Saturday, February 17, 2018

The Creaky Game Trade (Tradecraft)

Before I bought the Black Diamond Games van, I bought a Toyota Land Cruiser. This was going to be the store's adventure vehicle, with a cool wrap and our name in big letters to attract street traffic to make up for our anemic sign. The Land Cruiser's claim to fame was Christian Kane once ran it out of gas on the way to a music audition (the gauge was broken). The old Cruiser looked amazing on the outside, a weathered, ancient vehicle that had surely seen quite a few exciting trips.

When I started the test drive, well, that was another story. The beast took a while to get started, then it trundled down the street like an ancient tractor. If you looked behind you, you could see the road passing by through the cargo floor. As I picked up speed, the thing began to cough and sputter and eventually it simply stopped working, leaving me stranded in an LA intersection, the owner next to me swearing it was a minor setback. It turned out the battery was attached with a bungee cord that came undone, but he never could get it started again and I shook his hand and walked away, leaving my Ebay deposit with him. I considered myself lucky. The game trade is like that Toyota Land Cruiser.

The common saying for game trade retailers is two steps forward, one step back. There are no easy profits, no sure things, and more than likely, when something gets hot, the publisher or distributor or some idiot retailer will open the pot and let off the steam before it becomes a big deal. Large retailers know the game trade eats its young, so they work hard to capitalize on good games quickly, bringing in large quantities, demoing games extensively, mastering organized play, so when the publisher-distributor-retailer inevitably screws up the product, they will have already capitalized on its popularity. Two steps forward, one step back. The game trade can't get up to speed without feeling like an ancient tractor about to blow a gasket. It's like a piece of crap Toyota Land Cruiser that continues to exist entirely because of nostalgia and now that there's big money involved, that vehicle is no longer acceptable.

Times are changing and people are freaking out. Asmodee has dominated the final frontier of the game trade, the board game market. It's natural in any mature market for a leader to dominate roughly half the sales in its category. Then as the market gets even more mature, you see fragmentation, but we don't see that yet, we only see a quick domination of the hobby board game market by Asmodee through acquisitions.

It was such low hanging fruit, it's mostly a surprise it didn't happen sooner. Hasbro could have done it if they felt like it. Asmodee does not wish to ride in the piece of crap Toyota Land Cruiser, where you can see the road fly by through the holes in the floor. They want a new vehicle, bereft of clatter and empty promises of goodwill. They need something that can handle high performance. And that's what they get with exclusive distribution.

Exclusive distribution combined with brand value protection is a terrible deal if you're a crappy retailer. If you can't manage your finances, keep tabs on your inventory or the only tool in your toolbox is a product discount, you now have serious problems. If you rely on the holes in the floor of the vehicle that is the game trade to jettison weight to keep your vehicle moving, you are going to have a harder time moving forward. It's not just Asmodee though, Wizards of the Coast is being run more like a corporation than a typical game company, as is Games Workshop. These companies could care less if your wheels fall off because of their increased product release velocity. You are being forced into a vehicle where you must make smarter decisions on the front end because you're now restricted on the back end. Do you have the guts to take your crappy Land Cruiser on the highway?

Wednesday, February 14, 2018

Working for Yourself (Tradecraft)

My assistant manager asked me what brought me happiness and my response was never work for anyone else. It was kind of a smart ass answer, but I thought about it all day and what it meant to me. If you're young, and many game store owners are young, without a lot of experience in the workforce, you may not have much experience working for other people long term.

When you work for other people in a professional setting, as opposed to a limited service job, there's an expectation of progression. They ask dumb questions like "Where do you see yourself in five years?" It's a dumb question because most people see themselves somewhere else. They want to see if you have commitment, even though it's not yet deserved. 

You might start as a junior bottle washer with the expectation that over time, you might become senior bottle washer, head of the bottle washer department, or maybe even director of sanitary glassware. A boy can dream, right? A solid progression encourages you to invest yourself in that business and gives you a gold ring to strive for. It also gives them permission to manage your performance on your way up the glassware sanitation ladder, a process that irritates the hell out of an independent spirit. "You might have cleaned glassware with a brush at your last job, but here at Brushless Bottle Washing Incorporated, you shall use the steam invigorator or nothing at all. Our way or the highway at BBWI, junior bottle washer."

So that independent spirit swears off clean glassware and starts their own business. This is where it gets a bit complicated. Working without a boss requires a level of self motivation and goal setting few people possess. It's not that they're lazy, it's just they've never been educated on how to be an independent person. It's not taught in school, and in fact, if you're good at school, there's a chance you've been culturally assimilated into being a good employee.

Most people not suited for independent work will have their business crater in short order. It will never be about their not being managed or the stress of not knowing what to do, there will be other reasons, like a hostile market, or bad timing, or wanting to spend more time with their family. This is a known problem and not surprising. These people constantly blame others because they lack the flexibility to weave and dodge as they progress through the marketplace. They're standing still like a target.

What surprised me in small business is there's nobody there to fire you, when often that would be best. There's nobody there to lay you off when the company has ran out of money. There is nobody there to send you home because you just told another customer to get stuffed. There's nobody there to tell you you've washed enough bottles, so how about you take the director position. There is such thing in small business as having worked long enough, yet there's no place to go. If you believe in the concept of Return on Investment, it's likely you're just now reaping the reward of your business just as you're the most burnt out you've ever been. Yet you soldier on because it would be economically foolish to go back to washing someone else's bottles, right?

Those who have been married a long time will know that the only thing required to keep a marriage together is two people who don't want it to end. You can fight, you can withstand abuse, you can be terrible partners who enable bad behavior, but unless someone throws in the towel, you're still married. You'll talk to friends getting a divorce and think, wow, we've gone through way worse than that and we're still together. As many times as I've referred to my small business as a mistress, it more resembles a long term marriage with a lot of ups and downs, times when it should have ended and no clear exit strategy. 

Personally, I worked the counter for nine years, never getting a lunch, rarely taking a day off, before I finally said I need out of this relationship. Like anyone desperate in a relationship, fleeing was my first thought, but my manager stepped in and essentially fired me. I was promoted to director of sanitary glassware and was sent to the office to be more businessy. It certainly saved the business and it never occurred to me that was an option. Even after nine years, I needed someone, anyone to step in and tell me what to do. I had the key to my chains in my pocket, but nobody ever told me how to use it.

I want to say my issues with self management ended there, but it's a daily struggle to figure out what I should be doing, what goals to set, and there's always the question of whether I've had enough. I take a lot of time off nowadays and I understand the problems faced by retirees. The goal of a business is to be capable of running without the owner. However, the owner needs a place to go, a purpose after the business. Finding that purpose when you've spent years struggling to survive isn't easy and it would be far easier to start a new business, to put my head down and struggling not to fail, rather than learning to surf or mastering Italian lawn bowling. There are hopefully new opportunities on the horizon. One thing for sure though, I would never work for someone else.

Just a reminder to order my book, if you like what I write. Thanks!

Tuesday, February 13, 2018

Friendly Local Game Store

Almost a year ago to the day, I announced my intention to write a book. It was naive in its early concept, but we eventually got it done. Today it went live for pre-order. You can order it now for delivery in March (or pick up at the GAMA Trade Show). Electronic only versions, Amazon editions and game trade options will arrive later in May, but if you want a physical copy, it's hard to beat the pre-order deal with free digital content.

When I wrote that post a year ago, I expected the book to be a collection of blog posts interspersed with personal narrative. It turned out to be a whole lot more. Blog posts make terrible book chapters, it turned out. I didn't know exactly how terrible they were until I saw them in a Word document, puny and insubstantial. A blog post is supposed to be pithy and to the point, with a lot of assumed knowledge and at best a nugget of a concept. When I tried to turn those posts into chapters, it wasn't just about expanding a post, it was a full re-write. 

Chapters need themes with supporting concepts hanging off them. They can't assume the reader is "in the know." I can't put "Tradecraft" at the beginning of a chapter and pretend everyone knows what I'm talking about. Having an editor who wasn't a retailer also meant I couldn't get away with anything. All my concepts needed to be explained and the math crunched. That turned out to be a very good thing. The book shines because of my editor and is polished to a brilliant sheen due to my industry outsider, proof readers, who took issue with my business slang and occasional mean spirited discourse.

The obvious question if you read this blog is should I buy the book? I would say the book is inspired by the blog, but it's not a collection of old stuff or even re-worked stuff. It's about 80% new content and the other 20% has been worked over to be much better than the original content. So yes, please buy the book. You won't feel cheated after being a loyal blog reader.

The book has two concepts in one. The first concept is how to build a profitable game store. There are many ways to build a game store and even several that work. Writing this book was an exercise in best practises. It's one thing for me to say what I would do in a blog, but it's quite another to distill a concept down to what I truly believe will work for my readers, folks who may have hundreds of thousands of dollars on the line. 

The premise for this build is getting the owner to a middle class income in five years. That income is roughly $55K a year, a number that might seem overly ambitious to an existing store owner, but is the median household income in this country. So some people will think I'm insane to shoot for such a high income, while professionals will laugh that I'm essentially aiming for the middle. Who invests six figures and five years of their life to aim for ... the middle??? That sums up the game trade pretty well. Working our darnedest to achieve the middle. 

The second concept of the book is a personal narrative. I wrote a book that I wanted to read, which is not a book about building a game store. As an established retailer, retailing books bore me. I read them anyway, but oh man are they tedious. So the second part of this book, interspersed with the how-to,  is my story. It's a narrative of all my mistakes and victories that roughly corresponds with the how-to chapters. Every store owner has singular reasons why they succeeded along with unique failures. It was glorious to write a chapter on how I think you should run your business and then tell stories of how I completely screwed up that area when I tried to do it. If you find my how-to stuff preachy, feel free to skip it for the much more fun narrative. 

The narrative also goes over what was happening in my life during the 14 years of owning a store. There were major illnesses that almost ended my marriage, a new child was born, and I almost lost my house, but turned that defeat into my greatest victory. My attitude had to change over this period, as there was too much on the line. I think you'll get to know me in this book, which is a little scary. 

Thanks again for reading this blog. If you look back far enough, you'll see I had no great plans for this thing. You can find my 40K army lists and photos of my Dungeons & Dragons games. You'll find grand pronouncements of how to do something then descriptions of terrible failure that contradict what I said. I've enjoyed writing it and plan to continue. I hope you enjoy the book as much as I enjoyed writing it. Please let me know what you think of it.

Saturday, February 10, 2018

Rational Consumer

One of my main hobbies is what's called overlanding. It's a kind of off road, road trip through the most remote areas of wilderness with camping along the way. It's really just a fancy word for car camping used in places like Australia and Africa. My motivation for overlanding is so I can spend more quality time with my son in amazing places. I say that's my motivation, but what I really do is spend my weekends with friends, building my Jeep for these trips. Other overlanders I know spend their weekends at work to pay for their overlanding gear.

Few of us act in a way consistent with our stated motivations, spending time with loved ones or getting out into nature (In truth, I don't even like camping). In fact, some people spend all their time in this hobby building their vehicle, and never actually go anywhere. You can bargain shop for semi complete vehicles as people realize their stated motivations were never going to match their actions. We all have stated motivations for what we do and we all lie to ourselves to varying degrees, when in fact the answer to what to do this weekend if we were consistent, is to just go on a drive with those you love with what you have.

As a store owner, I see this conflicted motivation every day. I have to assume not only do my customers have mixed stated reasons for what they buy, but they have underlying motivations they don't really understand themselves, or like me, stated motivations that don't line up with their actions. Games Workshop published a pie chart a few years ago where they compiled what their customers really do with their models. A good percentage obviously play the games, but shockingly large percentages either just collect or just buy models to paint. Roughly half their customer base never plays at all, yet if you asked me how many customers fit into that category, I might tell you it's a percent or two. What I'm told and what actually happens is very different.

Yesterday I had a customer come in who wanted to get back into gaming after having a heart attack. This was a person who was crystal clear on his motivation. This game brought him joy. The expense of the hobby had held him back for years, was a source of conflict in his relationships, and was a reason for leaving, but now he knew it was where he would find his bliss. Getting him back into this hobby was a solemn affair, at least for me. It was as if his life depended on it, which perhaps it did. I didn't really feel up to the job but I listened and paid attention. Rarely do I have my role so clearly spelled out: I sell happiness. Sure, it's just boxes of plastic, but the potential for joy, of collecting, of painting, of playing a game with friends and connecting with others, all starts right here with me and my store.

Hardcore online shoppers think game store owners like me guilt people into shopping with them. I've been marketing my store for fourteen years and I can tell you guilt is not a selling point. It does not tap into anyone's motivation for why they play their games or shop with me. Guilt doesn't work. Yet, there are a large percentage of my customers (at one point I figured it was 20%), who support us because of the intangibles we provide. I know this because I started asking. That support may appear to come from guilt, but it's primarily a belief in supporting a local community (play space being a requirement to get this support). I think for an online buyer, these two concepts, guilt and community support, are likely indistinguishable. They see my Unique Value Proposition as psychological warfare.

After fourteen years selling things to people, I honestly don't know why people buy, and anyone who claims to know is a fool or a genius. There's a great book on this called Why We Buy by Paco Underhill. The book claims to explore the "science" of shopping, but it's really just an observational study on the insanity of the American consumer. We know which direction they turn when the enter a store, and how they need a transition between the outside and inside, and how when they brush against another person it creates a flight response. It's a book derived from countless hours of watching CCTV cameras. Designing a store like mine is really about maintaining circulation patterns and not putting impediments in place of the human animal in its primitive gathering rituals. I can't really claim to know why people actually shop. Paco doesn't know either. The online shopper who thinks they understand what I do and why my customers foolishly shop with me, knows least of all.

I'm thankful for my customers. Thankfulness is a wise position to take when you understand you only have a vague understanding of the way the universe functions. There are times I wish everyone who wasn't a rational actor, everyone who didn't shop with me because of my Unique Value Proposition, would just go away. That's right, if you're not clear on what I'm offering you, please take one big step back. But the truth is I have no idea if there would be anyone left in front of me. I can't even tell a model collector from an actual gamer, so what makes me think I know why people shop with me? So I'll keep my mouth shut and remain thankful. Thank you everyone.

Wednesday, February 7, 2018

Eat What You Kill (tradecraft)

We screw up everything.

That's the premise for the changes in the game trade, specifically brand value protection. I'm referring to retailer bad actors who are the problem with product dumping and brand devaluation.

This week we have an offer on the table from Fantasy Flight Games. Simply put, buy ten of their $90 Star Wars Legion board game and you can have a free demo copy. You also get a listing on their website and some minor perks that honestly have Games Workshop's fingerprints all over them. This whole campaign is a page from the Games Workshop play book, which is terrible when the product sucks but can be amazing when it's excellent. This product looks pretty excellent, for the right store.

There is hemming and hawing about this deal, mostly in how ten copies is well beyond the capabilities of small stores to sell. This brings us back to brand value protection. In the old days, stores would have quietly bought the ten copies, sold the two they should have ordered, and exhaust ported the other eight at cost online, incentivized by that free demo game.

My store would have ordered ten, hoping to sell ten, but would instead see the bottom fall out of the market with hundreds of online copies sold at cost. I would cry in the corner about how Games Workshop played on my hopes and hoodwinked me once again, but the problem lay with us, the retailers.  However, now, the exhaust port is closed. You can't just dump those copies online.  The result is real discussion about fairness and what it means to participate in such a program. I think that's the unstated core of this argument. You now eat what you kill.

Let's do some math. My premise is a demo copy is only good to you if you plan to sell ten copies. If it's a free demo copy, then it's great for everybody, right? But lets pretend you had to pay for it, such as offering it as an add on purchase. A $90 demo board game would be roughly $50 cost that you're now declaring as a marketing expense (where profit goes to die). We need to make up that $50 cost with our sales. How do we do that?

Let's assume you're making 5% net profit on each $90 game, which assumes you're profitable, a rare thing in the game trade, that you can calculate your profitability (even more rare), and assumes you're at the low end a reasonable range of retail profitability (a conservative estimate). Your net profit at 5% is $4.50 per $90 Star Wars Legion sold. So how many copies of that $90 Star Wars Legion would you need to sell to make up for that $50 demo game cost? Eleven is the answer we're looking for. If you can't envision selling ten copies of a board game, you don't need a demo copy and you certainly shouldn't expect someone else to provide one for free. Again, now that the exhaust port is shut, we're being asked to think a little deeper about this stuff.

What's fair is everyone has the opportunity to participate. I have three pre orders right now for this game and I'll be ordering the offer at ten copies, assuming I don't have a huge influx between now and then. I have been given the opportunity to play. I know some store owners ordering 40 and getting even more benefit. That's not me. That's fine. They're taking the risk at 40 and I'm not.

I can decide if this is right for my store. My store is not a miniatures centric store and this is really Star Wars 40K, the miniatures game, not some casual X-Wing thing played by the average muggle. Every opportunity doesn't need to apply to every store, either the product itself or the offer on the table.

Fair is being offered the opportunity, unlike say not being allowed to run Magic pre-releases because there's a backroom deal. You have the opportunity, so it's fair. By the way, fair is overrated. Fair doesn't reward those who hustle to find new opportunities, who corner new markets through initiative. My store has several advantages others don't because I made opportunities where there weren't any, and I made them when I was small. Is that fair? Is it fair the lion eats the gazelle? Fair's got nothing to do with it. But since it was brought up in this particular instance, this deal is definitely fair.

Thursday, January 25, 2018

It's Not That Complicated

I've got nine employees and every one has been vetted through the federal E-verify system. This is so I don't break federal law by hiring someone unable to legally work for me. It's free and it's not very complicated really. However, there a 1.75 million undocumented workers here in California. How is this possible if I'm required by federal law to only hire people legally able to work?

It's simple, really. Businesses are allowed to get away with this. When government attempts to attack the demand side of labor, these businesses, the businesses complain loudly and government backs off. They used to complain loudly when California was run by Republicans, but Democrats tend not to crack down on such things, so instead they complain loudly in Republican controlled states like Texas.

This happens obviously, because hiring undocumented workers is incredibly lucrative with no significant penalties if you're caught. There is really no red or blue position on this, it's all green. Cash dollars. If the government was serious about immigration reform, it would prosecute businesses that hire undocumented worker. Kill the demand side of this equation.

Because we won't address demand, businesses like mine comply with the law, while big businesses enrich themselves on cheap, illicit labor. We've given these 1.75 million workers a wink and a nudge for pretty much forever, as the southern border has been nothing but a literal line in the sand for hundreds of years. Serious border enforcement is a historically new thing. This is probably difficult for non border state residents to understand.

The border has almost always been porous and border states benefit greatly from this. We have actively encouraged these people to come, to fill 1.75 million jobs. To go after them and their families is to cause great human misery and suffering in denial of how we've not only used them in the past, but how we actively use them right now.  It's a tremendous act of cowardice.

I wrote this because I'm a business owner in California and I want it clear, this is not a complicated issue. This is an issue of greed and turning away from responsibility. We want to have our cake (cheap labor, cheap food, cheap construction, cheap manufactured goods), while also eating it too (whitewashing society and denying these people are part of our communities). It's just pure avarice and cowardice from my perspective. It's not that complicated.

Wednesday, January 24, 2018

Vacations and Delegation (Tradecraft)

80% of success is not showing up.  At least when it comes to learning to delegate to your staff.

I used to come in Mondays, after a weekend off, and spend a couple hours organizing shelves and cleaning messes. This is because I failed to communicate what I wanted from staff and failed to train them to operate without me. What happens in these situations is you think it would just be easier to do it yourself. Even worse, you think this is a virtue instead of a weakness. It's the sign of a good worker but a bad manager, and what's funny is I can see it not only in my staff, but in other businesses. "Ah, you must be the manager." I say to the proud person whose running a screwed up business because they clearly can't delegate to their subordinates. It's not a compliment.

Growing a business doesn't have to mean disengagement from that business, but it does mean leveraging the work of others to effectively do more than you could do yourself. Where small business owners have problems is when they insist that nobody else can do as good a job as them. They're probably right, but they fail to have the vision to realize how much more could be done spread across a staff of workers. They fail to acknowledge the leash the store has around their neck, as they run their business in a very narrow comfort zone.

We have a big industry trade show coming up in March, and there will be stores that simply close their doors during this week, which I find astounding. The owners have no trustworthy go-to for such eventualities. Nobody can do as good a job as them. Looking at the big picture, it also mean that business doesn't hold value without that owner present. Their "buy a job" will result in a liquidation sale when they decide to move on, and like the screwed up business in my example, they will proudly declare there was no other way.

Longer vacations take the weekend test of delegation a step further. Most small businesses don't get vacations, but even a week away, as with the GAMA Trade Show, can be a valuable test of policies and procedures. Assuming staff, even that one person, is trained, treat the store like a customer when you get back from your trip.

Before going inside, view the outside of your business with fresh eyes. Is there trash in the parking lot? Are there expired or tattered posters in the window? What do you see when you look in the windows? Are there "no" signs telling people what they can't do? We have an unfortunate clearance section in the front corner of the store rather than the back, meaning our garbage product is on display (I notice this more than anybody else). When you go inside and you're in that first ten feet of "decompression zone," do staff acknowledge your presence? What do you immediately see to your right? Is it family friendly games or are you greeted by war and murder hobos? Would it scare off your grandmother? Use your break to view your store with new eyes.

Before you start organizing shelves and filling in the policy and procedural holes left with your absence, grab a notepad and document everything wrong with the store, the misshelved items, the scattered invoices, the mail and packages in three different locations. Don't fix any of this yourself. Document and train staff to do all these things and then make them do it.

I was proud it took me three hours to catch up from a 30 day trip, but then discovered throughout the subsequent weeks that invoices were missing, and suppliers unpaid. Distributors use half a dozen methods to include invoices with shipments: In the box, on the box with the invoice showing, on the box with the invoice hidden, in the mail with packing slips in the box, or email invoices to the buyer that staff will never see. This required better staff training, but it also left me irritated with suppliers.

The next test is to take another trip, and maybe this will cost you money to be gone another week, but it's money well spent. After I felt comfortable taking a week off, I pushed even further to taking a month off. This was scary and felt grossly irresponsible, but it was an important test. This took policies and procedures a step further. Most of my distributor invoices are 30 day terms, so I could just about take a month off without having to worry about them.

However, the electricity bill, the credit card bills and other such bills are less than 30 days and unpredictable. We had to create a system so I could pay bills on the road without coming to the store. There were mixed results, as I improperly paid the electric bill and almost had the power turned off. I paid two credit cards on their due date as I was distracted with my vacation. My manager used Google Sheets to share a payment spreadsheet with me while I was on the road. My 14 year old business bank account didn't even have electronic banking, so I would mail checks as I went. It was crude but effective, provided I followed the procedures. It turned out the bottleneck in my 30 day policies and procedures was me.

Taking this another step further, my upcoming trip is 50 days away from the store and I'm being forced to delegate one of my core tasks as buyer. My manager will be trained as Buyer while I'm gone, meaning I just need to pay bills and decide if I want to delegate pre orders. I'm finally getting electronic banking, forced to as I'll be traveling throughout Central America and won't be able to mail payments as needed. Electronic banking is really obvious, but I'm still trying to get it set up with my backwards bank.

Delegating the buyer role is a big step for me, but with questionable broadband on a day to day basis, this trip requires a reliable buyer during our busy summer season. It would be easy to teach this task to my manager, but we're making sure to create a policy and procedure as well, so that knowledge doesn't leave with staff changes. The trip is forcing me to improve my business. Delegating more and more tasks leaves me with more free time to grow the business further, assuming I can leverage that time effectively (sometimes I do, sometimes I don't). Being able to delegate tasks is adding value to the business, as it makes the business less dependent on me. The last thing I want is to have someone say "Ah, you must be the manager."