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RePlay August 2014

 

August 2014



 

Building a New Legacy

Industry Vets Rely on Experience to Create New Value-Added Distributor

The success of Legacy Coin, the Myrtle Beach, S.C., - based game dealership started two years ago by three veterans of Green Coin, demonstrates the challenges and opportunities inherent in distribution today. Legacy has managed to grow its business, even as the volume of new games sales has been relatively flat nationally, by using their collective wits and market expertise to bring unique value to their customers.

That value manifests in a number of ways, including the proprietary digital music stands created by Legacy, as well as their expanding prowess in buying and selling used games, many of which they completely refurbish in house.

The trio behind Legacy Coin includes R.A. Green (son of Green Coin founder Royce Green), who has worked as an operator (Rosemary Coin) and a manufacturer; Ed Chermak, a longtime Green Coin distribution veteran; and Neil Anderson (Royce’s grandson), who has served in operations and distribution. They founded Legacy Coin in the wake of a devastating car accident that left Royce Green unable to continue leading Green Coin.

As RePlay reported at the time, the founders of the new company chose the name to indicate a strong connection to the past that would serve as a platform for building up a new kind of distributorship. The commitment made by Legacy’s founders was simple: to plant a new flag, stay engaged with the industry and grow the company.

“We’re a new company,” explained Chermak. “We are taking what we learned and have merged it with our sense of the market today.”

The initial transition period, recalled Chermak, seems chaotic in hindsight. “We had to make instantaneous changes, using our own resources to make things happen. It was kind of like being at an auction where you have to make decisions in seconds, not minutes, and it’s often a guessing game.”

Legacy has re-invested heavily in infrastructure, leasing a fleet of new vehicles and bolstering staff for its manufacturing and refurbishment efforts. Along the way, they have garnered accolades, including being named TouchTunes top distributor in their first year doing business as Legacy.

R.A. Green, a former AMOA president, was new to the distributing business even though he was involved in operating and game manufacturing for decades. “I brought a different perspective than my other partners because I had been an operator and a manufacturer,” he related. “I never had anything to do with the distribution until my dad got hurt, even though we worked in the same building. Legacy is a hybrid, touching on all three aspects. These last few years have been exciting, interesting and frustrating.”

Manufacturing Efforts

Legacy began staking its own unique claim in the industry when it released its first Sound Center, a jukebox stand and audio platform designed to give a broadband wall-mounted jukebox the same audio heft and location presence as a floor model.

The first production version of the Sound Center was designed specifically for the TouchTunes Virtuo, and when we caught up with Legacy execs last month, they were putting the finishing touches on a new version for the Playdium. Legacy has also created a special TouchTunes Photo Center complete with photo printer.

R.A. Green, who oversees the manufacturing process, stressed the importance Legacy places on customer input. Many final features of the original Sound Center were the result of operator feedback combined with active brainstorming and dialogue in-house.

“We value constructive criticism from our peers,” he said. “We’re still in the learning process, and we are better this week than we were last week. The more you do something, the better you become.”

As distributors in the Southern region, Legacy perceived the need for a more robust wall box stand in many of the locations served by their operators. “Not every location can accommodate a wall box,” explained Green. “Some of our locations are almost all glass. Some locations want a bigger sound package. The South has never been a wall box market. It’s traditionally been a floor box market. We are selling Sound Centers as fast as we can build them.”
Green got his start in manufacturing in the 1980s, building a popular multi-player video card game for the South Carolina market. The most satisfying aspect of building a unique product, he said, is filling repeat orders. “I really like it when we sell an item to a customer, and he comes back for another and another,” Green emphasized. “You know you are doing something right. That’s the real acid test.”

In recent months, a number of fellow distributors including Moss and Shaffer have also started carrying the Legacy Sound Center.

The development of the Sound Center was an outgrowth of the dealership’s work as a factory refurbishment center for TouchTunes. The firm’s technical staff learned to upgrade existing units with a new powder coat and updated components, hardware and software. These revitalized jukeboxes, provided at an affordable price, allowed operators to supply B and C markets with broadband music.

“They looked like something new,” Chermak explained. “And TouchTunes was seeing a monthly spike in the revenue without any costs of sales associated with new jukeboxes so they were happy.”

As part of that refurbishment effort, Legacy also started rehabbing the factory’s wall box stands. “We knew we could make a better looking product from scratch,” said Green. “And we have. It’s much better, cleaner.”

Will they branch out with additional products like the Sound Center? “Time will tell,” said Green. “Right now we have our hands full building our own current inventions.”

Game Refurbishment and More

The human and technical resources needed to design and build the Sound Center also give Legacy an advantage when it comes to restoring and refurbishing old games. In fact, the dealer has brought on additional skilled staff to oversee cabinet manufacturing (in conjunction with an outside supplier) and their in-house paint shop.

As a result, Legacy has developed a niche, taking old games and turning them into practically new games with updated software, new hardware components and a total exterior makeover. “It is part of what separates us from other distributors,” declared Chermak, who sees Legacy’s ref­urbishment efforts as a necessity required to add value as a modern distributor.

“Sales of our refurbished games produce higher margins than new equipment sales and give our customers something to help them generate a better ROI on the street and in the game rooms,” he furthered. “We spend a lot of time at auctions, and through experience we know what equipment is worth, depending upon its condition. That knowledge makes us unique, and we are relying on that experience in the refurbishment business as well.”

Despite the fact that many distributors have struggled over the past decade, the veterans who founded Legacy Coin express optimism about the future.

“This business has been changing since the day I got started in the industry, but there’s still a future for us,” said R.A. Green. “We have more competition for entertainment than ever and nobody is walking around with much loose change to spend on our machines. They are all using debit cards. Our challenge as an industry is to get our edge back. Hopefully, we can adopt new technologies in a way that will allow operators to earn more revenue. We are looking for opportunity, not an exit strategy.”

To learn more, log on to www.legacy dist.com.

 


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