Friday, March 8, 2019

The Game Trade Pivot

When a game hits peak popularity, it's not uncommon for it to be taken away from independent retailers in some form or another. It might be a retailer exclusive, or a publisher's attempt to spread the wealth (and power). If Target came to you after publishing a hot board game and offered you a bazillion dollars for an exclusive to the expansion, what would you say? It might kill your company, but you would have a bazillion dollars.


This morning I had two examples of pivot math, in which I needed to adjust expectations based on publisher removal of market demand. One is for Wizards of the Coast and the other for Ravensburger:

How many should I buy?
  • Saltmarsh: 30 days of Tomb of Annihilation sales (because those are my terms), with a 10% bump for growth, with this total divided in half because of removal of early release (it will be sold on Amazon the same day by idiot retailers).  I suspect Amazon gets half the D&D market. 
  • Villainous Expansion: Total sales of Villainous base game, divided by three, because it's an expansion, divided in half because of early Target release by months. Everyone who cares will already have it and coming out three quarters after our huge sales push means it will be cold.
A younger me might have decided to drop Villainous entirely and avoid it, especially after we sold 50 or so copies over the holidays as one of our top picks. That's a really small number for some larger stores, but out here in the burbs, we run shallow and wide. As for Saltmarsh, I might begin slimming down my D&D overall and start banging the drum for Pathfinder 2.0, which is coming soon. That's all counter productive though, so I just pivot and move on. I certainly won't push Villainous again or most Ravensburger games, nor will I be looking to invest time in jump starting Adventurer's League, which can't seem to gain a footing. I will cultivate my indifference. 

This gets to the problem of the game trade in general, without allies we have cold war enemies. Publishers want retailers to do some lifting for their product, but we have product PTSD. We're not willing to enter into new co-dependent relationship in which we're beaten in response to our love. So most retailers put minimum effort into promoting products and instead focus on well established events and reliable staples. It takes a tremendous amount of effort and tremendous love for these games to do otherwise. The key to success is a series of co-dependent relationships in which we don't get angry, we quietly pivot. But it wears you down, let me tell you.

Thursday, February 28, 2019

GMROI Application (Tradecraft)

This is a couple of posts from my Gary Ray, Author page on Facebook.  I've had this page for a couple years now and despite only a couple hundred people on it, there's far more engagement than this creaky old blog. I encourage you to follow me there, because there will come I time I give up on this medium.

Here are my posts, which I'll certainly use in inventory management or buying presentations in the future. It takes a rather arcane concept, Gross Margin Return on Investment, something I've talked about before, and uses it as a tool for ordering. Applying a tool, what a concept!




I don't want to spend much money this week on restocks. How many times have you been in that position, but you're not sure how to proceed?
I was in a seminar once and they suggested you work with your restock list with your distributor, going by code down the list, until you hit your purchasing budget. I found that astonishing.
Say you have $2,000 for purchasing and you really aren't sure where to spend it. This is where I was this morning and remembered GMROI, which I had just calculated for the store the day before. GMROI is Gross Margin Return on Investment.

For every dollar you spend, GMROI measures how much money you'll get back. Would you rather get $2 for your $1 investment or $1.50? You want the $2 of course, although you might decide you want to focus on short term velocity (turns) rather than long term return (GMROI). We have multiple tools in the tool box.
In my example below, I could spend my money on high turning card games for a short term gain, but the GMROI is just average. It's an average investment. If I need a snack run, I should probably do that order first, with its $2.06 return on every dollar I spend. Costco is my most profitable distributor, dollar for dollar.
What I used to do is place my Games Workshop order first, but now I see with GMROI that tactical miniature games are my lowest return. That's the last place I should spend my money, return wise. It also has a below average turn rate. It's marginal, but still worthwhile. It's certainly not my top priority.
So when I went through my orders this morning, I de-emphasized GW ($1.58 GMROI), made sure to re-stock every card supply option ($1.91 GMROI), and made sure my snacks were stocked (which I did on Friday), since it has the best GMROI of the bunch.
My store is healthy, but where you really see GMROI shine is with troubled stores or troubled departments. There have been departments where I've calculated sub $1 returns on my investment. In the GMROI example I'll link to, I was making 90 cents for every dollar invested in classic games. We shored that up, mostly by carrying far fewer of them.

---

I know from GMROI what department comprises my worst investment, but why is it my worst investment? Why are tactical miniature games my worst performing department when it comes to investing money?
The vast majority of that department is comprised of Games Workshop. I can see my COGS percentage number is far too high, 63%, when my average is 57%. What makes my margin so poor with GW? It turns out to be a lot of factors:

1. The base margin for most GW products is 45%, which is lower than many lines. 

2. Direct order products from GW are 35%, even worse.

3. My store offers a 10% discount for pre-orders, which brings a lot of product down to that 35%.

4. The splash nature of GW releases means I attempt to funnel as many sales through special orders as possible, at 35%, hurting my margin.

5. The splash nature of GW means I order heavily in hopes to avoid outages. This results in overstock, which is then clearanced at a discount.

6. The enforced once a work ordering AND the one week ship time for us means I can't rely on just-in-time ordering, like I do with the rest of the store, so I order deeper, taking more risks.

7. My 45 day terms with GW means I push my luck even further, which means when I lose, I lose bigger. 

8. My prize support tends to exceed my allowance of free product, to some extent, which is really a marketing expense, but it increases cost of goods.


So for that reason, tactical miniature games are my worst performing department. However, there are other considerations:

1. 4.1 turns is nothing to sneeze at. This is solid inventory performance, and if there was a worse performing department (there isn't), it might make sense to take advantage of this.

2. Metrics don't measure volume or profit, so Magazines might have better metrics, but I sell 30 times more miniatures making a much larger profit.

3. Tactical Miniature Games drives sales of paint and miniature cases, which are also weaker departments, but together make up even more sales.

4. Pre-orders and low margin special orders are risk free. It's low performing money, but it's free money.

5. The clearancing of product is painful, but GW products have brand value protection, so you'll always sell all of it, over cost, eventually, without a lot of work.
So what we see is tactical miniature games for my store should be of least priority, but they're a big enough draw to maintain, provided they're propped up by more profitable departments. It's not an area in which I should look to expand, unless I've exhausted all other options.
That's why when I had a little extra money from clearancing my last miniature game, I did the wise thing. I invested in ice cream.

Wednesday, February 27, 2019

Diversifying When the Show is S&#$ (Tradecraft)

The game trade has recently become, what's the technical term? Right, a shit show. So you naturally want to diversify into new product lines. I highly recommend this, provided you can find the right mix. Most veteran store owners will tell you, that mix is a struggle. It's not that we can't sell comics, toys, pop culture, or pop tarts, it's that getting those new lines to reasonable performance levels can be difficult.

Diversification depends on the kind of store you run. If the word "gamer" appears in your store title, we can assume you're likely to run a business that appeals primarily to hardcore hobbyists. However, if you've spent the extra money to build a store that appeals to the general public, you've got more options.

Even with a family friendly specialty shop, there is still the issue of location. My store is family friendly, but I have close to zero foot traffic. There are reasons to go there, as in it's a destination store with geeky stuff nearby, but there's nobody walking by.

I spent $20,000 on toys when I moved to my larger location because my competitor had a lot of toys and I needed new, diversified inventory when I doubled my retail space. Toys seemed safe. Boy was I wrong. This was a disaster, not because toys were bad, but because I had no foot traffic. My selection was just alright, not enough for my business to become a toy destination, especially when there were plenty of better options. I also misunderstood the nature of the toy market, which relies on a lot of volume to move low cost items, often stocked in depth. I would have a wall of board games in single quantities next to a wall of toys that only made sense stocked six deep. Toys were not for my store. Neither were comics, and a bunch of other things I tried.

Sending back a pallet of Melissa and Doug
What worked for me was gradually trying new lines, more in the category of gamer adjacent. What do my existing customers want to buy? What do they already buy from other people? What adds value to their lives rather than just idiotic add on purchases like wax candy lips? We dabbled a bit with Funko Pops. We tried pop culture items from distributors with limited success. We tried novelty candy and glow in the dark pirate figures. Eventually we found a few companies that made pop culture items, often things I would never have considered. For example, as our store has become more diverse, we've found success selling pop culture purses, scarves, jewelry and the like. Women were rare in the store, ten years ago, but the hobby has changed as has our store. I delegate these new categories to younger managers who know what's going on.

You want to ease into new waters, testing them out, learning what people want and adjusting to new problems, like loss control. We had homeless people who would wander into the store and flat out steal things, just walking away with pop culture wallets and hats. A lot of things we've learned need to go in display cases, for example. Suddenly we have things everyone wants, stuff that will sell on a blanket in front of a train station. It's a weird feeling.

The easiest form of diversification by far, is diversification of supplier. We make a point of backing a variety of Kickstarter games with retailer tiers. These games differentiate the store and although it took years to dial in what works and what doesn't, they've tended to be profitable. Likewise, there are many direct only publishers and suppliers that are worth pursuing, many of whom will be at the GAMA Trade Show in a couple weeks. We order direct for dice, dice bags, classic games, jigsaw puzzles, marbles, and even ice cream.  Hasbro mass market games sell well when we can get them. They didn't sell ten years ago, but with the demise of Toys R Us and a larger segment of the population playing games, there's newfound crossover back to the games of our youth.

Some diversification advice:
  1. Examine your specific set of circumstances rather than following what others do.
  2. Avoid declining markets (comics, Funko POPs, for example).
  3. Find things that add value for your existing customers.
  4. Ask around to see what people are interested in. Frisbee golf? Airsoft? 
  5. Look for gamer adjacent products before striking out into new areas.
  6. Find publishers who don't directly compete with you. I backed a Kickstarter today that offered me exclusive sale of their game!*  *except at conventions, on their website, in contests, at the BGG store...
  7. Look for favorable terms, margins, or net priced items with flexibility.
  8. Test the waters with minimum orders but remember to follow up quickly so you don't lose momentum.
  9. Test the limits of your concessions with additional snacks, coolers full of drinks, and potentially hot food options.
  10. Consider a long term investment, like diversifying into a coffee bar or real estate or anything else. 


Saturday, February 23, 2019

SNAFU

SNAFU: Situation Normal, All Fucked Up

I just wrote about having time away from the business. There are various approaches to freeing up time, and I wanted to mention what I think is the wrong way and of course, what I think is the right way.

The wrong way is streamlining. The book The 4-Hour Work Week sounds an awful lot like how I described my extended vacations. It's a New York Times bestseller that my own book will certainly never live up to. I can take months at a time off with 3-4 hours a week of actual work, but it has nothing to do with streamlining. I tried streamlining after reading this book and it was a short lived disaster. This book is about creating a turn key business, a machine really, that shaves off all the hard edges so you can spend as little time as possible running your business. I've mentioned it before, but this is not a hobby game store road map for more time. We thrive on exceptions and hard edges.

There is a lot to learn from business process books about creating processes and procedures, but in general, more and better customer service, more and better options, are the answer, rather than streamlining and offering less. I think doing one thing well is the key, but offering everything possible within that one thing with stellar service is why customers choose you. It's your Unique Value Proposition. Once a framework of processes and procedures was in place, I then empowered managers to create their own policies and procedures, sometimes with a few tweaks from me. It requires they understand the philosophy of the company. Overall though, it's not unusual for me to stumble on a new policy or procedure in my own business that I've never heard of. That's exactly what I want.

Policies and procedures to me are about how we can regularly hit high performance goals doing our one thing. If I can't do something repeatedly with high levels of success, I don't want to do it at all. For example, people ask me occasionally to ship them a game. We don't ship. If I made an exception, we would be in new territory and we would most certainly screw it up. If I'm going to ship, I'm going to ship a lot and I'm going to do it right, with a plan. Policies and procedures created by staff are often ones I might have shaved off, 4-Hour Work Week style, but their desire to serve the customer has lead them to create new systems to make customers happy.

What you won't find in a 4-Hour Work Week scenario is the huge amount of variability and passion required to run a store like this. It's complete, but bounded, chaos. A primary goal for us is to create a wide range of possibilities with policies and procedures addressing each, along with boundaries that limit customer demands. There is always that guy (or girl), who wants it one way, but it's the other. That's unfortunate for them.

We saw this with our recent ding & dent sale, amazing deals with long lines. There was the person who complained bitterly about waiting outside, even though we had little control or ability to let hundreds of people in early. There was the customer who wanted an even larger discount because the box was damaged! People will always want more and ironically, the closer you get to free, the more of your time people will consume. Post a photo of free stuff on a table to your Facebook page and watch your time evaporate as you answer endless questions.

There's a Zen saying, "If you want to control your cow, give it a wide pasture." This is a reference to your mind. If you want to control chaos, give it wide boundaries. Let chaos roam about and eventually it will get tired and take a nap. Some employees will not like this, as the chaos is hard to wrap their head around. It's why it takes six weeks for new employees to gain basic competence. Some customers will attempt to game the system or call out inconsistencies in the chaos. That's all part of roaming the pasture. Bounded chaos is the strategy.

With our wide boundaries, we can have strong customer service ... with hard limits. It's a chaotic environment with many variables, but employees are empowered to make important decisions, with leadership being fairly flat so most everyone is empowered. Leadership has to back employees for this to work, so rather than the customer is always right, the philosophy is employees first. It's common with some big businesses like the Virgin company. Am I the best boss? Heck no, but I'll always back an employee if they're following policies and delivering great service.

Do I fire customers? Yes, but very, very rarely. We have half a dozen permanently banned individuals in year 15: the double dealer, the white supremacist, the homophobe, the serial shoplifter; you get the picture. I recently fielded the question, "Where in your book does it say I should go fuck myself?" Grab me a pen, my friend. There's always room for another chapter.

This all works because I have really, really good staff, especially managers. I support them and let them run with the vision. All the credit goes to them.

Friday, February 22, 2019

A Week In The Life

My weekly scheduled as a hobby game store owner is based on the needs of my business, my personal needs and desires, along with financial considerations. I could afford right now to not work at all, to not go into the store. However, I have the same problem as every semi-retired person. If you don't go to work, then what?

That does not mean I'm financially independent, only that I've created a system that works independent of my continual input. As I don't have a better use of my time, it is best spent maximizing the value of the business until I have my 'then what" answer. That answer might be a second business, a second location, or who knows, I might buy a boat and sail off into the sunset and work remotely. I spent a bunch of time writing a book in 2017, so there are answers to these "then what" questions.

Do you dread going to work on Mondays? So do I! So I don't go. I work from home Mondays, placing orders online from about 7am to 1pm. That's a decent day of work for me, but to be entirely honest, I could send off this entire workload to distributors to do this job. Many store owners do this, and when I'm on vacation, I do it as well. However, I think manually ordering every single item ties me into the store "hive mind." I may not play as many games as I would like, but I know what's hot, what's available, what isn't and why. I know things.


Tuesday is shipment and meeting day. The vast majority of the stuff I ordered on Monday shows up on Tuesday. Having next day arrival means we can rely on just-in-time delivery -- probably a little too heavily. I would like to have about 20% more inventory in the store and we could probably double the inventory, if we had the money. As we're paying down debt, we run lean. We only stock best sellers and we drop the bottom 20% to make room for what's hot. There is always a bottom 20%. The store makes over seven figures in revenue, despite only stocking the best of the best.

On Tuesday, I help receive all those things I ordered, another way I feel connected to the store when I'm essentially off the sales floor most of the time. I learn what each thing is, get an idea of the value proposition now that it's in my hand, and get a chance to see where it fits in the store. Later on I go to lunch with my manager. We have an agenda of items we go over as part of our process improvement plan. I'm usually responsible for about 20% of those items and the rest go to the manager and staff. My job is to remove obstacles and occasionally take over thorny issues. We make a point of doing this every week and the goal is to constantly "fill the hopper" with new issues. It's a process I learned from Dave Wallace.

Wednesdays and Thursdays are slower days and I'm there with just my assistant manager. The idea is I do mostly office work during these days, along with covering for him and helping customers. As we grow larger, I expect I'll have extra coverage these days, freeing me up to do more officey things, whatever those may be. Thursdays are also order days, but as I may get pulled away from those if it gets busy, I often spend Wednesday night placing my orders for a couple hours. In fact, if I'm home at all, I'm often logged into the point of sale making adjustments and tweaks pretty much all the time.

Fridays are another receiving day, like Tuesdays, but not nearly as heavy. Before construction, I used to take half the day off and go to the gym and the range, but the financial burden after construction meant I dropped those activities. I'll usually do a little office work, help with receiving, work with customers and if it's slow, take off a little early. I'm not really needed, which was great today (Friday), because I'm home sick (I was sick yesterday, but had to go to work anyway).

Saturdays are a big day for the store. In year four, I got weekends off and one of the goals of the manager was to keep me away from weekends. That was by design. Saturday morning I'll get an email from my main distributor of all the new items that week. I'll spend a couple hours researching each one and send that in. I do not look at email solicitations, the "dailies" restock listings, or other day to day buying related communications. I pre order absolutely everything for my store so I can free myself from the daily burden. If I look at a daily, I'll buy stupid crap, guaranteed. If I talk to you on the phone, I will likewise make bad buying decisions. I need to research at home, in a calm manner, with my POS history open, over a long period of time.

Sundays are off, right? It depends. During the holidays, while traveling, of if I know I won't be in any condition to place a Monday order, I might spend my ordering hours on Sunday instead of Monday. I will also be checking the POS constantly to see what's going on, making sure events are firing, items are selling, and checking performance metrics on sold items. I don't really need to do this, but it's part of my taking the pulse of the business.

Could I save money? My manager and I just talked about coming in Mondays to save money, but having that one day off is both a luxury and a bit of a necessity. I get a lot of work done at home that day.

Could I work less? You bet. I went on vacation for two months. I delegated my buying job to my manager and spent about three hours a week managing the business. Most of that included my finance work, making sure we were paying bills and had enough money in the bank.

My time on-site is pretty low, about 20 hours a week, maybe 30 when it gets busy (like last week with our ding & dent sale). My time running the business, if I'm focused on that, is probably a full 40 hours a week, with a lot of time spent on the laptop at home. That's sub optimal work, as I can see when I'm on vacation. While on vacation, a few hours a week course corrects, but it would be foolish to think I could do that all the time. How much time could I spend away before it all began to break down? That's an interesting question I may one day answer. This may all sound rather lazy, but the less reliant the business is on my being there, the more value it possesses. So my goal is to maximize value in a fashion that's independent of me. I wish to be highly effective while also being dispensable.

I've got a job I enjoy with an environment I've crafted, with a management team I've selected. I can take trips when I want of just about any length, provided I can afford them. There's not much better than that when it comes to actual work.

Monday, February 18, 2019

A Tale of Two Publishers (Tradecraft)

When I was building my Jeep, I was pricing bumpers when I noticed some companies, like Smittybilt were priced all over the map. Buying anything from that company made me feel bad. I always felt there was a better deal somewhere out there I wasn't aware of. Their products were middle of the road, with some very good and some very bad. I would buy things from them, use them for a while, and quietly take them off. Their reputation was ... mixed. Their shotgun approach to sales and quality are infamous.

Meanwhile there was AEV, American Expedition Vehicles, a high end company started by Jeep engineers that sold a narrow range of products, all highly engineered, and never more than a dollar or two difference between suppliers. One customer complained in an online review about how retailer prices were so similar. A retailer explained if they were to sell AEV products for a dollar less than their agreement, AEV would cut them off. So at the most competitive level, all product was sold at nearly an identical price. That's the difference between no brand value protection and brand value protection.

The advantage to the retailer is clear. If I'm selling a bumper, I would rather sell the premium product for $1,400 rather than the squirrelly discount product for $700, or $600 or whatever the market will bear that day. The manufacturer of the high end product is partnering with me. The higher priced manufacturer is maintaining value in their supply chain, maintaining a strong reputation, and thus selling to a well heeled clientele rather than a bunch of mud boggers looking for the lowest price. They make more money, which allows them to engineer quality, and the cycle continues. As a retailer I can decide what products to sell based on where I place my store in the marketplace. I can build a high end store and sell high end products at higher prices or I can sell everything, good or bad, and be the Smittybilt of retailers.*

Wizards of the Coast just dropped their MSRP on all their products going forward. If there is no price, there is no need for price protection. Ironically, this is exactly what I've called for many times in this blog, yet I'm disappointed and a little worried. What I was hoping for was possibly a bit utopian. I want to run a retail environment where price is inviolate and off the table, where I can focus on customer service, and events, all the various joy producing activities with the assumption customers will judge me based on my joy production, rather than my prices.

I would rather sell packs of stuff at a price than a shiny piece of card stock of subjective quality at a constantly fluctuating price. Yet the ability to sell the packs has fallen while the sales of the variable shiny has risen. It requires expertise and a fiddly system to sell variable shiny while it's much easier to sell new packs at a set price through my retail operation. And because it's so much easier, absolutely everyone can do it and I'm losing that battle. One reason stores close we don't discuss is they can't run the kind of store they want, and this is one example. They want it one way, but it's the other.

Asmodee has brand value protection as does Games Workshop. They're still competitors with retailers, but there are price floors that help me sell their goods. My initial reaction is to shun Wizards of the Coast and embrace Asmodee and Games Workshop as best I can. Their strategies are retailer friendly, while Wizards of the Coast feels predatory, the game trade equivalent of the soy bean king, selling their products as commodities. I have heard the next step may be dropping pre releases, and that right there is an exit strategy for quite a few stores that aren't Magic centric. We run events to get the cool stuff. Butts in seats! If you're going to drop events, you've removed our golden handcuffs. Don't get me wrong, I like gold, but the disconnect between "go buy on Amazon, but play at your FLGS" really pisses me off. Watching it all burn has great appeal.

This is all overly dramatic. The reality is nothing will really change. The offroad store will happily sell me that $700 low end bumper or the $1,400 high end bumper and they'll happily agree with me when I mention the value of the low end product or the superior engineering of the high end product. There are few retailers who get to truly pick their market position. Likewise, I'm not going to shun Wizards of the Coast any more than I'm going to turn my game store into AsmodeeLand. I will serve up both to the best of my ability. I will do my best to attract the Asmodee customers but I won't turn away Magic money probably ever. Taking stands is for politicians and priests. I have no such requirements for ideological purity.**

In the end, there's a lot more going on than my own needs. These brand value protection schemes are delicate flowers. Hasbro just discovered this when they were sued for instituting brand value protection in Europe. The larger the company, the harder it will be to institute brand value protection policies, as they conflict not only with international law, but laws between states. There is also the problem of brand value protection schemes holding independent retailers to a higher standard than mass market retailers, which is inherently unfair, even if we do cause most of our own problems. It's no surprise the consensus at WOTC was to have a consistent message on pricing. Do what you want.



*This is the same argument I've made for industry wide net pricing, by the way.
**But if you gave me a bucket of money, I would diversify away from the game trade.

Thursday, February 14, 2019

13 Bits of Advice for the GAMA Trade Show (Tradecraft)

Are you going to the GAMA Trade Show this year? I'm skipping this year for various reasons, but I've been many times. As an introvert, it's difficult to fully experience these shows, but I have learned how to get the most out of them. Here is my advice.

  1. Occasional Attendance. You don't need to go every year, so don't feel obligated. I think every other year is fine, and for my managers, I really want them to go at least once. One time is the best bang for your buck, and for many retailers, once is all they'll ever do.
  2. Stay at the Show Hotel. Some retailers are cheap by nature and take great pride in saving a small amount of money by staying offsite. When the hotels were connected, like with Ballys, staying at Paris was a nice upgrade with a reasonable walk. You'll be commuting if you do this in Reno, and that's a waste of time. Plus Peppermill is a nice hotel, so just enjoy it. Heck, when was the last time you've been on vacation? Consider a room upgrade.
  3. Leave the Family. This might feel like a working vacation, but it's not. Wheeling around your baby stroller on the show floor is just unprofessional and bad form. When the show was in Vegas, it made some sense to bring the family and let them entertain themselves during the day, but Reno? Maybe if your spouse likes snow boarding and strip clubs. You'll also feel obligated to spend time with them in the evening, and there are better uses of your evening time.
  4. Go to the Retail Seminars. A lot of brainy retailers have poured their knowledge into teaching the intricacies of the trade through seminars. I can credit these seminars for my initial survival, and a chunk of my own seminars are distilled and modified versions of seminars I've attended. There is powerful institutional knowledge out there and this is your chance to tap it. I go to seminars as much as I can, even after many years of this. Network and try to find out which are the best. The best for a first time show attendee is unlikely to be the best one for me (thus you can go multiple times and gain value).
  5. Pick Publisher Seminars Carefully. You deserve to hear from a human with compelling and interesting information along with the ability to ask questions to someone who knows things, not a website rehash from a powerless intern. That might sound harsh, but some publisher seminars are worthless and some are fantastic and helpful. I once went to a one hour Wizards of the Coast meet and greet. How exciting! There was juice on the back table and we were instructed to talk amongst ourselves. That was the whole seminar. Ask around and figure out which seminars are valuable, and don't be tied into a waste of an hour of your time for the promise of a free googaa. After going to many of these shows, I tend to skip about 90% of publisher seminars. Publishers need to figure out what critical bit of themselves they can transmit in a seminar and focus on that. Some are so afraid of giving out confidential information, they provide no useful content.
  6. Network Network Network. Go to the meals if this is your first time. Go out to dinner with like minded people, if you can't handle one more cold cut sandwich. Go to the after hours gaming events and learn new games and meet new people. Find the smart people. These relationships will grease the wheels and help you form community, things you'll appreciate when you're back home in your Fortress of Solitude. This is also a good time to develop relationships with publishers and distributors, so break out of your retailer bubble.
  7. Bring Extra Socks and Good Shoes. This is an old convention trick, but along with comfortable shoes, bring an extra pair of socks and when you're getting tired walking the trade show floor, change them. It's better than a Red Bull. Under packing is generally a good thing for these shows. Speaking of packing, vendors will wish to burden you with flyers, samples, and a lot of useless junk. If you don't want these things, politely decline. 
  8. Trust Your Instincts. This is hard, but I generally know if a new game is something I want or if it's a turd. I've always known, really, and my buying expertise has mostly been about trusting that knowledge and removing my own ego and interests from the mix. Trust your gut. Also avoid back filling, as this is the time of year your purchasing budget may be flush. This is a forward looking, "front list" industry. Look for things coming out, unless you're hoping to diversify into a new department. 
  9. Ask What's Hot This Year. Talk with other retailers, because you've been networking, and get a consensus about what's hot at the show. Touch and experience that game or item and see what your instincts say. The herd is generally right. Sometimes there's nothing hot, and that's alright too. Last year nothing was hot. When I look back at the items I discovered at the show, their profit always equals or exceeds my costs for attending the show.
  10. Don't Be Afraid to Buy. GAMA used to ban writing orders at this show but that rule is gone. If you see something you like, buy it. The big publishers won't do this, but smaller publishers will be happy to take your money, although for some you'll need to twist their arm. If they say they don't know how, task them with finding out and come back the next day. I've gone to many shows, found things I've wanted to buy, and have been unable to acquire them later. It's ridiculous, but give them a credit card number at the show, and your chances of getting that stuff go up tremendously. Good examples? Everything you see at the Chessex booth, giant dice, tiny dice, weird dice, stuff distributors won't carry, are available to order -- and it all sells.
  11. Open Distribution Accounts. It takes almost no time, but be prepared with your own information handy to start new distribution accounts. Fill out the form on the show floor so you don't forget. It costs nothing and opens you up to a better fill rate and possibly better terms. I resurrected a distribution account this year I hadn't used in ages and now do an order a week with them because of their better prices (Magazine Exchange).
  12. Be Firm But Polite. You want it one way, but it's the other. Too bad. When dealing with publishers in seminars, it's fine to discuss broader issues and insist they act consistently and professionally (cough, Pokemon USA), but nobody needs to hear your personal anecdotes. Nobody cares. We all have stores and problems and unless your issue relates to a large number of us, share it later, one on one. Also, there are no participation points. You don't need to add your story to our pool of misery. Listen and learn. Everyone is a petty king of a tiny kingdom, used to giving orders and running their domain with an iron fist. Together we can solve problems, but as individuals, retailers have a reputation for being rude and provincial. Use your listening ears.
  13. Have a Good Time! You're in Reno. Grab a steak. Take a walk outside and get some fresh air (there's still some cigarette smoke). Caffeinate at Cafe Espresso. Eat at the surprisingly good Flavors of India, which looks like the house restaurant for an Econo Lodge. Enjoy! 

Friday, February 8, 2019

West Marches Style D&D

I was in Mexico on vacation thinking about retirement and realized what I really wanted was to step up my Dungeons & Dragons game a couple notches. I've been running at home for my regular group for years, but I needed more. That's when I discovered the West Marches style online. It seemed to be exactly what I was looking for, as it requires the players to bring the motivation to explore your world. This was also while I was studying Matthew Colville videos, so sharpening up my GMing skills seemed to be a good fit with this style of gaming.

The problem with running a game for years for the same group, is they get fatigued with your schtick. They're excited at first, but after a few months, they show up to the game to be entertained. They show up because Sunday is game day. You as GM are therefore in this position of needing to provide continual, free entertainment to a group of individuals, pretty much in perpetuity. This is why GM burn out is a real thing, which for someone who considers this their primary hobby, feels like a terrible sports injury ... of the brain. Before this campaign idea, I built an entire world, wrote a player's guide, got player buy-in, and trashed the whole thing. The campaign setting was not the problem, it was the format of play.

So I moved forward with West Marches at the store, while running the same campaign at home in the usual format. As a store owner, I have a pool of players to draw upon, thankfully, so I queried our RPG Facebook group and started a West Marches style group. I needed at least 10 players to ensure it didn't fall back into a standard campaign format. Up to five players form an intention to explore something in my world, they query me about my schedule availability, and we do it. Five is the perfect number, because we can still play with four, yet six is too big. Group fault tolerance.

We're on the second session of this campaign, where there are now two groups exploring the same world. Somewhat in parallel with my home group . My home group is an elusive group that are never quite around. So really there are two player groups of adventurers and essentially an NPC group of adventurers (my home group). This creates yet another layer of verisimilitude. The world is very much alive and doesn't owe you an explanation. Things happen, get on it.

I'm thinking I would like a few more people in the pool, because my biggest concern is one group falters and we end up running a conventional campaign at a set time, which is fine but ends up with the same motivational pitfalls that West Marches attempts to overcome. The first session adventurers gave themselves a name, and I'll need to talk to them about not doing that. The large group are on the same mission. They are required to share information, including a magical map, and are not intended to be competitive or even separate. There should be flow between groups, with no individualized "groups" to speak of, although scheduling might result in this, as most players seem to want a set night. Perhaps when they're motivated to go on a specific adventure, they'll be willing to change their personal schedules to come on an off night.

So what am I running? The Colville style would be to have a large sandbox with some preset towns and adventures out there, often of the store bought variety across every edition. I will do that one day. Instead, I've got a hex crawl where most adventures are short and either home made or modified from one shot adventures. I have a lot of experience with hex crawls and understand their pitfalls and limitations, and so far it's going well. My concern with long adventures is groups go down rabbit holes and now they're by default a member of a separate group, as they're out of commission for weeks of real time.  My hex crawls tend to be intricate webs of interconnected groups, all of whom think they're the hero of the story, yet none are very heroic. There's a lot of politics interspersed with monsters and treasure. This grayness means picking sides is not so easy, and defeating one enemy is to by default choose to side with another.

The campaign goal is to colonize a region inhabited by indigenous peoples, bandits, and monsters, at which time they'll use Colville's Strongholds and Followers to hopefully defend themselves from an angry empire from which their new colony is seceding. All of this implies a timeline of various political actors and it will be interesting to see how that interacts with the various adventurers who are often doing different activities at different times. In my (second) session this evening, there will be fallout for a new group of recruits based on actions of the last group of adventurers, which may be directly related to their actions or just a timeline event based on their just existing in the world for a period of time. Meanwhile, my home group moves forward, leaving echoes of their activity in the world. Who are those guys!?

Another down side I see with West Marches is the campaign isn't tailored to the characters as I would do (and am doing) with a home campaign. There are eleven players with eleven backgrounds and I honestly can't put a lot of that information into what's essentially a pick up campaign. What I need to do, and I haven't expressed enough I think, is attempt to get them to align their characters with the world, rather than the world somehow serving their back stories. If your back story doesn't match the world, perhaps it's not a good back story? Or as Colville would recommend, keep character back stories light and be on the look out for a concept or issue to glom onto as your motivation. It's much easier to decide you're a revolutionary with the colonists than insisting the DM allow you to find your missing sister, kidnapped by hobgoblins.

Wish me luck! There is plenty of time for this to go off the rails.


Thursday, February 7, 2019

WizKids D&D Miniatures

As a store owner, I'm always curious to see what D&D miniature customers are buying. Are female miniatures languishing on the shelves? Are there races rarely played? Nobody really knows for sure who is playing what, and the manufacturer was polling retailers after the first print run trying to get a grasp on what was actually selling. So just for fun, here are my numbers.

These are in percentages to avoid the inevitable measuring of our retailer prowesses. It only includes the character models, of which we have every one. We have been good about keeping these in stock too, often ordering multiples to avoid outages. I can't say that about Reaper Bones, which I'm less excited about. Overall, in the last year, we've sold about 800 character models. Here's how it breaks down.


With an almost even split, I think this represents a change not seen in previous years, many more women playing Dungeons & Dragons. 


The human centric party is no surprise here, as we see them take top billing in the rules. I'm a little surprised to see Dragonborn so high up. Half elves can pass for elf or human, so it's no indication of a class choice to see them last.




The wizard edges out the fighter, and the rogue is up there, but where is the cleric? I had to go through the data a couple times to be certain the cleric was a poor seller. The four archetypes certainly aren't reflected in sales by class. The arcane spell cards sell twice as many as the cleric, by the way.

Wednesday, February 6, 2019

Teeter Totter



There is an odd balancing act specific to game stores in which customer satisfaction vies with retailer profitability. This is unlike other retailer relationships because game trade retailers often see product as a function of service. Most game trade retailers know nothing about retail and a tremendous amount about event management. They are party planners with gift shops for the most part. When Wizards of the Coast marketing asks us about our customers, they say players, because to them, we are in the business of "butts in seats."

This model is a teeter totter, in which retailer profitability decreases as we give in to perverse pressures demanding customer satisfaction. A great store will have strong customer satisfaction and profitability, and we're not talking about that. This is a model of a broken store and in many cases a broken community, where selling things profitably and running events is simply not enough for the customer base. They demand more, be it even lower prices or free or close to free events. Let's take a look at each side.

On the retailer profitability side, the downward pressures on top result in decisions leading to higher profitability. Rising costs often result in higher prices or at least holding the line on prices. Labor, for example, is rising in many states with increased minimum wage and the decrease in Magic margins results in many stores increasing box prices and event prices (you would hope). These things are seen as greed to customers, thus the same activity in green for retailers is seen differently, in red, by customers. If you ever hear a customer talking about prices over MSRP, it's likely they are comparing online.

On the bottom of that retailer model are reasons why profitability declines because of retailer decisions, often with the goal of increasing customer satisfaction. There is a certain level of holding the line or even reducing costs to attempt to delight customers. Most weekly Magic events, I guarantee you, are poor margin events designed more as customer appreciation than profitable endeavors. That these weekly events have been declining in many markets means even this is not enough. Our Friday Night Magic is in the 25% range and even that decrease in margin isn't enough to attract large crowds anymore. I know there are areas of my store where I keep prices low to attract customers, such as card supplies. Some of these customers I know only buy supplies from me and buy their main game online, so I want something from them.

Also on the bottom tier are the monastic sycophants, the retailers who claim they are there to serve the community, like some monk choosing a vow of poverty, so some 20 year old dude can have a place to play Magic the Gathering. We are about the people man! I know I won't be insulting them because they're off on a Magic blog learning about some new mechanic and could care less about business.

On the customer side, on the top, we have pressures that push down profitability in exchange for customer satisfaction. Unrealistic expectations are what we get with the likes of Amazon, which has a net profit margin of around 2%, when it makes any money at all. Take your current personal income and divide it by three and ask yourself if you would still go to work today. That's how much you're asking retailers to earn in their business, selling games and running events for customers.

Customers come in truly believing and spouting their truth that the Amazon price is the price. Retailers may not set their prices at this unrealistic level, but the pressure means they're certainly not likely to exceed it. Thus happiness is decreased and retailers look for other ways to make customers happy, like low margin Magic events and a store clogged with D&D customers who buy their books on Amazon at wholesale. Retailers are increasingly looking for ways to turn their retail environments into service environments due to this pressure and many of my retailer friends can't move to this model quick enough.

Retailers call most behaviors related to unrealistic expectations entitlement, but as capitalists we see this for what it is. A large, multinational corporation is using retail as a loss leader to dominate market share while propping it up with outside services all backed by Wall Street against Main Street. Brilliant! Unbeatable! Customers on that march care nothing about the realities of rising wages and decreasing margins. When your store closes as you accept their entitlement, they'll rattle the door once or twice and drive across town. Your store closing will be the topic of conversation at the pauper event, for at least five minutes. For the entitled, the struggle about income inequality, higher wages and a strong middle class is a personal challenge, not something out there.

It took a couple minutes to think of examples in which customers improve store profitability through their actions, but they exist. Only 20% of our customers use our very expensive game space, but when I polled customers, 80% of them buy in our store because we support the gaming community by having space. I was blunt in these conversations and many said they wouldn't shop if we didn't have it, even though it didn't benefit them directly. Community support is a very real, and irritatingly intangible force, keeping stores in business. It lives in a strange psychological limbo where "word of mouth" and the shifting demands of tween girls resides.

Blind loyalty is on the dark side of community support. These customers will support a store because Bob is really trying. Loyalists spread their money around to every store in town because they want a vibrant, diverse community, rather than voting with their wallet for the best store. As store owners, we're in this death match of competition, working hard to delight customers in the face of rising costs, yet there are customers who won't reward our efforts, embracing a kind of game store socialism. The blind loyalists are a small crowd that can't be cracked, although I certainly try.


Thursday, January 31, 2019

Carrying Kobold Press 5E (Tradecraft)

I sell a lot of Dungeons & Dragons but I also DM 5E Dungeons & Dragons as well. Running my style of game has informed what I carry in the store. I obviously carry everything from Wizards of the Coast, but I honestly find many of their products lacking. That's where third party publishers come into play. 5E third party products were slow to get off the ground, due to confusion over the 5E open gaming license, and the vast majority have decided to forgo print and stick with PDFs online. Kobold Press stands out as a high quality publisher with print products that can sit comfortably next to a Wizards of the Coast product. This equivalent level of quality leads to stronger sales than other publishers, especially the occasional 5E Kickstarter items we bring in.

To understand where Kobold Press fits into your sales strategy, you need to look at the strengths and weaknesses of Wizards of the Coast (WOTC). WOTC is strong in rules, as in they have avoided rules glut. Past editions of D&D, every one, has seen the publishers reach exceed its grasp. Here's where I get a bit opinionated. I think every edition has gone too far in expanding their rules and they end up breaking the game. Unearthed Arcana, Skills & Powers, Book of Nine Swords, Essentials, all represent the point at which the game designers went too far and broke their games with dodgy content. The D&D 5th Edition designers have realized they need a slow roll on game mechanics or they'll otherwise kill their golden goose. We're in year five of D&D 5th Edition, and it still feels new and fresh, with only the most minor, mostly balanced upgrades for characters and crazy stuff tested online and only slowly released in print, if it works.

Therefore, nobody needs or wants a third party coming in and offering rulebooks of character offerings. Kobold has several books that do that, but only to add races and backgrounds to fit their Midgard Setting. Midgard Heroes, Unlikely Heroes and Southland Heroes add races and backgrounds that can fit in many D&D game, and they're balanced enough that many DMs consider them. For example, the races in Midgard Heroes include: centaurs, dragonkin, gearforged, kobolds, ravenfolk, shadow fey, and trollkin. I recently ran a campaign with ravenfolk and trollkin and players enjoyed trying something different. They sell well enough to keep one on the shelf, although we sold over a dozen Midgard Heroes last year. 




Where Wizards of the Coast is weak, is adventures. This is not new for this company. Although they have some classic adventures that are worth seeking out in PDF nowadays, it wasn't unusual to have the back bench work on adventures, or in the case of 5E, outsource them completely. In fact, Kobold wrote Hoard of the Dragon Queen, an official 5E adventure from WOTC. I've found the hardcover adventure path approach to be a little bewildering, hard to grasp, and well, creatively lacking, and I'm honestly surprised D&D is so popular right now with such impenetrable offerings in the adventure department. Thankfully the starter box and the Internet with programs like Critical Role have come to the rescue. 

I've personally bought both Storm King's Thunder and Tomb of Annihilation, read them and made notes, only to put them down and run my own thing instead. I do enjoy Tales From the Yawning Portal, which often gets savaged in reviews, but there are gems in there, faithfully translated from previous editions. In any case, if you want to run a "module" adventure, rather than a full adventure path in the high fantasy world of Forgotten Realms (no thank you) you can grab something from Tales From The Yawning Portal, or you can look at what Kobold is offering. 

Kobold excels in the "roll your own" department, as in DMs who wish to create their own campaigns or run shorter adventures. They're perfect for an evening of play, or if you're into sandbox style gaming, where it's your world with adventures mostly off the shelf with serial numbers scrubbed. You've got a few options in this department. First off are modules. If you've been running a store for long enough, you know modules historically sell poorly, and these are no exception. I try to keep one of each Kobold adventure on the shelf, but modules are not their strengths. I've found them a little wonky with occasional unbalanced encounters, meaning you need to pay attention closely as a DM. My group had a bad case of the crabs that killed a party member in Sanctuary of Belches, for example. Where Kobold really excels are books of one shot adventures. 

There are two types of one shot books, those dependent on a monster book from Kobold and those that aren't. The independent books of one shots include Eldritch Lairs, Prepared, Prepared 2, and the new 12 Peculiar Towers. These sell very well as any DM can grab a mini adventure to insert in their campaign. The Prepared books are more outlines of adventures and often take a little bit of work, but it hasn't stopped them from selling well for us.




Before I get into this other type of adventure books, let me say the other area where there's room for growth is monster books. From WOTC, we have the Monster Manual, Volo, and Mordenkainen from which to choose monsters, and this honestly feels like a fairly complete set of options. However, you really can't have too many monster books, unlike player rulebooks. Kobold has two very good monster books, Tome of Beasts and Creature Codex. I've used each of these books for a while now, with Creature Codex being a more recent release. 




Adding different monsters is a great way to add flavor to a game, especially with jaded veteran players. These books sell fantastic, along with their cardboard pawns. Even better, there are adventure books that leverage monsters from these tomes that sell well, although they require the DM to own the monster book. These are The Book of Lairs, which requires Tome of Beasts, which I find to be the best adventure resource from Kobold and Creature Codex Lairs, which is fine, but hasn't sparked my interest as well as Lairs. 




The vast majority of my Kobold Press sales are these two hardcover monster books, their supporting adventure resources, and the stand alone one shot adventure resources. The best way to get this stuff is to order direct from Kobold Press, as distributors rarely have this stuff in stock. Minimum orders are small for free shipping, margins are very good, and they promptly ship. 

My current sandbox campaign has 199 planned encounters, with 73% using the core monster books from Wizards of the Coast. I think this indicates those books are likely enough for most customers. But those books for the other 27% might just be worth carrying, if you're seeing stratospheric sales of the WOTC monster tomes. Here's my break down of what I ended up using, with all the resources at hand, including the very good Tome of Horrors from Frog God Games:



  


Wednesday, January 23, 2019

Start Your Engines!



I've been home sick this week, binging on Scotty Kilmer car repair videos and Dayquil while coughing up a lung. Automobile metaphors are my favorite for discussing the game trade. Let's start with the engine!


Image result for engine diagram 3.6 pentastar
The engine is your inventory. Inventory has revolutions like an engine, measured in turns per year, rather than revolutions per minute. Increasing revolutions in an engine produces power, while increasing revolutions in your inventory produces revenue.

There is no replacement for displacement is the old muscle car term, and it's mostly true. You can tweak solid performance out of your inventory by employing sales techniques and aggressive inventory management, but eventually you'll need a larger displacement of inventory, more money invested. I'm there right now and the old saying is true. However, every store owner knows you can cheat with a turbo charger.






Image result for turbocharger diagram
You can turbocharge your engine for extra performance, which in the game store metaphor means running events. When we went from no event space to event space, we increased performance by 40%! Turbo chargers on cars get similar performance. When we doubled our event space, we increased the size of our turbo charger,  increasing performance by a modest 15%, which pretty much topped out our performance. It's true: There's no replacement for displacement.




Image result for top tier fuel
You're not going anywhere without fuel. Customers are your fuel in a store, of course. A lot of performance is lost to heat in an engine, and a lot of that heat in a game store engine is called the marketing budget, used to obtain more fuel for the engine.

If you've got a small engine, perhaps tuned for a particular application, you're looking for some basic, low octane fuel to get yourself going. Most small stores that only appeal to gamers don't need a very sophisticated engine to achieve their smaller goals. If you have a larger operation that attempts to attract a broad swath of customers to a well capitalized, professional operation built to attract the general public, you need top tier customers. In fact, you might want to turn away the low octane crowd. I don't want to minimize the impact of customers or fuel. Customers and customer service is everything. I used to have an after market four-barrel carburetor on my two-barrel heads that would cough and sputter and occasionally catch fire. You gotta take fuel management seriously.

Image result for mobil one oil high mileageThere's a lot of friction in a high performance engine and that takes high performance lubrication. Staff play that role, including a motivated owner. The higher performance of a store, the more stress is put on the policies and procedures and the staff who moderate them.

I hate to use oil in this metaphor because it assumes oil gets tossed out when it becomes ineffective. In the case of staff, it means staff need to be constantly retrained over time. It's a reason why I don't really like weekend staff, as it's too hard for them to keep up with the constant change in a store. A better staff metaphor would be kidney dialysis, but for now lets imagine a world where we could filter our oil indefinitely!

Image result for exhaust system jeep jk

Alright, I'm going back to bed now. If you're in the area February 10th, we're having our quarterly Ding & Dent sale and it's going to be a big one! That's our exhaust system!

Vroom Vroom!

Saturday, January 19, 2019

10 Ways to Be The Better Competitor (Tradecraft)

You should be the good competitor. Everyone thinks of the competitor as out there, as them, but it's you. A good competitor rises tides for all boats, while a bad competitor drags everyone down and salts the earth. A good competitor is a godsend, because you will always have competition and a bad competitor will make your life miserable. In the absence of a competitor, there is potential chaos and disruption. The good competitor maintains balance in the ecosystem and scares off bad competitors. Be thankful for the existence of a good competitor.

It can be hard being a good competitor as time goes by, because most stores started as the scrappy underdog. Being a good competitor is really being a better store. You may have become your local market leader, and you got that way by acting small. Herb Kelleher of Southwest Airlines had a saying, “Think small and act small, and we’ll get bigger. Think big and act big, and we’ll get smaller.” 

Game stores start so small, they often aspire to not just be more professional, but legal. I had a friend who started a game store and aspired to pay his employees through a proper payroll service with proper insurance. Most people would be aghast at that, but for a lot of store owners, survival means doing what's necessary until they can afford to do what's right. In cases like this, you should act a little bigger to get a little bigger. 

Here's a list of areas where I think everyone could work harder to be a better competitor:
  1. Know Who They Are.  Who is your competition? Most customers assume our competitors are stores 30-90 minutes away and they'll posture and act tribal, assuming we're in economic combat. My competitors are within a 10 minute drive time. Everyone else is a regional competitor who I'm happy to befriend and share advice. 
  2. Follow The Law. Like the example above, we should be paying our payroll taxes, remitting our sales tax, buying the proper insurance, and following building codes.  It's common practice to stuff as many people as possible into an area zoned for retail rather than assembly, which also means HVAC and bathrooms are not to code. It's the cliche dirty, stinky game store. We should all be better, for ourselves, our community and for our industry.
  3. Keep Street Dates. There are too many street dates, and I've been known to be lax with the less important ones. This year I've created a new process in the store for making sure we keep them all. The problem with street dates for a larger store is process: the person who ordered the game, the person who received the game, and the person selling that game, could be three or more different people and they all need to know street date status. That's fine with a big Magic release but when your one-off board game has a street date, it's easy to mess up. We're working on that and it should make us a better competitor.
  4. Avoid Event Bombing. You don't need to coordinate events with competitors, and in fact I find the idea distasteful. I also have yet to see regional events make financial sense for stores, although some customers love them. I am event agnostic, in that I don't look at my competitors event schedules. We do what we do. Now, if I start questioning why an event isn't firing, only to learn my competitor has a similar event at the same time, I would certainly consider moving it (or just canceling it). There are events we cede to competition, often with customers we would also like to cede. We don't need to be all things to all people. And we don't need all people.
  5. Fill in the Holes. A good competitor finds under served markets and serves them. There are a number of games we've given up on, and sometimes those games are viable at a very low level but we can't be bothered. It's a common inventory practice to drop the bottom 20% of low performing products. That's prime territory for a scrappy competitor. My competitor regularly picks up those games and runs with them. Good for them.
  6. Speak No Evil. I used to know a guy who had a "Who List." If you got on his bad side, when people asked him about you, he would say "Who?" This is another way of saying speak no evil about your competitor. If you can't say anything nice, say nothing at all. I tend to say nothing at all. We keep a list of other stores that sell things we don't sell and we share this information with customers. I don't speak ill of my competition but they don't go on my good list either.
  7. Leave Them Alone. I had a competitor who would come by my store, check out my operation,
    send spies and intermediaries, talk smack about the industry in attempts to demoralize me and generally Littlefinger his way into my community. I eventually made it clear I wanted him to go away and he did. I've had competitors attend my events and hand our their store flyers, until I had a lawyer smack them down.  If you're going to spy, be a responsible Varys, not a self-serving Littlefinger. Now, some veteran store owners will tell you they keep tabs on their competitors, but I honestly believe the best policy is to mind your own business. There is plenty of work to do at home. No need to travel abroad for inspiration. Stores that need to spy and keep tabs have a weak value proposition. Bulk up.
  8. Poaching Employees. I always find it amusing when other stores attempt to do this. The truth is I would almost never hire another game store employee, because I know the shortcomings of all the other stores. I have different shortcomings and I don't need new ones. Store owners who try to steal my employees permanently burn our relationship (Littlefinger tried this).
  9. Maintaining Value. If you have only one tool in your toolbox, the tool is you. Discounting doesn't always lead to a quick failure, but it usually does. I personally wouldn't want to have a store in a market where it's possible to somehow get away with this, because I like nice things like a house, college savings and retirement. The worst competitor salts the earth and sets a permanent standard for discounting that generally means all the stores in your region are kind of shitty. Forever and always. It takes money to have a nice store, pay employees, and not die of a heart attack at the register in your old age.
  10. Decorum. Competition is a fact of life and talking about dancing on the graves of the fallen or otherwise humiliating, spreading rumors, gloating, complaining, or likewise behavior just makes you look bad. Over time, competitors come and go and I'm often too tired to do a grave dance. You hear of a new competitor and their entire life cycle flashes through your mind, because most are under capitalized, mismanaged, and market blind. 
There you have it! When a new competitor shows up on the scene, my general feel is I hope they're either good and lift all boats or they're bad and poor so they'll fail quickly. 

Thursday, January 10, 2019

10 (11) Reasons Why I Might Skip A Product (Tradecraft)

I have purchased $10,000,000 in games. I know a thing about buying. Yet, I'm often in the dark. I mostly buy from gatekeepers, distributors who use their buyers to know what to buy. Some of those buyers used to work for me. On rare occasions, I'll play a game before buying it, and my instincts are usually pretty good, although not nearly as good as those who do this all the time.

Increasingly, relying on distribution is a failed strategy. More of what I buy needs to be through firsthand knowledge, or at least firsthand risk taking. Backing Kickstarters is a thing I regularly do now and I've gotten better at it, mostly because I can spot an inexperienced mess of a product pretty well now. It doesn't mean I don't get burned, I really do (Dark Souls stretch goals), but I'm making enough money up front to offset the losses.

Telling you what to buy would be one heck of a holy grail blog post. I can't do that. I'm good enough to stay in business after buying my ten million, but I can't tell you what to buy. If I could, I would crush your store with my national franchise. We're still specialty retail with individualized hand selling to an idiosyncratic base of customers that is different just ten miles away.

So why wouldn't I buy something? Here are some reasons:

  • Margin. Of course margin. I often don't know the margin until after I pre order something, in which case, if the margin is too low, I kick myself and set a product not to re-order.  50% is a great margin. 47-49% is reasonable. 45% and I better see above average performance. 40%? I better see stratospheric turns like with a CCG. There is technically no floor to margin. I'll take 10% if I know I have a guaranteed sale. Car dealerships make their living like that. Then again, give me a medium to low margin on a run of the mill product and I'll kick it to the curb (Tiny Epic).
  • Packaging. Is your game in a brown paper bag? Unless it's Poop: The Game (really, that sells like that), I'm likely not to re-order it. Same goes for tubes. Nobody likes a tube, unless it's full of counters or dice. Tubes and boobs. Meaning I also don't want explicit graphics on a game. I'm looking at you play mats. We recently had a long thread in a retailer forum about the logistics of dice bag packaging and how few companies have figured this out. This stuff is critical. Kickstarter products often fail here, although much less lately.
  • Installed Base. If you're trying to sell me a collectible card game, just no. If I need a community to support a game, I need that community to ask me to carry it, not a publisher. How do you get that community? Don't care, your problem. Most stores will tell you they can only support perhaps three games in a community at most, and they probably already have those three. I've simply passed on several CCGs lately as companies seem to have some arcane inner motivation to break into this realm, and I'm not going to be their guinea pig.
  • Devalued Online. I'll often look to see if a product is already being sold when I'm solicited by a distributor. If it is, it's not a disqualifier, but if I see it's going for 30-40% of the MSRP, that game is dead before arrival. There are ways to protect your brand value and often that product is under assault before I'm even asked to order it. If Dungeons & Dragons were a new game today, I would shun it (same with Magic).
  • It's Everywhere. There are some games I don't have that I've seen at Target that look kinda neat, but Target has it. I think they're doing fine satisfying the demand. This is not to say I won't try such things. There are perhaps 18 Hasbro games I keep in stock when I can (I can't right now). They sell just well enough to make sense for me, despite being everywhere.
  • I'm Poor. I could easily increase my inventory by 10-20% or even double it. That's right, I have room to double my inventory. But I'm poor. For me to say yes to one game, I have to stop carrying another one. Sometimes that lines up wonderfully. Whenever a store has a clearance sale, that's the sign of a mis-alignment (all stores have clearance sales).
  • My Customer Base. I have demographic envy, a desire to have my competitor's customer bases. My customers buy what they buy, and it's not always the interesting stuff I want them to buy. I would love to have more exotic stock for them to purchase, but I'm in the suburbs. Sometimes I buy something and tell myself I'll buy it myself if nobody picks it up. Then, six months later, I don't pick it up, because I've grown to hate the site of it.
  • Line Extension. Line extensions marketing theory has been debunked, but it basically says when you add more products in your line, the line eventually becomes too confusing for customers and they stop buying. I can see this with Munchkin, Red Dragon Inn, versions of D&D, LCGs and many miniature games. There is debate about line extension theory, and it's likely nuanced, but it has increasingly become more true. Endless supplements will eventually collapse a line, and I increasingly avoid them and often desire to dump the whole thing. I'm always on the look out for that tipping point.
  • Bad Company. How terrible a company would you need to run for me not to carry your game? Well, money talks. I'm not happy with a lot of companies, but they make me a lot of money. Usually my irritation with a company is directly related to my inability to make money with them. The more irritated I am though, the higher that company needs to perform. So you can be a giant dick and if I'm paying my mortgage with your game, we're good. But when your product slows, retailers look for excuses to let you go, often with a vengeance. There is a brittleness with companies with ill will, and we make excuses for you if you're good people. There are companies with people I just really like and their stuff is marginal and often gets a pass.
  • I'm Ignorant (or I can't get them). There are 10 new board games released a DAY. My gatekeepers might present me with what, three? I might pick one to sell. I may not know of a games existence. A game might not be available to me at wholesale prices. I really want to sell Matthew Colville's Strongholds and Followers, but he has no love for the middle man. I'll have to be content with my personal copy. I regularly bug one of the distributor buyers to look into a game and I'm often told they're not interested in distribution. Fair enough. There are a lot of games I have no access to either because I don't know or just can't get them. I suppose that's two reasons right there.
Anyway, ten reasons why I might pass on a product. Why might I buy something? You're one of my 30 top companies of proven performance in the marketplace. You personally impress me with your cleverness or innovation. You provide me early copies before the rest of the marketplace. Customers ask for it (number one reason). It's not just good, but cheap, which bypasses online price competition. See, I'm not all negative today.