Thursday, November 29, 2007


Today I finally sold the last copy of a painting guide I bought two years ago. This is a good example of retail buying: Two years ago I bought ten of these books and sold them in six weeks. They were on fire! At that time I had to buy direct from the company, and ten got me free shipping. I bought ten more and sold those over the following three months. Whoo hoo! I bought ten more copies, and nothing. Nada. No sales for quite some time. The art of retail, and there's not much science really, is predicting demand based on past sales and what you believe your customers want. It's gambling really. In the case of this painting book, I saturated my market.

You can buy too few of an item and lose sales. You could have found me scrambling late this afternoon trying to buy boxes of Magic cards for Friday, after we had a run on Lorwyn booster boxes at the store. Customers will accept the occasional special order once in a while, but you generally need to be pretty spot on with their needs. Besides service, availability of product is a key selling point of a brick-and-mortar store.

Our Games Workshop inventory was a good example. We ramped up our inventory very quickly when we moved, roughly double what we started with. At first, we had 90% of requests, with 5% no longer available and the final 5% stuff we didn't stock that we could special order. 90% is not bad. With a GW store a mile away, 90% is death. With a GW store 15 miles away, like now, 90% might work, but 95%+ would be better.

Shorting inventory can result in a death spiral; sales fall, you stop re-ordering because sales are low, sales fall because you have less inventory and the cycle repeats. Customers learn you're not serious about their game and they stop shopping at your store. This happened recently at a now defunct local game store. The owner got the idea that special orders could save him inventory dollars and he began shrinking down his inventory until sales tanked and customers left forever. I worry about this all the time.

Buy too much of something and you obviously have money tied up in slow moving product. A good moving game will sell four or more copies each year. Now look at a company like Pressman Games, who only sell their games direct to game stores in case quantities of six or twelve. Do I really need an 18-36 month supply of a game? How about every game they make? If you want to sell me 6 copies of your game, you better assure me it's an above average seller. I would prefer no more than a six month supply, preferably two weeks (one copy of most everything). Lost sales aren't as glaring an error as overstock, but you always wonder what could have been.

One of the key functions of distributors is to keep game stores supplied with games, one copy at a time. In the case of this particular painting book, my sales of 20/year suddenly dropped to five a year. Five a year is very good, but those ten copies haunted me since late 2005, a constant reminder not to order too deeply (that and the eight copies of Oshi I still have).

You shouldn't expect a specialty store to have a lot of duplicate stock. I ran a report on my board games yesterday and I've got over 850 boxes on the shelf. How many of those are duplicate titles? I would say there are maybe twenty games that I stock deeper than one. One is the perfect number for 99% of games, since the next copy is only a couple days away. Big box shoppers find the single box suspicious. I learned this from my mother. What's wrong with this game that there's only one copy? Is it damaged? Is it no good? Is it the last one before it's gone forever? In a business where four sales a year of a product is a success, two copies of a game is a 6-month supply in a just-in-time world.

Oh yeah, and four a year is an average. Settlers of Catan probably sells 35-40 times a year. I just bought 25 copies of Blokus for December. These top sellers make up for the slow turners, the ones and twos. I usually drop single turn board games after they've sold, but so many new ones come out, there are plenty of disappointments that need to be culled from the herd on a regular basis. The unfortunate realities of the board game market is that good games can sell very slowly, yet I don't get as many special orders as I would like.

The board game department is especially prone to the "throw it against the wall and see if it sticks" method of stocking. Savvy board gamers research before they shop. I'll always give a good recommendation, but people don't always listen to me. That's a good thing too, because I know the turkeys and someone eventually picks them up, usually in December. Muggles don't listen to me. They'll buy a board game based on the cover art or the theme. I'll tell them which pirate game is good (Pirate's Cove) and which are bad (all the others!), but they don't listen. They'll buy the bad one even when I say it's bad. I know I'm not supposed to do this, but they buy the bad ones so often that it doesn't seem to matter.

There are few truly bad games out there. I usually do enough research to avoid those. Then there are games that I think are bad, that just appeal to a different audience. Munchkin is an atrocious game if you're a Euro board game snob, but it might be the funniest game you've ever placed with your D&D group. gives it a 5 on a scale of one to ten, a score not worthy of store presence. Those crappy pirate games that the muggles buy are bad, around-the-board, brain-dead Monopoly rip-offs, but they get bought faster than the good ones. The problem with those 800+ board games is that the bar is exceptionally high. You have to be in the top 20% to even stand a chance. In BGG terms, that's an 8.0 or better, a plateau inhabited by a dozen games or so.

I'm writing too much. This is what happens when I exceed my Netflix Watch Instantly quota.


  1. The thing that some store owners don't seem to get about special orders is that if I, as a customer, am willing to special order something, then I'll drop the "special" part and just order it direct or from an online discounter. The people who shop at brick and mortar stores don't want to order anything, they want to walk in and buy it and walk out with their purchase.

    Regular customers are willing to special order the occasional item as long as doing so stays "special" either because it doesn't happen very often, or because they're ordering some truly obscure item.

    Brick and mortar stores simply can't afford to let special orders become the standard way of doing business.

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  3. "just in Time" ordering does tend to break down during the holiday season.
    There are a variety of reasons for this, including:
    * shipping delays due to volume and weather
    * "one shot" gift buyers who don't come in regularly
    * busy customers needing to get their shopping done - now!
    * greater than average demand for "hot" items - an item might only sell four copies a year, but three of them sell in the holiday season, and customers would buy four more if they were in stock when they arrived

    So the big decision for a retailer at this time of year is - can you afford not to have it in stock vs. can you afford to have too many in stock, and carry them as excess inventory over the next year (for evergreen products), or forever (for products that have limited appeal).

    Gift buyers are frequently less likely than most customers to special order an item - in many cases they can order it online, shipped to the receiver, already gift-wrapped, from their desk at work. And they certainly will do so, if you don't have the widget they want when they do come in to the store.

    This is where having a good stock of "evergreens" can come in handy - basic troops for miniatures games are a good example - you really can't go wrong giving a miniatures gamer more basic troops and vehicles for their army. The sales staff may have to point this out to the gift buyer, but it's generally good advice. The other benefit of this is that these are also products that will sell at a steady pace throughout the year - meaning that they may hang around for a long time, but they will sell without having to be removed to the sale bin, prize bag, or auction..

  4. I agree with most of what you guys have said. However, I think the number of people willing to order online is way lower than you think. Alpha gamers like yourselves are more motivated to find stuff, regardless of the hassle. Most people are not.

    There are people who ALWAYS order online, and I used to be one of them. Then there are people who hate ordering online, and I think they're more likely to go to other stores or do without than go through the hassle.

    As for online ordering with gift wrapping, shipped to their door, I've done it. I found that people find it incredibly informal and de-personalized, like sending a check.