I've agreed to do a presentation at ACD Games Day in May. It's in Madison, Wisconsin, one of my favorite cities. My initial plan was to move to Madison and start a store, so strangely, I spent more time in Madison in my research than I did in California. When I started a new job, they even sent me to Madison for training. That's where (and when) I wrote my business plan.
I highly recommend you go to this show, especially if you've got a new store and you're local, like within a half day's drive. It's a mini Gama Trade Show, with presentations and vendors. I haven't entirely nailed down the topic, but I'll most likely talk about inventory management and open to buy. I did a presentation at ACD Games Day in 2008 where half of it, the half people found most useful (the dozen people who came), was on this topic. So why inventory management? It's where the money is.
I've discovered something interesting by going to trade shows and talking to other store owners. Those of us who made the decision (sometimes referred to as a mistake) to not have game space in our stores early on have a firmer understanding of inventory management. What else were we going to do? Your store is a traditional retail store with eight hour days, without the circus that's organized play. Without OP, we had far flatter sales patterns, so when everything is selling about equal, you're constantly tweaking and adjusting your mix, as opposed to a modern store, where a lot of effort goes into promotion (events). It's far more product focused. Heck, it's exclusively product focused.
Don't get me wrong, OP is amazing for a store, boosting our sales by 60% when we added it overnight. At the same time it supports and builds the community, allowing for far more rapid growth than a product only store (which is a completely viable, if less compelling business model). But OP is a messy, hard to quantify, often volunteer driven, subjective morass. I wouldn't give it up, but life was far simpler without it. The thought of it, and nothing else, keeps me from wanting a second store. I'll just grow the one I have. So those of us who didn't have to be the circus master seem to have a better grasp of many business fundamentals. That's my little narrative on why.
My understanding of the fundamentals has changed over the years. It's more nuanced, and many of the tools I intend to talk about aren't used as much as they used to be. I used to use the tools all the time, because my business wasn't working properly. If you saw me back then, you saw me with a tool in my hand and you may have winced, because all I ever talked about were tools. Tools kept my business alive. We spent the first five or six years in rapid growth mode, and growth can be painful. We were swinging for the fences. Every time we reinvested, it took a couple years to stabilize. We're about to do it again.
So I have the tools in my toolbox and they're not always in my hand now. I'm talking about sales per square foot analysis, turn rate analysis, and maximizing sales through various inventory means. These are all ways to take what little money you have in inventory and grow your business far more than should be expected. That's the thing. Efficient inventory is a miracle worker, creating wealth far beyond your peers and competitors. It requires you regulate the inflow of goods, measure the outflow of goods, and tweak, tweak, tweak. Or not.
A nuanced approach accepts that you grow your sales not just by numbers, but by psychology. You may focus on a best of breed in each department, completely carrying the full line, despite the metrics. This can also be termed a "top of mind" strategy, where the customer thinks of you first when they think of a product line. We do this with Pathfinder, carrying every single thing available. You have to consider a minimum quantity of items to maintain cohesion. You have to consider collections, accepting that a small subset may have tremendous sales, bolstered by slow sellers, because of the illusion of choice. Things I no longer believe include the "merchandising expense" of slow selling categories, designed to signal you're legitimate. If chess sets don't sell, and you haven't violated the other principles, dump chess sets.
If you've got questions about the topic that you want me to address, I"m happy to consider inclusion in the presentation. If you're there, I'm happy to talk to you about your problems with inventory management. Remember I'm just a guy who does a thing his way, so there are many ways to do inventory management. I happen to think there's only one reasonable way, but that's because nobody has shown me a rational system.