new LGS in Canada opens in 2020 and grosses $950k in sales. link
$950k in sales is nothing if he’s mainly selling modern sealed product (which it sounds like he is). The margins on it are incredibly small. After rent, taxes, and all of that, he’s probably in the negative. Opening a brick and mortar LGS in 2020 is a very poor idea, especially if most of your business is reliant on a single hobby.
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Lol why are you so negative? You don’t even know what his numbers are to say he’s in the negative.
To me it sounds like he created a successful business, good for him.
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Rudy from Alpha Investments posted a whiteboard video recently where he broke down the financials of running a LGS. Like Zorloth said, the margins are super small and the odds of success are not in your favour. They also said they were planning to open a store in Ottawa so they can probably kiss their margins goodbye on rent alone. I really wish them the best though.
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have you read the article? the guy started out as an online only store and then expanded to a location, mainly to have more room to store his inventory
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My interpretation of the article was that he was doing very well.
The percentage of businesses that ever reach $1MM in sales is very small. And he did that in less than 1 year.
I will tip my hat to anyone that can start from zero and create a one million dollar business!
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The story portrays this as an LGS success story, yet this is a LGS that literally just opened and is selling Pokemon product in the midst of the biggest Pokemon boom since 1999. The LGS business model is not viable anymore. One dude staying solvent for 6 months doesn’t equal a success story lol. Not to mention that gross sales is a misleading figure when you’re selling modern sealed product.
I hope he succeeds. But I also don’t think we should be encouraging people to open brick and mortar LGSs. It’s important that people are negative about it. Unfiltered positivity leads to people making bad decisions.
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It says he opened it as a retail storefront. If he wanted to just store inventory, he would’ve just bought a $100/month storage locker lol.
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My cousin shared the article with me the other day asking if I knew the guy lol (I don’t)
Of course it’s great that this company has done well. As others mentioned, calling it an LGS is a bit misleading since their business model follows dacardworld and collectorscache much more than your local store where you go play mtg
I also think there was a lot of opportunity in Canada for something like this because we really don’t have many options when it comes to say preordering modern product.
I’m happy to have this option available but I do want to agree with what was said earlier in this thread that Champions Path/vivid voltage are perhaps the easiest sets of all time for businesss to sell so now the challenge is whether or not they can put themselves in a position to survive more stagnant times or a couple of crimson invasions
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Definitely with @zorloth , and heres the video @bowleous , mentioned. I am SPECIAL - 2020 Edition - YouTube
It’s definitely worth the watch and again like zorlorth said, I’d hardly consider one LGS opening and staying open this year hardly news, let alone uplifting news. If a couple years pass and hes still open, *then* I’d consider it good news. I definitely wish this guy the best of luck but this store has definitely not stood the test of time yet.
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This article is good exposure for the hobby. Good luck to them, I hope they do well.
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This forum has such a weird culture sometimes. They’re not just selling modern sealed product, they’re selling board games, miniatures, etc., which have much higher margins than Pokemon TCG. And $950k in sales in your first year of business is nothing? That’s about what my LGS grosses annually, and they’ve been part of the community for almost 20 years.
If their numbers are inflated by cashing in on their childhood collections then this year likely isn’t going to be replicable, but it’s strange to cherry pick the article to sound like you know more than they do.
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I own a buisness with about the same yearly revenue. We operate with 5 employees and a very large overhead in the form of expensive equipment/shop facility. I see most of my buisness profits go to pay off my expensive depreciating assets. Most people would see me as some rich guy running a million dollar buisness but in reality I make just slightly more than I would simply being an employee in the industry. On the other hand I have a friend who owns a buisness in another industry… His revenues are less, with similar gross margins but his overhead is much less. He makes 2x yearly what I do. Revenue does not equal profit.
Overall owing your own buisness has its rewards (sense of pride, control of your day to day, respect from your peers) but also has many downsides (long hours, stress, risk of bankruptcy). I wish these guys the best of luck and It will be interesting to see how they transition their buisness model once this current hype dies out. Brick and Mortar retail is a dying industry and I hope they don’t overextend into retail space.
The video posted above does a great job of highlighting some of the behind the scenes costs a business faces. These hidden costs are understated (taxes, insurance, security, loan interest, accountants, lawyers etc). He also did not factor in the cash that the business has to outlay in order to purchase product from the distributor. Especially a new buisness, which will not likely receive payment terms and would have to pay for product upfront. I am new to the hobby but it sounds like many stores were stuck with cases of Evolutions that wouldn’t sell just a short time ago. Without the proper capital any buisness will fail if it’s inventory is not turning over regularly.
It’s a nice feel good story and I hope they thrive but I also hope anyone looking to start a buisness realizes that it’s not nearly as easy as this article makes it seem.
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$950k is nothing if it’s primarily in modern Pokemon sealed product, which it sounds like is the case here. I’m not sure if you realize how small the margins are for modern sealed product. For your LGS, my guess is that their revenue isn’t solely comprised of selling sealed product.
I can’t believe all the negative responses.
Even if you are correct and the odds are stacked against long term success, this guy created a business that generates $1,000,000 sales from the ground up in less than 1 year.
This is INCREDIBLY hard to do in any industry.
Huge congratulations to him and his team.
Was going to mention this video, it’s quite clear that running a physical store is expensive and takes a lot of work and sales to break even. I was surprised to learn that the margins on cards are so low, so one bad box transaction could take 10 sales to make back. It would be quite cool to do this successfully with both the physical store and online sales, but it seems too competitive now with oversaturation. Not to mention how difficult it is to obtain stock, how much turnover is needed and the risk of demand dropping.
As soon as I started thinking about it I knew that Pokemon/TCGs would be too niche in my town to make enough sales to pay the rent plus I’m sure a lot of people realise that online is cheaper by now. Also wouldn’t like the idea of leaving vintage products in a store at today’s prices
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In other news, Buckna still hates Zorloth.
Another post from you filled with ad hominens (and false ones, at that). When you decide you want to post something resembling an actual argument, let me know.
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@shinycards, Yep, its not easy to make it in the brick and mortar LGS world. I think its important that people realize this because it is articles like this that encourage people to put it all on the line to open that LGS they already dreamed of, shred through their life savings and end up going in debt. Im glad this store has made it this far and hope it stays open the rest of his life or as long as he wants but its also a double edged sword that can encourage what is otherwise kind of a dumb move. This was also sort of a response to everyone else wondering about all the negativity, not just directed at you lol
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Don’t LGS only make like $5 on a booster box in profit? For argument sake, say that equates to 6% margin overall on everything in the store so like $60k…now cover expenses and you have basically nothing?
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