Saturday, October 7, 2023

Anatomy of a Time Traveler

They say a store makes money in the buying, but I think you can also say a store loses money in the restock. I run a front list driven retail store, dependent on new releases. However, I've never turned down a reasonable restock. The key to a successful restock is understanding the product. 

You cannot just rely on performance metrics, which is why buying is not an easy job to delegate. Buying requires understanding the meta of the store, the game, and the customer. There is a story behind every product and you either know it, or you don't. The more you know, the better your buying performance.

Let's take a look at a single product. It happened to sell this morning, so it's on my mind. Today we'll examine the Necron Chronomancer.

The Product: Immediately, you may notice it is a blister from Games Workshop. It's a special character or command option and it will likely be a slow seller. That's all I really know about the game meta. It is likely to go out of print quicker than a box set, so if I want to have this for the holidays, I may want to buy more than one.

How is it performing? This is the first step in deciding if I'll bring in another model. However, it is not always simple. Looking at the Sales History table below, I've sold one in the last month, and five in the last year. I see that I've sold 14 in its history, which tells me it's not a new model from the recent release. It's a steady seller. 

The Game: One thing I might do is look back at the history. I may have sold five in the last year, but did I sell all five, say seven months ago? Could there have been a spike in demand hiding in the numbers? If it were later in the new Necron Codex release, that may be the case. I may have a product where the demand was satisfied early on and now this was the last one, rather than the latest one to sell. The numbers can lie.

What do these numbers even mean? I'm looking at turn rates on individual items like this. In this case it has a turn rate of five in a year, which may or may not be distributed throughout the year, as mentioned. My 40K department has an average turn rate of around four, which means this model is well within those performance metrics. The Necron Chronomancer appears to be solid.

There are other inventory considerations as well. For example, there are many slow selling, underperforming Games Workshop items that are considered part of their core offering. I must carry these, if I want to engage in various promotion programs. I'll have a notation on the product code to let me know not to make the smart inventory choice, but rather nod to the marketing department. It all gets lost in the sauce, to use a Miami Vice line.

There are products that are often part of a collection or set that I want to promote. The Necron codex was recently released, and for a while at least, I want to have every Necron item available. Unfortunately, about half are out of stock, but I'll keep trying. If the turn rate on the Chronomancer were really low, like perhaps one, I might decide this was my opportunity to finally move it. I also might second guess myself and figure the Chronomancer might be good in the new codex. Since it took several months for this to sell after the codex was released, I'll assume it's about the same. I might even ask somebody.

The Store: How is my 40K community? Is it on the upswing or downswing? Our coordinator coordinates for a couple different stores, a relic from the COVID times of attempting to get events restarted. I consider that shaky. Do they have events scheduled for the future? Is the community drifting towards other games? How many starter sets are we selling (not enough), which often determines if we have new entries into the hobby or if I'm selling to the same people. 

With a Necron model like this, it shows long term success over time, but there are often times where we see spikes in a new model, then nothing. That community got the model they wanted and there are no new people coming in to buy it afterwards. This happens a lot with miniature games. It's where all our Fantasy Flight miniatures games are. We sell a ton of new releases, while the middle period releases are dead, and the starters barely hang on. Veterans will buy out the new releases, but you often need new players for your restocks.

How do you teach this? That's my big concern with anything I do. How do I transmit my considerations to a new buyer? Do my fuzzy, subjective criteria even matter? I believe they do. When I first learned performance metrics, I broke a lot of stuff. It turns out you need a lot of stupid inventory to support the smart inventory. But how do you know which is which? It turns out there's a lot of art to the science.

We had a manager who was exasperated at my 40K buys, thinking I was clearly incompetent as a buyer. I let her take a theoretical stab at the new release and she was picking inventory no better than chance. Customers were not making logical choices! My performance with the line is probably just a little bit better. There are just too many competing factors, including the company itself trying to outsell me. In these cases, it's better to hope for a sell out than a long tail.

It would be easy to error on the side of not buying. At the end of the month, you're rewarded by not doing your job with a pile of money. You can do that once or twice a year, if you need to, but there's a cost. My first attempt at delegating buying, during a ten week trip, resulted in needing to talk with the manager. "You don't understand, you must buy. The amount you must buy is your Open to Buy number. Spend all those dollars." 

Finding things to buy on a daily basis is really easy. The hardest work comes from finding new lines, new companies, new departments to expand into. I could very easily continue to buy deeper and broader hobby games, and my systems says I should, but I do believe my market is being served in that arena as best as I can fathom. I get better results nowadays with hobby adjacent products, like stuffies, pins, magnets, and yes, toys. All of these new items must be carved from the existing budget. All of these items are the first to die in a recession.

So back to our time traveler. Maybe I decide to only stock Necron Chronomancer one deep, providing me $22 (the cost) to buy a couple stuffies. Can I sell these stuffies five times in a year, like those Necron dollars? Looking at my reporting, my Toy department turns at 5.42, so I think the answer is yes. Then again, it often takes me a month or longer to get a solid Games Workshop restock. I might need what we call "safety stock" to weather the typical Games Workshop outage. Perhaps two on the shelf would be safer. I just don't know. Neither does anyone else.

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