If you’ve seen the statistics about the industry before then you know that the average revenue figure (which includes some huge stores) is about $320,000. If you split that evenly across the year, you are assuming a $26,000 in revenue a month. If you assume that Nov is twice as good and December 3 times as a normal month, than an ‘average’ month would be $21,333. So if you figure that you get an average sale of let’s say $50, you are assuming 426 sales a month or approximately 14 sales a day. Now, obviously there’s a lot of fudging here (Magic players buy much smaller dollar value but a lot more often, board gamers buy much higher, etc) but you get the idea.
So, let’s say you do need to get 426 people to buy from you and you are an okay salesman; that is, you convert 1 in 10 walk-ins. That means you need 140 people to come into your store a day or 4260 people a month. Now, if your population is 50,000 you need 8.5% of the entire town to come in every month just so that you can make your daily bread.
Now, using the US Census age demographics and taking people between 15 to 55 (figuring they are your typical customer group). you have 57% of the population that might be your customers. That works out to be 28,500 potential customers. So suddenly, that % of the population has changed to 17% of the group.
That’s a frightening statistic isn’t it? It’s horrible, but there are ways to change that of course. The variables involved are:
- Target population number (population density)
- Conversion rate (how many you manage to convert into customers)
- Average sale (if you can sell more, the better of course).
None of this is really true of course – game stores are lucky in that they can create ‘loyal’ customers, who come back all the time. True fans as some people call them – individuals who will make up a large portion of these sales, leaving the rest to random walk-in’s. Still, it’s a good idea ot think about what your own conversion rates are.