricing. In general, commercial pricing seems to run 2 – 3 years behind retail pricing, so if there is a drop in sales in retail pricing, we might expect a price drop in a few years which means that any lease we sign right now might be on the high price.
I just learnt on Thursday that another game store is opening in the Lower Mainland of BC. By my count, that puts us at about 30 different game & comic stores in the Lower Mainland; not including big box stores that carry games as well. If you look at just the GVRD; it drops down to 28 stores for a population of 2,463,700. That works out to 1 game store per 88,000 people. More interestingly, if you look at just the Greater Vancouver area, you get this distribution:
||No. of Game Stores
||Population / Game Store
Common ‘knowledge’ in the industry (from what I recall) puts the number for a viable game store at about 50,000 at a minimum. Numbers jump up and down depending on the type of population (lots of college kids, tourist town, commuter town, etc.) and of course, other minor things like rent, salaries, etc.
So, if you assume that is correct, if I were going to open a store in the Lower Mainland I’d consider either Richmond or Surrey or North Vancouver just from the above data with Burnaby a far last. Of course, there’s a lot more to take into account – demographics and salaries, transportation and the like but it’s certainly an interesting statistic. Maybe we should move the offices to Surrey the next time 🙂