{"product_id":"video-game-retail-running-expenses","title":"How Much Does It Cost to Run a Video Game Store Monthly?","description":"\u003cdiv class=\"container_new_design\"\u003e\n\u003cdiv class=\"text-section text-1_new_design\"\u003e\n\u003cdiv class=\"line_top\"\u003e\u003c\/div\u003e\n\u003ch2\u003eVideo Game Store Running Costs\u003c\/h2\u003e\n\u003cp\u003eRunning a Video Game Store requires managing high inventory costs alongside significant fixed overhead, especially in the first year (2026) Your core fixed operating expenses—rent, utilities, and payroll—total about \u003cstrong\u003e$13,747 per month\u003c\/strong\u003e before inventory purchases and variable marketing The financial model shows you will not reach break-even until 14 months in (February 2027), meaning you must fund initial losses Total cash required to reach this point, including capital expenditures (CapEx) and working capital, is substantial, peaking at \u003cstrong\u003e$816,000\u003c\/strong\u003e by May 2027 Focus on maximizing the 80% visitor-to-buyer conversion rate and controlling inventory shrinkage (10% of sales) to stabilize cash flow quickly\n\u003c\/p\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"image-section image-1_new_design\" id=\"main_article_image\"\u003e\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\n\u003cspan style=\"color: #6067F2;\"\u003e7 Operational Expenses to Run \u003c\/span\u003eVideo Game Store\u003c\/h2\u003e\u003cbr\u003e\n\u003ctable id=\"dwnld_tbl_id\"\u003e\n\u003ctr\u003e\n\u003cth\u003e#\u003c\/th\u003e\n\u003cth\u003eOperating Expense\u003c\/th\u003e\n\u003cth\u003eExpense Category\u003c\/th\u003e\n\u003cth\u003eDescription\u003c\/th\u003e\n\u003cth\u003eMin Monthly Amount\u003c\/th\u003e\n\u003cth\u003eMax Monthly Amount\u003c\/th\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e1\u003c\/td\u003e\n\u003ctd\u003eRetail Rent\u003c\/td\u003e\n\u003ctd\u003eFixed\u003c\/td\u003e\n\u003ctd\u003eThe Commercial Lease is a fixed cost of $3,500 per month, requiring evaluation of square footage needs and local market price per square foot.\u003c\/td\u003e\n\u003ctd\u003e$3,500\u003c\/td\u003e\n\u003ctd\u003e$3,500\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e2\u003c\/td\u003e\n\u003ctd\u003eStaff Wages\u003c\/td\u003e\n\u003ctd\u003eFixed\u003c\/td\u003e\n\u003ctd\u003eInitial payroll for 25 FTE (Store Manager, Senior Sales Associate, Sales Associate) is approximately $9,167 per month, excluding taxes and benefits.\u003c\/td\u003e\n\u003ctd\u003e$9,167\u003c\/td\u003e\n\u003ctd\u003e$9,167\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e3\u003c\/td\u003e\n\u003ctd\u003eInventory COGS\u003c\/td\u003e\n\u003ctd\u003eVariable\u003c\/td\u003e\n\u003ctd\u003eThis variable cost includes the wholesale price of New Games, Consoles, and Accessories, plus 20% for Shipping \u0026amp; Handling Inbound in 2026.\u003c\/td\u003e\n\u003ctd\u003e$0\u003c\/td\u003e\n\u003ctd\u003e$0\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e4\u003c\/td\u003e\n\u003ctd\u003eMarketing\u003c\/td\u003e\n\u003ctd\u003eVariable\u003c\/td\u003e\n\u003ctd\u003eMarketing \u0026amp; Promotions is a variable expense starting at 80% of total revenue in 2026, used for driving traffic and achieving the 80% conversion rate.\u003c\/td\u003e\n\u003ctd\u003e$0\u003c\/td\u003e\n\u003ctd\u003e$0\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e5\u003c\/td\u003e\n\u003ctd\u003eUtilities\/Maint\u003c\/td\u003e\n\u003ctd\u003eFixed\u003c\/td\u003e\n\u003ctd\u003eUtilities are budgeted at a fixed $500 per month, plus $200 for Cleaning Services, totaling $700 monthly for facility upkeep.\u003c\/td\u003e\n\u003ctd\u003e$700\u003c\/td\u003e\n\u003ctd\u003e$700\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e6\u003c\/td\u003e\n\u003ctd\u003eSoftware\/Systems\u003c\/td\u003e\n\u003ctd\u003eFixed\u003c\/td\u003e\n\u003ctd\u003eFixed software costs include $150 per month for POS \u0026amp; Inventory Software, plus $50 for Website \u0026amp; Online Presence maintenance.\u003c\/td\u003e\n\u003ctd\u003e$200\u003c\/td\u003e\n\u003ctd\u003e$200\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e7\u003c\/td\u003e\n\u003ctd\u003eFees\/Shrinkage\u003c\/td\u003e\n\u003ctd\u003eVariable\u003c\/td\u003e\n\u003ctd\u003eVariable costs include Payment Processing Fees (25% of revenue) and Inventory Shrinkage (10% of revenue) which covers theft or damage.\u003c\/td\u003e\n\u003ctd\u003e$0\u003c\/td\u003e\n\u003ctd\u003e$0\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e\u003c\/td\u003e\n\u003ctd\u003eTotal\u003c\/td\u003e\n\u003ctd\u003eAll Operating Expenses\u003c\/td\u003e\n\u003ctd\u003e\u003c\/td\u003e\n\u003ctd\u003e$13,567\u003c\/td\u003e\n\u003ctd\u003e$13,567\u003c\/td\u003e\n\u003c\/tr\u003e\n\u003c\/table\u003e\n\u003cdiv class=\"dwnld_btn_div\"\u003e\u003cbutton id=\"dwnld_btn_id\" class=\"dwnld_btn_clss\"\u003eDownload Table in XLSX\u003c\/button\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e \u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eWhat is the total monthly budget required to sustain operations before achieving profitability?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eBefore the Video Game Store sees profit, you need enough cash on hand to cover at least \u003cstrong\u003e$13,747\u003c\/strong\u003e monthly in known overhead and staff costs, plus inventory purchases; understanding this runway is key to knowing Is The Video Game Store Generating Consistent Profits? This initial cash requirement defines your minimum operational burn rate in Year 1, assuming zero sales.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eBase Monthly Overhead\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eFixed costs are set at \u003cstrong\u003e$4,580\u003c\/strong\u003e per month.\u003c\/li\u003e\n\u003cli\u003ePayroll requires \u003cstrong\u003e$9,167\u003c\/strong\u003e monthly to cover initial staffing.\u003c\/li\u003e\n\u003cli\u003eThese two items total \u003cstrong\u003e$13,747\u003c\/strong\u003e before you buy a single game.\u003c\/li\u003e\n\u003cli\u003eThis is the absolute floor for your monthly cash burn rate.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eInventory Cash Drag\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eInventory and variable costs are the big unknown drain.\u003c\/li\u003e\n\u003cli\u003eYou must fund your opening stock before the first sale happens.\u003c\/li\u003e\n\u003cli\u003eIf your Cost of Goods Sold (COGS) is 60% of revenue, that is your variable burn.\u003c\/li\u003e\n\u003cli\u003eIf sales are slow, inventory sits on shelves, meaning cash is tied up, not burned.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eWhich cost categories represent the largest recurring monthly expense, and how can they be optimized?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eFor your Video Game Store, payroll at \u003cstrong\u003e$9,167\/month\u003c\/strong\u003e is the biggest fixed operating cost, dwarfing the \u003cstrong\u003e$3,500\/month\u003c\/strong\u003e commercial lease, though managing Cost of Goods Sold (COGS) will determine overall profitability, which is crucial when defining your target audience and unique selling proposition—see \u003ca href=\"\/blogs\/write-business-plan\/video-game-retail\"\u003eHow Can You Clearly Define The Target Audience And Unique Selling Proposition For Your Video Game Store Business Plan?\u003c\/a\u003e. Honestly, fixed costs are important, but inventory cost management is where retail margins live or die. You need to know exactly where your dollars are going right now.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eFixed Cost Comparison\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eMonthly payroll is the largest single expense at \u003cstrong\u003e$9,167\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003eThe commercial lease is fixed at \u003cstrong\u003e$3,500\u003c\/strong\u003e per month.\u003c\/li\u003e\n\u003cli\u003eThese two items alone total \u003cstrong\u003e$12,667\u003c\/strong\u003e in required monthly overhead coverage.\u003c\/li\u003e\n\u003cli\u003eOptimize staff deployment; high payroll demands high sales density per employee hour.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCOGS: The Real Lever\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eCOGS is the primary variable expense that eats into gross profit.\u003c\/li\u003e\n\u003cli\u003eThe trade-in program must be managed to ensure acquired used games cost little.\u003c\/li\u003e\n\u003cli\u003eIf COGS runs high, you won't cover the \u003cstrong\u003e$12.7k\u003c\/strong\u003e fixed overhead.\u003c\/li\u003e\n\u003cli\u003eAnalyze the margin difference between new stock sales and pre-owned sales daily.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eHow much working capital or cash buffer is needed to cover costs until the projected break-even date?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eThe \u003cstrong\u003e$816,000\u003c\/strong\u003e minimum cash requirement is likely insufficient if it only covers 14 months of operating losses without explicitly funding the initial inventory purchase cycle for the Video Game Store. You must verify if that cash reserve accounts for the lag between paying suppliers for specialized stock and collecting revenue from the end customer.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eRunway Check: Burn Coverage\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIf you need \u003cstrong\u003e14 months\u003c\/strong\u003e of runway, the implied average monthly operating loss (burn rate) is \u003cstrong\u003e$58,286\u003c\/strong\u003e ($816,000 \/ 14).\u003c\/li\u003e\n\u003cli\u003eThis calculation assumes losses are steady; uneven monthly operational costs can quickly erode this buffer.\u003c\/li\u003e\n\u003cli\u003eFounders must know this number to assess runway, which is why defining your market is key; see \u003ca href=\"\/blogs\/write-business-plan\/video-game-retail\"\u003eHow Can You Clearly Define The Target Audience And Unique Selling Proposition For Your Video Game Store Business Plan?\u003c\/a\u003e\n\u003c\/li\u003e\n\u003cli\u003eIf your actual fixed costs plus negative gross margin months exceed this, you’ll need more capital fast.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eInventory Cycle Impact\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eRetail requires cash to buy inventory before you sell it; this is your working capital requirement.\u003c\/li\u003e\n\u003cli\u003eIf your inventory turns over every 60 days, you need cash on hand to cover two full purchasing cycles.\u003c\/li\u003e\n\u003cli\u003eThis initial inventory investment must be layered on top of the \u003cstrong\u003e$58k\u003c\/strong\u003e monthly operating loss estimate.\u003c\/li\u003e\n\u003cli\u003eA good rule of thumb: Capital needed equals (Monthly Burn x Runway Months) + Initial Inventory Cost.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\n\u003ch2\u003e\u003cspan style=\"color: #126CFF;\"\u003eIf actual sales fall short of the 80% conversion target, what specific costs can be immediately reduced to protect cash flow?\n\u003c\/span\u003e\u003c\/h2\u003e\n\u003cp\u003eIf the Video Game Store misses its \u003cstrong\u003e80% conversion\u003c\/strong\u003e goal, immediately cut discretionary spending tied directly to driving traffic, specifically Marketing \u0026amp; Promotions, and defer hiring non-essential roles like the Part-time Event Coordinator. Knowing how you clearly define the target audience and unique selling proposition for your business plan is vital for growth, but when cash tightens, flexibility matters, so review \u003ca href=\"\/blogs\/write-business-plan\/video-game-retail\"\u003eHow Can You Clearly Define The Target Audience And Unique Selling Proposition For Your Video Game Store Business Plan?\u003c\/a\u003e right now.\u003c\/p\u003e\n\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eSlash Variable Marketing Costs\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eMarketing \u0026amp; Promotions currently eats \u003cstrong\u003e80% of revenue\u003c\/strong\u003e.\u003c\/li\u003e\n\u003cli\u003ePause all non-essential digital ad buys today.\u003c\/li\u003e\n\u003cli\u003eThis spending is highly flexible, unlike rent.\u003c\/li\u003e\n\u003cli\u003eCutting this protects contribution margin fast.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eFreeze Non-Essential Headcount\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eDefer hiring the Part-time Event Coordinator role.\u003c\/li\u003e\n\u003cli\u003eThis role is budgeted at \u003cstrong\u003e00 FTE\u003c\/strong\u003e for 2026.\u003c\/li\u003e\n\u003cli\u003eStaffing decisions need to wait for sales recovery.\u003c\/li\u003e\n\u003cli\u003eYou can defintely run events with existing staff for now.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e \u003cdiv class=\"card_smpl\"\u003e\n\n\u003cdiv class=\"double_border\"\u003e\n\n\u003cdiv class=\"card_smpl_header\"\u003e\n\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-plus-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\n\n\u003ch3\u003eKey Takeaways\u003c\/h3\u003e\n\n\u003c\/div\u003e\n\n\u003cul class=\"lst_crct_blog\"\u003e\n\n\u003cli\u003eThe core fixed operating expenses, including rent and initial payroll, total approximately $13,747 per month before accounting for inventory purchases and variable marketing spend.\u003c\/li\u003e\n\n\u003cli\u003eFinancial modeling projects that the business will require 14 months of operation to reach the break-even point, necessitating sustained funding until February 2027.\u003c\/li\u003e\n\n\u003cli\u003eA minimum working capital buffer peaking at $816,000 is required to cover initial operating losses and necessary capital expenditures until profitability is achieved.\u003c\/li\u003e\n\n\u003cli\u003ePayroll ($9,167\/month) and the commercial lease ($3,500\/month) are the largest fixed expense categories, while variable costs like marketing (budgeted at 80% of revenue) must be closely monitored.\u003c\/li\u003e\n\n\u003c\/ul\u003e\n\n\u003c\/div\u003e\n\n\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eRunning Cost 1\n: \u003cspan style=\"color: #126CFF;\"\u003eRetail Space Rent\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eRent Fixed Cost\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYour fixed retail rent is \u003cstrong\u003e$3,500\u003c\/strong\u003e monthly, which must be justified by your operational needs. Since this is a fixed overhead, you need to immediately determine the required square footage and benchmark the local market rate per square foot to ensure efficiency. This cost is critical for calculating your break-even point.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl_2\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eLease Cost Inputs\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e$3,500\u003c\/strong\u003e monthly lease payment covers your physical location for the video game store. To confirm this cost is reasonable, you must calculate your required square footage and compare it against the prevailing local market price per square foot. This fixed amount sits alongside other facility costs, like \u003cstrong\u003e$700\u003c\/strong\u003e monthly for utilities and cleaning services. Honestly, getting this number right early prevents massive overruns later.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eCalculate required square footage.\u003c\/li\u003e\n\u003cli\u003eBenchmark local price per sq ft.\u003c\/li\u003e\n\u003cli\u003eFactor this into total fixed overhead.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eManaging Space Costs\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eManaging this fixed cost means avoiding over-committing on space you won't use immediately, especially given your high variable marketing spend (80% of revenue in 2026). Ensure the location supports your planned events and inventory density. A common mistake is signing a long lease without favorable exit clauses. Defintely confirm if the \u003cstrong\u003e$3,500\u003c\/strong\u003e includes common area maintenance fees.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eNegotiate tenant improvement allowances.\u003c\/li\u003e\n\u003cli\u003eSeek shorter initial lease terms.\u003c\/li\u003e\n\u003cli\u003eVerify all included operating expenses.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\u003cdiv class=\"double_border\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-pin-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eFixed Cost Pressure\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eBecause rent is fixed at \u003cstrong\u003e$3,500\u003c\/strong\u003e monthly, every dollar of revenue generated must first cover this obligation before contributing to profit. If your initial sales projections are low, this fixed cost will rapidly inflate your required break-even volume. This expense demands consistent foot traffic to absorb it efficiently.\u003c\/p\u003e\n\u003c\/div\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eRunning Cost 2\n: \u003cspan style=\"color: #126CFF;\"\u003eStaff Wages and Salaries\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eInitial Payroll Baseline\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eInitial payroll for 25 full-time equivalents (FTE) covering management and sales roles totals about \u003cstrong\u003e$9,167 per month\u003c\/strong\u003e before adding employer taxes and benefits. This is your baseline labor expense before factoring in the true cost of employment.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCost Components\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e$9,167\u003c\/strong\u003e estimate covers the base salaries for \u003cstrong\u003e25 FTE\u003c\/strong\u003e positions across three tiers: Store Manager, Senior Sales Associate, and Sales Associate. Remember, this number is just the gross wages. You must budget an additional \u003cstrong\u003e20% to 40%\u003c\/strong\u003e on top for payroll taxes, insurance, and benefits to get the true employment cost.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eFTE Count: 25\u003c\/li\u003e\n\u003cli\u003eRoles: Manager, Senior Sales, Sales Associate\u003c\/li\u003e\n\u003cli\u003eExcludes: Taxes and benefits burden\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl_2\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eStaffing Efficiency\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eManaging staff costs means aligning schedules tightly with expected foot traffic, not just covering store hours. Overstaffing during slow periods crushes contribution margin. A common mistake is treating all 25 FTEs as static; instead, map staffing hours directly to projected sales volume to avoid paying for empty floor time.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eSchedule staff to peak sales times\u003c\/li\u003e\n\u003cli\u003eAvoid paying for idle floor time\u003c\/li\u003e\n\u003cli\u003eUse sales data to justify shifts\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\u003cdiv class=\"double_border\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-pin-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eRetention Risk\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eHigh turnover among sales associates will destroy your budget through constant recruiting and training costs. Focus on retention early, even if it means paying slightly above market for key roles. If onboarding takes 14+ days, churn risk rises defintely.\u003c\/p\u003e\n\u003c\/div\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eRunning Cost 3\n: \u003cspan style=\"color: #126CFF;\"\u003eInventory COGS\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eInventory Cost Basis\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eInventory COGS for your store isn't just the wholesale price of games and consoles. In 2026, you must load an extra \u003cstrong\u003e20%\u003c\/strong\u003e onto that wholesale cost to cover inbound Shipping \u0026amp; Handling. This is your true cost basis before factoring in other variable costs like fees or shrinkage.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl_2\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eModeling COGS Inputs\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eTo model this variable cost accurately, you need firm quotes for the wholesale cost of all physical goods you plan to stock. Remember, this figure must incorporate the \u003cstrong\u003e20%\u003c\/strong\u003e S\u0026amp;H markup applied to the base purchase price. This cost scales directly with every unit sold, unlike fixed rent or salaries.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eUse wholesale unit cost.\u003c\/li\u003e\n\u003cli\u003eAdd \u003cstrong\u003e20%\u003c\/strong\u003e for inbound freight.\u003c\/li\u003e\n\u003cli\u003eScales with sales volume.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eControlling Freight Spend\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eManaging COGS means attacking the wholesale price and the freight component aggressively. Negotiate volume discounts with distributors for consoles and new releases. If you order infrequently, that \u003cstrong\u003e20%\u003c\/strong\u003e S\u0026amp;H eats margin fast. Consolidating shipments saves money, but watch inventory holding costs.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eNegotiate distributor discounts.\u003c\/li\u003e\n\u003cli\u003eConsolidate inbound shipments.\u003c\/li\u003e\n\u003cli\u003eAvoid small, frequent orders.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\u003cdiv class=\"double_border\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-pin-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eMargin Risk Check\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eBe careful if your wholesale supplier terms change after 2026 projections are set. If actual inbound Shipping \u0026amp; Handling exceeds the budgeted \u003cstrong\u003e20%\u003c\/strong\u003e rate, your gross margin shrinks instantly. This cost component must be reviewed quarterly against actual supplier invoices to defintely prevent margin erosion.\u003c\/p\u003e\n\u003c\/div\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eRunning Cost 4\n: \u003cspan style=\"color: #126CFF;\"\u003eMarketing \u0026amp; Promotions\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eMarketing Spend Reality\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eMarketing spend starts high, consuming \u003cstrong\u003e80%\u003c\/strong\u003e of revenue in 2026. This large variable cost is necessary to pull in enough foot traffic to hit your target \u003cstrong\u003e80%\u003c\/strong\u003e customer conversion rate for new visitors. You need traffic volume now.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCost Drivers\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e80%\u003c\/strong\u003e allocation covers all efforts to drive traffic, like local ads, event sponsorships, and trade-in promotions. To model this, you must link projected revenue directly to marketing spend, since the cost scales with sales volume. If revenue projections shift, this expense moves defintely.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eLink spend to projected sales volume.\u003c\/li\u003e\n\u003cli\u003eInclude costs for launch events.\u003c\/li\u003e\n\u003cli\u003eFactor in trade-in program subsidies.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl_2\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eOptimization Levers\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSince this is tied to conversion, optimization means improving the quality of traffic, not just cutting the budget. Track cost per acquisition (CPA) against the lifetime value (LTV) of a repeat customer. High LTV justifies the initial high CPA.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eTest local tournament sponsorships first.\u003c\/li\u003e\n\u003cli\u003eMeasure CPA against repeat customer LTV.\u003c\/li\u003e\n\u003cli\u003eReduce spend if conversion drops below \u003cstrong\u003e80%\u003c\/strong\u003e.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\u003cdiv class=\"double_border\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-pin-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eThe Conversion Trap\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSpending \u003cstrong\u003e80%\u003c\/strong\u003e of revenue on marketing means profitability hinges entirely on achieving high repeat business quickly. If initial conversion falters, this spend level is unsustainable past the first few months. That's a big bet.\u003c\/p\u003e\n\u003c\/div\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eRunning Cost 5\n: \u003cspan style=\"color: #126CFF;\"\u003eUtilities \u0026amp; Maintenance\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eFacility Upkeep Baseline\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFacility upkeep for the store is a predictable \u003cstrong\u003e$700 per month\u003c\/strong\u003e, split between utilities and cleaning. This fixed cost must be covered before you worry about variable expenses like inventory or processing fees. Know this number precisely.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl_2\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCost Breakdown\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eFacility upkeep costs total \u003cstrong\u003e$700 monthly\u003c\/strong\u003e. This covers two distinct fixed line items essential for operating the physical retail space. Inputs are simple: $500 for utilities and $200 for contracted cleaning services. This $700 is a baseline overhead you must absorb every month, regardless of sales volume.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eUtilities: \u003cstrong\u003e$500 fixed\u003c\/strong\u003e monthly.\u003c\/li\u003e\n\u003cli\u003eCleaning Services: \u003cstrong\u003e$200 fixed\u003c\/strong\u003e monthly.\u003c\/li\u003e\n\u003cli\u003eTotal fixed upkeep: \u003cstrong\u003e$700\u003c\/strong\u003e.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eManaging Upkeep Spend\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSince utilities are fixed at $500, optimization focuses on the \u003cstrong\u003e$200 cleaning contract\u003c\/strong\u003e. Check if the cleaning scope matches the store's actual foot traffic and event schedule; over-servicing leads to waste. Don't lock in long-term contracts without review clauses.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eReview cleaning scope against traffic.\u003c\/li\u003e\n\u003cli\u003eAvoid multi-year cleaning commitments.\u003c\/li\u003e\n\u003cli\u003eUtilities are hard to cut since they are fixed.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\u003cdiv class=\"double_border\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-pin-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eContextualizing Fixed Costs\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eCompared to your \u003cstrong\u003e$3,500 rent\u003c\/strong\u003e and \u003cstrong\u003e$9,167 payroll\u003c\/strong\u003e, the $700 upkeep is small but defintely non-negotiable. This cost is a true fixed expense, unlike inventory or marketing. If you delay paying this, you risk immediate service interruption, which kills customer experience.\u003c\/p\u003e\n\u003c\/div\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eRunning Cost 6\n: \u003cspan style=\"color: #126CFF;\"\u003eSoftware \u0026amp; Systems\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eFixed System Costs\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYour essential software stack costs a defintely predictable \u003cstrong\u003e$200 per month\u003c\/strong\u003e. This covers both the point-of-sale (POS) and inventory management system at \u003cstrong\u003e$150\u003c\/strong\u003e, plus maintaining your online presence for \u003cstrong\u003e$50\u003c\/strong\u003e. These are fixed operating expenses you must account for before calculating gross margin, regardless of how many games you sell.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eSystem Cost Breakdown\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eThis \u003cstrong\u003e$200 monthly\u003c\/strong\u003e figure covers two critical areas for your game store. The \u003cstrong\u003e$150\u003c\/strong\u003e fee supports your POS \u0026amp; Inventory Software, which tracks stock levels and processes sales transactions. The remaining \u003cstrong\u003e$50\u003c\/strong\u003e maintains the website and online presence, keeping your digital storefront functional. These are non-negotiable overheads.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003ePOS\/Inventory: $150\/month\u003c\/li\u003e\n\u003cli\u003eWeb upkeep: $50\/month\u003c\/li\u003e\n\u003cli\u003eTotal fixed software: $200\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl_2\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eOptimizing Software Spend\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eDon't overpay for features you won't use right away. For a new store, check if the POS provider offers a scaled-down tier that bundles inventory tracking adequately. Avoid premium add-ons until sales volume justifies them. You want systems that scale without forcing you into expensive bundles too soon.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eAudit required features now\u003c\/li\u003e\n\u003cli\u003eAvoid premium add-ons early\u003c\/li\u003e\n\u003cli\u003eScale tiers as you grow\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\u003cdiv class=\"double_border\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-pin-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eOverhead Pressure\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eSince these are fixed costs, they exert maximum pressure when revenue is low, like during slow months in Q3. You need enough gross profit from sales to cover this \u003cstrong\u003e$200\u003c\/strong\u003e, plus the \u003cstrong\u003e$3,500\u003c\/strong\u003e rent and \u003cstrong\u003e$700\u003c\/strong\u003e utilities, before covering variable costs like payment processing fees.\u003c\/p\u003e\n\u003c\/div\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\n\u003ch2\u003eRunning Cost 7\n: \u003cspan style=\"color: #126CFF;\"\u003eFees and Shrinkage\n\u003c\/span\u003e\n\u003c\/h2\u003e\u003cbr\u003e\n\u003cdiv class=\"card_smpl blue_card\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-colons-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eTotal Variable Drag\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYour non-inventory variable costs—payment processing and shrinkage—will consume \u003cstrong\u003e35% of total revenue\u003c\/strong\u003e right off the top. This \u003cstrong\u003e35%\u003c\/strong\u003e hits before you even pay for the games themselves, meaning your gross margin needs to be exceptionally high just to cover basic operating expenses. This is a huge structural hurdle for a retail model.\u003c\/p\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"container_2_clmn_row\"\u003e\n\u003cdiv class=\"card_smpl_2\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-tips-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eCost Breakdown\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003ePayment processing fees take \u003cstrong\u003e25% of revenue\u003c\/strong\u003e from every card transaction you process. Shrinkage, which covers theft or damage to physical inventory, is budgeted at \u003cstrong\u003e10% of revenue\u003c\/strong\u003e. To calculate the total immediate hit, you multiply projected monthly sales by 0.35. Honestly, 10% shrinkage is high for specialized retail.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003ePayment Fee: 25% of gross sales.\u003c\/li\u003e\n\u003cli\u003eShrinkage: 10% of gross sales.\u003c\/li\u003e\n\u003cli\u003eTotal Variable Hit: 35% of sales.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003cdiv class=\"card_smpl\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-intro-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eManaging Leakage\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eYou must defintely push customers toward lower-cost payment methods, like cash or debit, to cut the 25% processing fee. For shrinkage, invest in better point-of-sale (POS) security and inventory tracking from day one. If you can cut shrinkage to 5%, you save \u003cstrong\u003e5% of revenue\u003c\/strong\u003e immediately, which is pure profit.\u003c\/p\u003e\n\u003cul class=\"lst_crct_blog\"\u003e\n\u003cli\u003eIncentivize cash payments.\u003c\/li\u003e\n\u003cli\u003eTighten inventory counts weekly.\u003c\/li\u003e\n\u003cli\u003eNegotiate card processor rates post-scale.\u003c\/li\u003e\n\u003c\/ul\u003e\n\u003c\/div\u003e\n\u003c\/div\u003e\u003cbr\u003e\u003cdiv class=\"card_smpl\"\u003e\u003cdiv class=\"double_border\"\u003e\n\u003cdiv class=\"card_smpl_header\"\u003e\n\u003cimg src=\"\/cdn\/shop\/files\/fml_20_fml-20-blog-pin-icon.svg\" alt=\"Icon\" class=\"icon_how_to_use\"\u003e\u003ch3\u003eContribution Reality\u003c\/h3\u003e\n\u003c\/div\u003e\n\u003cp\u003eIf your Inventory COGS is 50% of revenue, adding this \u003cstrong\u003e35%\u003c\/strong\u003e variable drag means your true contribution margin is only \u003cstrong\u003e15%\u003c\/strong\u003e before fixed costs like rent ($3,500) and wages ($9,167). You need very high sales volume just to cover that $12,600 in fixed overhead monthly.\u003c\/p\u003e\n\u003c\/div\u003e\u003c\/div\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e","brand":"FinancialModelsLab","offers":[{"title":"Default Title","offer_id":49304248418547,"sku":"video-game-retail-running-expenses","price":0.0,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0522\/6191\/2762\/files\/video-game-retail-running-expenses.webp?v=1782694798","url":"https:\/\/financialmodelslab.com\/products\/video-game-retail-running-expenses","provider":"Financial Models Lab","version":"1.0","type":"link"}