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Starting an online video game store is a lot easier than it sounds. There are a lot of reasons why starting an online video game store is a great entrepreneurial business to consider.
You should start a video game store business because there are low barriers to entry and it’s considered a low-risk business especially if it is an online video game store. Having low start up costs and low risk will also increase the chances of the video game store becoming profitable fast. By controlling your start up costs, you can shorten the time it will take your video game store to turn a profit.
The steps outlined below will detail what is necessary for starting an online video game store business.
Steps How to Start an Online Video Game Store Business
If you are looking for more of an entrepreneurial business to run in the video game industry involving e-commerce and video game distribution, thinking about starting a business and buying video games in bulk and them selling them commercially.
Starting an online video game store business is a great business to run out of your house.
According to the US Small Business Administration Office of Advocacy, the share of businesses that are home-based without paid employees is 60%.
An online video game store business is also considered a “semi-passive” business because the majority of the business involves managing a logistics process.
Managing the inventory of video games on hand and shipping out those video games to buyers, accounts for the majority of the business operations.
License and Register Your Online Video Game Store
One of the first tasks you will face with starting your online video game store business is to get it licensed and registered as an LLC.
Do You Need a License to Sell Video Games?
A lot of people wonder if you need a license to sell video games and the answer is no. You do not need a license to sell video games no matter where you are selling them. If you are selling video games online or in a physical store, you do not need a license to sell video games in either scenario.
It is a good idea to set up your business as an LLC and register your online video game store so the debts and assets are not held in your name personally.
There are also a lot of tax advantages as well if you are running an online video game store out of your home. You are able to deduct a lot of items such as:
- Home Office Deduction
- Some Transportation Costs
By registering and licensing your online video game store business, you gain a lot of advantages and also lower the risk for you.
If your business doesn’t make it, you can file the business for bankruptcy and your personal assets won’t be included most of the time.
Everybody’s tax situation is different, so be sure to check with a licensed tax professional to discuss the advantages and disadvantages of registering and licensing your online video game store.
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Determine Where To Sell Video Games Online
In this article, I am not going to cover topics that relate to setting up your physical store because the focus is on starting an online video game store business.
It’s already assumed that you will not have a physical store, rather an online video game store only.
One of the big decisions you will have to make is how to sell your video games online. There are many ways how to sell your video games online as a business.
Some of those include the following:
- Will you create your own website and domain, or will your online video game store be an Amazon storefront?
Both of these options are great options for an online video game store business.
Let’s explore each of these options below
Online Video Game Store with an Amazon FBA Store
If you decide to start an online video game store with an Amazon FBA storefront, there are advantages and disadvantages.
One of the disadvantages of an online video game store with an Amazon storefront is that you will have to pay Amazon fees. Those fees are offered in two different plans which are “individual” and “professional.”
- Individual: $.99 per unit sale
- Professional: $39.99 per month with no unit limit
If you are starting an online video game store, you probably will want to use the professional plan.
In addition to the flat fee, there are also a whole host of services that come with that plan that the individual plan does not offer. Those include:
- Access to API’s and more selling reports
- You want to sell with programs such as Handmade or Launchpad
- You want to sell products in restricted categories
- Create listings in bulk
- Manage inventory with feeds, spreadsheets, and reports
- Advertising tools to engage online shoppers
- Run promotions such as free shipping
For the $39.99 a month, you get a lot of software that covers a lot of what you will need to create on your own.
Online Video Game Store with Your Own Domain
The other option how to start selling video games online is with your own website.
By having your own website, you can save a lot of the fees that you would have to otherwise pay to use Amazon’s selling platform.
Starting a website now a days can be done for less than $8 a month.
Check out our guide How To Start a Blog and Get Paid FAST! [Beginner’s Guide] that walks you through the process of how to start and set up your own site!
- If you choose to go this route, you can also sell space on your site to advertisers which is a whole new revenue stream that you would not have with using Amazon’s storefront platform.
However, you will also have to pay more for advertising your online video game store (such as Google Ads) so you can reach potential shoppers with your own domain.
For that to happen, you might have to hire an outside SEO agency to do work and you also will need someone manage the site as well.
You can use selling and e-commerce software that will minimize these tasks.
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Buy Wholesale Video Games
Once you have figured out if you are going to use Amazon FBA or run your online video game store with your own website, the next thing you need to figure out is how to get your video games that you will be selling.
Keep in mind that you will have to buy video games wholesale in order to get enough profit off of each sold unit to run your business.
In addition, the profit on each sold video game has to be enough to cover the wholesale video games that you will buy that won’t sell.
Therefore it’s important that you buy wholesale video games cheap.
How to Buy Video Games in Bulk CHEAP
There are benefits to buying video games wholesale.
There are a lot of different ways to buy video game liquidation pallets and buy video game lots for sale.
What makes an online video game store a great online business is that you can start from the comfort of your home especially if you have lost your job or have reduced household income.
All you need to do is locate wholesale video game suppliers and start a blog listing your inventory.
I have a list below of the best wholesale video game suppliers and distributors.
How Much Are Video Games Wholesale in Bulk?
Buying video games wholesale does save money. Based on the video game wholesalers below, buying video games in bulk, is about 20% cheaper than what video game retail prices are. If you have a game you buy new from a video game wholesale distributor for $50, you can expect to sell that video game at the full retail price of $60 or more. If you end up buying a video game lot for sale, you can expect to save even more such as 20% to 40% below retail price.
Where Can I Buy Video Games in Bulk?
You can buy video games in bulk from wholesale video game suppliers. Wholesale video game suppliers are the best option to buy video game liquidation pallets from.
A lot of them will post their video game distribution lists online.
Some of these video game distributors and wholesalers also offer video game console liquidations as well.
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Purchase Inventory from Best Wholesale Video Game Suppliers
Below are some of the best wholesale video game suppliers that you can purchase your inventory from to start your online video game store.
MCD Video Games
Reliable supplier of Xbox One, PS4, Wii, and Nintendo Switch. Additionally, they offer gaming accessories, hardware, and software.
You can also buy popular games at wholesale prices such as Tomb Raider and Call of Duty.
U.S. Games Distribution
Video game wholesale distributor located in North Hills, California, US Games Distribution specializes in gaming consoles for Nintendo, Wii, and Xbox. They also sell gaming cards available for wholesale purchase.
WholesGame is located in London and New York and has a wholesale video games list of suppliersworldwide.
The list includes things such as release dates of new video games.
They specialize in game accessories, video games, and offer video game distribution and video game lots for sale.
With a showroom in Chantilly, Virginia, you can make bulk purchases of video games.
They also offer preowned video games as well and also collectible video games.
CodesWholesale only sells video games and offers a supplier list consisting of over 70 countries with their list of video game wholesale suppliers.
One advantage of using their platform is that they have an automated selling feature that you can use through their website.
INGRAM Entertainment Inc.
Ingram Entertainment Inc. is a wholesale distributor that only distributes in the US.
In addition to video game distribution, they also offer tablets and mobile devices.
They sell software, DVDs, movies, and video game consoles in addition to video games.
US-1 America Inc.
This is one of the best video game wholesale distributors if your located in Central and South America and the Caribbean.
They only ship to those countries however they are based in Florida.
There are video game lots for sale for a lot of the new video games in addition to video game console lots for sale.
Some of those consoles include Nintendo, Playstation, Sony, Xbox, Razer and more.
Gameworld Distributor has a 10,000 sq ft facility in NY, and is one of the famous wholesalers of video games in the United States.
They offer a wholesale video games list for video game distribution. In addition to video game consoles, they also sell DVDs and other electronic items.
Set Up Your Inventory System
Once you have purchased video games in bulk, the next thing you need to do is to set up your inventory system.
There are many options for this. Depending how extensive of an inventory system you need, you can get software and a scanner to accomplish this task.
As you make a video game sale, the UPC is scanned and a running inventory total is kept in a database recording what your current inventory is of each video game.
Knowing the current inventory counts of your video games is extremely important because this will also help you decide what kind of promotions to run.
If you have a large inventory of one game, maybe you end up packaging it with another game and selling it.
Otherwise, the video game that you have a lot of stock of will just sit there, take up space, and not be sold.
Unsold video games will equal a loss for your business.
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Use a Customer Loyalty Program for Online Video Game Buyers
Another thing that you can do to promote your business for online video game sales is to start a rewards program as part of your marketing. Starting a rewards program is a great way to increase video game sales for your business.
You can run promotions such as:
- Buy one get the second game half off
- Every 6th game is free
- VIP 20% off all sales for one day only
As you can see there are many promotions that you can do to promote your online video game store and sales of video games.
Depending on what type of customer loyalty program you want to use, there is software to manage the implementation and management of the tasks for you.
Some other types of customer loyalty programs to are noted below.
Earn points for each purchase a customer makes.
After they earn so many points you can offer them a $5 or $10 coupon off their next purchase.
Membership Rewards Program
Offering a paid membership program to customers is a good way to create a loyal customer base for your online video game store.
You can charge an annual membership price for your frequent buyer customers. In addition, you can offer them early-bird pricing on new releases, and other incentives for video games.
Another great option would be to offer a flat 5% off all online video game purchases they complete.
Charity Donation Program
Another way to use a customer loyalty program for your online video game store is to offer a charity donation option.
There are a few different ways you can run a charity donation program:
First, you can offer a charity donation program where the customer has the option to make a donation at the end of their transaction to a certain cause.
Pet stores do this a lot where the customer can make a donation that will benefit pet shelters.
You can do the same for your online video game store and maybe
Second, you can offer a charity donation program where on certain days a certain percent of all purchases will be donated to a specific cause.
Those causes could be either related to video game additions or maybe other related charities.
You can also offer your charity donation program to make donation to more generalized humanitarian causes as well.
Incentive Levels Program
Creating different levels of incentives for your online video game store business is a good way to market and increase sales.
This program is based on how much the customer spends on video games and purchases. At certain levels of money spent on video games, you can offer a discount or other promotional items.
For example if you spend $250 or more in a year, you can take off $20 on your next purchase.
If you spend $500 o more in a year, you can take off $50 on your next online video game purchase.
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Keep Detailed Financial Records
Be sue to keep detailed financial records for your online video game store. While you will not have as many expenses as you would have with having a physical store, there are still expenses.
Some of the expense examples are noted below:
- Mailing costs
- Transportation costs
- Inventory costs from whole sale video game distributors
- Software costs for order tracking
- Legal Fees
- Accounting Fees
These are just some of the expenses you might encounter. The good news is however that there is a lot of software programs that can automate this process for you.
With programs such as Peach Tree and Quickbooks, tracking these expenses is a cinch.
When it comes to tax time, all you have to do is send this information over to your CPA and you are done.
You don’t have to go digging through all your receipts that you have been stashing in a shoe box throughout the year.
Run Promotions and Sponsor Events to Grow Business
One of the last steps for opening an online video game store business is to continue to grow your online sales of video games. You can do this through a few different ways.
You can sponsor events to get the name of your business out to people. One of the things that would be great to sponsor is a video game tournament.
This makes sense since you are running an online video game store business so sponsoring things like a video game tournament directly relate to your business.
You can either pay towards a contest that is organized by someone else or run your own contest and give away prizes for the top three winners.
A lot of people will be interested in an online game competition for money and if you sponsor this event you will be sure to grow your customer base and your brand.
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Opening an Online Video Game Store is Profitable
If your looking to start your own online video game store and video game distribution business, you have a lot of decisions to make.
Some of the biggest decisions involve whether or not your video game store will be an Amazon FBA Business or a business hosted on your own website.
Getting video games in bulk for cheap will also be important when it comes to purchasing your inventory.
You can buy video games in bulk from some of the best video game distributors listed above. Through buying video game liquidation pallets and video game lots for sale, you can expect to earn a decent return on investment.
Luckily there are a lot of great wholesale video game suppliers that you can buy video games directly from in bulk for cheap.
You also need to have an inventory management system in place for your video game store and you should keep all financial records as well.
Starting an online video game store business is a great semi-passive business to run.
Once it is set up, all you need to do is buy video games from distributors, run promotions, and sponsor events to grow your business and video game sales.
If you can master that, your online video game store will be on its way to profit in no time.