So I get this email in my inbox at exactly 12:05pm on Feb. 14th...Here is the body of the email...more or less... "GameStop is a dying business...But shareholders shorted the stock 2 weeks ago...and the financial leaders on Wall Street were nervous. The spike in stock price didn't represent GameStop's growth...and this whole stock situation proved one thing: The financial markets are shaky... Brick and mortar companies like GameStop are dying...And the stock market seems less reliable now. However, there is a way to make a big profit without relying on stocks or dying businesses..." Then the email proceeds to sell you their latest info product, get rich quick scheme, or MLM...Let me break this down for you guys reading this. GameStop is a flipping freak of nature in the business world for 5 reasons. But first I need to tell you what short selling is. The traditional way of shorting involves borrowing shares from a brokerage and selling them on the open market. Clearly, you want the value of the stock to decline, so you can buy the shares back at a lower price. Your profit is simply the price sold minus the price purchased - pretty straight forward (not really). Let's have the guys over at WallStreetSurvivor.com explain short selling to you. Short Selling by Wall Street Survivor.com https://www.youtube.com/watch?v=Z1LctxzEREE I am not going to try to an explain why GameStop is over valued so I am gonna let investorplace.com do the talking for me, but please make note that it is OVER valued as it stands (or so they say). Please make note also that I am also not a licensed broker, this isn't legal advice, and all that other legal jazz... GME Stock Is Still Over Valued Based On Fundamentals https://investorplace.com/2021/02/gme-stock-is-still-overvalued-based-on-fundamentals/ Here are some facts about GameStop that make this business model interesting and something business leaders of the future should learn from. 1.) It's hybrid business Model The hybrid business model is a mix of traditional product sales with the addition of hardware, software, cloud offerings, and other services via subscription. Customers are contracted to pay you a monthly fee for the delivery of these ongoing services. (there are also some other business mechanics at play here) 1.2.) Brick-and-Mortar Business Model Brick and mortar refers to a physical presence of an organization or business in a building or other structure. The term brick-and-mortar business is often used to refer to a company that possesses or leases retail shops, factory production facilities, or warehouses for it's operations. 1.3.) A Reseller Business Model Is a company or individual merchant that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit. (Reseller Business Model - item acquisition standards cap at 33 percent of the market value for items purchased for resale.) 1.4) Retail Business Model Pretty self explanatory you shop there. DUH! This is how GameStop runs their operations and what made it a powerhouse. What they don't talk about is this... 2.) The Gaming Community Please read my article on Community and Unity. https://behindtheartsubversionart.blogspot.com/2021/01/community-and-unity.html The online and offline gaming community is what pushed this company forward along with its hybridized business model. Gamers aren't going anywhere. This communities core consists of millions of 30 somethings that have been gaming most of their natural lives like my self and we enjoy going to physical locations and holding physical products in our hands. Not to mention good deals. This is why GameStop became huge in the first place and what other articles fail to talk about or analyze. As you can see we can all stand to learn from GameStop's hybridized business model. This model is great, because it gives the company many revenue streams that most retailers don't have and the diversity of those streams allows the executives to make changes within the organization lightening fast. For instance let us say there is an uptick in online sales only that isn't reflected through the brick and mortar locations balance sheets (DUH). We can then plan accordingly. Maybe we make cuts in our spending or make incentives for our customers to come into the store by enticing them with exclusive merchandise like NINTENDO has. I also can't get a used game from Walmart or even take it back if I don't like it mostly because of anti-pirating laws. However with GameStop I can purchase the game online, pick it up at the store, play it, and then sell it back to them at a fraction of the price in exchange for store credit or take the cash. You actually get more for the used game if you take the credit, because of the huge markup on games and consoles. They also can actually sell you a game or software title twice which equal double the profit. This is what makes this company special, why there are lesson's to be learned from them, and why hybridizing your business model is so important in today's economy. Andy Ray Uppole is an artist from Peoria, Illinois that specializes in audio and video production, graphic design, commercial art, and creative consulting. You can contact him by calling 209-509-4120 or email him at subversiondesignsolutions@gmail.com
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