Whole New Door

Whole New Door
Buy, Sell or Trade

Brian Rowe | 12 Nov 2007 12:59
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I began working in videogame retail as a lowly clerk, or Media Specialist, as management deemed more professional. My only concerns were keeping the shelves organized, not getting caught playing games and avoiding the man who mistook his sock for a wallet. That was five years ago, and now that I manage an independent location, my perspective has changed. Each game on the shelf represents my ability to pay for food, rent and games of my own, but sometimes, it hardly seems worth the effort.

Gaming is an expensive hobby. While price doesn't enter into the equation for some people, others are stricken with perpetual sticker-shock. Every day, I hear customers scoffing at $60 price tags, often followed by a hushed "Let's go to Wal-Mart." Wal-Mart may have cheap toilet paper, but the price-cutting smiley face barely touches games. Some large retailers offer cheaper prices during release week, but only because they know you're likely to walk out with other stuff you come across as you navigate their labyrinthine aisles.

On a $60 game, an average retailer's profit is only $2-8. That may be respectable in other retail environments, but other retailers are not constantly looking over their shoulders for price-drops. A game like Halo 3 will hold its $60 price tag through Christmas of 2008, but most games only last a matter of weeks at their original price. It is not enough for games to sell; they have to sell fast. Otherwise, breaking even is the best a retailer can hope for. And when it comes to systems, which every manufacturer but Nintendo sells at a loss, breaking even is all retailers have.

This is why the units per transaction (UPT) metric has become the hottest buzzword among upper management at major retailers. They still care how much you the consumer spend, but they care more about how much you buy. Due to the margins between wholesale and retail costs, selling two games for $30 each is actually twice as profitable as selling one game for $60. UPTs are also why you can expect to be offered extended warranties, magazine subscriptions and a plasma TV before you reach the exit.

Some retailers are more cutthroat than others. GameStop employees, who until recently could have been fired for not making magazine and pre-order quotas, were obligated by their employer to be the worst. Some customers have even been turned away for not adding reservations or strategy guides to their purchases. When you work for a company that's rumored to have had a 106 percent turnover on employees in 2006, you do what you have to, to survive.

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Employees in the retail industry are motivated by fear - fear of a bad review, fewer hours or even unemployment. People look to clerks for specialized advice, but that expert knowledge frequently gets swept under the rug. Back in the day, I was reprimanded several times for not pushing products with higher margins even though they were vastly inferior. To protect myself, I adopted my own "Don't ask, don't tell" policy. If the customer didn't ask for my opinion, I didn't offer it.

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