Quest for Fixtures

You would think a visit to buy used fixtures at Borders would be an almost gleeful experience, just as you might think I did the happy dance when our latest competitor closed a few months ago. I talked about the happy dance for months, really wanted to do the happy dance, worried about my dance steps, and contemplated a Youtube video, but when the time came, there was no joy. Actually, it's quite sad. I know what it's like to throw yourself into your business and I know from working at failed companies the pain the staff goes through as they wind down, tearing apart what they've built. At one dot-com start-up, I took a boot camp and got Cisco certified, installed an amazing OC3 connection between cities, and as I was finishing up, got a call to shove everything in my car and bring it on home. The bubble had burst.

At the Borders, customers circle like vultures. Signs, usually sparse and subtle, are gigantic, bright, and ubiquitous. Everything must go. This is not retail, this is an autopsy. Order and propriety break down and kids run screaming down the aisles. No deal is good enough for the customers and they complain bitterly. The staff are shell shocked and resigned. I want to say something, but what? Customers shop as usual, looking for bargains of top quality merchandise. Recession spending has permanently changed their patterns. There's still a lot on the shelves and I wonder a little selfishly how long before they'll clear them off.  I just bought them, after all. I am a vulture now as well.

As a store owner, there is little solace in being the last man standing. I really don't believe brick and mortar is dead, but it's constant pummeling, dismemberment and general apathy in its pounding from the public has me worried. Everyone is a free market capitalist until your job is on the chopping block. You have to wonder sometimes if survival of the fittest is the best way, especially when the invisible hand beating your face in is a publicly traded company that has lost over a billion dollars (a billion with a "B")  in their pursuit of modest profits. Meanwhile, local governments are horribly screwed as their sales tax base evaporates and their down towns are hollowed out. They pass on bogus fees to small businesses, hold votes to raise sales tax for survivors and cut local services to get by. Beatings will continue until morale improves.

Then again, what we're seeing is also opportunity. It's opportunity for me to get four new book cases and a new board game display table. It's an opportunity to sell role-playing books a little more exclusively, or possibly fan fiction for games like 40K. More importantly though, it's an opportunity for independent book stores to make a return. Independent book store numbers have stabilized recently, hovering around 1,500. They know their customers, stock what sells and work with ebooks and online sales. They are creatures of the current economic climate as well as survivors of it. They are a niche trade, destination stores, knowing they have no business as anchor stores in shopping malls. I love my local fantasy book store, Dark Carnival, and try to make all my purchases there. Where there is crisis, there is opportunity, as they say.

It's still hard not to get demoralized. I try to focus on my current situation. It's like being unemployed. You only need one job, you don't need to psyche yourself out with statistics of how the overall economy is doing. The game trade ecosystem seems strong and I've seen a number of really good stores open up over the last year or so, run by people who have hit the ground running, who seem to be avoiding the big mistakes. I don't know why I have a sense of pride in that, but I do.

Miniature Games

For the last few years I've looked at the "market share" of our miniature games, which is generally an indication of what people are playing. Here's a look at what we've got:

 

 2009

The big news between last year and this year is how we dropped, after much painful deliberation, Flames of War. You can see the tail end of our clearancing out FoW in the top chart. So how are we doing overall with miniature games after that painful decision?  Our profits are up 5% in the department. We were just too weighed down with a lot of dead lead, both with Flames of War and a lot of little "throw it against the wall and see if it sticks" miniature games. 

For the most part we paired down our miniature games to what was getting played in store, much like we do for CCGs (with an exception or two). For 2011, after the top 5 games, the bottom 6 games are practically invisible. When looking at a pie chart, this would mean that the established games grow in their percentages, which can be deceiving, since it doesn't necessarily mean they sold more, only that there's more pie. 

You would think that as our store grew larger, our selection of games would expand, but strangely that's not true. Part of this is because inventory becomes less manageable, cash flow is hampered by useless stuff that nobody wants and inventory mistakes become more painful and downright dangerous. We're a business, not a museum or an art studio. So we tend to take fewer risks, which is good and bad. It's good because we focus on efficiency and profit, which keeps the store alive and the stuff that everyone wants on the shelves. Do you really want us to run out of a top game so we can carry some resin junk that nobody buys? It may be pretty, but it's no way to run a business. It's bad for obvious reasons because we hesitate to try innovative new things. Innovative new things means pain of some sort. I can't promise you we'll be more innovative, but at least I'm aware of the tension. I aspire towards innovation.

At this point in discussions internally, we usually start talking about Privateer Press. Privateer Press, since they never get rid of anything, suffers from similar problems we had with Flames of War. The inventory is inefficient. There are too many SKUs for too few players.  This is what everyone warned me about with Games Workshop, but they're actually ruthless with their inventory control. I understand Games Workshop. When it comes to Privateer Press inventory creep, it means we pare back our offerings, which reduces sales and drives customers away, probably online, which results in paring back our offerings in a vicious circle. It's what happened with Flames of War as well. On top of that, SKUs are often gone for long periods of time at all the distributors, making carrying the line a rather haphazard endeavor, again, sounding a bit like Flames of War. I really hate this about Privateer Press. Their numbers look very much like Flames of War, both in sales and inventory efficiencies (or lack thereof). So are we going to drop them? No. 

Here's why: Unlike Flames of War players, Privateer Press players are cross-genre gamers that buy regularly from other departments and other miniature games. Carrying Privateer Press is a service to our customers who buy other things that make us money. It's kind of a loss leader of sorts. Come in and buy some cheap tires and we'll sell you some profitable wheels while we're at it. We could painfully jettison our PIP customers if all they bought was PIP, but they buy lots of other stuff, so we compromise. We also have a minimal level of organized play for Privateer Press (Sunday mornings) and although it's rather sad and sorry, it exists and does drive some sales.  If you buy Warmachine or Hordes in our store, you will get to play. We couldn't say that about Flames of War.

The Ownership Experience

I thought I would touch on some of the more esoteric parts of owning my own hobby game store. These are some of the psychological issues I wasn't expecting and nobody told me about before I began. I was too busy trying to get the spread sheets to line up properly in my business plan, so I wouldn't have listened anyway.

Class Consciousness. I grew up in a world that was upper middle class, where everyone was expected to go to college and where everyone, even those who didn't finish their college educations, ended up a professional. Looking back now, my schools were in the top 1% in the state, compared to the failing one my son started at this year (bottom 10% until we moved him thanks to No Child Left Behind). I knew no one who owned their own business as an adult, unless it was IT consulting, and my adult friends were all professionals with lots of disposable income. We talked about cars, houses, international vacations and our latest gadgets. My passport from back then is nearly full (it expires this Summer and I'm in no hurry to renew it).

Even now, the new iPads, new cars, fancy vacations and private schools of my friends are in sharp contrast to my far more modest means. There is truly a sense that I've taken a step down to a lower middle-class socio-economic tier. My goals are smaller by comparison. I want my kid to go to college. I want to someday retire. I would like a new car in the next decade. This might not be a big deal if you don't have a degree(s) and didn't come from a profession, but it's quite the contrast when you have (or had) other options.

The Slowness. Owning a store goes so slow in comparison to the fast pace I was used to in the tech world. Projects were big, expensive and quick in IT. My last IT project took two years when I knew I could have accomplished it in six months if I had been in a more nimble organization. It felt like wasted time. In contrast, the progress in a game store is measured in years, in near glacial time. It's like Soviet five year plans, the same period as property leases. Sure, lots of little things are constantly added and tweaked at a game store, but the profitability, the debt pay down, the expansions, are slow and few and the scale is much smaller. There is the danger of pushing the limits, of making it go faster. I do this all the time with my store. She doesn't like being pushed.

Intellectually Challenging. Although progress is slow, it doesn't mean the intellectual demands are any less. I was originally intrigued by the perceived slow pace of running a store, like Mr. Olesen on Little House on the Prairie. An old boss once told me he fantasized about running a hardware store because of the pace (then thought I was insane for starting my own store). The progress may be slow, but the knowledge required to run a small business and the demands on our time are as ever changing and intense as any corporate job, or at least it should be if you're doing it right.

You've got management, sales, finance, and facilities (including IT, which ironically requires other consultants, despite my background). You're responsible for both strategy (the big picture) and tactics (day to day operations). Trends and toilets. You can be a genius at any one of these things, or two, or all but one, and still fail. Or something unforeseen can happen in your personal life and scuttle the whole enterprise. I love that about doing this, and it explains why a lot of game stores become road kill. 

Tiniest of Margins. In my seventh year, I only now have the financial breathing room to consider non essential purchases, like the staff lockers I mentioned recently, or going to a trade show without budgeting far in advance. I have enough operational savings (I can hardly call it profit) to do these things to improve the business. I recently had a discussion with my wife in which I argued that the many days and intense hassle I spent changing payroll companies, working to get our credit card processing hardware working and converting to a corporation were not only worth the time, but were essential activities in running the business. This is the job, just as much as sales.

Lately I've made saving money into a game as I've seen how much easier it is to improve the bottom line than increasing sales. For example, I'm trying right now to see if we can get through the week on two trash cans instead of three, because I really don't want to spend the extra money. In any case, if I had known the thinness of the line between success and failure when I was just starting, I probably wouldn't have done it. Also, if I had known it, I sure would have been a lot thriftier from day one. I mourn all the money I wasted learning how to save money. I feel the same way about other peoples poorly run stores.

The Happiness. I love getting up and going to work in the morning, although I don't like to stay late because I want to spend time with my son. I love spending an additional 3-4 hours a day on the computer outside of the store, handling finances or other remote needs. I enjoy watching the sales patterns and projecting the revenue, and watching as a marketing program produces results. When I'm not making money, I blame myself and I'm grumpy and insufferable.

I recently learned to enjoy squeezing the vendors to cut costs and coming up with new schemes to tweak a little more profit out of what's already there. This is my favorite game. That said, I always wonder if I could have been happy working on my own in IT. I hated IT really, but the things I hated about it where elements of the companies I worked for. I regularly recommend that people who are considering the game trade instead try to start their own business in their current expertise. If they fail, at least it won't be such an incredible loss of capital.

There is also happiness in living simply, of having more focus on what's important and less on toys and fancy trips. Family trips to Disneyland replaced trips to Europe and I'm likely to get the full value out of my current car before replacing it (my previous average was 2 years). Having weekends off is my biggest luxury and I savor each day. You would think you would get to game a lot more owning a game store, and what they say is true, you don't. However, when I do game it tends to be the gaming experience I want, with the people I want to spend time with. I have the pick of players and lots of time to think about what games I really want to play.It's almost always something familiar with friends (otherwise it's work).

The People. I very much enjoy my customers and the friendships and acquaintances I've made at the store. Even the surly ones, the socially stunted ones, the guy who complains about D&D 4th edition in scathing tones every time he comes in to buy the latest D&D 4th edition book; yes that guy too. The muggles who shine a light of reality into my fantasy world. They're all my people. I enjoy my conversations with my suppliers, especially Scott and Travis. If you get lonely working by yourself (I don't), suppliers are often your lifeline to reality, possibly your armchair psychiatrist. I wish I had more interaction with my peers, other store owners out there, but we're all silo-ed like nuclear launch technicians. I think we would be less exotic folk if we weren't such isolated, wacky rulers of our own little kingdoms.

Locker Rentals

We've discussed the idea of customer locker rentals for a couple years. I've dismissed it out of hand a bunch of times. The idea is similar to what some cigar shops offer to their customers, a place to store their stuff for both convenience and to keep their hobby a bit under wraps from prying eyes (alright, their wives). Gaming isn't stigmatized like smoking (any more), but still, the demand for convenience seemed to be there, and yes, wives are occasionally mentioned.

For a locker to be convenient, you would have to be one of the 15-20% of our customers who actively use our Game Center (I revise this number all the time). If you're lugging the same army, the same tub of D&D miniatures, the same half dozen board games or the same RPG library to the store every week or every day even, locker rental might be a godsend for you. Those 15-20% probably make up about half our sales, in case you wondered why game stores spend so much time with their events.

What got the locker rental conversation moving was the acquisition of staff lockers. We now have five people working at the store and the amount of random junk that each of us brings and keeps in the back and scattered about became incredibly irritating. There are reasons for some of this stuff, including a ton of gaming paraphernalia, but it became impossible to organize the back office without having a specific place to put all this stuff. Yes, as one business partner pointed out, I could have done this with plastic bins of some sort, but lockers are a space efficient solution that has the added benefit of security, if we want it. They are far from cheap, true, but the advantage as the owner is I can now issue proclamations about keeping your junk in your locker or else. Alright, the main reason is they're cool.

Patrick beginning staff locker assembly

Once we began chattering about staff lockers, customers began expressing interest in locker rentals and that old locker discussion was resurrected. I waited until our staff lockers arrived to make sure they weren't a nightmare to assemble and that there was enough room in them to be gamer useful. Books, CCG boxes and card games would certainly have no problem fitting in almost any size locker, but the locker litmus test was your average 12"x12" board game and the Battlefoam PACK 432 case (the GW base case is smaller than a 432). If we could fit those things in a locker, we were golden.

The rental lockers will be an inch deeper (and blue)

As you can see above with our staff locker as a test, there's plenty of room for all that stuff. Sure, you can't fit the bigger miniature cases in there, like the PACK 1520 but that was never going to fit in any size locker. Also, in case you were wondering, one of those mega sized Fantasy Flight board game will fit, but it takes up the whole locker. As for the details of the lockers, we crowd sourced them on Facebook.

My initial prices were way out of line, basing it on returns I needed for prime retail space. After I put down the crack pipe and realized the price was way too high, it naturally meant that lockers had to occupy otherwise dead space. Yes, using dead space was not my first reaction, which would have meant I was somewhat clever. Instead, it came from necessity when I realized I wasn't going to make retail level returns on the space they occupied. So my initial gym membership pricing dropped down to fast food lunch pricing of $80/year.

The photo sold it once everyone knew exactly what we were talking about. When I finally ordered the lockers yesterday, I got slightly deeper ones: 24"x12"x15". I also ordered a more premium locker in a beautiful blue color and with commercial grade latches and number plates (which were promptly back ordered). We began advertising that the first person to reserve a locker would get number plate one.  That honor went to Dave Richardson with Jon Finch reserving his over the phone while Dave was signing his contract.

If you want to learn more about locker rentals, including the rules, please visit the locker rental webpage. It's the first time I've created a new web page in about three years. We've tried to address all the possible concerns with our rules and contract. I think one thing we haven't mentioned is that I'm leaning towards contracts that are at least semi-annual, preferably annual to reduce the administrative headaches. I can't see dealing with a bunch of people on a monthly basis trying to pay for their lockers at the register or worse, not paying for their lockers and disappearing. For the moment, we're only accepting annual payments until the unit is full so we can immediately offset the costs of purchasing the lockers. After that, we may get additional lockers.

Level Playing Field

Nobody "owns" a customer. Saying someone is my customer, refers to an ephemeral business relationship that includes neither exclusivity nor the promise of future trade. We work extremely hard to attract and retain customers, but it's like sand through your fingers. Customers constantly leave, lose interest, get married, die or whatever, and the process of acquisition and retention never ends. I mention this because when I talk about how publishers deal with my competitors, I want to make it clear that I'm not entitled to anything, including customers.

What reasonable retailers want from publishers is a level playing field. Many retailers will decry the various sales channels publishers have established that don't include them: direct, big box, the book trade, Amazon, PDF sales and of course, competing game stores that sell online. In my book, this isn't reasonable, as it stinks of entitlement. We don't own the customers, nor are we owed consideration from publishers beyond our tenuous business arrangements. There is one exception, however, when a publisher sells something exclusively to one tier.

The latest case that annoyed me quite a bit was the sale of a special Munchkin version with a booster pack sold exclusively at Target for the same price as regular Munchkin sold through hobby retailers. I understand the desire to sell to mass market, to break out of the hobby ghetto. I also understand the logic that the "muggle" customer will seek out the game store to fulfill their needs once they purchase their base game of Munchkin, Caracassonne or Settlers of Catan. Steve Jackson himself likes to tout this benefit, and I'll give him that. However, this assumes all things are equal. When a special Killer Bunnies or Scrabble is sold at Barnes & Noble or a special Star Wars miniature set (Wizards of the Coast) or Munchkin, as in this case, is sold at Target, it's more than growing the market. This is directing hobby game customers, those ephemeral folks who shop at my store, to my enormous competitors. In fact, it puts a wedge between me and my customers, since I can't get these special items.

Looking back to 2010, I sold 357 Steve Jackson Games card games compared to hmmm, let me count them, carrying the one, zero at Target. So why am I being treated badly for supporting this company? The same question can be asked of Playroom Entertainment or Wizards of the Coast when they've pulled similar stunts. If your product can't compete, as is, in the big box world, perhaps it doesn't belong there. If you do need some special oomph to make it work, let those who helped keep you in business participate in the promotion. Otherwise you build animosity with your head sales people, AKA me. 357 is also close to the number of total card games I carry. Do you think I'll have a difficult time recommending a non Steve Jackson Games card game if I've got a bee in my bonnet?

"Aha!" you say, "There are hobby exclusives as well!"  This is true, but I would argue that the small size of the hobby trade and the incredible level of support we provide will often justify this little somethin' somethin'. They may not be my customers, but it is our market. It is our responsibility as hobby store owners to build that community, that market and hobby exclusive products cement that position. The purest expression of this is Wizards of the Coast's program to allow stores that support D&D with organized play to sell product early. You build the hobby and we'll give you special status. Other than mass amounts of foot traffic, Target and Wal-Mart offer nothing of value and will dump your hobby game when the turns fall below their threshold (but well within the hobby trade threshold). Alright, so perhaps there is a bit of entitlement inherent in this argument.

The exception to all this is the electronic product. We try to participate in the electronic market with those publishers who will allow it, but it's really never going to be a strong point for brick and mortar stores. That said, just providing us the opportunity to play in the electronic marketplace creates enough good will for us to boost our promotion of those companies, even when most of their sales are rather small. Perhaps we'll come across a better way to market electronic products in our store, but we'll never know if we're not given the opportunity.  We're also more likely to stock the print product when we get such consideration. Honestly, just offering this in some rough form is enough to build that good will. If SJG gave us a one week window to order special Target Munchkin, very few stores would have likely taken advantage of it, but that consideration is really what it's about. We want a level playing field, even if we don't feel like playing.

Top 100 Card Games 2011

This is my second year of making this list, inspired by a very good retailer who made a similar one that helped me out tremendously. The list includes our best selling card games by quantity sold, stripping out expansions and the Living Card Game category. Game of Thrones LCG would be #26, for example, if it were included. Several of the expansions for Dominion are in the top 10. Every one of these sold a respectable number of copies (3 or more).

It's an imperfect category, as it includes games you might not classify as card games, including some party games and the occasional dice game that I forget to remove. You might want to compare this to the list I did last year at this time. There are also some that might have been mis-classified and missed the list. What's a card game, board game, party game, living card game, or CCG is highly fluid nowadays. Most game stores lump all of these games into their board game category and call it a day.

Last year I had Dominion stuck in the board game category (my mistake), so you can see that game is the heavyweight champ. The bottom quarter of this list includes a bunch of new kids games from Haba, which I hope to see creep up the list over time.

The list goes from left to right, top to bottom, with Dominion as the top game and Famiglia holding the #51 spot.

Dominion	Famiglia
Space Hulk: Death Angel	Chez Cthulhu
Dominion: Intrigue	Munchkin Impossible
Munchkin	Munchkin Cthulhu
Poo	No Thanks!
Resident Evil	Family Business
Apples to Apples	Blink
Saboteur	Lunch Money
We Didn’t Playtest This At All	Are You A Werewolf?
Guillotine	Werewolves of Miller's Hollow
Gloom	Great Dalmuti
Cookin Cookies Lunchbox	Dutch Blitz
Pirate Fluxx	Slamwich
Fluxx	Scary Tales: LRRH
Bang	Heroes of Graxia
Quiddler	Munchkin Booty
Ascension	Clue Card Game
Killer Bunnies	Fictionaire: Tall Tales
Zombie Fluxx	Early American Chrononauts
Bang! The Bullet	Myth: Pantheons
Star Munchkin	Scrabble Slam
Citadels	Martian Fluxx
7 Wonders	What's Yours Like?
Five Crowns	Tichu
Munchkin Fu	The Stars Are Right
Back to the Future	Pit
Nightfall	Deluxe Pit
Dweebies	Mille Bornes Collector's Ed
Stoner Fluxx	Onirim
Lost Cities	Parade
Bohnanza	Memo Orchard
Munchkin Bites!	Animal Upon Animal Card Game
Once Upon a Time	Little Teddy
Wizard	Wild Vikings
Pocket Battles: Celts vs Roman	San Juan
Uno	Killer Bunnies Remix
Fictionaire: Naturals	Family Fluxx
Chrononauts	Are You The Traitor?
Mr. Jack Pocket Edition	Ren Faire
Whack a Catgirl	For Sale
Monty Python Fluxx	My Dwarves Fly
You've Been Sentenced!	Phase 10 Masters Edition
Set	Rat-a-tat Cat
Rhodan's The Cosmic League	KB: Odyssey Starter Combo ACL
Fictionaire Classic	The Good, the Bad, & the Munchkin
Fictionaire: Fool Science	Pocket Battles: Orcs vs. Elves
Sounds Like A Plan	Mille Bornes
Coloretto	Mummy's Treasure
Race for the Galaxy	Cheese Snatching!
Felix: the Cat in the Sack	Beer!