Monday, August 11, 2025

Last Man Standing: Life at the Bottom of the Retail Funnel

In roleplaying games there is the funnel. You throw a bunch of zero level townsfolk into a meat grinder and see who crawls out. The survivors become heroes. Retail has its own funnel.

Our value proposition is simple. We do not have the lowest price. We do not have infinite selection. We have the thing you want, right here, right now. If a store cannot master that, it will not be around long. That reality makes us front list driven. We live in the land of release days and the Next Thing.

Most game players are not hobbyists. For many people we are just “the store.” They come in once a month, scan the shelves, ask a question, maybe check their phone, and walk out with a box of fun. I do not pretend they never buy online. Some refuse to touch the online world at all and will not even use my web store to check stock. Most are hybrids. 

These customers buy from me, online, across town, and occasionally from a guy with a blanket at the train station. They do not optimize like alpha gamers who stretch every dollar for maximum cardboard. They buy something that looks fun. Our proposition resonates with those customers, and we do everything we can to turn up that resonance. For example, most do not use our Game Center, but they shop with us because we have one. They support a community they're tangentially part of.

Because of this, you learn to read the pattern. You see the Matrix in your sales data. Most of the time it hums along predictably. Then something glitches. A disruption hits the product funnel and you can feel it in your bones before you can chart it in your POS.

Here is how that funnel looks on the ground. There is a new hot game. You know it is hot because you bought it when it was just potential. You ordered deep. You brought it in for Jack, and Olivia, and Liam, and a dozen other actual people in your head. You matched your local demand with your local supply. Then the game catches fire.

The fire starts far away. It climbs the Amazon charts, then disappears. The fire spreads. It sells out at the publisher and at the large third parties. Most publishers now run multiple channels. The vast online-only crowd and the big corporate retail shoppers are happily buying from those channels. They do not know us and we do not know them. When I talk about standing outside a game renaissance hurricane, catching demand with a thimble, those folks are the hurricane.

Soon the publisher declares the game sold out. Yet my back room has a neat stack reserved for Jack, and Olivia, and Liam. The fire spreads to my little building in Concord. Customers begin to arrive. Not in a stampede, but in waves you can feel. The question comes like clockwork: “Why do you have this?”

Sometimes it is "Why do you have this when it's sold out?" or “Why do you have this when my favorite store across town does not?” Sometimes it is “Why do you have the Kickstarter version before I do?” I have heard the same person ask that more than once, which led me to ask in return, “If you know I have it, why keep going back to the place that doesn't?” Often it is online-only buyers who suddenly recognize my core value. I have what they want today. They wince at paying regular price. They notice I do not have a Walmart quantity. Then they buy it anyway. Some see me as some sort of predatory monster, preying on the ignorant. That is life at the bottom of the funnel.

Being the last man standing feels bittersweet. We want to be the first thought for hobby gamers, not the necessary evil at the end of a long search. We focus on pleasing Jack, and Olivia, and Liam, the people who follow our social media, who show up every week and share their wins and losses. So it stings a little when the stack sells out before our locals have had a full cycle to pick it up. I am grateful for the revenue. I also resent being the necessary evil for a hurricane of customers who learned about the game from someone else, planned to buy it somewhere else, and now strip my shelves clean like locusts, with a sense of grudging reluctance. 

Twenty years ago we built hobbyists from scratch. We introduced people to games despite every reservation. Many of those customers graduated into hybrids. We do not own customers. We are not owed anything for our effort. That is a hard lesson until you accept the storm for what it is. The hurricane is not ours. The thimble is not ours either. Our job is to hold the thimble steady and fill it. We are here to serve.

The trade was roughly an $800 million market when I started. Today estimates put it around $3 billion. The feeling of being a necessary evil has not changed, and some conditions make it sharper. During COVID, publishers had to build new direct paths to customers while my doors were closed. It took me a year and a half to feel fully functional again. Now tariffs push more publishers to sell direct because they cannot afford to pay the markup friction twice. Distribution has to take a cut. Retail has to take a cut. The math does not always work. So more of the storm bypasses us.

What do you do about this if you run a store, or if you care about the survival of your local?

Keep living on the front list. Be the place where the Next Thing is reliably on the shelf on release day. If you are not that place, your other efforts are bailing water.

Buy like a local. When you back a project or go deep on a title, imagine the real people who will buy it in your community. Those mental preorders keep you honest. They also make you kinder when the hurricane arrives.

Protect the locals’ window. Give regulars a clear chance to get the hot thing. That could be a brief hold period, a preorder list, or a simple message that it arrived. If they pass, let the market do its work. Do not fight the storm. If I feel I've given clear warning of the coming storm, I am not super sympathetic when you're caught unaware.

Say yes with a smile. When the necessary-evil customer walks in, sell them the game, answer their one question, and send them on their way feeling good. Do not scold them for their purchasing history. Some will be back. Some will not. Both outcomes are fine.

Invest in your resonance. If your only value is “we have it right now,” you live and die by allocation and luck. Layer on community, events, trusted curation, and a store that is pleasant to visit. Those things turn a one-time hurricane buyer into an occasional customer, and sometimes into a Jack, Olivia, or Liam. Understand you have a value proposition and people can either engage with it or not. It's probably not going to bend to their whim.

Accept the limits. We do not control the storm. We can only widen our thimble and keep it upright. Some weeks the thimble feels small. Lately it feels smaller as channels multiply and costs climb. Yet the storm is bigger than ever, and there is still plenty of water for the patient and prepared.

That is the retail funnel. It is not glamorous. It is not fair. It works. On a good week the locals get what they were waiting for, the hurricane pays the light bill, and the next stack arrives just in time. On a great week, one of those hurricane buyers sticks around and learns our names. Either way, the job is the same. Keep the Next Thing in stock. Keep faith with your people. Keep the thimble ready.

Thursday, August 7, 2025

Gary Goes Car Shopping

This week, the car I bought for store deliveries during COVID, the one I planned to keep until the wheels fell off, had the wheels fall off. It was parked in San Francisco and got hit hard enough to jump the curb. Just about every door panel, front and rear bumper and even the exhaust system needed repair or replacement. My little Lexus IS, with 100,000 miles on it, was supposed to go another 200,000, maybe even 300,000. But the insurance company totaled it.

I’ve bought more than 25 cars in my life, and honestly, I’m over it. Over the process, the pricing, the pattern of nonsense that happens every time. I think buying an RV, with its archaic process and practices outlawed in the auto world, finally broke me. Thanks Camping World. I’m also trying to live by the motto: Debt is the promise of future work. That includes car debt. So this is the story of how I bought vehicle number 26, or whatever number we’re on.

First, I make sure to shop with someone who will be patient or else I go alone. I don’t bring my wife anymore. The last time I did, she took the side of the closer. “Extended warranty? Sounds great!” She doesn’t care about cars. This time I brought my son, mostly to help spot things that would annoy his mom. I'm really buying this so she can drive him around.

Second, I know what I want. In this case, I wanted a cockroach. Something unkillable. A jellybean that would run for hundreds of thousands of miles. I wanted Certified Pre-Owned, so it would be vetted and come with a decent warranty. I was willing to pay more for that. Basically, a new used car.

She needed ground clearance because of our driveway. The Lexus had its front and rear bumpers nearly torn off trying to get in and out. The back bumper cover is still sitting on the side of the house; it would have been destroyed in the accident. She also needed space for plants and instruments. The day I saw dirt ground into the white seats of the Lexus, I knew my vehicle choice had been ... sub optimal. I didn’t want to think about this vehicle again. I already have a Ford and an RV to worry about. I just needed something beyond reliable, with a warranty, and no drama.

So really, it came down to the cheapest certified cockroach between Toyota and Honda. Lexus was too expensive. We only had one because I got a stripped-down, off-lease model during the COVID shutdown for a steal.

I test drove the cheapest certified Honda CR-V first. I had read it was a better driving experience than the Toyota RAV4. I was planning to buy the Toyota, but I needed to rule out the Honda. Due diligence. The CR-V was as nice as the Lexus it was replacing, according to my son, but it had a turbo engine, direct injection, and a CVT transmission. I follow cars closely and that's three strikes in my book. Three knocks on long-term reliability. But Honda does those three things better than anyone else. There's apparently a big difference between say, a Nissan CVT and a Honda CVT.

The next day I went to Toyota, ready to buy the RAV4. I was hoping to feel that it was simply better, even though people said it was less refined. I was hoping for some confirmation bias. I’ve owned two Toyota products already, and my next vehicle will probably be a Toyota. I wanted to like it. I really did. I was willing to overlook flaws.

Boy was I wrong.

The seats were uncomfortable, a common Toyota issue. The cabin felt cramped and gave me the beginnings of a panic attack. The Lexus does that to me too; just a little too tight. The engine sounded harsh and buzzy. The whole thing felt more like a Corolla than a Camry. And it cost more than the Honda. "How do you like it sir?" "Ha! I don't like it at all!"

I started doing the math. I could put some repair money into that Honda over time and still come out ahead. And every owner I talked to with a Honda said the same thing. It lasts. Two hundred to three hundred thousand miles, easy.

So I went back to Honda and put down a deposit on the CR-V. The three-strike cockroach won. It's a boring little silver jelly bean from 2021 with a slow head unit and cloth seats. Perfect. If we she can just keep it on the road for the foreseeable future, that would be great.