How can I tell if a video game store for sale is profitable?

A game store earns money in several different ways, and they do not behave alike. Ask the seller how much of the sales come from new releases and what is left after costs. Used and retro titles can leave more, but they rest on trade-in stock that the owner has to buy, test, clean and price. The profit story sits in that mix, so ask for it in detail and expect to check it against records.

New versus used and retro

Ask for sales by category over several periods, not just a total. Find out how much comes from new releases, used discs and cartridges, consoles, accessories and collectibles. A store leaning on new releases depends on its supplier terms. A store leaning on trade-ins depends on a steady supply of good used stock and on the owner’s skill in judging it.

How trade-in stock is recorded

Trade-ins are bought from customers, so the shop sets its own cost. Ask how the owner records that cost, how items are tested and graded, and whether untested or unsaleable items are still counted. A physical count with you present is a fair request. Your accountant can explain how the method flows into the statements. BDC covers how inventory works for a small business.

Repairs, events and the owner

Repairs, tournaments and pre-order nights bring customers back, but they also take staff time. Ask who does the repairs and whether that person would stay. Learn how many hours the owner works and which customers deal only with the owner. Ask whether the store’s online listings and customer lists are held in its own name.