Why “Geek Shops” Fail

My husband and I are huge nerds. I’m certain that I’ve mentioned this more than once. We may not be the worst kind of nerds, but most of the things we enjoy are the geeky kinds of things, and with that comes a certain amount of collecting. I’m big into shows like Doctor Who, movies like Star Wars, and anything ever done by Joss Whedon; he has an outrageous number of horror movies, many of them VHS tapes of some of the worst pieces of cinema ever filmed. I have McFarlane Dragons all over my bookshelves, he has an entire shelf of horror character figures to go with his movies. We both almost exclusively wear t-shirts plastered with nerdy sayings, superheroes, or video game characters. The list goes on, but I don’t think I really have to go much further to prove that yes, we are huge nerds, so I rest my case.

I rest my case...again.
Need I remind you that this was all amassed in a single day?

The point is that, because we’re nerds, and because we amass nerdy stuff, we regularly frequent what we refer to as “Geek Shops”. A nicer phrasing would be “comic shops”, but since not all of these stores necessarily focus on comics, we kinda figure that “Geek Shop” is a more accurate phrasing. These are the places you go to buy toys that you will insist are “collectibles”, and various forms of the kind of literature that makes your family roll their eyes and yell at you for wasting your money. These are the shops where the nerdiest of us go to get our guilty pleasures. These are the kinds of shops that my husband and I have watched fail time and time again.

The pop culture example would be Stewart’s comic shop on the Big Bang Theory. It’s a nice looking shop, and the Big Bang cast frequents it regularly, but we’re never under any kind of misunderstanding that Stewart is in any way successful. He regularly mentions such things as being unable to pay the bills, not having anything to eat for the day, etc. Even with people regularly in his shop, he’s failing miserably. The subplot is part of the humor of the show, but in real life my husband and I have seen this kind of thing time and again. Since we first started frequenting “geek shops” several years ago, we have seen no fewer than five of these shops disappear within a year because they couldn’t hold their own, and a few more downsize to significantly smaller shops because they overstepped their bounds and had a really rough time making a go of it. Alternatively, there are a few shops that have withstood the test of time, that have been around since long before hubby and I started shopping there, and will probably be there for years to come. So what’s the difference? Why is it that some shops are perfectly successful and others can barely stay open for a few months? I have a few thoughts. I’m going to share them.

The owners don’t consider their market/location.

When you open a specialty shop in a big city, chances are that someone will be into it, simply because there is a greater population and a greater variety of people and personalities. Alternatively, when you open a specialty shop in a less populated area, you have to consider that your clientele will not be as varied. Several times I have seen someone open a “geek shop” and immediately order a crap-ton of different comics, books, and collectibles from a great number of distributors. They want to have variety, so they order some video game stuff, some superhero stuff, some TV-related stuff, some movie-related stuff, and maybe even some tabletop board games, stuffed animals, collectible card games…you get the point. They order everything. And then they fail miserably because they can’t sell it.

In a big city this would be a more reasonable approach because chances are, at some point, someone is going to walk in who desperately wants a particular item that you happen to have in your vast inventory. In a small area, the chances of a customer arriving for each of the hundreds of things you’ve decided to stock is very unlikely. You might get lots of people coming in and buy comics, but you might find yourself sitting on thousands of dollars worth of tabletop games for years, unable to pay back all the money that you spent on them in the first place.

In the area where my husband and I grew up, big collectors are few and far between. People like us have slowly been appearing over time, but as a “by population” statistic, it’s a small percentage. Therefore, someone who opens a shop full to the brim with collectible figures in our area is likely to find themselves drowning in those figures for months, and maybe even years, until eventually they sell them all at a loss just to pay the last month’s rent on the store.

I’m not saying that a shop in a smaller area shouldn’t order lots of stuff, but you have to scope out your market first. Buy a few of a bunch of different things, see what sells, and then focus on that stuff. I’m sure that’s right up there in some of the top lessons they teach in marketing classes, and yet a large number of comic shop owners find themselves deep in the hole because they fail to have that little bit of common sense.

They cater to a certain crowd, and alienate everyone else.

Several of the geek shops I’ve seen fail had one big thing in common: they were constantly hosting tabletop or collectible card game tournaments in the shop. This, I’ve come to believe, is an enormous no-no. Why? Space. One particular shop I’m thinking of constantly had their entire store filled wall to wall with tables to host these tournaments, and the result is that no one else who comes in can reach anything. Entire walls of product will be inaccessible unless you want to press your entire body up against the dudes playing Magic the Gathering, or else climb right over the damn table. I have witnessed, on dozens of occasions, customers walking into a store, seeing the army of gamers taking up every inch of floor space, and turning around to walk right back out. No one wants to deal with that, I’m sorry.

Maybe the store owner earns a little bit of money from the tournament itself…maybe a few of those gamers buy something on their way out. But how many customers does the shop lose because they just can’t be bothered having to fight through the crowd just to be able to see anything?

I’m not saying that these shops should never host tournaments, because I’m sure there is some revenue to be had from them, but you have to consider the other customers as well. One shop I know of has a room off to the side that is set aside specifically for these tournaments. The gamers are away from the product, the door can be shut if they’re making too much noise, and other customers can come and go as though it’s any other day. That shop is successful. The one that constantly has it’s entire floor space covered in gamer nerds is not.

They spend tons of money on stuff they may never sell.

This one goes along with knowing your market. There’s a vast world of geeky items and collectibles out there, and for every item there’s someone who desperately wants it and will spend ridiculous amounts of money on it…but that person is not likely to ever walk into your shop.

I die a little inside every time I walk into a geek shop that has a $2000 sword replica hanging on the wall, or a huge glass case full of resin statues that range anywhere from $100 to $5000, because chances are that all of those items will still be there the next time I visit…and the time after that…and the time after that. Those items almost never sell, because honestly, what do you think the chances are that someone who just happens to have $3000 of disposable income in their pocket and really desperately wants a life-sized stainless steel replica of Ned Stark’s sword is just going to happen to wander into your store? Sure all that stuff looks awesome, but if you’ve bought it just so that your customers can say, “Wow, that’s so cool!” and then walk away…well, it’s not a very good investment, is it?

A more successful shop – one that has already stood the test of time and proven that they’re going to be around for a while – can get away with a few of these items because they have the capital to be able to survive if that item never sells. But when a brand new shop opens up and has their walls covered in the kinds of items that only the richest and most dedicated of nerds would ever even consider buying…that’s just dumb. There, I said it. Sorry, but it’s true.

They try to cheat people.

This is not something that every shop owner does, of course, but I’ve noticed it in several shops, some of them being the ones who eventually crashed and burned.

Here’s the thing…geeky stuff has become much more mainstream over the years, and that means that some of the items that we previously could only get at geek shops are now available all over the place. Therefore, where geek shop owners used to pretty much be able to choose their own pricing for items, now they have to consider what that item is being sold for at the Walmart down the street…and a lot of the time they don’t.

I’ll give you an example. I love Funko Pop collectibles. They’re adorable and I love ’em. When the hubby and I first discovered them they were something that we only ever saw in geek shops, but in recent years the cute little figures have become a lot more popular and can be found in lots of stores and also bought online. Therefore, tell me, please…why would I spend $20 on one of these figures from a geek shop when the local Chapters has the exact same one for $12?

Hey, profit has to come from somewhere, I get that, and if a collectible is obscure or hard to find I can totally understand a geek shop charging extra for it because it’s not like you can just walk down the street to buy it from someone else. But if you actually can just walk down the street to buy it from a dozen other someones…well, maybe – just maybe – you should consider not charging 30-50% more than those other someones. There are plenty of people out there who would prefer to support their local specialty shop, but the overwhelming majority of people are going to choose to pay less because of course they are.


 

This is all just my opinion, of course. I don’t claim to truly know anything about marketing, or business models, or any of that nonsense. All I know is what I see with my own eyes, and when I’ve seen the things I mentioned above, the result has almost always been a “Closed” sign on the door of an empty building.

Join me, my fellow nerds. Do you frequent “geek shops”? Do you notice these trends yourself, or have you noticed other things that tend to contribute to a shop’s downfall? Share!

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6 thoughts on “Why “Geek Shops” Fail

  1. Nicely put, I definitely agree. If Chapters has it for $12, then the most a little store should be trying to sell it at is $14. I can totally understand a bit of markup, but it’s not like Chapters sells things at cost to begin with.

    Another one: Walking into a board game store and having a bunch of people playing Magic, including the people working there, makes me just want to walk back out again. If I didn’t want help finding a game, I probably wouldn’t have bothered to come to your store in the first place. I’d be much better off ordering online after some time on boardgamegeek.

    • Oh I’m with you on that one too. I haven’t run into this issue as often as the others I listed, but every now and then I’ll walk into one of these stores and find the owner playing in a game tournament with his buddies and it makes me raise my eyebrows. Once or twice I was completely ignored (while standing at the cash register with an item to buy!) and vowed never to shop there again.

  2. I think the focus on a geek store needs to be on balancing atmosphere with competitive prices. They can’t get things as cheaply as other stores, so the profit margins are tight.

    • Definitely agree with you there. A big thing about these kinds of stores is making it a comfortable, friendly environment that nerdy people enjoy going to. That’s probably top of the list, honestly. Then the second part would be making sure that your prices are acceptable. Nerds will pay an extra dollar or two to get something at a store they love and want to support rather than a big box store, but not many people will willingly pay double price just because the atmosphere is friendly.

  3. There was a great “hobby shop” in Berkeley that had half of its store dedicated to puzzles and collectible stuffed animals for kids, and then the other half for all things geeky. They also made sure to price competitively, and I knew that I could buy stuff from them that couldn’t be found on Amazon (another huge thing), or would be cheaper (when considering shipping) if I bought it from the shop instead.

    But yes, geek shops have a hard market. There are basically none left in Kyoto (you buy your geek stuff in convenience stores like 7-11, no joke!)

    • Yes, it’s definitely a rough market. I do feel, however, that a large majority of the people who decide to start a “geek shop” have absolutely no idea how to actually run a business. I’ve seen so many of them come and go in the last decade that it’s hard to think otherwise, especially since there are a handful that are making a great go of it (thus proving that the market is, in fact, there). What really amazes me is when these shop owners don’t notice the obvious issues, like how customers turn around and walk right back out when they see that the shop is full wall-to-wall with tabletop gamers. :\

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