Wednesday, September 27, 2023

Thoughts on Selling Your Business

I was talking with friends about selling my business. I'm not looking to do this, to be clear, although there's always a price. There are a couple of scenarios. Let's peer down this rabbit hole (again):

My Business Has No Value. Not my scenario, but if you have an unprofitable business, you're in the category of needing a liquidation value. Some people don't believe in the myth of profitable retail and think all hobby game stores are in the liquidation category. The liquidation value of a business is pennies on the dollar. Ten cents on the dollar for inventory, furniture, fixture and equipment (IFFE) is about right. 

Most (former) store owners will dig in, keep their inventory and sell it online out of their garages for years into the future, in hopes of getting 20 cents on the dollar. They have never been good at figuring out the value of their time. I once bought a friends store for 20 cents on the dollar in consignment, and it nearly broke me. I wouldn't have done it, except I picked out his inventory.

Your Business Has Some Value. It's a little bit profitable. Let's look at sale multiples. Do 3-5x your net profits exceed your liquidation value? Let's say you have $10K a year in net profit. You have $50K in IFFE. Liquidation will get you $5K, $10K if you don't value your time. You could argue a 3-5 multiple of your $10K net for $30-50K. You can see here that being just a little bit profitable will vastly increase your payout. Even at that highest multiple though, you're just emerging barely alive. 

This scenario assumes your business is worth keeping rather than liquidating. Buying a business in this fashion is deciding, as a new buyer, that you want to personally run this business. This kind of business is a "buy a job." It has little potential. It's a place to park your life or maybe the life of a child who needs to find their place in the world. The new owner would expect to take your current salary, plus that $10K a year. Living the dream.

Your Business Has A LOT of Value. You're living off it. It's your retirement plan. You're in the groove and can do it until you go blind or die quietly in your bed. This is my scenario (although not my numbers). Let's say you do $100K a year in profit. You have $500K in IFFE. Liquidation might get you $50K, which is ridiculous in this scenario. However, treating it like a real business, you might attempt to get a multiple of your net profits. A 3-5 multiple of your net is $300-500K. However, we have a couple problems.

First, finding someone to pay you half a million dollars for your hobby game store is going to be difficult. It would be nice, but it would be unprecedented for a store that's probably doing (let's say a 5% net profit), $2 million dollars a year in gross sales. It's not unreasonable, just unlikely. I do think the world is changing and the odds are increasing.

Second, $500K really isn't enough money. If you're enjoying your perpetual $100K a year in profit, $500K isn't going to provide you that steady income you need in perpetuity. Let's assume you can get a long term return of 5% on your new $500K nest egg. That's only providing you $25K a year in income, a far cry from your current $100K. 

The amount of money you actually need to replace your $100K annual income is a payout of $2,000,000. I have to say a one year payout of your gross is a multiple that's thrown around, but it's way more than five years of your net. You better have a turn key operation and that key better be made of unobtainium. You aren't likely to find such a generous buyer. So clearly, a profitable business, providing you the money you need, is never going to be worth selling. However...

You Need Out. Nothing lasts forever. You've simply had enough and want to do the next thing. Or your health is failing. You are ready to retire. You have made some missteps. You need to sell it. In my case, I will eventually have social security income, retirement savings, and probably a small inheritance. I might decide I have enough and don't mind my $25K extra a year in exchange for my time back. You can also see that putting more money into this monster is probably the wrong choice when there are other retirement investments available.

There may come a time when I'm ready, but I might not be prepared. In fact, the longer I wait, the less likely I'll be prepared. This is very dangerous, because it not only takes time to sell a business, the reasons you might want to sell it, such as the business not doing so great because of your distractions, can greatly impact that business value. Drop down from highly profitable to break even and our pay day becomes a fire sale. 

My impression is that after decades of fostering the business, you have to get out while on top, but also at a time of your liking. You have to sell the cash cow while it's still in good health, not when it's forgotten out in the pasture. When you have to sell it, is when you look around at what's possible. A $500K graduated inventory reduction sale might be the payday you're looking for. 

You might start courting potential buyers years in advance. You may decide to hand it to your heir, who may require years of training and experience. At the moment I have a key man insurance policy that will give those around me a fighting chance at making the business work without me. So if you've got this profitable business, you're walking a knife edge here. Nobody can possibly give you what it's worth. Finding a buyer who will pay you less than it's worth is a time consuming challenge that seems foolish considering your current circumstances.

As a small business owner, it's just another thing you need to think about.

Saturday, September 23, 2023

Why Turn Rates Lie (Tradecraft)

A friend noticed my comment yesterday about how my CCG turn rates went from 18 to 4, over the last several years. He lamented that must have been difficult to deal with. Yes and no. The problem with talking about turn rates is in the name, it is a measure of something happening. But what's happening?

Turn rates are the number of times in a year you turn over, or sell through your inventory. So we're dealing with two numbers here. We have the inventory value and the sales velocity. It's fine if your inventory is stable, but what happens when your inventory is expanding or shrinking? 

My inventory value of CCGs in 2023 is roughly three times what it was in 2020 (my sales are not three times higher, and we'll get into that). So maybe my 2023 turns should be a COVID adjusted 6, instead of 4 (18 divided by three). A turn rate is a nice data point, something to keep in mind, one variable among several. It can be deceptive though. 

I should mention we sell almost twice as much CCG product in 2023 than in 2020, which has transformed the store and my life. But as I mentioned we have three times the inventory, which is way too much.

Rather than look at turn rates, a more accurate view of what's going on is Gross Margin Return on Investment. GMROI was something I would rarely calculate before my new POS system, because it was cumbersome. However, my new reporting package crunches those numbers for me, without having to ask. GMROI says that for every dollar you spent, you got X dollars in return. 

The first time I crunched the GMROI numbers myself, I realized I was getting a 65 cent return on every dollar I spent on chess sets. That was a much clearer reason to dump that category from my store than say, a turn rate of 1.5. I now carry just a handful of chess sets. GMROI is a much clearer lost opportunity. 

My overall store GMROI is 2.92. This is alright, but not great. A good GMROI, according to articles I've found (because we don't talk about this number in the game trade) is 3.2 or higher. I don't know of a game trade specific value. 2.92 means we have room for improvement, and the biggest area for room is ... you guessed it, CCGs. 

My GMROI score for CCGs is a sad 2.17. Basically, all the same categories with poor margin (calculated in the last post) showed up with below average GMROI scores. However, CCGs is by far, the worst offender. Like a lot of stores (and distributors), I'm sitting on a ton of CCG product from the last three years. 

Because we're all in the same boat, with the same CCG product that needs to be dumped, there is little opportunity to quickly liquidate that product. It is often sold well below cost online. I'm primarily talking about Magic: The Gathering. The game has seen a shift in strategy, production volume, and product variety. Many stores are trying to unwind this experiment. 

What this means for a purchasing budget, meaning how stores spend, how distributors spend, and what happens to people trying to sell to stores and distributors games, is a slowdown. We will all slowly unwind this product, because there is no quick selling of a universally dead product, other than a dumpster fire. It is broadly recognized as trash (even when it's objectively good). 

Those of us who can't unwind their inventory might fail, and I'm certain some already have. It's one thing to personally over order and make a mistake, but when an industry over orders and makes a mistake, the effects will ripple outwards and it will gum up the works. I will buy less, distribution will buy less, and publishers of games, who having nothing to do with Magic: The Gathering, will feel the effect as orders decline. Even if we did get rid of this stuff, we have been left a little impoverished and gun shy as a result. And that's how the post COVID boom ended. 

Friday, September 22, 2023

Margins (Tradecraft)

Your sales are strong, but your profits aren't where you want them. Margin may be to blame. Strong POS reporting can help you determine weaknesses. Likewise, you may find yourself with a perplexing abundance of cash, and margin may get the nod for that success, once you identify it. I'm questioning margin this morning, so where do I look?



The first thing is trends. My margin this month is no different than my three year average. I'm probably fine, or if I'm not fine, I'm no worse than average. If you don't have a fancy reporting package, you might have to crunch some numbers to get this data. I have this calculated on my Open to Buy spreadsheet as well.

Next is individual departments. I might be hitting my average when it comes to margin, but I feel like some of my departments are under performing. I feel a disturbance in The Force. Let's take a look:

In this case I've massaged my numbers and added some color. The green departments are doing pretty well, above average of around a 45% gross margin. Some of this is a lie. For example, my puzzles with a 51% gross margin don't include shipping charges, which are often part of purchasing. I offset those when possible. Dice include non inventoried loose dice with no cost associated with them, which can boost the reported margin. Statistics are lies, but if you know which ones you can and can't trust, they're still useful.

Of all the colors, the blue departments are most irksome. CCG Supplies should generally be a high margin department. However, we've had a bit of a purge, and with a clearance sale comes a hit to margin. Board games are in the same category, a perpetual cavalcade of clearance. The question there is should I order fewer board games? I decided several months ago I should be more cautious, but that's not reflected in the numbers yet. 

I have a strong FOMO instinct when it comes to board games, mostly because I'm not a board gamer and don't want to miss a chance. We sell 700 board games and none sell more than 100 copies in a year. I have a strong Bilbo Baggins feel about my board game.


Finally we have the red departments, the problem children. CCGs are commodity priced, so I see their low margin as systemic, part of the deal. I don't sell singles or lump "events" into this category, which could raise margins. This is systemic for many stores, part of their deal. I was also hurt by selling Commander Masters at market prices, which is pretty much a fire sale. CCG margin has held up pretty well, regardless, if you can accept those numbers. A diversified store is able to sell CCGs at a 35% margin all day long, but a card shop? You better have volume and low overhead.

Miniature Games are a bit vexing, as it feels like sales are primarily comprised of new releases and clearance items. Again, I've decided I should slow down on ordering some of these games, but that's not reflected in the numbers yet. We lack enough new players to keep these lines strong; they are somewhat static. We can't give away Games Workshop rulebooks. Despite a new 40K edition, there does not seem to be a lot of energy in the category. It's a tough category to crack with an uncertain economy, but that's probably just an excuse.

RPG miniatures have also seen a deep clearance of dead wood. I've dumped a huge amount of WizKids dead miniatures, while at the same time bringing in a ton of back orders that finally came back into production. The restocks aren't reflected in the numbers, but they offset the dump of dead plastic in sales.

To summarize, we want explanations, not excuses. We want action items, otherwise we're just wasting our time. What we don't want to see are perpetual low margin categories, if it can be avoided. What are some of my action items?

  • Price Increases: Boost prices on snacks slightly to return to higher margins (50% at least)
  • Diversification: Crack low margin CCG titles for singles. Commander Masters, for example
  • Fine Tune Ordering: Order about 15-20% fewer board games, maybe when you're thinking about ordering 6, you order 5. The biggest change would be to order none rather than speculate.
  • Stop Ordering Multipacks: Fine tune RPG Miniature ordering based on performance metrics, and not a sleeve of 6 of everything. I order a six pack of paints from one company that doesn't require me to, because Games Workshop trained me.
Low margin is a buying problem. You primarily have a low margin because you're an inattentive buyer (blaming myself here). Sure, marketing could be improved. You could demo board games better to not have to clearance them, but low margin generally comes from blowing out dead product. You have dead product, because you didn't forecast demand properly. Be better at forecasting. Build a more robust supply chain so you can re-embrace just-in-time ordering. Get your sales team to promote fewer titles at higher volume, rather than a shotgun approach. Easier said than done!

Gross margin is also just one metric. If I look at a seemingly healthy department, like puzzles, what do I really see in sales? My staff despise puzzles, and they've been a thorn in my side, but they've been managed since COVID and have a turn rate of four for the year, which is really good. My 3.14 GMROI is slightly above average too. If puzzles were sitting on the shelf at full margin with a turn rate of one or two, that would be a problem. Margin won't tell you about those shortcomings.


Turn Rate

GMROI

Then again, my CCG turn rate is currently four, but before COVID it was 18. Somewhere between 4 and 18 would be better. You have to have a grasp on what's normal and what you're trying to accomplish. Four is actually up from two at the beginning of the year, so I'm not complaining too loudly.

Finally, this is dynamic. I can't think of a time where all departments were firing at 100%. There is always a problem child. Try to not make it the same kid every time.

Monday, September 18, 2023

Off The Road Recovery

I'm spending time recovering from four months on the road. I'm not doing a long trip any time soon, but here are things that need addressing. I imagine you could get into a recovery routine, if you do this enough. Or maybe include them in your trip. Some of them could take some time:

  • Healthcare. This includes a much delayed trip to the dentist and a trip to my new doctor for a checkup. I'm getting older and with that comes some issues that need adressing.
  • Truck Maintenance. Ford called me on our way out of town to tell me a windshield part was ready. I had informed them they needed to get it before I left. They've been holding the part for four months. I also need maintenance like fluid changes. Since I did a lot of towing in the heat, I'm putting the truck on the severe duty maintenance schedule, which means some expensive maintenance like differential fluid changes.
  • Trailer Repairs. I had the trailer washed last week and before that the underbelly repairs were finally done properly. There are about 10 repair items for the professionals, and they might keep the trailer a day or six weeks. The worst problem is my refrigerator really isn't attached to anything. I'm taking the trailer to a reputable service center in Lodi, even paying for some items out of pocket that are under warranty. I want repairs done right. I want them done timely. The next trip is mid December. They may keep it until then. Who knows.
  • Trailer Storage. After repairs, I'll be looking for a new home for the trailer, hopefully close by. Most places are full. The ones that aren't full are expensive. I'm on some wait lists. I may store it far away while I wait for my name to be called. 
  • Reset Finances. I spent more money than expected on the road and at home. I need a full reset. I went from project mode, spending way too much money, to travel mode, spending way too much money. That must stop. I'm saving for a Spanish intensive trip using frequent flyer miles, but mostly money is going to the truck and trailer reset.
  • Re-engage with Friends. I missed my friends terribly and realized they are the glue that keeps my life in place. I'm visiting with friends, starting a new D&D campaign, and trying to get my social life re-started. I'm looking to see if any friends might want to join me for the next adventure, since Rocco will likely be in school. Besides a trip to SoCal in December, I fantasize about a slow drive down the 395.
  • What About the Store? I stopped by and had two pieces of mail to pick up and a short meeting. As I've mentioned, working from the road isn't much different than working from home.
I have some culture shock, especially things like the cost of gas and eating out. Gas was actually more expensive in Mexico, but between liters and pesos, I didn't think much about it. I've noticed a lot of empty restaurants, as others are probably in the same boat. We had lunch at our old haunt in Concord today, Spaghetti Factory, where my old waitress told me they had only one waitress during the week days, down from three before COVID. People are still working from home. 

I was building a trailer for a year before I left, so I'm back without a project. That might be for the best while I reset. 

Our next Mexico trip is distant, probably 18 months away. We want to start where we left off, include the Yucatan and maybe Belize. Perhaps Guatemala, although there are no RV parks there. We also want to do it during the winter. Summer is brutal.

I'm taking my son to visit relatives and spend a couple days at Disneyland over Christmas. We'll take the RV and make it an RV centric vacation. The plan was to do five RV trips to Mexico over five years, but I think we'll do two big trips to Mexico and as many smaller trips as I can manage. After the five year mark, I'll decide whether to sell the trailer and truck or continue on this path in some fashion. I have other travel ideas as well, including dreams of driving the Trans America Trail

8,640 miles driven on the last trip

Friday, September 8, 2023

Least Adventurous Adventurers

I work in adventure gaming. I think that best describes a trade where we sell games about exploring dungeons, fighting space bugs, battling wizards, and settling imaginary lands (my four store categories). We sell adventure, but we sell it as fantasy. Most of our customers are not going on adventures; most people don't go on adventures. Actual adventure is a bit repulsive to quite a few of my peers. Retailers seem least likely to go, due to constraints of time and money, and deep immersion into the games we sell. Adventure is often the trip to the next trade show.

My retailer peers fit into a couple fitness groups, those whose health you worry about: obese men, mostly, who you see at trade shows, huffing and puffing as they make their way to the next presentation. I have been known to huff or puff on occasion at a trade show. We worry greatly about these folks, and when they pass at a young age, we are sad but not surprised.

We also have those who devote significant energy into not being in the first group, including some fitness gurus who you'll find at the hotel gym at 6am. It's a sedentary hobby, and rebelling against an early grave is natural. We are chained to a counter and eat whatever (often cold, often fast) food we have available. I did this for nine years before I broke the chain. I use the example of the baby circus elephant, where they put a dinky chain on its leg and it learns it can't pull against it. When it's an adult, it's conditioned not to try. I needed someone to tell me I could break the chain before I could free myself.

I've struggled to keep weight off for years, to the point of hurting myself exercising. After I had the store recovered from COVID, I time where I hand delivered games to customers doors and worked long hours as the sole employee (an adventure for sure), I became an overweight, sedentary slob. I had a mental shut down and was just done for a while. I had no time to process worldwide pandemic, the death of friends and relatives and the imminent demise of my business, at the time it was happening. At my lowest point, I hurt my back from just sleeping wrong and struggled to get out of bed. 

My response was to throw myself into a fitness program, deciding I would get in shape, even if it killed me; and it nearly did. I lost 30 pounds the first year, but then hurt my back. I have a friend who did the same recently, and we both struggle with back injuries because of our over exuberance working out. At middle age, you need to be more careful when it comes to these things. We need more calculated, gradual fitness improvement, probably with professional assistance. But fitness or death, is not an unusual response at middle age it seems. Our self images are not easily discarded. Being told you're not fit to go on the adventure is not acceptable.

Our characters are exploring continents, while we struggle to move our bodies a minimal amount. They wield broad sword, while my arms get sore from wrenching on my trailer. This came into clearer focus on my recent trip. We were gone for four months, so a lifestyle emerged. I should mention for someone with a more active lifestyle, like my buddy, this was nothing, but for me, it was nothing short of an adventure.

While in Mexico, I failed to hit my "step goal" most day. This bothered me for a while, until I realized I was losing weight and getting stronger. Our life of adventure, setting up camp, tearing down, cooking and cleaning, and exploring 35 towns, a couple mega cities, and a dozen ruins, didn't conform to my exercise regimen. I did a lot of store work on my laptop, but it seemed every other moment of the day was about preparing for the next thing. The food wasn't always great, but it rarely left me feeling awful like the food back home. It didn't seem healthier, often just simple ingredients, but my health seemed to be improving. I wasn't the only one.

However, my son was not happy during much of this trip, as it dragged him away from his adventure gaming online. His online adventures were taking a back seat to climbing Aztec pyramids and exploring 3,000 year old villages. He has his own health and fitness struggles, so he preferred his adventure in a darkened room with friends.

My realization this morning is all these artificial fitness and exercise routines are, for me, about being prepared for real world adventure. I don't always climb Aztec pyramids, but when I do, I want to be able to without having to ramp up my fitness before I go. The oddity of being upset because I was missing my fitness goals while doing the thing, was lost on me until recently. I was hitting the fitness goals in order to go on the adventure. 

I now have to put up or shut up. I continue that lifestyle or I fall back into "training mode." I don't want to become the retailer slug of the past. Lacking another town to explore, I plot out my step goals for the day. I look around and wonder where the next adventure will come from, the elusive active lifestyle. I wonder when I can hook up that trailer again and head off into the unknown, to regain that lifestyle again. The goal is to take a wonderful experience like this and use it to transform your life. Until then, I've got a new D&D campaign to prepare for.

Thursday, August 17, 2023

Three Quarters Edgy

I just ordered a book for my store from Indie Press Revolution called The Privilege of Play. It tracks the white male origins of hobby gaming from model railroading to the present, along with the discussion of how there's a denial this is the case. My grandfather recently passed, and his basement railroad was an inspiration for the family over the years. You can draw a line from my grandfather, to my fathers beloved train sets, to my own gaming. When I visit my parents next week, I'll likely compare notes with my dad on where we overlap, usually scenery painting. My son is an online gamer and we also find hobby gaming overlap in which to bond, usually strategies related to online games we share. 

When I ordered the book I wondered if anyone would be offended. I found the description intriguing, maybe challenging. Dipping my toe into the culture war certainly isn't my intent, but isn't it refreshing to be challenged once in a while? Yes, until they throw rocks, which happened recently with a triggered "customer" who didn't like we have a pride flag in the window. 

Despite rock throwing malcontents, I've found that I'm generally more conservative than my customers and staff. I think this comes from well, owning a store. Small business owners naturally engage in risk taking behavior, but successful ones intuitively know where the line is drawn. When I start to wonder if I've gone over the line, the answer, nowadays at least is, "No you haven't." 

I work within an invisible box of constraints that has allowed me to be successful. Even if I can't see the box. This isn't bragging, it's an observation, and maybe I would be more successful with a bigger or smaller box.  However, I think the box has been "right-sized" over time. There are areas within geek culture where you can push the boundaries and areas left well enough alone .. and they've changed dramatically in twenty years.

Getting back to my book, the reality of this book and all the various meta books I love to bring into my store is they sell poorly. I have a section called "Better GMing," which accounts for the slowest department amongst my role playing books. Most people just want to have fun, something important to remember. A few of us, and I know your names, also want to explore the meaning of that fun. 


Tuesday, August 8, 2023

10 On The Road Thoughts

I've been traveling through Mexico for three months, with a week left before traveling back to the US. We'll be crossing over in Eagle Pass, Texas, but being a Californian, I still have 1,700 miles to go (at around 300 miles a day). I have some thoughts for living and traveling on the road, especially here in Mexico. Here's a brief list:

  1. Are you living in or out of your RV? My goal was to experience as much culture as I desired, while also having a home as a refuge. That home could be a nice hotel room or in my case, a new RV. If you have a small RV (a van here is ideal) or a small budget for a cheap room, you're probably living out of your accommodations. You spend as little time there as possible. You might go small as a strategy to force yourself outside, but I didn't want to take that chance with my kid and months away at a time. If you have nice accommodations or a larger RV, you can live in it. If I have adequate power, my experience in my RV is the same in a beautiful mountain town as it is in a Wal-Mart parking lot. With size comes problems, so it's no free lunch. Decide which of these appeals to you. My advice, go small and spend your money on language improvement. Being outside and talking with people is key.
  2. Who is Going? I originally planned on a truck camper, a much smaller option. The main problem was nobody I know would want to live in a 35 square foot tiny home with me, at least not for months at a time. I looked at who would come with me, and what I would need to entice future travelers. Eventually I decided I wanted all the comforts of home, just in case the outside world wasn't what we bargained for. It has been derogatorily called a cocoon, a bubble, a box, but it's home to me.
  3. Telecommunications. We found our AT&T phones had 5G Internet traveling in the US, but were often bricks in Mexico. Starlink was the answer. It's not perfect; it drops out on occasion. Mine failed early on and I've been moochnetting off a friend. At no time was it so bad I couldn't use it for work. Just forget about cellular as a solution; it won't work reliably everywhere. However, I did buy a local phone, a Wal-Mart Android phone that cost me about $150 and uses local cell services (their BAIT network). It saved us when the AT&T phones dropped to 3G, usually when I'm using Google Maps. I sip data on my Wal-Mart phone, while my AT&T phone was set up to guzzle bandwidth.
  4. Budgeting and Money Management. Movement is money, so traveling to and from your main destination is probably the most expensive part of the trip. Slow way down. Also, save up for those times. In Mexico, you use a lot of cash, and ATM and currency fees are sometimes nuts. I use a Schwab account that reimburses me for fees and does a more favorable currency conversion. I only use this account for travel. I also use credit cards that don't have currency transaction fees; Capital One and now Chase are both pretty good. Nobody wants your Amex.
  5. Be Adaptable. When I drove through Mexico five years ago in a Jeep, there were times it broke down. When a battery cable came loose, we got to the next town when my buddy used a nail off the side of the road. In RV living, you will need to do home repair or find people who can. I'm waiting for the carpenter to show up today. Maybe he will, maybe he won't. I have nine items on my repair list for when I get back; none stop me from enjoying myself.
  6. Gradual Removal from the Workplace. I took a day off a week, then weekends, then a two week vacation and eventually worked up to 10 weeks five years ago. After COVID, I stopped working on site. What I've found is being prepared means there is no difference between working from home and working abroad. I do have a small problem with the state tax officials, who want me to call them on an 800 number (no bueno), but I had my manager send them a letter.
  7. Management is Key. Delegating day to day operations to a responsible team takes years. There are things I could delegate that seem to ask for it, but they're so key to the business, I keep them for myself. Learn which are which through trial and error. There should rarely be a case in which the on site staff don't know the answer. This takes years to develop.
  8. Things You Can't Get. There is very little you can't find on the road. I bought a new laptop before I went because I knew it would be a crisis if my five year old model failed (it had problems). It turns out there are unofficial Mac stores in every city. My list of unobtainable items are mostly conveniences, like Swiffer pads for my mop. RV parts and accessories like tank treatments are completely absent here. Amazon.mx is so lame I never bothered trying.
  9. Learn some of the Language. I was woefully unprepared on this trip, with about 60 Duolingo Spanish lessons over three years. Yet, I spent ten days on my own without my Spanish speaking friend, living my life, going to the movies, getting work done on my truck, buying groceries. Sure, I failed at times, but I also got everything done and built confidence. I know way more Spanish than five years ago, and I know a lot more than when I started this trip. I'm planning to come back soon to do a Spanish intensive.
  10. Wonderful Discoveries. I discovered micheladas, a beer and clam juice concoction that hits the spot on hot days. I like toasted corn crackers and my go to at any restaurant is consome de pollo (chicken soup). The food on this trip has been so-so and I've done a lot of cooking in the RV. Eggs are in the cupboard, rather than the refrigerator. All the cheese seems to be manchego, so a specialty cheese shop is a blessing. Regional breads of every kind are the go-to snack at any time of day. I drink about a bottle of jamaica a day, unsweetened and designed to be the base for some family's sugary beverage. The people have been wonderful, especially the times I've been able to hold a brief conversation in Spanish. It's the small things.

Monday, July 31, 2023

Mordida

I was pulled over yesterday while pulling my trailer in the city of Pachuco. This is not unusual and we're expecting it to happen more as we head north. The Dodge Charger cop car was filled with several officers, which is how they do this. It's a team effort. The charge, according to the young officer, was driving a vehicle too heavy on the highway, more than 2.5 tons (my truck is less than that). Big rigs and buses zoomed by me while I sat there, engine running, in the rain. 


The thing about something like this, which on its surface is complete bullshit, is that perhaps its true. Perhaps I broke some law. I started texting my buddy who suggested I get him to show me in his law book where this regulation existed. I declined that strategy because the language barrier was going to make it tedious. Meanwhile, the officer took my drivers license. This is when hostage negotiations begin.

Once they have your license, you're going to have to negotiate to get it back. I was informed there was a fine. Sure, a fine, whatever. But if I were to pay his supervisor directly, the fine would only be half. He never told me the amount of the fine, only that I had to pay one. 

I told him, sure, I'll pay the fine, if you give me a receipt. This is code for make it official. He told me he couldn't give me a receipt right now, but if I wanted to come to the police station to pick up my license on Wednesday, I could pay it there and get a receipt. This was a Sunday, I was clearly a traveler, so he figured this would entice me to pay him now.

I told him, sure, I'll come Wednesday, just give me the address. He looked a little surprised I had called his bluff. But really, I would have come back Wednesday.

Well, he said, if you drive north on the tourist corridor, they will check your license periodically, you will need it. I knew this was complete nonsense. I pointed to the GPS screen on my truck and told him I've got about 23 minutes to my destination, I'll take my chances and return Wednesday.

He's not happy about this and goes back to his car to talk to his buddies, which I found out later included his supervisor. Meanwhile I started taking photos. I did this conspicuously, so that they knew I was taking photos. I was documenting mordida, the Mexican form of "commonly occurring petty corruption." 

Within minutes of entering Mexico and seeing my first speed limit sign in kilometers, I was pulled over for mordida. I never even had time to do my half plus 10% on the fly calculations before they nabbed me. I was speeding, they had clocked me, I was dead to rights. I should have gone to the police station to pick up my license and pay the official fine, but I didn't. I paid the cops on the spot in cash, which certainly went into their beer budget. This was in Sonoyta Mexico, which I had to travel through several more times on our trip, eliciting the response from me each time of, "F%#k this sh#$$y little town." I was intent on not paying mordida again, if possible.

We were pulled over again months later in Tultitlan, outside of Mexico City. This time my friends bus was supposedly smoking too much. There is no visual infraction for such thing, as it's a scientifically calculated infraction that would need to be measured at some sort of smog station. This is what he gathered when he insisted they show him the broken ordinance. We spent about an hour there, while they threatened to arrest him and impound his bus. He held his ground and eventually the fine started dropping until they just let him go. We had been warned the police in this town were in cahoots with the cartels and liked to prey on tourists. We should have gone around.


Five years ago we went through the same process, pulled over on a toll road for not having the proper permit for driving in Mexico state. Foreign plated vehicles must apply for this free permit, which is on a Mexican government website, only in Spanish. Knowing you need this is some sort of magic knowledge and acquiring one in a foreign language required an alternate web browser, some serious language fluency and a copy shop. They hate electronic copies. They threatened to impound my Jeep and my buddies truck, fine us a bunch of money, and generally make us miserable. After a couple hours, their demands were reduced to "just buy us dinner," and then in frustration, the cops wandered off, supposedly to find their supervisor. We just drove off, having paid nothing.

Back to my story, I was not arguing the law, not being belligerent. I was warm and comfortable in my truck with the engine running, while this young officer was getting soaked in the rain. He mentioned this and I gave him a somewhat sincere, "Lo siento." I had all the time in the world, which is key to these negotiations. I'll wait until you produce a receipt. I'll come back Wednesday, if you so desire. I will not give you a bribe. 

He asked me if I had been pulled over in Mexico before and I told him, yes, four times. Did you receive a ticket? I smiled and said no. Technically I never got a ticket in that sh#$$y little town.

The supervisor exited the patrol car and immediately covered his face with a shamaugh. He preferred not to be photographed. He walked up to his officer, they spoke a few words, and the supervisor handed me back my license. I wasn't playing. Time to cut their losses and seek out the next victim. 

So amongst my very few complaints about Mexico, we have trash fires, topes (speed bumps), and I need to add mordida to the list. Also, coming in fourth place is fireworks. It's not uncommon to hear random explosions at any time. Just Mexico being Mexico. But bribery is certainly a bigger issue.

Is this all worth it? Is the trouble and fear caused by these interactions worth the trouble? Of course. Mexico is a beautiful country with friendly people and a rich, ancient culture (when they're willing to admit it). I have had no problems with crime (other than cops), no petty theft, no aggressive and often mentally ill panhandlers, and an awful lot of very helpful people who want us to succeed here. I enjoy Mexico quite a bit, but they're never going to get a handle on real crime if they can't get a handle on their cops. You can't turn the people agains the criminals, if they can't tell the good guys from the bad guys. It's a US problem as well, now that I think about it.

Thursday, July 27, 2023

Fecal Matters

We're planning to spend next week higher in the mountains of Mexico. Here we will find virtually no services. Most interesting, both RV parks don't have dump stations. The logistical cogs in my head creak into motion as I attempt to figure out how many days I can "reasonably" go without dumping my 38 gallon black tank. Black tanks contain human waste, if you weren't familiar with the term.

The reality of that 38 gallons is it takes about 3 gallons of water as a base. So it's really about 35 gallons. Then there's the fact that the RV gets a bit ... ripe ... at around 55-60% capacity. That's around 17 gallons. We tend to use about 5 gallons of capacity a day, so that's three days of odor free usage. We have tank enzyme treatment, but we're running low, as it's not sold in Mexico. We may splurge with our rations and double up while in the mountains.

There are two RV parks, one for three nights and one for two nights, followed by a full service RV park elsewhere. With planning, we should be fine with our tanks. We've scouted a dumps station we can hit between RV parks, so theoretically we won't need to break camp and go find a place at the first site: three days - move and dump - two days - new RV park with services. Will the dump site be open? Will we fit? We assume so, but it's Mexico. It is what it is. We may have find ourselves searching for a hole that morning.

These logistics are dreaded by a lot of people, who also dread dumping tanks. There are tales of horribly disgusting accidents, and for most older couples, the men almost always end up doing this work. I kinda like it. I've got clear connectors on my hoses so I can see the state of my tanks, potential clogs, and the overall flow. I don't mind the smell and I've never had a black tank accident. Maybe my attitude will change when my hands are covered in other peoples business.

Dump Station

As I write this, I am waiting for the propane truck to arrive. This will be my first propane fill in Mexico. I have two, 30 pound propane tanks and we've completely used one. We use propane primarily for cooking and hot water, and almost nothing for heating this trip. Our maiden voyage of ten days during the winter saw us blow through both tanks, so usage really depends on the season. We're expecting cold temperatures in the mountains, with no power, which means we'll be using the propane heater. This seemed like a good time to fill that empty tank, while contemplating how to dump the others.

Tuesday, July 25, 2023

The Mexico RV Paradox

Mexican RV parks are about infrastructure challenges. My five year mission is to explore Mexico's Pueblos Magicos while being able to work uninterrupted from my RV. To do this I bought a new RV and we installed a pretty slick electrical system for energy independence along with Starlink for Internet. I can go indefinitely on solar, or a few days unplugged, if I need air conditioning. 

In Mexican RV parks, we've seen dangerously low and high power conditions along with complete power outages for days. Today we woke up to clogged sewage lines. Very low water pressure is the norm. When I researched RVing in Mexico I found disappointed campers, people who were not prepared for these situations. Preparing for this trip meant preparing for all these problems.

My RV has survived all these challenges with flying colors. We are currently at an RV park with 15 amp power, basically an extension cord. The mornings are cold, so I'll turn on our electric fireplace, which probably has a 20 amp draw. It takes the 15 amps of power from the RV park and 5 amps from my battery bank, which is recharged in an hour. But there was a cost to all this. 

Not only did I spend a fortunate on the electrical system, but the RV and truck were expensive, which gets us to the paradox. The roads in Mexico are terrible. RVs on these roads rattle apart, mine included. One of the services I look for upon arrival in any RV park is references to RV repair folks. Something has either broken on the last leg of the journey or there's something that wasn't fixed from before. 

RVs get a 10 year import permit for Mexico and the consensus is they will likely be destroyed or close to worthless after 10 years on Mexican roads. The paradox then is that my expensive, prepared RV will be sacrificed during that 10 year permit. This was implied before we started, but the reality of it is hitting home. My original plans were to return four more times, but we recently discussed what that would look like.

We wouldn't come down the coast in summer ever again. It was horribly hot and humid. We wouldn't do short days of 3-4 hours of driving, as that prolongs the pain. I think the coastal route had very bad roads, but I'm told they were not uncommon. I am still holding out hope that we find a way back that isn't as brutal as the way down, a quick toll road from Central Mexico to Texas with nice pavement. I'm told that doesn't exist, but I need to believe for the sake of the next four trips. 

The other option is to just leave the RV here, but since I tow it, I still have to make the long drive. My buddy has a bus, and he could just hop on a plane. 

Thursday, July 20, 2023

Cactus and Labor Opportunities (Limitations)

One of the nice surprises in Mexico is fresh nopales, or cactus. Since I visited five years ago, I've been eating nopales every morning with breakfast, They're tasty and healthy, especially chopped up in scrambled eggs. However, there's a small problem and it's about labor.

Fresh nopales in the United States tend to be sold in paddles, with the cactus spines still on them. There's really no way to justify the labor of removing the spines as a processing step. The cost of the nopales would need to go beyond a comfortable price for the small local community that eats them. It's not a big community, in fact many restaurants have stopped serving them because the demand is small and they don't stay fresh long enough.


The first time I bought nopales back home, I spent the time to remove the cactus spines, impaling myself a couple times, dicing the nopales, cooking them up to reduce the sticky sap, and well, that was the last time I did that -- and it was just one paddle! What a giant pain in the ass. The second option was to buy them in a jar, and that's what I've been doing for years now. Jarred nopales aren't exactly fresh and they're spiced like the (only) company that sells them wants to spice them.


Nopales in Mexico are different. They're amazingly fresh and sold on the streets. The spines are removed, as the labor to do so is inconsequential. For a couple bucks, you can have a huge supply. I currently have a stash in my freezer, because one bag could feed a giant family for a week. When we went and talked with one of the nopales ladies in the market, she was carefully cutting the nopales into a bag, an extra prep step that again, had an inconsequential cost added to it. She was kind enough to give us an excellent recipe with fresh spices sold nearby. We made a big batch of nopales we've been eating since then. 


So we have the same North American product, sold differently and essentially one viable and the other not viable because of labor costs. As various regions of the United States struggle with different income tiers, this is something to keep in mind. The federal minimum wage is $7.25 an hour, while my California minimum wage is $15.50/hour (it's about $1.54 in Mexico). What is good for Idaho, may not work in California. 


This is especially true with high labor activities like selling Magic singles. My $15.50/hour employees are selling in the same market as stores with $7.25/hour employees. It doesn't make much sense for me to compete in that marketplace. Of course, I could buy a machine that does sorting, but those costs need to be factored in agains the $7.25/hour stores. Is it competitive? I bet it is, but I'm not sure. Perhaps we just don't sell Magic singles, much like how you're going to get the spines if you want nopales in the United States. The extra processing step may not be financially viable, even if Magic singles are the healthy add on for the game trade.

Building a Community Around a Brand (Necromunda)

I have ordered most Necromunda products and carried them for a while, but the game isn't really played in my store, so they end up going away. The new edition seemed like a great opportunity to try again. How many times will I try? Well, I had a dozen or so rulebooks sell of the last edition, so I knew there was interest. I thought I might try once again, because as a retailer, this chasing of potential is what I do.

So I ordered half a dozen copies, what I sold in the first six weeks of the last release, and... I was allocated down to one copy. I'm passing on that one copy. For a new game, not allowing me to capitalize on that buzz is death. Worse, imagine a bunch of customers now wanting to play Necromunda in my store, after buying their copies on the Games Workshop website. 

If it were an allocation of one for a 40K release, fine, I'm going to carry 40K regardless. But for a game that I'm trying to reboot? I would rather it not exist at all. Zero seems like the appropriate number. For Games Workshop, this also means I will not be buying any of the subsequent Necromunda releases. It's not out of a sense of spite, just that it's not a game that has proven any sort of traction that might have occurred with rulebook sales.

If you have a Necromunda community, my advice would be to get your one copy, maybe use it as a store copy, and hope to get more later. Let your community beat the hell out of it as they attempt to upgrade their game. However, if you don't sell Necromunda, I don't see why you would want a game sold elsewhere to be played there. I would skip it.

Monday, July 17, 2023

My Purchasing Process



I made a chart to show how I purchase product, as a buyer. This is using my venerable Open to Buy spreadsheet, which tells me how much money I have available to spend. If you're profitable, you can generally follow such a budget without worrying about the bills. If you're somewhat on the margins, it takes more care. This process has grown dramatically for me over the last three years, especially as I've allowed my role as buyer to expand to most of what I do. When I worked the counter, this would have been a nightmare.

Here's how I do it:

Weekly Orders (Mandatory)

It's inconceivable that I wouldn't have enough funds in a week to make at least one order with my Primary distributor (ACD). Usually it's twice a week, sometimes every day. Pre orders with my primary trigger an order at free freight, so not all the orders from my primary are initiated directly by me. I pre order everything, ignore "dailies" and I have enough sales volume to absorb it.

My Secondary (Alliance) almost always gets one order a week, and usually two. Lately they've been getting more than 50% of my restocks and my improved discount reflects this. I have a small number of items pre ordered from my Secondary, usually things I only get from them or special orders where I'm happy to order from multiple vendors to ensure a timely arrival for the customer.

I have a CCG distributor who I specialize for restocks of collectible card games that almost always has stock of what I need (Magazine Exchange). Magex makes it clear precisely what's in inventory, rather than having to call to find out. This works best for me, working remotely, increasingly abroad. I use them once a week at least, sometimes twice.

Asmodee gets a weekly restock, even if there's not enough for free shipping. About 90% of the time there are enough restocks and new releases to trigger an order, but occasionally it will sit until the next week. If I'm concerned about stock outages, I'll order some safety stock from ACD. I place the Asmodee order before ACD.

Games Workshop always gets a weekly restock, with a poor fill rate of about 33%. I order all the new releases except for a few specialty games that nobody wants. Games Workshop makes me work a schedule, as I add new releases on Monday, photos on Saturday, and have to manage pre orders with customers and street dates. If sales were lower, I would consider dropping them because of the friction. At least Asmodee allows me to pre order in advance, rather than requiring just-in-time labor.

Monthly Orders (Nice to Have)

This is where money can be tight. If I'm swimming in CCG product and I'm over budget, I might hold off on these suppliers for a week or two ... or longer. This is often discretionary spending, although if my purchasing budget is flush, it becomes somewhat obligatory

These "Nice to Have" products are what differentiates my store and I consider them crucial to my operation. However, they take a back seat to the bread and butter products I receive from the more frequent distributors.

Besides direct accounts, I have tertiary distributors that tend to fill in holes that get an order once or twice a month.

The Orbiting Filler Suppliers

There are many orbiting suppliers that provide me baubles and wonders that are not really necessary for my store. If the weekly order suppliers are the cake, and the monthly orders the icing, the orbiting suppliers are the sprinkles that make that cake pop. Orders often get triggered when we notice product is gone. Sometimes we notice product is gone and decide that's good, no more of those.

Orbiting suppliers can be ignored for months at a time without ill effect. We have specialty soaps, plushes, toys, various fire and forget Kickstarter projects, jigsaw puzzles, playing cards, and so much more. At times there have been upwards of 100 of these suppliers. 

Growing The Budget

As my budget grows, the ordering increases. Orbiting filler suppliers become monthly orders, monthly orders become weekly orders, and weekly orders get placed multiple times a week. If you are one of my suppliers, I suppose moving up categories should be pretty desirable. How do you do that? 

Watch how Game Workshop and Asmodee create a portfolio of products that practically require weekly orders. Both have programs that reward weekly restocks. My distributors are always using sales tactics to get me to place additional or larger orders. One will entice me with a tiny amount of desirable product, knowing their minimum order for free shipping is $750. Others have exclusive products.

As for how stores grow budget. It's like the Steve Martin bit about how to be a millionaire and never pay taxes. First, get a million dollars. Profits need to be reinvested into purchasing budgets. I've been very stingy in the past, until COVID era profits allowed me to triple my inventory. My eyes were opened to how I was staving my business, so since then I've added a healthy amount to my purchasing budget each year.

Anyway, I hope this helps. 

Saturday, July 15, 2023

Learning Spanish in Mexico

I've been asked twice in Mexico how it's possible I've gotten this far into the country without being fluent in Spanish. In both cases, I was having some language difficulties and an English speaker stepped in to help. I no doubt would have gotten my tacos or been able to buy my fruit eventually without their help, but they were surprised I got as far as I did. 

I'm learning Spanish. I don't know it. I don't not know it. Estoy aprendiendo espanol.  I know enough Spanish to get things done and armed with a translation app on a phone with a local SIM card (because AT&T sucks), I can get the vocabulary I need. On my own a couple weeks ago I was eating at restaurants, I got gas, I bought two car batteries at an auto parts store and had them installed, I went grocery shopping, and I even got my oil changed at the local mechanic. 

Sometimes interactions are smooth and predictable and other times I have to hand my phone to the person I'm talking to and ask them to type what they're saying. It's much easier if you've got time and you're not rushed. You have to be willing to screw up. Occasionally I'll find someone who knows as much English as I know Spanish and we'll gush over each others abilities. Oh, you're English is very good and my Spanish is bad. Oh no, you're doing very well speaking Spanish! We'll bond over finding a crack in the language barrier.

Our last night in Mexico City we ate pizza at a local restaurant and all three occupied tables were speaking English. In a place like Mexico City, every language is spoken. I followed a group of French tourists through the archeological museum and watched when their French speaking tour guide spent extra time on an artifact. He knew what artifacts were important. When they were gone, I would pull out my translation app and snap a photo so I could translate the Spanish to English. "Ahh, that's why he spent so much time on this." In a language fluid environment like Mexico City, this is pretty common. But showing up language limited in a small town can freak people out a bit.

I was at a small produce store a couple days ago in our local town. I brought my fruit up to the counter and pulled out my wallet. This is the universal sign of I am ready to check out. In a supermercado, a large super market, the bored checkout person would ring you up without a word, but in a small town market, there was conversation. I assume it was something like "Did you need any help finding anything or are you ready to check out? This exceeded my language skills and along with the road noise impairing my ability to hear, I was instantly out of my depth. In retrospect, it's what I might have said in my own store.

In the past I would often just go along with something like this, "Si." Yes, let's move this interaction forward. However, I've learned this isn't always helpful, I don't learn anything, and I occasionally get exactly what I don't want. Instead I said, "No entiendo." I don't understand. This resulted in the nightmare scenario of the clerk saying in Spanish, "Hey everyone, this guy doesn't speak Spanish!?" The customers in the store gathered round, they asked if anyone spoke English, and a slightly inconvenienced customer asked that question in English. "How did you even get here without Speaking Spanish?" Ugh.

I drove south. That's how I got here.

Embarrassing situations like this threaten to erase the ten days of successfully fumbling by myself with Spanish, the shopping, restaurants and oil changes. Maybe next time I'll be better prepared, ready to check out with a phrase of my own, like Estoy listo para pagar. I'm ready to pay. Or just Estoy listo. Or maybe in time I'll become more familiar with the Spanish equivalent of "Did you need any help finding anything or are you ready to check out?"

I've been working through the language program Duolingo for about three years and 60 language units. I don't recommend it, and that's because they have a very tiny selection of speaking options. If you want to learn to speak Spanish, practice speaking Spanish. Duolingo fails here. They have an excellent interactive Spanish section where you travel to Mexico City and talk with some students, but you can blow through that in about a week. I've been working with the program for over three years, in anticipation for this trip (along with two other shorter ones we took). 

My plan is to come back to Mexico, fairly soon, and do a language intensive one on one that includes immersion when I'm not in class. Immersion sounded scary before this trip, but it's what I do every day here. Only with immersion will I understand the grocer, including cutting through all the road noise, the occasional muffled speaker with a mask on, and the fact my hearing isn't getting any better. That's really learning Spanish in Mexico.

En el autobus

Thursday, July 13, 2023

It's Fine

I was on the highway through the town of Pรกtzcuaro, on the way to the laundromat. The parking for the businesses is next to the highway slow lane, where the mini buss drivers, in their Toyota Hi-aces, would come within millimeters of you, if you weren't careful. This is their lane. There's incentive to get off the road and park quickly in the tiny parking spaces, to avoid their wrath. 

In front of my laundromat was a single orange cone blocking the only parking space. I quickly moved the truck in front of the cone, jammed it in reverse, and crushed that poor cone as I took the only available space to avoided the minibus wrath. I grabbed the mangled cone from under the running board, smoothed it out, and put it back where I found it. A little worse for wear.

I hadn't noticed him, but an old man had been shoveling filth from the gutter. It was his cone I mangled. Rather than being angry, he looked at me with a bemused smile on his faith and said with a thick accent, "It's fine."

I smiled back at him in appreciation of his understanding of my predicament and said, "It's fine."

"It's fine." He said again, smiling.

"It's fine." I said, with a smile. And dropped off my laundry and went on my way.

And that's how "It's fine" became another one of our regular sayings in Mexico, along with "It is what is is." 

When I complained that every floor in our hotel was un-level, probably from earthquake damage? It's fine.

Today when I barely got the awning in before the wind could tear it off? It's fine.

It's fine is a less infuriating, more accepting, "it is what it is."

Give it a try.


Wednesday, July 5, 2023

Retail Anthropology

I'm fascinated by shopping in Mexico. In big cities, there is vibrant mall culture. The malls are full of stores, many of them international. Stores that have died in the US still exist in Mexico and Latin America. Sears? Radio Shack? Thrifty? We've got you covered. Malls are full of young people, doing young people things. Malls are not ironic, malls are where it's at. It reminds me of my youth. Many parts of Mexico remind me of my youth in Pennsylvania, or Southern California, both the landscape and the people.

I'm also fascinated by the corner shop. The lady running my corner shop right now will sell me a single egg, which she'll take from an unrefrigerated carton, and sell to me for two pesos, about twelve cents. You can buy a single stalk of celery, if you wish. That might be amusing, but my distributors are happy to sell me a single bottle of paint. Who am I to argue?

The department store is alive and well too. I can buy some shampoo or a motorcycle. My buddy asked the salesman exactly what they needed to sell him a Chinese motorcycle for several hundred dollars. Just an address of some sort and you're on your way. At that price, it's almost disposable for a tourist. You could drive it around for six months and give it to the lady at the corner store. I love department stores. 

By far my favorite shopping experience in Mexico is the indoor markets that stretch on and on. You might start in the meat section, with various animal parts for sale, graduate to the food counters where you can grab a quick meal, end up in the leather and belt section, move on to clothing and textiles, and it just goes on and on. If you need something a vendor doesn't have, they'll walk you over to someone who does. You can just get lost in these multi level fire traps of commerce and I just love it.



What I really love though is wandering these stores myself. My companions shop with a purpose; rushing me along. I shop to answer questions. I want to wander every aisle and wonder about every product. 

There are no self service laundromats in Mexico, yet there are washing machines for sale, including the old drum style my grandmother used. The aisles are full of laundry soaps, so clearly people do their own laundry. So who goes to all these full service laundromats in small towns? They seem so busy. It probably speaks to huge income stratification. Without good Spanish, I can only imagine without asking questions. That's probably for the best.

Sometimes there are secrets. I wanted to buy corn tortillas in the middle of the day in a small town. I went to the tortilleria of course, because that's where they make them. "Oh no," the lady told me,  "We don't have any, try the corner store." It wasn't that they don't sell them to the public, it's that I came too late in the day. You need to know these things. 

I went to the corner store she pointed to and found a ton of flour tortillas but no corn tortillas. I was about to leave when I noticed an unmarked cooler stacked on a milk carton next to the door. What the heck, I peaked inside. Behold, the corn tortillas, still warm to the touch! I bought my corn tortillas, like I knew what I was doing, and was on my way. 

There are some things I just can't get right, like bringing in my bags when I'm grocery shopping. They often don't have single use bags. I end up buying re-usable ones every time, to the point where they're starting to populate the trailer like rabbits. 

Water was a problem for a while, as I originally planned to buy a super expensive filter system, but then decided on a huge, five-gallon water container. Imagine lugging around a 42 pound container of water with you. I gave it away. Now we've figured out that a five liter water container is the perfect size. They sell them in the stores for $1.50. I use it with a USB rechargeable water pump that fits on top. 

My desire to overanalyze products and purchases is often defeated. I needed two new batteries for my truck this week, after one exploded. I did a bunch of research on Project Farm and realized locally I could choose between Walmart batteries or AutoZone batteries. Walmart was an hour away and AutoZone was in town. When I got to AutoZone, my first and second choices weren't available, but I got my third, old school lead acid batteries, like the ones being replaced. AutoZone also installed them for free, something they don't do back home. I recall replacing a battery in Colorado in the rain in my Jeep in an AutoZone parking lot. They let me borrow a socket extension.

When I finally got to Walmart yesterday, they had one, no name battery, which meant that gamble would have failed. If I were at home, I probably would have ordered a fancy brand off Amazon and paid to have it delivered to my doorstep the next day. You learn to compromise in Mexico. Also, because choices are limited, you can focus on your life, rather than the latest toy.

Anyway, I actually buy very little in Mexico other than groceries. I'm not big on souvenirs. I don't shop for craftwork. I do like to take advantage of cheap labor when I can, like my $15 oil change the other day (with the $100 in fancy synthetic oil I brought from home). I'm hoping our next RV park has an RV repair recommendation. My list is growing. 

Friday, June 30, 2023

The Cost of Things

One of the questions I used to get regularly is, "Wow, you own a game store? You must get to take home all the cool games." One of the variables in Dave Wallace's game store calculations included take homes. It was kind of lumped in with shoplifting. It was also something I considered to be unacceptable, being a numbers guy. I buy my games at the wholesale price plus tax. For me, it has more value if I earned it and I tend not to buy games to just see what's in the box. Speaking of value, I have a confession to make.

I think my games are too expensive. I buy them at wholesale, which is usually about 45% off plus tax, and that feels right to me as to their value. This is not to say hobby games are a bad value, only that my personal feeling of value stopped at around the year 2004. That happens to be the year I opened my store. A current $50 D&D book in 2004 dollars was about $30, roughly my wholesale cost. They're about to go up to $70, which is completely nuts to me. So wholesale feels right. Wholesale in 2024 might even feel too high.

I spent a lot of years since 2004 being pretty poor, where playing hobby games, bought at wholesale, was my sole interest.  When I finally had some money, which took about seven years of struggle, I woke up to a world that had changed; a very expensive world that was only getting more expensive. My personal income recently reached where I was in 2004, adjusted for inflation. 

However, my perception of prices is still stuck back in 2004. So I feel like a Rip Van Winkle figure, waking up to a changed world, surprised that people spend money like they do, only they spend it with me. I am grateful, but regularly mystified, despite having extravagances of my own. I can't get enough $500 Lord of the Rings collectors boxes; they fly off the shelf. Mystifying.

One of the joys of living part time in Mexico, assuming we continue to return, which is in doubt, is the prices. If I don't move around, with Mexico's $5/gallon gas with a gas guzzling truck, it's really inexpensive. I am back in 2004 when it comes to eating out, grocery shopping or getting work done on my truck. My benchmark is about $7 per person for lunch, which is living pretty high on the hog in Mexico. Back home in the San Francisco Bay Area, it's probably twice that. I am sure this is a major appeal to retirees, able to experience an economic time warp back to the olden times of easier living. It wasn't really easier, it's just how our brains process change.

There's a similar thing with vehicles, in which at a certain point in your life, certain safety features are viewed as essential and anything more is superfluous. If you're really old, maybe it's seatbelts. If you're a young Boomer, it might include air bags. Gen-X might insist on traction control and ABS. Millennials might require emergency brake assist and a suite of cameras. There is a point though at which everything that came after your personal safety standard is superfluous. My personal benchmark is around 1996, something I think a lot of as a car guy, daydreaming about an older affordable vehicle to take on some adventure. Safety features after 1996 are "nice to have." My point is I think we have points in our lives where there's a set standard of value and it pretty much stays put.

So $70 D&D books are completely nuts to me, as you might imagine. It's also nuts that I'll likely continue to sell them well at that price. Not everyone has my perception of money and value. I still want them for myself, and I still worry about my customers being left behind, like how I feel I'm mentally back in the venerable year of twenty ought four.




Tuesday, June 27, 2023

How Do You Stay Dynamic?

When you first open a retail store, you are a dynamo. You are a machine that turns energy into retail sales. You take chances, you make big mistakes and have big gains, and you can be there to file away the rough edges on crude processes, or put on a dog and pony show to sell that last box of trading cards. It's about you, your decisions, your skill, your money put into the right places, with the right support behind it, with unlimited hours as your time has no value. As you grow, this changes. It must change.

Your successes are settled, product categories on autopilot, events that fire without a hitch. You need these known variables to be set to make room in your brain for new things, but it also means these areas lose dynamism. There are over 20 Magic the Gathering formats and you probably don't want to think too hard about it when you know the three that work in your area.

You know your pain points. Perhaps you don't sell Yugioh anymore because it crushes staff morale, or you know if you sell pop culture wallets, criminals will target you. You know what works, you know what doesn't work. Every good decision is a milepost for success, but it is also limiting. It cements your mind while also giving competitors a wedge. You also learn to strike a work-life balance that takes your unlimited, dynamic energy and caps it, so it's sustainable. Your gushing, wild wellspring of energy is now a capped off oil derrick of energy. So predictable and steady.



Your capital, once used to buy product and precisely what you need to keep your operation going, begins to diffuse into other things. At one time my store had a pinball machine and a van that was more billboard than needed vehicle. Buying art for the walls became a thing I just did when I felt like it. I'm driving the company truck right now with the company paying the insurance. Your money can get distracted over time, not focused on return on investment. As you become successful, business cases get stretched thin as you justify why you need the latest iPhone or gadget. 

How do you fix all this? 

Hire Dynamic People. The best people to help you stay dynamic are people from within your organization, with their own dynamo of energy. They understand the core values of the business. If they push back against one of your decisions based on these core values, you know you're in good shape. They know the goals of the business. They are usually eager to seek out new products, new projects, new hires to do great things in the name of this mission. Hiring from within ensures values are maintained and they understand the economic constraints of the business. 

Retail is damn slow, and many dynamic outsiders want to do everything, right now. They want to make a mark on the world, rather than finger paint in retail. I once hired an outside manager who spent an alarming amount of money, very quickly, on amazing projects. I kept that going for as long as I could, but there was a mismatch that couldn't last. They imploded before we had to have that discussion, but honestly, I would have gone into debt for that energy.

I am the buyer for my business, but I'm also 55 years old. Do you think I'm up on the latest anime or hot pop culture topics? That's an area where I assign buyers under me to handle accounts I have no business working with. It doesn't take a lot of time to have another employee handle a few accounts that get bought from once a quarter.

Don't forget the larger you build your organization, the less efficient it becomes as you inevitably hire less useful people. I can see it on any given afternoon, looking at our cameras remotely. You can't hire your way into a dynamic environment, it's painstakingly built with competent staff and excellent managers.

Audit Yourself. Think of how you would view your business if you were going to sell it. You would take the usual EBITDA calculation (earnings before income, taxes, depreciation and amortization) and subtract all the nonsense and owner compensation above market rate. What would your business look like if you were lean? Maybe know your nonsense number. 

There's certainly nothing wrong with paying yourself well or having your cell phone covered by the business, but there are likely some dodgy things you might want to pull back on that are starving your business of cash. It's best to do something like this before your business takes a downturn. Even if you don't change anything, you know where the fat lies (you are probably a producer of fat). 

Have a Through Line. If you don't have goals for your business, it's unlikely you'll suddenly achieve one. Maybe you want additional product lines. Who doesn't? Maybe you dream of opening a second or third location. Maybe you want to expand in some fashion. Maybe you want to hire a marketing-online sales person (I do). All of these goals are risky, prone to kill your business, but necessary in keeping you dynamic. I'm at the Maui Beach House stage, where I need a project to keep me from jeopardizing the business while it grows organically. I would like to say I'm done, that my business is fine like it is until I retire, but we'll be out of retail space in a couple years and wondering what to do next. I better be ready.

Monday, June 26, 2023

I Can't Make You Like Artillery

There is a tension.

Do you keep a box of models nobody buys because you want to have a complete set, or do you let the customers, community, and publisher know that the game is not giving that box its due by dropping it? Maybe the box is not cool. Maybe the rules don't support it. Maybe it's so expensive it gets bought online at a discount. Inventory metrics lets me say, "Don't care; not my problem."

I bring this up because of a box of unloved artillery in my store and my indecision on what to do with it.

This artillery problem applies to everything in your store really, but in this case let's look at war game models. We often hit a wall where the coherency of the line brushes up against what people actually want to buy. I used to play Astra Militarum, otherwise known as men. I really liked my basilisk artillery pieces and I would regularly field three of the giant models. I mean, I wouldn't win with them, because 40K doesn't reward artillery, but they were cool. 

On the other hand, I played Flames of War and used a special US commander who would drive around the battlefield in his Jeep and spot for artillery. That was his special background ability, and because Flames of War is more historically accurate, artillery was a winning strategy. I could talk about artillery until I'm blue in the face, but customers aren't going to buy it, if the rules say artillery sucks.

So do you keep the dusty box of artillery that nobody wants or do you follow your inventory reports that say get rid of it?

I'm here to say, there is no wrong answer. You may feel it is your responsibility to represent. You may also feel, after decades of dusting boxes of artillery, that this is not your fight. Someone in a board room had a discussion with the game designers and decided artillery is not what their game is about; it's about close quarters combat, and the reality of artillery would radically change the game in an undesirable way. So we have artillery in kind of a superficial way, but artillery sucks (until the optional special rulebook, when it doesn't for a little while, because we need to move those dusty boxes of artillery!).

You could argue that there is a product pyramid, product coherency. I'm sure the publisher would argue that for you. We are inundated with far too much product of all sorts, some of which, like stretch goals are really "splash" items, meant to be bought up quickly and never re-ordered again. We often miss the splash cue and find ourselves flailing in the water, rather than jumping out after the initial splash. Game store owners are sad when they're out of product, while publishers often consider it a success. We are wired to make this mistake.

There are some very brave, hard working, lovers of the community, former game store owners where this is the case. There are store owners who are passionate about games far more than about running their business. It's why game stores are such wondrous places, at least for a while. Going down with the ship is noble, but to quote Patton, "No bastard ever won a war by dying for his country. He won it by making the other poor dumb bastard die for his country." Harsh, but true.

So I guess I'm here to say you can be ruthless, perhaps you need permission from a random outside person to be ruthless. Here I am! If artillery is there to fill a hole and nobody is buying it, don't feel obligated to keep artillery on your shelf. Or dead expansions, or stretch goals, or airbrush paint when nobody uses an airbrush. Or anything that isn't performing. Let the other poor dumb bastard carry it while you achieve financial victory. 

Of course, you might consider this loyalty to the box, the line, the community, a form of integrity. You have to draw the line, I suppose.