Saturday, May 31, 2008

Religion in D&D 4

I've read through the classes in the new Player's Handbook. There's a curious change to how religious characters obtain their power. In previous editions of D&D, religious characters prayed to their deity or pantheon and received powers based on their faith. The deity or deities might be listening or might be distant, but the power gained came from the gods.

In 4th edition characters are divorced from their deities. They gain power from their investiture into the faith, not even from their faith itself. A deity becomes the religious characters fashion accessory. The character can defy the will of the deity, defy the will of the faith, or do whatever they want, but that invested power is irrevocable. I find it an odd design decision and I don't like it.

Meanwhile, wizards "tap the true power that permeates the cosmos." The warlock also taps into power from beings they "commune" with, either fey, infernal or alien. Don't get me wrong, I like the new designs of these classes, but why downplay the religious character? I can't imagine it's out of some concern over religion in the game, because honestly, this approach strikes me as rather hostile towards the whole concept of religion.

Paladins are no longer paladins. They're more like holy warriors from Player's Handbook II or Book of the Righteous from Green Ronin. There is no more paladins' code, no restrictions on association, and a definite step away from the pompous knight that nobody wanted to play (which is good). They must be the same alignment as their deity, even if it's unaligned. Paladins are also invested into their faiths, their power coming from ritual, rather than their god that they must follow in alignment so closely. But what if they don't want to tow the line? Their paladinhood is irrevocable, as neither the god nor the religious order seems to have any control over the paladins power once he's invested.

The investiture approach to divine power is one step too far for my liking. I appreciate the concept that a god might not be paying attention and that a follower might deviate from the straight and narrow (or crooked and wide, if they worship an evil god). I like that the high priest of the good god can be corrupt without some simple spell revealing his schemes. What I don't like is the divestiture of religious power from the game. It makes the gods and the heavens irrelevant and elevates the arcane and alien. It's a simple enough fluff decision to change, but I find it odd that the designers felt the need to do this and I wonder why.

Seminar in Madison III

Turn Rates

At a trade show a couple years ago I sat in the hospitality suite between two store owners who both did a million dollars a year in sales. One store owner had a turn rate of 6 while the other had a turn rate of 1. What does this mean? The turn rate is how often you sell through, or "turn" your inventory in a year. The guy with a turn rate of 1 had a million dollars in inventory (retail). The guy with a turn rate of 6 had $167,000 in inventory. Put a different way, the guy with the 1 turn rate was sitting on $833,000 in inventory that wasn't performing for him. That's a lot of money that could be in his pocket. I don't think anybody plans to do a million dollars in sales with a million dollars of inventory, it just creeps up on you over the years. Who has that kind of money?

Those of us starting out have limited inventory dollars. Every dollar needs to count. Inventory needs to perform in a timely fashion or else get dumped like a bad employee. You need to be ruthless with your inventory. We can determine if our inventories are performing well using various tools, but one I like to use is turn rate analysis. You divide sales by the retail value to come up with a number, usually between 1 and 8. So what's a good number?

Old school retail sources say that 4 is a good turn rate. I think this is a good overall number, but some things in the game trade turn faster or slow than this. For example, the collectible model is known for a small amount of inventory that sells continuously. You might have a turn rate of 6-10 on collectible miniatures or trading cards. On the slower end of the spectrum are things like paint. You probably won't get a high turn rate out of your paint department unless you've limited your selection drastically. Everything else is in between, but aiming for a turn rate of 4 is a good practice.

Having a very low turn rate, overall, clearly wastes money. Those inventory dollars could be put into better inventory or into your pocket. A very high turn rate, overall, is also a danger. It could mean that you're losing out on sales and you're running too lean. Adding more inventory in those areas might increase your sales.

Your trusty spreadsheet is the tool you'll need to perform turn rate analysis. Here's one I did recently, removing departments that are less than a year old. It's got some excellent performers and some real dogs:

Department Inventory value Sales Turns
Trading Card Games $6,086.38 $ 62,358.22 10.2
Snacks $1,415.95 $ 10,937.64 7.7
Collectible Miniatures $4,484.53 $ 32,910.95 7.3
Role Playing $9,923.92 $ 45,276.85 4.6
TCG Supplies $1,815.34 $ 6,750.44 3.7
Dice $2,573.20 $ 8,754.92 3.4
Card Games $6,280.93 $ 18,949.66 3.0
Tactical Minis $31,349.07 $ 85,140.38 2.7
Board Games $18,717.86 $ 45,001.21 2.4
Paint $7,949.84 $ 18,025.49 2.3
Flames of War $7,736.43 $ 11,827.88 1.5
Miniatures $9,089.09 $ 8,662.81 1.0
Classic Games $7,440.71 $ 6,190.49 0.8
Puzzles $2,989.10 $ 1,911.00 0.6

Total $117,852 $ 362,697 3.1

The numbers from this spreadsheet come directly from my point of sale machine. It can run a report on annual sales by department and a report on inventory value, but it lacks the ability to crunch these two numbers together.

What does it say? The most important number, I think, is the overall turn rate. It's 3.1 on this analysis, which tells me I have room for improvement to get to my target number of 4. We moved the store in October and increased inventory by 65%, so there is still a lot of room for performance improvements. Still, turns are up by about 20% from last year.

The blue items are very good, as the highest turn rate items are mostly collectibles and food. I could look at the numbers for role-playing and decide I could loosen up the inventory there, taking a few more chances since the turns exceed 4. It's probably the only department in this report that warrants increasing inventory.

The green items are average, but might need some attention. I was concerned with dice last year, so I made some changes. I down-sized my dice collection by about 50% from the year before and sales went up 25%, doubling the turn rate and providing me $1,000 to spend on other things. You can have too much inventory and a reduction of slow sellers or dead product can often increase visibility of your good product.

The purple items are in need of attention. Miniatures have dropped over the last couple of years, and we're slowly reducing slower sellers, hoping that D&D 4th Edition will pick up sales. We've tried to become the local source for board games, so we've allowed the board game inventory to grow at a rate beyond what's justified by their sales. Our main board game competitor closed up shop recently, so we'll look at this again in another year to see if it improved. Departments like classic games and puzzles have been disappointments. They mostly exist in our store because people expect them, but we're trying to visualize the store without them. A better visualization? How about $5,000? That's roughly the inventory dollars these two departments suck up that could be spent on things that sell.

Caveats. This is just a tool. You can use turn rate analysis by department, by game category, and by item. When I'm re-ordering items, I check the turn rate and drop things that aren't performing. Beginning stores will likely see a fairly slow turn rate, possibly 1.5 the first year, 2 the second year, 3 the third year, etc. We're in our fourth year and I would be very happy with a 3.5. It's important to give your inventory a chance and to avoid dumping a product lines before you really know what your customers want. That could take as long as 18 months. Also don't be afraid to gradually bring things back that you dropped early on.

You might also allow slower sellers to remain out of a sense of cohesion. For example, we made a point of stocking every Dungeons & Dragons book in print because we wanted to be the local D&D source. The key here is that you want it to be a conscious decision, not something you do on instinct or because you're a gamer.

Finally, one of the most important things this analysis can do for you is allow you to be nimble with your ordering. If you see a game declining, you can begin shifting inventory dollars to something that's performing better. This keeps you from having a lot of inventory dollars captured by dying games and having to spend your valuable time liquidating inventory on eBay or in-store sales.

D&D 4 Gift Sets and 40K 5th Edition

D&D 4th Edition gift sets are sold out at Wizards of the Coast and it will take a couple months for them to reprint them. We'll have about 30 extras on the release date, and I have absolutely no idea how long they'll last. If you're still holding out, I suggest you buy one soon, either from us or at your local store. We're still offering the 10% discount on gift set pre-orders, either in full or with a non-refundable $30 deposit.

Warhammer 40K 5th edition. Our store copy arrived yesterday. You're welcome to peruse it in the store. There was quite a bit of in-store discussion about it, but you'll have to see it for yourself. Similar to the WOTC gift sets, the Gamer's Edition product, with the ammo box and templates is sold out at Games Workshop. It's been sold out for about a week now. We still have 8 slots available for pre-orders. I expect them to be sold out in the store within two days of release.

Friday, May 30, 2008

Seminar in Madison II

Continuing with my series of electronic resources for game store owners, I'm going to discuss the lowly spreadsheet. Some of this is pretty dry, so I'm not sure how much to go over and how much to provide in a handout.


The point-of-sale machine can provide lots of reports and raw data, but there are a couple of processes that it does poorly, or it only performs them with an expensive software add-on. The most important of these reports is called "open to buy." It's used to budget your inventory purchases.

Open To Buy
This is the term used to describe how much money you have in your purchasing budget for spending on new inventory. Most point of sale software can't provide this, so you need to make a spreadsheet for your budgeting.

Starting out, I suggest you make a simple "open to buy" spreadsheet. As you get used to the process, you might pull out one department that's doing really well. For example, your Games Workshop sales might dominate your store sales and you might want to track it separately to keep it from eating into your general purchasing budget. A more sophisticated spreadsheet can track purchasing dollars by department, which avoids having your inventory involuntarily shift between departments. I've allowed my store to grow more organically, with a generic open-to-buy procedure, but you may have other plans.

Below is an example of how my Open to Buy spreadsheet works using numbers from my first year in business:

Starting Budget: $ 1,000.00

27-Feb $ 358.15 $ 208.59 $ 1,208.59 $ 201.00 $ 1,007.59
28-Feb $ 543.69 $ 255.59 $ 1,275.96 $ 1,193.30 $ 82.66
1-Mar $ 334.35 $ 194.12 $ 286.49 $ - $ 286.49
2-Mar $ 690.33 $ 415.53 $ 722.79 $ 500.00 $ 222.79
3-Mar $ 597.10 $ 339.16 $ 578.91 $ 901.44 $ (322.53)
4-Mar $ 453.38 $ 246.19 $ (64.03) $ 94.61 $ (158.64)
5-Mar $ 391.26 $ 212.69 $ 64.68 $ - $ 64.68

Sales. You don't need the sales category, but you can use it to come up with other calculations in your spreadsheet, like your cost of goods percentage. I track my overall sales using this spreadsheet, including year over year comparisons.

As a side note, remember not to count gift certificates as sales when you sell them (only when redeemed), otherwise they get booked twice. Point-of-sale machines don't understand this. My sales category includes daily sales, minus gift certificate sales (their own department).

Cost of Goods. This number should be provided to you on your POS end of day report, also known as the Z-Report. Some store owners use a flat rate of 60%, but I think this is too inaccurate and puts additional money into the purchasing budget that doesn't belong. Your end goal is to have a 60% cost of goods that includes credit card fees, shrinkage, shelf worn items, take homes, etc. However, if you don't have a POS machine, calculating the actual COGS is impractical. If you want to use a flat number, try 54%.

Available. This is how much money you have to spend on new inventory. It's calculated by taking the balance from the day before and adding the cost of goods for today.

Purchases. Here is where you put how much money you've spent on inventory that day.

Balance. This is your actual balance, taking into account all the other variables. You want to keep this to as close to zero as possible. You might want a surplus if you're saving up your money for a big release. You might run a deficit if you've just had some big releases that you couldn't budget for.

The Goal of the open-to-buy process is to carefully track your inventory purchases to avoid extremes. If you buy too much, you'll lose money that could be profit or used elsewhere in your business. If you don't spend enough money, you can starve your store of new inventory and drive away customers. This assumes you're not in a growth phase, expanding your inventory as you move forward. If you are in a growth phase, you can create another field in your spreadsheet where you add in new inventory capital, so you can grow in a measured rate.

Next: Sales Analysis. Turn rates and sales per square foot.

Thursday, May 29, 2008

Player's Handbook Impressions

I've read the first 50 pages or so of the new D&D 4 Player's Handbook. I'm going to write about the general feel and layout of the book so far. Most of the rules have been discussed to death in other places.

The introduction is well written and concise, explaining where a role-playing game falls within popular culture and providing a brief history of the game. The authors of each edition are listed in the credits and the book is dedicated to the memory of Gary Gygax. The How Do You Play section is well done, and reminds me of what I read in D&D For Dummies, a surprisingly good book for beginners. There's a helpful blow-by-blow game session described, similar to what I remember in the 1st Edition Dungeon Master's Guide. I still recall such great lines as "I crush the nasty thing with my boot!"

The "Making Characters" section is a step-by-step process, laid out better than previous editions. You can make character backgrounds easily using the question & answer format provided, similar to what we found in the 3.5 Player's Handbook II. Character roles, as reported before, are clearly defined rather than assumed. Players are encouraged to cover each role and new roles, we're told, will be in the Player's Handbook II. This mentioning of future books and other books, such as the Dungeon Master's Guide, is a common theme than runs throughout the book.

Character ability scores are chosen using either a set array, a custom point buy model (with plenty of examples), or rules for random rolling. It's easy enough for a DM to say, use method 1 or 2 (that's what I did). Alignment is cut down to good, evil, lawful good, chaotic evil and unaligned. Players are encouraged not to play evil characters, or risk the wrath of their fellow players. Good advice.

The write up for gods are well done, with some of them unaligned, which was surprising. Many of the gods seem more organic and realistic than in previous editions. Pelor, for example, is the sun god, but is widely worshipped due to his agriculture portfolio. I was able to easily assign the core gods to the real-world Phoenician gods in my home brew campaign.

A character sheet is provided, with numbered lists showing how to fill one out. Very innovative and clever.

The only quibble I have so far is the inclusion of technical terms that are not defined until many chapters later. For example, the dragonborn get a to hit bonus when "bloodied," but bloodied isn't defined for hundreds of pages later. This happens several times, but the alternative of listing everything up front, or starting with combat, might be more confusing.

40K Varnish-A-Rama

Just an update that re-spraying the models with Testors Dullcoat fixed the "frosting" problem. I also went over some of the transfers and painted the areas around the numbers and symbols to blend in better with the background. In the future, I'll use the gloss coat trick Josh mentioned, along with my decal solution.

Wednesday, May 28, 2008

4.0 Street Date Low Down

As the first store in the US to get in a D&D 4 order, I've had quite a few conversations with industry people today. As for us, our Baker & Taylor D&D order, planned as a backup, arrived today. It was a partial order, not enough to even fulfill pre-orders. Still, there was much industry curiosity about this order, which technically arrived about a week earlier than it was supposed to, with no reference anywhere to a street date. We'll be sitting on these books unless there's verified proof that local stores are breaking the street date. Then there will be some interesting discussions.

As for Internet orders, the only company confirmed to have shipped D&D 4 books is They shipped 8 copies before Wizards of the Coast came down on them. Still, eight copies was enough to catapult the gift set from #41 to #1 on their best sellers list, a 4,000% increase in one day. They're quite proud of their little maneuver. In any case, those who pre-order from them now will absolutely be kept to the June 6th street date, at least according to WOTC. They may even sell out, now that people think they're selling them early, in which case they might not get them until after the street date. Still, was slapped on the wrist and lightly too.

As for brick & mortar stores, I had what I thought was good evidence that both Borders and Barnes & Noble were selling early locally, but when I sent Michael out there, there were no books. Both WOTC and my primary distributor were very keen on learning more about these two. The strategy from WOTC's perspective is to plug holes in the dikes by tackling individual stores or sites that sell early. There's no widespread sales of the books as of yet, and WOTC claims there probably won't be. They've done a lot of work to make this an exception release for big stores. They're releasing the book off the usual Tuesday release schedule, which costs them more money but also allows them to have a more open dialog with the stores and big distributors like Random House. In fact, WOTC wanted me to pass on that street date violations from big book stores should be reported directly to Random House (800-726-0600).

As for electronic copies, torrents appeared early this morning. Am I worried about them? Not really. Of all D&D books published, the core books are the most essential at-the-table reference books. I can't imagine a regular player not shelling out the money for a paper book. What's disconcerting is that the copies are allegedly printers copies, meaning they were leaked from the printer, and not scanned in early by fans who somehow got copies.

D&D 4 Street Date

There are rumors of D&D 4 being sold early from one online retailer. It's just a rumor right now, but if we get confirmation of the street date being broken, we'll be selling our D&D 4 books the minute they arrive. The street date is June 6th, but I'm hoping to get them early next week from multiple sources. I'm not being a maverick, I just wanted to let folks know this is how it works when the street dates get broken.

Tuesday, May 27, 2008

Number 5 (40K)

I felt like actually finishing something, so the vehicles got transfers and the first sentinel got based. Unfortunately, the varnish was bad, so I didn't get to completely finish. The first basilisk got a weathered look from the bad varnish, which isn't half bad. The sentinel looks kind of beat up now, which I like. It was a brand new bottle of Armory varnish, although I don't know how old it was. It looked good as I was spraying it, but the varnish slowly turned white. I was reading that another coat of "good" varnish might fix it, so I'll give it a shot with some Testor's Dullcoat from the store.

I failed my saving throw on the varnish, but I might get a do over. I did make my Fort save against chemical poisoning thanks to the mask and my wife's insistence on a better ventilated area, aka the side of the house.

Here's number 5 with his fancy number and iron ore basing. Under the base material I used a sandy paste from Vallejo to break up the flat surface. Notice how washed out it looks, ala bad varnish.

All the vehicles are numbered with low numbers and have the white fist emblem. I'm not sure what it means, but I saw it on some of the Tallarn vehicles in Forge World's Imperial Armour 3.

You can see the "weathering effect" from the bad varnish on the bottom of the chimera. As annoying as this is, if they sold a bottle of spray paint called "weathering effect" it would probably sell.

I don't usually show models in process, but here's a sentinel that just got it's secondary coat of Mechrite Red paint. The lumpy yellow stuff is "blue tack." The next step is a coat of Blood Red over the mechrite. Then I take off the blue tack and draw the lighter gray line around the dark gray camo.

These two guys narrowly escaped getting varnished. The command Chimera has "Tallarn" across one side, something a pretentious officer read was required. As if the men in heads scarves running across the desert didn't give it away.

Monday, May 26, 2008

40K Chemical Free Weekend

I've been having severe allergic reactions to any chemical fumes, including primer and model glue. This is partly because of a cold, but mostly because this is the most horrendous allergy season I've experienced. If you told me from now on it would always be this way, I would start packing. It started a few weeks ago, when I was recovering from a cold while suffering form allergies. Fumes from primer caused massive chest congestion as my lungs filled up instantly with fluid. It took several days to recover, after which, bam, I did it to myself again. A man's gotta prime! It was the second round that put the cause and effect together for me. Since then I've had smaller "attacks" from glue fumes. Acrylic paint has no effect on me, so that's how I spent a lot of my holiday weekend.

Here's what I've been up to:

I took my chances and while coughing and wheezing, put together my 59 soldiers. Why 59? One of the sergeants was missing from the box. Games Workshop doesn't sell them separately, so they're sending me a replacement box with 10 men for free. I can always use more men. If I had an extra 500 points, it would be all guys and probably another sentinel (seen here).

This was the first basilisk I've painted. I reversed the paint scheme and I think it looks fine. This is a gray basecoat with a red coat on top, reverse of the chimeras. One problem I'm having with the Foundation Paints is that they go on pretty thick, so when you use the camo tacky putty trick, it often leaves a noticeable edge between paint layers. I can try to hide it with the lighter colored bordering, but it's still noticeable. I'm guessing the only solution is to use standard paints in a minimal number of coats.

Here you can see the two chimeras with the basilisk. I don't see any major differences.

The sentinel was surprisingly hard to do. While painting it, it didn't feel quite right. It's a strange vehicle and afterwards I decided to give it a black ink wash. It's still wet in this photo. The sentinel has a more organic, animal like appearance, so things like camo are more jarring, while ink washes that normally look bad on vehicles, suits this pretty well. Still, the multiple layers of paint feel bulky and inappropriate on the sentinel, while standard military vehicles look normal.

Stuff to Do:
  1. Paint the other three sentinels.
  2. Paint the other two (three) basilisks. I've got a custom built "apocalypse" class basilisk arriving tomorrow. I might sell off one basilisk in the store, since I can have a max of 3.
  3. Paint the 59+ men, along with new lascannon models.
Army List Change (again)
After reading the Imperial Guard Armour Book 3 from Forge World and the Desert Raiders novel from Games Workshop, I'm more amenable to different weaponry. I'm keeping the autocannons and grenade launchers for alternate options. Here's my current list:

1500 Pts - Imperial Guard Roster - Imperial Guard Tallarns

HQ: Command Platoon (6#, 161 Pts)
Command Platoon @ 161 Pts
Command Squad @ [90] Pts
Cameleoline; Light Infantry
1 Junior Officer @ [70] Pts
Cameleoline; Iron Discipline; Light Infantry; Honorifica Imperialis; Close Combat Weapon; Laspistol
1 Honorifica Imperialis @ [25] Pts
4 Guardsmen @ [0] Pts
Cameleoline; Light Infantry; Lasgun (x4)
0 Sentinel Squadron @ [71] Pts
1 Sentinel @ [71] Pts
Armoured Crew Compartment (x1); Searchlight (x1); Lascannon (x1)

Troops: Armoured Fist (11#, 196 Pts)
9 Armoured Fist @ 196 Pts
Cameleoline; Lasgun (x7); Meltagun; Lascannon
1 Sergeant @ [6] Pts
Cameleoline; Laspistol & CCW
1 Chimera @ [91] Pts
Extra Armour; Searchlight; Multilaser; Hull Heavy Bolter

Troops: Infantry Platoon (36#, 536 Pts)
Infantry Platoon @ 536 Pts
Command Squad @ [191] Pts
1 Junior Officer @ [45] Pts
Cameleoline; Iron Discipline; Close Combat Weapon; Laspistol
4 Guardsmen @ [136] Pts
Cameleoline; Lasgun (x1); Meltagun (x2); Lascannon; Chimera
1 Chimera @ [91] Pts
Extra Armour; Searchlight; Multilaser; Hull Heavy Bolter
9 Infantry Squad @ [115] Pts
Cameleoline; Close Order Drill; Light Infantry; Lasgun (x7); Meltagun; Lascannon
1 Sergeant @ [6] Pts
Cameleoline; Light Infantry; Laspistol & CCW
9 Infantry Squad @ [115] Pts
Cameleoline; Close Order Drill; Light Infantry; Lasgun (x7); Meltagun; Lascannon
1 Sergeant @ [6] Pts
Cameleoline; Light Infantry; Laspistol & CCW
9 Infantry Squad @ [115] Pts
Cameleoline; Close Order Drill; Light Infantry; Lasgun (x7); Meltagun; Lascannon
1 Sergeant @ [6] Pts
Cameleoline; Light Infantry; Laspistol & CCW

Fast Attack: Sentinel Squadron (1#, 71 Pts)
Sentinel Squadron @ 71 Pts
1 Sentinel @ [71] Pts
Armoured Crew Compartment (x1); Searchlight (x1); Lascannon (x1)

Fast Attack: Sentinel Squadron (1#, 71 Pts)
Sentinel Squadron @ 71 Pts
1 Sentinel @ [71] Pts
Armoured Crew Compartment (x1); Searchlight (x1); Lascannon (x1)

Fast Attack: Rough Rider Squad (8#, 88 Pts)
7 Rough Rider Squad @ 88 Pts
Close Combat Weapon (x7); Hunting Lance (- LP) (x7)
1 Sergeant @ [11] Pts
Cameleoline; Laspistol; Hunting Lance

Heavy Support: Basilisk (3#, 375 Pts)
1 Basilisk @ 125 Pts
Earthshaker Cannon; Hull Heavy Bolter; Indirect Fire Capability
1 Basilisk @ 125 Pts
Earthshaker Cannon; Hull Heavy Bolter; Indirect Fire Capability
1 Basilisk @ 125 Pts
Earthshaker Cannon; Hull Heavy Bolter; Indirect Fire Capability

Total Roster Cost: 1498

Sunday, May 25, 2008

Monkey Pound Keyboard

I probably won't put this in the seminar, but I thought folks might be curious how an order gets placed. It's a surprisingly inefficient and error prone process that is not helped much by technology. My point-of-sale system is a godsend, but it's a powerful tool that doesn't get utilized to its full potential.

There are three ways to place an order: Sending a purchase order, manually entering data on a distributors website and electronic transfer of purchase orders. Lets get the electronic version out of the way first, as nobody in games uses the powerful, standardized formats available for sending purchase orders via my point-of-sale machine. Diamond, which does comics, is rolling out such a system and I dare say that their little brother Alliance would have a huge advantage in my book, if they followed.

Sending a purchase order. Most stores call in their order on the phone. I generate mine using my point of sale machine. I run a report for all items in which the distributor is the primary supplier. It creates a report with every item whose re-order threshold is met. For example, a bottle of Citadel paint might be set to re-order more when the quantity gets at or below three bottles, and then to order a pack of six (the minimum quantity).

Once the raw purchase order is created, I then have to go through it and prune out items that I don't want. Looking at my "open to buy" spreadsheet tells how much money I have to spend, based on recent sales. I might have generated a $1,500 purchase order, but I only have $750 available. Slower turning items or items that are still in stock but were triggered because of the re-order threshold are removed for now. If you've wondered why a story doesn't stock an item deeper or at all, it might be about the budget rather than the will or intelligence of the owner. There are always items that I would like to order, but can't. They await some magical time when I'm flush with cash, like after a big sale. If I'm really clever, I might rotate stock, letting a game go away for a while, but bringing in a similar title until that sells. I'm not that clever.

Once I have my pristine, carefully pruned purchase order, totaling no more than my budget allows, I save it as a PDF file and email it to my distributor. That's right, I've got a perfectly good electronic version that could be sent directly to an electronic order processing system, but game suppliers don't have them. Fear not, because this manual system is quite useful. My distributor sales rep gets my email, has a lackey type it into their system (or themselves if they're shorthanded) and then calls me back.

He's calling me back because my purchase order is a work in progress, a wish list. He's going to tell me that I've been smoking crack, and various items that I desperately want are not available. Didn't I get the memo? The percentage of unavailable stuff varies and for various reasons. They tend to be out of things due to their own shortcomings about 10% of the time, meaning I've got a 90% fill rate. However, what's not included are items that are out of stock at the manufacturer, out of print, or otherwise not the fault of my supplier. The total out-of-stock items might be as high as 20%. We joke that my rep is saving me money by not having these things. Items not available are back-ordered.

So I'm under budget now, right? Wrong. Next, my rep reminds me of items that I've back-ordered before that have finally come in. I manually add these to my purchase order, which may or may not put me over my budget. I'm somewhat obligated to take these items, so there's not a lot of argument here, which is why many game stores don't place back-orders or pre-orders, and why the industry has such a supply problem. Next, my sales rep reminds of new release that I've neglected to add to my purchase order or he entices me into buying something for my own good. We'll also discuss upcoming releases, his recommendations, and any pre-orders I want to make. I pre-order everything. I have a bad memory as it is, so I like being reminded about new releases. I rarely miss a new release because I forgot. I just don't rely on my memory.

So what about my budget? All this wrangling over new releases and returned back orders might bump my purchase order over my budget. What often happens is a product line is robbed of its budget for a while to pay for a new release in another department. I might skimp on re-ordering Flames of War because of a big Games Workshop release, or in the case of our toy department, stealing its re-order budget for just about anything else.

My purchase order almost always goes over budget for hot new releases. My Dungeons & Dragons 4 order will be about $5,000, money that I don't have budgeted, it's impossible. However, if I sell it all, I can pay it off with the float between my order and when the bill is due. Thus there's a big incentive for me to get pre-orders from customers so I can predict how much I should buy. This float period is very important for budgeting purchases. One of my suppliers offers me the same discount as Wizards of the Coast, but with only two week terms compared to the 5-6 weeks I get with a credit card with WOTC. The distributor doesn't get a lot of my business because of this. The danger is when you go over budget and a hot new item ain't so hot, or periods like now when items are releasing for an upcoming buying season, but customers aren't coming in to buy yet. I almost bankrupted myself a couple years ago by buying my entire Christmas season inventory in October instead of November. You've got a fully loaded store, no money in your purchasing budget, and not a lot of customers.

Electronic processing. Two of my secondary distributors have websites for order processing. These might seem like a good idea, but the end goal is for the sales rep to spend less time on me and with me, which is not always good. It saves them money but at my expense. I create my purchase order as normal, then I go through their website and manually add items that are in stock. Now I'm the monkey pounding the keyboard. This greatly increases the error rate, as a distributor rep is much better at pounding the keyboard for order entry than me. He does it all day. We're currently having a sale on tournament packs from the last Magic set because I bought them instead of a box of booster packs. Monkey pound keyboard.... badly.

Once my web order is manually entered, a process that offloads the work to me, I submit it. What happens next is similar to the email process. The sales rep calls me to say what's not available. Their websites aren't usually dynamic and the availability data might be from hours ago. They might also have pre-orders or back-orders for me that they'll want to include. What happens with some distributors is that they only call if there's a problem or something is missing. I don't hear back about the order until it arrives the next day. In those cases we don't get an opportunity to talk about pre-orders or upcoming releases.

And that is order processing, something that I do nearly every weekday nowadays. Let me stress the dangers of going over budget. Most profit margins are around 8%. If your sales are $21,000 per month, the industry average, that profit is around $1,680. Any purchasing deficit comes directly off that profit number. It's very important to maintain purchasing discipline, or it's the bottom line that pays the price.

Process and Time Away

I was getting my oil changed last week at this place with strange magazines in their waiting room. They had dozens of trade magazines, with hardcore auto repair articles about things like the latest wiring diagrams for Chrysler products. I thought it was strange that they would provide these things to their customers, as opposed to standard "consumer" magazines. I wondered if it was intentional or if they just dumped their back issues into the waiting room. For a moment, I actually had a certain respect for them. It was as if they were silently touting their expertise by showing off their impossibly complex reading materials. Then again, it also said to me that they were more interested in impressing me with their knowledge than actually providing me customer service.

Despite the obtuse material, I found an interesting article about auto shop owners. The magazine performed a poll of shop owners and their results could have been applied to any small business owner. Shop owners, according to their survey, overwhelmingly work towards two goals: Improving their process, including training employees and documenting procedures and creating opportunities for time away. They're actually the same thing, if you think about it.

Improving process is how you get time away. Process is how you standardize your procedures, or to use that cliche, how you work on your business instead of in your business. Creating process creates standardization, a consistent customer experience and makes it easier for your employees to do their job. Once employees have process down, they don't need you so much. Voila! Opportunity for time away.

Time away is my goal for implementing technology. The point-of-sale machine standardizes a lot of processes. Remote access software now lets me do all accounting and ordering from home. I'm also big on empowering employees to suggest or implement new processes. I went three years with a paper notebook for special orders before I finally gave in and allowed us to use a spreadsheet. The big reason? I can't look at a notebook from home, which impedes my ability to place orders. The danger is that I spend my evenings logged into the store, rather than with my family, but I still demand a certain level of control.

Saturday, May 24, 2008

Seminar in Madison

I'll be giving a seminar in October for the annual ACD Games Day in Madison, Wisconsin. I was supposed to do one last year, but it was when we were moving, plus problems at home made it impossible. There are half a dozen game store owners giving these talks to other game store owners, a kind of preaching to the choir, or more like the blind leading the blind. Specialty retail is complex and there are many ways to do it, and those ways often don't translate well to other business owners. Plus business owners are a trailblazing, recalcitrant lot who want to do things their own way. Otherwise, why not work for someone else? I'm giving my seminar on technology, attempting to focus on the basics of what's absolutely necessary to run the business.

My audience is diverse, but most won't be planning to spend much money on technology. When I started, only half the industry had point-of-sale systems. I'm told that number is probably up to 75% now. The big issue I've seen, however, is money. The barrier to entry for starting a game store is pretty low, so many begin under-capitalized and without a business plan. This is one reason why so many fail, as they don't take into account such things as losing money at the beginning, aka startup losses. So when you start talking to them about a $7,000 point-of-sale system, their eyes might glaze over.

My approach. I've got an information technology background, ten years as a network engineer, architect and IT project manager. Unlike many IT professionals, my approach towards small business technology is as a minimalist. Information Technology can do wondrous things in a large company with a large staff, but in a small retail business, the job of the owner is to sell things, not rebuild servers and play with gadgets. You should spend close to zero time on maintaining your technology. This doesn't mean you should turn our back on technology, but it does mean you should avoid added complexity and cost. Technology should make you more efficient, simplify your processes, and help you make money. At it's best, technology should allow you to spend less time working in your business.

I'll be going over the bare essentials of what you need.

Point of Sale Machine. You need one. A point of sale machine will process your sales, track your inventory, create purchase orders to buy stuff from ACD and allow you to analyze your sales. You could do the job of a POS machine with a cash register and an index card system, but the POS will allow you to grow faster, manage inventory better, and allow other people to easily take over some of your duties so you can ultimately spend less time in your business. A point of sale machine is like your first employee in many ways. It should increase the speed of your transactions, provide you useful information, and do a lot of the heavy lifting of sales analysis.

What Should You Get? There are many out there, and none solve all our needs. There are Macintosh based systems, free systems, and systems that require professional installation. After a lot of research, my choice was Microsoft Retail Management System (now Microsoft Dynamics). I was looking for something reliable, based on established technology, that could grow beyond one register or one store. It had to have strong support when it all went wrong (which has happened twice). You will want something that can process transactions, including credit cards without a separate terminal, track your inventory, create purchase orders for your distributors, and run reports to analyze your data. If you plan to sell comics or a lot of singles, you might want to investigate other packages that specialize in that.

What Can It Tell You? It will track your inventory and give you some indication of shrinkage (theft). It can help you determine the frequency of your sales, either by item, department or category. You can do fancy sounding things like "turn rate analysis" and "sales per square foot," and you can do them quickly. It will collect your sales tax and pay it at the end of the month. It will track your customers and what they buy. Most importantly, it will help you determine if you should purchase an item again. I would argue that you make your money in saavy purchasing rather than clever sales techniques. A point-of-sale machine can help you pick apart your purchase orders to make sure you're not buying dead or slow moving product.

What It Won't Do. It won't do your physical inventory. It only reports on what you put into it. It won't do your accounting, and often won't interface with your accounting software as you like. It won't tell you how much money you have to spend or give you an accurate sales history. It's just one tool in your arsenal, and the more complex you make it, the more you'll rely on it as a piece of a puzzle instead of the entire picture.

Friday, May 23, 2008

Jumping the Shelf

Our Games Workshop section jumped the miniatures section bookshelf, marking it's onward march towards the front of the store. It's mostly a symbolic move, but one that allows me to envision our miniatures outside of their designated space. It's the most compacted area of the store and the most profitable, so perhaps the toy department will shrink a bit to some day make room for tin and plastic.

Our Warhammer 40K section will be complete by mid-Summer, meaning we'll have every model offered in the line. We're pretty close now, but we need to shift some inventory around before we can afford to finish. It doesn't help that the hot 40K sellers need to be stocked in such depth. It's good, because it means we're selling stuff, but it takes away from breadth. These are the problems you want to have! We have become the local GW store and as for 40K, it seems we can do no wrong (queue warning sirens). Warhammer Fantasy is a top game now as well, but there are certain items that don't sell, while everything for 40K is selling.

The Flames of War section compacted a bit and our army boxes are on clearance starting at below cost on eBay. We won't be carrying army boxes again, except for special orders. I don't want to say I'm giving up on this game, because sales are erratic but still not horrible, but the product line is simply too wide and the game isn't dynamic enough to encourage people to play obscure models and one-off armies. Only a historical gamer at heart would choose lesser equipment options or less involved nationalities. It's also a game that has failed to capture many new players over the last year, and new players move "back list" stock, while new "late war" releases have failed to energize the existing players. Flames of War is the one miniature game that hasn't blossomed with the addition of a game center. I suppose they can't all be winners.

Thursday, May 22, 2008

Now With 50% More Camo! (40K)

One of the things I've learned in this project is the tight integration of craft supplies with the GW hobby, as well as unique consumption patterns. For example, almost nobody ever buys two bottles of Vallejo paint. Why would you possibly want to do that? With 40K, it takes half a bottle to paint a tank, so if you've got a few vehicles, it's totally reasonable to buy a couple bottles at a time, which is what I've been doing this week. This is why we let Vallejo and P3 paints get down to 2 bottles (lately down to 1) before re-ordering, but Citadel paints get a restock when they hit three, and even then we get outages. Foundation paints curiously sell slower, but I think it's because customers haven't been educated in their use (yet). Add airbrushes, like we'll be seeing from GW this Summer, and paint consumption will accelerate even faster. GW is counting on it.

Second, there is a brand loyalty that is logical, and not just kneejerk like I once thought. I've got a paint set already, fairly complete and comprised primarily of Vallejo and Reaper Master Series paints. I've probably spend a couple hundred dollars on this stuff. Nevertheless, I bought $70 worth of GW paints this week because I wanted to use their painting guides. It doesn't hurt that I've actually come to like the GW paints. I'm a hack painter. I don't thin my paints, mix new colors, blend, layer, stipple, fold, spindle or mutilate my paints. I paint straight from the source and GW paints are the easiest for this. All this talk of dropper bottles and advanced technique is like me talking about performance characteristics of super cars: useless knowledge that will never see practical application. Just give me a bottle and a brush.

Now what I've been up to:

The six, 10-man Tallarn squad boxes came in today. I was beginning to wonder if this would be one of those embarrassing projects where I had a completed army, except for those 60 or so men I needed.

The box sets are metal and are disappointing. This is because I can only use 7 of the 10 figures, as I'm not using rocket launchers or melta guns. Still, they're cheaper and much easier than buying little two or three man packs, which I may have to do once I finish my inventory. Plastic sprues with modular weapons are a giant leap forward, in case anyone had any doubts.

My camo ratio is all about packs of blue-tack. This is 50% more blue-tack than the previous chimera, meaning more camo. I think I like the first one better, but I wanted more red and less gray. I'm hoping that when I reverse the paint scheme with the basilisks, it won't be too noticeable or jarring.

Camo adds two hours to the project. Accessories add about an hour and a half, including installation.

Wednesday, May 21, 2008

D&D 4: A Rocky Start

Our order didn't ship from Wizards of the Coast until yesterday, making the release of Keep on the Shadowfell a precarious one for us. We snagged just enough copies from distribution and hopefully we didn't lose any sales. We ran out last night, but nobody asked for a copy after that. Our regular order arrived a couple hours ago. This problem came about because I ordered very early. Keep on the Shadowfell got lumped in with Star Wars releases originally scheduled the same day. When the Star Wars stuff got bumped, so did my KotS order.

My 4th editon order is big enough for WOTC to ship it via freight, rather than UPS. A big tactor trailer will pull up and offload a pallet of D&D 4 books. The positive side of that is that freight orders are a bit more unpredictable, so they're delivered earlier than a UPS order. This is especially good, because the book stores are already breaking street date on Keep on the Shadowfell, so every extra day is more sales. Of course, the down side is the unpredictability of freight. The freight company may promise a lift gate, to get that pallet off the truck, but when they arrive without one, are you going to tell them to come back in a few days and not delivery your thousands of dollars in product or are you going to roll up your sleeves and start with the heavy lifting?

My backup plan is still my book distributor, but with pre-orders in the many dozens, the book distributor order would likely last only a few hours before being depleted, and that's not even covering all the pre-orders. It's sad that I need a backup plan, and there is definitely a cost associated with the plan, but street dates are the real problem here.

Mass market cannot handle street dates. They are just not capable of that level of granular planning. Mass market gets many pallets of stuff in their stores every day and this stuff need to go out on the floor immediately. There's limited space and it's all about staging product for flooring, not storing it because some podunk publisher says you can't sell it until Tuesday. In the game industry, everyone is podunk to the likes of Target or Barnes and Noble, and although D&D 4 might be an exceptionally big release, most stores probably barely notice a Yu-Gi-Oh or role-playing release, let alone care about their street dates. The solution is to eliminate street. There is no middle ground, no "soft" dates or soft releases, just get rid of the street dates and all these problems disappear. Of course, I say that with the luxury of no local competition to scoop me on new releases.

Tuesday, May 20, 2008

Camo (40K)

This didn't turn out exactly as I had planned, but I planned wrong. I was going for a red vehicle with gray bits, but I got the reverse because I used red as the base coat. I don't think it looks bad, just not what I planned. The big question is whether to keep going like this, possibly using a lot more blue-tack to mask more red, or to call this an experiment. I'm reluctant to call 8 hours of work (total) an experiment, however.

This is my "command" chimera, the junior officer chimera in my infantry company. That's why it lacks any gear on the outside. The lieutenant is very picky about such things, going strictly by the book. What a brown nose.

They gray is Adeptus Battlegray, a Foundation color. The gray highlights are codex gray. The treads are textbook tin bitz with a dry brushing of boltgun metal. Shiny metal is done with chainmail. It could still use an ink wash and I'll likely wait until all the vehicles are finished before applying transfers (decals).

I've decided I kind of lack the muted Foundation colors for armor. It looks more appropriate to the battlefield.

Monday, May 19, 2008

The Return of D&D

Yes, 3.5 D&D is still around, but sales this year have been dramatically off with D&D 4 around the corner. D&D is role-playing games, if you happen to own a store, with about 60-70% of sales being D&D or D&D related accessories, including things like dice, which also ebb and flow with RPG sales. This week we arrive at that corner we've been waiting for. Not only do we have Keep on the Shadowfell released this week, a very good D&D 4 adventure with enough rules to not need the core books due out in 3 weeks, but I've had my first solicitation for third party products.

I suppose these aren't truly 4E third party products. The GSL license debate has dragged on for so long that we're probably 6 months away from GSL third party releases. I don't know if WOTC planned it that way, but what appears to be big conspiracies are often just incompetence with an unintented twist. Goodman Games is releasing "system neutral" source materials with 4E code words like "points of light," which happens to be the name of a new release for August:

GMG4380 Points of Light (System Neutral Gazeteer) $10.99 Aug 2008
This SYSTEMS-NEUTRAL mini-gazetteer describes four lands suitable for insertion into any role playing game. These isolated bastions of civilization can be used as home bases for an ongoing campaign, or places visited by heroes over the course of a game. The Wildland is set shortly after the fall of a large empire where civilization is on the brink. The Southland is on the frontier of a large kingdom. The Borderland is the frontier between two empires, and the Swamps of Acheron is a tumultuous realm in need of heroes.
Role-playing games takes up a quarter of our store and it's been in a kind of holding pattern for quite some time. Yes, there are great new releases on the shelf now: Pathfinder adventures continue to sell well to D&D 3.5 players, Traveler has picked up, Dark Heresy is supposed to be re-released when the oracles throw the bones in the right combination at Fantasy Flight Games, and even White Wolf, returning from the land of the undead, has been having good success with Exalted (they're now a top 10 company for us, if you're a list maker like me). With the exception of Dark Heresy, all the hot releases combined wouldn't sell as many copies as a new D&D release about how your bard could inspire the party with good cooking. Last time I checked, however, the Dark Heresy core rulebook was our best selling item of the year, and it was only out for five weeks. Time will tell if the 40K RPG, botched horribly in its release, will make a comeback.

Role-playing is cyclical in many ways, but as a store owner I can't help looking at that quarter of my store, with shelves bare in some places due to sheer lack of new material, and wonder if there was an easy way to expand the blockbuster miniature game section into its real estate. There's a concept of sales per square foot, and role playing games has been a near charity case for a while. It deserves about half the space it currently takes up. The toy section also gets that squinted glance, as if I'm wondering how Flames of War would look next to Thomas the Tank Engine. No, best to be patient. While RPGs are cyclical, the toys are slowly beginning to grow. Sales per square foot of that quarter of the store would have me condensing it into two shelving units. Patience grasshopper.

We have kind of a toy dilemma. We do seem to be selling them at a better pace, but there is a subtle shift occurring. Things that do well, like puzzles (yes puzzles), crafts, novelty items like slingshots that shoot nuns (no kidding) and Schleich stuff are being concentrated, while we're trying hard to divest ourselves of the stuff that doesn't really fit the store. It's a painful strategy, but we're claiming it as the toy department of our game store, rather than the mini toy store that some people would like it to be. Toy customers are coming in and trying to push us into directions and product lines that we really don't want. Unfortunately, this means some of our emerging toy customer base may be disappointed, but I think our game customers will find it more appealing in the long run. It came down to a realization: Our toy store kind of sucks, but parts of it comprise a pretty good toy section of a game store, if that makes any sense.

Sunday, May 18, 2008

Base Coat (40K)

I started painting today. The base coat is a Citadel Foundation Paint called Mechrite Red. It took half a bottle for each chimera and went on very easily in a single coat. I considered making it the only coat of red paint on the models. However, after painting one chimera with standard Citadel Scab Red (on the left), I could tell the difference. Scab Red seems to have a more vibrant finish, plus it's a bit more "red" than the Mechrite, which has more orange in it. I actually like that orange shade of red better, but the finish seems too dull.

The base coat took about 2 hours per chimera, with the scab red coat taking only half an hour. Still, it's quicker than the recommended paint scheme, which was before Foundation Paints. The painter recommended several coats of Scab Red.

The end result is below. I'm not too hip on the triangles. I'm thinking of making green crescents instead, which goes with the middle eastern Talarn theme.

It's About the Diesels (cars)

My car guy consciousness has been gradually shifting away from performance, which is not only very expensive, but recognized as socially irresponsible. In my city of Richmond, the second hand cars driven by the poor tend to be nice, gas guzzling hand-me-downs from the more well to do. Anyone with a guzzler is either lamenting about gas or lamenting about the fact they can't find buyers for their cars at even a fraction of their worth.

Many of my friends have upgraded to hybrids, the winner being the Toyota Camry hybrid. Some adopted the Prius early on, but realized it was a very expensive economy car with finicky electronics. They moved on to something else as soon as they could. What I'm waiting for are the diesels.

Clean diesel technology has been around in Europe for years now, and will finally make their way to California this fall. The great thing about diesel cars is that you can still have a nice performance or luxury car, but with tremendously good gas mileage. A recent road test in Europe put a diesel 5-series BMW against a Prius on a road test and the BMW got 1 MPG better than the Prius. The diesels still pollute, especially particulate matter, but they're a big step up from gas engines and they already exist in the rest of the world.

On vacation a few years ago, I rented a Alpha Romeo 156. It was a 5-series like Italian car that handled like a dream, had style to die for, and got about 40mpg with a 1.9 liter diesel engine.

Alpha Romeo claims they'll return to the US sometime in the next few years, and I don't mind fantasizing at all about these cars. Reliability is supposedly improved too, as they've brought in German management to take up build quality. Their electronics are as badly put together as Mongoose role playing books. Although I was driving a 156, the car that I ogled in Italy was it's little brother, the 147:

If you don't want to play Russian roulette with your car picks, you could always get more tried and true vehicles. The car I lusted after for quite some time was a previous generation BMW 530D. This was a three-liter diesel engine that outperformed most 6-cylinder gas engines, yet got 35 miles per gallon. These are likely the kind of vehicles that will become commonplace in California in the next few years. You won't notice them, except for the combinations of letters and numbers on their back ends. They do produce a tad more smoke out the tail pipe, regardless of what people tell you, but they're not like the oil burners of the past.

My father had an olds cutlass diesel in the 80's. We called it the "gutless," because of it's pathetic power. However, once you got that sucker on the freeway, it would fly, albeit with a cloud of black smoke trailing behind. The gutless engine pretty much self-destructed shortly after warranty, which didn't exactly inspire confidence in American diesel technology. That was the last time my parents bought an American car and diesels in California have been restricted to trucks since then.

The Inevitable Disillusionment (40K)

The 40K game system itself is fine, but my issue, before even playing seriously, is the Imperial Guard codex. A set of rules should provide options that are useful. They might not always be useful. They might only be useful in clever combinations. The problem with the IG codex is that there are so many very cool doctrines and equipment choices that never make sense, or only approach making sense in ridiculous quantities. The point costs are just too high. Clever one shot combinations are one thing, but there are many options that nobody will ever pick because of the cost. That is disappointing and a sign that the game design is lacking rigor.

It would be the Dungeons & Dragons equivalent of saying that the fighter, cleric and wizards are good choices, but the bard, sorcerer, rogue, druid, ranger, paladin, and barbarian are crap, or at best only good when in extremely specific situations and only once. That's pretty much how Imperial Guard doctrines break down in usefulness. One of the complaints about D&D 3.x that's fixed in D&D 4 is that with a little creativity, it's possible to create entirely incompetent characters because of the toolbox nature of the rules. From what I'm reading about Imperial Guard, the army is incredibly difficult to play unless you follow very narrow parameters in army design. A good army is the exception, not the rule, which means the creativity of army design is lessened dramatically.

If you want flavor, it means you make concessions to effectiveness. If you want to play Tallarn raiders for example, you might end up taking doctrines like Sharpshooters, that most people think are marginal at best. It's like the D&D equivalent of crap feats, like Alertness, chosen in protest to qualify for some cool prestige class, only in 40K there's no payoff. I'm not sure if this is true with other army codices, and I certainly didn't feel these constraints in Warhammer Fantasy. Nevertheless, I'm happy with my choices and I'm enjoying the army building. However, as a power gamer and someone who enjoys roleplay and flavor, those lesser choices, chosen for color, weigh on me and take away some of the enjoyment.