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setting up shop for games

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I''m looking into an e-commerce opportunity using my parents business license (will be scanned and easily available to view when shop opens) while I apply for my own. I''m definitly going with one line of products (non computer related) but am also curious about selling games. The basic idea is that if someone wants to sell a game they let me know some basic information including how much they want to sell it for. What they want to sell it for is their profit. I add a dollar or two to the price (my profit) and charge shipping (Priority mail 3.50 for up to one pound). They ship the product. Payments are done through Pay Pal for now (already have a business account). I can also use VeriSign. I''m wondering if that''s a good business model or if anyone has any suggestions. Ben http://therabbithole.redback.inficad.com

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Guest Anonymous Poster
Some questions:
Who would have responsibility for Customer / tech support? Hosting patches, etc?

Second, what do you offer to a game developer that makes it worth the $1-2 fee? Marketing? PR work? Why wouldn''t a game developer just make their own website with a paypal account? I wouldn''t expect a dollar or two to buy a lot, but I don''t see the benefit.

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Customer support...depends on the issue. Any business issues I''ll handle. Any specific game related questions will be forwarded to the author.

Tech support for any given game...the author. Unless I became familiar with the game I wouldn''t really be able to help people get it to work if there was a problem. I''d be more than happy to host FAQs and manuals on the site for any given game. I can also host patches. I have 40gigs (upgradable as needed) of server space to work with. It''s not much of an issue.

Basically, I can legally cover the business end of it which most people can''t. Anyone can do what I''m doing. It''s just a matter of do they want to.

I also have an established web-site. I plug it all the time to people and I would expect that the authors pass the word around as well. It''s to their advantage. My fee covers the basic operations of the site including the PayPal fee (7%) and state tax (8%) I get to file each month.

Say someone wants to sell a game for $20. They will get that $20 plus $3.50 for shipping. To break even I''d have to charge $27.03 at the site. I''d charge $30 in order to make a bit of profit. Any kind of discount that the author wishes to give will come out of their $20 (or whatever they charge).

The benefit is having another outlet to sell your game with zero risk. Even if an author decides to start their own online outlet, my shop is still an option. I''d work to match prices in that case.

It''s intended for people who want to get their game on the market to see what it can pull in but don''t have the investment to go all out at this time. If you want the fancy box and mastered CDs, this isn''t your place.

If you have any other questions or need something clarified let me know. I''m working to get this up and running by August 1st. The site is already created and on-line. It''s just a matter of putting in inventory and posting the link on the main page.

Ben
http://therabbithole.redback.inficad.com

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Sounds like you''re trying to compete with Garage Games (www.garagegames.com).

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Actually, he''s not trying compete with anyone. He''s just offering a service because he can. He is doing the prep work for himself, anyway, and he can offer the service to others at little or no cost to himself. It''s basically a "co-op" setup. He''s not looking to get rich off of the deal, just to help out other developers who might not be willing or able to go through the trouble of doing the same thing for themselves.

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Exactly.

I''ll be working on writing up the forms and whatnot this week. A public demo site will be up probably by this weekend.

Ben
http://therabbithole.redback.inficad.com

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Why shouldn''t I be?

If you start ragging on me like you do Crystal Interactive I''m going to ignore you. This is something I am going to do and I would like input on making it work as best as is possible given the resources I have.

I''ll be more than happy to answer your questions as long as you keep them civil, direct and unassuming.

Ben
http://therabbithole.redback.inficad.com

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Guest Anonymous Poster
whatever man....

you''re an amateur just like all the rest....
Crystal Interactive, Garage Games, GarageDeveloper International,
Xtreme Games, Shrapnel Games and all the rest who claim to care about independent game programmers.

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I think all those are worth it just for the publicity, say you have a game and you sell through them, but you still sell on your own, you sell to the other sellers for the $20 a piece you charge at your site, they will have to charge more than you do or no profit is made, most customers will buy from you, and eigther way you get the $20, and when someone makes a search on a web search engine for games, they will get your URL + the urls of the other sellers that sell your game, heck! they might get the sellers URL and not yours.

my 2 cents.

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If you afford the money to go through a major label go for it. I''m offering a no cost solution to those who can''t.

Legally you can''t sell from your own site without a business license. If you were to force me to charge more than you, I''d have to drop you from my inventory. I''m here to help the author out, not compete with them. You can buy direct from ID Software but you''ll still pay retail.

Everything I charge over your cost minus a couple bucks is the tax and fees you''re trying to avoid. Legally, you could only undersell me by a couple dollars. And like I said, I''m not going to fight you over it. Check the FAQ, it''s all laid out.

I''m here to help people out, not compete with them.

Ben
http://therabbithole.redback.inficad.com

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yes, Legally I cant sell without a bussines license according to USA laws, I am in Costa Rica, what stops me from doing so? I can sell what I want to who I want where I want, being a small bussines even the government has social programs to help me export and make more money for my country.
the US postal service has signed an agreement with our postal system so sending packages to USA costs the same from here than doing it from inside USA.

of course if you buy me a whole 100 lot of disks, then the price a piece goes down like say fom $20 to $15, maybe even less because it will cost me $5 a piece to get them produced (nice cd booklet and some 2 color design on the cd Face), if I sell them all 100 at once for $10 a piece is an instant profit of $500, as opposed to maybe keep the lot in your room and lose $500 or getting $1500 profit in payments of $20 a day, a week, a month, a year?

--------------------------------------------------------
"When you say 'I wrote a program that crashed Windows',
people just stare at you blankly and say
'Hey, I got those with the system, *for free*'."

Linus Torvalds.

Edited by - kwizatz on July 18, 2001 1:19:06 PM

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You''re lucky then. But I still wouldn''t be able to help you out if you force me to overcharge people. This is probably why most distributers require exclusive rights. I don''t but I do require fair pricing. You can sell where ever you would like as long as you don''t purposly undercut me to try to damage my name.

I don''t keep up on foreign laws so I don''t know what kinds of expenses you will have to pay if any.

Ben
http://therabbithole.redback.inficad.com

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You should read my FAQ. I don''t store inventory and the production costs come out of the author price. It''s up to you to adjust your price to cover production.

I will burn CDs and print documentation for you but whatever cost it is will come out of the author price. I figure at least $1 for a good CD-R and jewel case and $1.00 for full color copies of documentation at Kinko''s. I can do black and white copies at no cost. I buy CD-Rs in bulk but I don''t make copies of anything until needed. I can get 50 Sony CD-Rs for less than $20. That alone would significantly cut your costs.

You will get paid at the time of every sale, just like you would if you sold the game yourself.

Ben
http://therabbithole.redback.inficad.com/teenpro/


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Positivity people! KalvinB''s not trying to establish an empire here - he''s not promising massive publicity or demanding exclusive rights. He''s providing an infrastructure for those who don''t have their own (or don''t want to bother) and community-based advertising. Say I buy one game from his site; I''ll probably see tons of other games there as well - all at bargain prices. Given a couple of demos, trailers, screenshots... I might be convinced to buy another.

It''s sound business logic. And he''s been a member of the community for a good while, so isn''t some "new face" trying to "rip people off" (though I can''t see how anybody can rip you off with this scheme - except by not forwarding returns). This idea is a proven one, that "insider" and "word of mouth" marketing can amount to a potent revenue base.

At the very least critique (a constructive activity) rather than criddicizin'' (akin to defamation). Word!

Cha-ching!

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I see then, but say I want to do bussines with you, I will have my own online store (I will when I finish my product), I can sell you 100 CD''s for $15 each (I would take care of shipping costs), I can make a net profit of $1000 from selling to you, so I am able to invest $500 on making another 100 disks that I would keep on my store, or sell to another reseller, I would sell for $20 + S & H in my store, you can sell the copies you bought from me at $20 + S & H so the $5 is your profit and you sell for the same price, would you agree in such a deal? the risk of not selling some or all (very bad case) the merchandise is passed on to you. The problem to me would be that if you buy 10 units, or 5 or such a small quantity I might as well sell those 5 or 10 and get the whole $20 bucks in my pocket.

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Guest Anonymous Poster
This business model does have it''s place. You can never have too many distrubtion points. But you should be careful on stating the author won''t have to worry about business license or sales tax.

I don''t see that it matters wether he sells to your site or to end users wether he needs a business license or not. For sure the author will have to pay income tax. If the author is full time working for himself he will need a tax id for income tax and self employment tax. Possibly if they are still working full time for some one else then they don''t need to pay self employment tax and just add the income to the 1040.

Sales tax is different for every state, and in some states they require the tax to be paid to shiping point not the purchase point.

I guess the moral is that if you''re going to go into business selling your own software wether it is to the end user or a distributor you need to be aware of your own tax and legal requirements. The "I didn''t know" defense just doesn''t work with the IRS.

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I still dont have to worry about the IRS, I am not a US citizen, I am truly free.

hmmm actualy I think at some point I have to pay sales tax, oh well, when the time comes I will.

Edited by - kwizatz on July 18, 2001 2:53:22 PM

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I can''t preburn CDs or advance your price. I wouldn''t suggest you do either. Until you know your game is going to sell well it''s best to have a burn and print as needed approach.

The idea is to eliminate risk by sucking up the minor increase in cost by not going bulk.

I can give you $1500 in advance for 100 copies or

Buy 100 blank CDs for $40 and give you your profit as the orders come in which amounts to zero risk on both ends. If your game doesn''t sell 100 copies quickly, I have extra CDs to use for other people''s games or for my own personal use.

I''m going for zero risk.

Ben
http://therabbithole.redback.inficad.com





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sounds good, keep me informed, I have a deadline to have something working by february next year, so I can''t say I will be one of your first users, but the deal of getting the $1500 sounds good, burning as needed I dont like as much, because of my copyright, and well, you could just sell 100 copies and report only 75 to me, and the user might feel ripped off when he gets a home burned CD, and might get the feeling that since he got a home burned cd, he can make copies and give it to their friends, yes, yes, I know this is for people that dont want to mess with marketing, or dont have the money, etc, dont need to remind me, but I am not rich eigher, I would pay the initial $500 for producing the CD''s out of my pocket, from the money I make from my actual job, I dont think that someone that does get something finished is unable do such an investment, maybe it is just me.

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I could sell 100 and report only 75 to you...if I do the shipping and if I was dishonest. This is why I encourage the authors to handle production and shipping. That way, every order must go through them.

If you''re doing professional burning, that''s fine. It''s up to you to produce the CDs how you want and to account for the cost. If you need a loan for the cost of production, I would have to refer you to the bank. I don''t have the cash flow to advance any amounts of money. I''m just matching you with buyers and handling the business end of it.

I''ll have more exact numbers on everything within a month.

http://therabbithole.redback.inficad.com/teenpro/10001.jpg

That''s a shot of the jewel case used for Cradle Quest 1 & 2. The green haze is from the green screen I used to remove any background. I''ll be retaking the shot later just using a white background.

Ben

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wooohooo, wait a secound, I am not saying you are not honest, I am only saying that it could happen if you burn and sell the product, if you reffer people to me to do the shipping and handling, you could just start a game site with reviews of all the games there are, refer people to the sites, and get revenue from advertising (as banners as well as directly by the authors).
I am not asking you to do any cash advance, nor a loan, is just a sale transaction, you give me te money I give you the discs as simple as that, what you do with the discs after that is your problem, you can give em for free and promote the game, for all I care I have the money in my pocket for the sale of everyone and each of those discs and I can re-invest on more discs, when you run short of inventory you give me a call, and I ship more disks to you, is how the market works.

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About being "ripped off" there''s simply an indicator which are the lies, I didn''t see any contradiction nor any attempt to make people believe that he had a huge safe company from KalvinB or similar things so it seems to me that there are no lies in his case, there are other cases in which someone tells me that a game sold a millon copies and denies that in public or says in public that Cliffsky''s Star Miner sold 150,000 copies and Cliffsky denies that, all those are cases of real lies, or the guy of pcgamesforyou.com saying so many things that simply common sense tells you that it''s just not realistic.
Lies make the difference between honest business or people who want to rip off others. And as I said KalvinB seems to be lie-free by now so if that doesn''t change and no one says he was ripped off by him we can consider that is an honest business.

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Nicole Poster:

I paid attention during the CI discussions. I appreciate the fact you see me as honest from what I''m posting as I know you''re quite good at investigating things. I have a good reputation and I am not willing to risk it for anything.

From my Author FAQ
9. What kind of sales can I expect?

That depends on a lot of factors. I will keep numbers on how many of each game is sold which I will make available to the author of the game. I can’t guarantee or predict how many of any game will sell. I will never release the sales numbers of any game to anyone who is not the author of that game. I will never promote Teen Productions based on the sales numbers of any game. I will keep track of how many people visit Teen Productions and how many total sales there are. How well you are doing can be based off of those numbers.

-----
Kwizatz:

I will never advance money to an author. Simple rule. So don''t ask. It creates a risk and that''s not what my business is about. It''s zero risk for both sides. Any author who wishes to add risk to my side will not be able to sell their product at my site. This is a rule that will never bend.

Already covered dishonesty.

As I said, I''m working on the FAQ still and will have forms and proceedures written up before the site is launched. No author should be in doubt as to what''s going on at any point. I suggest you take the time to read the FAQ as it addresses many of the points you are bringing up.

You will never see ads at my site for any 3rd parties.

You will never see a review of any game especially the ones I sell other than than what''s written by the author.

There are plenty of business opportunities out there, this is the one I''ve chosen to pursue.

Ben
http://therabbithole.redback.inficad.com

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I assume that I''m the guy from pcgamesforyou.com. I will gladly accept your criticism if you could back it up with some facts. I''m sure I haven''t made any false promises and I haven''t told any lies. However, I''d be interested to hear what it is that I said that isn''t realistic.

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