Archive for October, 2009

DVD and Game stores are feeling the pinch of a low-margin business. Should we feel bad for them?

used media store

Ron McCardle, DVD Hunt.com

First off, I can’t see how preowned sales of dvds and games would ever go away. While publishers may always gnash their teeth at being cut out of the profit-stream of used games, there’s very little they’ll be able to do about it. I’m not worried used games would go away, Instead, I was wondering why we think brick-and-mortar gaming stores need to be saved.

Reselling games and DVDs is a low-margin business. I managed a game store for a few years, and it’s a grueling, penny-pinching piece of work. You get leaned on daily to make sure you’re selling the right things: high-margin used games and warranties. Rent is a huge expense. The only place that margin can be improved in this business is through used games, so of course the stores give the least possible amount for trade-ins, and sell them for as high as they can. You don’t know how brutal it can be until you give someone US$5 for a game, and then sticker it for $34.99 as they walk out. This is the business we need to keep alive? Why shouldn’t we be calling for the death of these places?

Find a place online, like Amazon or eBay, to sell your dvd or game, and price it at US$20. You get more than that US$5, and the buyer gets their purchase for less. Sure I understand why the used stores price the way they do, but why should we support their margins? If the business doesn’t work for you anymore, get out of it. I can do better buying or selling by cutting out the middleman of these stores. The more people do this, the more the emphasis will be placed on things like replacement plans, controllers, acessories and other high-margin items. The harder the sales pushes get, the more consumers will stay away, and soon the stores simply won’t be there. Going into a chain used media store is already asking for a bunch of high-pressure sales tactics.

While I like spending time in a game or dvd store while browsing and talking to other aficionados, the value just isn’t there anymore for purchases. Digital distribution is taking off, and often online retailers price less than their brick and mortar competition. I can buy my games from any place I please online, get it delivered to my door, and then when I’m done resell it for a fair price to someone who wants to save money and doesn’t want their cases covered in stickers.

We may be passed the point where used chain stores provide any service we really need. At this point, why fight to save them?

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