Thursday, January 19, 2023

Purchasing Wizard Wanted

Do you like to buy stuff? Do you enjoy shopping? Do you like to find shiny things that delight you and your friends? Are you sad because you have a limited budget and would like to buy thousands of dollars of things? How about millions of dollars? Would you like to surround yourself with a wonder emporium of your own making? Would you like to aspire to making $50,000 a year, while juggling a million dollars of revenue while chasing the Next Big Thing? Boy do I have a job for you!

It seems lost on a lot of people in the hobby game trade that the primary job of a store owner is buying. Sure, they understand we buy, but they have a vague idea of how much we buy, the immense scale. Even the smallest store owner is responsible for a six figure purchasing budget in a year. Larger stores? Seven. That's right, store owners are walking around, spending hundreds of thousands of dollars a year, ten, twenty, a hundred thousand dollars a month, on cardboard and plastic. Even small store owners are likely hitting six figures in a year.

Our buying jobs are ridiculous. Sometimes we buy on sliding discount sales, moving targets. We are expected to place pre orders and back orders using obtuse tools, like static spreadsheets. A million dollars of sales a year in games, with orders tracked on a spreadsheet. We use them, distributors use them, publishers use them. Every week my primary distributor sends me a 900 line spreadsheet of what I have on order, sorted by the order the sales rep put it on the spreadsheet. Astonishing.

How may of the seven Pokemon releases arriving two months from now would you like to pre order? I shall take 5X. Well, I can get you 2X of SKU 1, 4X of SKU2, 1X of SKU3, etc., etc. And we chase this product across the multiverse through a handful of distributors, with a margin of error for the distributor that always ships late, and the distributor who sometimes loses the order (doesn't happen to me, but happens often enough to others). 

We shall get some safety stock from the poor margin, but reliable distributor. We will pay several different prices that will hopefully cost average to success. We chase product through distributors, direct with publishers, and somewhat indirectly and ridiculously inefficiently on Kickstarter. This IS the job of owning a store. Everything else is details.

A lot of small stores have one distributor and take whatever X is. They often have no product, while I'm trying to manage crazy overstock. We are often, like in the case of Wizards of the Coast, forbidden from selling to these stores. They could fill out a form and order from another distributor, but they don't for some reason. Maybe it's scary. Maybe they don't have the budget, so what's the point?

Buying is the most important thing in retail. You could be an entirely incompetent sales person. You could have the personality of a brick. You could shove your product into vending machines and watch behind one way glass. You could have (gasp) no game space, no marketing of any sorts. If you were an expert buyer you would clean up. 

Buying isn't just ordering, it's a dance of research, finance, purchasing, selling, inventory management, and liquidation. The experts, those really good at this, are expert buyers AND expert sellers. As sellers they know their customers, research product, attend trade shows, and demo the heck out of what works. They manage money like a boss. But if you had to choose buying or selling? They would tell you it's mostly in the buying.

Once the balls are in the air, the inventory bought, todays sales pay for last months invoices, in a Rube Goldberg, perpetual motion machine. Stores without terms, most new ones nowadays, skimp on small releases to save up for the big release. They have been taught leverage is dangerous and to avoid it, rather than credit being a great opportunity.

An expert buyer would be flush with cash, have no excess inventory and no liquidation needs. An expert buyer wouldn't be able to spend the money fast enough. An expert buyer is like Gandalf the wizard: Inventory is never late, nor is it early (Bilbo Baggins). Inventory arrives precisely when you mean it to.

The better Gandalf you are, the more efficient your store, the more money you'll make. It's a painfully tedious job. It's a job that has barely changed in the 18 years I've done it, other than massively growing ten fold. It's a job that could be automated significantly better with technology. It's a job that would have been impossible at my current scale, 18 years ago, without the minuscule technological advances. I love the job. You can't have it. If you were a purchasing Gandalf, I could never afford you. 

Tuesday, January 17, 2023

Customer Service and Profiling

As a bored high school student, I decided to take a community college course at the nearby military base. It was called Patrol Procedure, where we learned how to be a cop. One of the things that struck me was we were taught racial profiling. We learned the Sesame Street lyric, "One of these things is not like the other, one of these things doesn't belong." I didn't think anything of it at the time. This must be what it's like being a cop.

Later I went off to college, bought a beat up muscle car (they were cheap then) and regularly visited the upscale middle class community of my parents. This community was known for their overly attentive police department. I got pulled over in my beat up muscle car a lot.

Officers would look at me, check my license with my parents address on it, and give me a warning for things like going around a corner too quickly. I always made sure my car was in good working order, to avoid getting pulled over, which was hard as a poor college student. I was being profiled based on my out of place car. One of these things is not like the other...

Racial profiling does not work in preventing crime. Let's get that straight. We know this now. You might think racial profiling works, but it's bad because it's a net that drags in every person of color. But that would be incorrect. There is no evidence racial profiling prevents crime. It's lazy policing that intimidates the local community. It certainly has no place in retail.

When I recently received a couple bad reviews because customers felt staff were overly attentive, racially profiling them, I had to wonder. Are my staff racially profiling? Maybe they think this is a form of loss control? You have to assume the worst first.

The assumption is yes, until it's proven otherwise. Our training entails a high degree of customer attention. Customers are greeted when they enter, approached when there's time to see if they need anything, and if possible, a follow up. Three points of contact. You'll likely get no points of contact at Wal-Mart, unless they've got a greeter at the door. It's shown if you greet someone, they're less likely to steal from the store.

Staff are also trained in loss control, but trained to a lesser degree. Ask how many have caught shoplifters and my guess is only the manager will raise his hand. The training is bad because we're bad at it. Where there's poor quality training, there's staff making stuff up, self training. That can be bad. In any case, where there's a negative perception, there is an opportunity for training.

This attention could also be benign. Customer service attention is not only unusual in the big box reality of todays retail, but it might be seen as profiling. Just as "courtesy can be mistaken for flirtation," you could say "service can be mistaken for profiling." Again, you want to give the customer the benefit of the doubt, and start from there. How can we provide a high level of service while making everyone comfortable?

I'm not sure we need to overhaul what we consider good customer service. I do think we need to be aware that our high level of service can be mistaken for profiling. That service might even be turned on to a higher level for people of color, which would be a mistake.

I have to admit in the past I've been overly enthusiastic when people of color (or women) showed interest in hobby games. I try to keep cool, but it's been like living in a California Zen monastery, with a sea of white dudes. That has thankfully changed significantly in the last decade, due to reasons both in and out of our control.

I think the solution to this profiling problem can be as simple as treating everyone with the same level of service, while being aware that people can be sensitive to that attention. The culture may have changed, especially for young people, whose retail perceptions are formed by brushing up against multinational retailers.

All of these things are just like the other. All of these things always belong.