In order to become a video game distributor you will need to create and register your business and then find and build relationships with video game wholesalers.
Game distributors are essential in the chain of supply from a developer or game company, all the way down to the consumer who will play the game.
Distributors are in charge of selling games to consumers, and with a booming market, this gives new business ventures a fresh launchpad that’s primed and ready to take off into the world of game reselling.
What is a Video Game Distributor?
Distributors are in charge of delivering video game content. And while this can imply a physical store with physical games, it more so implies that the games are digital and being sold and delivered over the internet.
How Do You Become a Video Game Reseller?
There are two ways to get started in the video game distribution industry, one involves a physical store, and one takes place online. We will look at both and break down the steps for each.
To check the current price and selection of Xbox games, click here to view the selection on Amazon.
Open a Physical Video Game Reseller Retail Store
Here are some steps to open your own video game store:
- Research and write a business plan for your store, and decide on what factors the competition is doing that you want to incorporate or use as a point of reference to set yourself apart and stand out.
- Do the paperwork for your own business license and insurance. Also, look into what legislation your government has around best business practices, so you understand the legalities behind your new venture. The insurance protects you and your customers, as it acts as a barrier against theft and injury.
- Consider where you want to set up your shop, choosing a place with good foot traffic and visibility and large enough for all of your envisioned stock.
- This is the most crucial step – getting your stock. Ensure you are talking to wholesalers directly to get the best deal for buying in bulk. You can also look for used games and include these as stock if the price is adequate. You will also want to purchase other items, such as a cash register, for your shop.
- Invest in marketing and campaigning for your video game store to attract customers by setting up branded campaigns in print and online, setting up a mailing list on your website, and keeping people engaged on your social media.
Start Your Own Online Video Game Reseller Store
Here are some steps to start your own online video game store:
- Use the online space to your advantage, realizing that you no longer have to worry about the costs of renting physical space, a place to hold physical games, and other overhead associated with a physical store.
- Consider selling more than just video games and consoles in your online store. Items such as toys, collectibles, and board games help you to upsell and increase your profit margins for online stores, capitalizing on consumer demand for memorabilia products.
- Start building up content around your niche on your website and building brand awareness. This can be accomplished by joining the gaming community, hopping in on the conversation, and putting together blog articles for ‘Top 10 Games Of….’
- You can also consider making guides for your blog, such as walkthroughs, speed runs, and how to’s for boss battles, which the gaming audience as a whole find useful and enjoyable. This will help to garner more traffic and attention.
- To continue that train of thought, you can consider making a Youtube channel for your online store and making Let’s Plays and live streams (on Twitch). This is another way to attract a larger audience.
- Master multi-channel selling, such as a Facebook store and tagging products on your Instagram. You can also consider Google Shopping for creating customized ads based on individual product listings.
As long as you know your specific niche, you will be able to cast a wide net and target a converting audience.
How Much Do Distributors Pay for Video Games?
According to a digital publishing manager, wholesale rates for stores and outlets can purchase games worth $60 at around $40.
To check the current price and availability of Nintendo Switch games click here to view the selection on Amazon.
How Much Profit Do Video Game Resellers Make?
If a game is worth $60, a retailer or distributor can expect a profit of around $20. However, they do not have a lot in the way of safety nets if they have physical stock, as it is the distributor’s responsibility most of the time to cover costs in case a physical copy doesn’t sell.
Digital games are similar, with the console platform taking a cut of 12% and credit cards taking 2.5% (or gift cards for a slightly higher percentage.) Other IT costs are involved, taking another 12% to leave $53 of a $60 game.
Then the manufacturer behind the console will likely still have their license fee to pay for, reducing the price down to $40, similar to the physical copy.
How Do I Find a Video Game Distributor?
There are a number of ways to find video game distributors, such as going to trade fairs, looking at forums for wholesalers, going on LinkedIn, Codes Wholesale, MCV, or online platforms such as Alibaba or eBay.
To check the current price and availability of Playstation games, click here to view the selection on Amazon.
Trade fairs connect you directly to the gaming community, allowing you to share with an entire network, and tapping into the gathered network of business partners.
Participants who gather at trade shows are typically shopkeepers and wholesalers, and you will be able to get leads from both your competitors and those you want to form business relationships with.
Sometimes attending trade fairs may be a costly venture, including travel and admission, but can be a potential investment that can be beneficial in the future.
Wholesalers of the gaming community are active in the current day and age of the internet, and can often be found on wholesale forums. Among other wholesalers selling other items, you will find gaming wholesalers who can offer good prices for bulk purchases.
You can also ask for their contact details and build a long-term relationship with them, giving you access to new games at discounted rates in the future.
All types of businesses and industries find themselves in Linkedin, making this social platform a great place to potentially source stock as video game distributors and wholesalers can be found there.
LinkedIn also has a groups feature where you can join specific groups, keeping you up to date with the latest market news and finding an easier way to source deals.
Codes Wholesale is an entirely digital platform that connects community members for the purpose of buying and selling video games, making it catering to satisfying the need to find video game distributors and wholesalers.
They typically have a large selection of games without a minimum order quantity, along with instant delivery.
Magazines still hold their own marketing strategies for connecting the community, generating revenue, and getting the message out. MCV is a magazine catered towards the business aspects of video games, which is useful to keep up with market trends.
Along with statistics and industry events, the magazine also offers a collection of prominent businesses that you could potentially reach out to.
E Commerce Platforms
Wholesalers on sites such as Alibaba and eBay are useful for game deals, but typically involve many hours of searching through listings.
What Do Video Game Distributors Do?
Game distributors distribute either physical or digital copies of games. However, in this day and age, the most prominent sales are made digitally.
There are many prominent distributors already in the industry, such as Origin, Steam, and GOG, offering a glimpse at what a successful distributor looks like. Distributors are not in charge of marketing individual games, they simply allow you to sell your game on their platform.
Some distributing platforms even allow publishers to have a digital rights management system, such as only allowing a buyer to have one digital copy of a game on one device at a time for an account.
While publishers focus on the development and marketing of their game, distributors are the ones who purchase the game and choose where, and how to sell it. This may even include creating their own media to promote the game.
With the video game production industry only expected to grow, now is a great time to consider new business ventures such as video game distribution.
Mimicking a platform similar to Xbox or Steam may not be easy at first, and to make it easier it may be better to team up with small indie companies when you first start out.
But for the diligent business person, there are many opportunities to take advantage of in a growing economy.