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.

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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.

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. 

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.

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.

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.

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! 

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.

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.

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.