Quest for Fun!

Fall Down Seven Times

2013-06-18T14:26:00.001-07:00

Something that tends to throw people off who don't own their own business is the sheer number of times we business owners bang our heads against the wall attempting to find the right path. Finding the right combination of advertising, for example, requires learning as much about what doesn't work as it does what does. If you're not accustomed to this process, it appears wasteful, foolish and maybe a bit insane. But if the definition of insanity is doing the same thing over and over expecting a different result, the definition of small business is doing different things over and over until you figure out the best path.

Succeeding at small business is learning from mistakes and you can't learn from mistakes unless you make a bunch of them. That requires throwing a lot of stuff against the wall to see what sticks. In my retail business, there's a certain amount of flex in my system for this very activity. I bring in new product to try out, gauge effectiveness and either bring in more or blow them out. We have "vulture" customers, a term I use to describe those who only shop us for our clearance items. They essentially pick the bones clean from my trial and error, serving a useful purpose in my economic ecosystem.

Am I foolish to buy these things? Only if I don't learn from the experiment. There is no harm, no shame in trying new things, finding they don't work, and moving on, at least as long as you do it within your parameters for experimentation. What you learn to do over time is fine tune and speed that process, whether it be new product that doesn't work, a dying product line, or even an employee that isn't working out. Where I would once lament, hand wring and make myself miserable over these difficult decisions, I've now learned to cut my losses as quickly as possible, even clearancing an item or line the day of release, if I've somehow miscalculated.

You have to have the stomach for this in small business. You have to see money as a grease to lubricate your economic engine. Without grease, without trying new things constantly, performance wanes and can seize up as you're caught unaware. Customers have a short attention span, so although they may like today's new releases, they're already thinking about what's next. Will there be an expansion? A second game? Will they return to what they were doing? If you're not always willing to get out in front of that, you're going to have problems. This includes advertising, which has a finite shelf life, as well as employees, who in retail, are there until they're Next Thing comes along or for the younger ones, their real lives begin. To do this small business thing, you must enjoy the process, accept or even revel in your failed experiments, and get back up to do it again every day.

Exit Strategy

2013-06-15T07:40:00.001-07:00

There's a rather horrible saying that your first marriage and your first business should be all about the money with a clear exit strategy. If you're contemplating a game store, most likely you've never heard this before. Most small businesses (and first marriages) start from a place of passion, with a commitment for the long haul. Commitment is good, but an exit strategy allows you to keep things in perspective.

Part of your business plan should be thoughts on how you will gracefully depart from your beloved business. It should include clear rules on how to buy out partners, how you will valuate that buyout and the time frame in which that will occur. For yourself, you should consider what failure looks like, as well as success. Failure is going to be about the money and you need to draw the line or risk losing everything personally. Will you risk your home? Is there a clear line in the sand you wish to draw in regards to debt? Drawing the line in advance prevents the slow creep of debt.

Departing while successful seems kind of a dumb idea. You've worked so hard, taken so much abuse from the naysayers, why would you "give up" now. But it's important to consider this. Not only should you know what failure looks like, but you should define a "win" condition. A "win" condition may mean your business is in a place it could be sold profitably, or you could decide your initial objectives are met and you have new objectives.

Objectives should be rather subjective, I think, as in building a strong gaming community in city of Gamerville, or revitalizing role-playing in the region. Objective goals are rather empty, I'm finding, as in, build a store that does $1,000,000 a year. So what? That's just a number on a piece of paper and doesn't take into account your passion or that of your employees. Building a salary you can live on is a great objective, but that's more a staying strategy, not that there's anything wrong with staying. Defining success can be as difficult as determining when to quit.

An exit strategy has a couple fine points to it, one of which is it allows you to do other great things with your life. It might mean you've won the store battle, and perhaps you want to open a second store. Perhaps you want to move into another area of the game trade like distribution or game design. After nearly a decade doing this, I can see why the trade tires you out with all the small time shenanigans. An exit strategy could leverage your skills to run any number of other small businesses. I constantly (half) joke that my next business will be a Subway franchise.

An exit strategy can also be of benefit if you find yourself sick or injured. If you've ever been to a trade show and seen the average game store owner, let me tell you that carrying an extra 20 pounds, I'm in the featherweight category. If you're going to throw caution to the wind and game like you just don't care on Cheetos and Mountain Dew, well, consider an exit strategy even more so.

Here's the real kicker though, an exit strategy will help make your business better. If you want to leave you business or have any hopes of selling it, or expanding to multiple stores it in the future, you need strong managers and even stronger processes. Building strong and consistent people and processes makes businesses great. We're not talking about once size fits all processes or mindless policies, and we're not taking about four hour work weeks, we're talking about empowering your employees to make the important decisions that make your business profitable and your customers happy (that perfect middle ground).

By always assuming that you will not always be there, you avoid adding your own idiosyncratic processes and procedures into the mix, or worse having no processes and procedures. Even if you're a single store operator, work on building consistent policies and procedures. Even better, write them down. Have a manual where this stuff is written and change it over time. Make it a living document not a dusty book on the shelf. You need to write this yourself and you can't borrow someone elses. Living means it not only changes, but it's unique and it's yours. It may be such a part of your retailer DNA that you never look at this stuff, but you'll find current and future employees will, and they'll likely be more invested in it than you ever thought. Everyone wants to know what's expected of them and I know my single biggest frustration in working for others was not knowing what they wanted, and usually because they didn't know themselves.

So an exit strategy means a bit of your ego is removed from the picture. You're building an institution that can live beyond you, whether it means you're in the ground or next door running your new sandwich shop. You've created something of value, rather than a twisted mess of "what you did" to get by. Nobody wants your crappy game store if only you can run it, but a clearly run business with documented policies and procedures, possibly with an experienced manager in place, has actual value.

Best of all, you've not only increased your ability to sell your business to the next guy or gal, but while you're still enjoying it, you can now take a vacation, have sick days, go to trade shows and plan a retirement with income, not just a one time, fire sale payout. An exit strategy pays off now in both a better run store and an improved quality of life.

The Money Disconnect

2013-06-05T09:00:00.002-07:00

We're often taught to equate our time with our income, to do a cost benefit analysis of whether, say, washing your car is worth an hour of your time compared to a $10 car wash. If you make more than $10, you might assume it doesn't make sense, where if you make less, well perhaps you should look for a bucket. Never mind that washing your car is good exercise, that work is noble and enriching, and that you'll do a better job of it, just do the math on the back of a napkin and you'll see for yourself.

Money, for most people, is a theoretical concept, and it doesn't require you make a lot of it. You put in the time, you get paid, you spend it, mostly on things you don't want to spend it on, with a sliver, if you're lucky, available for things you do. Most of us don't see how the sausage is made.

As a "knowledge worker," we tended to abstract money with exercises like theoretical budgets (that nobody ever followed with no penalties for going over), cost-benefit analysis, and various hocus pocus involving technology savings. In contrast, as a small business owner, and especially a retailer, I can't afford such economic mysticism, or more accurately, I'm brutally punished financially if I engage in it. Long term savings, like word of mouth advertising, is a bonus that pays off so far into the future that you won't even recognize it when you see it.

Being a game retailer, especially, is to see the granularity of money, seeing how all the pieces come together based on the $3.99 transaction, the most common unit of measurement. In the game trade, these tiny units of measurement fuel a small profit margin business that grosses in the hundreds of thousands of dollars. Even a smaller store deals with sales around $200,000+ a year, mostly fueled by those $3.99 transactions, usually with a tiny margin of around 5-8%. Not only does money become granular, it becomes tightly controlled. This changes your brain chemistry, your thought processes.

As an aside, I want to be clear that this approach to money does not necessarily make you especially politically conservative, although many conservatives would like to assume such things. I still believe in public assistance to get people back on their feet, taxes to keep the roads from crumbling and regulation of things like fertilizer plants. I still believe that government can do good. There's nothing inherently conservative about small business ownership, only a growing distaste for government waste, which is an across the aisle trait. Where I'm often at odds with people, therefore, is not politics, its how they visualize and organize themselves around money.

People who don't use $3.99 units of measurement, who still see economics as an abstract, just don't click with me anymore. We need to talk about something else, or risk sounding like the crazy uncle. They might see the big picture, but they can't see the small one. This includes friends and family, local government, and various vendors and customers. Once you've seen how the sausage is made, you can't un-see that. It doesn't make me cynical as much as it makes me eminently, painfully practical (not necessarily thrifty), and probably hard to live with. That's just one way being a store owner will mess with your head.

The Invisible Hand

2013-05-30T08:19:00.004-07:00

When a customer comes in and asks for a bag of nails, I tell them to go to the hardware store. When a hundred customers come in and demand I provide them a bag of nails, despite the hardware store being conveniently located, then it is my duty as a retailer to sell them a bag of nails. I am now in the bag of nails business. This is how I described my role to a game trade friend when he asked about Cards Against Humanity.

Is the game racist? Is Amazon the enemy? Will it hurt my customer relations if I re-sell it? Before I get ahead of myself, lets talk about this game for a moment. It's a Kickstarter derived game that is basically a blatant, over the top, politically incorrect version of Apples to Apples. It's an accidental success from amateur designers and it's the hottest thing in games right now. Whatever rudeness in the game was brought by the player, albeit coaxed by the designer.

It's sold exclusively on Amazon with the patent refusal to offer it to the game trade and angry denunciations of game stores who acquire it, which just about guarantees I'll want some. Deliberately or because they don't know what they're doing, the supply is almost always out, so people come to us. The demand generally far outstrips the supply.

Enter the invisible hand, or at least a somewhat twisted version of Adam Smith's metaphor. At its simplest, the profit motive will win out and a way will be found to supply the demand in the marketplace and everyone will be happy (or the social good will be furthered, according to Smith). In other words, if I'm asked to sell bags of nails and bags of nails are not made available to me through normal channels, I'll go outside normal channels. I'm not going to argue about nails, whether ten penny is better than a duplex head or whether my supplier has my best intentions in mind. I pull up my big boy retailer pants and put in my orders with Amazon.

The internal game trade debate about this practice is heated. However, there is no piercing of the veil here. It's not like people don't know you can find nearly everything on Amazon for a little cheaper. We will buy CaH from Amazon and re-sell it for a bit more in the store to willing customers who often know exactly what we're doing. In fact, we made a point of explaining this whole story to customers for a while, at least until we were sure they didn't give a damn, which was the case for most people. Sometimes they come up and explain how the Amazon price is cheaper. I smile and say, "We'll, you've got a choice then. It's here now." I really do just want them to get their bag of nails and I really wouldn't mind for this thing to just go away.

Many retailers are uncomfortable with this since it breaks the wall between the brick and mortar value proposition that we all work hard to uphold and the online discount model, which de-values the games we love and makes it hard to run a legitimate business. What happens, however, is nobody cares. We've sold over 100 copies of the game. It outsells our top board game in volume, Settlers of Catan. And nobody has pulled the curtain back and said, aha! You're just a miserable little man pretending to be something else! Everyone knows these uncomfortable facts we don't want to discuss. Brick and mortar is not a charade, it's not smoke and mirrors, it's a truly valuable community service and the trolls need to go read some Adam Smith if they don't get this.

Top 10 Games (2013)

2013-05-28T08:43:00.003-07:00

Around this time each year, I like to post our top games. For most people, they have their game and they happily, blissfully, go on playing it. Good for them. For others, we want to know the trends, where things are headed, possibly as a crystal ball to see where we're going. I use this to spin a narrative about my store, justifying decisions and verifying gut instincts.

I think there are two game trades right now. There is the traditional model with established publishers, distributors and retailers and then there is the indie scene, primarily via Kickstarter. The money is certainly in the traditional market, by far. All of Kickstarter derived "sales" to date are a rounding error on a year of the traditional game trade, although to believe there's a firewall between them is to miss the point.

That said, the traditional game trade is coasting. Game stores are doing great, amazing, fabulous, with CCGs, but that's about it. Board games haven't seen another innovation like deck building and even that category has become rather tired and derivative. Our board game sales are driven by Tabletop, which is more about marketing than innovation. The choice of games for that program seems arbitrary, although there is some reason related to their format. RPGs (AKA Pathfinder and "other") haven't seen hits in quite some time and as I've mentioned, those "second wave," mostly 90's RPGs have lost in-store steam, while getting in on the "third wave" indie games is maddeningly difficult. It's possible, we just haven't cracked it.

So it's ho hum in the game trade, while Kickstarter and other direct projects, seem to have all the energy, but without much (financial) spill over everyone was hoping for. There are no crowd funded games on our top list (although one is close, and I'll get to that). So here's the list:

Jumping onto the list and a game to watch is Cardfight Vanguard. I would describe this Japanese CCG as played by Yu-Gi-Oh graduates who want a more nuanced experience. There are multiple deck types to build and each release focuses on a type, rather than being a universal blind purchase for everyone. If you were thinking Yu-Gi-Oh players might graduate to Magic you would be mistaken. It's Cardfight Vanguard.

Hordes joins the list with Warmachine, and together they would be at the number four spot. I would like to make some sort of claim that Warhammer Fantasy players have gone this route, but most of our Hordes players have chosen the game as their second or third army after Warmachine. You know that old Games Workshop strategy of having a primary, secondary and break game? This is the Privateer Press secondary, it seems.

Warhammer Fantasy has dropped off the chart and is generally perceived as a failed edition by our fans. The upconing stock list from GW doesn't require much breadth or depth of this game from a partner store like ours, and I'm thankful for that. Sales have fallen off the chart and interest in events is lacking. Some will blame us for lack of support, but you need cheerful volunteers for an event like this and there's not much cheer. Step up if you want to run it. The latest High Elf release was our worst ever, but maybe you weren't aware it even happened.

Dungeons & Dragons is likewise down in the dumps, with special edition sales keeping it on the radar. We still sell this game, including to new players, but for us the game is no longer "top tier." D&D Next is due next Summer and it will bring the game back for sure, although it's no Pathfinder killer, at least from what I'm reading. I really hope it does well, kind of like how you hope your ex-girlfriend finds happiness, with someone, hopefully, over there somewhere.

What else? Malifaux was on the top ten two years ago and we plan to bring back second edition. Cards Against Humanity, a Kickstarter derived project that uses Amazon as their wholesaler, is number eleven, a strange and uncomfortable blog post in itself. Rio Grande is likely to be replaced by Z-Man as popular board game licenses transition to that company. I thought it would have happened already.

Caveats: Yes, data for only one store and across town it could be completely different. Top games and top companies are not the same. For example, "Fantasy Flight" is only FFG board games, with LCGs and RPGs pulled out in other categories. FFG is probably our number three company. Also, because sales are year-to-date, they ignore seasonal increases, mostly the holiday board game sales bump (which is a skewed mess anyway).

What They'll Tell You

2013-05-21T18:25:00.001-07:00

They'll tell you that you can't have a game store. It can't be done. Retail is dead, so do what you can to sell lots of Cokes and candy bars, if you must, but nobody will actually buy games from you. Because Internet. This was common sentiment on a Reddit thread recently.

They'll tell you you'll be giving up your current livelihood, and no matter how long it takes you, the opportunity costs will be harsh. In my late 30's and 40's, I was told I was giving up my peak earning years. This is true.

Once you have a store, they'll tell you failure is imminent. The competitor has been there for 20 years. The store down the street does Magic better, does 40K better, has a better selection of Yugioh singles. How can you possibly compete?

When your competitors fail, one by one, those same people will have logical reasons for why they fail having nothing to do with the management of that business. Well, that Games Workshop store had difficult demographics, which is why they're gone. It's hard to steer a narrative. When a store is gone, they're gone. Call it a failure if you want, but they're still gone.

They will continue to be surprised when you are stubborn enough not to die. The property manager for my old landlord confided in me that they both thought I would fail well before my lease was up. How surprising I'm still in business! Why ... thank you. Customers would visit my old store in years two and three and express shock at my continued existence. Imagine someone coming into your work every day and expressing surprise you haven't been fired.

When you succeed, they begin to make excuses for why you succeeded. Other store owners will point to your superior demographics. Oh, you might have something to teach us, but your demographic doesn't match ours. Your success is special. You're an outlier, a corner case. Psst, demographics is also a choice.

They will credit the economy, the housing boom, for example, but will not give you credit for surviving the economic crash, like 9/11 or the financial meltdown. They will instead call you counter-cyclical. Well, of course you do well in a bad economy, it's a flight to value, and of course you do well in a recovering economy, people have money to spend again.

They will give all the credit to your staff, as they are the ones truly running the business. I often think of myself as the Venkman of game store owners, so I'm happy to give away that credit. They will see me come in and work my 35 hours a week at the store, but not see my 20 at home. Like the tree with invisible roots.

They will think you are lying about all of it, question your numbers, and poke at your business model to see if it deflates. They will give you bad reviews online for the sake of punishing hubris and they'll send their rejects to you to rattle your cage.

They will start protest stores, because you don't love them as much as they deserve. Then they will fail and blame you.

The truth, the reality of why I'm still in business, is I don't fall down as often as my competitors. It's a game of attrition. I don't discount, so I have resources. I don't cheat my customers, so I have growth. I hire good people and pay them well, honestly, and above board, and they grow the business. We take small chances and try new things and keep the things that work. It's not rocket science, it's just failure avoidance. What's the secret of flying? According to Douglas Adams, you "throw yourself at the ground and miss." That's small business in a nutshell.

I've had enormous boons and resources, including growing up with well educated parents with the best public schools in the country and a free college education (thanks to those parents). I've got well educated friends who understand business who could help me through the process. I had access to easy capital before the financial crisis. There are a lot of reasons I should be thankful and give credit to others, but those reasons aren't what they want to talk about.

The Impossible Employee

2013-05-19T13:08:00.002-07:00

People like to complain about service in this country. It's practically an art form, with Hipster hangouts like Yelp existing so people can out smarm their friends about the shortcomings of small business. We know big business fails, but small business offers so many new variations on the form. Just today I could write a blog post about the annoying Fox News playing on the TV (I don't want around) at my diner or the lecture I received about pumping gas and hose tension at my usual gas station. There's no limit to this.

Service is uneven for a reason. It comes down to compensation and what it takes to get someone to work a retail or service job, and their inevitable leaving.

My store is hiring right now. Honestly, we've been short staffed for many months at this point. We're always hiring. My problem is I can't find qualified employees, despite an 8.1% unemployment rate in our county. When I say qualified, what I'm referring to is a nearly impossible set of circumstances that rules out all but a particular type of potential employee.

So what does it take to be an employee? Employees, first and foremost, need to have reliable transportation, both to work and to the bank afterwards to make deposits. I'm not allowed to say they have to have a car, but buses aren't running after we close.

I don't offer health insurance, so that's pretty much on them. Heck, I don't offer it to myself. Imagine the UK, where universal healthcare is a huge benefit to retail and small business.

Employees have to have a flexible, part time schedule, meaning the job likely won't pay rent on its own. We're pretty good about keeping schedules regular. Businesses with rotating schedules are evil, horrible places with lazy managers. Shame on them.

Employees need to be well spoken, appropriately dressed, and fairly well educated and able to communicate electronically with staff and often customers. I can't require they have smart phones, but since they all do, we have systems in place that leverage that, like our backup Square credit card readers.Yeah, I don't pay for that either.

They will be required to learn new skills, improvise on the job, and generally read my mind. They'll get emails day and night from me that they'll need to figure out how to deal with as part of their job responsibilities and hours. That's not an extraordinary part of the job, those are base requirements, and I do expect them to get compensated for this time.

They'll all need to be at least 18 years of age, so they can work alone at times. Some will leave because they feel overwhelmed by the solo gig, or creeped out by having to make bank deposits at midnight (alright, I'm describing me).

In exchange, they will be paid an hourly rate of around $9-10, even if they're a manager. Managers mostly get more responsibility with a token raise in pay. It's a resume booster for later.

So mostly who we're talking about is college "kids", adults who are subsidized by other adults (who thus subsidize my business). Although I've had some employees for years, and I would love to have them all for years to come, all employees working for me are on there way to something else, something better. Sure, I could hire lifelong retail people, but they wouldn't fit my high requirements or the generally unrealistic demands of my customers. They certainly wouldn't put up with my crap for what I'm paying them, and occasionally we'll get an applicant who didn't understand that.

So I seek out these niche people, who, by the way, must have retail experience already. I prefer to have someone else do their basic training. I want to see a resume, not some cheesy application form. It should impress me with past experience, and to get to the top of the pile, it should have something extraordinary. Eagle Scouts get top pick for men. Being female and knowledgeable about games is somewhat equivalent in rarity and desirability. I don't want to down play the female requirements, in fact their higher level of maturity alone eliminates the myriad of problems I have with young guys.

I can do this, being incredibly picky for essentially a sales clerk position, because being around things you love is a wonderful thing. There are toilets to scrub, annoying children to wrangle, and plenty of work to do, even when it's slow, it's still a way better job than anything I had in college. For the most part, you get to share your passion about what you love. Also, if I'm doing my job right as a manager, I'm handing out challenging projects and tasks that engage employees, rather than expecting a counter monkey. The biggest insult you can give to a retail employee is ignore them, or allow them to do homework or play video games on the clock. That's a truly pointless job, and they'll perform pointlessly in response.

So there are opportunities, if we find the right match. Of course, most people who apply think it's standing behind the counter pontificating. Hey, I had to vacuum a lot of floors to get that pontification position. In the end though, everyone will leave. We'll start over with the new person. We'll have new and different problems, err, I mean training opportunities. Ideally, we get better at expressing what we want up front. I've learned to let someone go as quickly as possible if it's not working out, and because I really despise letting people go, I've become much pickier on hiring.

And while we go through this process, some jackass hipster will write a scathing Yelp review about how a staff member hadn't heard of their favorite game from ten years ago or looked at them funny, or wouldn't date them. And we'll all lament about the death of retail and wonder why game stores still exist. Sell more sodas is what they'll tell us, because it certainly can't be about selling games.

Our Reaper Relationship

2013-05-15T08:10:00.002-07:00

Back in August of last year, Reaper Miniatures raised $3.4 million, the biggest hobby game Kickstarter project at the time. The question was raised whether this direct to consumer appeal would undermine our brick and mortar local market, whether we would dump Reaper out of protest, or whether this would just whet the appetite of alpha customers and grow the market. It turns out to be far more complicated.

We've since dropped our Reaper paints, the full line of Master Series paints that it took months to initially bring in. We've also dropped a bunch of stock, and we're down about 70% from last August. Was it protest? Animosity? The death of a local market? None of that. It was about Reaper being unable to "fill" their product lines. They've ceded the market by not having the resources to continue their normal operations at the same time as their Kickstarter Bones initiative.

Our miniature selection is down 50%, and when our paint selection dropped by a third, we knew it was time to let that go. Reaper left us, we didn't leave them. Some rumors state they're in trouble due to miscalculation of shipping on the Bones project, but the reasons are not my primary concerns. So like a parting couple, I want to set the record straight with my friends, it was their idea.

On the bright side, as the stock dwindled down, we were able to take a closer look at our Reaper strategy, re-evaluating our relationship. Items and sections of our "wall of lead" came into sharper focus. Maybe the relationship wasn't so great after all. We decided to dump various sections as the dregs came into view. It went beyond tactical inventory management and more into strategy. Reaper has gotten a free pass for years, mostly because I'm at heart an 80's era RPG enthusiast, and Reaper is a huge part of that legacy. It would be like growing up with a poster of a super model on your wall and then getting to date her as an adult, only to find she's not as amazing as you thought.

The reality is RPGs, as much as I love them, are a dwindling sideline. D&D is dormant, Pathfinder has peaked for us (although it's still very strong), the second wave 90's games have gone direct, and we have a heck of a time trying to break into the indie scene with our local demographics. If RPGs are a sideline, then paintable miniatures is an even smaller subset of that. Again, there is love there, that supermodel will always be in my heart, but Reaper really doesn't belong in game stores, I would argue, not one that appreciates modern concepts of inventory efficiency, or you know, a strong relationship.

We're not going to drop Reaper, although it's not like I can call someone and get the 155 back ordered miniatures I want from them. What we will do is re-allocate some of that space to other companies, other projects, hopefully some other games. We're going to reboot Malifaux with version 2 of those rules and their plastic reboot. They're also a nice cross-over miniature for RPGs. What we won't do is give Reaper a free pass any longer. It would be easy to cheer a little at their misfortune, but I actually like this company, and if they want to leave me and see other people, I'll respect that. I just don't want to be jerked around.

Fair Taxation

2013-05-06T20:14:00.004-07:00

It's kind of dumb I feel compelled to write a post about the fairness of the Marketplace Fairness Act, but the closer this issue hits my demographic, the more misunderstanding I see. The youths, they are appalled.

Here's the thing: If you buy something online, you are legally obligated to pay sales tax on it. If you don't report it on your state income taxes, you're evading the tax. Few people do this, and honestly, I'm not super orthodox religious about it either, although I'm meticulous when it comes to the store's finances.

For what it's worth, I at least know better. To gnash your teeth about having to pay this tax is to be angry you can no longer break the law with impunity. I see why you might not like it, but to publicly decry it is to be kind of a douche. Pay you're freakin' taxes already or shut up about being a scofflaw.

The fairness part of this tax refers to the fact that my store must collect sales tax, currently at a combined 9% rate, while most online businesses out of state do not. That's essentially a 9% discount before the typical online devaluation even begins. Sure, I can go online and screw over the tax base of other states, but that's not the point. A level playing field means tax is collected across the board, not only where enforcement is effective.

We tend to give new technology a pass on the rules, allowing them to skip taxes, possibly because they claim they're some sort of charity, like a holy prostitute. We do this because this country loves the new, but it's time for some old fashioned fairness.

If you don't like sales tax, find a way to increase revenue to cover the roads, police, schools and other services you benefit from daily. Californians pay some of the highest sales tax in the country, while other taxes, like real estate, are very low. We're in the top ten for sales tax, depending on how you calculate it, and 39th for real-estate. You can see who this hurts the most, those who can least afford it. That's typical California though. However, if it makes you feel better, our effective tax rate is pretty low compared to other developed countries.

Invasive Species

2013-04-30T18:24:00.002-07:00

The ecosystem has recovered nicely. The circle of life is stronger than it has been in years. What? What is it you say? You would like to introduce a new species into the mix, one that's not native to these lands? Oh, and it competes with the creatures in the existing ecosystem? And it's biologically less efficient? Now why would I want to do that?

That's exactly the case with collectible card games. A community can at most support a handful of CCGs before it begins to fragment, break down and spin out of control. Each game store owner knows how many games, exactly, they can support, and each knows precisely what those games are. For us it's Magic, Yugioh, Cardfight Vanguard and Pokemon. Add another game and I'm more than likely sucking the resources, customers and event space, from an existing game or just spinning my wheels. For other store owners, it may be three games or six, and they might be different, but we all know what they are.

It takes a tremendous amount of effort for a store to get a CCG off the ground. It includes volunteers, staff time, inventory resources, dedicated high value play space, and a ton of marketing. A dead collectible card game is the only thing we'll ever throw in the trash.

As for what gets introduced, there are predatory companies with poor margins like Upper Deck where it makes no sense whatsoever to even risk their new games. They are the worst of an invasive species, one that sucks the resources from vibrant species and leaves the environment worse for wear. Dollar for dollar, I'm poorer, plus I know from experience, I will curse their name on a weekly basis.

Game companies want very much for us to take this risk, to introduce the new species, whether it's a new superhero game from Upper Deck, the re-skinned Duel Masters (Kaijudo), the super high tech but no street cred whatsoever Redakai, or the "other" game from Bushiroad, Weiss Schwarz. If customers start asking for it, we'll certainly consider a new CCG, but oh my god is this a dangerous game to play.

Right now we're in a CCG bubble, a highly profitable period where it feels almost like a race to accomplish financial goals. Pay off debt, repair and replace old FFE's (furniture, fixtures and equipment), build out new spaces, and possibly, maybe, put some money aside for the future. Game stores, for the first time I've ever seen (in nearly 9 years) are acting like real businesses. They have capital and staff and ideas and they're doing new and interesting things. Nobody wants to pop that bubble with some dangerous, sharp edged new things.

Selling Out

2013-04-27T08:15:00.002-07:00

Selling out is only a virtual when the supply of your product is limited. Selling out of hand made cupcakes, a product that will be obsolete tomorrow, is a great thing. That last hotel room for the night should be sold, as it won't have any value tomorrow, as is a seat on a departing airplane. Print runs of magazines are in a similar category. Yes, perhaps you should have printed more, but an old magazine is about as popular as yesterdays hotel room. You should do whatever it takes to sell out of these products, short of free.

It's not a virtue to sell out of your everyday product. When demand exceeds supply of a board game, card game release, or role playing book, you have failed to gauge the marketplace. You have left money on the table, you've under performed. You've treated your product like that hotel room from yesterday, like the hot potato of last months magazine. You're not making cupcakes, cupcake.

If this is a strategy, your company is under capitalized and your marketing budget is going to waste, promoting items that may or may not exist as you carefully turn people into potential customers through repeated exposure. They say it takes nine impressions before a prospect becomes a customer. Do you really want your product gone as the counter ticks over to nine? What a tremendous waste. Of course this assumes you're trying to be a profitable company, that you have a marketing budget. The game trade is peculiarly resistant to these arcane concepts.

The rest of the game trade is not amused. You may have trained your customers to snap up your product when it's released, but you've trained everyone else in the supply chain not to value it, not to promote or support it. Why should they when the supply won't exceed demand? Do you think Ferrari ever puts a car on sale? Do you think the salesmen puts effort into actually selling the car? The car sells itself. Eff you if you don't want a Ferrari; go buy an Audi, plebe. Demand for a Ferrari is never lower than the supply. You will likely wait for one. The same is true for your high demand, low volume product. As a retailer, I'll bring it in and often not bother reading the box. I'm busy doing activities with value.

Super low volume releases, like special Magic sets, fall into this category. It's a widget to me when there's zero effort required to sell out upon release. However, certain low volume Kickstarter derived products are in the same boat. If you plan for your product to be in my store for half the year, I'll give it a half assed promotion. Why? Demand will exceed the supply, so why bother? Congratulations on building a Ferrari, I hope you're making a living off it, but I doubt it as it's an ordinary product with a premium supply.

How about events? Selling out of an event is a good thing, it's like the hotel room or the airplane seat, with limited supply. However, if we hit capacity on all of our events, all the time, we have a problem. We're in the midst of a Magic pre-release today. For the last few pre-releases, we've had four events over the weekend. Our midnight pre-release is well attended, the Saturday morning one turns people away as it hits capacity, and the Saturday night and the Sunday morning events are well attended but under capacity. This is a good kind of selling out that can be managed.

However, when staff started tracking weekly events this year, we found we're hitting capacity all the time. Sure, it's nice to be popular, but we're experiencing the Yogi Berra Effect, that it has gotten so crowded, nobody comes here anymore. Our last store had a parking problem, and after we moved, customers would comment that they would drive by, and if the parking lot was full, they would keep going. That's a terrible thing to hear as a business owner.

Capacity for our game center isn't about filling it to 100%. There's a point where it becomes uncomfortable. For me, personally, it's at around 50%, but for most people, I think, there's a perception of too many people at around 70%. As you can see from the chart below, all of our events are well over 70%, and customers tell me they're avoiding it well before we hit capacity. My guess is if we had more space, more people would be willing to attend up to that theoretical limit.

Selling out of event space is a virtue of sorts, as it's nice to be popular, but if my business, any business, can find the capital to fix this sort of problem, they will get to the next growth level. For us, it's about an expensive construction project, but for others, including the ones I criticize, it might be a much bigger leap. It might mean running their business as their day job, a massive capital expenditure in equipment, hiring of new employees that may or may not be sustainable in one of those nasty catch-22 growth curves, or maybe just more risk. However, for many it might just be a change in perspective, accepting that their shortcomings and clever promotions are not virtues.

Embarassment of Riches

2013-04-13T08:05:00.002-07:00

This is one of those rare times of the year when I have a big purchasing budget surplus. I have thousands of dollars that must be spent on inventory. It's my economic engine and it does no good to sit on cash. If I don't keep the money in circulation, it will evaporate. The problem? There's nothing to buy.

In some cases, like several companies at the Gama Trade Show, I threw money at them and they neglected to pick it up, never shipping my order. In the game trade, it's surprising how often you want to buy, but the seller isn't receptive. It's so much work. The stuff. The boxes. The UPS guy has BO. Yadda yadda yadda. I'm waiting for a game company with that name, the honesty would be refreshing. Yadda Yadda Yadda, LLC.

In other cases, what I want is small, esoteric and new and there's no supply for it. That happened yesterday with two fledgling miniature companies and one of our classic games suppliers. "Give me all the stuffs!" Sorry, there's no stuffs. Come back later. The big problem is the time of year.

The game trade is really geared towards a couple big release periods: Summer and Christmas. Stores like mine see big sales during December and we come out of the period with a bankroll that we would like to spend, but there's nothing to spend it on. Since inventory is a zero sum game, we really should spend it, but it makes no sense to buy things that don't work, so we sit on the cash if we're lucky, or spend it elsewhere, if we're not. Instead, we wait for the Summer release schedule to rev up or the more traditional suppliers to get their post holiday manufacturing orders back in.

When I say there's nothing to buy, I'm referring to new things, what we might call front list, as opposed to older, back list product. The game trade is front list driven more than ever. Weeks where there's new stuff are weeks we're profitable. The worst thing you can do is take your newly minted cash and buy a bunch of old stuff, unless you're filling in holes you might have in games that are doing well. A good example of that is how I went through our Warmachine stock and increased depth on top sellers. I did the same with our Tabletop featured board games. The advantage to that tactic is I can always pare it down later if sales slow. It increases sales to a small degree without much risk.

"Nothing to buy" also refers to inventory performance. There are a bazillion products I could buy. We probably have 5% of the available board games, for example. We just can't buy willy nilly though. To give you another example, we have five miniature game systems right now and there's interest in another one, although consensus is murky. The truth of these games is none of them meet my performance metrics, so a sixth game, or even that fifth game, is throwing good money after bad. Performance metrics refers to turn rates, meaning either the sales are not strong enough to support the inventory or the inventory is too vast for what passes for sales.

Role-playing is in the same category, with our department never so skewed between D&D and other as it is now. The second generation, 90's era games have been going direct or disappearing and it's clear we need to pay more attention to the third wave, more indie games, although, by their origin and nature, they've never had a strong footing in game stores. It's adapt or die in this area, with "die" referring to shifting inventory, as RPGs haven't kept game stores in business since the 90's.

Patience is clearly not a virtue I possess. Luckily, I've been doing this long enough to know what's going on, so this month we're doing more maintenance related projects. We're painting the bathrooms, repairing the flooring, fixing the pinball machine, moving around impacted inventory, considering merchandising projects, and generally making the store a better place for when we do have shiny new things to sell. It's what I used to refer to as re-arranging the deck chairs on the Titanic. We also started having management meetings, which, if nothing else, keeps me on track. That, along with obsessing over my car, should tide me over until the new release announcements for the Summer.

Brendan, wondering about the strange orders we've been receiving

Gama Trade Show Follow-up

2013-04-09T07:50:00.001-07:00

Now that the bills are in, orders received (most never arrived) and I've had time to digest information, the question my wife asked yesterday was whether GTS was worth it. I would say yes, but probably for different reasons than most. First, there was nothing that caught my eye this year, as the game trade booms on collectible card games and mines the depths of the deck building game model. Second, I'll mention the surreal and often astonishing disconnect I had with the droning on about the glory of Kickstarter. The dialogue at GTS is about a year behind where it needs to be, but then again, it's essentially a show for game manufacturers and what do they have to lose? Other than reputation and their brick and mortar support model. But on to to the good stuff.

I'm in my ninth year of owning a game store and most of the basic challenges are behind me. My current issues are things like improved management of people and processes, deciding strategic steps on how to expand, and models for how to run a successful store well into the future. I can always fine tune things (the majority of what you get at this show), but my job as an owner is to do the heavy lifting, the strategic thinking, rather than improve already functioning processes, which is a lot of what I do, but kind of a waste of time and not where success lies. I don't usually talk about people, but here are a few that stepped up to share their wisdom publicly, so I suppose they're fair game for public praise.

When it comes to inspiration, I need to see successful people, doing what I do, longer, and with bigger results. What can a store owner accomplish in 15 years? 20 years? 30 years? A good example of that was the industry award winning store The Sentry Box in Calgary and its friendly owner Gordon Johansen. The Sentry Box is a 13,000 square foot wonderland of gaming and has been the set for the independent movie Lloyd the Conqueror as well as the site for a wedding, because some people love that store so much they want to marry (in) it. It's rare that a veteran store owner like Gordon attends a show like GTS, and even rarer when they let you peak under the hood. If you can point and say, I want to be like that, it's the first step towards reaching such a goal.

The Sentry Box does the huge store well, with modern processes and procedures, strong inventory management, well run events, and an eye towards the future that includes embracing the latest technology. Many stores this size are what I would call legacy stores, or shock and awe. They're from a pre-Internet past, have no replicable business model and are basically artifacts created by eccentric owners. That's thankfully not Sentry Box, the first truly large and dynamic store I've seen, and it left me deeply impressed and inspired.

Inspiration came from Dave Wallace, as usual. As I mentioned, he touched on high level esoteric, strategic stuff when he gave a seminar on building a better manager. He was also candid on his business model and how you might step away with a general manager handling much of an owners responsibilities. Dave is also a cautionary tale, which makes his voice even stronger. He can tell you what happens when you do it wrong, because he's done it and recovered, building up to nine stores, semi-retiring, but having to come back and pare it down to three, including firing his own brother. A common response to uncomfortable truths from successful business owners is perhaps they just got lucky. That's not Dave Wallace. You know you're listening to hard won wisdom. He's the business equivalent of a cancer survivor whose now running marathons. You should listen to those people.

Marcus King blew us away with his new Troll and Toad store in Kentucky. It took me seven years to reach the sales goals he achieved in his first. He might claim it was a fluke, but he's been running game stores for decades and I don't believe that. What I believe is if you know what needs to be done, know what mistakes to avoid (probably because you've made so many of them), it's highly likely you'll succeed on your next run much faster (failing much faster is fine too).

For me, it's a reminder that the past doesn't have to dictate the future. Expansion or new ventures don't have to include the same painful learning experiences, there are new and interesting painful learning experiences ahead. That's an enormous motivator for a store owner, because honestly, I won't open another store if it involves the same lessons as the first. That's why when I go to my happy place I rant about opening a sandwich shop rather than another game store.

Besides these game trade giants, it was great talking with various store owners throughout the show. Some knew me by this blog and they thanked me or gave me their impressions on how they might tackle an issue or problem. I should start every post by saying, "this is just one store owner and there are many opinions on how to do stuff." For every insurmountable problem, you can almost guarantee there's a store owner who has found a solution. Hearing those solutions and gaining that inspiration is the main reason I go to GTS.

My trip back on US 95. These signs make me smile. Possibilities are endless.

Wild Swinging

2013-04-03T10:43:00.003-07:00

There's a steep decline in video game sales, the big example being World of Warcraft sloughing off millions of users a year. Then there's the 22% drop in video game sales reported in 2012, an amount equal to about two billion dollars. That's a billion with a "b," a designation hobby games rarely see. The entire hobby game industry is estimated to be about a billion dollars a year in sales. So video games saw a decline equalling twice our entire industry. Money that just evaporated, although to some extent, the game trade has been a prime beneficiary.

As for the millions of WoW customers sloughed off annually, the only relevant data for hobby gamers comes from a twelve year old Wizards of the Coast study, that put D&D players at around a million. So imagine twice that many people, just in the last year, looking for something new to do, something that already ties into their current gaming interests, something with better value for sure. It may even be something they've done before, considering when WoW was launched in 2004, it reportedly devastated much of the RPG community.

So why the wild swings? Why the massive drop off? That's the second half to my previous question of why we're on such a stratospheric trajectory. The fear, if we admit to being afraid, is that hobby gaming will experience similar wild swings, a sloughing off of customers as they engage the Next Big Thing. 20% increases in sales was a fairly common number for successful retailers as we talked at the Game Trade Show this year. ICV2 informal surveys confirm these big increases. Assuming our time will come, that our growth is not organic, what's a game store to do? I'm not putting on the brakes, but my foot is riding the pedal.

(I can't recommend Googling Wild Swinging)

What Lit the Match?

2013-03-24T08:07:00.002-07:00

One of the questions I had going into this year's Gama Trade Show was: Why, exactly, have collectible card games been so successful of late? Answering this question is very important in understanding why our sales, along with the sales of many successful retailers, are currently up in the 20-30% range from previous years.

The answer allows us to plan for the future, including expensive capital projects, like new stores or our own expansion plans. We're in the middle of an expensive Magic singles project that has already cost us thousands of dollars. Knowing the answer allows us to avoid over-extending, since what goes up, generally comes back down. Knowing why it went up can help predict how it will deflate, and knowing that can allow us to have a controlled, graceful landing, rather than a crash. I've seen a CCG crash, and it's not pretty.

Wizards of the Coast claims their beautiful upward slope on their spreadsheets is due to organized play. That was the gospel they were spreading, and I heard it repeated by others. I don't buy that. Organized play has certainly helped it along, fanned the flames, but I don't believe it lit the match. Organized play is critical to what's happening now, but it's a bit like crediting the quality of your gasoline for the performance of your car. Organized play is very good marketing, it's not the product. It also doesn't explain why games like Pokemon, Yugioh and Cardfight Vanguard are doing so very well.

Another retailer I spoke with credited the decline of the MMO. Games like World of Warcraft are in decline. Before you discount such speculation, remember what happened on the upward ascent of MMO's, and how it decimated much of the RPG community. I recall when I first started in 2004 the lamentations of store owners whose customers suddenly abandoned them as they shunned their stores to play WOW at home. Several million people have abandoned WOW in the last couple of years, so it's plausible they're looking for some alternative entertainment. If so, why not return to RPGs rather than CCGs?

The economy is also a common answer, with improvement on the rise for those who are participating. Consumer confidence is up, the mood is improved, and the dark days of just a few years ago appear behind us. Although sales in other areas are uneven, I have noticed a loosening of the purse strings, as they say. Customers remain cautious, but not irrationally frugal, driven more by the media than their own circumstances.

So my question remains unanswered, but I would love to hear your thoughts on the question.

Knowing When You're Done

2013-03-21T13:48:00.003-07:00

The most helpful thing I learned at this year's Gama Trade Show came to me the first day. Dave Wallace gave an esoteric seminar on Building a Better Manager. I say esoteric because it touched on a lot of conceptual, strategic level stuff that's rarely discussed at these shows, which tend to focus almost exclusively on retail tactics. I love the esoteric stuff.

At one point Dave mentioned that when you do a good job working in your business, it opens doors, like branches of a trees, creating cascading opportunity. This opening of doors, a process of constant improvement and opportunity, is never ending. Therefore, since there's no end, you decide when you're done. Just as I mentioned in a previous post how it took a year to realize I had permission to start, Dave is describing the end game, essentially reminding us we have permission to stop.

When I say stop, I'm referring to the activity of working in the business, day to day work at the counter, with customers, placing orders, and the like, which is in stark contrast to working on your business, which is a more strategic activity divorced somewhat from the day to day world of the store. Working on your business is stepping back and creating opportunities, working to branch out vertically or horizontally (which direction is my big question right now).

There are practical factors in stepping back (or up, or vertical or horizontal), such as your loss of salary. This assumes you have a profitable business that can support you or you have some other thing you'll be doing to replace your lost manager income. This is not about giving up and getting a job, it's about creating a hierarchy where you can be productive in a different way. The point though, is if you've been waiting for the time it will end, the time you can step from behind the counter, if you're doing your job right, it will never come. You just have to do it, deciding to work through the practical matter of how. It will never come if you wait.

Finally, if you love working in your store, the message is still good for you. The opportunities created by process improvement and better management propel the business forward almost without limit. If you think you've tapped out your market, you just need a better perspective to realize the opportunities. The take away though is knowing that you've decided each of these paths by following them.

And that was probably five minutes of two hours of great stuff.

Kickstarter and Quality

2013-03-19T15:02:00.001-07:00

I'm at the Gama Trade Show this week and I was mentioning to some industry people a bit of research I performed regarding Kickstarter games, board games in particular. Having supported around 20 projects and having been disappointed by the majority, both in production value and game quality, I wondered if Boardgamegeek would show these projects to be below average.

BGG has a Kickstarter list of board games created by Kenny Ven Osdel with nearly 800 board games on it. So I went through the rankings, creating a chart for the lot of them on the BGG user reported scale of 1-10. What did I find? Nothing really. There was nothing in the curve that suggested that Kickstarter board games were any better or worse than non-Kickstarter board games. I never bothered keeping the data because there was nothing to see.

Although there is much anecdotal evidence that a lot of what's derived from Kickstarter is slap-dash, that's not what I found with the rankings. Neither do these games deserve any accolades from fans because of how they were derived. For me this is important because it says that if these games are no better or worse than other games, and I have a problem selling them, my hypothesis that Kickstarter has saturated the market, making sales at my retail store difficult or impossible, is more likely. It's not a quality problem, it's a disintermediation problem.

The Wheaton Effect

2013-03-08T08:34:00.001-08:00

I was skeptical when the Tabletop program began, the Wil Wheaton program where celebrities play hobby board games. The skepticism was enhanced when they announced a deal with Target, and when major distributor were running out of these games, while mass market had a steady supply. It seemed like the typical example of the hobby trade doing the heavy lifting so the mass market could skim the cream off the top. The show is also kind of hip, which clearly goes against my Groucho Marx mantra of not being a member of any club that would have me. However, when International Tabletop Day was announced for March 30th, along with a nebulous $500 retailer marketing program, I jumped at the chance.

Why? Tabletop mostly works for my hobby game store as a promotional tool. Our results from Tabletop promotion are uneven, but they're indisputably strong. Tabletop is advancing the hobby, highlighting games that have been overlooked, super charging sales for games that have always been hot, and only in a few cases have failed to light that fire. But sales are minor compared to what's really important.

The holy grail of Tabletop is not to increase sales of these games, which according to my data, are up about 50% after the Tabletop treatment. The goal is to bring new customers into the hobby. We need to grow hobby gaming to survive. Grabbing new gamers is an incredibly difficult task. Our games are clever, relatively complex, and maddeningly difficult to introduce to non gamers.

Tabletop helps us with that. As a retailer, we have a Tabletop kiosk using an iPad, rotating through each program. The kiosk is next to the highlighted games, which tends to result in sales. This is something we learned a couple years ago with the Fantasy Flight Games media center, which allows customers to learn about each game through an iPad interface. Like with Fantasy Flight, these games are good, which is key, they've always just needed a bit more help in promoting them.

Without too much analysis, here is my raw data. We sell about 1,000 board games titles and this is a tiny subset of what we've sold, so I don't mind allowing the peak behind the curtain for these 20.

The highlighted number in each row is sales in the month that game debuted on Tabletop (sometimes rounded to the next month). The shaded games are ones that went out of stock for long periods of time, making their data pretty useless. There are other games with significant outages as well, but these were the worst. Note that most of these games performed well before Tabletop. The average "turn" rate for the hobby game trade is around 3 a year, so even a potentially slow seller, like the classic Alhambra, is still doing well enough in this chart.

Hopefully you can join us at the store on March 30th. We'll be providing space and volunteers to let you play these games and experience them firsthand. We'll have prizes and other deals going on as well.

Motivation

2013-02-28T09:07:00.000-08:00

I wrote this on the boardgamegeek forum in a thread about starting a game store. It's edited and expanded a bit here, because I can't leave well enough alone.

Figure out your motivation. Why do you want to own a game store?

If it's because you think you can do it better than everyone else around you, well duh, you're probably right, but is that a good reason? Beware of winning.

I started my store because my favorite game store went down hill after a management change (Gamescape North in San Rafael). It turned out at least one other well known game store owner did the same. Gamescape is thankfully back in good hands, but you can see where a major life decision was made almost as a protest vote.

If it's to play more games, it's likely you'll play fewer, and always off hours, and usually to learn some stupid game of the month you don't care about so you can sell it better. I don't believe you'll ruin your hobby by making it your business, but you'll have less time for it (oh yeah, and beware of losing your hobby).

I recall a horrible, sinking feeling when I realized that I didn't want to play Dungeons & Dragons 4th Edition any longer. Sure, I've played other games, but D&D was my cornerstone, my linch pin, my passion. Would I still want to run a game store without games I love? Now imagine loving that game but being kept from it, just a bit out of reach. That was my first year in business when I took a break from games to focus on work... selling games. If I hadn't succeeded, I might still be that struggling guy without his game.

Speaking of games, how is your game knowledge? How well do you know board games, miniature games, collectible card games, role-playing games and classic games? You don't get to pick, you must know them all well enough to sell them. Diversification is survival, not just success. Active selling is key too. Expect to hand sell a lot of stuff you don't care about to people you don't care about who think you should care a lot.

You will hopefully develop The Stills Effect, where you "love the one you're with." It's something I actively practice, although times like now, when I need a vacation, it can be difficult. You don't need to know every game, but you need to know how to provide entry into the hobby. I will look like a veteran hobbyist when I sell board games to new customers, but after a year or so of shopping with me, it's likely you've gone beyond my knowledge. My job is to empower customers, not be the ever full font of all knowledge. As retailers, we try anyway, and regularly beat ourselves up for our shortcomings of not being all knowing gurus.

If it's to make money, hopefully you've learned by now there's no "there" there. You can make a living at it, but not a very good one. Key here: if you have the skills to succeed at running a game store, you have the skills to succeed doing things making a LOT more money. It's wickedly complex and painfully inefficient and resistant to progress. Open a Subway franchise instead and play more games in your free time. Whatever you're doing now, do it as a consultant or as your core business. It's likely far less risky than a retail store.

Even if you succeed, as my father pointed out when I started, there is a severe opportunity cost. If you're young, you probably lack the skills, but if you're in your 30's and 40's, you'll give up your peak earning years in a profession, provided you had one or intended to have one. You'll likely set yourself back from your peers and possibly take a notch down in your social class, which in this country means lacking access to real estate, good neighborhoods and adequate schooling for your children.

What's your exit strategy? One not so great thing about a game store is it's rarely worth the value of the contents of the store even when it's wildly successful. You've really just bought yourself a job, which might be great if you want something to do in retirement, but it's a dead end if you want to buy a house, put a kid through college or one day retire on your business fortune. Game stores should be this thing you rent that you hand off to the excited next guy. Are you ready to devote your life to retailing? Forget the games, you're a retailer.

As I've mentioned before, the job takes a high level of both passion and dispassion. Loving what you do, what you sell, but knowing that all of your babies will eventually need drowning in the bathwater. Gasp! That's a harsh analogy, perhaps embracing impermanence is a more sanitized version. All games, every game, will eventually hit the clearance bucket or better, leave with a loving owner. Nothing, no thing, is sacred.

Anyway, it's entirely possible that you can do it. It's possible that you succeed at it and you love it. Just be careful what you wish for.

Discounting

2013-02-24T15:02:00.001-08:00

Some who don't understand retail ask us why we don't have a blanket discount.

Our store has three strong suits:

1. A clean, well maintained space with attentive staff.
2. A central, downtown location with a thousand square feet of game space.
3. New product, usually on release day, whether the rent is due or not.

If we were to discount, you would be asked to choose one of these attributes. The other two would be far too expensive to keep and still stay in business.

But wait, there's more.

Part of choosing would be convincing the other two-thirds of our customers that your choice was right. Losing two thirds of our customers would certainly destroy the store faster than a fast food fire. Only then would we be bringing in enough revenue to survive. You might be willing to put up with slovenly stores, stores out on the interstate, or stores that rarely have new releases other than Magic, but what about everyone else?

I think not.

Small Business Freedom

2013-02-12T08:01:00.001-08:00

Unless you came from a family of small business owners, the mindset of owning a small business probably wasn't taught to you. They don't teach it in business classes and it's certainly not taught in our schools. Schools are more interested in making sure we show up to the factory on time and stand in a straight line. Look alive citizen. So when I started my own business, there were three important psychological breakthroughs that thankfully developed on their own, but it took years. These were thought processes that helped me succeed that nobody taught me, and perhaps they can't be taught.

You have permission. You can leave your job. You can start your business. When I first started, I had this anxiety that I wasn't supposed to be doing this, that someone was going to come and get me and bring me back to reality, to work or maybe school. There's a bit of insanity inherent in starting a business, because you just don't know. Whenever a prospective business owner asks me how he should project his sales, I laugh like a maniac for a moment. You just don't know. Project them to cover your costs. What else can you do? Asking that question is the first koan of small business.

Even if you think it's perfectly fine to start a business, there's nobody to tell you when to begin or to say when you've had enough. Worse, there's no safety net or unemployment if you fail. There's no relevant trade organization or support group. You're on the trapeze. There is no net. Nobody is even watching. I worried the IRS would audit me for being implausible.

It took about two years to realize I had permission to be there, I could truly own the business and only then did I have the confidence to move forward. Before that time, I was tentative, asked a lot of people what they thought I should do, and constantly kept my options open. I was always afraid to burn a bridge, and always wanted to keep one foot in my old life. Accepting I had permission opened me up to be creative in what I was doing right now.

The money is mine. If you've never had your own business, the money you've been spending at work is someone else's. It may be a faceless corporation, some shadowy investors, or a mean boss, loved only by his dog. Spending money at work is like playing a game, passing Go, exchanging wood for sheep. It's not your money, so it's never a big deal. The rent went up? Well, what's a Sim to do?

Realizing it was my money got me to resent when money was spent, when someone had their hand in my pocket. It took three years to get to this stage. It required profits really, the realization that if I paid an extra dollar in rent, that was a dollar I couldn't use to pay my mortgage. Bills and debt weren't passive things to be endured, they were active enemies to be conquered, potentially eliminated. Sales were important, but you have less control over income than you have over expenses. Beating down expenses became fun, even when they caused endless headaches. You know my goals in December to reduce the alarm and Internet expenses? Nothing but trouble. But there were savings and eventually the pain will be forgotten.

There is no limit to your success. You own a small hobby store. You probably won't make much money. You certainly can't afford a mortgage or an education for your children. You should probably expect a modest salary. It's a monastic lifestyle without the spiritual benefit for yourself and others. These are all things you're told or tell yourself or worse, your family tells you, so you can accept that you won't be making what you used to, or you won't aspire to the middle class ideal (mortgage, retirement savings, college savings and annual vacations). Perhaps they hope you'll come to your senses and get off that trapeze. It's a lie.

It took about six year to realize I wasn't being held back by society, my trade or the invisible hand of economics. There was nothing holding me back but myself. There was no limit in how much my business could earn, if I could figure it out. I wasn't getting rich, but I was punching through my self limitations. The worst group to listen to turned out to be my peers, the majority of whom, like peers in every trade, had limitations for themselves firmly in place.

At this stage, my personal effort wasn't as important as figuring out how to leverage the energy of others. In other words, if I could plan it properly, other people could continue it after execution. A lot of business owners quit early because they can't give up control, can't delegate, can't accept their job is coming up with the sausage making process and not physically making sausage. The thought of future sausage making exhausts them and they quit. Sure, there are some theoretical limits in all this, but these are limits you realize after you hit them, rather than barriers you place in front of yourself.

Finally, these are hard won realizations, but realizations that many small business owners come to. It explains why many are fiercely independent, do their own thing, spit in the eye of anyone who tells them it can't be done. Doubt and apathy are indulgences they can't afford.

My Job

2013-02-11T08:10:00.001-08:00

I am the owner.

My job is to say no. I say it to handicapped children in need of a donation, to vendors with games who hope to feed their families, to staff with demands, to customers who push constantly for more, better and free for nothing.

My job is to swallow the blame, and spread the praise. Staff shall blame me for any policy or decision that they wish. Push the blame upwards. I will praise them for all successes that can be reasonably attributed to them, pushing credit downwards.

My job is to play bad cop. No, you may not return your opened and played board game two months after you purchased it. The boss said so, sorry, nothing I can do. What a jackass.

My job is to maximize shareholder value, to quote Neal Stephenson in Cryptonomicon. That includes everything from choosing the quality of the toilet paper in the bathroom (I've heard criticism), telling you that you can't play your AD&D game on Friday night in my game center, to deciding how clean, how safe, how everything the store can be ... to maximize shareholder value.

My job is to view the money as my money. It is to resent it just a bit when I must part with it. I don't have to take it personal, but I have to take it seriously.

Alright, I have to take it personal.

The empty husks of dead businesses with loved owners litter our shopping centers. Their past customers can't remember their names, perhaps only remembering the bargains.

The staff wish to please the customer, bend policy to accommodate them, and generally bring them happiness. My job is to place limits on this.

I often feel like the pirate ship captain, one bad decision away from open mutiny and a short life of being dragged behind the ship I command. I know because I've seen it happen.

For all this, I am disliked by some. My job is to be ok with that. If you want to be liked, get a dog.

I do this job every, single, day.

I love my job.

I am the owner.

Are you Gamer Geek Enough?

2013-02-08T10:03:00.002-08:00

White Dwarf had an interesting article a couple years ago about how people engage with their miniatures hobby. Some paint, some model, some play the game, some just like to read the stories. There's overlap, but we all have our way of engaging with our hobby. That method of engagement is determined by interest, time available, and the period we are in life. I mention this because of the ongoing geek challenge of whether someone or another is geek enough, gamer enough. The judgment is continual, harmful, and quite unnecessary.

Like most realms of geekery, gamers constantly engage in the authenticity debate. They wish to weed out posers, put others on pedestals and place themselves somewhere in the hierarchy in their mind. Geekery was hard won for older gamers, unlike nowadays, where learning and engaging requires time and an Internet connection. Regardless, geekery comes with yardsticks for measuring and tests of purity. Perhaps it's the ease of information that makes people grasp so hard at their hard earned geekery. You can't just know it, you must own it. You have to have a take.

If you're focused on one game or type of game, you lament your lack of well rounded geekery. If you flit from one game to another, you wish you could focus in depth on just one thing. I had that exact conversation a few years back with another game store owner. Me, wishing I had more time and interest in more games; him, wishing he could focus on one thing as I did. And me again, wishing I could go farther, deeper. Even right now, I'm not sure I'm worthy to talk about these things.

There's a love for games, so there's a desire to do it all, but there's also the darker, underlying, nebulous worthiness that we're all trying to live up to. As if we're caretakers of a precious treasure that requires a higher calling, a stronger dedication to The Cause. So many games, but only one lifetime? So unfair.

Criticism is one way we see gamers flaunt their stuff. The daily conversations I have about minutiae, such as art in role-playing books, or the purity of dice with rounded corners, is exasperating. Nobody is getting rich on these games. Many of these games are produced by a guy who does it because he loves it. It's time taken from his friends and kids and his lonely dog. You're going to bust his balls over one piece of artwork, or a feat in a book of feats? Or a miniature pose? Really, a pose? I've seen people denounce entire games because of one card.

Add on that the moaning of the height of the prices and it's a bit too much to bear sometimes. Do you think guys go to sporting goods stores and moan about the price of golf clubs or skis? Does this happen? It's part of the uneasiness of the lifestyle justification. I know I'm buying a $60 box of army men or a book on how to make my imaginary wizard more powerful, but I just want you to know I'm on to your scam to satisfy my needs. I see what you did there. I am a discerning individual, now hand me six shiny packs and that unicorn deck box; pronto mister.

Nowadays, gamer culture has gone so mainstream that you can arrange your life completely and exclusively within it. You've got conventions and shows of not just games but celebrations of pop culture and costuming. The pervasive Internet contains every conceivable interest, and everyone with that interest available for you to follow and interact with. If you choose where you live, you can even have fantastic game stores and game communities. I moved to the Bay Area for similar reasons. In this modern cocoon of personal interest, you might never leave the confines of gamerness, never have to hold a conversation with those who don't hold your interests. It's probably at the expense of the larger community, the country at large, but that's another debate. This is a bit unusual for those of us who grew up pre-Internet.

Back in the day.... here we go ... geekness was hard earned, it required finding odd zines or cork board notices where you would send away for your next bit of potentially interesting geekery, dollar bills hidden in first class envelopes or money orders issued by the many locally owned banks found on every corner. It was a crap shoot. Often things didn't come, or they came in battered boxes from foreign countries that were so intriguing that your family would gather round the kitchen table while you opened your exotic package. Perhaps it's how you started collecting stamps. Remember stamps?

Or perhaps you found your gamer goodness in a store, like the cookware store I rode my bike to (without a helmet) that had a corner of forbidden lore because the owners son played Dungeons & Dragons. The smell of a cookware store still floods back memories of those wonder years. They should make incense with that smell.

You would take your forbidden lore to school to show your friends, but secretly, not because your teacher would confiscate it, like today with fistfights over Yugioh cards, but because that guy who shook you down for your lunch money might beat the crap out of you, for being you. Geekery took some guts. Meanwhile, we still had little league practice, learned musical instruments, and went on dates (I'm told). Geekery was smaller, I think, a closet interest, rather than a lifestyle choice as it tends to be viewed today.

My point is, it's all good. We engage at the level we can, like all things in life. We're hardest on ourselves, but we needn't be. We definitely don't need to judge others in this area. We need more hobby gamer geeks, not fewer. The herd is no longer big enough for such indiscriminate culling. Give yourself and everyone else a break (but especially yourself) and enjoy your geekery without so much judgment. As we move into game convention season, let the old guy talk about how his first hobby board game came in a plastic bag (Car Wars), or how it took him five years to get his fighter to 10th level (Jerlea the Third -- don't ask about the first and second). Be thankful for the rich geek culture we live in today. Geeks have won, and you are gamer geek enough.

It Just Works

2013-02-06T13:10:00.001-08:00

In my last life, I was a network engineer and architect. Among my certifications was the MCSE, Microsoft Certified Systems Engineer (now referred to as Solutions Expert). As a solutions expert, I was expected to come up with technology that solved business cases, usually in a Microsoft environment.

As a business owner, my priorities are different. I don't really care about the environment, the infrastructure, or whether the solution has a certain technological purity to it. It started with phones, the iPhone being my gateway into the Apple world. It was the most revolutionary bit of technology I had ever encountered, allowing me to keep in touch with my business anywhere in the world. I recall the wonder in logging into my server at work while my wife was driving down the 101. Plus it naturally fit with my marketing efforts, sharing photos and status updates on our Facebook store page, now one of the top game store fan pages in the world, by fan count.

I'm not concerned with rooting my phone and running alternate operating systems like my tech friends with Android phones. Nor am I interested in the various arguments over the evils of Apple. I want to be socially responsible, but there's plenty of evil to go around. I have a business to run, not a team of geeks to impress (although I suppose I still have that).

Then there are laptops. My first lesson in large store security occurred in 2007 at our new (current) location, when a homeless guy with gold teeth snuck into my office and stole my creaky old Thinkpad T40. I had neglected to secure the area, faith in humanity still existing somewhere within me. The Thinkpad had been my trusty companion for seven years, and the replacement laptop was already on order. The Thinkpad was solid, worked perfectly, but had grown painfully slow over the years, despite reinstalling the operating system multiple times. Seven years is a good run, and back then, speed was the main driver for laptop replacement, not durability.

My next two laptops demonstrated what the PC laptop industry had devolved into. I had carefully researched them, but they were tragically flawed and unreliable. They each lasted a couple years before dying, the last one, a high end Samsung, would send an electrical short through the system if you touched it without being grounded. I had a little ritual at the store where I would rub the metal band on the display case before touching the laptop. I still find myself doing it with the new one. I'm convinced the PC laptop industry is beyond redemption, shown by my willingness to spend anything to get a good laptop, with serious disappointment following.

Then there's Windows 8, an operating system nobody wanted configured for a device that doesn't really exist. Gah. If I had to learn a new, frustrating operating system, it sure wasn't going to be that. If I wanted a PC laptop, that was likely what was going to be pre-installed. It doesn't help productivity, but instead focuses on media consumption. Did I mention I also just bought an iPad?

So last month, following the success I had with the iPhone, and happiness with my iPad, I bought a MacBook Pro. It's mostly about hardware, which is how I justify the price tag that's at least twice as much as my last laptop. The theory here, according to my friends with Apple products, is while the PC industry was dumbing itself down with cheap, commoditized hardware, Apple continued to use high quality gear. So although you pay twice as much for a laptop, a 4-5 year run is expected. It's essentially the old Thinkpad model. You spend more; it last longer.

As for the operating system itself, it's not the Mac of my youth, with the hidden architecture, minimum configurability and no available software. My MacBook is essentially a Linux box (BSD to be more accurate) running a very slick, highly supported shell. It's easily as complex, rich and configurable as a Windows machine. I can pull up a system window and mess around with the command line, if it pleases me. It generally does not. I really don't care about any of the technical bits. I have work to do and the MacBook just works. There are no compromises, no applications that I can't run on it. Even with third party PC emulation software running Windows 7 installed, I prefer not to use it.

And now I get to see how it is on the other side of the Mac debate. The ridiculous criticisms of Apple and Apple users has always been part of IT culture. There have been the accusations of "drinking the Cool Aid" or "dumbing down." I feel I owe my old Mac friends an apology, although many of my IT colleagues have since gone to the Mac, at home at least.

Today was the first time I saw the debate put into a political context, with someone accusing Apple users of ceding control to others. Huh. Bottom line though: Mac people don't have these discussions. They're busy creating stuff, or building their businesses. They don't have time to discuss how oppressed or conformist you think they may be for the tools they use. Nobody discusses the political ramifications of the hammer or the screwdriver.

As for the future, I still have a Windows server at the store, which will one day be replaced by a $300 box the size of my hand. The POS is the most annoying bit of tech at the store. It runs Microsoft Retail Dynamics, a stable system that Microsoft would like me to pay expensive maintenance fees if I would like their consultants to work with me. Perhaps there's an Apple solution for that as well.

What I got: Refurbished 15" MacBook Pro 2.6GHz Quad-core Intel i7,

Retina Display, 8GB RAM, 512GB flash storage, along with a 2TB Apple Time Capsule.

How We Did in 2012

2013-01-25T11:31:00.003-08:00

Black Diamond Games did very well in 2012, with sales up 13% from the year before. We continue to see collectible card games boom, our CCG sales up 30% from 2011. Magic accounts for a frighteningly high level of our sales, something we're hoping to leverage in 2013 with a new online singles catalog using Crystal Commerce. Still, the big fear is we let other areas atrophy. We're also seeing stores featuring Magic pop up all over to take advantage.

Yugioh and Cardfight Vanguard are heating up as well. Vanguard, especially, will see more support as Bushiroad implements a stronger organized play structure, including upcoming pre-releases of new sets. Many Pokemon and Yugioh players play Vanguard as their second game, and between Pokemon sets, our Pokemon nights see mostly Vanguard sales. We're done carrying Kaijudo and we gave up on World of Warcraft CCG in 2011.

Collectible miniatures are up 37%, thanks almost entirely to Pathfinder miniatures. They haven't quite stepped into the space left behind by Dungeons & Dragons miniatures, but they're a welcome addition nevertheless. We do sales in Heroclix, but they're honestly more trouble than their worth, with our local community playing at other venues. We'll probably stop carrying them this year, something we've done twice before.

Also hot right now, board and card games saw a 16% increase in sales. I think a lot of credit can go towards these games getting some love, especially programs like Tabletop, which reach customers we don't normally encounter. As for individual companies, Fantasy Flight Games has been doing exceedingly well for us, with licensed Star Wars and Game of Thrones products doing great. Our Euro style games also selling fast, with Settlers of Catan remaining on top and most Days of Wonders games selling strongly when in stock, thanks in part to Tabletop. Despite all the hemming and hawing over Kickstarter, it doesn't effect the bottom line much, at least not with board games.

I'm afraid that's the end of the good news though, as we've seen declines of around 10% in areas like role-playing games. D&D is dormant, which in most years accounts for half to two thirds of RPG sales. Kickstarter likely plays a larger part in the decline of RPG sales, since so much of what we carry tends to be "fringe." Accessories like paint and dice are also down about 10%.

Classic games and puzzles are down 10% as well, categories that haven't aged well with the population. We'll be shrinking those departments down, rather than expanding them.

Tactical miniature games are down 10%. Although Warmachine and Hordes are on fire, it doesn't make up for the steep decline in interest in Warhammer 40K and Fantasy. When it comes to Games Workshop, they've jumped the price shark for us. It's hard to justify price increases that far outstrip inflation or cost of materials. These things are thankfully cyclical, but at the moment, if we were worried about non-CCG areas atrophying, there might be some evidence available for that.