Sunday, March 22, 2015

Fresh Eyes (Tradecraft)

My trip to the GAMA Trade Show this year was with a good friend of mine who owns a newer game store in Minnesota, as well as investing in Black Diamond Games. He runs a mean Pathfinder wizard as well. Helping him navigate this first show provided a fresh perspective on the game trade. The big question with any decision was: Is it worth it?

My GW sales rep, Daniel, painted this model.
We're fans as well as business people, which
helps with the frustration.
For example, Games Workshop is a constant pain in my ass. It's a company that gives with one hand and takes with the other. So did I tell him to avoid Games Workshop? Umm, no. In his circumstances, there was absolutely no logical way to avoid setting up a new account. As much as I like Privateer Press, I couldn't possibly consider them the go-to miniature company. Their line is too scattered, their intro products not quite coherent, and their tools and paints constantly unavailable. I think a new store with discipline will be more successful with GW. I think that's just a fact.

We talked about why I complain about these various companies. We complain because we care. The opposite of love is not hate, it's indifference.

Every new company we saw went through a similar analysis:

"What about that card company?"
"We do well, but their boxes are sold at wholesale prices online on release."

"What about these cool board games?"
"They sell just ok, but they use Kickstarter. Avoid most of them because of market saturation."

"What about these cool dice?"
"Yes, I love them. They're never available through distribution. You'll need to go direct."

"Should we even bother with Reaper miniatures?"
"Tough call. Here's the facts."

"These guys?"
"Poor discount."
"These guys?"
"They lie to us."
"These guys?"
"They bring in problem customers."
"Those guys?"
"Yes, but they sell mostly direct."

I had him take pictures of everything I thought he should carry; mostly board games. His $10,000 bank roll was tapped by the end of the day.

These various game trade weaknesses are actually game trade strengths. It's like the big box stores are giant health care companies who only want healthy patients, but the game trade? We do hospice work. We take all comers. We'll take your sick, your dying, your economically troubled. We'll hold their hands all the way to the end, when they leave us holding the (colostomy) bag.

Going to the show with fresh eyes also let me consider older options I had shut the door on. For example, opening a second store went from a bad idea, to a preponderance of evidence suggesting its inevitability.

It comes down to a couple factors. We're in year six of a game trade expansion. Is there a bubble? If you think there's a bubble, you behave differently. You don't expand. You don't take on excess debt. You are cautious. You can certainly have a six year bubble, as we know from housing (which had a 20+ year bubble). However, at some point, your mind switches from bubble to long term trend and you start making more aggressive decisions. That's where I'm starting to lean.

Assuming we're in an expansion trend, there is a good deal of evidence that suggests an experienced game store owner can hit the ground running. It took me years to become profitable in my first store. It was exhausting and I will not willingly do that again. How about 18 months? I've seen three experienced retailers open second stores and nail it in 18 months. It requires knowledge, discipline and a lot of experience, but not as much capital as I blew gaining those things the first time. I have no doubt I could be one of those guys. I'm not saying I'm going to open a second store, but I no longer have barriers, thanks to a fresh perspective.

Oh, and I'm more comfortable with long term leases thanks to this thinking. A decade in a "do over" situation seems like hell, but a decade doing what I do now? No problem. That's the hope with our current location, a long term lease with expansion money.

Thursday, March 19, 2015

Interview and Gama Trade Show (Tradecraft)

I did an interview on The Company Bard, "the gaming careers podcast." We talked about the game trade from a retailer perspective. It was a solid, nuts and bolts interview with a lot of crunchy numbers. You can listen to it here.

This week I'm at the Gama Trade Show in Las Vegas. The show feels packed, with retailer attendance up 20% from last year. It continues to grow rapidly. This is very good news, since game stores are also continuing to grow and proliferate. Nobody goes to Gama unless they're serious about improving their business.

There are three main components to this show: retailer seminars, publisher seminars, and the trade show floor. A fourth component is networking outside and within these events, and not surprisingly, that's where I've been getting the most insight into the trade.

From the retailer seminars, I didn't come across anything that revolutionized my business, like my last show, two years ago. I did come across many best practices I was able to load "into the hopper" for changes back at the store. That change management function was a critical skill I learned at that 2013 show from Dave Wallace.  This year it was mostly ideas about human resources and events. We're all about constant improvement.

The publisher seminars were fine, with a couple of interesting juxtapositions. On one hand, we had Reaper Miniatures stand in front of a room full of retailers, asking where the hell their product was in the distribution channels, and answering "Don't know." Everything is cool on our end. Don't know. "Don't know" comes off as ignorant or deceptive, so it wasn't surprising it kicked off a retailer discussion of whether Reaper was still right for game stores, or necessary, or even relevant with their direct to consumers Kickstarter model.

That's hardly the take away you want for your company after spending thousands of dollars going to a trade show. Poor messaging. Moreover, after telling us "don't know" why we can't get stuff through distribution, they handed out a catalog with about a dozen high value rack deals and told us not to order from them; go through distribution. Riiiiight.

I mentioned that juxtaposition. If you want to see a company handle messaging correctly, the WizKids seminar was an inspiration. WizKids has really screwed the pooch (technical term) with supply of Dice Masters. Did they show up and say "don't know?" Hell no. I'm not a big fan of this company, but the CEO, Justin Ziran, showed up, explained exactly what happened and why, what's happening now, and what they're doing in the future to avoid the problem of stock outages. He put his cell phone number on a presentation slide. It's safe to say, "he knew." I came away from Reaper wondering if I should disengage. I came away from WizKids sending emails to my staff asking how we could engage further.

The show floor. I mentioned in a previous post I came with a bankroll to spend. If all goes to plan, I will have spent $5,000. How did I spend it? My first stop was a small playmat company, one of several. I promised to buy $500 in mats, but they had no order forms or catalogs. That meant I couldn't really place an order, but they'll call me. I give it a 50% chance of happening.

Next was airbrushes with Grex. I've wanted to bring in airbrushes for years, and these were beautiful, with quiet compressors. Unfortunately, they had a six page retailer application. I was determined though and went back to my room, filled out the app and handed it in, along with one of their forms of suggested starting stock and a demo kit. They took my credit card information and I spent about $1,200.

Combo GCK03 gravity feed airbrush with compressor, Tritium TG3 gravity feed airbrush, Genesis XGi3 gravity feed airbrush, Genesis XSi3 side feed airbrush, 2 AC1810-A 1/8HP mini compressors, a variety of nozzle kits, replacement needles, airbrush holder, valves, hoses, adapters, cleaning kits and a full demo kit. 

Then I walked right over to Vallejo, saw their new Model Air airbrush paint line, and emailed my Alliance rep to get me one. $600. Some people have been waiting for this line for years, and I just happened to hit it on release.  Who knows, it may even show up today at the store. In fact, there were probably half a dozen games where it was all about a quick photo sent to my sales reps at the distributors.

Next I found the old Wench card game, which despite the controversial name, has nice pin up art that I know is appreciated by a good number of both my male and female customers. I picked up a couple displays off their table and they ran my credit card right there. $90. Stop judging me. 

I vowed to place a direct Koplow order this year, after seeing them at trade shows for 10 years and not really being able to get their stuff. I was helped by a friendly gentleman named William Niebling, who many in the game trade know well. They tell me he has been there for years at the Koplow booths, and I somehow didn't engage him before. Nevertheless, he was happy to write me up a $1200 order as I pointed to various products.
Plastic display boxes of opaque dice, double dice, Japanese/Chinese dice, 54 sets of hanging polyhedral sets, box of sand timers, box of wooden dice, L-C-R- display, 5mm mini dice display, two types of pawns, 20mm tactile dice, hit dice, compass dice, 55mm opaque dice, jumbo polyhedral dice, jumbo life counters (14 in a plastic fish tank), "life stones," two each of 7 colors.

What about Reaper? Well, I did place an order through ACD for a couple rack deals, both the Bones and the Pathfinder metal models. It came out to around $1,000 and I was told there was at least a months lead time and don't hold your breath.

If I've learned anything from the game trade, it's not to hold my breath.

Thursday, March 12, 2015

Into the Pit

The Pathfinder adventure we commissioned for our Kickstarter campaign, Into the Pit, is now available for purchase on the Paizo website. We went all out with professional designer Amber Scott to create this fantastic adventure, inspired by my own campaign, and themed around the store.
Here's how it's listed, and I'll admit, it has me excited:

Into the Pit (PFRPG) PDF

Black Diamond Games

Between the city of Tara and the valuable black salt mine known as the Pit stretches a barren expanse of dusty badlands. Decades ago, prisoners were sent to the Pit to labor in its lightless depths. Now it stands abandoned of living workers, inhabited only by the spirits of the dead and a vicious salt drake. Reclaiming the mine would bring great wealth to Tara and industry to its people. All the city needs is a group of heroes brave enough to venture into the Pit…

"Into The Pit" is a Pathfinder compatible adventure designed for four 7th-level PCs. By the end of the adventure, PCs should be midway between 7th and 8th level.

The adventure centers around the exploration of a multi-level underground black salt mine called the Pit, but the adventure offers more than a straightforward dungeon crawl. The PCs’ initial patron is the Black Knight, king of Tara. Over the course of the adventure, though, the PCs may receive an offer from Na’Kriss, the salt drake who lairs within the mine, to serve his needs instead.

Author and project manager: Amber E. Scott
Cover art and border design: Caitlin Bauer
Cartography and graphic design: Robert Brookes
Layout and design: Marie Small

44 page adventure, including full color maps for both GMs and players (unmarked).
This professionally developed adventure was part of the Black Diamond Games expansion Kickstarter.

It was extravagant when you consider only a couple dozen people received it through the Kickstarter. The adventure cost about $200 per person when you take the cost of production divided by those who chose that backer level. If you balked at the $25 Kickstarter pledge, please consider supporting us at this more competitive price point. We do get money, just like every other PDF centric RPG business. 

If we can break even on this adventure, we'll probably do another one. And just like that, I've become a game publisher with poor business practices. 

Future Blog Post: I'm investigating "key man" insurance and how to ensure your business continues after you're dead, while still taking care of your family. For most, it's a quick liquidation fire sale, but what if you've got something worth preserving? It's an option for those with strong management and strong business process.

Tuesday, March 10, 2015

The Last Two Percent (Tradecraft)

The Law of Diminishing Returns basically states that your effort put into a problem will eventually far outweigh the desired results. The goal becomes getting a process far enough along, and not sweating the details. In business nowadays, "close enough" is good enough. We see this all the time in various industries.

My POS software company recently announced a version 2.1 at the same time they announced 2.0, promising to fix the 2.0 bugs with that future version. Car companies are desperately trying to increase sales by homogenizing and dumbing down their cars to the most common denominator, abandoning niche vehicles, and interesting features. Disgruntled Wal-Mart customers flee to Target to find themselves treated just as poorly there, failing to realize their embrace of discount stores comes with a hit to service. Business books suggest getting your business "good enough" so you can lie on the beach for the remaining 36 hours of your work week.

Good small business owners will tell you "good enough" is the enemy. Good enough is not good enough. It might work for your entrepreneurial MBA run business, whose goal is to be acquired or strike it rich with Other People's Money, usually within a strict time limit, but small business is about filling in that last couple percent of efficiency, of striving for perfection, of dazzling your customers. The Law of Diminishing Returns is our constant companion, not a fools errand.

I'm mostly referring to process. For example, special orders are really hard. There's a Reddit discussion about a local game store that flunked their special orders. The thing about special orders is they should be invisible to customers. We spent about $7,000 upgrading our IT infrastructure a couple years ago, primarily to address special orders. Good process and good IT should function below the surface, with no drama.

We often have 20-30 special orders in our system at any given time. Our success rate with this new system went from 95% to 98%. 95% might sound good enough, but it meant we disappointed 1 in 20 customers who placed a special order, as opposed to now, where it's 1 in 50. 1 in 50 is still unacceptable.

Today we got our new sticky notes from the printer to help with that last 2%, a process issue where we either fail to pull an incoming game, fail to notify the customer, or put aside too many games that then sit in a bin for months before they're noticed. A game that sits in a bin is lost opportunity, which costs us money.

This last, analog part of a sophisticated ordering system, a simple sticky note, addresses the last 2% of our problem. It was the end result of a lengthy discussion with other game store owners who had the same problem.

As I've stated many times, we're not special. We're not geniuses because we have a sticky note. We're just one of those game store owners in pursuit of the last 2%. We may fail on occasion and we certainly have our shortcomings, but nobody can accuse us of not trying to improve our process.

Being a store owner then is being the kind of person who wants to embrace this last 2%. You have to be bothered by that final bit of inefficiency, rather than having that "good enough" entrepreneurial mindset.

Thursday, March 5, 2015

Trade Show Fu (tradecraft)

I'm going to the Gama Trade Show this month. Looking at my open-to-buy worksheet, I have around $4,000 to spend. Would you like some of that? It's burning a hole in my pocket. I'm losing money by not spending it. So will I spent it all at the show? Probably not.

If you're going to the show as a publisher, please follow rule zero: Take their money. Is the guy manning your booth there because he's your second cousin's boyfriend's brother who has a strong back, or is this a key man in your operation? Can he answer question? Can he take orders? Most importantly, can he take my money right now?

There are well known publishers that have a terrible time of this. There are several levels of ineptitude when it comes to not taking my money. The worst is when they hand you a catalog, a thing that will sit at the bottom of my backpack and may get perused by staff in a month or two.

The next is the guy who takes my order and promises to hand it to the people who can actually take my money back home. There's a 50% chance this ever happens. If they take my credit card (some don't wanna), the chances go up a little.

Finally, there's the smart guy, the one who has Square attached to his bank account with a free smart phone reader. That guy takes my money right now. That means I know my remaining budget. It means I can generally plan without having to pretend to spend $8,000 because half the vendors flake. Please take my money.

If you're at the Gama Trade Show and you can't take my money right now, you have no right to complain about retailers or distribution or the foibles of the game trade. You are the barrier.

Friday, February 27, 2015

Game Store Etiquite

We used to study the rules created by the early Buddhist order in graduate school. We wanted to understand what people (in this case, monks) were really doing. Nobody sane makes up rules unless there's a behavior they want to curb. Where there's a rule, there's a behavior. You get general rules, like don't kill, but you also get really specific rules, like don't be a jerk when it comes to the rules about sex, and when people are pointing out you're being a jerk about the sex rule, don't deny you're being a jerk (that means you, Bob). This reminds me of Shane from Wal Mart.

When it comes to the store, I've been reluctant to slap down rules before behavior became a problem, so we tend to avoid posting a lot of rules. That said, there are three rules, etiquette really, that seem endemic to game stores. They are:

Don't Scare the Straights
By all means, let your freak flag fly. We are a safe place. However, try not to scare the straights. The muggles keep the doors open for most full range game stores, so you want to maintain a modest level of propriety. If I can hear you screaming about murdering the orc baby from the counter, it's too loud. If you're screaming about murdering the orc baby at the counter, which can happen, you need to work on your tone deafness.

Also remember we have four major categories of games in the store, and all but the alpha gamer think the other three categories, games they don't play, are a little weird. That's right, you're all weird to each other. I try not to laugh at this. Plus we have the moms and uninitiated who need to be eased into the hobby. Don't scare the straights.

It's All Good
When it comes to those other three categories of hobby games or even competing games, please don't denigrate them. By all means discuss the ins and outs, comparing and contrasting various systems, but reserve the value judgments.

The beauty of a game store is we have such a vast variety of games that appeal to so many people. Unless you're very old or incredibly stubborn, there's a good chance you may gravitate towards one of these games in the future, so I kindly suggest you don't slam the door closed. It makes it harder to open later. Putting down other peoples games is bad form. 

This is a hard lesson for staff too. One of the easiest ways to sell a great game is to point to how it's better than another game. I have groups that regularly feel the staff doesn't like them because the staff member is fervent about a particular game system at the expense of the others. My constant criticism of Games Workshop in this blog is often taken as a dislike of the game and its customers. It's a fine game with fine customers, regardless of GW shenanigans. So by all means have opinions, because you're a gamer after all and we can't change the position of the stars, but respect the person whose getting satisfaction out of that other thing.

Own Your Odor
Perhaps you have a glandular condition. Perhaps you walk everywhere because you're saving the planet. Perhaps you just got off a 12-hour shift. It's all good, but if you stink, that's on you. Unfortunately, this stink is so common and so pervasive, it has become a trait of your sub culture. Shower my friends, or at least carry some deodorant to spare the rest of us. You stink. 

Our mail carrier came in this week and asked if it always smelled so bad on Saturdays. This is a woman who walks half way into the store for ten seconds, turns around, and leaves, yet she was bombarded by stank from a group of guys about thirty feet away. That is some hefty stench. 

Today our new "odor control dispenser" arrives. This is a device that will cost us $5 a month because our customers apparently don't bathe in their culture. So I can put a price on stank, it's $5 a month plus the hidden costs of driven away customers. Please help us in this area. If you have a friend who stinks, perhaps subtly suggest bathing, or maybe a gift of deodorant is in order.

It shall be known, thousands of years from now, that these were the problems in the early gaming subculture.

Wednesday, February 25, 2015

Lesser Boat (Tradecraft)

Lesser boat, or hinayana is a pejorative Sanskrit term in Buddhism, used to describe earlier traditions that lacked the sophistication of what you're doing now, sailing to enlightenment in your greater boat (mahayana). There's a lot more to it than that, but I wanted to use this lesser boat terminology in discussing small business.

As small business owners, we are distinctly different from entrepreneurs. Entrepreneurs swing for the fences, introducing innovative business concepts, funded by other peoples money and often created by the best talent available, rather than their own hands. Most will fail spectacularly, their boat going down with millions of dollars of capital. When Americans talk about small businesses, they mean entrepreneurs, the greater boat. If you follow business programming, this is where the action is, while small business gets mentioned usually because it's just so surprising the lesser boat still exists. They regularly do health checks to see if the leaks have finally claimed the small business armada.

The smoke and mirrors of Amazon and the Wall Street money behind it seem intent on crushing small business in an attempt to grab Internet market share. So it's no wonder they're perplexed at our continued survival.

But should they be surprised? Small business is true capitalism. If you're a capitalist, this is where it's at, at least at the micro level. There are no government subsidies, bail outs, tax tricks or cronyism in small business. I am not going to buy up assets with other peoples money and depreciate them over time to give the impression of profitability so my investors can pump money into my business. When I run out of money, I've failed.

When a small business does fail, it's considered healthy for the ecosystem, as opposed to big business, where everyone wrings their hands and looks for solutions and morals to the story. A dead small business is a sick bison feeding the hungry wolf in a nature parable, while big business failure requires solutions, restructuring and fixes. Small businesses are often started with credit cards, home equity, and meager savings. It is true banks only loan you money when you don't need it. But lest you think this is truly the small boat, small business is also surprisingly sophisticated.

Small business leverages cutting edge technology. Facebook is my bitch, allowing marketing power never experienced in human history. Point of sale systems are leap frogging in sophistication from one version to the next, with web integration, custom ordering, and bells and whistles the big retailers have had for years. I can't keep up with it, while it was pretty stagnant just five years ago. We use and experiment with modern management techniques. We employ just-in-time inventory models and inventory metrics for maximum efficiency. We study how to improve and how others are succeeding in fiddly, corner case areas where big business and entrepreneurs fear to tread. We do this while placing orders for toilet paper and instructing staff how to put boxes on shelves. Small business gets so little respect, that even the designation "small business" is appropriated. the SBA considers small business to have up to 500 employees. 500!

I started this business because I wanted a simpler life, something easier to understand. I expected my game story to be like Oleson's Mercantile from Little House on the Prairie. I actually envisioned that quant store when I thought about it. I saw myself counting nails at Oleson's. Let me tell you though, this business can be just as complex and sophisticated as any business out there. This ain't the prairie, my friend.

And that's where we get into perception. It is perceived, by those who know us, that we are in fact Mr. Olesons in our mercantiles. That our small boat, is a hobby of a business, a simple place where we play games all day, rather than a sophisticated small enterprise.

I don't want to sound defensive, because I know I will to the uninitiated, but we are not entry level. We are not a place for your first job or for high school kids to get their feet wet in business. The staff is educated, sophisticated, and well trained, with jobs easily as complex as any entry level college graduate corporate position. My staff will crush it when they move on to their professions. I am not exaggerating. I'm also not saying we're special. This is true with all small businesses like ours. It's really damn hard. There is no net or societal support, in fact often the opposite, as we are not represented by a lobby or effective trade group. Want a tax hike? Tell small business to bend over. Don't get me started on the county agriculture department harassment. There is also no luck.

We're not swinging for the fences, so we're not entrepreneurs, but neither are we playing store. We won't have a shot at riches and fame like those clever MBAs (nor will we burn millions in a bon fire), but we're no less professional in our endeavors. We are all in the same boat. I suppose if I could impart one bit of understanding to our friends, family, community and the rest of the business world, it would be this.

Thankfully, I believe most of our customers understand this.