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.

Wednesday, July 19, 2017

Third Place Theory in the Devalued Marketplace

Third Place Theory is the foundation of the modern hobby game store. Here's a reminder of the characteristics of Third Place from the Wikipedia article cited above:

  • Free or inexpensive
  • Food and drink, while not essential, are important
  • Highly accessible: proximate for many (walking distance)
  • Involve regulars – those who habitually congregate there
  • Welcoming and comfortable
  • Both new friends and old should be found there.

Third Place Theory is the Unique Value Proposition every game store needs. It's not enough to exist and sell stuff well, it requires this special sauce. The problem with Third Place is it functions poorly in a devalued marketplace. When customers buy product online at a steep discount and use the Third Place to access community, the Third Place facility acts as a host in a parasitic relationship. 

With game trade product devalued, the response from the venue is to increasingly monetize Third Place, whether it be nominal fees or how we do it with paying a small fee to play that goes towards store credit, essentially guaranteeing anyone playing is a de facto customer. This is somewhat at odds with Third Place and a bit alien to store owners. 

Nobody wants to charge for game space. I'll just repeat that: Nobody wants to charge for game space. Game stores are not built on the movie theater or hotel model where our commodity is the space and there's a need to sell it in a particular space-time or forever lose its value. There is limited money and opportunity to make third space our main event. The main event is having things customers want, when they want it, with special sauce to increase that demand. We're not in the special sauce business.

Increasingly publishers are moving to protect their brands from predatory pricing. They understand the hobby game store is their marketing arm, and when people stop playing their games in stores, publisher sales fall. Store owners who understand this relationship between brand value and Third Place are actively shying away from devalued brands and actively embracing protected brands. 

Retailers no longer wish to be part of a polyamorous relationship. Let me be clear though that root cause of devalued product is the very system itself, the distribution model that sells to poorly run game stores that use the Internet like an exhaust port. There are only a handful of relevant online discounts, not that they don't bear responsibility as well. As with most dysfunctional relationships, there is blame and failed responsibilities on both sides.

The winners and losers in this selection of publisher value are not always obvious, they're not the usual winners and losers. 30 publishers account for 80% of my sales, and I'm increasingly looking beyond these top 30 for value, which assumes I have an apparatus in place that can push demand. For example, we're seeing stores shy away from Wizards of the Coast, with their deep devaluation and move more towards companies like Cool Mini or Not who are more active in protecting brand value and supporting retailers. 


Saturday, July 15, 2017

Competency Curve (Tradecraft)

It takes a long time for a new team member to gain competency. This often surprises people, especially those who think their teenaged children would be perfect for a game store position. The complexity of the job mostly has to do with the level of service we provide. A game store owner who makes a bunch of exceptions to satisfy customers is likely to create a chaotic environment. A store owner who turns those customer pleasing exceptions into policies and procedures is bending the service curve in their favor. Unfortunately, that also adds to staff complexity.

The complexity of implementing such policies and procedures is why working at my store is wickedly complex. I personally would have a difficult time learning all the tasks we're expecting new staff to master. There is a tremendous amount of detail involved in sales, special orders, receiving, and day to day operations of the store. Change exceptions occur on a daily basis, usually communicated through Facebook. Some of our tasks are now specialized with a division of labor for things like online sales and technical tasks, like iPad content updates.

The game trade doesn't help either, as we have no uniformity amongst suppliers, meaning it takes a holistic understanding of the trade in order to function well within it. Yesterday we had to adjust our cost of goods on Magic boxes, because Wizards of the Coast sells product by the pack, while everyone else sells it by the box. Our point of sale system had Magic boxes with $2.11 cost of goods. As an employee, you inherently understand this and know how to manage this in the POS, how exactly? 

Special orders are looked up on one distributors online system, but might be set to be sourced from another. The employee will need to know which product code to use based on distributor, as one insists on a space between their alphanumeric code, while another might just make them up as they go. Oh and margins on items? Yeah, they're all the same with our primary, our secondary changes on a quarterly basis, and they're always the same with Games Workshop, unless it's a web item, in which case it's not. You all should know that, right?

This is all fine with a single owner-operator, but with nine people on staff, it means there's a competency curve, often based on time in service. Institutional knowledge takes a long time to develop. This means there's always confusion. Always. It also means we're insulated from a lot of big competitors because the game trade is such a shitshow.

It takes about six weeks to train up a new employee. Acquiring competency takes even longer, perhaps six months. I still consider an employee new within the first two years. Mastery? That's probably at the four year mark. Mastery really means they've internalized store culture and behavior, good and bad. If it's hard to train a new person, it's even harder to change behavior in a veteran. There's the Zen saying, "In the beginner's mind, there are many possibilities. In the expert's, there are few."

As an IT professional, my longest job was two years, yet I'm expecting my own employees to stay for far longer than that, and in fact need them to stay far longer to acquire the institutional knowledge necessary to make the business function. Could it be simpler? I think the answer is no. I really do. I think the level of service needed to survive as a brick and mortar store is now at the level of "exceptional." It's a big reason why we're all so obsessed with our trade, why we write blogs and talk incessantly on Facebook within a half dozen groups.  Survival requires tricks, customer delighting exceptions turned procedure, and the goal of perfection, which will always fall short. We'll do it with a staff that isn't paid nearly enough for the years of service required to learn the skills necessary to maintain such quality. 

As I've said many times, achieve mastery working for me, and you can go anywhere, do anything. I thought getting into this trade would simplify my life. The complexity is enormous. I'm extremely lucky to have such dedicated staff making it look easy.


Thursday, July 13, 2017

Presentation Anxiety and GTS 2018 (Tradecraft)

I will be presenting my inventory management seminar again at the GAMA Trade Show, March 12th-16th in Reno. I really don't like talking in front of groups, another reason I've been hitting the YouTube hard with new videos. I'm not even comfortable with myself and a camera, so overcoming that anxiety is important for me and my future endeavors (I sound like a guidance counselor).

Funny story, I took my freshman speech class requirement as a senior in college. I had this absurd idea I could skip graduation requirements if I demonstrated I was well beyond the minimal requirement. Ha! I also turned in my MA thesis close to the deadline, in the last hours of the year, because I ignored the margin size requirements. I learned to follow directions by having it pounded into me.

So true story, I was also taking courses at an executive security school, namely bomb detection and identification. When it came time to do my freshman speech class presentation (as a senior), I chose bomb detection and identification as my topic. I went to the classroom thirty minutes before class and hid fake bombs throughout the room.

Then as I explained each type of explosive device, I went over to the hidden bomb and demonstrated a detonation, using a battery and flash cube element to simulate the explosion. There were motion sensitive bombs, time bombs, pipe bombs, you name it. It was a huge hit. This was 1991, so we were still a decade away from 9/11 and the social more against joking about explosives. I suppose the point of the story is find ways to personalize your presentation to take your focus off your anxiety and onto the topic at hand.

If you're planning to go to GAMA in Reno, now is the time to reserve your room. The block with the cheapest rooms is already full. Yesterday, when I reserved my room, I ended up in the next most expensive block. I've stayed at the Peppermill a couple times, on purpose even, and it's an excellent, smoke free hotel. It is away from Downtown Reno (a good and bad thing), so if you don't get a room at the Peppermill, you will be commuting to the show.




Tuesday, July 11, 2017

Video Roundup (Tradecraft)

I've had more free time than usual this summer, with my family out of town, so I've been playing more with game trade videos. I started with some "around the store" topics, but settled in with business interests. I've had readers wondering if I had switched mediums, but rest assured, I'll keep writing. I'm going on vacation in a week, so the videos will stop for a while and I'll consider if I want to put more effort into them when I get back.

If you watch the videos, I think you'll agree they get better going forward. I learned important techniques, like holding the camera horizontally, taking the case off the phone for better sound, trying to use the best lighting (and locking the iPhone to keep it from hunting) and not letting them see your nostril hairs. I've also become more comfortable in front of the camera. Part of that is doing most of the later videos by myself in an empty house.

My goal was to do this without new equipment, and so far that has worked. Videos also get made without a script, editing and in a single take (lucky you). I figure if I need a script, it probably deserves a blog post. As I've gone forward, "one take" has meant multiple takes, and I've gotten comfortable re-shooting the same topic with my thoughts better organized. Sometimes I re-shoot four or five times.

If an idea comes to me and I can organize it in my head, I think it's worth a video. If it's deeply complex, and many of my video requests are complex, then it's probably a better blog posts. Blog posts take more time, especially complex ones, so you'll see I've shot a bunch of little videos in a little over a month.

Anyway, if you like the videos, please "Like" them on YouTube and Subscribe to the channel. Someone recently discovered my YouTube channel and tweeted I was a great resource on finance, known by less than 100 people. You would get that impression on YouTube. It's not that I need personal validation (which is always nice too), I just need to know if it's a medium worth pursuing.

Here's what you may have missed since my last post about videos, in order except for the first two (two parts). There are more besides these, so please explore the channel if you find them interesting.

Introduction to Commercial Leases, Part Un


Introduction to Commercial Leases, Part Deux


The Successful Hobby Game Store


Game Retailer Success


Avoiding Discount Culture


Monetizing Game Space


Process Improvement


Impressions of Kobold Press D&D 5E Products


So You Want to Start a Game Store: Business Plan


Rejection of Expertise in the Game Trade


So You Want to Start a Game Store: Your Income
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Monday, July 10, 2017

Ordering Board Games (Tradecraft)

I banged out a post on Facebook over the weekend that store owners appreciated, so here's an expanded and cleaned up version of how I order board games. It goes more into my thinking process of why I do what I do.

What distinguishes board game ordering from every other type of ordering is new board games are almost always not that new. What I mean is they've been out in the wild. People have played these games, reported back their thoughts, and there's a general consensus about its quality and value. Many games are derived from Kickstarter, so I also need to determine if the market is big enough, too big, or if there's artificial hype related to this.

Nothing else in the game trade is like this. If I want to order a new Magic set or new RPG book, there are very few people who have touched this product before me.  Being a buyer for board games is a bit like playing catch up, even though the game hasn't technically been released yet. Board games are also tricky for new store owners because reprints are always coming back into the trade, yet distributors never mention this when soliciting for a game. It's easy to get burned ordering a cool looking game, only to find out it was released five years ago and everybody already has it. There is institutional knowledge gained from doing this over the years, skills that both irritate store owners and insulate them from competition.

Below is my process for ordering board games. Note that although I have product knowledge and can sell a lot of gateway games to new customers, I am woefully out of touch personally, with most new releases. I also don't work the sales floor that often, so increasingly I rely on my staff to do the heavy lifting of board game sales.

Also, I'm not saying anyone can do this. Unlike games like Magic, there tends to be one dominant board game store in each market. If you are not it, you are not going to be happy attempting to sell board games. I struggled with board games for four years before the dominant board game store closed when the owner retired. It has taken my many more years to be deserving of that mantle.



We're going to pick on Vikings: Invasions of England as our example today because it was the first item solicited by ACD on Saturday.

Here's how I do it:

1. Solicitations. Every Saturday, ACD Distribution, my primary distributor, sends me an email. This email has everything new for pre order. There's nothing new on their emails throughout the week, so I completely ignore them. This one email is my key to pre ordering. If it gets lost or it's not worked on by me or my sales rep, bad things happen (ask me how I know).

I'll also go through Game Trade Magazine from Alliance and pick out things ACD is not carrying (since Alliance is my secondary). Then my GTS rep will call to tell me about some exclusive they've cornered or a game he thinks isn't getting enough attention. So three distributors all wanting to sell me generally the same stuff, along with emails from a few more. If I'm certain of a hit and supply or release date is in question, I may order the same game from all three.

I pre-order everything I will want in my store. Everything. Let me mention one more time, absolutely everything that comes into my store was on pre order. It means when distributors get allocated product, they first fulfill their pre orders and then divvy up what's left. All the complaining about being allocated comes from people in the divvy pool. My fill rate on allocated product is close to 100%. There's a caveat to that though. Because I only order a 30 day supply, I generally order reasonable amounts. If I had a robust demo program and was ordering a hundred or more copies, I would likely not get my full request. So stores that don't do the right thing, as in not pre ordering, are punished by the system along with alpha stores who do everything right. I'm in the middle for now.






2. Research: Ranking. I hate to say it, but I rely on boardgamegeek for most of my information. So do buyers at distributors. I'll go on boardgamegeek and look at the ranking. Ugh, that game looks terrible, or wow, that designer has a LOT of friends. This means ... something, like the Richard Dreyfuss mashed potatoes scene from Close Encounters.
Like the Vikings game above, a game with many rankings in the "8" territory is a good sign. A small number of rankings is meaningless. A huge number of rankings is a warning sign the market may be saturated, usually reserved for a Kickstarter game that's getting a reprint for distribution, or something similar.  The 8.68 Vikings game above has 46 ranks. That's not bad. You have my attention. Anything below a 7.5 is not a win in this category. It doesn't mean I don't order it, but I'll need more positive information.
Note on Kickstarter rankings: There is the belief that Kickstarter games have a strong confirmation bias when it comes to rankings. This means customers who backed this game, bought into the hype, waited a year, and then finally got their game, tend to rank their games higher than something they just bought off the store shelf. I might knock off half a point for that. 


3. Research: Desirability. I'll look at the desirability stats for this game. How many people have it? How many people want it? This is far more important than a ranking really. That's because rankings on boardgamegeek are a bit elitist and many popular games are not well ranked. Munchkin has a 5.95 on boardgamegeek and 1,200 people still want 15 year old Munchkin. 361 people want Vikings so that's a market I want to tap. 
Note that 5,425 people already own Vikings, a game that hasn't been released it.  Is that a deal breaker? For me, no. This game raised half a million dollars, showing it has depth of interest. If it had 500 backers and $50,000? I might pass. Around $50K is where I begin to pay attention. 

4. Quantifying an Order. Now I decide how many Vikings I want. This game has a very high ranking, which is a plus. It has a very high desirability, which is also a plus. However, it's $80, which is a huge negative. It's not that my customers can't afford it, it's that the higher the price point, the more likely a game is purchased online at a discount. 
If I had some early release offer, it would boost this number, but I don't.  I should also do actual game research at this point, and see if this game is a niche game, like a deep simulation or strategy game, or whether it has broader appeal. I think it's the former. 
I might look at how well Viking themed games sold for me in the past. It's not a popular theme for me, it turns out. If it had a popular license or theme, it would certainly boost numbers. 
If I'm really on the fence, I might post a link to this game and ask my store board gamers their opinion. We're partners in wanting to get them cool games from me, so they'll often chime in. Through a lot of marketing effort, we've built our private group to over 400 board game customers, so it's often a tremendous resource. My board game customers know way more about board games than I do, and I ask them regularly for help. 
So how many do I buy? First, I want to buy a 30 day supply. Why 30 days? That's my terms with my distributor. I want to sell all these Vikings copies before the bill is due. If I had COD terms, my thinking would be different and my opportunities curtailed, as I would need money up front to back my Vikings.
Because this is an $80 game, the number I'll buy is severely curtailed, but because it's ranked so highly, and it's so desirable, it gets bumped up a bit. I believe my local market will move through 5 Vikings in 30 days. Something else to consider is the publisher. Academy Games is not a big publisher, so my likelihood of getting a restock on this game, especially starting as a Kickstarter, is incredibly slim. 
Kickstarter games that get into distribution usually consist of a small print run over the backer numbers, so I will assume that I will get my 5 copies of Vikings and never see it again. If I have strong feelings about the viability of Vikings long term, and I have deep pockets (I don't), it would be wise for me to go long on this game and get perhaps a six month supply. 30 copies of Vikings. With those deep pockets comes the responsibility to better research this game, but with my 30 day supply, my risk and responsibilities are significantly lower. If I miscalculate, my 30 day supply might be 90 days, while the deep play might leave me with unsold copies of Vikings for years.

5. Sure Things. There are 30 publishers where the question is not whether I'll buy a game, but how many copies. Even a low ranking game (or not even listed game) from one of them is worth one copy. 80% of my sales come from these 30 publishers, so I don't mind going a bit deeper or taking a risk on one of their games. There are a ton of "dog" games from Asmodee, but in the aggregate, I make out like a bandit. Taking a chance on an unknown Asmodee game is still pretty safe. When I was new, I would have stuck with these 30 (once I figured out who they were) and avoided independent board game publishers, but I've learned if I want to lead in this category, I have to consider everything. 
"Everything" for me includes distribution solicitations and many games on Kickstarter. Although I'm highly critical of Kickstarter, I've backed 51 projects. I've lost about 10% of my money doing this, so a Kickstarter project for me instantly has a 10% lower margin. It has to be a sure thing. Because Vikings is obtained through distribution, and not Kickstarter, I don't need to factor in that risk (resulting in lower quantities). To really succeed with board games, I believe you need to be out beyond the bubble of the game trade, talking with publishers, going to trade shows, and buying games without someone in the middle curating your experience. You know, like alpha board gamers do. I don't do that, but I will in the future.

6. Social media. I'll pay close attention to my peers in the game trade AND my local board gamers. What is everyone talking about? Retailers have gone quiet over their scoops, because supply is limited and we are all competing for the same limited pool of product. I made a big deal here about Gloomhaven after hearing the inside hype and ended up with a single copy from my large pre order. 
I'll listen to board game publishers and give extra attention to specials. For example, if I'm given a month of exclusive access to sell their game in exchange for ordering a higher quantity, I'll often take publisher's up on that offer. Kickstarter hype is also important for me, especially since I'll back projects for my customers. They will now come to me to ask me to back a project, and I'll usually assume there's stronger demand behind their request.

7. Supply. When the game is finally released, I'll ask about supply from my sales rep and if it's low, I may up my order quantity. This is often my last chance to keep that game in stock. Also, a limited quantity means higher demand, another variable in determining stock quantity. 

8. Missed Opportunities. How would I improve this? I would be at the forefront of board games and attend fan conventions. I would play more board games to understand the trends and desires of my customers. I would have better publisher relationships. I would visit board game forums, pay attention to what's hot. I would most certainly demo games and be looking for games that demo well. We have an expanded demo library but it has a long way to go before it becomes an impressive resource. 
I can't emphasize game demos enough, as it trains staff and supercharges sales, yet it's hard to implement. I would hire board game specific staff at every opportunity (incredibly difficult). I would do more staff training, including paying staff to attend board game nights. I would have a bankroll for going deep when I know I need to go deep. I can often identify opportunities, I just lack cash reserves.
9. Results. We sell a quarter million dollars a year of board games with this method. I believe I'm successful in getting the hits in my limited, somewhat provincial market. I believe I'm paying attention to what customers want. I'm certain I'm missing a lot of opportunities, especially because of cash flow, but definitely because of lack of product knowledge between myself and staff (sales is a whole other topic). To be successful selling board games, customers need to want a game within my economic window of being able to obtain it. That's a narrow window that taps buying, marketing, and sales. The better I am at all three of these skills, the more I sell and the happier my customers.