Wednesday, June 22, 2022

Hiring and Neurodiversity

If I were to go back in time and do one thing differently when it comes to hiring, I would assume that one in ten people have some form of learning disability. That is the statistic. It's an area that's often overlooked, lumped into overall employee performance. It's often invisible, unaddressed and thus undisclosed.

Under the ADA, employees have the right to choose whether to disclose their disability. I can't accommodate them without disclosure. However, I can create a safe environment, explicitly making it clear we're open to such diversity. Letting your employees know you are open to accommodation, and open to diversity in general, are factors in their decision to disclose.

Even if they don't disclose, we can avoid some biases. I am very much aware of how seemingly simple cognitive tasks for us neurotypicals have inherent bias. It's something to keep in the back of your head when figuring out how to create work. You might find sorting Magic cards mindless grunt work, but a dyslexic employee might find it torture. Don't assume everyone will experience this like you. Don't assume every job can only be done one way.

My blunt instrument hiring modality has been a very cruel, old fashioned view of alpha employees and their lessers. Having a child with learning disabilities, AND having very capable, essential staff with learning disabilities, discovered only after many years, has made me painfully aware of my error in understanding. I would be discounting some very capable, creative people, if I kept my outdated understanding.

As small business owners, we generally feel that we're too small for specialization and thus we don't want to think about accommodation. It's a kind of don't ask, don't tell. I think we're missing out on a lot of very good people who just happen to process the world differently. To be an owner you need to be good at everything (or hire for your shortcomings), but I think it's wrong to expect that from every employee. Also look for areas in which they shine brighter than the average employee. My son has difficulty reading, but he has an iron clad memory and a college level vocabulary.

I have nine people on staff now, which statistically means one probably has a learning disability. Like all staff before them, it is pretty well hidden, since we don't make any effort to discuss learning disabilities with new hires or staff members. Let your employees and potential new hires know you are accepting of diversity of all sorts, including cognitive differences. My bet is like being open with other sorts of diversity, you'll unlock a lot of human potential.

Anyway, I'm no expert on this topic, just a business owner and father.

Sunday, June 19, 2022

Economics of Leisure

I am having a heck of a time shopping for a travel trailer. This is a post about the insanity of that market and the economics involved. I find it fascinating how incredibly screwed up it is, and the danger for me, like with starting a game store, is attempting to crack the code, rather than standing back. A wise person would take a step back. A gamer might try to beat the system.

COVID forced people to seek safe travel locally, and there's hardly a better self contained, safer and cheaper travel option than buying an RV (assuming you use it). Air fares are up 50% in the last year and people are commonly coming back with COVID. Sales of RVs have skyrocketed. They were high before COVID and now they're out of the park.

Buying an RV in normal times is a bit like buying a car. Nobody pays full price. In fact, discounts are even deeper than passenger vehicles. You can normally expect a 30% discount off MSRP. I know some retailers get irritated with me when I talk about haggling for a new vehicle. It seems hypocritical to insist on holding the line and then go off and haggle for a car. However, that's the way of these markets and if you personally want to give a dealer an extra 30%, feel free.  

There are no 30% discounts on RVs right now. In fact, there are mark ups over MSRP in many places (like California), much like with passenger vehicles. The demand far outstrips supply. My first special order for a trailer was for a model that is built two months out of the year. Normally this isn't a problem and they sit on lots for many months. After the manufacturer increased the price by 17%, I dropped my order. I was already stretching and this priced me out of the market for that brand. What I realized after the fact was not only wouldn't I get that trailer, but I would now be competing for a place in line, if I wanted to try somewhere else. Allocations were accounted for and the option disappeared. I dropped that brand, at least as a new option.

My second order had me buying a used RV from a dealer in Arizona. In this case, after taking my deposit and providing me financing (a credit hit) they were unwilling to wait for me to have it inspected. There were people in line and if I couldn't show up within five days (a two day drive away), they would sell it to the next person in line (that was a week ago and it's still listed for sale). Companies will show you their true stripes when they make mistakes, but they'll also show them when they don't need you as a customer.

My third order was for a new, mass market trailer, built continuously in two factories. In this case, I was able to get a 10% discount, but no promise on the eventual pricing. They asked for a huge deposit for a trailer with a theoretical price point. They wouldn't even send me a sell sheet. I accepted. That's how unpredictable prices are and nobody in this space is willing to guarantee anything. If you don't buy it, someone else will.

There is a bit of a race here. Material prices continue to skyrocket with supply shortages, meaning waiting for a trailer means it's going to be more expensive over time. Interest rates are also on the rise and every month I wait to buy a financed trailer, the more expensive it becomes. I'm diverting more money to a down payment, kind of grateful I have more time to save, but my down payment may be offset by higher rates. The wise who can wait understand this can't last forever. Do you buy at the peak or do you wait potentially years for the fall?

There are other headwinds. The price of fuel is ridiculous. My gas truck will get 9 MPG towing a trailer, which the diesel truck folks would laugh at, if they weren't fearful of diesel and DEF shortages. RV park fees are also going up in price, while a lot of BLM land is closing to camping. Wal Marts and other free overnight spots are closing as well. There are too many nomads. 

There's a rise in services like Boondockers Welcome, where you can camp on private land, for an annual fee. The market provides. With all these costs and complications, it is possible you could buy an RV, only for it become a fancy lawn ornament. Also, good luck finding affordable RV storage. Most of my travel will be in Mexico with state controlled fuel prices (but rampant COVID).

There is fear of a travel trailer value collapse. A travel trailer loses 30% of its value the first year. Unless it happens to gain value in our upside down world. People are selling used trailers at their original MSRP of a year or two ago. The second trailer I attempted to buy has a new MSRP of $65K, while it was selling new for $45K about 18 months ago.  I was willing to pay that $45K, if I could find one. There were two in the nation, so I couldn't. But what happens when the market cools?

If you buy a new trailer at full price and it loses 30% of its value the first year, and the new market is back to selling trailers at a 30% discount, well you're seriously upside down, if you want to sell it. What keeps people on track buying a trailer, knowing this, is FOMO. Fear of missing out is real when this is your retirement plan. Now might be your only time. A lot of used trailers for sale are from people who waited too long, usually with a sick or deceased spouse. A lot of these have never been used, sold with knick knacks and new bedding, waiting to leave the driveway on their maiden voyages. A lot of RV buyers, like myself, are under the retirement age and we could theoretically wait, if we were wise. Like buying a boat or a time share, trailer buyers are clearly not paragons of financial wisdom.

2022 (2023?) Keystone Cougar 26RBS I have on order, if I ever get it. My third trailer order.




Wednesday, May 18, 2022

Someone Stole $10,000

Yesterday someone stole $10,000 from my store bank account. I noticed early in the morning that it happened overnight. I spent the day figuring out the details, closing and re-opening new accounts, and to some extend contacting vendors. It occurred to me this could be a real disaster if I were on an extended trip.

I won't have online access to my accounts for several more days. Until then, items will bounce off the old account and the bank will call me each morning to verify the days transactions. As my bank manager pointed out, I have a strong cash position, which will help. Imagine losing all your money and not being able to process transactions.  It took an hour sitting with the bank manager to close and re-open the various accounts, but there will be many hours of work to follow.

What Happened?

To be clear, it was not an employee. I think it was professional criminals. Whomever did this had my banking information and was able to log into my online banking or otherwise see my account online. Nobody but me has this. I am assuming my account password was hacked. 

How do I know this? Test transactions from another bank preceded the withdrawal the day before. This is when an institution sends a couple small withdrawals from your account and then sends a total of that amount back as a deposit. If you didn't do this, it's a warning you're about to be in trouble. Contact your bank immediately. You had to be able to see these micro transactions on my account to be verify them with the other institution, and since it happened within a day, it meant they had online banking access, and not a paper copy of my bank statement.

That other institution where the money was sent was Capital One. I happen to have a Capital One credit card, so I called them as a customer and learned more than you probably would otherwise. My money was being transferred to a business checking account that had been opened ten years previously, probably some abandoned account. The name on that account was not mine. When I asked for more information, that's when they informed me I had reached the end of our conversation. How did they know I wasn't trying to hack that account?

Capital One sent me back to my bank, who had me fill out a Written Statement of Unauthorized Debit. All of this, the withdrawal, phone calls, and reporting to my bank, happened within a couple hours on the same day. This morning I noticed the $10,000 withdrawal was temporarily removed while they investigated. I am probably fine. If $10,000 had been shipped to some offshore Nigerian account or business, I assume it would be gone. American bank to American bank? They don't put up with shenanigans.

When my online banking is re-established, I'll have to set up everything again. It turns out of the 50 or so online payees, only 14 need to be re-added.  There's an element of clean up.  



What Could I Have Done Different?

Account information was breached somewhere, but it's clear to me this couldn't have happened without online banking access. Make sure your passwords are extra secure. At this stage, if you can remember a password, it's probably not good enough. Nobody else had access to my account, which was everyones first question. I do not think this was an employee or a vendor, because of the online banking element. 

Thursday, May 12, 2022

Are You A Good Person?

"Are you a good person?"

"Hmm, define good."

(sigh) "It's not hard. You actively do good things for people."

"As opposed to not doing harm, which just makes you average."

"Correct."

"No, I think I'm kind of an asshole. I don't actively do good. I know the difference though. I admire those who do good. I'm stuck in my own nonsense."

"What about the good you do for your community? What about employees you pay and treat well? What about your happy customers who you bring joy through entertainment? What about your family? You have a positive effect on the people around you."

"Well, that gets down to my definition of good, which I think is about intention."

"You don't intend to do good?"

"No, I do what's right. I do what makes me happy, which is what I think is right. I don't tend to think about doing good. I give a small amount to charity and community causes, but not as much as I could. I could do a lot more and I don't. Which is why I'm a bit of an asshole, because again, I know the difference."

"But you're doing good nonetheless."

"It's a Confucian good, as opposed to a Buddhist good."

"I think even the Buddhists would argue with you."

"Buddhists love to argue."

"I've noticed."

Tuesday, May 10, 2022

Nimble Processes

When you first start out, you have things you want to do and you do them. You sell Magic singles with your arcane knowledge. You hire and fire people on your own, using your gut. You buy from suppliers requiring unique product knowledge, like comics or Warhammer. As your operation grows, you hire people, and you begin to be concerned about continuity. Perhaps you want vacations. Perhaps you want to retire one day. Your thought processes change. There are five elements to any new initiative that can result in success or may tank a project before it even starts:

  1. Ubiquity: How can I make this process work for anyone on staff?
  2. Training: How can I create a training regimen to hand off this process for when staff inevitably change roles?
  3. Documentation: How can I document this process in a way that creates institutional knowledge?
  4. Continuity: How can I inject future proofing into my documentation so this process is dynamic?
  5. Validation: How can I create checks and balances to make sure this process is being performed properly and profitably?

These are natural questions, not some clever scheme I've come up with. As you grow, you will want to run every new process through this regimen. If any of these five elements are lacking, you will own this process. You will be needed forever, until you die or resolve the element. If you're a small store owner with few or no staff, you might be laughing right now.

A small store is nimble and quick. You might survive entirely, whether you understand it or not, based on crumbs, working on projects that the big store can't crack with their five elements. I compete with Amazon because I run a successful brick and mortar store and Amazon can't, based on their needs. My competitor competes with me because there are things I won't do because I can't get my five elements in line for an initiative (like running Yugioh events). If my competitor isn't careful, someone might step in and do the same to them. But the reality is, you probably want this.

You want to get to the level in which you are big enough to drop processes that no longer work for you. You want to maintain customer service, for sure, but there are going to be new projects you pass on and small elements of your operation that you cease doing, because you can't crack the code. These failures are elements of success, as well as opportunities for competition against you. I think the only mistake is to stop innovating altogether. 

Thursday, May 5, 2022

Reconciliation Rituals

This is a "day in the life" post. It's what I do between the time the store closes and the time it opens again. Oh, you thought we were done when the store closes? Not even close. Every store owner has their rituals. These are mine, and they've mostly been unchanged for years. Technology has improved them, but I don't take advantage of every technological leap; I don't sync my POS to my accounting software, for example. My rituals represent a tight degree of control of inventory and money. This is by no means the most efficient way of doing things, so as always, it's what I do, not necessarily what I recommend.

We begin (it never really ends) when the store closes at ten o'clock. It may not actually close until later than that, as late as eleven on Fridays. I am getting old and I would prefer to be asleep by then, but I always try to stay up for closing. On weekends we close earlier, but that will probably change soon.

Upon closing, I look at the sales report. I often look at it throughout the day, but if I've been busy, I look at it now. Every sold item has a re-order threshold. That number is dynamic and changes often. Now is when I change it, based on past performance and a bunch of subjective factors. I could change this number when I create purchase orders for restocks, but it's better if I do it now, since it's on my mind. Often there are several hundred lines of sold items in a day, and if I don't have the time, I'll focus on big ticket items. I might say anything over $50 gets a look. A store makes money in the buying, more than the selling, and this activity links directly to buying.

Staff run an end of day report. They cc me a copy, which includes the cash deposits and an explanation for any discrepancies. Sometimes the explanation is "I don't know why we're up $20." My manager then investigates and emails me back with an explanation the next day. I don't ask him to do this, it just happens. This is a clear chain of responsibility and it took years to figure this out. I enter the cash deposit manually into Quickbooks, along with the amount of credit card transactions from an integrated report. I might also need to move money manually from Paypal. Stupid Paypal. Dude can send a car into space, but couldn't code nightly deposits.

If it's a particular day, or if sales are crazy, I might decide to place an order or two at ten or eleven at night. Yes, I'm tired, but I want to get a head start. If I know I'll be busy, because I game every Sunday, for example, I'll start placing orders earlier, like on Saturday. Rushing orders is bad (although being tired is bad too), and it's better to take my time on Saturday and miss some sold Sunday items, rather than feel the stress of the Monday morning rush. Mondays used to be an orders only day, but I now prefer to take Mondays off. Of course, Mondays are when sales reps want to inundate me with stuff, which I'll get to later.

The next morning we open at 11am, but I'm usually up with the sun. I check various POS reports and log into my bank to make sure everything checks out. Usually the cash deposits from the night before aren't recorded yet, but I'll double check the deposit from the day before that. I like to manually reconcile all deposits and all debits at this time. This helps me spot errors, maintain cash flow and reassures me things are fine. I have spent years with a few days of cash flow, so at some times this has been mandatory. Nowadays I like to maintain six figures amongst the accounts, thanks partially to our government loan. Baller.

I am happy when: The money is where it's supposed to be. The stock is set to order the proper amounts. Orders are placed. I can now go out and explore the world, at least until lunch time. What happens next is a chaotic mess. Distributors and suppliers have sent emails, since I won't answer my phone. There are new releases, questions to be answered, pre-orders to be placed. Invoices begin peppering my inbox and don't let up until late at night. Alliance orders notoriously show up around 10pm, and I'll reconcile them upon arrival, because I'm foolish like this. Asmodee orders need to be scraped from their website to obtain tracking numbers. All of these invoices require manual or some sort of automated import of new items. All require me to find photos and descriptions for our online store, that only accounts for 10% of our sales.

My goal of traveling six months out of the year in Mexico is to work from around sunrise to lunch time and have the rest of my day free to explore. Let's call it 20 hours a week, but I bet I can get that number down. This will require me to ignore a lot of nonsense until the following morning. This is an interrupt driven field, and some folks, like ACD and Games Workshop, even send me work to do on Saturdays. The people that set up those Saturday tasks certainly aren't awake when they're assigned. Getting my hours down will require me to streamline my rituals, without sacrificing fidelity. It may require some delegation, but working from home now, I don't see anything in particular that needs delegating. I have traveled for several months with a manager completely in control of the business, spending an hour a day derping around with emails and such. I know that can be done too, but I like the control I have now.





Sunday, May 1, 2022

Inventory Sizing

This is a wonky inventory article you should probably skip, unless you're curious how I'm restocking inventory. It's one of those things I'm writing to get processes straight in my own head, more than to instruct others.

I doubled my inventory (and then some) over the last two years. The goal was to both stock up for potential outages and attempt to meet increased demand, which seemed limitless. I had hopes of establishing a baseline for a new normal. I really just wanted normal sales with double the inventory. This worked and our sales were stratospheric in 2021, and up 28% in 2022. This is typical in the trade, I think. The ratios I use for my stable inventory are different now, and that's what I wanted to write about. What did I do then, what do I do now.

Why am I stocking lower? A few reason: 

  • I'm less concerned about outages. Product is certainly late, but it's now a few weeks late rather than a few months. Stock outages, like COVID, have moved to the endemic phase. It's just there all the time. Deal with it.
  • I've learned the limits of demand. I stocked way up on everything as a means of somewhat blind, yet historically informed inventory growth, and have organically drawn inventory down as product sold. My inventory, when I could get it, was functionally limitless in 2021. I got a really good glimpse of demand. That glimpse was invaluable, even if it was a snapshot in time.
  • Dead Stock. I want to emphasize that this method was successful in that it didn't result in huge gluts of dead inventory. 2020 was the year of dead stock, with months of the store being closed, but 2021 was my most efficient year in history. We did not start 2021 with dead 2020 stock. That was gone.
  • Budget. We're no longer swinging for the fence, attempting to survive by pulling the inventory lever as hard as possible. I have enough money in the bank to pay off my EIDL loan, but I'm still using it as a backstop. The goal is to pay that debt next year, and I can't do that by spending the rest of that money. We're back to a sustainable inventory budget.

The ratio! Right, that. The ratio I used to expand inventory rapidly was to divide my annual sales by my turn rate, which was six. The image below is from Top Loader sales. If I were to bump up my inventory for the apocalypse, or simply the need for rapid inventory expansion, I would divide my annual sales of 191 by 6, and set my restock to 32. Now, carrying 32 top loaders is probably not enough for top loaders, which are in short supply, but you get the idea. 

32 top loaders, a somewhat arbitrary number, should satisfy demand for about six weeks. Sometimes this ratio, with other products, satisfied demand for months. This is a very liberal ratio. It worked well with stock in flux, but it left a lot of slack in the system overall. That was fine then. I would only change this restocking ratio as items sold, so slow selling items weren't changed, and eventually the inventory stabilized at around double the previous amount. I was getting worried there for a minute, let me tell you. Will this ever end? If I had an extra $100K or so, perhaps I would stick with the original ratio.

I also clearanced items at a very liberal six months of low activity. Inventory is about opportunity cost. If you have all the money in the world, as in all the inventory I could possibly want to buy, there is no opportunity cost. Clearance sales are then about space and a clear sales channel, rather than recovering inventory dollars. My store is completely full, so space is now an issue.


The new ratio was implemented to "right size" inventory to normal levels. I decided on a 30 day supply. I check every item after a sale and tweak it. That's right, every sale in the store is evaluated. Some might find this tedious, I just consider it part of the job. This 30 day supply is a much smaller number than annual sales divided by turns. It also has the advantage of being in line with distributor terms. 

The goal, not for the first time, is to sell this stuff before the bill is due. The top loader example would have me stock only 23 top loaders at any given time. That's 28% less stock, which might not seem like a huge difference, but this draw down helped "right size" the inventory without resulting in outages. It is also helping me get my budget back on track. 

Exceptions: There are times I know this is going a bit lean, especially with slower selling items. An RPG book might have sold 18 copies in the last year but only 2 copy in the last month. Do you stock 3 copies like the expansion example (18x6) or 2 copies (2 sales in the last month)? If it's D&D and you don't want to ever be out of a title, perhaps 3. If that item is not part of a strategy, perhaps 2. I like to identify leaders in each segment and treat them more liberally than everyone else: D&D, 40K, Magic, and ugh, core Asmodee.

Disclaimer: This is what I do and not what I'm recommending. Inventory is part art and part science, but even the science reeks of art. There are always exceptions with inventory, subjective decisions related to your expectations of future sales and future availability. There are inventory coherency issues to consider. There are times you're actively stocking up or slimming down a line. My formulas are not something you could plug into a spreadsheet, they're a baseline understanding. You wouldn't hand this to a young buyer and say, do this. There's a ton of institutional knowledge behind it, and quite a lot of handwavium.






 

Saturday, April 30, 2022

My Problem with Ultra Pro

This is a case study of a problem product line from a purchasing perspective. Whether Ultra Pro is a good product or not is irrelevant to me as a buyer, at least until it effects sales. When we have it, we sell it. We've been approached by marketing folks who I believe represent Ultra Pro, trying to figure out the role of the brand in my store. I've been thinking about it ever since. Here are my issues with Ultra Pro:

Market Leader: Ultra Pro is the CCG supply market leader in the game trade, and my top selling brand of CCG supplies at 40% of my sales. It should be higher in a mature market, but I believe they've slipped and allowed others opportunity. This is my single store perspective, of course.

Their position has eroded over time. We've been able to easily source and sell Dragon Shields by Arcane Tinmen. In fact, we've spent thousands of dollars buying pusher shelves for Dragon Shield boxes. We've invested in Dragon Shields because the brand is strong, available and consistently priced. I believe the success of Dragon Shields is primarily availability

Going forward, I wouldn't be surprised if Arcane Tinmen took our top position. This is not to say anything about product quality, customer preference, or other subjective factors. I can get Dragon Shields from everyone, at a consistent price, with consistent availability, even during the supply chain crisis.

Out of Stock. Whatever you want to say about Ultra Pro, I can't sell it if I don't have it. Basic items are regularly out of stock. Most themed items are "splash" on release, meaning it's unlikely I'll ever see them again. This lack of availability wears on you, especially when I can easily get other brands of supplies without the hassle. I have long lists of products I check on regularly, and it drags down the purchasing experience overall for the store. 

Splash Releases. It might just be me, but the number of themed releases, like this quarters Magic themed play mats, sell very thinly. Perhaps other stores can't get enough of this product, but I've done something I swore I would never do, I've stopped inventorying individual items. Ultra Pro Mat: Kandahar: Various, might describe twelve new play mats from a new Magic set. I can't be bothered to create individual items, or find photos -- often on the Ultra Pro site because distribution can't be bothered either. It's a splash item for them too. The indifference comes through the screen. This means they don't appear in my online store, which hurts their sales. They never get re-ordered, even if available. This is a recent thing for me, but while comparing notes, I learned other stores do this too. I should really stop selling them.

Erratic Pricing. Ultra Pro is probably, maybe, sometimes net priced now. Do they have an MSRP? Who knows. Let's look at that for a moment with a ubiquitous item: 

Deck Protector Pack: Green Solid 50ct (82671)


Ultra Pro website to consumers: MSRP: $3.99. This is the de-facto MSRP, since it's on the UP site. 

PHD:  $1.85 with a different MSRP listed of $3.49 (in stock)

Alliance: $1.89 net priced (in stock)

GTS: $2.10 net priced (in stock)

ACD: $2.23 net priced (OOS)


There is price confusion. Normally I like price confusion, but this level of chaos is unusual in the game trade. Are they net priced? Is there an MSRP? What is that MSRP? Why isn't there agreement on this? The most shocking thing about this is three out of four of my distributors have these in stock. It must be Magic release time! Ultra Pro stock might be described as seasonal.


Too Broad a Line: There are simply too many SKUs for too few sales and they're simply not available often enough. If I had to give some advice it would be go back to basics. I can't keep track of the 136 Ultra Pro deck boxes, 228 sleeve packs, 176 play mats, and 148 binders, and Ultra Pro can't product them consistently. 


A CEO once told the game trade if you can't keep it in stock, order deeper. That might be true if you're the only producer of the Arkham Horror board game, but I've got six other viable manufacturers making roughly the same products as you. We've established the licensed stuff is garbage, so that's not your unique value proposition. What is the Ultra Pro Unique Value Proposition? Anyway, if you could actually keep your line in stock, I might carry all that product. Because you can't, I throw up my hands and order from the other six.


Anyway, that's far too much thought for what should be a turn key, easy to understand product line. The bottom line is if enough product is produced, everything else is details. 


Thursday, April 28, 2022

Pull the Lever

Working from home turned me into a professional buyer.

As a store owner, I wear many hats, none of them more than 10% of anything I do. However, my hat collection shrank dramatically when I handed my manager most of my operational responsibilities. I did not intend to be become a professional buyer, it's what happens when you only have a couple of levers to pull. I can attempt to clearance items online, since I have no active sales role in-store, or I can be a better buyer. Those are my two levers.

Buying while working in the store was always an interruption. Yes, you can say the key to a stores success is in the buying, but you wouldn't tell a customer to wait while you placed an order. Buying might be the most important thing, but it's rarely the most important thing right now. Being a buyer at home, without interruption from staff and customers, meant I could focus all my energy on my main job. Normally, I would be constrained by budget, represented by my "open to buy" worksheet. It might tell me by Tuesday that I've bought quite enough, cool it.

With loan money both from the government and shareholder reinvestment (I refinanced my house), I suddenly had a huge budget for buying, near limitless at the time. This money was to rebuild sales and customer confidence, through any means necessary. If you had all the money in the world AND all the time in the world, what kind of buyer would you be? That was my situation in 2021. I added new distributors and a couple dozen new vendors, about ten of which are core to our business now. Our inventory doubled and sales supported it. It wasn't about shoving product down customers throats, it was meeting demand, both pent up and new demand. 

A lot of this spending was hampered by shortages, and to some extent, still is. There was no amount of money that could acquire the product I wanted. I had to create new demand, find new product for my customers. Thankfully I have peers who have gone before me who could turn me on to new vendors. They didn't always work for me, but they mostly did. 

In 2022, we still have shortages, games I would buy by the case if I could get them. I no longer have unlimited funds as before. There is a lot of money in the bank, but I'm planning to pay back my EIDL loan completely before its due next year. We are on a budget. If I had to go back to work in store, my guess is I would let some of my vendors go. Some of these folks are an enormous pain in the ass, taking far too much time to place orders with far too little shipping when they do. As long as I'm at home, I'll continue my new role as professional buyer, looking for new vendors and coddling the ones I have now. 

COVID brought us challenges. We were forced to reinvest in the business, to go in debt for the business. We were also forced to innovate and expand for what appeared to be a perhaps permanent shrunken market. Maybe doubling inventory was what was necessary if you've lost half your customers? We didn't know. We had money and one lever left to pull.

Monday, April 25, 2022

Just Because You Can

When you start a store, you're looking for any angle to make a buck. Any extra income will keep the lights on or preserve your savings. This is a good attitude to have, but eventually you begin to see the outlines of your business, a view of what belongs. A sculptor, I've read, has a vision for what their piece will eventually look like and they remove everything not that. A business is also like this, although customers will help form that vision.

Not taking every opportunity sounds like heresy. It sounds like you're giving money back, the most hated thing in retail. What you're doing is honing your vision, crafting your art. A well focused store with a clear vision will make more money than a looney tunes, anything goes store. A counter intuitive analogy is crowded shelves. If you can highlight one thing on a crowded shelf, and you pick the right thing, that item will likely sell better. You may need to have less stock on that shelf. That's right, less inventory will make more money in some circumstances. A store is like this overall. A store needs coherency, flow.

It's not just inventory, you need to set a tone. If you're going to have an upmarket store, you don't need downmarket product and services. I used to sell used video games. It made me some money, but it harmed the up market tone of the store with a lot of muggles who could care less about my offerings, other than their ability to dump the latest Madden game. It was gross. 

My tone is set by my staff primarily, then the surroundings like furniture, fixtures, and even flooring. Music sets or ruins a tone. The inventory is a tone setter, including what I carry, where I place it, the depth and breadth of stock. The walls are decorated, in a perfect world I have nice displays and demo tables. I agonized over our unfinished ceilings. Oh, it's all the rage in Portland! I am not from Portland. In the end, I took a few months of free rent, in exchange for unfinished ceilings, and decided not to look up for a while until it grew on me.

I can't tell you what your tone is, or what's good or what's bad for you. You'll have to figure that out. You might name your store after a farm animal and sell at a deep discount, making it up in volume through desperate marketing and attention seeking. You do you. You might also need every angle to survive, especially in a small market. The smaller your market, the more angles you'll need or want. 

Imagine a store in a market so huge you could specialize in something tiny, like only selling role playing games. I dream of a megalopolis where I can have a corner store only selling the games I care about. That will never happen, you're thinking, but I can point to a lot of things I don't do, that you might consider essential, because it's simply an unnecessary pain in my ass. Maybe my competitor will notice and start doing it (this has already happened). Such is business.

Have a vision of your sculpture in your mind. Remove everything that is not that. "Consider Yes" is a great RPG mantra to enhance player agency, but "Ponder No" may be appropriate for a maturing store with a clear focus. As you sculpt your store into existence, move slowly enough so you don't lop off an ear or make the lips too thin. It's hard to go back. Accentuate what's working. Don't look at the other artists with envy because they're sculpting something cool that's not part of your vision. I do this all the time. If you don't have a vision, why did you even start? Maybe spend some time in contemplation, thinking about what you really want to be doing with your store. The customers have spoken, have you? Remove everything not your vision.


Wednesday, April 20, 2022

Employee Performance Vs. Trust

The video below highlights the balance of performance and trust in business, and puts its finger on my thoughts about management. It basically says we have two critical metrics for business, performance and trust. We measure performance endlessly, but we have few trust measurements. Corporations are concerned almost entirely with performance over trusts. As an owner of a small business, concerned primarily with long term goals and stability, I value the high trust individual more than high performance.

High performance would be great, but medium performance is more likely when combined with high trust. A high trust, medium performing individual is a win for small business, while many corporations work to weed them out. 

Trust is more important because small business is playing the long game. We are not concerned with impressing shareholders with quarterly profits. We are not trying to juice sales so we can sell the business. I have big publishers that betray my trust on a regular basis. I don't trust them. I try not to speak with them, if I can help it. I will be there, in my business, longer than any person I speak with at a corporate level, all the way to the CEO, who as a customer, is probably high performance, low trust.

Performance is the key component in a corporate environment, unlike small business. In a corporation, you provide your high performance for high compensation, with both sides wary, since trust is in short supply. Corporations, in my experience, are a devils bargain of compensation for agreed upon exploitation. 

Corporations are the parable of the scorpion and the frog. They don't exploit out of spite, they do it because it's their nature. They think with their wallets in a short term fashion. So you take a job in an untrustworthy corporation, build your eff you fund, and always put a percentage of your effort towards the time when the scorpion will bite your back. Some corporations have a facade, a corporate culture of trust, but cultures come and go in corporations. 

Because I can't trust a corporation as a small business owner, I'm always looking over my shoulder, checking my margins, and hedging. So much hedging. I'm dividing my efforts, diversifying my inventory, questioning whether I should put effort into the latest initiative I know will be abandoned next year. This is the drag corporations experience from partners because of lack of trust. 30 companies have 80% of my business, yet I'm always looking at hundreds of others, mostly because once a company becomes a market leader, they become low trust.

Small business values trustworthiness over performance in its employees. Margins are thin, it's a high theft environment, and every employee is the face of the business. We can't afford to break trust with customers, but it all starts with the employee. The down side to low performance, high trust, is it emphases the "steadies." It brings in those who are great at keeping the status quo. 

In a corporate environment, you need the high performers, but the foundation of a department is often the steadies. In a small business, you have trouble attracting the high performers, because you lack high performance compensation. As an owner, because you have difficulty finding the high performance employees, you end up relying on yourself for this. You are the high performance, risk oriented individual you need. That's generally your contribution and it's a bit of a problem when you disengage.

Small business has the time to build trust without the performance pressure of a corporate environment. I've had people compare my business to Burger King, as in Burger King is paying more than you. Would you want to work in the corporate pressure cooker of a Burger King franchise? Do you want to work for a low trust employer who demands high performance, for an extra fifty cents an hour? Perhaps. Maybe you need that pressure cooker to feel good at the end of the day and you expect all work to be in a low trust environment. For most people, I think that may be their entire experience of work. Expectations of low trust, high performance.

Now as for measuring trust, it's mostly a factor of responsibility and time. Perhaps there are no easy metrics for measuring trust. Maybe measuring trust is a big of a Shrodinger's Cat, where the act of measuring trust is a distrustful act that effects the experiment. It wouldn't be the only soft thing I measure by knowing it when I see it. I'm no navy SEAL, but my paramount need as a small business owner, with my livelihood in their hands, is being able to trust my people.



Monday, April 4, 2022

Death of the Hold

 I can't hold that thing for you. One of the lovely ways we provide support to customers is we tell them about something cool we have and they ask us to hold it for them. In a "single stream" store environment, where there is no online store, the hold is to remove the item from existence in the store. It's one reason why if a customer calls and we look something up in our POS system, we want to touch it before confirming its existence. 

With an online store, we have Shrodinger's Items, items that can both exist and not exist. Held objects are not available on the sales floor, but they are available online. To hold an item is to remove it from the sales floor and mark it as invisible in the online store. That's a recipe for disaster, although you can certainly do that and with a single person store, it might even be feasible. It's just you and your memory. 

I've also become overly cautious about promoting anything that is currently in stock with a limited supply. I tend to promote pre-orders rather than things that exist now. I've had customers swear they would never shop with us again after we oversold an item. We had four, I created a rush, we sold some in store and some online and there was an inevitable error in reconciling these things. There is a delay between selling something online and when it's actually picked from the sales floor. The solution is to have deeper stock or separate stock. Both solutions are not feasible.

One solution we had for about 10 minutes before I flipped out was reducing the count of every online item by one, making single items on the shelf invisible online. Something like 30-40% of our items are just one copy (it used to be higher). If you've got a solution to the venerable held item, let me know.

Thursday, March 31, 2022

Bending the Line

Let's say you read my last post about bending the line towards customer desire or obtainability. Most store start by offering product from game distributors and perhaps a couple direct accounts, like Games Workshop. That's a fine place to start, but what if you want to go further? How would you go about having the funds for seeking out the obscure and arcane? How do you bend these products towards your through line?

You need money for the unobtainable. Let's assume, since you have a game store, you don't have money. Where could this money possibly come from? Consider an experiment in creating desirability. Take a product and go the extra distance. Select a solid, value oriented mainstream product, and teach your staff to sell the heck out of that product through game demonstrations. Set a baseline of what you would consider normal sales. Anything over that baseline is wonder money, money to invest in the unobtainable. Meanwhile your staff now know how to demo a game and will sell the heck out of that game for as long as they're employed by you. 

This extra money you made goes to inventory that's not normally available through distribution with the hope of differentiating your store from competition, delighting your customers and most importantly, making money. There are safe bets in this sphere, such as bringing in the top brand of jigsaw puzzles, finally establishing a Games Workshop or Asmodee account, or perhaps some direct to store sales. My big winners direct to store in the last couple of years have been wholesale accounts with Foam Brain and Squishables. You could decide to spend a portion of your money speculating on retailer friendly Kickstarter projects. I probably back one in five projects of the peers I follow. If you backed one if five of what I backed, they would be obvious choices.

Now that you have new blood in your ecosystem, make sure you continue to order, paying careful attention to stock levels. It's easy to let new stock become absorbed into your ecosystem and not re-ordered. Keep promoting, delighting and marketing your customer base. Make sure they know of the new wonders in your emporium. Pick another or perhaps multiple items to promote and reinvest. You are the ring leader of this circus and the size of your tent is entirely up to you. Create a system of promotion and reinvestment and you'll really be on to something. Eventually you'll need to new and unusual to fill your circus tent. But start with one game demo.


I assume you're familiar with Mystery Loot?




Tuesday, March 29, 2022

Desirable and Attainable

What does a modern hobby game store do? What role does it play in serving its customer base? You have two major factors, what's desirable and what's obtainable. These are elements of demand and supply, but not quite the same.

Desirable. What generates desire is often outside our control. Most of what is desirable is locked down in existing markets. For example, we have 30 companies that make up 80% of our sales, despite having several hundred on hand. What Magic players want is not something we control, generally. In fact, the desire for this is product is created externally from us. The publisher and its designated agents create the demand. As a store, we can run events to foster this excitement, make social media posts, and generally get excited, but for the most part the desire for this product is external from us. When you think you'll open an "X" store and sell particular products, you are hoping your small bit of enthusiasm will translate to strong desire. You'll sell what they let you sell.

You can also create desire through experiential retail. Events are the obvious Useful Value Proposition. Demo tables with active selling will take well vetted product choices and exponentially increase sales. More demo tables, more sales. Without experiential retail, you will not have a value proposition and will probably fail. With just events and no active selling, you'll be working a passive retail model that will be determined entirely by foot traffic and population base. Creating desire for product is often the difference between break even and profitability. The bar is high.

Obtainable. Obtainable product is stuff you can get, at a margin or price you can deal with, in reliable quantities to meet your needs.  You may overcome some of this with enough capital or size. There is no margin too small, only a price you mark up to that people are unwilling to pay. There is a huge swath of consumer goods, that you would think we should be selling, that we're locked away from because of lack of distribution, direct sales, or our volume is simply too small. We're are often second choice for a lot of products, so the more niche the product, the more likely the alpha customers will have it by the time you get it. If the product is entirely niche, the market may not exist at all. I have this problem with many Kickstarter games, especially role playing games.

Mainstream vs. Niche. This means our real role in the marketplace is to have the most mainstream products for the most mainstream customers. Niche products serving niche customers is something we engage in, but it's a sideline to carrying the top products for the average customer. As store owners, we like to be niche. We like to delight customers. We do end up spending a lot of time and money differentiating ourselves by seeking out niche product. Just today I had a niche RPG arrive (which everyone loves, but nobody will buy) and a long awaited, classic board game (which everyone loves, but nobody will buy). These make me happy. They send a message about the kind of store we are. They will not pay the rent, and thankfully both publishers took my money over a year ago.

If you are a customer looking in, you probably only see the things that interest you, the niche product probably. As a store owner, we are much better off putting our thumb on the scale, so to speak, than seeking out new product to weigh. Tweaking my Magic prize support or drumming up a Yugioh event is likely more profitable than my next five backed Kickstarter projects. It is our enthusiasm for cool stuff that keeps us driven to find new, delightful product for our customers.

The 45 degree slope. Finally, imagine a chart. You have desirability on the vertical access and attainability on the horizontal. A line runs at 45 degrees, cutting this graph in half. Everything on this line or slightly adjacent, you can sell. Everything else is either not desirable to your customer or unobtainable. Each product could be charted on this graph. At least, it could be if we knew what they are. Each desire is likewise a mystery. We don't know where customers spend their overall entertainment dollars. The stuff that aligns along this narrow corridor is the stuff my store sells. Sometimes I grasp for items far out in the distance of attainability. Sometimes things are game store exclusive and we see demand that hints at a larger universe we're barely part of. Sometimes we can channel desire to what we already have, but far less so than we would like. 

Surviving in this trade is acknowledging your line and working to bend desire and product towards it. It's also realizing when you're being played, when you're being asked to create desire for the unobtainable, or promise the unobtainable in ways that won't satisfy desire. Pull desire on top towards the line, attain product from the bottom towards the line. This is maddeningly difficult. This is the work part of the job.

Friday, March 18, 2022

The Single Store and my 4.0

I have one store. I've had one store for over seventeen years in various configurations. If you ever hear me giving advice about opening multiple stores, you may slap me square in the face. I know nothing about that. My first store was small, and I outgrew it in three years. Some would consider that store a mistake, but my needs for additional income grew when we adopted a child. 

This was my 1.0 store, a test really. I don't think I passed the test. I don't believe I would have invested in a 2.0, if I had been on the outside. "Your business is bad Gary, and you should feel bad." I tell myself in my imagination. Over its three years, it never made a profit, although revenue grew and a stunted, potential community was definitely interested in what I would do next. I learned how to "store" and wanted more. I doubled down on a foolish endeavor when I opened store 2.0, using the last penny of my home equity before the entire housing market shuttered.

My 2.0 store was three and a half times larger. We included 1,000 square feet of game space, and we instantly grew revenues 45% in the first year. It wasn't enough. Store 2.0 was a struggle, as it was simply too big at 3,300 square feet. It took years to grow into that space, as we watched competitors fall by the wayside. Often I wished for a quick death. I would try something new, it would fail and lose some money, we would retrench and jump out later to try something else. It would fail and lose money. Smaller changes and improvements had small effects, that eventually added up to really good retail practices. Those big initiatives? They rarely worked. Eventually we grew into that spot, partly with the help of all my competitors leaving the field, some just temporarily.

In 2016, feeling both cocky and burned out on store 2.0, we launched store 3.0. We created a Kickstarter project, raised funds through private investors, and built a mezzanine with a complete store re-model. We now had 2,000 square feet of game space and we aimed to be a regional event center. That never quite worked out, but it was a Unique Value Proposition that loaded the store with roughly double the customers from before. It got peoples attention. Store 2.0 was good, but Store 3.0 was special. It was beautiful, comfortable, and purpose built. It was also stupid expensive and with a 15% bump in revenue, it was a kind of place holder to keep me interested in the field. We could pay back our loans, and there was profit, but there were also good and bad months. Our problem was the promise of ever larger Magic events never materialized, in the wake of a Magic slump. In fact, the Magic judge, right before construction, told me our proposed space was too small

2021 saw the somewhat desperate launch of store 4.0, which featured double the store inventory. This doubling happened over time, sometimes unintentionally as we attempted to get ahead of the supply chain shortages. It was hoped that with COVID we might make up lost sales through additional offerings. That seemed to work! We had a 60% increase in sales from our dismal 2020, with its missing quarter. We also had a 20% increase from a very good 2019, before the crisis. This 4.0 feels fundamentally different than 3.0, as we have a depth of stock I've only dreamt of. I've chased breadth of stock my entire professional retailer life, but never imagined depth would pay off for us. I believe 4.0 is as far as we can go in this location. If you had asked me in 2019 how much stock I could add to the store, I would have told you, with industry pros agreeing, 50% more. We soared past that to 100%. I've got five more years in this location before I can consider a 5.0, but I would rather not.

So how do you know if you should open a second store or just a bigger one? I don't know. I have a competitor that has had something like nine stores while I've had my one in various incarnations. We're in the same area and have a completely different mind set. His new stores open, they close, he buys a store, it closes, he opens two more. It's like a confidence shell game. I have no idea how many stores he has right now. I have no idea his thought processes, but apparently a new store is low hanging fruit in his mind. He also wouldn't believe me when I told him my single store revenue. Impossible. We have different goals and objectives. I want perfection in one entity. I will never get it. I will try and fail. This is fun to me. An exasperated reader once asked, "Is this just a game to you?" Now you understand. It's the best game.

There are certainly low population areas of the country that can't support a giant store, or a rapidly growing one. I've seen roughly ten percent a year growth over 17 years. I have peers that blow by me and make me look like I'm wasting my life. I'm no genius, just stubborn. My "one" store did roughly four times the sales last year of my same store in year three, mature in its first location. We grow slowly. We improve processes. We create a company culture. We attract customers and dissuade others from coming. We try to innovate without losing what we have. The net result is growth, but not without troubles. 

Slow, organic, seat of your pants growth is not for everyone. I was once told by a high powered business person they coveted my slow growth life of daily challenges. I was building a thing, while they managed people and processes in a rather abstract manner. Sure, they got paid a fortune, but my life looked fun. When I first started I had some difficult conversations with tech friends who couldn't quite understand brick and mortar. Why would you do that? Why would you limit yourself in this fashion at the dawn of a new world? Because it's slow. Because it's mine. Because I decide when it's time to upgrade to a new version.

Tuesday, March 15, 2022

Running the Store Remotely

I've been the buyer for my store well, forever, but I've done it from home for the last 22 months. Two years ago, almost to the day, I sent everyone home and shut down for two months. I ran the store mostly solo, did home deliveries, ordered everything we needed, installed a brand new POS system by myself, and when we re-opened, I handed the reins to my manager. I needed this two months to realize I still had it, as my confidence had waned after stepping away from the counter for six years. I could step back anytime and make the business thrive. I went home, but retained purchasing and finance as my roles, but everything else was handled by staff. This crisis gave me my freedom, or as usually happens, allowed me to see I was the only one keeping me chained. So what did I learn?


Tactics vs. Strategy

When you are in the thick of things, when your inbox is overflowing, customers are streaming in and there is a mountain of receiving in the back, you are more focused on getting through the day than thinking about purchasing strategy. I gave up counter work in my ninth year, but I kept coming in to engage in the battle for another six years. Sitting at home, I don't experience any of this. 

At home, I don't worry about finding time to research new product. I don't worry about where a product will go once it arrives. We've always found space, although we're now objectively out of space for new product without cycling out old. I also don't worry about the work I'm creating, since other people are doing the receiving. Since I'm providing excellent buying services, there is little to no data entry for them when orders show up, with purchase orders accurate to the penny. It's turn key. Nowadays, if an order arrives without a purchase order in our POS, it's a bit of a crisis. Two years ago that was a Tuesday.

I have to admit, the idea of a truck full of product arriving in a day is something that would have made me take pause if I were there. At home it's a logistics problem for my manager to handle. My personal feelings about products are also removed. I'm likely to order something when it sells and not order it when it doesn't. At this stage there are products I've ordered, sight unseen and clearanced, without ever putting eyes on them. There are some products that always irritated me when they arrived for various reasons, often packaging. Not being in the thick of this battle, means I can think clearly about product mix, supply and demand, and objective sales data. 


Budget Concerns and Sales

I only have two levers to pull from home: input and output, purchasing and clearance sales. I can buy product and watch the results as it streams into the store. I can put items on sale in our online store and watch the feeding frenzy (or lack thereof). Because I only have two levers, I probably pull them more often than I should. 

I've found regulating purchasing to be difficult, mostly because of supply issues. Having a huge bulk of holiday goods arrive in January and February devastated a lot of holiday savings, although it also resulted in February being our best sales month ever. We have doubled our inventory over the last two years, thanks to government money, but now it's time to stop. But I like pulling that lever when I want. I like researching the new coolness. Sometimes I need to go for a long walk and realize my work for the day is over. Stop pulling that lever.

The other lever is clearance sales. Working from home, I primarily use my Open to Buy spreadsheet to know when I'm over budget and my POS to tell me what that stuff is. I've been grossly over budget for a very long time. I rarely look at turn rates nowadays, as my fancy POS analytics provides me a screen with GMROI. Gross Margin Return on Investment tells me how many dollars I'm getting back from every dollar I spend. 

Having an online store resulted in segmenting many categories, so I can now tell you I get back about 90 cents for every dollar of Citadel Air paints, even though Citadel paints overall give me back $2.83. You guessed it, I'm blowing out Citadel Air where before I would have a vague feeling they sold poorly. There might be a hole in the rack, but losing 43 cents a pot is unacceptable. Note that a lever I don't have from home is good old fashioned sales and promotion. I can't drum up excitement for airbrush paints from my dining room table.

The other mechanism for figuring out what to put on sale is my Dusty Inventory report. There is some inventory you'll want to blow out immediately, some within a month, but Dusty tells me when something hasn't sold in six months. I can change that to a shorter period, but my current strategy is to keep inventory longer. With a 5.52 turn rate, I think I can afford to do that. Once a week I get a Dusty report (a report from Dusty?) emailed to me automatically and I start pulling that lever. That $7,450 of Dusty stuff (above) rarely moves. There is eternally more or less $7,450 of dusty stuff, as new stuff gets added to Dusty and old stuff sells. I have this lever next to the purchasing lever, so you can imagine I use it a lot. I have poor inventory control when it comes to clearance sales, and that's something we need to work on. A lot of things are Dusty because they don't exist. Schrodinger's Inventory.


What About Customer Input?

Do I need to listen to customers? Yes and no. No, because I've been doing this a long time and although we have 300+ publishers represented in the store, about 80% of sales come from 30 of them. Most of those 30 are on auto pilot, the question not being whether to carry a product, but how much. Working from home has me far more dependent on listening to peers, following Kickstarter projects that are retailer friendly, and stretching outside the game trade for product. I certainly carry a wider product range than the Before Times, and that comes from active listening and breaking out of the insular bubble that you can get from customer interactions. That's right, listening to customers can also trap you into complacency.

I do listen to customer though, and it's through the Internet. We have a variety of Facebook Groups for each game category and a Discord server. A customer asked me about a pre-order on Discord yesterday, I let him know we had them on order, added it to our online store with a 10% discount, and he bought it. Ta da! Listening to customers. I also have SMEs I listen to. A SME is a Subject Matter Expert. If an RPG SME tells me they just got in a new Kickstarter RPG and I should carry it, I put extra weight on their judgement. I allow SMEs to co-buy with me, to some extent. I've got SMEs in RPGs, board games, miniatures, etc. Some of them I knew before I started working from home, but some have developed after. I have a new SME who is an expert on kids board games. Whatever she asks me to bring in, I make sure to get an extra copy.

Not having events for nearly two years has removed that huge customer input from the equation. You can learn a lot from what people are playing in the back, what they're talking about, the accessories they use. Without strong events, due to COVID, that input doesn't exist. I'm not there to hear it anyway, but as things return to normal, this will be a loss on my part.


In Conclusion

This works for me because I spent 15 years previously working in my store, talking with customers, developing friendships and contacts, networking in my field, and understanding this trade. There is a chance that I will become out of touch. There is a chance that the trade will take an unusual turn and I will be making course corrections. I don't have to be first, but I don't want to be last. There is always a chance and it happens often, that I'm buying product that no longer fits on shelves, that sits in storage or is forgotten in a cabinet somewhere. I am delegating customer service, cleanliness and organization, human resources and safety. Having a manager who can handle all of this requires training, communication and a lot of faith. When that manager leaves, it may require weeks or months of returning to work in the store to start over. This is not a perpetual motion machine. But it's a wonder to behold when all the pieces are moving.

Sunday, March 6, 2022

What You Should Know About Our Mask Policy

We don't like masks either. Masks suck. They're uncomfortable. Masks discourage customers from shopping in our store. They turn people away from in store play and have a detrimental psychological effect on our community. Masks cost us money. 

If you are rabidly anti mask, you probably have reasons. Your reasons are in your head. You have principles and ideas and theories. Our reasons are in our bodies. We don't have ideological reasons, we have health reasons and yes, economic reasons. Our reasons are solid and real and unquestionable, because we live them. They are informed by science and enforced by the government from agencies you've probably never heard of. If it's not entirely clear by now, I don't respect your reasons, not when you insist they be taken seriously at the expense of other peoples lives and livelihoods. 

You may safely play the odds as an individual. What is the percentage chance you'll get COVID with your limited circle of contacts? What is the percentage chance you'll get seriously ill from COVID? As a business, we see hundreds of people a day and we have nine people on staff. Unmasked, someone will get COVID. How do I know? It has happened already a couple of times with a mask policy. We have been forced to cancel shifts and close the business early. 

Anyone on staff working with an infected person is assumed sick unless proven otherwise. At one point, there was a good chance we could be closed entirely for days. I was the backup plan, working from home, and I was in the middle of a COVID quarantine. I also have skin in this game in the form of a backstop loan from the government. I pay 3.75% interest on a large loan because I frankly don't trust you, anti masker, not to screw up this country further. I could pay it back, I have the money sitting in a zero point nothing percent account, but I don't trust you. My lack of confidence in you can be measured to the penny, paid as interest to the federal government. You are literally a drain on my finances by your very existence. We should call you the 3.75 percenters. 

You may see the odds of getting COVID as small and the symptoms inconsequential. For me, COVID is a reality that will 100% infect staff, harm their health, and potentially cost thousands of dollars as we close. My personal feeling is everyone will eventually get COVID, it's just a matter of delaying it until the variant is inconsequential and the vaccines super effective. I think we're almost there, unless you screw it up by spreading a new variant. 

I think masks will disappear by the end of the year and you'll go back to chemtrails or crop circles or whatever it was you obsessed over before masks. Or maybe we'll get a new variant. Maybe it will kill someone you love and we can watch you cry and admit you were wrong. I hope that doesn't happen. It will bring me no joy. We will remember your reticence though. We will remember that your twisted ideology was more important to you than our lives. Your freedom without responsibility can die in a hole with the nearly one million people who have perished from this disease, almost all unnecessarily.

Sunday, February 27, 2022

Premature Proclamations

In regards to my speculation of whether the CCG market has collapsed, I can assure you, it didn't happen in February. The music continues and I'm not eyeing chairs.

We've seen amazing sales of Pokemon Brilliant Stars. In fact, sales are better than any set before. We've seen collectors come in to buy multiple cases at a time at full MSRP.  We've sold over 100 boxes in the last week, which is pretty amazing for us and we have half our supply in reserve. Inventory of a couple older sets are alarmingly high, but they're moving along slowly. Overall store inventory should stabilize in the next couple of days, after spiking once again with new releases.

Magic the Gathering: Kamigawa Neon has also done well, and back at a more predictable level. Magic has traditionally been steady for us, both in sales and supply. That tends to engender a bit of indifference. If something is easy to get and sells at a predictable level, regardless of your efforts, it goes on auto pilot. Magic has been anything but predictable during the last two years, and we still suffer from overstock of some of those sets. I predicted moderate sales of Neon, ordered a moderate amount, and have sold a moderate amount. It's a welcome yawn, from a buyers standpoint. I should mention successful stores regularly stock deep of sets with no concern for overstock. Having these reserves is a luxury I'm unfamiliar with. There is no Magic set that doesn't sell (eventually).

When I talk like this, let me assure you it's my supplier voice. I handed events to my manager in 2007 (5 managers ago) and haven't been much of an event cheerleader, and CCGs are about excitement and events. That's another department. As a buyer, I've decided to skip another year of the GAMA Trade Show. I was planning to go, but I'm going to pass one more time due to COVID concerns. I'm also hoping to conserve store cash. 2021 was about capital improvements and buys, while 2022 will hopefully be a conservative year where we pay off the remaining government debt.

My primary concern, in February, our second best month on record after December, is the inability to control expanding inventory. In boom times, which we're experiencing, it's a lesser concern, especially with large cash reserves. As I draw down my reserves to pay back my government loan, I'm painfully aware of five figure invoices approaching. The money is good, but the risk has increased. Cash flow reports are now more important. We're down to days instead of weeks, although we just paid off some giant expenses (taxes).

Is this a winner take all trade? My success pales in comparison to some of my peers, who have their larger stores even better dialed in. There are likely still stores cut off from supply and struggling. There are a large number of stores likely to close in 2022. Is it because of supply issues or something else? I think it's mostly about capital. Not starting with enough of it, not knowing how to manage it, not understanding how to leverage it, being too proud to acquire it. This is a trade where you don't have to be big, but you must be clever. It's an information poor environment and those who can get intelligence on what's happening are winning. If you sit in your silo and don't answer the phone, you'll be left out.

My job, the one I have at home, is more about managing capital than knowing how to sell games, but that's a modern development. I did my time on the sales floor and I wouldn't mind terribly going back for a while, by choice. I don't know where I would be without developing strong credit terms, having big buckets of credit card reserves and of course, that EIDL cash reserve, which I expect to pay off by the end of the year. I can tell you I've been poor, with days of cash flow and unsure if I can make payroll (I bounced it once).  I've been cash rich of late as well.  As you can imagine, I prefer operating in that rich environment. The stress of being cash poor is just too much. 

Monday, February 7, 2022

My Store in 2022

Here's the current mood for 2022, as if its going to last:

It's positive. 

We stretched in every way possible to get stock for the 2021 holidays. At our height, we had $70,000 of extra stock, at cost, in hopes of not missing what was likely to be amazing sales and a dark Q1. This was possible through copious amounts of government money and confidence whatever we bought would sell eventually. Inventory is opportunity cost, but if you're sitting on a pile of money that doesn't have to be entirely paid back for 30 years, what's an extra six months of overstock?

We did indeed have a great holiday season. December was our best month ever. Q4 was our best quarter, beating out Q3 and Q2, which used to hold that record until each were shattered with astonishing sales performance. Even another store break in, two for 2021 (three since 2004), wasn't enough to crush the spirit. Sales into 2022 have continued to be strong as our store is now different than before, with every perceivable product demand met and, of course, that pesky overstock. The quantity right now is $25,000. 

Overstock, in our case, is money we would like back. Overstock is normally extra stuff you don't need. That's not the case here. I run reports and there's nothing to get rid of. Turns are strong, GMROI says keep spending. There's actually very little stock we don't want. In a sense, the store has told us that $25K is not mine, but is rather in the stomach of the beast. It has no intention of barfing it back up. If I want it back, I'm cutting away muscle, not fat. The store dares me to come at it. It flexes.

This is a good thing! This is money well spent. Except I want my $25K. The result is a somewhat return to normal for the store. I'm no longer chasing product. I'm stocking leaner. I probably won't get that $25K back any time soon, it's there for the taking, over time, if I use my retail fundamentals. 

I am dissatisfied with a lot of people right now. I am coming out of my COVID crisis haze, despite it still going on, and wanting to make changes to who I do business with. I'm tired of excuses. Some of you have sucked for too long and I'm not having it. The money has become mine once again, not the governments, which means I take things more personally. I'm getting hungry and that's good. There's far too much slack.

In December, I made a list of the eight things I wanted to buy with holiday profits. Some of them were store related and some were personal, like a fully funded IRA or a trailer down payment. In the end, my focus narrowed to one objective: pay back the EIDL loan. That money is now "sequestered" in a separate account, the full amount of the loan. The goal is to live lean on what's left, maybe even pay taxes without a dip into the EIDL pot. None of my personal objectives can happen with that loan over my head. 

I won't pay off the loan quite yet, because honestly, we have COVID crisis points more now than ever. I've never been closer to closing my store down for a week or more than I was last month, with a staff COVID outbreak. Staffing is lean, and it only takes a couple minor infections to take out both shifts, and when I had a COVID scare at home, that would have left me out of commission, as the sole backup. I am a bit tired of it all, and yes, I know COVID isn't done with us yet. It's just hard sitting on a rainy day fund that costs me hundreds of dollars a month when the skies are so blue.


Saturday, February 5, 2022

9 Steps to Better Amateur Writing

I am not a professional writer. I used to publish a magazine, which had me writing a number of articles under various pen names when I couldn't get enough content. I've written a book, a masters thesis, a couple thousand blog posts, and half a dozen magazine articles. My total compensation, how I personally measure "professional" versus amateur, is less than $10K. However, the advantages I've received from being a half way decent writer are incalculable in my professional life, or lives as they were. Here are some tips:

  1. Use bullet points. It's a way to gather your thoughts without formal writing structure. It's lazy and easy. If you want to write something people will read, that's a bit "click baity" as the kids would say, include your bullet points in the title. Nine steps to better amateur writing. It's a magazine writing trick for content creation.
  2. Start simple. If you don't know how to write well, start with something simple like the five paragraph essay with five sentence paragraphs. If you can master this discipline, my bet is you'll write something tight and well reasoned. It's much harder than what I tend to do, but oh can it be a beautiful thing. Also consider writing in a more journalistic style, with the most important content in the front and less important stuff towards the end. Hit the facts of who, what, when, where, why, how and voila! I was the feature editor of my high school paper and slamming out these kinds of articles on a deadline was pretty easy.
  3. Writing can be awful. The process can be awful, especially if you're writing for someone else or writing with a deadline. Everyone starts writing in school, which means assignments and deadlines and stress. If you're an amateur, you shouldn't see a lot of deadlines. I find it satisfying and relaxing, provided I know what I want to say and nobody is forcing me to write it. 
  4. Popularity results in discipline. If you're writing for yourself and half a dozen people, you're less likely to worry about structure. You'll be somewhat self indulgent, like some annual letter you send to your family. Nobody cares if it's a paragraph or five pages. You'll probably not develop as fast as a writer because you won't get much feedback. Just keep that in mind.
  5. Less is more. It's true that what you cut out is often as important as what you include. Again, if nobody is reading your writing, it's easy to write too much, because there's no argument to win or point to get across. At a certain point you can write anything to any level of depth and you need to start thinking about your audience. My most popular posts are often the shortest, but popularity isn't everything.
  6. Your voice. Some say your writing should sound like how you speak. I don't know about "should" but I think this naturally occurs over time. I went from being an alright, high school level writer, to becoming a beaten down academic writer. I had to learn to write academically, formally, to get through grad school. Then I had to "unlearn" academic writing, which is too formal and standoffish for most people. This unlearning is where my voice as a writer developed. I'm not a great speaker, so you get what you get.
  7. Practice, practice, practice. My writing has improved over a very long time. I hope it continues to improve. I cringe when I look back on my early blog writings, when I was weaning off academia. Again, it helps to have a topic popular enough to get feedback on your writing. Writing in an echo chamber is a slow path to better writing.
  8. Get an Editor. My book is super clean and well written, because I had a team of editors. They pushed back on a few content points, but mostly it was cleaning up my writing. I want to be the writer I sound like in my book. I also have after the fact editors, like my friend Kent, who reads my stuff and points out my mistakes. I might self publish in the future, but an editor would be contracted.
  9. Revision. For online writing, I write a paragraph, re-read it, and since I don't have an editor, I'll get some coffee and come back and read it again with fresh eyes. I'll often edit a bit further at that point, but usually just a word or two. It's cheap writing to go with the free price tag and I'll admit it's written and edited to that price point. 
That's it! Keep writing and you'll slowly improve. Don't attempt to jazz up your work with fancy words. Write simply and clearly and if you've written something halfway interesting, you should start to receive valuable feedback. I hope this coming from an amateur is useful. If not, seek professional help.

Thursday, February 3, 2022

Heraclitus

 I like the Yoda-like direct translation of Heraclitus:

"Into the same rivers we step and do not step, we are and are not."

 A cleaner translation might be:

“No man ever steps in the same river twice. For it’s not the same river and he’s not the same man.”

Meaning the river is constantly changing, but we also change constantly. This is truly the dilemma of small business. The environment changes. We change to meet the environment. We look around, prepare to take our next step, and the landscape looks unfamiliar. We look around and we don't recognize ourselves either! We constantly re-invent. We lack a consistent view from which to make decisions and our decision making faculties are likewise transformed by the experience.

Large businesses struggle with this by attempting to lock down that view. They don't want the man to change. They want people to fit into their corporate culture. Some try to create a corporate culture of constant change and questioning, which works to some degree. Some organizations that hate change (police and military), filter out those who question our subjective reality. I posted recently about complaining to a teacher I was feeling disoriented, at which he replied, "Well, don't get oriented." The man will always change. Large businesses also work behind the scenes to keep the river from flowing, but that's another discussion.

The river is constantly changing and you can't stop the flow. My store has done very well over the last year. Is this the river or the man? The retail environment has changed over the last year, and in fact is vastly different from the beginning of the last 12 months than from the end. My store, the man, has also changed, and I believe it is a fundamentally different business because of the transformation that took place over that period. Where does the river end and the man begin? That same teacher who told me not to get oriented probably would have responded, "Wrong question."

You might say you can't enter the river and return the same man. Its waters are transformative, restorative even. Water plays that role in spiritual traditions. Water washes away sins. The lotus of wisdom emerges from the mud. Fountains hold the secret to eternal life. You can stand in the river and question its nature, as I often do, or you can embrace its mysteries and step out a new person, ready for the next challenge... ready to cross the next river. Oh, you though you were going to get oriented?