Tuesday, July 10, 2018

Vacation Essentials and the Shiny Bucket (Tradecraft)

I've been on vacation for nearly a month now, exploring Mexico and Guatemala and later this week, Honduras. Along the way I'm visiting game stores, which in Mexico has meant stores that specialize in Magic: The Gathering almost exclusively, but with some green shoots in other categories, like board games and D&D. I'm documenting some of this on my author Facebook page. Having an interpreter with me has been essential in understanding where game stores fit in the local culture. It's fascinating stuff.

This trip will span nearly two months and is a test of my stores policies and procedures. A month long trip is a great test, and I did that last year, but two months spans my normal billing cycle. It forces me to create procedures for posting bills while I'm on the road. It even resulted in my finally adopting online banking. When I crossed the country last year, I brought my printed checks with me and mailed them along the way. Old ways are good ways. Of course this is only possible with a great manager, so if you're unclear where to begin, look there.

New product is a concern. Because I pre order absolutely every new product that enters my store, new items arrive with my managers restocks. She does this using Open to Buy, so although I haven't trained her on turn rates and culling inventory, the budget dictates the restock. Everything else is details. This is the first time I've given up ordering, and last year I spent many hours while on vacation restocking the store.

I never really looked at it too closely, but there's about a 90 day lead time on new product solicitations, with Games Workshop being the infuriating exception, with every new release being a surprise. While on the road I continue to pre order product for the future, with some concerns I'm not doing enough research. However, something has to give if you ever want a vacation. Since 80% of my sales come from 30 companies, it's the fringe stuff that will be taking a hit about 90 days from now. That may be a lesson in personal time management.

I've got a list of about $20,000 worth of upgrades my store needs. This trip has emphasized what I really need, especially if I want a stress free vacation: a shiny bucket of money. Managing cash flow on the road is no fun, with regular reviews, contingency plans and transfers when things get slow. This is mostly because of debt from our big construction project, but also because I'm constantly eying that $20K list of stuff we need and checking them off. That shiny bucket of money would provide some vacation peace of mind about now. If you handed me $20,000 in a shiny bucket, I could easily see putting it on a shelf and just leaving it there. Veterans will confirm keeping the shiny bucket is the best bucket strategy.

Resting on the throne outside the Cosmovitral in Toluca, Mexico



Monday, June 11, 2018

Photo Contest

As you may have heard, I have written a book called Friendly Local Game Store. We've sold hundreds of copies the first couple months and it has eight, 5-star reviews on Amazon. Yeah!

I thought I would do a bit of creative promotion of the book. Post a photo of you with the book, either the print copy or the book on your electronic device to my Gary Ray, Author Facebook Page. On August 10th, we'll declare a winner random (probably via some dice rolling method).

What do you win? Why more books, of course! The winner can give me the names and addresses of two people they think could use this book (a $50 value). I'll sign and inscribe them, and send them off. It could be a copy for you, a potential new business partner, your staff or even your local store owner. Heck, send one to your competition as a gift! I won't judge (that's a lie, I'm always judging).

I leave for vacation to Central America on Friday, so I look forward to seeing a bunch of happy photos when I login, lonesome for home.


Sunday, June 10, 2018

Five Lessons

The first lesson of small business is you've got nobody to blame but yourself. When my staff make mistakes, it's my fault. When an employee turns out to be a bad apple and steals from me? Still my fault, because I hired them. When the world collapses and my community has become cannibals? My fault for not anticipating the demand for food. All my fault, today and every day. This first lesson is what separates us from the general population and creates an informal fraternity of small business owners. Our culture plays the blame game, but it's the only game we won't sell.

The second lesson is: Life is unfair. It's entirely possible to do everything right and still fail (which is your fault, see lesson one). It's possible you have the same business model, with the same gray areas as everyone else, but someone decides to make an example of you. Talk to a store owner who opened right after 9/11 and you'll hear a story of perseverance or unfair circumstances that led to failure. We did really well during the recession, but some communities in the exurbs simply disappeared, their inhabitants moving out in the middle of the night and their retailers left with no customers. Terribly unfair. And still your fault.

If I had to propose a third lesson, it's this: Nobody cares. You're on your own. This third lesson is important because new small business owners forget the first two lessons and constantly complain. Because the trade is small and you may have only dealt with big institutions (schools, corporations, etc), you may be unaware of your ability to effect change by simply asking. Nobody cares, but you have some power to effect change. In every circumstance of my life before owning a business, if I was failing, someone would step in to help. Not small business. We're working without a net and nobody cares.

The fourth lesson is a corollary of lesson three, which is: Everyone is here to make money. What they need to do to make that money, may or may not align with your desire to make money. When their needs don't align with your needs, the phrase we tend to use is "That's none of your business." Making money is extremely hard, with retailers in the 5-10% net profit range. Look at how hard it is to juggle your personal income without going into debt or going hungry. Now multiply that complexity by ten. That's what it's like for me to run a store. If you aren't doing it to make money, you better not have a lot of money on the table. That's usually the case.

The fifth lesson is Everyone is here because they love their hobby. It's not always true and there are a few exceptions I can think of, but everyone got into this because they love hobby games and everyone stays because that passion gets them through the hard times. Sometimes they love their hobby more than they love making money, and sometimes it's the opposite. A big lesson I've learned from observation is a great company, be it a publisher or retailer, balances these two opposing forces in equal measure.

Those who understand these five rules tend to be successful. They're not wealthy. They're not always happy. They are successful in their own ways and their like minded peers wish to associate with them. Those that don't follow the rules are left to scream into the wilderness until they understand it's all their fault, life is unfair, nobody cares, and it's time to get their act together and focus on their motivation and their bottom line.

Wednesday, June 6, 2018

Neutrality in the Culture Wars

I just want to run a hobby game store in the suburbs. My store does not take political sides, make political statements or support political causes. In fact, pinning me down personally would be pretty hard, with my pseudo libertarian views. My investors range from very liberal to very conservative, and we've had the discussion early on about the role of politics and small business, with our decision being to let investors make their own stands with their own money.

This is a position I thought was reasonable, but one that has upset some of my friends, who believe change at this stage can only come from the private sector. Still, you won't find a political sign in our window and we don't donate to political causes. When we donate to charity in the name of the business, it's to help children via Toys for Tots, California fire victims, or the occasional donations to local schools. We are neutral in the culture wars.

Or at least that's what I thought. One thing to keep in mind is we are culture. Game stores are bastions of the gaming subculture, which is part of the general culture. As such, store owners are ambassadors to not only members of the subculture, but also the public. We've known this pretty much forever, with the biggest threat being the occasional Bible Belt picketing for promoting devil worship, laughable in California but a real concern elsewhere. Nowadays, we're less concerned with church groups and more concerned with maintaining credibility and a thread of leadership within our subculture.

However, as politics in general has infiltrated every level of society, small businesses of all sort are being called out for not toeing someone else's political line. Politics has gained a foot hold in geek culture, by those who want to stir up trouble and maintain their antiquated status quo. The main issue regards women playing a bigger role in the subculture and the men who support them. It's a welcome revolution, not only from my personal perspective, because what a wonderful breath of fresh air and introduction of new perspectives, but it's great for anyone who has something to sell.

As a store owner, I wouldn't be very successful if 90% of my customers were men, as it was when I started nearly 15 years ago. Much of our success is about creating a welcoming environment for all the public. This is apparently a divisive position. Our tolerance a form of intolerance to the alt right folks, who want to make every cultural arena their battleground, game stores included.

This is what happened at my store and others in the San Francisco Bay Area. In our case, our veil of neutrality was pierced when we asked a disruptive customer to leave, causing an online firestorm and real threats to life and property. The customer, a conservative white supremacist was bothering people playing games with his political rants and difficult attitude, a shit disturber in our little Switzerland. We showed him to the door and became his new cause. That this has publicly happened to other local stores, by other conservative shit disturbers, shows neutrality is hard to maintain. These people have a literal handbook for stirring up controversy, and it has moved from university campuses to main street.

The culture wars are not waged only by one side. The most recent example, the most infuriating really, was a Portland case where two employees were fired for not serving a customer after the store had closed. As will happen in an eating establishment, there's a cut off time when the kitchen is closed, but customers remain to finish their meals. The customer in question was a black woman, a firestorm ensued, and in a pretty profound act of cowardice, the owners fired the employees involved under political pressure:

"In the statement "Back To Eden" says the employees were fired because the woman and the "clamoring public" demanded they be fired.
In one statement, the bakery admitted that the employees did not necessarily do anything wrong, "this is more about how a black woman was made to feel" at the business.
That statements have since been deleted."
In radically liberal Portland, the threat of boycott and review slamming for not towing the political line is enough for a store owner to not have their employees backs due to a misunderstanding. Backing employees is what you do as an owner. If you've got a procedural or training problem in your business, you own that problem, it is your fault. The buck stops with you, which is the big lesson in owning a business.

As cowardly as this act was, you have to remember that such a business problem is an existential threat to the livelihood of this owner, whose purpose in life is just to serve you their hand made granola. Really, they make hand made granola. That's not to excuse their cowardice but more to offer an explanation.

Imagine if you, as an individual, expressed your political views on Facebook, and a group of people came to your business, camped in your lobby and demanded you be fired. Take it a step further and imagine they went to your bank and demanded your branch manager close your accounts and cancel your mortgage, destroying your net worth. That's the threat to a small business. Your kids will go hungry and all you want to do is sell games or granola, and since we're not culture warriors, you won't always see acts of heroism. Being a Switzerland in the culture wars is a tricky proposition.

Tuesday, June 5, 2018

Weird, Unwieldy Wonderful, Kickstarter

I was for it before I was against it but I came around again and have supported it for years now. I'm talking about Kickstarter. When games began emerging on Kickstarter, they were so unique and unicorny that I bought every one. Big mistake. Besides the duds, many didn't ship, taking my money which as a retailer, was often in the hundreds of dollars. I'm still owed money by the Wizard Nystul and an extra from the Walking Dead.

The old guard got their shot early on, including the undelivered Nystul's Infinite Dungeon.
It's kind of ironic considering how the spell works.


Kickstarter is a distribution method, not a design studio, so there's no reason to believe they're any better than traditionally funded games. The consensus is they're overall a little worse, actually. What they often tend to be are things that wouldn't make it through normal channels, the weird, the unwieldy, the wonderful. For that reason, I'm interested.

Backing the right Kickstarter derived games gives my store a unique flair other stores don't have. This is especially true if I have to buy deep into a Kickstarter and I get the game early or it's only available through this method. I can use my size as a competitive advantage, a differentiator.

Waiting on my Pencil Dice with Ken Whitman
However, what game designers need to understand is my goals are different than theirs. Their goal is to capture sales from as many end user customers as possible. I say end user customers, because I'm technically their customer too, but they would prefer to avoid me when possible. Game stores are the marketing arm and low margin distribution channel to get their game to those who may have missed their campaign. We're gravy, not the meat.

My goal, as a supporter of their game, is to capture those customers from them, before they do. If I do it wrong, and announce a game offering a poor value proposition, I just used my efforts to drive customers to the designer. This obviously means that I'm trying to capture sales at the same time as them, while the campaign is going on. That's because I don't actually know if I want to back that game if I don't have customer interest, and with backer kits asking my to commit for more copies or thousands of dollars of add ons at the end, my ability to capture customers right now, before the game arrives, is incredibly important.

We compete for customers, while also acting as partners. That's as new economy as it gets! It's also a terrible business model for the game trade. The game trade is a poster child for bad business models. As a retailer, if you see some new technology, Print on Demand, 3D Printing, Kickstarter, and you immediately think how this will enhance your business, you're doing it wrong. New technologies disintermediate the middle men. Consumers make the same mistake. These same technologies won't create books printed in your living room or 40K armies banged out on your printer, they'll provide small press publishers the ability to create cottage industries where they sell you the weird, the unwieldy, and the wonderful when they couldn't have before.

So how do I make it work? When I sign on to a Kickstarter as a retailer, I don't sit back and watch my money work for someone else for a year (or forever) and then tell customers about it once my far too many copies show up on some random day. What I do is promote that Kickstarter while the campaign is going on. I announce it to my customer group on Facebook. I let them know a pre order with me is safer than with you, the publisher. I offer a 10% discount to offset the rampant, wink wink nudge nudge, tax evasion that is the Kickstarter pre order system. Then I get to watch that pre order money work for me, while staying up at night wondering if the stretch goals for Dark Souls will ever arrive and what exactly my liability is if they don't.

The publisher needs to understand we are at cross purposes. We are competing for the same customers. Their organized play or other attempts to get me to promote their game is so far off the mark to be laughable when I've got legitimate partners, without cross purposes. I will help you sell your game to my customers, but we are at odds with each other beyond that. Keep this in mind. Know that pimping your game with the word Kickstarter just tells me you're part of this special relationship that's only worth it for a tiny number of stores. For everyone else, the small stores, the distributors, and for a growing number of disillusioned customers, Kickstarter is the mark of death. But don't get all pouty about it. I may end up being your last friend in this equation.

Friday, June 1, 2018

Prognosticating (Tradecraft)

In a previous incarnation, I was an IT manager in a failing technology company where the blame would shift on a weekly basis, resulting in layoffs. This week it was the marketing manager, last week it was the head of development. Eventually the founder and CEO ran out of people to fire and the board fired him.

In such an environment, with shifting loyalties, regular vocational executions, and no real consequences, morality tended to get a bit compromised. That's how I found myself rooting around on the HR directors laptop over the network. "Holy crap, she has the RIF list in an Excel spreadsheet called RIF List!"

I became known as the guy who "knew things." People would come to me and try to wheedle out whether they would be alright or not. Or in the case of the company attorney, he would visit talking about cars and I would advise him now is not the best time to buy that Mercedes. Eventually my name appeared on that list, which meant my days were numbered. By the time I was laid off, I had been searching for weeks and already had a job lined up. When it comes to the game trade, I don't have a magical list pilfered from a laptop, but I do predict trouble. I feel a disturbance in my cash flow.

As a potential new store owner, I would plot a trajectory. I would visit the next several distributor trade shows as well as GAMA. Is the industry doing better, worse, or about the same? Ask retailers at these shows what's exciting, if anything. If they aren't excited, that's a sign. Plot a game trade trajectory over your shows. The game trade is recession proof, assuming customers have jobs, but it has its own cycles you need to be aware of. The economy could crash during this research period. Doesn't matter, and in fact may help you with future lease negotiations. What's the trajectory of the game trade? That's what you want to discern.

Ask 50 store owners, are you doing better, worse or about the same? Some successful stores are stalling out and looking around for ways to diversify. Other stores are circling the drain and talking about changing their formats, moving to small locations or closing entirely. It's hard to tell, on the whole, whether we're seeing more stores or fewer. New stores, undercapitalized, under researched, are still popping up quicker than the old guard stores are closing.

While you do all this, raise more capital, perfect your business plan, figure out more details of your operation and what you really want out of all this. Take some community college classes to save money on skills you need. I recommend: Excel and spreadsheets, Quickbooks and accounting, small business management, website design, Photoshop and graphic design, and video editing. If you're handy, learn basic carpentry and home electrical. You'll need all of this. This is what I tell my 13 year old to learn, as he'll always have some extra cash if he knows how to do these things.

If you've got a solid business plan, a six figure investment and a ton fo research under your belt, there is nothing that can stop you really. Even if you start in a down environment, everything is up for you. However, if you have no plan, a shoestring start up budget, and you're relying on some optimistic numbers to get you through your first year, and YOU ALL ARE, you need to time it right. It's like the stock market. You want to get in while things are going up. You can't predict the bottom, so don't think you can jump in then. You certainly don't want to be going down, because you really don't know how far down it will go.

Right now I think we're heading into a down cycle, but don't trust me. I'm one of your fifty retailers. We're down about the same as last year, in a period when my business should be growing by double digits. I'm not looking for advice, thanks, I'm stating facts. If I am wrong, and I often am, you will have taken a year to raise money, educate yourself, acquire skills, and shake the hands of 50 game store retailers. You won't have the chance to to this again, so you win whether I'm right or not.

Wednesday, May 30, 2018

How to Order Games (Tradecraft)

This week I'm handing off the ordering process to my manager for the next three months. I'll be on vacation in Central America for seven weeks, so this includes a couple weeks of practice and a week after I get back. If you're trying to hand off this process to someone, this might be useful. It could also be useful if you're new to ordering. Trips like this are an excellent opportunity to check your policies and procedures. Last time I was gone for a month, it took me about four hours to get the store back up to speed when I returned. That's what I want to see.

In the beginning, there were pre-orders. These have been placed in the past and will arrive throughout this period on a schedule of their choosing. I don't track them because they're unpredictable and our revenue levels can easily absorb them. My store pre orders absolutely everything and nothing is ordered last minute other than special orders and the Games Workshop weekly surprises. I don't read dailies. Although I'm handing off ordering, a critical part of this process is buying of new goods, and that's not getting handed off. So really I'm handing off restock ordering and purchase budget management.

My primary distributor is ACD and I get a full list of all pre orders every Saturday morning.
I have an almost equal amount of work to with Alliance, especially for Asmodee.


If I had no budget controls, there would be around $10,000 of stock that could be ordered at the moment. This is accomplished by generating purchase orders from our point of sale machine. To keep on budget, we use Open to Buy. You can download a sample Open to Buy spreadsheet here.

Open to Buy is how we know how much we can spend. Cost of goods are added, product purchases subtracted, and the total subtracted from the available balance, leaving a balance hopefully near zero. I'm currently over budget by almost $4,000, so there's no spending right now. Or is there?

Open to Buy with a negative starting balance

Pre orders will show up regardless of budget and although we can vaguely plan for the big ones, the small ones hit us by surprise and we tend to adjust purchasing after the fact. It's alright to go over budget, but it's not alright to keep buying once you're there. I do have exceptions though. I don't run the kind of store that doesn't have product on the shelves when Magic is released, so some categories get to exceed the budget.

These are my Top of Mind departments. It's alright to top off these departments even when over budget. They include the top performer in each department:


  • Dungeons & Dragons
  • Warhammer 40K (especially Space Marines)
  • Chessex dice
  • Magic: The Gathering
  • Asmodee Family
I would like not to be out of any of these products we've determined to be worthy of carrying, regardless of budget. Most of them are also exempt from strict inventory metrics. Chessex is a "product pyramid" where we don't perform metrics, although Asmodee regularly gets looked at since the line is so vast. 

A long term buyer would be required to do inventory analysis on their potential purchasing to see what to continue ordering and what to drop. I would like to say we're training for that this week, but we're going to focus on budget for that filtering mechanism for now. Long term inventory analysis would be critical for success.

The next step is communication. All my sales reps need to understand that from this point forward, my manager is buying until further notice. Email communication goes to and from them and they have permission to buy. The manager also needs to ensure they have access to all the various web portals for orders, including logins and passwords.


Ordering schedule with notes

From here it's a matter of keeping on schedule, knowing when to order. Pre-orders will auto ship, if they hit enough freight, but restocks need to be manually placed, budget permitting, Top of Mind overriding. My schedule is particular to our circumstances with warehouses being next day ship and Games Workshop slapping penalties for more than one order a week. GW is by far the most painful to manage here and I'm often scrambling to make sure I have all the new releases. They could really use a pre order mechanism.

At this point I'll be out of the ordering loop, focusing instead on daily receipt totals I receive from staff. My job is now finance and continuing to place pre orders. My primary job is to make sure we don't run out of cash, but being out of the country, I have limits on what's possible, especially with new online banking which locks down my bills a week in advance. Ideally I would have checks ready from backup accounts, a big cash cushion, or overdraft protection on my account.

The last bit of this puzzle, for trips over my distributor terms (30 days) is a Google Sheets document with the bills. If I were going for a couple weeks, I could just pay my bills when I returned, but I'll exceed my store terms, along with various credit cards and utilities that often give me 2-3 weeks to pay.

My manager enters each bill into this sheet so I can use online banking to schedule payments. My biggest problem with this from my last trip was enjoying myself and forgetting to pay the bills. I woke up one morning and realized a bunch of stuff was due and just missed having the electricity cut off. Not for the first time, the weakest link in my system was me.