I would like to setup a retail storefront and sell video games and
consoles.  Playstation1, PS2, Xbox, Gamecube etc at first.  I'll get
to PC games later.

Anyhow... I've found space, have a lease agreement that I have not
done anything with yet due to supply issues.

Here's my question:

WHERE do these dealers like gamestop and others get their games?
I've found several so-called wholesale places and they sell wholesale
for $3-4 less than a retail store.  Surely there must be more profit
to be made than $3 or $4.  I have a business license, sales tax
exemption certificate and everything I need aside from signing a lease
for space, but I cannot seem to find a supplier who could get me the
games cheap enough for me to make enough to cover rent.  Any help
would be GREATLY appreciated.

I've done TONS of research.. found these:

alliance distributors
jack of all games
classic games

Those seem to be fairly large distributors but pricewise they just won't work.

Send me what you can find....

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Clarification of Question by limitlessenterprises-ga on 31 Jul 2005 19:01 PDT

I haven't signed any leases... I'm just in my 'research' phase at the
moment.  I've gather lease information and actual copies of leases to
see what sort of term arrangements I could make.

I'm just trying to see if there's anyway I would be able to compete
with something like a 'gamestop' or if it'd take so much money to be
able to compete that it wouldn't be worth it.

I asked a Gamestop manager essentially the same question, in hopes of
getting games cheaper myself.  While he didn't know precisely who
their supplier was, he did say that because of manufacturer price
locking, most of their profit came not from selling games new, but
from buying back used games for very low prices and then reselling
them as "used games".  For example, a game purchased new for $49.99
(average retail) might be sold back to the store for either cash or
credit for anywhere from $1 for less-popular games to $15/$19 for a
title in high demand.  Gamestop will then "refurbish" the game (wipe
it with a cloth), and then sell it for $20 - $35.  The same principle
goes for consoles.  Sorry I don't have supplier info, but you might
consider the used game industry at least for your storefront.  As far
as I'm concerned, places that allow me to trade my old game in to
bring down the price of a new one are much preferred to those that
dont.  Good luck to you.

Yes, and the buy-back service is much appreciated by die-hard gamers
who want the latest greatest game now, and complete it quite quickly.

Unfortunately, large companies like Gamestop, Blockbuster, etc set up
contracts directly with the game manufacturers.

At the expense of sounding crass, why wouldn't you research this and
have your wholesale contracts in place BEFORE committing to a lease
agreement?

OK where shall I start.

Wholesalers/resellers. Depending on what area you are in you should
look for a local distro. I will use Southern California as an example.
If you are located in say Los Angeles County or somewhere around there
you will find the wholesale district in downtown LA. You can do a
simple search on Google or other web pages for "video game wholesale"
or do a Google Local for something similar and get a list of several
places. In Los Angeles there are about a dozen wholesalers located on
11th street and the surrounding area. All purchases are made without
tax providing your business/resell license. You can get listings of
prices from these vendors. Prices vary depending on the frequency and
quantity in which you buy. Smaller companies tend to come to these
wholesalers as they only require small orders of say $500 - $5000 per
order. If/once you start getting into larger orders and can make a
constant committment for your orders then you would seek out
Ingram-Micro and other larger companies that distro to Walmart,
Gamestop and other stores. Sadly there is not much profit in the sale
of new games or equipment. Bundles, resells, refurbs and ACCESSORIES
are where the money is at. An example of a new game selling in stores
for $49.99 you would buy it wholesale for say $43.99 - $46.99 on
average. Yes it is only $3-$6 profit. That is why you must sell
accessories. Buy a memory card wholesale for $3 and sell it for $10 to
a customer. Sell a console to a customer where you are making maybe $1
profit, but sell 2 controllers that you are now making $15 profit on.

Some of these wholesale places will also sell or provide marquees,
signs, banners for your store. You will also find that accessories
from overseas are by far cheaper. Not only in price but also in
quality. A lot of places will provide a few quality products for their
brand name, but overfill their store with the cheaper generic ones as
you are making 3-5x more profit off of them.

Now for the games that you can buy for cheap. Older games that are
about 1-2 years old you can buy from wholesellers for about $5, be
warned though that these games are selling for $15-$20 new at other
stores. Also with buying back of games it is preferred to sign on with
a service that does game pricing for you instead of trying to price
the items yourself. You may buy back a game for $15 when everyplace
else is selling the game for $5.

Standard leases in this area appear to be 3-5 year term, sometimes
longer, $2-$3/sq foot and triple net which is basically additional
cost for parking lot. A lot of places dont want video game stores in
the area because of too many kids, so be aware of this. Also with a
store space you will need to provide security system, insurance, and
also consider your location and hours of operation as well as
employees and insurance required by law for having employees. You will
notice most small game stores employee immediate family to get around
this, and avoid medical benefits.

Your other option is to franchise. Again a Google search should pull
up about 15 or so video game stores/companies that are looking to
franchise. They will let you use their name/logo, advertisement but
take a portion of profits for a set amount of time. I know the larger
franchises are looking for about $100,000 investment for initial
inventory, marketing, training, design/decoration of store, their
profit and some include initial rent of location. Hmmm Games 4 Less is
one such franchise. There are also smaller places that will sell you
simply their name, method of doing business, POS (POint of Sale)
software for inventory/sales and sell you their monthly service for
pricing new/used games.

OK I think that is it for now. If you need anything else, or I missed
something let me know. If you want more details, persons name,
address, business, etc let me know. I went through all of this already
so I can give you a 1st hand encounter and information. Also invest in
a piece of software called Business Plan Pro, or use someones. Then
present your 50+ page business plan to banks in the area to provide
you with a business loan. They will give you the money you need to
open up the store, money in pocket and help with other business tips.
The software is also good because it gives you insight into other
areas that you will need to spend money on for the business and manage
your funds ahead of time.

When you do get your store open, design is important. Your two biggets
places for loss of income are theft from customers grabbing stuff from
counters (btw - keep all games on the way empty. Use empty cases, and
buy a locking drawer/cabinet for all games/hardware), keep your cash
register cover with a backing so they cant see into it, or touch it,
same with your cash drawer. And the number 2 place for loss is from
your own employees. Try and figure out how much needs to be sold in a
day to break even. Say 4-5 video games an hour times the number of
hours your store is open in a month. Then figure if that income will
cover employee wages, your wages/profit, rent on space, electricity,
maintenance/repairs of anything doors/windows/cash register, software
maintenance, licensing fees, advertising, etc...

Have fun.

Are you goimg to sell used or new.Or Both

look at this i hope it helps http://www.worldwidebrands.com/wwb/?6702
http://videogames4u.theshoppe.com/index.html

Hi there i can help you with the game consoles but not the games