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Worldeaters
03-09-2013, 07:49
After a long conversation with a friend last night who runs a small but reasonably successful small business we got to talking about the space marine release and the problems of GW's website over the weekend and he told me that he was thinking of becoming a stockist. He's a gamer but doesn't really go on places like warseer so I told him about a thread with people debating online stores and there problems (mainly delivery times) and he claimed that he could do 17-20% off everything with a 5-10 day delivery max time (including anything he wouldn't have in stock) he currently has a 3-7 day time on 95% of what he sells at the moment.
Due to the size of his store and stockroom he was thinking of starting with just 40k and expanding if it does well. Due to other commitments he was gonna wait until the new year before doing this.
So does anybody know how well the online stores are doing?

Note also I said that I might post a couple of things fishing for information and he asked me not to reveal the name of his business so please don't ask.

Herzlos
03-09-2013, 09:44
I don't think he'd be allowed to just stock 40K, GW has a 'core' set of products, so he'd probably need to stock fantasy/hobbit stuff as well.

I think they were also restrictions on online-only retailers now, but that may just be for GW direct rather than via a distributor. He's got a bit of research to do there.

They do have a referral scheme though, so I'd suggest you refer him to GW and have them chase him; he'll maybe be able to negotiate better and if he starts selling with them you'll get a voucher for something like 100.

Onto the general online store thing, I think good communications and honesty are vital. Most people aren't too bothered about when stuff is delivered if they know what's going on. So being clear when something isn't in stock or may be delayed is important, as is letting customers know via email if any delays occur. It shouldn't take too long to get a good reputation for that, and getting repeat customers. Aim to have replied to any customer within 24-hour hours and apologise if it's taken any longer than that.

Have a look at the complaints aimed at other stores; from what I can recall most are down to poor communications and uncertainty, rather than how long stuff takes to ship (not that anyone will complain about it happening quickly).

Worldeaters
03-09-2013, 11:42
Sorry, I should have stated he has a bricks and mortar shop, he was aware of the core products element, he would stock the minimum of each system in store but only add 40k and paints after the minimum and they would be the only things he also makes available to his website aswell.

Edit: we used to work together many moons ago and like me he is very customer service focused and values communications highly, he personally chases up any emails they receive especially any complaints.

Glimfeather
04-09-2013, 05:10
The key to successful small business is cash flow. If your friend can afford to tie up his money in a large amount of stock that will generate low margin, then it might be a good idea if:

1) it does not require him to hire extra help to process the additional orders, thus creating additional overhead,
2) he can do it alone but it won't take away from handling his normal in store customer base and delivering the same level of customer service,
3) the return on equity is higher (over time) than an item he might stock and sell at a higher margin with a lower turn rate (example - it takes him a week to realize $5 in profit from selling a box of dwarf warriors. He had to spend $25 - guessing for the sake of simplicity - and tie that money up until it was shipped to the customer. Lets say he can take that same 25 inventory investment and repeat that same process without fail for a month. A $25 investment nets $20 in profit over a months time. Yet, there is an item that he can sell about every three weeks with a higher margin - say $18 profit - it might be a batter business decision to stock the higher margin item in this case...)

Ultimately you can't stock everything. Then you factor in returns, etc.

What about in store customers? Are they going to be given the same discount as online buyers?

Personally, I don't think mail order is a long term successful venture in this hobby. There are probably those who can do it successfully but I think you have to scale up to do it. I would not prepay for anything from an independent store that had to order an item and pay for it using my cash, just so they could make $3-4 in profit. I would much rather buy it directly and get it faster.

Maccwar
04-09-2013, 10:43
The problem he will face is that GW have been slowly and steadily making life harder for independent web stores in recent years.

McBoner
04-09-2013, 11:50
The problem he will face is that GW have been slowly and steadily making life harder for independent web stores in recent years.

This. GW tend to change their trading terms at a drop of a hat, sometimes quite drastically, making it very hard for a webstore to adapt. Focusing on the GW range alone would be very much like putting all your eggs in one basket. You never know when the next change in GW trade terms might come and how it might affect your business. It's also clear that the type of indies GW want are the high street brick and mortar kind, not the online resellers.

I'd also point out that we're spoilt for choice with online stores in the UK. Wayland, Element Games, Triple Helix, Wargamestore, Dark Sphere....the list goes on and they all offer around "17-20% off everything with a 5-10 day delivery max time." Why is your store going to be any different? Why are people going to come to your store when they can get the same prices and service from more established online stores? I think for any new online store to be successful it's going to have to offer something that no one else does. Wayland were quite good at this as when they arrived on the scene a couple of years ago they put prices as low as they could go. Since then everyone else has just copied them.

As a result, you're going to find it very hard to compete on price as prices are already as low as they can get from online stores. My advice would be to focus on some other form of service that no other store does. Perhaps sell at close to RRP but guarantee next day delivery on all orders?

redben
05-09-2013, 07:36
he claimed that he could do 17-20% off everything with a 5-10 day delivery max time (including anything he wouldn't have in stock)

He needs to his research on GW then. Anyone who's dealt with Total Wargamer before may have noticed that orders for non-GW stock tend to go out in that time frame but GW stock can take them weeks to get hold of. Unless your friend is going to launch his business with a lot of product already in stock and then keep it that way he'll be running a big risk of failing to meet that claim. And, as others have already stated, GW have a nasty habit of changing their terms with independent retailers at the drop of a hat and have developed one recently of failing to provide new armies at launch. To be beholden to the whims of GW and what they'll provide you, when they'll provide it, what else they'll force you to buy, and their willingness to move the goalposts, would make a retail store focused on 40K a very risky proposition. He'd probably be better served widening his net a little to mitigate any issues with GW. Warmachine would be an obvious one.

If he can develop a reputation for low prices and good customer service then there'll always be a space in the market for that.

Lostzilla
05-09-2013, 15:54
Most improtant thing is to be clear to customers and if you make a mistake or something never stop talking with the client.
I ordered some things more than a month ago from darksphere.co.uk. Codex arrived but nothing more. I just asked them and they said "wait" now im off with patience and you know what? two days without answer. :mad: :mad: from them. Maybe they are waiting till I wont be able to make a paypal claim.

Worldeaters
07-09-2013, 23:08
Was out having a drink with him tonight and we talked a bit more about what he is planning on doing, currently he is thinking about starting with 5 grands worth of stock and making sure his website stock levels are accurate and is looking into privateer press and Mantic aswell,
all the stuff he currently sells includes free postage so he's thinking of doing that with his GW stock aswell so that would make his discount not look as good as others but he has faith in his quick delivery times combined with stock accuracy. His store is over the road from a post office and he just crosses the road three times a day with his orders.
He is currently heading more towards 12-15% discount with free postage, but he's getting a load of kits weighed next week and thinking more about it. And knowing what he's like he'll probably change his mind ten more times then his Missus will make the decision for him.