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Tuesday, May 19, 2015

Would I Buy This Product?

In the game and comic hobby industry, the buying is where the money is made.  With perfect precognition, procurement would be pro-forma for your preferred purveyor of Pandemic and Planar Chaos.  We would order up exactly what customers wanted, the products would sell, and lather rinse repeat.  No need to worry about such arcane matters as safety stock, hedge inventory, anticipation inventory, or what have you.  There would be zero waste in cash flow and turn rates would be immediate.

Alas, back here in the real world, store owners and managers have to make their best guess instead.  And we have to make these guesses every week, sometimes hundreds or even thousands of times.  We have software to help us, metrics, analytics, entire fulfillment systems designed to steer us toward particular purchases.  Though the publishers and distributors have bills to pay too and usually oversolicit as a general rule, they don’t push too hard.  After all, a store that chokes on overstock and fails is no help to their ledger.  So mostly the publishers and distributors keep us on the straight and narrow and give us ample warning about key releases we ought to be buying and when.  They can’t possibly tell us everything, however — there is simply too much product released every single week — so at the end of the day, on a lot of what is available, a store owner has to guess.

Some guesses are easy.  In some cases extremely so: filling a pre-order is back in pro-forma territory.  It is also easy for a store in our industry to intuit that every current Magic: the Gathering booster product, a wide variety of dice and sleeves, and concessions should be kept in perpetual stock.  It is easy on the negative side of the ledger to pass on a heavily Kickstartered product, knowing the “alpha gamer” early-adopter market will be saturated long before we ever receive stock.

Some guesses are surprisingly difficult.  Comic vendors get to spend anywhere from three to eight hours, once per month, placing their massive Diamond comic order for items that will be delivered two months later.  The time delay introduces natural error into the process, and on top of that there are just so many titles and products available.  The Diamond web initial order form typically runs several hundred pages.  What’s worse, many items ordered will arrive “whenever.”  First-run comic books typically do arrive during the month expected, but graphic novels and apparel often arrive much sooner, while toys, statues, and other paraphernalia are sometimes delayed many months.  I am still receiving statues that were ordered last summer.  We can’t control erratic supply, but we can mitigate erratic demand: To reduce guesswork, comic buyers use “cycle sheets” or similar mechanisms, in software or on paper, that track the exact sales behavior of given titles and title groups.  This helps reduce gross error considerably, but not entirely.  Past performance is simply no guarantee of future results.

There is really just no time in the day for a buyer to make a careful analysis of every single procurement decision.  A buyer will take shortcuts and save labor where possible, typically resulting in restocks where software makes most of the decisions, and the restocking criteria are revised at later intervals, generally when items are designated for clearance.  For evergreen stock and bread-and-butter stock, it isn’t a question of whether to order the item, but how many.  On the flip side, many items are solicited where it’s easy for me to shake my head and say, “That will probably never sell.”  This takes place rapidly, over and over, moments per item, as I parse the distributor solicitation emails.  If, as usual, I never hear hide nor hair of the product again, I was right.  If, on the other hand, the item becomes a hit, I’ll just jump on board for Wave Two, like with the Force of Will TCG that’s currently unobtainium.  The risk mitigation is worth stepping back from the cutting edge.  In this business, the early bird gets the worm, but the second mouse gets the cheese.

So when an item is a sure winner or a sure loser, my job is easy.  What about that middle ground?  The mark of experience is that the middle ground narrows, so naturally there becomes less and less of a bubble zone.  But even a small gray area will encompass huge numbers of products.  A buyer needs internal guidance, something more than a gut feeling.  Gut feelings were how my business partner in 1999 ordered a hundred Space Marine Land Raiders against anticipation and mired us in the Cash-Flow Choke of Y2K.

I use a decision tree based on trusting my perspective as a consumer.  The fundamental core question is, Would I Buy This Product?  The consequent spans a range.  At the lenient end, if I can understand the target customer for this product and I would find it appealing if I were so situated, I’ll buy.  At the stringent end, I won’t order that thing unless I can lay a skin wager that if I bring in this merchandise and nobody ponies up the funds within 90 days or so, I would be willing to dogfood the item, purchasing it for myself.  (Or sacrificing my free time to expedite the item’s clearance, etc.)

Here are a few “bubble” items that I have encountered so far in 2015, how I approached the buying decision, and how it turned out.  I chose items with varying typical stock depths to illustrate how quantity figures into the buying decision.

INGRESS Dice by Q-Workshop

The publisher Q-Workshop is a Polish manufacturer of stylish dice priced at the high end of the scale.  In general the manufacturing quality of their plastic dice is not quite as robust as Chessex, and they do not range into unusual shapes and sizes like Koplow.  Q-Workshop's solid metal dice offerings are about on par in design and manufacture with Iron Dice, and look better but are less clean and classic than those by Metallic Dice.  The strength of Q-Workshop is that the aesthetics are excellent.  They make dice with faces featuring Elvish script, Dwarven-style runes, Japanese kana and kanji characters, pirate and steampunk themes, dice that glow in the dark, and so on.  Their existing IP licenses include Pathfinder, Warmachine/Hordes, and Axis & Allies.  Even their dice bags look good enough that a hardcore roleplayer would consider them an immersion aid.

When Q-Workshop announced the Ingress dice, I was excited immediately.  Ingress is a massively multiplayer smartphone game that roughly blends geocaching with Capture the Flag.  I am on the good team, the Resistance Faction (blue), and I play Ingress with my children fairly regularly.  This product obviously passed the dogfood test: I would be delighted to own both the polyhedral and d6 Ingress sets for myself, regardless of the set price clocking in just under $20.  I had to decide whether this was a strong enough product to put on the shelf in quantity, and what its true likely market reach might be.  Dice are a stock-it-wide category, but expensive niche dice eat purchasing dollars and turn slowly.

I reasoned that the target market, "Ingress enthusiasts who also happen to play TCGs or RPGs and like high-end dice sets," was limited.  Based on normal product flow, I estimated a safe shelf fill level at 2 units each of the four SKUs.  (Enlightened and Resistance, polyhedral and d6 sets).  For new release products it’s normal for me to double or triple the shelf fill and allow the early demand to draw down my stock to regular levels.  This time, I hedged low and added my pre-order: Four each of the Enlightened sets, five each of Resistance.  So far only a few Resistance d6 sets have sold after my personal purchases.  This product is shaping up to be something of a dud, and it appears I overbought.  My overexposure is less than $50, which isn’t terrible, but that’s most of a Magic booster box.  In a week or two I will peel off the excess and sell it on eBay or Amazon, leaving two of each SKU in the store for shelf stock.


Citadels by Fantasy Flight Games

I saw a solicitation for what is apparently actually a reprint of this simple table game, which exists in the complexity gradient somewhere north of Love Letter and south of Catan.  That’s a decent enough space, but plenty of games are aiming for it, among them such evergreens as Guillotine and such strong new entries as Timeline.  Fantasy Flight, of course, acquired this game from elsewhere and added it to their agglomeration.  For such a game to earn a roster spot at DSG, I need a reasonable certainty it will move.

The dogfood test left me lukewarm on Citadels.  Yeah, I suppose I wouldn’t mind owning this one, it does sound fun, but I own a lot of games I rarely have time to play.  I’d like to have something more.  I reasoned that the target customers would be "people playing socially who want a game at that complexity level and possibly who enjoy the building-scoring theme that’s of the same animal species as Carcassonne."  Board games are a mile-wide, inch-deep category.  Our customer profile still does not appear a strong indicator.

Experienced owners learn to avoid using “has a customer asked for it?” as a buying criterion; customers ask for all kinds of stuff, much of which they have no intention of buying or which they already own, except of course those times when they want a thing right now and by not having it you’ve already lost the sale to Amazon.  Oftentimes as well, a customer may not know what they want until they see it.  As the story goes, when Henry Ford asked people what they wanted, they said “faster horses.”  He came up with something a bit better.

This time, however, a customer recommendation provided me with just enough enthusiasm to bring in the game.  I’ll start at quantity one with the reprint release.  Our small-box board game gallery is rich and diverse, so it will not look lonely on the shelf.  If Citadels moves, I’ll restock for as long as it turns par.  If that first unit is still there ninety days later, I’ll take it home and not replenish.  It’s possible this is a turner and I’m understocked not having it already.


Avengers Omnibus vol 2: Earth’s Mightiest Heroes by Marvel Comics

Comic omnibus collections possess tremendous purchasing “pull,” and don’t think the publishers don’t know that.  Despite that these volumes typically clock in at over $100 MSRP and don’t sell with any significant frequency, it is difficult to find the comic fan who sees one and does not feel the pang of want.  This is not limited to Marvel and DC, with Image Comics offering Walking Dead omnibi in multiple configurations and price tiers, with or without autographs or limited slipcases or what have you, all in service to discerning collectors.  

Marvel tends to print to order and allow these books to be unavailable for long intervals, letting scarcity create urgency, while DC attempts to keep top sellers in stock.  Regardless of their production strategies, all publishers share common elements in their omnibus books, most noticeably a kitchen-sink approach that jams metric tons of content into these doorstoppers, and is then unapologetic about demanding a pound of flesh in exchange.

With Avengers: Age of Ultron on the slate for 2015 and this book appearing in a late 2014 initial order roster, I had a decision to make.  I had no intention of dogfooding this; though I do like comics and I like the Avengers, I haven't been reading this series and I have enough material pending already that I'm not looking to start another title or title group.  However, it was very easy to me to imagine the target customer for this item: an Avengers or Marvel comic reader!  Even more specifically, one who is affluent enough that this is a compelling purchase.

My methodology seems to have swung and missed this time.  The book sits on the shelf, still unpurchased after six months.  I'm not in a hurry to clear it because if you're going to have any Avengers omnibus in stock, this one is a perfectly good option.  All the same, I wouldn't mind recouping the spend on it and directing those dollars elsewhere.



Hatsune-Miku art playmat (and deck boxes and sleeves) by Ultra-Pro

Every store stocks an abundance of Ultra-Pro products, of course, but the evergreen lines are mostly solid-color sleeves, deck boxes, playmats, binders, and storage supplies.  Art sleeves and playmats are trickier.  They tend to be more expensive, varying by the potency of the license.  Magic: the Gathering art playmats are the most expensive of all, and thus sell slowly, relatively speaking, despite the high proximity of the branding to its origin products.  Other art playmats vary in sales, with most releases selling few or no units.  I could carpet the polished concrete floor of my store with playmats that I have had to clearance out at near or under cost.

Despite this somewhat alarming underperformance rate for art playmats, deck boxes, sleeves, and binders, etc, there are a number of reasons to consider carrying at least most of them in some quantity.  Sourcing is strong: Ultra-Pro is net-priced, which means you can always keystone their merchandise, and every distributor has tons of it.  Even with the port strike fiasco of the past year holding up some of Ultra-Pro’s replenishment stock, there was so much product in the channel already that stockouts were sporadic at worst.  The IP licenses for the art tend to be A-list material, at least by the standards of this industry.  The production quality is typically high.  And sometimes a given art piece is a bona fide hit and sells through, possibly even after restocks.  The black-outlined “Nicol Bolas” art sleeves and playmats from the Magic 2013 Core Set were big hits, so much so that when a distributor unearthed a few lingering cases of black Bolas sleeves last month, I couldn’t push the “order” button fast enough.  By contrast, Ultra-Pro made ten different SKUs of each product for Dragon’s Maze in 2013, and that was about ten more than the market demanded.

I saw the solicitation for these sometime in late 2014 and didn't know I would be waiting until April 2015 to receive them.  I am not particular about playmats, and I already have my "preferred sleeves" for personal use, so I did not feel great about dogfooding this product line.  And in any case an order for a product line like this is going to be multiples of each art style, making the dogfood analysis a mismatch.  I had to decide whether I understood the target customer for this and whether I would have bought it if I were that target customer.  I've liked anime for many years, though I don't watch it much anymore for lack of time.  As Penny Arcade put it, who doesn't dig robots and nurses?   I did observe that quite a few customers seemed to enjoy the genre as well.  I thought about my perspective during the height of my anime fandom, my "otaku years" of 1987-1993 or thereabouts, and realized that if that were now, you couldn't keep me away from these.  Even today, if the license were for Robotech/Macross/Southern Cross/Mospeada, Akira, Bubblegum Crisis, Ranma 1/2, or something Miyazaki, I think I'd have to pony up.

This time, the "if I were so situated" branch of the Would I Buy This Product? analysis worked.  I brought in three each of the playmats and deck boxes and a dozen each of the sleeves in the four or five art SKUs that were offered.  I expected a shelf stock of three of each playmat to draw down to two for replenishment, and the deck boxes and sleeves would be treated like periodicals unless they sold very quickly.  As it happens, almost all of it did.  Four of the five playmat styles sold out within two weeks.  The fifth sold one of three and is at the proper stock level.  I replenished the others to two units per.  The sleeves and deck boxes sold in various amounts but enough that I'm restocking them.  I don't know much about Hatsune-Miku, but whoever she is, my customers seem to like playmats bearing her likeness.




Metroid: Samus Aran poseable figurine by Figma

There was some added degree of difficulty on this one.  Figma makes collectible figures that straddle the line between statue and action figure.  The $50-$120 figures are highly articulated and well-manufactured, resulting in a beautiful showpiece that can be posed very precisely and will remain in place.  The problem, as with many figure and statue manufacturers that sell through Diamond, is that you cannot be sure when the hell you will ever get the item.  What seems hot now may seem passe tomorrow.  Ask anyone who got in early on any movie tie-in Green Lantern figures or statues a couple of summers ago.  Also, these items typically cannot be restocked.

Fortunately, Metroid is a video game classic, and Samus Aran is the defining female video game protagonist and among the best player avatars of any gender.  Super Metroid might be, depending whom you ask, the best console video game ever made.  Knowing this, even if it took a year or more for a Samus figure to arrive — and in fact I have been waiting that long for First 4 Figures’s $370 Samus Light Suit Statue first solicited in mid-2014 — there is no likelihood that the interested buyer pool will diminish.

So, knowing this, our buyer pool can reasonably be defined as “Collectors who like Metroid and are spendy enough to buy a Samus statue pretty much no matter when it shows up.”  Bit of a tall order.  I am completely in the tank for Metroid, so this figure passed the dogfood test in spirit before they even announced it, but as a practical matter I would face an uphill battle persuading my wife that it was a reasonable purchase.  Accordingly, I had to make a buying decision on the basis that I would totally buy this thing, but I really needed that not to become necessary.

As it happens, the Samus Figma sold within hours of its arrival, and of course Diamond was already out of stock on it forever.  I kicked myself knowing I probably could have sold ten of them if I had pre-ordered that many.  As Yoda once said, it is the way of things.

Conclusion

The Would I Buy This Product? analysis is an imperfect tool for an imperfect purpose.  However, properly honed, it can provide significantly better guidance than the mental dartboard that serves too often as a buyer's default method.  If you find a better method, by all means follow that, but just so you are doing it systematically and not by chance and a shrug.

Next week I'll stay topical, with Modern Masters 2015 and Phoenix Comicon on the horizon likely providing me with some manner of inspiration.  Have a great week!

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