Friday, September 15, 2017

The Magic (Tradecraft)

Back in my day... we bought booster packs or a starter deck. There was one deck, and you didn't need another one once you had your one. You had started. We had no idea what a booster "box" contained, how many packs or what it cost. Heck, boosters could have came in bags for all we knew. Booster bags.

There was also no World Wide Web, no Ebay and no "net decking" to tell you what to build. There were no well known Magic tournaments either. You played with your friends around a kitchen table, although tables were beginning to show up in game stores too. We lived in caves, subsisting on melted snow, dreaming of a time when we could spend hours a day arguing about nothing on the Internet (in a more pleasing graphic rich format). My lawn was just starting to bloom, so no need to ask folks to get off it. The year was 1994.

I mention this because I sell a ridiculous amount of Magic: The Gathering at my store and I had no idea how I was selling it until I recently ran the numbers. Sure, we sell singles. Even back in my day we would buy some out of the case. I was especially fond of French versions and I recall building a really cool French vampire deck so I could beat up my friends. We had been playing games like Dungeons & Dragons for years, but as young adults, we didn't have the huge blocks of time to devote to that game any longer. Magic filled that gap and kept us together as a group.

 At the store, we've only recently started getting more serious about singles, even selling them online , but I never expected them to be our best seller. My number one selling product in the store is used cards. I'm still trying to wrap my head around that.

Magic boxes are close behind, and if you ignore the few points of online sales of singles, boxes are the actual best seller. Our store strategy has always been to appeal to casual players. But what does it say when singles and box sales outstrip packs and casual products? I'm not sure if it means we've lost our casualness or if casual players are now more inclined to dip into the singles collection or gamble on boxes.

Many, if not most game stores focus on single sales. I reluctantly followed suit, getting nervous every time my staff made a big buy. Then I ran the numbers. A solid turn rate, how many times a year I sell through inventory, is perhaps 4-5 for things like board games and RPGs. I ran the numbers for our singles collection. Then I ran the numbers again. That can't be right. 50. 50 turns a year. That's like taking our entire Magic singles library, and selling them to a dude (or dudette) nearly once a week. In reality there are cards that fly through our collection, selling as soon as they're received, while other cards have never sold at all. Our recent foray into online sales saw those leave us, with a nice sales bump.  But 50 turns... It's why we have backpack dealers and stores buying point of sale machines that handle Magic singles first and everything else second.

If I sound kind of ignorant as a store owner, that's because I've resisted the pull of Magic and especially singles. We are strongly diversified, enough so that Magic could fall off the planet and we would still be here (the game trade might implode though). The mercenary nature of a lot of players has made me reluctant to engage 100% with this subculture, and that's what it is, a full fledged subculture. It's an independent subculture where judges report to the mother ship, not me, and players see Magic product as a commodity, available instantly from the lowest bidder. It's a pretty sandy foundation on which to build a business.

Magic singles are the Bitcoin of the game trade. My landlord will take neither in payment for the rent, yet I'm supposed to believe a surplus of either makes me wealthy. As of a few years ago, I've handed Magic over to my expert employees to manage, following the money rather than my 1994 concept of how things should be. I've been happy with the results as they've doubled our Magic sales from just a few years ago. It's nothing like Magic-centric stores, but it's a wonder to watch.

I've also been happy to see the Magic community come together and support the store. Our expansion project, at least the money to get it started, was done with Magic money. When it was finally built, I approached the community with arms open. This is yours. You built this. As many events as you can maintain, we'll run those events. And they've managed it four nights a week. It has come a long way from those days around the kitchen table with my friends.


Thursday, September 14, 2017

Faith in Humanity

Before owning a store, there was such a thing as having "faith in humanity." Most people were generally good and kind and well meaning. Owning a store showed how easy it it was for supposedly good people to become so-called "bad people," to steal and lie when the opportunity presented itself. The line is perilously thin between honest and dishonest. It's not some colossal battle of wills between an angel and devil on each shoulder. It's just opportunity.

If you haven't owned a store, there's no way I'll convince you this is true. There's no way I'll budge your faith. I accept that. If you do own a store, you know what I'm talking about. The familiar knife in the back. The smiling regular who spends a fortune in your store who you still discover steals on the side. The employee you took into your home who robbed you blind. The guy, now this story is totally true, who you catch walking out of your store with two hundred dollar army boxes under each arm, who blames you because his in-store D&D group is now down a player because you banned him.

When owning a store, there is no longer faith in humanity. Faith is belief and you now have demonstrable proof. The vast majority of people will make the wrong choice if given the opportunity. It's about 90%, 10% who will always steal and 80% when given the opportunity. How you engage with this fact determines how you'll view people going forward and whether you'll be happy or not. You will give up your Faith for a philosophy of trust, but verify. It's easy to become bitter when coming to grips with daily betrayal. If you want to own a store, know this loss of faith, this change in philosophy, will be a psychological price far higher than your initial investment.

Tuesday, September 12, 2017

Is It Beachworthy?

I love my staff and my customers and my hobby, but the beating heart of my business is the processes and procedures that keep it running. The ultimate goal is for me to be able to sit on a beach and have my business run smoothly. The beach is a metaphor, because if you know anything about me, I would go nuts lying on an actual beach.

The beach represents my ability to run a second business, to go on vacation, to retire, to increase my operational prowess without being laden down by poor processes and procedures. It's being able to do all processes of my business at a time of my choosing and have smooth running procedures back home that don't create exceptions in the system.

The value of my business, it's worth to other people, will fundamentally be about its beachworthiness. If the business only operates with me in it, like so many game stores, the value of the business is what you could get in a weekend fire sale. If it requires me to periodically fight fires or uncover a missing invoice because they're hidden in a box, the value of my business is severely diminished. If it's profitable while I'm on the beach, we go from fire sale to a business valuation that looks like a healthy retirement portfolio.

Getting my business beachworthy, unfortunately, requires my business partners, notably distributors and publishers, to have beachworthy processes and procedures. As my business grows, I tend to discard partners who are not beachworthy, or elements of their business that are not compatible with my very basic goals of reclining on a beach. So let's take a look at where my partners tend to fall short:

Invoicing. Is your invoicing, your fundamental process for getting paid, consistent with industry standards or are you behind or ahead of the curve? Both being behind, such as randomly tossing invoices in boxes, or being ahead, such as electronic invoices only, are painful exceptions for your beachworthy partners. 

Ask your finance people if they believe customers are paying on time and I'll bet you they'll say no. So maybe try an experiment. Maybe put your invoices in a flap outside of the first box. If you do that already, perhaps print invoices on pink paper so it stands out. If you're invoices are electronic only, compare your dating to before you became so sophisticated and see if perhaps you should go back. Can a minimum wage game store employee with six weeks of training spot and process your invoices or are they getting lost?

Sales. How does your customer, sitting on the beach, learn about new products to buy from you? Are you still sending paper? Did you get a request to forward that to the beach or is it sitting in a stack of old Uline catalogs? Are you relying on calling beachgoers to speak with them about things? Have you noticed how they avoid your calls? 

Beachworthy businesses have no time for these interruptions. Whatever it is they're doing, they're doing at their own pace, at their own chosen time. Find consistent ways to inform them of new releases. Follow up on the hits that are important for them to know, as a value add, rather than bombarding them with paid marketing messages from companies they have no interest in. 

Pre orders should be funneled to a website where that information is visible, changeable (to a particular date) with clear indications of shipment times. If you don't have this, the beachworthy business will be forced to move to someone who does. The more beachworthy, the more likelihood of switching. Beachworthy businesses have all the money, by the way.

Clear Processes. Beachworthy businesses have staff with assigned tasks. One of the biggest mistakes of a game supplier is expecting crossover. They envision the game store as a one person operation, rather than a bundle of processes and procedures spread across a large staff. If the person running events is asked to place orders, or the order person is asked to perform event related activities, you've crossed the streams of the beachworthy business and it's likely what you're asking won't reliably happen in that business. Know what you're asking and who you need to handle the task. 

Finally, be aware of who is beachworthy and who is not and find ways to add value to their businesses while they are on the beach. A strong partner will remind the beach goer of events, products, and even upcoming seasonal issues. They might be more flexible when the customer is close to the free freight requirements. This might sound like doing their job for them, but it's easy to lose focus when you're not physically present in your stores every day. There is likely a program worth developing for such stores, which are also likely to be your biggest accounts.

This may sound like special favors for big accounts, but all stores can become more beachworthy with better processes and procedures from distributors and publishers. Beachworthy is another word for valuable, after all, and removing your exceptions and idiosyncrasies from their operation directly contributes to that value.


Tuesday, September 5, 2017

Good Luck and Tight Lines

There's not enough capital.

Publishers underprint their products. They would like to print more, but they have limited resources and for the mid level publishers, perhaps too large a portfolio.

Like tired fish swimming up a narrow stream, there can only be so much product in the distribution channel. The channel itself is a bottleneck that restricts available fish. As fish enter the distribution stream, I need to decide on my catch of the day. How deeply do I want salmon? Will my supply of carp last through it's inevitable demand?

I could curse the river, and it's narrowness and how it tends to twist and turn giving advantage to some fish over others. If it were only wider, I curse. And maybe deeper. But the real problem is my own. Despite the shortcomings of the stream, the number of fish far outstrips my meager ability to catch what I need. If I only had another line, perhaps I could satisfy all the demand. My problem is I am also undercapitalized, so I have to pick winners and losers among an embarrassment of riches, and hope for the best.

The customer in my shop care nothing about concepts like capitalization, they just want their fish. Some even want exotic saltwater fish that don't enter the stream, but occasionally I'll be tricky and find a way to get those as well, direct from the deep sea fisherman. The most loyal customers will buy from me, if I have the fish they want, but will declare they're heading out to sea to find a catch of their own, if I can't provide.

I sadly nod and wish them well on their journeys. "Good luck and tight lines," I tell them. I want them to be satisfied with their catch, but I know eventually, if I send them out to sea enough times, they'll get a taste of that salt air and they'll stop buying fish from me. The secret to my trade is turning people into occasional fish buyers faster than I turn them into fishermen.


Sunday, August 20, 2017

Passion and Business (Tradecraft)

If game store owners could run their businesses on passion, good intentions, and love of games alone, we most certainly would. Believe me, many of us have tried. Outspoken game store owners are told they're destroying the hobby when they encourage others to run their store by the numbers, profitably. They're told this by other store owners mostly, future ex store owners to be sure, because passion doesn't cut it alone. 

If you want to see passion alone, read the Designers & Dragons series and you'll see the pattern that passionate game designers with no business sense are doomed to the pages of an obscure series like this one, relegated to wistful conversations about gamer childhoods. The winners, those that survived to make it to today, were able to match their passion with business acumen. It's no different with running a game store. 

The margin of error is too slim for passion alone and as you expand, the complexity of running a store is well beyond the capabilities of the average person's ability to manage their personal finances. New tools and techniques are needed and you will not receive them from your distributor or publishers, who are intent that you buy-buy-buy constantly, with carefully constructed finance systems that insulate them from the enormous churn of failing stores, estimated to be as high as 25% a year. Of course we have no real data nor even a definition of "store," to show how backwards we are.

The desire to reduce this churn is why some of us give talks on business management at trade shows, in hopes to reduce the churn. Although the number of such stores attending trade show seminars is certainly growing, it's probably a bit like preaching to the choir, perhaps the top 10% or so of store owners attending. Those are just people receptive to advice. Most of the advice I give falls on deaf ears, because it doesn't match the idealized nature of a game store in the future owners mind. "But if I don't have a lot of money, I can still do this, right?" Well, no. You can't. Money would be a barrier to entry in most fields, but not this one. They proceed anyway and join the 25%.

So you don't become a professional retailer because you lost your passion, you do it because you want to survive and prosper at a level beyond "buy a job" status. Perhaps you want to own a home one day or get married or have children or just take vacations. In this trade, that often makes you a sell out, a money grubber, or the worst accusation of all in a hobby that runs on geek credibility, an imposter. And you'll likely suffer from imposter syndrome for a good long time, probably until you get crusty and stop caring about the opinions of others. May you acquire crust with great alacrity. 

Saturday, August 12, 2017

Vacation and WPN Article

I've been on vacation, so I haven't written much, with my usual level of rantiness reserved for myself, rather than expressed outward. Vacations are great to stress test the business, watching the rubber hit the road when it comes to policies and procedures. In my case, it became crystal clear what needed doing by the second week ... but with three weeks to go, I've got to put a pin in that and revisit it when I return.

My revelation was about the precarious state of the business after expansion, and the buckling down that I personally need to do to nurse it back to better health. It's like a marathon runner that just ran 26 miles and nearly collapsed at the finish line and I'm asking him if he wouldn't mind running over and picking up a quart of milk across town. Just chill out already. That's directed at me, while my staff and my manager have been fantastic in my absence.

I've agreed to write articles for Wizards of the Coast in their Wizards Play Network series. Other game trade authors like Michael Bahr are also in the mix, and I encourage you to read them. It was infuriating to hear non retailers give retailers advice in previous WOTC articles (just keep your bathrooms clean), so I'm glad they've asked us to write for them.

My first article is When and How To Expand. I have a very good editor over there that cut this sucker down to size while keeping my "voice" intact. I think it turned out well, especially the section on motivation. In the upcoming book, I try to expand on just about every option for obtaining money for these endeavors. This is an area that I don't mind admitting I've mined pretty hard over the years. OPM is my specialty, at least at the micro level.

Tuesday, July 25, 2017

Subculture, Style and Enjoyment of a Thing

Gaming is a subculture, a basket of subcultures really. Using the Dick Hebdige definition of culture from his book Subculture: The Meaning of Style, culture is a "coded exchange of reciprocal messages." Style is how that culture expresses itself, defined as a "signifying practice." The problem we have in gaming culture is a question of authenticity.

When those who believe they are part of the subculture experience someone outside the culture signifying, we have the potential to run into conflict, especially when that person doesn't match the usual encoding for that culture, usually because they are female or a person of color.

Geek culture is overwhelming white male, as we know (which is thankfully changing). As a store owner with female employees, I know they are regularly challenged on their cultural authenticity, their signifying questioned because of their gender. The messaging reciprocity isn't accepted because of unfortunate stereotypes.

The thing to remember about subculture, is it's an adopted culture. There doesn't need to be accusations of cultural appropriation, a term used to describe those who adopt cultural signifiers as style, without belonging to the culture itself. Cultural appropriation has a political component, as in the cultures being appropriated have a history of marginalization. Appropriating a marginalized culture is a kind of theft. However, as much as geek culture is marginalized by conventional society, it hardly rises to the level of say African American culture or the travails of the LGBT community. Geek culture can drop the militancy.

Geek culture does not need special protection or organizations to preserve its roots from conquering cultures. What it does need is a little more understanding of how people engage in subculture. In short, geek culture needs to chill out and allow engagement at a level comfortable for the signifier. You can legitimately like a thing without going deep into the tradition. The Internet allows deep immersion into subcultures, with nearly no limits to its depth.

There needs to be respect for those who dwell at all the depths of the subculture, an openness that allows each of us to learn from each other, rather than ego driven genitalia measurement that often accompanies signifying conversations.

At its root, geek culture is youth culture, and youth culture is about how one defines oneself. Defining oneself is often in opposition to the Other. A sign of maturity, a sign that geek culture can grow up, is dropping the opposition, signifying to root out the Other. The high priests can engage and embrace their brethren, even if the adherent only goes to church on Sunday.