Ep15: Buying a Local Game Store with SciFi Factory

Join Josh on The Business of Gaming podcast as he visits with Jeremy from SciFi Factory in Keller, TX. This episode discusses the pros and cons of buying an established game store, game communities' roles within the store and what you should consider before starting your own game store.

Auto Generated Transcript:

SPEAKER_01: 0:00

Hey y'all, welcome to the Business of Gaming Podcast. I'm Josh with Game Haven Guild, and today we're with Jeremy Albright, the owner of Sci-Fi Factory, which has two locations, one in Lake Worth, Texas, and the other one that we're currently at in Keller, Texas. Jeremy, what got you into gaming?

SPEAKER_00: 0:14

I've been into gaming pretty much since childhood. So I started with, you know, Pokemon cards and playing the game a little bit, you know, in early middle school, like 10, 11 years old, kind of evolved into uh Yu-Gi-Oh in its original format. Um, and then really just took off with all things gaming from there. Um, as an adult, I've stepped into my what I spend the most of my time playing when I have time to play is uh is DDs. So I've gotten I've gone all over the the spectrum as far as you know TCGs and tabletop games. So now this store is relatively new to you.

SPEAKER_01: 0:51

You just purchased it within the last year? We did. My wife and I uh bought the store in July. And tell us about that process of one deciding to own a store and then why buy an existing one versus start your own?

SPEAKER_00: 1:04

Yeah, so funny enough, my my wife and I we kind of like joke about it now because I've we've always had these talks amongst ourselves of, you know, if I could ever have a game store, I would have a game store. Um, but the starting one and buying one are two very different things. And so one night we were just sitting on the couch, just kind of like scrolling, still, you know, chasing dollars, looking for passive income opportunities, if you will. And so we were just scrolling a website that has businesses listed for sale. And if I'm being totally honest with you, are we were looking at laundromats, anything to just, you know, for a little bit of extra cash. And um, these businesses do a really good job, they try to do a really good job of keeping the business anonymous on the website. Um, but we scrolled over to a local game store, one location in Keller, one location in Lake Worth. And um, we've actually been frequent customers at the stores over the years, and so my wife clocked it pretty quick. And she was like, I think, I think this is sci-fi factory. And uh, and I doubt it had to agree. I was like, Yeah, I'm pretty sure you're right. I'm pretty sure it is. And so um we just kind of like made that initial, like, hey, let's just reach out. But worst case scenario, they they tell us to kick rocks, and then we can we can go on about our merry way. But um, but we reached out, had a few conversations, and then got a little bit more serious about it. And then we decided, you know what, I think we're gonna take the plunge on this and um and and and win for it. And here we are now. Did you do many much exploring of what it would be like to start your own? I looked into what are the things that people don't think of when they're starting a business, so I could make sure I understood the potential pitfalls or or challenges that we would experience in that process. And it's it's super expensive to begin with, right? Like you need a lot of capital just to just to get your foot in the doors. And then with the state of games, specifically trading card games these days, um it's uh it's an established man's game for the most part. So it's very difficult for people who don't already have really good relationships with distribution to get in at all, much less get enough to do well. And so it it was really, it made it a much easier decision for us to be like, if we are going to do this, we're gonna have to buy. Otherwise, starting our own is gonna be so much harder because then you got to spend the time finding a location, you know, getting the capital to get started, hoping that you can even get an account with the distribution center, much less get the allocations necessary to be successful. Could you walk us through the process of buying a business? Yeah. So it was we were on weekly calls. Uh, it was mediated by a third party. Um, and weekly calls to kind of like talk through uh, well, I guess the initial part is, you know, hey, do you have the money? And of course, and and you know, without going into too much detail there, if I'm being completely honest with you, that that was the hardest part. So let's not mince words about the difficulty of of finding money, especially in this economy. Um, but we found a unique opportunity that allowed us to get our hands on enough cash to kind of like make the initial offer. And then we are incredibly grateful to be surrounded by friends and family who trust us enough that we kind of went uh fundraising amongst our family members. And so my brother-in-law is involved, um, my best friend's mom is involved, and and so my my in-laws, my wife's parents are involved. And so it was very much a community village effort. And and without them, we wouldn't be here today. And so they helped us kind of get the the the money part of the conversation taken care of. Um, but after that, it's really a lot of there's a lot to talk about. Um, you've got to talk about the employees, you've got to talk about the landlords for because there are two locations, so it's more than one every time. Um, we have to talk about the accounts with the distribution centers. So, you know, kind of make sure there was a very dedicated effort by the previous owner that I'm incredibly grateful for of contacting distribution and saying, please give him everything from a relationship standpoint that I had. Let's not miss a beat so that the store can continue to be successful. And then it was kind of just, you know, chat, chat, chat, and then closing day comes and then you kind of make it work from there.

SPEAKER_01: 5:37

How long was it from, hey, I think this is sci-fi factory to you having the keys?

SPEAKER_00: 5:42

I think we got the deal done in about 60 days. So a little faster than usual. We were, we were, we knew, we we knew we wanted it, and so we were like, no, no need to spend too much time on it. Um, and so we got all the financials, kind of went over everything, made the decision pretty quick, and then it was just kind of like almost like a real estate deal at that point of like, all right, do the numbers work? Okay, cool. We're itching to close. Let's go. Let's let's how fast can we do this?

SPEAKER_01: 6:09

Well, and when you start your own business, there's kind of a ramp up and you have time to get used to it, a rhythm before you even open it. You're day one going, and you already got people coming in for products. Yeah. What is that first week month like of all of a sudden now you own two stores?

SPEAKER_00: 6:24

It was in it was incredible for us. So um, our very first day was uh Thursday, July 24th. It was a relatively normal Thursday, you know, nothing, nothing too crazy. Obviously, incredibly overwhelming day from an emotional standpoint, but from a from a business standpoint, just a just another day as usual. But then Friday, July 25th, was actually the release of a Magic the Gathering set, uh Edge of Eternities. And it was the first magic set that they had released in over a year because they do this universe is beyond thing. And so pure magic players were so excited that they came out in droves to support that. Um, and again, kudos to the previous owner for kind of making sure that we were set up with product for the release that day. Um, and it was it was insane. It was an incredible weekend right off the bat. We went from zero to a hundred out of the frying pan and into the fire. And it's been chaos ever since, but it's been incredible chaos.

SPEAKER_01: 7:23

So you're about six months in now. Where's been the biggest thing that has surprised you in these last six months?

SPEAKER_00: 7:29

I think the most surprising thing for me, it's it's I guess surprising is a really good word for it. Um, as a relative gamer myself, I didn't spend a lot of time in game stores. It was very much at friends' houses and things like that. So I'm I'm aware of a community, but I wasn't necessarily diving headfirst into it. I think the most surprising thing was how big and how diverse this community is. These people come from all walks of life. No one has anything in common with each other except for their games. And and to see them put any of the divisive nonsense from the world to the side to come together to play these games together, um, and you know, really, really appreciate each other was was incredible for us.

SPEAKER_01: 8:20

What has been the biggest surprise from you thought you were getting into versus what ended up actually being something in the business since you ticked?

SPEAKER_00: 8:29

So I think the biggest surprising challenge for us was finances from a working capital standpoint. We were given really, really good information to help set us up for success, but my goals are a little bit different than the previous owner. And so my the goals that I'm trying to achieve, I knew we're gonna take more money, uh, didn't necessarily know how much and like when it was to be dispersed and things like that. So we've definitely uh encountered a couple of challenges there, but but we're incredibly grateful for the way that we've managed to uh maneuver it all and we were working through it and we're coming, we've all we're already out on the other side of it, and so we're in a much better place. Um, right? It it was just kind of just learning experiences.

SPEAKER_01: 9:16

Were there anything in particular you wanted to change to either make it a little more unique or a little more your style in the store? Yeah.

SPEAKER_00: 9:22

So I actually pre previous to uh owning the store, I I spent 13 years in retail management uh working for Costco. And um, so I learned a lot about you know merchandising, how things need to be set up, right? Um, how they need to be displayed, all that stuff. So I think the biggest changes that I was willing to make were really just the aesthetics of the store, how the product is laid out, how the shelves are laid out, where you shop, where you don't shop. Um, so that that was where I felt like I could make the biggest impact the fastest. Um, and then other than that, it was really just taking in a lot of the uh ideas and and opinions from the members of the community, really the leaders of the individual communities, um, having lots and lots of good conversations with them to help understand what it is their communities are looking for in a game store and trying to incorporate all of that to where, right, you can't make everybody happy all the time, but but you can certainly try. And so that's been that's been a huge, huge uh fun undertaking for us.

SPEAKER_01: 10:30

Speaking of the communities and the the various communities within the stores community, how do you spend your time or what activities are you doing to help either build those communities, rebuild, or continue to grow what you were giving?

SPEAKER_00: 10:43

Yeah, so we we support, I think it's like 13 or 14 different communities here at the store. We've got, you know, Warhammer, uh, Star Wars Shatterpoint, DD. Um, there's another one for Marvel. I can't really remember off the top of my head, but like several strictly for tabletop and war gaming. And then we've got, you know, 10 or 11 uh trading card games that we support as well. This particular store already has a very strong Pokemon community, a very strong One Piece community, um, and a and a relatively strong Yu-Gi-Oh! community. Um, what I wanted to do was let's turn our weaknesses into strengths. And so some of the other games that we felt like we could really grow in were games like Gundam, Digimon, Magic, really. So there was a the previous owner and previous management had a very strong magic community here at the store. Um, they kind of went somewhere else at one point, and so we're kind of building that from scratch, which it's ironic to us because it's the largest and oldest trading card game out there. And so having to build a community from scratch of the oldest game on the market uh has been an interesting challenge for us. Um, but we're having a lot of fun doing it too.

SPEAKER_01: 11:56

What do you see coming in the next six months of your year that you think is gonna be your most challenging thing?

SPEAKER_00: 12:00

If I'm being totally honest with you, the the potential uh economic landscape that we're currently and potentially futurally navigating. Um very curious to see kind of like where people end up, right? You know, we don't know, we don't know where anything's gonna go, right? Every day, every day seems like it's something new. Um but I will say, you know, on the flip side of that, while things are incredibly, you know, mysterious in in the future, there's also something that feels very certain of it doesn't like and for the communities themselves, they don't care what's going on out there, they will come here. And that's what we wanted to provide for them is is despite what's going on out there, everyone is welcome here. Um, it doesn't cost any money. These these guys play their games completely for free. I see no reason to try to squeeze them for any extra dollars when they're already being squeezed for those dollars elsewhere. Um, just come here and hang out, right? I don't care. Stay as long as you like.

SPEAKER_01: 13:03

Well, if you were looking at this uh with fresh eyes, having now owned it for six months, what would you be telling yourself a year ago or even 60 days before you took the keys? Oh, be sure and think about this.

SPEAKER_00: 13:15

Definitely probably to kind of circle back to the the working capital concept of like, hey, make sure, make sure that you already have this much extra money flying around. Um, because and in and it's it's ironic because like I'm making it seem like a challenge, but it's really a very positive uh pitfall of we came in and things did so well so quickly that we actually were able to get more product than what we anticipated. And I don't I that's a that's a wonderful problem to have in in this particular industry. And so I was like, it's really just okay, this is gonna go really well. Go find more money so you can buy more product uh because that's what people want. People want the product, they want to, they want to pay where they play.

SPEAKER_01: 14:00

Marketing seems to be uh a hot topic with a lot of game stores these days. What are you doing to help fill the community and drive people in? What are you finding is working and what's not working?

SPEAKER_00: 14:09

We've definitely intentionally pushed social media a lot heavier than what was done in the past. Um, we actually have kind of a dedicated social media manager, uh, if you will, that that is really pushing our our Facebook and we've actually created an Instagram. Um we're treading carefully, but we may dive into the TikTok world. Um, so we're we're definitely understanding that it's not necessarily the established members of the community, they don't spend a lot of time on social media, uh, but the younger community does. And that's kind of our goals, not just for the store, but for the games themselves. If the games want to continue to have the longevity that they've had in the past, they have to continue finding younger and newer players. And so we're utilizing social media in that way. Um, and then just taking advantage of like opportunities to kind of like put things on sale. So, you know, just really advertising these big like for example, we had anime product um that had been sitting for a while. So we discounted it to like 90% off. Um, and that was the that was what it took. And that was what it took. And they came in and bought it, right? But you know, we blasted that all over our social media platforms, and people who have followed the store for a while but haven't really been here in a while start to see posts like that, right? You put a little bit of money into the Facebook advertising and and you start to see it really spread out. And then people are like, oh wow, I haven't I haven't been here in like six months or a year. I saw that you had stuff on sale, right? And so taking advantage of things like that. Um, and then hopefully one day we can kind of really expand the advertising budget. Uh, I've got big dreams of a of a billboard on I-35. So we'll we'll see if it's in the budget one day, but but that's that's the goal.

SPEAKER_01: 15:56

For someone looking to get in the industry, either start a store or make their own game, something along those lines. What advice would you have for them on getting into the industry?

SPEAKER_00: 16:04

Yeah, I think having a very large network of people who play the games regularly and are involved in the communities. Uh I don't want to say at a corporate level, but like definitely involved legitimately with the communities, right? So like my Pokemon community leaders are dedicated, they are signed up with the Pokemon, like with the Pokemon company, right? So and and all the games have that opportunity available. So they're either signed up as a judge, signed up as a community leader, having yourself a network of people like that, because the when you're starting a store, it's incredibly difficult just to get people to come in and shop. Having people to come play is a really, really good first step. So I would say that's a that's a big, big piece of the puzzle. Thank you for taking the time to talk to us. Yeah, absolutely, man. Thank you.