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Progress into my very first start-up

by Ken T.
11 replies
Hi everyone. Time to come out of the woodwork Lengthy post ahead, I really appreciate your advice and time going through it.

I've been lurking the forum for a (long) while, but have put off posting, until now.

A short introduction as to who I am:
I'm 29, Belgian and a massive nerd. I say this with pride, but no zits, with contact lenses and the ability to score a hot girlfriend. You get my point I'm an IT consultant by day and plan to be an entrepreneur by night. The reason I bring up the nerd part, is because a good 20 years ago, I was gifted a Nintendo Gameboy. You know, those big, grey brick-like hand-held gaming devices. I bring up the girlfriend, because when we moved in together, more than a year ago, I came across my old unit, in my parents attic. I was overwhelmed with nostalgia, I had presumed my own Gameboy long lost in a yard-sale or something.

I dusted it off, cleaned it from the outside and then came to the conclusion I needed a special screwdriver to open up the unit. I'm curious like that. The device still worked, but there was something amiss with the display. After some research, I found the special screwdriver online and... well, long story short: more than a year later, today, I've repaired, cleaned, restored, fixed, modified, spray-painted and upgraded a few dozen Gameboys.

This started snowballing, into the idea, which brings me to you guys.

Short term goal:
Sell refurbished Gameboys. I currently know all the common defects of a Gameboy and how to fix them. I have a fair amount of original and aftermarket spare-parts. I have ordered from, communicated with and tested several vendors from across the globe, for spare-parts or components to upgrade a standard Gameboy with several items.
There's already a few players in this field, but they either target a special niche (music crowd, people hook up old electronics to turntables, to make music from it, aka chiptunes or 8bit music), or they just sell components.
My perspective, on a short term, is to hit that nostalgia string: offer a fully tested, functional, clean and perhaps upgraded Gameboy, along with a few classic games (Tetris, Super Mario Land, etc.). I want my customers to receive their package, unwrap their Gameboy, pop in the batteries and get transported back to the nineties with a wall-to-wall grin on their face.

Long-term goal:
Sell not only refurbished Gameboys, but also upgraded Gameboys. Upgraded means a backlit screen, recheargeable li-on battery with USB connector, better sound. Same approach as above: Offer the unit battle-ready.

Long term dream:
Get a 3d printer, print my own components. Offer 3d print services to everyone. Create a creative lab where people can refurbish or upgrade the items through tools and services offered by me. Pardon the short the description, I feel this digresses from my post but I'd be happy to elaborate if anyone would like me to.

My audience/niche:
This is still a bit of a struggle. I've recognized two audiences so far:
- The not-so-nerdy-people, aka, the "Nostalgia Crowd":
they're in it for a cheap, but near-mint Gameboy and the desire to beat that one boss in Super Mario Land 2: The 6 golden Coins.
- The nerdy, "ooh-shiny buttons!" people: aka, the "Nerd crowd":
They're in it for the complete experience. They probably own at least one retro gaming console and want something more. The backlight screen, the recheargeable battery, the emulator, to play more than just Gameboy games, etc.

You'd think this is a male-dominated crowd, but I've had the most enthusiastic responses from women. These people are in their twenties, early thirties. Same age as me and probably grew up with Gameboys... but are now provided with capital. Still, I realize, it's not a mainstream crowd, however, there's a strong Belgian/Dutch retro gaming community with conventions, facebook groups, online communities, etc.

My competitors:
Globally: there's a few, but none offer the full experience, by adding a game cartridge along with the sale. What's the point of buying a Gameboy for nostalgia's sake, if you have to go through the bother of finding games for it, afterwards?
Locally: virtually none. Locally is more important, I feel, due to shipping costs and time.

Risks:
Somewhat low.
Costs: Most costs go into buying aftermarket components, which cost between € 0,40 to € 12.
Inventory: Keeping up with inventory is another thing: I'm entirely dependent on buying second-hand Gameboys. I specifically hunt for lots or broken devices, since most fixes are very easy, if you do the research and have the necessary tools.
Buyers: Don't have enough data or experience for any foresight on this

Turnover vs. profits:
For JUST a refurbished unit:

Out of all units I've bought, I pay max. € 10 per unit.
The very few local sellers I found, sell Gameboys, non-refurbished, without a game for € 25 to € 35. Keep in mind that these have scratched screens, missing port covers, leaked battery acid and are not tested for common defects.
Components, on average, cost me about € 7 per unit. (new scratch-free screen, buttons, battery contacts, etc.)
Washing (detergent, vinegar, rubbing alcohol, glue remover, hydrogen peroxide and other chemicals to restore their color): € 3 per unit.
Repairing: Varies way too much per unit to tell. Worst case scenario: € 10 for an entire circuit board.

I'm not counting work hours, as I just do this for fun. I get a kick out of washing and scrubbing a derelict unit and getting it fully functional again.

This brings me to 10 + 7 + 3 + 10 = € 30.
Add in a classic game, not a worthless game = € 7
To overdeliver, I usually surprise buyers by adding a second game, usually one of several double games I have = € 3
Shipping + packaging = € 6

This brings me to grand total of € 30 for the unit, € 10 for the games and € 6 for shipping and packaging = € 46.

In order to evolve and get some profit, I'm setting my sales price to € 60, including shipping.

How far I've gotten:
I've set up my own website, designed my own logo's, banners and set up my own facebook page. These were launched the 27th of March, 2015. Not too long ago. Because I don't have the funds to go legitimate on Belgian company terms, I've sold 6 units through second hand facebook groups. Naturally, I have every intention on getting a registered company. I have my day-job, that I love and currently do not have reason to quit.

My website currently does not have a webshop, for legal reasons, I'd need a registered company first. That's why I'm using second-hand channels, which is perfectly fine, but cumbersome. Woo-commerce is installed and ready to go. I just need to add the buttons to my menu.

I don't want to keep my knowledge to myself, so I share refurbishment guides on my website.

What I want, of course, is to grab an opportunity if it presents itself. A year ago, I'd be ashamed to admit this, but now I realize I have no reason to: I want to monetize this. This is a passion, I've done my homework and I'm learning every day, but I'm still new to making a business out of this.

Why am I posting this?
General advice, please! Pretty please. Very pretty please. I'm too young and inexperienced and currently feel like I'm on a crossroads, can't lose too much time, but have to decide on how to go forward. I believe that in order to equip myself best for this, is to ask people that have gone down the road I'm thinking of travelling.

OR, if you feel like this venture is a dead-end, please tell me and tell me why. My girlfriend and I are making ends meet, but we wouldn't say no to a slightly more comfortable financial situation while doing something I love.

I don't want to blatantly self-promote, but my website and facebook can be found through my signature. Sorry if this breaks any rules, but I've seen people post this before. Please notify me if I'm doing anything wrong.

Also, apologies for any errors, English isn't my native language, although I adore English. Feel free to correct me if need be.

Thanks for working through this lengthy post and please know that I really, REALLY appreciate any and all feedback!
#progress #startup
  • Profile picture of the author Path Theory
    Ken,

    You're a step ahead of a lot of people on this forum, with a solid, well thought out plan, and a proven method.

    I think you've done your research well, and you know where you want to be. There's only a few things I can think of to help you.

    You need to get your costs down. As it sits, 130% ROI isn't the worst, but that's not factoring in your own time. You need to try and buy the components in larger quantities. You need to get creative with how you find the gameboys, and try to find them cheaper. Call thrift stores in your area, or all around your country if you can convince them to ship it to you. Don't be afraid to make offers on larger quantities, even when dealing with local shops.

    There's more than enough potential customers, so I wouldn't be worried about that. The good thing is, most of these people don't even realize they want what you're selling until you tell them. That's what you need to start doing - Get paid ads out there on FB and social media. You could start advertising from your fb page tomorrow.
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  • Profile picture of the author mirko76
    Your plan only covers the variable costs, and I think 14 € profit per unit may be a little slim for the work involved.
    As a rule of thumb, you will need to make 3000 € in profit to make a living. This is what we say in Germany, Belgium should be close to it. Sounds like a lot, but you have to cover taxes, insurances. etc.
    So you would need to sell more than 200 units a month. For every unit you have to repair it, do the marketing (i.e put it on sale on whatever platform you choose), write the invoices, handle the shipping and all the small stuff one forgets in planning a business. Ask yourself if that's doable.

    Maybe you should get some excel template for business planning. Banks who give small business credits usually have them. Try to fill one out and then decide if it's worth it.
    Btw. I didn't see any mention of VAT in your calculation.
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  • Profile picture of the author ben500
    I think you really need to focus on a top quality website that shows your passion for gameboys. You need to give people a reason to go to you rather than that aution website.

    I have purchased a boxed NES and Megadrive I over the past couple of years, it never even crossed my mind to look in google and search for a small private seller.

    Like the idea though.

    Good luck.
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    • Profile picture of the author Ken T.
      Thank you, everyone!

      Originally Posted by Path Theory View Post

      Ken,

      You're a step ahead of a lot of people on this forum, with a solid, well thought out plan, and a proven method.

      I think you've done your research well, and you know where you want to be. There's only a few things I can think of to help you.

      You need to get your costs down. As it sits, 130% ROI isn't the worst, but that's not factoring in your own time. You need to try and buy the components in larger quantities. You need to get creative with how you find the gameboys, and try to find them cheaper. Call thrift stores in your area, or all around your country if you can convince them to ship it to you. Don't be afraid to make offers on larger quantities, even when dealing with local shops.

      There's more than enough potential customers, so I wouldn't be worried about that. The good thing is, most of these people don't even realize they want what you're selling until you tell them. That's what you need to start doing - Get paid ads out there on FB and social media. You could start advertising from your fb page tomorrow.
      Thank you for the advice (and the praise, that helps)!
      I know the € 14 profit is pretty poor to cover for any overhead and working hours. Above that, I need to be able to use my profit to evolve. If forgot to add in the OP that I'm currently not in the financial position to take any risks. After all, I'm (currently) the only person bringing home the turkey, while my gf and I rent and have our daily expenses.
      Looking at other prices, I feel like € 60 to € 70 is the max. price I can ask for a refurbished unit and a game. There's international resellers that sell a modded unit with a paintjob, backlight screen and buttons for about € 90. Those modifications are a huge increase in value, though.

      I can only deduce I need to offer both. There's people that want a pristine, original unit that is guaranteed to work, whereas there's the other crowd that want the wow factor. It's the wow factor I can profit from.

      I've never had an economy class in my life, but am I correct in the following idea?
      - It's better to focus on a luxury product (modded Gameboy), to get a higher profit
      - This means selling less in quantity, but therefore, also reducing overhead
      - This hinges entirely if there's a demand for this luxury product

      I've also mulled over your suggestion on buying in larger quantities. I've contacted a retro game shop reseller that doesn't live to far from here, to see if we could help each other. I thought it was best to go out and see him and we had a productive, but short meeting.
      He agreed on selling a few of my units on his webshop/retail shop, if I supply the unit to him. Only if there's a sale, will he pay me the price I want. He decides whatever price he wants. My brand name remains attached to the Gameboy. He usually declines units that are in poor shape, but from here on out, he'll supply them to me. We just need to think about which prices we're going to ask.

      The added mutual benefit is that I surf on his customer base and he can expand his range of items. He has a pretty solid and positive customer base and a very professional webshop. I supply him with high grade of Gameboys, including modded ones, which is unseen in our region.
      Even moreso, he often gets requests on repairing units and as much as he'd like to help, he doesn't have the time/skills. I do, so I can jump in and he can increase customer happiness.
      When a customer buys a unit from me, he/she might have an itch for more games, so from my website/facebook, I'll direct them to his shop. With every unit I sell, I add a small "maintenance" guide + thank you note, in which I will also direct them to his shop.

      The only risk I see in this, is that I become too dependent on him, so I let him know that I will continue to sell my units on my own webshop. He had no problem with this.

      Another way to cut costs, is that I'll ask my usual suppliers for bulk discounts. No idea how they will respond to this.

      Would that be a good approach?
      Originally Posted by mirko76 View Post

      Your plan only covers the variable costs, and I think 14 € profit per unit may be a little slim for the work involved.
      As a rule of thumb, you will need to make 3000 € in profit to make a living. This is what we say in Germany, Belgium should be close to it. Sounds like a lot, but you have to cover taxes, insurances. etc.
      So you would need to sell more than 200 units a month. For every unit you have to repair it, do the marketing (i.e put it on sale on whatever platform you choose), write the invoices, handle the shipping and all the small stuff one forgets in planning a business. Ask yourself if that's doable.

      Maybe you should get some excel template for business planning. Banks who give small business credits usually have them. Try to fill one out and then decide if it's worth it.
      Btw. I didn't see any mention of VAT in your calculation.
      I have a full-time job that I don't intend on quitting (in the near future ), but it's good to know that amount of € 3000 euro's is the minimum I need to survive, should I go about on my own. At this point, I'm looking to do my hobby of fixing Gameboys, while getting a profit out of it. Is that OK to admit? I don't want to be naive and say something like "I do this in my spare time and if I get a dime from it, that's OK.", because if I'm spending my time doing this, I end up with an item that I can't do anything with. Might as well sell it.

      Currently, there's no VAT applicable, since I'm selling through second-hand channels. Belgium laws allows this VAT exclusive, until a certain amount/year. Another restriction is that I can't advertise this as if it were a retail/online store.

      Originally Posted by ben500 View Post

      I think you really need to focus on a top quality website that shows your passion for gameboys. You need to give people a reason to go to you rather than that aution website.

      I have purchased a boxed NES and Megadrive I over the past couple of years, it never even crossed my mind to look in google and search for a small private seller.

      Like the idea though.

      Good luck.
      Thanks! Have you checked out the website in my signature? That's what I'm currently building. I'm adding (real) content on a regular basis and I feel happy about where it is now. Any suggestions there? I'd be very thankful about any constructive criticism, I'm not entirely sure about where to go.

      I did, however, take inspiration from your argument:
      ...it never even crossed my mind to look in google and search for a small private seller...
      You see, that's the problem. Out of every two Gameboys I come across, one of two has some sort of problem that needs fixing. When you're out looking for a retro gaming console, you're essentially buying an electronic device that might've been stored in a grimy, musty, dark basement/attic. My units are extensively tested, repaired and thoroughly cleaned. Over time, I've found how I need to clean a Gameboy, so that's squeaky clean ànd doesn't have an odor.
      That's why I posted a small guide on my website and facebook, that tells you how to spot defects or problems in a Gameboy unit. They're the same things that any other collector or reseller look for.
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  • Profile picture of the author Janice Sperry
    Congrats on your efforts so far and the well thought out business plan. As others have mentioned you will have a problem making much money with all the labor involved finding, fixing, shipping, advertising, etc., etc. You might do well branching out by also selling games and other peripherals.

    Here is another idea since most of the people you want to target are also proud nerds. Film everything you do on several of your refurbishings and teach people how to do it. Put a course on Udemy and clean up. A lot of people may want to actually fix one themselves but would happily pay a small fee to get tips, sources for parts and shortcuts from an expert.
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  • Profile picture of the author mirko76
    Okay, now I understand a little more about your situation. My Idea would be as follows:

    - make your repairing a way to build authority in your Nostalgia and/or Nerd crowd
    - build a list, and engage with them with usefull stuff (minor repair tutorials come to my mind)
    - find out what 3d-printed products (or services) they want
    - if you're ready, launch your 3d-business

    This is of course my personal opinion. But whatever you do, I wish you the best of luck. It seems to me that you really want to turn your passion into a business. And to me that seems very promising in your case.
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  • Profile picture of the author bobert8590
    I reviewed your post and just wanted to say GREAT JOB, the first step in making a successful business is getting started so you have a leg up on so many other people in many niches across the board. I don't have much more to add. But in the worlds of BILLIONAIRE Mark Cuban...One thing you control is effort, once you put in the work, your ahead of the rest"
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    • Profile picture of the author Devilfish168
      huh you got auto responder?
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      • Profile picture of the author Leatherman
        Mirko76, is right, with this calculation you can't do anything.
        My first advice is to stop giving away a second game for free after your customers have agreed already for one game for this price - that's how I understood it.
        You need to make money with the games. With the hardware you can't hardly make a shipping cost. Offer games and more games, like take 3 pay for 2, take 20 pay for 10, something like that.
        To increase the margin of the hardware, you need to give reasons to your customers and "customized" is here the keyword. Can you make customized gameboys? However, faster, sleeker with Mickey Mouse or Batman or whatever. Retros are all mad people, see what they are paying for their vintage cars! Help them to spend some money. 3 d printer seems for me here ideal, if you don;t have money for your own one, I'm sure you can outsource, Brussels is not a village. Create fancy designs and paint/print on them, outsource if you can't do it yourself. Don't worry about the money part here, everybody knows, that customized is costing money. Money is not a problem, they want quality and class.
        Think how many Gameboys you can organize? You agree yourself, that you can;t get big numbers and how many hrs can you work, if you have job also?
        The answer to your business model is, make less gameboys with high margin, via selling games and customizing. What you have now, is a hobby not a business, please understand the difference.
        Good luck, by the way, I was a real Champ with Super Mario!
        Leatherman
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        • Profile picture of the author Ken T.
          Originally Posted by Janice Sperry View Post

          Congrats on your efforts so far and the well thought out business plan. As others have mentioned you will have a problem making much money with all the labor involved finding, fixing, shipping, advertising, etc., etc. You might do well branching out by also selling games and other peripherals.

          Here is another idea since most of the people you want to target are also proud nerds. Film everything you do on several of your refurbishings and teach people how to do it. Put a course on Udemy and clean up. A lot of people may want to actually fix one themselves but would happily pay a small fee to get tips, sources for parts and shortcuts from an expert.
          Thank you Janice.
          I'm certainly going to branch out into NES and SNES.

          I'm looking into Udemy and it's looking nice. I also like how they give you the choice on having them promote your content for you at 50%, or do it yourself for 100%.

          What I'm not really understanding from Udemy, is if I can link back to my site. All of the teachings/tutorials would be posted on Udemy, but can I advertise as myself? They talk about "building a brand", but I can't seem to get a clear idea on this.

          Originally Posted by mirko76 View Post

          Okay, now I understand a little more about your situation. My Idea would be as follows:

          - make your repairing a way to build authority in your Nostalgia and/or Nerd crowd
          - build a list, and engage with them with usefull stuff (minor repair tutorials come to my mind)
          - find out what 3d-printed products (or services) they want
          - if you're ready, launch your 3d-business

          This is of course my personal opinion. But whatever you do, I wish you the best of luck. It seems to me that you really want to turn your passion into a business. And to me that seems very promising in your case.
          I've already started publishing tutorials on my website, low-level entry tutorials.
          As for the 3D printed services, I already have an idea I've been thinking about:
          There's a few places where you can buy certain electronic parts:
          * Tiny computer that fits in the palm of your hand (raspberry pi)
          * LCD display
          * Buttons
          * Speakers
          * etc.

          Combine these in a custom, 3d printed, Gameboy lookalike shell, and you can make a handheld gaming device that can both play emulated Gameboy games, up to SNES games.

          For that custom case, you'll need a 3d printer.

          Originally Posted by bobert8590 View Post

          I reviewed your post and just wanted to say GREAT JOB, the first step in making a successful business is getting started so you have a leg up on so many other people in many niches across the board. I don't have much more to add. But in the worlds of BILLIONAIRE Mark Cuban...One thing you control is effort, once you put in the work, your ahead of the rest"
          Thank you for the kind words!
          I'm putting effort into this on a nearly daily basis and when I'm not at work (or daydreaming behind my desk, don't judge me, it can happen ), I can't shake it off. Keep searching for new ideas and ways to reduce costs.

          Originally Posted by Devilfish168 View Post

          huh you got auto responder?
          I'm sorry, I don't know what you're talking about? I don't think I have an auto-responder? I have had this account since 2008 or something and it's been fairly inactive for a long time, so might've jinxed something.

          Originally Posted by Leatherman View Post

          Mirko76, is right, with this calculation you can't do anything.
          My first advice is to stop giving away a second game for free after your customers have agreed already for one game for this price - that's how I understood it.
          That's correct!

          You need to make money with the games. With the hardware you can't hardly make a shipping cost. Offer games and more games, like take 3 pay for 2, take 20 pay for 10, something like that.
          You know what, you're right. Most of the games that I have, are cartridges that people either gave away or sell cheap on the side when I buy their Gameboy.
          I do have a pretty big collection that's good to go, with a good amount of high-value games. Especially lots, like games that go together (Super Mario Land 1, 2 and 3 or Pokémon Red, Blue and Pinball, etc.).
          They're added value, becuase I firmly believe that offering a Gameboy and not having games to play is a lost chance. I should stop giving away things and calculcate the games into the Gameboy cost and get some margin there.

          To increase the margin of the hardware, you need to give reasons to your customers and "customized" is here the keyword. Can you make customized gameboys? However, faster, sleeker with Mickey Mouse or Batman or whatever. Retros are all mad people, see what they are paying for their vintage cars! Help them to spend some money.
          Yes, I can and have customized Gameboys and I realize that that's where the increase in product value lies. Gameboys don't have backlight displays, which makes them hard to enjoy in a poorly lit environment. I can backlight them, even with customer colors. Here's an example of mine. Don't mind the mess, I've upgraded to an organized workstation now

          Other than that, certain color schemes are popular as well.
          The trick here, is finding the right product to paint the plastic. I've already gathered some experience here. Acrylic paint works, but flakes off and requires extra treatment to make them water (ie.: sweaty hands) -proof.
          Spraypaint works too and is water resistant, but the results are hit and miss and sometimes messy. Also takes a long time between layers.
          That's why I contacted international resellers that offer high-end customized cases and found out they use a special kind of spray paint. I've found out where I can get these in Belgium and am going to expirement on that.

          I'm planning on having 30% "original" Gameboys to please the puritans and 70% customized, to garner a higher margin.

          3 d printer seems for me here ideal, if you don;t have money for your own one, I'm sure you can outsource, Brussels is not a village. Create fancy designs and paint/print on them, outsource if you can't do it yourself. Don't worry about the money part here, everybody knows, that customized is costing money. Money is not a problem, they want quality and class.
          Think how many Gameboys you can organize? You agree yourself, that you can;t get big numbers and how many hrs can you work, if you have job also?
          The answer to your business model is, make less gameboys with high margin, via selling games and customizing. What you have now, is a hobby not a business, please understand the difference.
          Good luck, by the way, I was a real Champ with Super Mario!
          Leatherman
          Yeah, 3D printers and what I'm doing, go hand in had. I encounter certain limitations that I could overcome if I could make my own components. Hence 3D printing. If I could create some sort of 3D printing service and use the Gameboy modding scene and a jumpstart, that would be awesome.

          You (and everyone else) painted a clear picture:
          - Cut costs
          - Add product value
          - Increase margin
          - Don't stop there and move on to the modding/customizing scene

          Thanks, Leatherman!

          A general question:
          Do you think there's any use into adding AdSense to my website? Are there alternatives to AdSense that work as well and require no starting fee? I'm asking, because I've my account suspended on AdSense, years ago when I was a student and launched a website that didn't attract any visitors and ended up clicking my own links (I know, stupid me).
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  • Profile picture of the author postik
    I think you choose a very good idea, you love what you're doing. You need partners don't do it alone.
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