Quote from ccc1522 »i believe he is correct. This whole ordeal is going to shut down many businesses and quite frankly already has as lay offs have begun in many industries such as the service, industrial goods and energy. there is no reason to believe that card shops and LGS are immune or even capable of fighting off this crisis.
Simply put all sectors of the economy are suffering and will suffer as this crisis continues. LGS's wont be able to stifle the blow due to wotc's recent neglect, a already dying player base, ARENA syphoning off new players and old players, the nature of an LGSs importance in a time like now and the current crisis forcing shut downs. 2 months of profits lost is kind of a big deal. Now there are alot of things that can be done like 0% interest business loans and stuff like that but if game stores were already hurting to stay afloat i cant see how they can make it through this especially when government aid keeps being obstructed. Time is ticking and LGS's are definitely high risk businesses at this time.
Quote from ICv2 »The two stimulus bills passed by the U.S. Congress and signed by the President, including the Coronavirus Aid, Relief, and Economic Security Act (CARES), passed late last week, have provisions that can help retailers and other small geek culture businesses stay afloat through the coming months. The best summary we've seen of all the programs for small business from both bills is on this page from the U.S. Chamber of Commerce site, and the linked pages from it. Here are some of the key elements:
The Paycheck Protection Program provides for Small Business Administration loans through banks, without a personal guarantee or collateral, for small businesses to fund key expenses. The portions of the loans that are used for payroll, mortgage, rent, and utilities in the eight weeks following origination of the loan will be forgiven.
Economic Injury Disaster Loans are available not only to small businesses, but to individuals operating as independent contractors, and can be approved based solely on credit score. Loans under $200,000 do not require a personal guarantee. Emergency grants of $10,000 can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.
Some businesses may be eligible for both the Paycheck Protection Program and the EIDLs.
The CARES act provides for tax credits of up to 50% of wages up to $10,000 paid to employees between March 13, 2020 through December 31, 2020, for businesses that lose revenues, suspend operations, or have higher costs due to coronavirus.
Businesses can defer paying payroll tax obligations and instead pay them over the next two years (does not apply to wages supported by a Paycheck Protection loan forgiveness).
Businesses are required to provide paid sick and family leave for coronavirus-related absences, but can receive reimbursement for expenses beyond those normally offered via tax credits or direct government payments.
This is only a partial list; check out the U.S. Chamber of Commerce page linked above, or for another list of government small business programs and helpful hints, the Comic Book Legal Defense Fund page linked here.
Quote from Rudy from Alpha Investments »
So today what we're going to talk about in regards to card shop failures is simply on "Space". Straight up space. I know not the final frontier, not space stock, space (looking at you guys Wall Street bets). Not space just card shop space. Also known as overhead, square footage, cubic feet, this and that fancy schmancy. What happens is that a lot of people you know and I did the same thing originally a couple of years ago when I opened up the Alpha Investments location. I remember telling many people it was like a temporary location so I can expand and do another location.
Originally I wanted to buy the big shopping center and expand like a fancy store. The problem was with YouTube and the rest of my businesses online expanded so much that I just couldn't get anything done. It almost became like a tourist type stop and it really messed up all my shipping which fell behind. So anyways while eBay and Patreon works and that's still great, the location, everything's fine, and it's good to meet people and do collections and all that which we're not doing now, not meeting anybody, or doing anything but the issue remains that this is a very interesting time because it really exposes a risk that I don't think people fully took into consideration.
You know, everybody out there who wants to do a card shop or open up a comic book store, coins, or any form of collectibles in general because these are the times when you have tremendous table space just for play area like huge play area space because you're a WPN store which unfortunately as you guys know I'm not which is why I don't get Mystery Booster Boxes and you know Spellbooks. But these are the times when the flaws come out. You realize the excessive risk you took that wasn't so obvious before because at a time like this when we really reflect and think about it you realize that, "Wow! A lot of the decisions I made in the overhead, the space, and the lease I signed was a bad move."
New York can't even open anything the whole thing is shutdown. I think actually a lot of states are and by the time this video goes live probably even more states. I'm sure it's going to get a whole lot worse. New York and California have some of the highest rents for retail space in the United States and now they're under mandatory quarantine shutdown. So you have the highest space with products that have the thinnest margins and now you're forced to close temporarily. I mean talk about a one-two punch worst case scenario. The amount of people contacting me sending me messages who own Local Game Stores (LGSs) replied back to me saying, "How on Earth am I supposed to recover from this?"
I've received many messages now probably about five to ten stores now across the United States that told me, "I don't have plans to open back up so do you want to work out a deal to buy out all my inventory because I really have no intentions of reopening after one to two months of no income having expenses deferred." So I don't know why everyone's so excited about student loans, credit cards, mortgages, and rent being "deferred". I really don't get that because deferred does not mean you'll have to pay. If you have a credit card and many of these other things or like a mortgage it just means you'll have to make a payment.
The interest in the bill is still accrued, you still owe, and they're gonna add it on. So many mortgages and loans add on If you have rental space or a lease and shopping center. They're going to add that payment on to the end of your lease or something. Deferred is not as good as it may sound. Now If they forgive it then that's a different conversation but the "deferred" thing is a very loosey-goosey term. It really exposes the risk and danger of doing these LGSs and trying to work with Wizards of the Coast in 2020 during the "Corona Crash". It's dangerous. It really exposes how weak the system is. It exposes how high risk / low reward it is for most people to try to start their own business in the collectible world.
Anyone whose interested in this stuff gets blurred by the enjoyment and passion they have for the products. For the MTG cards, Pokémon, Yu-Gi-Oh!, you know. Force of Wills and Final Fantasies and I guess Flesh and Blood, Argent Sagas, Exodus', and Cardfight!! Vanguards. You know it really exposes the risk of going all-in into a situation like this because we don't really plan for extreme things like this. It's very difficult for the human brain to really comprehend a very extreme Black Swan event and let me tell you something, this is the KING of all Black Swan events. I mean it's up there with the zombie apocalypse and the end of the world though I'm sure the doomsday prepper people out there are laughing at all this but it really exposes the Phrygian nature of everything. How phrygian everything is.
Yes that is a word I write it on boxes all the time. But seriously everybody it really does show how fragile everything is. It really exposes the dangers of opening up a card store in getting a unit or renting something that's two or three times the space to try to become WPN approved, host tournaments, and go from like a basic store to an advanced or advanced plus Wizards of the Coast store. You know. These are the times that really make you step back and go, "Wow!" I mean is Wizards of the Coast going to step up to the plate? Are they going to bail out all these LGSs and WPN Network stores? Are they just gonna start sending out free product after this to bail them out? Are they gonna adjust prices? I highly doubt it. Should they be required to bail out card stores? Not really it's not their fault either.
Should card stores require or request something special from them to help cushion the blow? Probably, I mean it is a business relationship and If the stores survive and you buy more product which helps Wizards of the Coast. I mean it's a give and take. Every relationship in this world is you know compromise, compensation, and negotiating. I guess If you look at it this way, If you have a card store that costs $2,000 a month rent in a shopping center (my particular Alpha Investment store is $150 month rent) then you have to pay a couple thousand dollars a month just to have that empty space. Not for inventory. Not for warehouse. Not for storage but just to have it. In times like this when things don't function smoothly and easily then that extra overhead will destroy you. It will crush you.
That's kind of what's happening. In 2017 about a third or 25-35% (so between a quarter and a third) of all card stores went out of business. During that time so many stores shut down with all the Masters set reprints and I think this is going to be a similar situation. Distributors have already expressed concerns with me about some stores that are on credit 30 day terms that are not going to be able to pay. I guess the point of this video is to reflect on everything in the last 5 years. In my opinion the turning point still remains. I'll never forget when I woke up that one day and Wizards of the Coast announced that they were going to start sending pallets of sealed product to Amazon to sell direct on Amazon and then they remove the MSRP and then of course Amazon essentially became the MSRP.
You know when they sell boxes for $90-95 so that's what the boxes are worth that release and of course with the stores almost paying $80 and some stores paying $85 a box you know at this point in time why would anybody start a new MTG store at this point? I'm trying to come up with reasons like If somebody sat down in front of me right now and said, "Rudy I want you to convince this person to start an LGS". What would you say? How would you do that? I don't think there's any real argument for me to be able to convince somebody to do that now. I just don't think an argument exists to be able to convince somebody to take that path because anyone with any good common or higher level even basic financial literacy is going to realize that it's all about risk / reward, the teeter-totter, and the amount of potential reward is nowhere NEAR the massive amount of risk that has to be incurred to go down this path.
With the water level in the ocean dropping now and all the ships going down with it and we're all seeing whose exposed and whose gonna make it or not it really reinforces that it's just a dying business model. I still wouldn't be doing this If it wasn't for YouTube and all my Patreon supporters, the videos, my eBay sales, and the combination of everything is what makes me successful at it and what makes some other stores out there successful at it. But you have to be able to do the whole package just to make it work Post - Corona Crash 2020. There's just nothing else out there to make this stuff work. I don't know If and/or how there can be a full recovery back to before all this happened because I feel like it's almost a permanent change.
Even when everything stabilizes in the coming months and years I don't think it's ever going to go back to pre 2020 culture and levels. I think we're at a permanent change in culture. It's almost like the handshake when you meet people can almost become like a dying breed. I feel like culture itself is going to be shifted from an event of this caliber. I guess it just really exposes how much on the backs of Wizards of the Coast pumping Secret Lair drops, Amazon sales, no MSRP, and now selling Fetchlands direct to the public now. We knew Fetches were never going to be in a Standard product again but I didn't think it was going to get this crazy.
We got to look at the facts and the facts are that's the direction that they want to take MTG. Now it doesn't mean that the opportunity for collecting or investing in MTG cards is dead. I don't agree with that. I think many strong will survive and I think a lot of very weak financial people are just going to get completely clobbered. If I was in college right now and I was still waiting tables I mean what would I do? I guess it would be just sitting at home sorting MTG cards or playing digital MTG Arena I guess I don't know. The entire service industry is literally shut off right now. It's the same thing with card stores, If you relied on FNM and the WPN store then how on Earth are you going to make it?
If you have five to ten thousand dollar a month overhead then I just don't know what to say. What are you going to do sell extra MTG cards? You sell boxes online and make a dollar a box? It's not enough. You'd have to sell 20,000 boxes at $1 apiece to pay your rent and overhead. What are you going to do, pay your employees? I think the conversation is important and I think it's important for everybody to recognize that going through an actual Black Swan event and how Wizards of the Coast, how the WPN, how MTG prices which are actually holding up surprisingly well, or being a business owner is just not a good idea anymore. In post - 2020 I don't see how that would be any better. So hope you guys learned something.
Quote from WarMachinePrime »You won't have any need for your paper cards then. You can ship them to me, since they're worthless and all that.
Quote from SavannahLion »How is that a R.I.P.?