Tuesday, March 4, 2014

Inventory Makeup (Tradecraft)

Building on the last post, the question is how much of your inventory is of each type? Primarily, how much is your current demand inventory versus your safety inventory? My impression from talking to other retailers is they perceived their safety inventory to be a small percentage of their overall inventory. What I found is quite different.

  • My current inventory contains 14,391 items. There's currently a purchasing budget surplus, so normally I have more.
  • As an aside, over 10 years, I've dropped nearly 25,000 items (items with a zero quantity). They hang out in my database and slow things down and have dug in, making them difficult to delete.
  • The total SKUs, number of unique items, is 4,761.
  • The average number of items per SKU is 3.0.
  • Inventory with just one item in stock, my current demand inventory is 3,324 or 23% of my inventory. You might argue that one of each of every item over that one item should be included in this number.
  • Rather than safety inventory comprising a small percentage of my stock, 77% of my inventory has some safety built in.
  • Coming up with hedge inventory is a bit tougher, but I'm guessing it's perhaps 10% of the safety inventory, with almost all of it being collectible card games.

Items Qty
1 Item 3324
2 items 691
3 items 235
4 items 132
5 items 79
6 items 72
7 items 42
8 items 34
9 items 6
10 items 20
11-15 items 56
16-30 items 54
31-50 items 37
51+ Items 27


  1. You have only 6 SKUs with stock quantity of 9? Interesting.

  2. Go figure.

  3. How then do you decide to make the plunge into a complex line? Something like a miniature games system with multiple codes, but not a guaranteed market? A market that incidentally seems to now use kickstarter and similar to establish itself, supplying early adopters with more than they will ever need... Is it just too much of a jump? A risk that you could only take after a community of customers who actually want to buy more stuff is established? Do you think the gaming centre would change that dynamic?

  4. First, miniature game systems perform poorly. All of them. That's in relation to other options in the store. At their best, when you've got a thriving, growing, expanding community with lots of organized play, they'll do average compared to say, board games.

    There's also only room for one or two of them in any meaningful way. For example, as 40K has floundered, we've managed to successfully transition our focus on Warmahordes. Our sales have flipped, our community has embraced our re-focus (or they have re-focused, or whatever you want to call that), but there is not room for say, a third game to come in and do something.

    But a Kickstarter derived miniatures company that wants to have a line in a game store. Pass. I have taken chances recently. We were one of a handful of early adopters of Dropzone Commander. But that game had buzz. It wasn't crowd sourced. It left customers wanting more after seeing it presented at local conventions. It did well for us for a while, but it wasn't embraced, even after I paid staff to run events. We sold a bunch, but events stalled out.

    If a Kickstarter funded company wants a store to carry their game system, it's going to have to be a more push oriented approach. Stores will need to see little risk in the process, since the market is likely very saturated. Customers will have to come to us, in quantity, and essentially ask us to carry it and put their money where their mouths are. Our Flames of War crowd is doing that right now.