Selling Video Games to Wholesalers and Retailers

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This is Part 4 of our guide How to Sell Wholesale Video Games. In the previous chapters we have looked at how to buy video games from wholesalers. This included finding proper wholesalers, opening accounts with them, and then trying to get better prices from them.

What if we want not only to buy from wholesalers but also to sell to them?

The reason you, as a game business, buy games is to resell them and make profit. You may sell games to the end users, i.e. gamers, or if you are a wholesale video game trader, once you buy stock, you sell it to other traders. As a wholesaler you sell your stock to other game companies, either to retailers or to other wholesalers. This is a so called business-to-business (B2B) trade.

The idea of selling to wholesalers may seem a bit challenging for a small company which doesn’t turn over much stock. But it is quite realistic, even for a small company, to be able to sell to other game companies, retailers and wholesalers. In fact significant number of small companies manage to sell to larger wholesalers every now and then. Some of small wholesalers sell to large companies even on permanent basis.

In reality it is not that difficult as it may seem. Significant part of the success is in your buying ability, to find and stock products with good demand and for good prices. If you get good stock with relevant prices, selling it becomes more of a technique. Let’s have a look at the major components necessary for successful selling.

Stock list

First of all you need to have a stock list, which accurately reflects what items you have in stock, in what quantities, and their current prices. You have to send your stock list to your customers every day, preferably in the morning, so that they can send you their orders during the day.

The stock list needs to be updated every day, in order to reflect any changes that may have happened in the previous day after the previous stock list was sent out. This includes new arrivals of stock, changes in the quantities of the existing stock due to some stock being sold, with some of the items may be even getting out of stock. The changes in the stock list would also reflect any changes in the prices that you may be willing to make.
The easiest and most convenient is to make a stock list in an Excel sheet. A sample for Excel stock list is shown below.

As you can see it’s quite simple. The first column is SKU (Stock Keeping Unit), an ID number that you give your products for easy reference. The second column is item name including the platform. The third is the type, i.e. the game platform. The fourth column shows the quantity of the stock available. Note that this number is not necessarily the quantity of the item that you keep in the warehouse, if some of the stock is already reserved, then less quantity is available for sale. For example, if you have 24 pcs of GTA 5 (PS4) in your warehouse but 22 pcs are already reserved by your customers, then your stock list should show only 2pcs in stock, because only 2 pcs are available for sale. The rest is already sold even though they are still physically in your warehouse. The stock list needs to indicate the available quantity not the total physical quantity stored.

The fifth column indicates the wholesale price. You may remember from the previous chapters that wholesale prices may have banding. If you would like to have price banding for your customers, then you will need to prepare several versions of stock lists, one for each banding, every day.

If you sell in more than one country, you may have to deal with multiple currencies. You can include prices in several currencies in the same stock list. For example in the sample above, the next column to the Price USD may include prices in other currency, for example in GBP, or Euro. For simplicity we have not included these additional columns above, but you can make your stock list with multiple currencies. USD, GBP, and Euro are usually enough to cover most of the countries.

Of course your stock list will probably include more items than the two items in the example above, however the number of columns will probably be similar. You may want to add more columns with information that may be useful for your customers, for example another extra column may include languages of the game if necessary, and any other.

Daily emails

Stock lists should be sent to your customers by email every day. The Excel files can be attached to emails. In addition some product highlights may be added to the body of the email. For example some interesting arrivals, or items with price reduction, or some bundles including few games with special price can be included in the email body. Pictures of the products may also be included in the email body for better visual reference.

In order to make sending emails easier, you may include different customers in different groups. For example you can group customers by price band. It is quite easy to organize in Microsoft Outlook if you use Windows or iOS. Some other mail programs have grouping feature too.

For example if there are four price bands, you may group your customers in four groups based on their price band, open four groups in Outlook and prepare four excel files of stock lists with different price band each. Then you attach each stock list in a separate email and send corresponding emails to each of the groups. In this way, you make sure that each customer receives stock list with their appropriate price band.

Your daily emails are very convenient also for your customers to send you orders. They can just reply to your daily email and include their order.

It is very important to send daily emails every day. That’s also a way to remind about yourselves to your customers. As much as it may seem outdated, the email marketing still remains one of the most effective ways of direct marketing. If you don’t email your customers regularly, they will just forget about you, whereas your competitor, who emails them regularly, will get orders.

Important: Remember to include your customers email addressed to the ‘Bcc’ field when you send them mass emails, not in ‘To’ field, otherwise they will be able to see each other names and email addresses. This will create two major problems. First you would violate their privacy by publicly showing their addresses to others. Second, more importantly, you don’t want your competitors and your customers to learn about each other, otherwise they may start trading directly, eliminating you from the middle.

Phone calls

Phone is used for selling to different extend in different countries. It is very common to use phone calls for trading in English-speaking countries. Moreover, a new buyer is unlikely to buy proper quantities from you before speaking to you in person, at least once. Some buyers would speak to you in the beginning to get acquainted, some buyers may prefer to always make buying by phone. It seems a bit strange in our time, when the communication means are so developed and diverse. In addition to emails, which seem more convenient for sending orders than phone, many websites have online ordering forms. But with all these, phone communication still remains one of the most common and effective, if not the most effective way of communication in trade.

Building your sales

Selling wholesale video games is business-to-business trade, with a limited number of business customers, who periodically come back to the seller for buying more. This makes it very important to keep your customers happy. Of course, keeping customers happy is important also in retail trade when selling to numerous customers. But in wholesale trade where you may have only a handful of customers, making your customers happy becomes of vital importance. Many business buyers purchase video games on daily basis, to keep their stock levels. Such customers can buy a lot, and can bring a lot of business to you company. For this to happen, it is important to build good relationship with your customers.

Building relationship with customers is a long process requiring significant effort from your part. It is necessary to understand your customers, and what makes them buy from you, and what you, as a seller, can do so that they continue buying or buy even more.

One thing to always keep in mind is that buyers do not look for the cheapest price, they look for the best value. For example, if a supplier offers the cheapest prices but is not reliable, i.e., may send a shipment late or not send at all, then buyers most probably would prefer not to buy from such a supplier even though they are the cheapest. On the other hand, if you provide the best quality service, but are insanely expensive, then the buyer will not be able to make a profit, and can’t buy, no matter how wonderfully pleasant it is to buy from you.

The buyers are looking for a good balance of price and quality, i.e. the best value for their money. If a buyer starts periodically buying from you, with the time the value may increases, because with the time, you, as the seller, learn the buyers preferences better, and are able to provide even better service and better value.

Buyers are humans like all of us, they would like to save not only their money but also to save their time and their effort. Which means that if they find a supplier who is more or less good for them, they would stick to that supplier. Until, of course, that supplier starts making mistakes, provide worse service, increases prices unreasonably, etc. In other words if the supplier loses value for the buyer. If another supplier can provide better value, the buyer would probably buy from them instead.

It is important to try to learn what your customer needs and to memorize it. You might want even to write down in a notebook, for some customers, in order to remember what they are looking for. This may include, for example, some games that they would like that are not in stock at the moment. Later, when that game arrives and appears in your stock, it is a good reason to give your customer a phone call and say, “Hey, remember, you were asking about this game the other day? We got that in stock now! Would you like to order it?”

This gives two major benefits. First of all you will get a sale, because the customer most probably would order that game since you bothered to call him specifically for that. Not only that but more importantly, the customer would be impressed and will appreciate your call and the fact that you remembered what he wanted and came back to him. That’s a little trick to gain a good credit, and another block in building good relationship with your customer.

Building relationship with the customer happens on various levels, and might also include personal level. Buyers are people and of course they appreciate good, friendly treatment, and might want to engage in some small talk about the weather or the holiday they had recently been, before they start making an order. Others may be more to the point and prefer not to spend time on unnecessary conversations.

Constant search for new customers

Looking for customers is a permanent process. Even the most successful sales people who have large customer base of efficient buyers, never stop looking for new customers. In fact, it’s because they always spend some time on daily basis for looking for new customers, they are successful and have a good quality customer base. And they constantly improve it. This has been already indicated in Chapter 2, for the case of buyers, that the search for suppliers is an ongoing process. Obviously the same applies for the customers. Search for customers may take significant portion of time during the day, especially at low season.

Improving the quality of the customers’ list

Every seller tries to increase their customer base in order to increase sales. There is however a limit of how many accounts can be effectively managed by a single sales person. Because of this, sales reach certain level and flat out, i.e. cannot be increased any more. They way to overcome this is to improve the quality of the customer base. This is achieved by getting rid of inefficient customers, and acquiring new, better customers. Inefficient customers are those who take a lot of time from sales person but do not buy much. By substituting less efficient customers the sales person can increase sales.

Less buying customers can be for example passed to other sales people if a seller works in a team, for example in the sales team of a wholesale distributor. There might be other sales people who might be glad to get any, even not very efficient customers, due to the fact that they might be new employees who are still building their customer base, are not very experienced, or not very skilled in finding new customers. By substituting customers a successful sales person can further increase sales.

Increasing average order

Sales person should also try to eventually increase the order amount by each of their accounts. Buyers normally should be well informed about the product, but in reality it’s not always the case. During sales if seller provides valuable information, it can bring additional sales. For example, seller can proactively offer best-selling items that currently sell very well. It is good to be able to group products by certain criteria. For example if the seller notices that a buyer purchases games with low age limit, i.e. for children, the seller may offer other similar games for children, and there is a good chance that the buyer may want to purchase them too. Another grouping may be sports games, car racing titles, or other.

Another big group or products are non-game items, such as accessories, merchandise, figurines, etc. Many buyers don’t even realise the potential off such items. Good salesman can educate buyers of possibilities of previously omitted products.

Very good potential in increasing sales is to bundle different items. This requires good product knowledge. It’s good if the items are related but it is not always a requirement. For example back catalog non-expensive items may be bundled into 2 – 3 game offers with attractive prices. If the buyer buys them, they can later use the same bundles for reselling to their customers, for example the retail customers. Games may be also bundles with accessories, for example controllers. Sometimes the opposite also happens, bundles get unbundled, for example console plus game bundles may be unbundled and sold separately. A lot of these combinations on bundling/unbundling emerge during conversations with the buyer. By discussing various options, seller can work out some offers that will be accepted by the buyer. That is why speaking by phone to the customers is so important. If the communication between buyer and seller was carried only by email, some options may never get even mentioned and realized.

Seasonality and planning the year

Video game trade has high seasonality. The majority of trade happens during couple of months before Christmas. Months of October, November, and first-half of December provide majority of sales throughout the year. Major triple-A releases are also scheduled around the same time. Things become more quiet on second half of December till mid-January. The second half of January and February become active again and may provide some good sales. Things become really quiet starting from March – April and onward. Late Spring and especially Summer are the low sales seasons. Sales eventually pick up again starting from September.

This affects on how you should schedule your work throughout the year. In the peak-season, most of the time is spent on getting orders and processing them, i.e. the account management. There is no much time left on anything else in that period. This is of course if you have good customer base.

Starting from March, there are not too many orders, and the majority of time during the day should be spent on acquiring new customers. Researching, sending emails, speaking with potential customers, with the objective of gaining new accounts, which will provide you with good sales at the peak-season. During the low season that’s also the time you want to take your annual leave and settle any other non-work related matters.

Good practice, in any season, is to divide the day on both acquiring new business and managing existing accounts. The percentage of the time spent on each of these activities would vary depending on the season, as described above.

Your daily routine as a sales person will then include all of these activities: preparing the stock lists for each price band, sending out emails with the stock lists, processing the orders that arrived by email overnight and sending them to the accounting and the warehouse, plus spending some time also to new business development, i.e., finding new customers. This list includes the minimum that any sales people should do at work every day in order to be successful.

Conclusion

To summarise, good selling practice should include:

• Keep stock lists, always know what you have in stock so that you know what you can sell.
• Send emails with your stock lists to all your customers every day.
• Use phone for calling your customers as much as you can. Good practice is to call each customer at least monthly. If possible even weekly.
• Build good relationship with customers. Show individual approach. Remember what they are looking for and proactively offer it. Try to provide good value to your customers.
• Constantly search for new customers and improve your customer base, i.e. substitute low sales customers with new, higher sales ones.
• Gradually increase average order of each of your customers. Try to bundle products to make them more attractive for your customer.
• Keep in mind the high seasonality of video game sales, and plan your year accordingly.

Previous Chapters

• Video Game Wholesalers – Part 1 – How to find them and create an account with them
• Part 2 – Prices that You will Get
• Part 3 – New Releases vs. Back Catalogue Games