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Tuesday, December 26, 2017

That Tax Basis Ain't Gonna Lower Itself

In small specialty retail, we want to have as much inventory as possible right up until the days before Christmas, and then we want as much of it gone as we can manage, before the last day of the year.  This is because we want the most possible holiday sales, and then we want to avoid being stuck with a bunch of extra inventory because growth on that ledger counts as income at tax time.  I could avoid this pinch if I simply reset my fiscal year to begin and end on some other date, but we're not nearly at the kind of scale where such a logistical upheaval pays off.

In practice, what this requires is good forecasting.  Based on the sales numbers of past Decembers, we're able to project sales for this December, and starting in late November we tailor our ordering so that the inventory asset ledger tapers off right on time and then we can do some modest after-Christmas year-end sales event and shed down to the number we want.

It's rare to hit the mark perfectly or even within a few percent.  If I'm wildly off on the low side, my shelves are barren and I've got that nice low tax basis, but we probably missed a lot of potential sales.  If I'm wildly off on the high side, I've got overloaded shelves that I'm about to have to pay for twice, as it were.  The latter is the situation in 2017, since holiday sales came in well short of projections, even after hedging from spotty results last year.  In fact, if you took DSG's numbers from last week and erased the dates and mixed them up with a bunch of other weeks of the year, I'd have a hard time telling them apart from an average week in April or June.  It was disappointing, likely an ongoing effect from our move, coupled with the fact that holiday shopping is far more volatile against online and big box volume than our day-to-day bread-and-butter business is.

This meant our end-of-year sale for 2017 had to be a little more aggressive than I might prefer, while still protecting products I know I can't restock reliably in the first quarter of 2018 because half the factories on the planet shut down for Chinese New Year.

So I figured this blog post might be a good time to look at the when, how, and why of sales.  It's a topic I've covered before, but always good for a refresher.

The best answer is "almost never."  Sales in small specialty retail should be rare, limited in scope, and unpredictable.  If the public knows what's going to go on sale and when, they'll respond to that incentive by never buying those items any other time.  Black Friday and end-of-year are the biggest danger spots here.  A good way to mitigate this problem is to avoid storewide "everything" sales and be more focused, and that's in the "how."  But in terms of "when," only the mass market with its vast economies of scale and automation is able to benefit from keeping rolling sales underway seemingly every week.  Small specialty is always safe to hit the major sales periods, and shouldn't hold big prominent sales otherwise unless there's a tie-in event like a grand opening, store move, expansion, or what have you.

The best answer is "purposefully."  Either attach a simple rule to an entire product line or category (such as Buy Two, Get One Free), or attach a simple sale scheme to select items.  Those are the two winning plays really.  Blanket percentages off are logistically easy but also tend to result in narrowing the dynamic range of your stock -- don't do that to categories that have big jackpot items or super-rare stuff in them, or that's all that will get bought and you'll lose the most money possible.  I like to take the clearance rack that already exists and get really aggressive there as a sale promotion, because it's stuff we already wanted gone.  Importantly, you have to set up the terms of a sale and set up boundaries so the promotion is contained.  If you don't, you have the same problem as with frequency.  People will start to speculate that you'll go blanket-dump on board games or singles or what have you, and they will stop buying and wait you out.  Conversely, players will happily buy WarDoggies models the week before Thanksgiving if they have no specific reason to believe you're going to knock the floor out from under WarDoggies prices on Black Friday.

The sale should never be just to bring people to the store.  Small specialty retail can't use sales that way; once again, you lack the economies of scale and automation that the mass market uses to do that, and moreover, you don't want to curate a customer base of the most price-sensitive customers you can find, because they won't be back during ordinary time.  Sales need to have purposes that, once achieved, allow the store an unambiguous benefit and a chance to return quietly to normal operation.  My end-of-year sale is driven by tax policy and is among the more obvious "good reasons" to "devalue" my own goods.  Clearance/closeout are probably the most common purpose and as long as you're not expecting to continue turns on that stock, it's pure cash recouped when you sell it, even if it comes with the regret that the BattleDucks Core Set never caught on and did not become evergreen as you had hoped.  Overstock sell-downs are a store correcting partial mistakes; we don't enjoy having to have such sales, but a bad overbuy can put a store in real danger if it ties up enough cash flow, even though you plan to keep the game itself around after that.  There are other niche reasons to put a product on sale, such as ding-and-dent or a new edition announcement, and anything you do in those scenarios is probably safe.

Anyway, if you're an industry peer, I'm sure you're nodding along and I hope your end-of-year reduction sale, if any, is successful.  If you're a customer reading this, allow me to quote from the late Peter Steele: "Please buy our products."

That about puts the wraps on 2017 here at DSG and the Backstage Pass!  May all of us have a better 2018 than the last twelve Godforsaken months have been!  Cheers!

Tuesday, December 19, 2017

The Excluded and the Excluders

I thought we were seeing the start of the holiday shopping ramp-up over the past couple of weeks.  Nope!  Still idling along at basically average numbers.  Which are good if I've got average invoices to pay, and less good if I have much larger holiday inventory invoices to pay.  Take a guess.

On further sifting of the numbers, the slow build we were seeing after the start-of-month dip was just general transactions, primarily in categories we already dominate and are hobby-based and not mainstream.  Magic cards, Pokemon cards, video games, the middle range of board games.  Not Warhammer.  More on that in a moment; that issue became the second half of this post.

But in terms of the mainstream merch we carry: Comics, POPs and action figures, mainstream-buzzing board games, apparel, and so on?  Black Friday weekend was great for these, and they have been utterly asleep since then.  Like, really asleep.

What we're seeing is this.  People just shop on Amazon now for the holidays.  Gifts, etc.  It's over.  That's just how it works now.  Nothing can be as easy as tapping your phone and the thing appears on your doorstep magically a short time later.  But once it's too late to be sure you'll have shipping in time to give that present, then that's when people will shop local.  Not until then.  I could be proven wrong later this week, I'm sure, but I bet I won't be.  I saw this last year but chalked the malaise up to Trump-based anxiety and depression.  Business as usual until the last minute, then BLAM some huge days and then the calendar gut-punched us with a Saturday Christmas Eve and the entire season amounted to a disappointment.  I saw it to some extent in 2015 but it was less of a dip from the usual pattern of sales because, probably, our usual wasn't as good then as it is now.  Now I realize it wasn't Trump, and it wasn't whatever else.  It was that small business are no longer part of the holiday picture.  The rest of the year we can make hay and our sun shines.  But right now we are, as Neal Morse put it, on the outside looking in.

There will eventually be an inversion due to this where small local businesses will have better pricing on this sort of merch, because Amazon will have something like 70%-80% market reach in entertainment goods, and will be at liberty to price up.  Everyone associates Amazon with low prices so it will take time before that price memory becomes replaced by the discovery that it's not always the best deal.

Even now, Amazon is already awful if you want a game that's sold out in distribution but stores still have.  As of this writing, board games like Fallout, Game of Thrones Catan, Ex Libris, and Photosynthesis are way above MSRP and/or are back-ordered on Amazon, but they are on many store shelves (like ours) at MSRP today, a comparative bargain.  Since much of Amazon fulfillment is done by affiliate retailers, their well will run dry first, and stores like mine will be the ones that Have The Goods (still the gold standard) deeper into the season.  But like I said, it will take a while before people really notice this, and before it pervades across all games.  Right now instead of shopping their FLGS, an awful lot of people are shopping via iDevice while waiting for a bus.  They never come in so they never realize we actually have what they want and at a competitive price.  We're left to preach to the already-converted.  Paradoxically, the procrastinators who are almost the last ones to visit will be rewarded because the hotness will be in stock for them.  Only the latest of the Eleventh Hour Crew will see us truly sold out.

So, Warhammer.  Warhammer is doing so poorly for us since the move that I may have no choice but to discontinue it outright.  We ended our standing discount on Warhammer when we moved, on the rationale that the discount was unsustainable in the first place and we only offered it to make up for the Gilbert facility being so small and cramped for minis gameplay.  With the gigantic, palatial game room we have now, there are no more apologies.  Top stores in town already collect MSRP on Warhammer with smaller spaces.  Knowing we'd see some drop in sales from ending the discount, we ripped the band-aid and were prepared for some impact, and figured we'd grow from there.

Unfortunately that's not what happened.  Instead of being painful but bearable, the reduction in Warhammer sales was ridiculous.  Warhammer had consistently been our 2nd through 4th place category all year long at DSG Gilbert.  Some combination of Magic categories always led, and once or twice a big month for some other category poked into the top tier.  But month in and month out, Warhammer got the job done.  We moved on September 29th.  In October, Warhammer was in 11th place for sales.  In November, Warhammer was in 10th place, but if you back out the sales from our Black Friday deep liquidation of Age of Sigmar, it was in 15th place, barely outpacing apparel and the Dragon Ball Super TCG.  So far in December, Warhammer is out of the top 15 and in an area where the data can be too grainy to draw reasonable conclusions.  That, my friends, is what you call sales falling off a cliff.

We did not think our Warhammer player base was that price-sensitive.  I'm still not positive it is.  A lot of the guys who hang around and use the game room and haven't been spending, have armies that do not yet have 8th edition new releases.  Some others are enjoying our game room but buying from other sources, either online discounters like Frontline or whichever other store(s) in town still discount their minis, which I'm not going to waste time investigating because it doesn't actually matter which one(s) it is.

"So nurp nurp put the discount back!", some may retort.  No.  At less than full margin, which is a short margin already because Games Workshop does not grant us keystone, Warhammer is not worth carrying.  I've had years to suss this out, it's pretty conclusory at this point.  Warhammer takes up an inordinate amount of space and labor in logistics and support, relative to the revenue it generates.  We are better off putting those resources into something else.  Compared to TCGs it's an absolute joke, I can seat 8 to 12 players in the space that one Warhammer table takes up, and I can fit cards worth the value of our entire Warhammer aisle into a single white cardboard storage bin and have room left over.  And that's not even counting that a card player doesn't splay their duffels and totes across a bunch of nearby regular tables or the aisle floor while they play.

And again, it's possible we're just seeing a sales gap from only a few armies getting meaningful product releases during the last three months.  Warhammer holds value well, and the miniatures hobby is a healthy pursuit, and Games Workshop is mostly great at supporting its retail partners, and these things help the balance so that if we're at MSRP, Warhammer is fairly safe to carry.  At the very least, the risk becomes negligible on a basic-stock-plus-special-orders basis, and bringing in the new releases on an open-to-buy budget basis can be maintained indefinitely.  We have sought to do better: to carry the line in depth and provide luxurious amenities.

I'm not fully decided on what to do about this.  Blowing it all up and starting over, including disallowing Warhammer play in the game room until that happens, seems like overkill.  But shedding the line down to minimum has to happen.  Right now Warhammer isn't pulling its weight.  For whatever combination of reasons.  And it needs to get fixed.  The economics of Warhammer are different enough from TCGs and video games that a one-size-fits-all venue monetization model isn't quite feasible for us yet, so the pay-to-play game space is also not yet a starter.  We'll see what happens.

I don't want to have my last article before Christmas be nothing but a bunch of Debbie Downer content, so I'll say this: Our crew is running strong, our video game category continues to improve by leaps and bounds, we're in a gigantically favorable tax position going into the end of the year,  and event attendance is through the roof.  I don't know whether every store in earshot is also seeing high player counts or whether it's just us.  But I'll take it.  Butts in seats does not equal net revenue, but stores like ours that can offer the goods players want and develop that community are seeing the right metrics follow.  That's up to us, to welcome those arrivals and find them a reason to become part of our player community.  The doors are open.

Tuesday, December 12, 2017

Glasses By Any Other Name

It's that time of year again when I look back and absorb it all.

Long ago he set the ship aright
Then he sailed away into the night
And I don't believe I wear rose-colored glasses
But I believe we have the greatest hope
And I know that we are more than dust and ashes
And one day we will know what we have known.

- Transatlantic, "The Whirlwind VI: Rose-Colored Glasses" (main) (alternate)

Looking back across posts from this weblog these past few years, it's easy for me to tell whether business was great or lacking at the time I wrote each article, whether my personal outlook on the business was positive or pessimistic.  Even in the best times there were setbacks, just as even in the most difficult times (some of which accompanied our move this summer) there were home runs.  More than that, I carried my business worries home, and that's something I would dearly like to learn one day how not to do.

I'm sure some of that confidence or worry, that excitement or disappointment, or perhaps all of it, bled through clear as day to the reader's side.  I am autistic so I can't really tell.  I find it close to impossible to discern what someone else is thinking or feeling, unless they give off the most obvious cues, and not always even then.  This deficiency can be something of an advantage on the logistical side, where I can examine hard numbers without being swayed by personality effects or emotion.

In any event, here is the answer key to 2017.  Here is what really happened.  You may have intuited much of it already, but now the signals should match the inputs for you.

January - The big news of the early year for DSG, of course, was the merger and acquisition of Tempe Comics and the organization gaining Michael Griffin and his crew.  We would end up closing that location at the end of October, but it served as a failsafe in case we couldn't find an acceptable lease.  We could have continued as a merged store there, though that would have meant a substantial business adjustment as the Apache Blvd location was truly awful and had bad parking, bad freeway access, and minimal shopping footfall.  The strengths of the physical plant were a dirt-cheap lease and a decent amount of space.  It could be a lot worse.

February - By this time we got to the end of our possibilities to stay at the Gilbert location, and had to start scouting out in earnest.  I was deliberately obscure about specific times and dates in certain blog articles so as not to tip off the competition to where we were looking, but once we had our spot, I had no qualms about making it public and only had to wait until the landlord gave the all-clear that no other tenants would be impacted by our announcement.  In Magic, Aether Revolt disappointed somewhat; it would take until much later in the year for players to want cards other than Fatal Push. Now the set is a trendy spec pick.

March - I had a splendid time at the GAMA Trade Show in Las Vegas, and I look forward to attending in 2018 in Reno.  In Magic, Modern Masters 2017 underperformed out of the gate thanks to the player base assuming it would have no value because Rudy and the other unregulated "investors" told them to be bearish on it.  After Iconic Masters landed in November with its second-tier roster, all of a sudden everyone loved Modern Masters and it was the best.  Yeah, I said it was the best when it was first spoiled and it had so many great cards in it.  Maybe try thinking for yourselves and not taking buying advice uncritically from YouTube personalities?  Back to that in a moment.

April - Our Tempe location was burglarized, and even though we got an insurance reimbursement, it was still an expensive and harmful event that netted us significant losses.  This event served as essentially our final determinant that the only way Tempe was staying open was if we could not find an acceptable lease elsewhere.  In Magic, Amonkhet landed and the player base mostly didn't like it.  The overload of product had begun and Magic product performance in its totality became worse from here on out.  Without singles, we'd have been in a really clenchy position.

May - We landed our Chandler location, though it would take weeks to finalize the lease and far too many months of construction before we could move in.

June - Lots of waiting.  Small optimizations.  Knowing the storm was imminent, I took the family to Disneyland.

July-August - My memory of this time period is mostly dark and angry.  And hot.  Dealing both with construction in Chandler and normal store operations back in Gilbert had me at the limits of exhaustion and frustration.  In Magic, Hour of Devastation flopped.  The warning alarms were blaring.  I was standing on the brake pedal, reducing my orders, but I didn't do so fast enough, and I felt the pinch.  The set was good, but wallet fatigue was metastasizing into authentic player disengagement.  I used the blog as a welcome diversion by starting the Arizona Gamer Story.  It has plenty of installments still to go.

September-October - We exulted in opening our new location, but it was still half-finished and we had none of the advantages of size or comfort, and all the disadvantages of a store move and the attendant loss of business.  And half of everything was put away or inaccessible or some damn crap reason we couldn't do it right.  (We're down to 25% of everything being screwed up, as of this writing.  Maybe 20%.)  The impact of the move was less than I projected; many of our customers followed us to Chandler.  But October was the worst month of sales all year and it wasn't close, and that's counting Tempe still being open.  Griffin and I were stretched to our limits, doing far too much in far too little time.  We won't think back on these months with fondness.  But we got through and made it to the promised land.

November - I haven't closed the books yet for the month but it looks like it might have been the best performance of the year, even up against ten previous months with two open locations.  The November swoon was real, but at the end of October we got the rest of the main room open and as a result, event attendance exploded and drove revenue.  Every single Friday and Saturday in November was better than every single day in October except for Friday October 6th, which had the combination of Ixalan still being new, Commander 2017 being back in stock, our PPTQ registration opening, and the Legend of the Five Rings LCG releasing.  We did still have some dud days in November, especially mid-month, and too many new releases.  But Black Friday was great, it set a new record, and the ensuing week has been decent and has let us make up some ground.  The crew is finally unified in one place with one goal, one mission, one flash of light, one vision.

December - Around the community, there is unrest and uncertainty.  Remember those YouTube personalities?  Yeah.  Back on the homefront, expenses are still staggering -- we'll be paying for construction until the end of 2018 or even later.  We are fortunate to have so many understanding creditors.  But the holiday sales tornado has already been kicking up some swirling winds.  The mainstream customer visits have been an utter delight to witness, especially with us having a chance to start all over and erase mistakes from our original Gilbert opening.  I have literally years of work ahead to make DSG's Chandler hub the store it ought to be.  But for at least this glorious winter into spring, that's our entire focus.  Be awesome.  Here.  Doing this.  And the people will arrive.  And DSG will reach back out into other locations in due time.

I may be too busy to keep the blogging schedule for the rest of the month.  At least, I certainly hope I am.  If I don't return in time, stay safe out there, and I'll see you again in 2018!

Tuesday, December 5, 2017

Once You Pop, That's Great!

The pace of new releases right now across tabletop categories is such an overloaded blast that it can only be properly depicted by the Whaaargarbl Sprinkler Dog:
We can't keep up with this.  There are not enough gamer dollars out there to ingest all this content.  There is so much that the top gamers in my player community, the guys who jump onto each new game system with top enthusiasm, are tapping out and abandoning ongoing games, and largely shrugging at new ones.  The top fervor I get for new titles on the rack is when the reseller scrappers show up because that title has already sold out online and they know they can flip it at a profit.

I talked about this a few months ago and concluded that despite the content quality being very high right now, we were headed for an analogue of the 1983 video game industry crash.  This bubble was bound to pop.  Well, it's happening.  Maybe people should heed my warnings instead of brushing them off.

The mass market, which pushed so hard to bring about this torrid pace of releases, is learning something the game trade knew all along: by mass market standards, these things don't turn worth a damn.  They're fine for small specialty retail, which can survive and even thrive on a turn figure between 3.2 and 3.8 per annum.  But mass sets a base standard of 12.  If it doesn't turn over monthly, clear the rack.  And the bloodbath has ensued.  Among others:

Barnes and Noble is tapping out.

Gamestop is tapping out.  Maybe.

Walgreens is tapping out.

Target kind of tapped out after their "all these exclusives" plan last year, with Oregon Trail and Dirty Codenames and Machi Koro Nights and so on.  They'll retain Cards Against Humanity (or Prongles or whatever it is now, see also title of this article) and Hasbro mainstream stuff, and a few sacrificial lambs to be able to say they have hobby games.  But they won't really.

Pardon the use of Reddit for links on those; much of the circulating news about those clearances was via social media that is not readily linkable.

The DSG plan to ride all this out?  Lean on our pawnshop business, of course.  Ain't no such thing as a new release when all the merch is used.

I wonder what will happen once the bubble has popped and things contract back to reality.  Will some of these amazing games finally have room to breathe?  Will I get to enjoy like three years of data packs from Android: Netrunner?  Will HeroClix v2.0 with its streamlined rule set finally start gathering momentum again?  And wow, what about Magic: the Gathering, which has had enough content to hold player interest for ten years released in roughly the space of two years?

You know what?  It's going to be miserable and lose a lot of people money, but maybe this is for the best.  Content is eternal and good content will still be around for us to partake of it later.  The mass market is Leviathan, and perhaps that tortuous serpent will finally starve out and seek waters better suited to its gluttony.

Tuesday, November 28, 2017

Four Days of Extremes

Thanksgiving weekend 2017 brought a great high and a troubling low.  I wanted to touch upon a little bit of each.

Black Friday set a new record for us, while not quite hitting the target I had hoped for.  Pretty greedy, right?  Sure, it was the best Black Friday yet, but what have you done for me lately.

At ground level, though, BF's robust sales and great footfall happened despite what we failed to do in preparation.  We really just ran out of time.  With the aftershock move of our Tempe store to Chandler and so much else going on, I didn't spend enough time in advance ordering up targeted inventory for the event, and I didn't have enough time to devise a promotional framework that would better straddle the various departments and reach more products, while still providing healthy returns and not training people to "shop the sale."  A week or so out, I realized I had time to set this much up, and so I wrote it all down and did a bunch of setup myself and delegated the rest.

The promotional "deals" we offered by and large worked. (I'm not a fan of the way "deals" has become a euphemism for "offers" or "sale prices," but that is the apparently the parlance of our time in advertising right now.)  This suggests that given enough time to tie in product groups, simplify, then expand to other groups, then consolidate and simplify, etc, ultimately encompassing a storewide promotion, we should see greater sales still next year.

Small Business Saturday was meh and Whatever Sunday Is Called was decent, outperforming the expectation.  Yesterday was even good, a rare robust Monday thanks to a blast of online sales and higher-than-expected early-day visits.  We expect to see a quieting now, a calm before the storm.  Somewhere around December 9th, the light switch will go on and it will be bananas until Saturday the 23rd, and then from the 26th well into January.

Alas, the holiday weekend was marred by the announcement that the expert and famous cosplayer Christine Sprankle (@Cspranklerun), was departing the Magic community after enduring bullying and harassment by a certain YouTube personality whose name I won't mention and I'll explain why in a moment.  For ease of reference, I will refer to him as Offender.  The specifics of Offender's actions in this matter are well established elsewhere, and I won't revisit them here.

For those of you unfamiliar with the scene and the practice, cosplaying is far more than merely dressing in a costume and schmoozing around.  Expert cosplayers typically create their wardrobe from scratch, or nearly so, and put tremendous time and resources into this process.  The greatest degree of verisimilitude is their triumph and their prestige.  And Cspranklerun is the best in the Magic: the Gathering scene.  The world of MTG provides a rich assortment of characters, and her performances of e.g. Chandra Nalaar, Liliana Vess, Olivia Voldaren, and Archangel Avacyn are the gold standard now.

I have encountered Ms. Sprankle several times at industry events and she has always been friendly and gracious to me and everyone who I've accompanied, and conducts herself as a consummate professional.  Her tormentor, Offender, is someone whom I cannot say the same about.

It's easy to look at Offender and say, oh, he's a typical chauvinist, or a typical alt-right agitator, or a typical bully, or whatever label seems to fit.  But to label him and direct ire toward him or even retaliate against him is to miss the point.  Offender runs a clickbait YouTube channel.  He doesn't have to be right, he doesn't have to be sensible, he doesn't have to make you agree, and he doesn't have to make you disagree.  He only has to make you watch.  He is in the attention prostitution business.

Like Neil Peart famously said, "I don't believe a prostitute is an evil thing."  But recognize what a prostitute is, and what it wants.  A prostitute engages in behavior that elicits compensation from an audience.  Literally, the euphemism of whoring reflects the reality that any given prostitute may not consider any particular behavior off-limits, no matter whether it might be socially questionable, if the result is that the whore gets paid.  If Offender's whoring is for attention, any attention you provide to him is giving him what he wants.  Controversy sells.  Bait draws clicks.  Views draw dollars.  There's no such thing as "bad" publicity.  And this is how Offender stays in "business," as he is a Patreon-based "content creator."  When you tune in, Offender wins.

The best and greatest punishment the community can inflict upon Offender is to ignore him evermore.

Don't watch his videos.  Don't read anything he writes.  Block him on whatever social media you can.  Don't mention him, don't acknowledge him.  Shun him utterly.

Come on, people.  We can do this.

Meanwhile it would probably help if Wizards of the Coast banned him or something.  Lord knows they've banned others for less, in some cases questionably so.  They had not made a statement as of the night before this article went live, but I am reasonably confident they will, and that any delay is/was simply a matter of the appropriate staff needing time to meet and deliberate on the matter.

And then I hope Cspranklerun will return and I hope everyone who enjoys her cosplay performances at the various conventions, events, and tournaments will provide a heartfelt word of appreciation to her.  Even people who know they have friends and allies can feel awfully alone in the moment when a bully or harasser is doing their worst.  I'd like for those on the receiving end of such abuse to have more confidence that the rest of us are there to back them up.  The only way that's going to happen is if we demonstrate it.

Tuesday, November 21, 2017

Seasons Calendar Greetings

So, in addition to the spurts and stops of intense sales activity this time of year, we also have to deal with the effects the calendar has on when our staff works, when our shipments arrive, and when our money moves.  Back in 2012 and 2013, it made for some stressful experiences, but by now I know what's coming and I can plan it pretty far out to ensure business as usual.
The Thanksgiving Holiday week (in the United States) brings with it a Thursday in which nobody at DSG is realistically expected to be open or be working.  Some stores do offer gatherings of a sort, which I think is cool because it reaches that part of their clientele who maybe don't have family (or locally reachable family) with which to spend the holiday.  In our case we just close and give everyone the day off.  Salaried employees have a couple of hours bolted on to other days just to ensure we don't suffer for task completion, but are otherwise on paid vacation for the day; part-timers simply aren't scheduled for that day.

Moreover, the day after Thanksgiving, Black Friday, is a day when many businesses are closed and retail stores are open.  We know on the front end that it's a shopping day, but on the back end we see a variety of on- and off-duty vendors.  The mail does get delivered and banking occurs normally.  Our distributors are mostly closed.  UPS and FedEx deliver but most things we need for that day will be ordered the week before, so that they will arrive in the short week leading into the holiday.

Oh, and Veterans Day tends to create a day's unusualness, but since it's a single-day holiday and usually doesn't change much about business activity, I don't have to do very much to "prepare" for it.  It's not an entire weekend, effectively, deeply shared as time off by the majority of American society that does not work in the retail or hospitality sectors or in emergency services.  So there's not a whole lot of accommodation needed.

Thanksgiving's saving grace in terms of preparation (since it already has the great saving grace that the Fri-Sat-Sun frame tends to be pretty good for sales) is that it happens the same way every year.  The dates change but the days stay the same.  The opposite is true of the Christmas holiday, for which the dates stay the same and thus the days change.

This year is an arrangement I love: Christmas Eve on Sunday, Christmas Day on Monday.  For the first time since the store opened in 2012, I feel at liberty to go ahead and close on Christmas Eve and give the entire crew two straight days off.  Saturday the 23rd before that should be a record-breaking sales day, and I will go out of my way to get as much awesome stuff prepped and presented on time for that, but we're usually closed early on Sunday evenings anyway, and every Christmas Eve thus far has seen customer foot traffic taper off dramatically in the evening.  In essence, I don't see us losing much in the way of sales, and the value of having the recharge time for everybody gets much higher.

Best of all, with the Sunday-Monday cadence of this year's Christmas holiday, I don't really have to do any hocus-pocus in terms of ordering, shipping, mailing, banking, or any of that.  And the day after Christmas, Tuesday the 26th, should be a glorious party of youngsters indulging in their greatest material desires, funded by that sweet, sweet Grandma money.  The week before, my orders will go in on Monday and arrive Wednesday and Thursday and our TCGPlayer shipments will go out the same as they ever do.  Aside from what I hope will be overwhelming customer traffic, my crew will not be doing anything unusual mechanically where their schedules are concerned.  After Christmas I can blast in my orders to a rack of distributors who will be fully at battle stations, and have them by the end of the week.  A lot of us get healthy that week, though aside from normal sales I will have a lot of tax preparation to do, activities that need to get paid out and ledgered before the clock strikes zero on the Year of Our Lord Two Thousand Seventeen.

New Year's Eve is also a Sunday and we've always seen customer footfall basically end at rush hour on that day.  Rather than closing for the day, I'm inclined to staff light and keep the 10am-6pm regular hours, with projects on deck and general cleaning and straightening up to occupy the staff time.  New Year's Day is open for business of course and is usually very good.  A lot of people, whether workers or students, are off and ready to play some games.  And we'll be ready for their arrivals.

Whatever you are doing this coming weekend, whether it's with family, friends, or enjoying the solitude, stay safe, stay warm, stay healthy, and have fun!

Tuesday, November 14, 2017

The Tyranny of the Necessary

Thing I am doing: Spot duty putting out daily fires, many of them caused by incomplete infrastructure as a result of the move.
Thing I would rather be doing: Leaving daily operations in the hands of my store managers, knowing the infrastructure was built and the store was at cruising altitude.

Thing I am doing: Physically lugging assets from the closed Tempe location to Chandler.
Thing I would rather be doing: Developing Chandler's infrastructure.

Thing I am doing: Patchwork to keep our Crystal Commerce deployment effective.
Thing I would rather be doing: Moving in-store sales to the Square Retail POS.

Thing I am doing: Triaging video game buys for deployment to the racks.
Thing I would rather be doing: Finishing the new process for shelf proxies and rack layout so that the staff can quickly and easily triage video game buys for deployment to the racks.

Thing I am doing: Swimming through admin every week to navigate and maintenance all the financial moves we made to make the store move happen in one piece.
Thing I would rather be doing: Looking for great new items I can bring in that will amuse and delight the store's visitors.

Thing I am doing: Ongoing buildout iteration and refinement.
Thing I would rather be doing: Ongoing process iteration and refinement.

Thing I am doing: Performing life support on underperforming categories.
Thing I would rather be doing: Developing new revenue streams like cell phone screen replacement, video game console repair, category adds like brick toys and children's games, disc media restoration using our awesome commercial-grade resurfacing machine, and event broadcasting and media compilation.

Thing I am doing: Learning, slowly and inefficiently, how to use the tools to create awesome graphic art assets for the business.
Thing I would rather be doing: Deploying awesome graphic art assets for the business, for uses such as signage, branding media, and wider channels of advertisement.

Thing I am doing: Spending late nights putting in pre-orders on distributor websites and answering emails I was too busy to deal with during the day.
Thing I would rather be doing: Sleeping.

Thing I am doing: Making sure that it continues to be possible for people to play games at the store.
Thing I would rather be doing: Actually playing a game once in a while.

Thing I am doing: Working in the business.
Thing I would rather be doing: Working on the business.

Thing I am doing: Administering a retail business.
Thing I would rather be doing: Writing epic adventure stories.

Thing I am doing: Working long hours to ensure the future of the business.
Thing I would rather be doing: Spending time with my wife and kids.

Tuesday, November 7, 2017


I left an uneaten sandwich on the back table at the store when I closed up.

The console controllers I bought just before closing still have those corroded batteries in them.

I left the door to the refrigerator open at the store when I closed up.

There is a $7,000 order coming in and I only have one person on shift in the morning to process it.

I left my workstation iMac unlocked and all of creation can get into the staff payroll records.

I forgot to sanction the next whatever the hell it is this time in Wizards Event Reporter.

There are new releases streeting tomorrow that I forgot to prepare the pickup invoices for pre-orders.

I left the "OPEN" sign on when I closed.  There are hooligans outside pounding on the door.

I left the door to the safe open at the store when I closed up.

There is a $7,000 autotap going through at midnight and I forgot to move funds from the operating account to the purchasing account.

I left the lights on when I closed up.  There are hooligans outside vandalizing the windows.

Wizards of the Coast just banned the card I bought six playsets of yesterday.  Its market price fell from $38.50 apiece to $2.75 apiece.  Nobody plays it in eternal formats.

There is a $7,000 ceiling job being done at six in the morning tomorrow and I forgot to have someone on site to let the contractors in.

I left the door unlocked at the store when I closed up.

There are hooligans entering my store.

I forgot to arm the alarm when I closed up.

There are hooligans eating my sandwich and drinking my beverages, but they have left the refrigerator door open.

The safe is wide open so hooligans took all my cash.

There are hooligans destroying my store while I sleep.

There are hooligans stoically guarding the storefront while patient, systematic friends of theirs are carefully parsing through my inventory and stealing the most valuable Magic cards and video games that I will have the most difficulty establishing the market value of, while inflicting damage on my fixtures and equipment approximately equal to my insurance deductible, and leaving carefully and quietly so as not to attract police attention.

/rush into den, log in to surveillance system

//there is nothing happening at the store

///all is dark and peaceful

////I sleep well

/////It's a brand new day

//////Time to get in there and make stuff happennnNNNOHMYGOD! That autotap DID try to go through and I didn't move those funds!  AAARGH CARDIAC ARREST

Tuesday, October 31, 2017

Back to One

Happy Halloween everyone!  The end of October also marked the end of my Tempe location, so for the time being, the new store at 3875 West Ray Road in Chandler is the one and only Desert Sky Games.  Our game room is open, it's gigantic, and its capacity is continuing to increase as we bring in equipment and assets from Tempe and deploy out our rack and fixture.

The effort to build a regional empire that I described last year around this time, and then revised, and then revised again, has finally coalesced into the establishment of One Big Hub Store, which was really a prerequisite to the model I wanted moving forward.  Spokes/branches don't work unless a hub serves them, there are underlying logistics that are mostly transparent to the end user but we did not have them in place and could not have them in place for as long as the Tempe location was configured like a hub, but was not situated adequately to do business as a hub.  Now that the far larger Chandler store is unambiguously the one and only company HQ, branch locations may follow for the low price of buildout and equipment.  Look for our first in the spring, unless we decide to hold off a bit longer and lay in reserves.

Note that the business name no longer includes "and Comics."  Comics are still happening here, though.  I've been asked a couple of times whether that meant we had shed the category.  While I think that's coming at some point, it's not happening yet.  "Desert Sky Games and Comics" was just a really cumbersome and inelegant brand representation, and I saw plenty of industry stores doing dependable business in comics without bolting on the word, such as Millennium Games, Madness Games, Nerdvana, et al.  "DSG" needed to stay lean and mean in the market mindspace.

They say you never have a second chance to make a first impression.  In case anyone reading thought that was only a canard, let me tell you, it's proving more and more real every day.  From day one, DSG Chandler's shelf presence was strongest in TCGs, board games, and miniatures.  We have the video games out but not really set up like we want.  RPGs, comics, and other subcategories are only partly set.  Lo and behold, sales of TCGs, board games, and miniatures far and away lead the pack.

I don't think there is a tremendous market difference between Gilbert and Chandler.  What I think is that Gilbert spent 2012 and 2013 sucking at board games, so the customer public knew to disregard us to some extent.  We ramped it up in 2014 and 2015, but in addition to fighting against our own prior poor impression, the board game market itself went into some upheaval during that time, which I've chronicled extensively on this weblog.  In 2016 I was ready to be out of the category, despite being a board game player myself.  I had a category I loved that didn't love me back.

But as of 2017 we saw some of that work begin to bear fruit.  We started to focus on finding key titles and getting in deep in advance, sticking with protected brands, keeping mainstream-accessible low-price titles available, and like such.  In May and June, we ran a moving sale culling everything that wasn't the latest and greatest; we knew the rebuild would bring back anything that was still relevant.  And then with the move to Chandler, we had a chance to fix that brand impression.  The result has been a board game category that consistently finishes in the top 5 every day, rather than almost never doing so.

It isn't the answer to all things, not by a long shot.  Any category whose buyers were truly as fickle as that would not be worth catering to.  What I hoped to do, and appear to have done, was to be positioned as a legitimate source that people will check first, or almost first.  As long as some number of them do so sometimes, that should suffice to drive core sales in the category and present a dependable day-to-day revenue figure.  My responsibility then shifts to ensuring that the back-end economics are not wasteful or broken.

One category at a time, we need to get the stock deployed cogently, the organized play (where applicable) scheduled and running effectively, and then the marketing underway.  The brand impression has to bring people in knowing they will find things that surprise and delight them.  And when that is happening every day, we will know the time has come to resume the branch expansions.

Tuesday, October 24, 2017

September Sun, October Rust

Okay, I've put upon you long enough.  Thank you for reading weeks upon weeks of "DSG's big move" coverage here on The Backstage Pass.  And if you skipped the articles as soon as you saw my increasingly cryptic titles?  You missed all the juicy dirt and gossip, but it's too late to go back and read it all, as I've edited out the best parts.

Time to get back to what's happening in the greater comic and hobby game industry, and rather than spend a few kilowords on a single item, I'm going to do a quick round-up of assorted things that happened in September and October (so far) that caught my incredibly limited spare attention during that time.
Peter Steele, 1962-2010, official mascot of October
September and October have been the blessed Autumn Gothic Relief for game stores everywhere for years now, mostly owing to the arrival of the new Magic Standard environment and a brand-new stand-alone expansion to kick it off.  Not so this year apparently.  The new Magic set, the wildly well-received pirate-and-dinosaur romp "Ixalan," has sold at par for my two stores but I'm being told has seen tepid response for many other retailers.  Some peers and I have been fiddling around with something of a nationwide store closures list.  That list grew noticeably these last six weeks or so, and looks poised to grow further.

What happened?  Reasonable people are observing as we go and trying to draw meaningful conclusions.  It appears to be some combination of booster boxes being available for a few bucks over wholesale on Massdrop and elsewhere, the glut of product that is bringing us seven booster releases in 2017, there being too many stores fighting over a pie that's not growing as fast as the store coverage count, the ordinary time and tide of the market, and whatever other question mark reason you like.  As I've mentioned before here, don't discount the calendar: Stores that opened in boom times in the fall of 2015 and 2016 are now hitting the rent escalator months in their lease, and are only now discovering they left too much money on the table, most of it in the form of discounts to the hardest edge of their customer base.  Their business framework is unsustainable, and they don't have time to fix it before they drop their transmissions at redline.

While I'm not seeing the bottom fall out locally, I am seeing that worrisome overall trend line.  Khans of Tarkir was the most successful product in the history of Desert Sky Games.  Battle for Zendikar started stronger than Khans but cliffed and never got back that level of momentum.  Kaladesh did decent business but was well below that pace, though I also attribute some of that to local competition dumping boxes to gain market share at the time.  Ixalan is a whisker better than Kaladesh was, and in any case is not making us nearly as healthy and happy as Khans did.  These holidays are going to be built on the back of other products, from video games to board games to comics and gifts.

In a world where we didn't raise our own performance ceiling a mile into the sky with a gigantic new facility, I would be moving away from Magic with vigor right now.  It appears many stores that had been built on the Magic economy in the first place are finding that there isn't enough protein elsewhere on their plate to continue.  Where will the bloodbath end?  We shall see.

Last year, Games Workshop made big news by ending its board game license with Fantasy Flight Games.  Some of those titles were among the better sellers for us, including Fury of Dracula and the Conquest LCG.  There were some high-profile games that fell victim to the pre-Asmodee dumping syndrome that typified FFG at the time, such as Relic and Forbidden Stars.  We were sorry to see those all go out of print as there was broad demand by this time last year.

Nottingham had a plan, however.  Perhaps it was Fantasy Flight pushing ever more into miniatures, perhaps it was other reasons, but they apparently wanted to give it a go with a different licensee.  That licensee was just announced, and lo and behold, it's WizKids!  Long known for HeroClix, WizKids's recent success has been most visible for us in the world of Dungeons & Dragons miniatures.  Their prepainted collectible minis had always done well, but their unpainted Nolzur's and Deep Cuts figures have performed off-the-charts great.  That raises the question of why Games Workshop needs WizKids, though, because Gee-dub seems handily able to manufacture plastic figurines.

In the intervening time, something happened that may answer this question.  Zev Schlesinger, namesake of Z-Man Games (now an Asmodee property), joined WizKids to develop board game content.  The ensuing product has been hit-or-miss, with high production values but middling results overall.  It's a similar place to where AEG and Iello have been for a while, and each of them ended up producing some great evergreens amongst the misses.  If we can expect to see the same out of WizKids, the Games Workshop license makes a lot more sense.  Warhammer is a gold-plated license with a devoted following.  A strong board game product in the Warhammer universe should be a cash cow up and down the sales channel.

In the board game world, we're seeing more and more top-tier titles released with a special "brick-and-mortar first" or other similar accommodation to get the game circulating in meatspace before the presumed hordes of online buyers procure it in their usual manner.  (We're assured by knowledgeable folks that these hordes are not as massive as the hordelings believe.)  In any case, mostly the release arrangements are working.  Dark Souls and Mountains of Madness both did well for us.  Clank In Space! is up soon and if it performs anything like its predecessor Clank!, it will be fine.  Meanwhile Codenames Disney busted out of the gate like a dart, very quickly attracting mainstream visits and purchases.  I don't think there is a substantial market difference less than ten miles from my previous spot in Gilbert, where board games perpetually struggled.  I think it has more to do with being able to open with a lot of product already visible and winning some first impressions that we lost last time around by opening as Just a Magic Store (Tm).

Speaking of which, and I won't dwell on Magic much longer in this space: Wizards of the Coast changed Magic's logo drastically for the game's 25th anniversary, and as you might imagine, the masses instantly decided they hated it, as they hate all change.  I like the logo, as it's sharp and modern and stands well off the page or screen.  I've heard a fair bit of agreement from those who have taken the time to give it more than a cursory glance.  The new logo will debut on product packaging with the spring's Dominaria expansion.

The other reason I bring that logo up is that it's the trade dress for Magic Arena, the new digital offering of MTG that is Hasbro's latest attempt to build their own Hearthstone.  And that's an inevitable development, but one I still cannot like.   Hearthstone exists in a world that doesn't need physical retail stores.  Know how we talk about how we're making hay while the sun shines and there's a trend toward hybrid deployments and so on?  Well, Hearthstone is basically designed to monetize players while offering virtually no revenue conduit to any third party they don't have to.  In terms of the FLGS, the only ones that realistically stand any benefit are those that are already far on the cafe end of the spectrum, and that's treacherous space.  A typical small specialty retailer has virtually nothing to gain and general entertainment dollars to lose by supporting Hearthstone and its organized play gimmick, "Fireside Gatherings."  Firesides are a swell thing to have at coffee shops or campus union buildings or what have you, but FLGSes hosting them are toying with peril.  I have been asked multiple times to do so and it's a hard pass, and will remain a hard pass.  If you like Hearthstone, that's fine, go play it.  But it's incompatible with my business, plain and simple, so it's never going to be supported for as long as there's no sustainable monetization structure for us.  And unfortunately, that's where Hasbro wants to take Magic.  And can you blame them?  They'd get to write off the mostly horrible and unprofessional independent retailer channel ever after.

We got let into the Force Friday party this time!  Small stores had to order blind knowing only that it was a Star Wars license item from Fantasy Flight.  The online brain trust had it narrowed down quickly enough to some sort of The Last Jedi-branded core set for either X-Wing, Destiny, or a new game.  Turns out it was Destiny.  Alas, late in the game the exclusive distributor was made to deliver the game on the day of rather than in advance of Force Friday, so a great many of our customers bought their copies at midnight at Target instead of from us.  But it's a decent product, an evergreen SKU, and one I need to have in stock for as long as Destiny is a thing, so aside from wanting to have cycled through more of it at this point, I'm OK with still having twenty-ish copies on hand.

I believe in the "soft sell" or "soft pitch," and I'm in an industry where most of the customers prefer that approach, so it's a very win-win situation.  My soft pitch is something like, "I've got a lot of really fun stuff and if you want to come check it out, that's cool, and even maybe buy some, that's also cool.  But seriously at least check it out.  I know you probably like at least something in this building as much as I do.  Possibly more."  It helps that I really do like a lot of what I sell, and my staff does also.  People can tell when you are or aren't into a thing.

Though usually I am the pitcher and not the pitch-ee, I do get pitched fairly constantly by vendors of every stripe, whether for products I already carry, products I don't currently carry that someone wishes I would so they could make money, or for business products and services in general.  And almost without variation the vendors who are pitching me are not pitching the soft sell.  There must be some sort of desperation scent in the atmosphere that I don't realize I am giving off, because I'm attracting them all these days, and this is by far the worst slate I've ever seen.

Let's count down the hits!

Third runner-up: 
A reseller of unlicensed comic-themed t-shirts came to the store when I was trying to get some time-sensitive work done off in a corner of the floor.  My manager is taught to screen such arrivals and phone calls, letting them know the owner doesn't take calls or in-store meetings and the best way to reach me was by e-mail.  However, this vendor spotted me and slid past the block, and interrupted my work to make his pitch.  So, colossally bad idea obviously.  At first I suppressed my autism recoil and answered, look, this is something we may look at eventually but we just moved and we're not in a position to add product lines any time soon, so no thanks.  I deliberately walked to a different part of the store and resumed work.  The guy apparently went to reengage and my manager stopped him with a stern "Don't."  Well, he heeded that warning and left his business card and a free sample shirt.  That exercise of good judgment is going to get him a return contact from me.  In 2018.  As opposed to never.

Second runner-up:
An entrepreneur more tone-deaf to today's business realities than most, has been sending a series of emails and messages pitching a Magic newsletter to stores for only $97 per month.  Not a typo.  Ninety-seven dollars.  And oh by the way there's already more community-generated Magic content than the world ever asked for, and in the social media age, a newsletter is quite possibly the most worthless means of delivering such content.  This isn't 1996.  Nobody is going to buy your 'zines, and rage against machines, you flagpole sitta.

First runner-up:
A vendor of statues and figurines called in and my manager mistook the call at first for a customer looking to sell us collectibles.  The caller was sufficiently vague that this was a legit engage on his part.  Anyway, once the guy made it clear he was a vendor, my manager deployed the screen block, explaining that I don't take calls or in-store meetings and he was welcome to e-mail me whatever he had.  The guy suddenly turned furious.  Cursed back at us, "such a bleep-bleeping waste of my time, thanks for nothing" and so on.  And now due to that vendor's discourteous treatment of my employee who was doing precisely what I taught him to do, I will never carry those products.

Most Unwelcome/Unprofessional Pitch:
I was at my desk and the store was busy so I took the call.  "Good evening, Desert Sky Games Chandler?"  A joking-sounded guy replied.  "Desert Sky?  So is this like an airline?"  He sounded a bit sarcastic but I gotta play it straight, I'm in the fun business after all.  "We're a game and comic store."  "So like video games?"  "Those too, but also tabletop games and card games."  "And you're called Desert Sky?"  So now I was getting annoyed, but I'm a pro at this, I kept it straight.  "That's us, what can I do for you?"  His response, naturally: "I need to talk to whoever is in charge of your merchant services and credit card processing..."

I really hope that call was recorded for quality and training purposes.

Tuesday, October 17, 2017


"A deed once done is done forever.  A task returns over and over again.  Some are doers of deeds; others are managers of tasks.  Few can master both." - Some Guy

It's a good thing I have staff who can master tasks, because tasks set my teeth on edge.  I am the quintessential doer of deeds, and naturally there are deeds stacked to the ceiling right now as the move has wrought an onslaught of work that has to be completed once and then stays completed.  It would be nice to spread these deeds out over the months and years to come, but of course that's not the way these things work, and if wishes were fishes, we'd all cast nets.

Since it's down to ceiling lights and then the play area can open, I have a bunch of deliverables upcoming that can't really start yet, much to my irritation.  Meaningful retrieval of assets from Tempe in our preparation to close that location can only happen as quickly as we can rack it in the compressed Chandler front room.  Once the game room does open, it will be a race against time to get the counter fixtures from Tempe so as to build the front counter down the length of the side of the store, since there aren't nearly enough showcases at Chandler to do the entire thing in advance.  I can't really deploy comics at all, aside from new and recent releases.  There isn't a place for them yet.

The top move, then, is to do as much work as possible that stays done after the consolidation of locations and the opening of the entire facility.  Product gondola racks are perfect.  These are being built the same way in every instance, I have the materials to make several more, and I will soon have the floor to deploy them and fill them with games.

I've got a couple hundred gridwall mounts and some eight-foot panels that will mount to the walls in the next week or so, which on one side of the store will accommodate sleeves and backcounter merch, and on the other side of the store will display new and recent issues of comics.  That will stay done as well.  And a ton of gorilla racks that are holding product now will stay built for use in housing additional singles and supplies later.

Got my security/network/AV hub built and situated.  Every workstation that has to exist is at least functional, though that won't finalize until the shipping room gets built, which is much later.  My crew took care of consolidating the gargantuan amount of cleaning and maintenance supplies that Gilbert had built up due to its horribly constrained space largely preventing us from centralizing those supplies in a functional commissary.

There is a lot of virtual work still to do, all the marketing materials and contact updates beyond those weekly distributors and vendors who already had to know and were updated as the move proceeded.  I'll be catching these and updating them for years to come.  Mail forwarding will stop after 90 days or 180 days or whenever it is, so hopefully all the crucial updates will be done by then.

I've been fighting exhaustion so this process has been slower than we wanted, but we'll get there.  It's not like I'm going to be moving the hub location any time soon.  Or ever, from today's outlook at least.

Tuesday, October 10, 2017

Mostly There

We were able to get the front area of the store and one restroom up to code on time to open them to the public, so there's a delightfully spooky passageway between the two zones and it's nicely in keeping with the Halloween season.  Meanwhile, the HVAC is finally fully online throughout the building, and we're down to needing overhead lights, ceiling tiles, and some miscellaneous hardware installation in the closed space, and then it can join the open space.

Construction isn't finished yet.  That's the way of things in commercial property.  It's done when it's done, and not until then.  I've made a habit of magnifying the delay, expense, and logistical difficulty that any construction is going to cause my business, and yet I still manage to undershoot the mark.  It's that bad even when it's better than par for the course.  Stores aren't wrong to seize opportunities to move into "finished" space even when that space is not optimal for the deployment.  The difference extends to more than cost savings, but also time savings.  You get to operate right away in full, with cash flow.

We prepared in advance for the cash flow irregularities we knew would accompany the move, and we did some borrowing in the end, and mostly we've weathered the storm fairly well.  It helped that our TCGPlayer Direct business basically never stopped.  We ran uninterrupted singles sales throughout the move and it wasn't storefront volume but it was a damned sight more than zero.  The Tempe location also stayed open and business as usual.  A store move where you're simply dead in the water for any length of time?  You shut your mouth, nobody needs to hear such horror stories.

The best part is that, when everything is finally open and the transition is long since paid for and our clientele has all found us again (and a huge portion of our clientele made the transition without a hitch), we will get literally years of enjoying the cost savings of a below-market lease rate and enough room to continue to grow operations without climbing up the walls.  It will be a little while before we're freerolling, but if we can reach the lease renewal point and continue in place, the sky is the limit.

I'm afraid that's about as much bloggery as I have ready right now, as the store punchlist is a mile long at this point even without the back-end space open.  So much to do.  We're going to Grand Open in November so it's early bird time right now, and I want this place looking awesome for the big unveiling.  Right now, it does not look awesome.

Tuesday, October 3, 2017

The Price of Open Doors

We made the move.  DSG Gilbert is entirely empty, and DSG Chandler stands in neonatal form, much of its merchandise and racking still not properly deployed on account of the game room still awaiting completion of construction.  As such, we had to do a Phase 1 deployment, to be followed by Phase 2 (completion of everything but the back room), and finally Phase 3 (all done).  As you might imagine, this is frustrating and slow and has built-in redundancy.  But we're open now.

Bottom line, DSG Chandler opened its doors to the public on September 29, 2017.  And there is a world of difference between being open and not being open, in terms of brand strength and optics and logistics, but especially sales.  People are buying things, sales are high for an opening frame, but less than what we'd have seen in place at Gilbert with our established draw.  I'm glad to see as much traffic as we are getting, with another few days still yet to wait for the sign company to move our marquee so people can even see us.

The worst part so far is the loss of sales from where we are not caught up.  Where the item someone wants is packed away in one of the many boxes scattered about the store and attempting to guess its location is laughable, and we have to tell the visitor their money's no good here.

Moving a card-focused shop is easy.  There's not a lot of live inventory on the floor, so if you can get to your singles and packs, you can basically operate.  TCGPlayer orders proceeded uninterrupted all week, so we had that moved and operational very rapidly.  Boxes of cards.  Take down off racks, move, put back up on racks, back in business.  Friday Night Magic drew three pods of drafters and a nice healthy raft of Magic sales.

The same is not true of other product categories, where if it's not merchandised properly on the floor, it's tough to sell anything.  Our regulars have been patient while we dug in boxes for a requested product here and there.  But even today my heart aches at each visitor who walks in, looks around at the almost nothing on the racks, and walks out, because I know we not only missed any sale, but also made a terrible brand impression.  We had a short window to move and that's a consequence I accept.

I should come in late, or early, and do some more setup.  But at my age, I no longer have the physical stamina to keep up with it.  I've moved homes something like ten times.  Moving a store is orders of magnitude worse than moving a home.  There are a lot more items that will only fit into a moving truck, and a lot more heavy or unwieldy items that were designed to be installed securely, safe from public damage, and largely not moved or adjusted in day-to-day use.  I had a staff and payroll and no sales coming in to support them, and insurance and tax issues precluded our use of volunteers, so largely it fell upon our own team to lug all the contents of the Gilbert store into a truck and back out again at Chandler, all by main strength.

By the second day, my back and legs were shot, my hands were cracking (despite gloves), my neck was sore, and each night I was collapsing into bed like a corpse.  I have kids, so of course I had to drive them to school at oh-dark-thirty every day before starting up the entire process again.  I can't remember a week in years when I more fervently needed a mulligan.  None was available.

Two days with the moving truck was barely enough.  Two large loads, each taking the better part of a day to deal with, followed by a day of sending small vehicles full of the remains back and forth ad nauseam while I coordinated with contractors and hurried to prep for what they needed.  Finally a walkthrough, which I only had to postpone once, and then passed.  Thus endeth the glory of Gilbert.  And assembly of the Chandler store ramped up with a vengeance.

Friday, we got our all-clear to open very late in the process but had people in immediately at that point.  There's a spooky and fun lamp-lit pathway through the darkness to the restroom in the back (the one that's up to code; the other needs tile work) and enough seating up front for maybe 32 players at most.  Griffin and Jake built us a batch of grid gondolas and we're starting to populate them, but on Friday it was a race against the clock to be ready for FNM.

Around mid-day Saturday, I hit the wall.  I just collapsed to my desk and could barely move.  I had to stay at the store, though, because our crew was already stretched to the limit in coverage and I was the only person who could run assorted spot logistics.  Moreover, we had to rebuild the store opening and closing procedure to account for the new facility.

It might have been nice to throw a pile of money at the move and just let the concierges do it.  But that wasn't in the cards.  Our budget only went so far.  Wounds heal, sleep renews, and we made it through the weekend.  After Sunday I was a little better rested, after Monday better still.  Even in my elderly decrepitude, recovery abounded.  Plenty of deliverables to muddle through in the weeks ahead, but they seem so much more achievable now with clear heads and strong hearts.

We are open.

Tuesday, September 26, 2017

Who Knew We Had So Much Crap?

I'm writing this before the weekend because 9/25 through 9/27 are going to be utterly busy days and nights with the store move.  I just figured I'd make a few observations from the vantage point of coordinating the final disassembly and dispatch of the Gilbert location's physical assets.

The staff has been diligently packing and delivering merch to the Tempe location.  It took until pretty late in the game before we knew that opening Chandler on 9/29 was highly likely, and we didn't want to create a situation where someone couldn't purchase anything we had, even if it was only a web order or something.  The singles collection can exist anywhere and be serviced so that's not too troublesome, except that it will have to move in one shot straight to Chandler.

Part of the expense of five years running the Gilbert location is the insane sprawl of tools, fixtures, and storage racks.  Far from being able simply to move merchandise and supplies, we end up dismantling entire moving truck loads worth of racking and shelving.  Toolboxes and bins full of equipment.  Hundreds upon hundreds of grid and slat product pegs.  Mailing supplies by the carton.  Desks, tables, and cabinets.  Aaaalllll those tables and chairs.  And merch?  More cards than there are atoms in the universe.
The good news is that oh man, will the Chandler location ever give us more room for all this stuff.  We are excited on top of excited to be able to put things away in a logical fashion, from where they can be used in daily business without making a project out of retrieving key components.  We know at first everything will be a mess at Chandler and we'll struggle to find things in the flood of boxes and bins, but over the course of October we'll construct a place for everything and put everything in its place.

Anyway, by the time this article goes live, our store Facebook feed will no doubt be keeping current with updates.  And now, I'm going to get back to work.

Tuesday, September 19, 2017


Hiring competitive TCG players is a good way to build a staff.

For small stores and owner-operated stores, a point-of-sale system is a waste of money.

It's important to get in the last word when replying to a negative social media review.

Women aren't really serious gamers.

A good use of a store's marketing dollars is paid search engine optimization.

Warhammer alone cannot carry a miniatures selection.

The best deployment for TCG singles at the counter is to keep them in binders so customers can look through them page by page.

Snack and soda sales more than make up for discounts elsewhere.

Make friends with your local flea market dealers and garage flippers, and they will look out for you in return.

If there isn't much enforcement, a store doesn't have to worry about the rules.

Most sales problems at brick-and-mortar retail can be laid at the feet of publishers.

Cash prizes are legal as long as all the players in the event agree on the stakes.

A marquee sign is a waste of money when a banner will do.  Players will find your tournaments on the WPN event locator.

The used video game category is unviable because of digital delivery.

Teams should punt on fourth and short.

The best merchant services companies will call you first.

Your customer base will respect you if you're outspoken about your political beliefs.

Volume outweighs margins regardless of scale.

Rewards points programs and discounts are worth a try, because they are easy to move away from if they don't work out.

Nobody reads comics anymore.

The Reserved List cannot realistically be abolished.

The most important thing for a new store to focus on is event attendance.  Butts in seats.

Tuesday, September 12, 2017

The Arizona Gamer Story, Part 5: Cart

Welcome back to the meandering tale of the Arizona Gamer, my second game store in which I was a minority shareholder and served operationally as "the card guy" and "the organized play guy."

I told the tale of how Jason Barnes started Arizona Gamer as a mall kiosk.  Arizona Mills Mall is located at the epicenter of the metropolis, at the junction of I-10 and US-60 in Tempe, just southeast of Sky Harbor Airport.  It was still the newest mall in town when Jason got started there, so even after moving to a permanent storefront at Mill and Baseline, he intended all along (and I agreed) that it was worth our while to get a mall presence again.  Enter the cart.
That photo is about what our cart looked like, though we had it arranged so that the center was an open surface for a Warhammer 40K demo, and the endcaps had mini-shelves full of TCG booster packs and sleeves.  We kept getting moved around by mall management, so we basically played the role of the Tuatha'an and made our camp where we found it.

The part I wasn't privy to was that November and December were triple rent months, wiping out most of our profit on the cart.  We had no point-of-sale apparatus back in those times, so the benefits of load-balancing were essentially absent.  Our employees who worked the cart were sometimes on the ball but sometimes absolutely not.  The mall environment is a weird microcosm and is not entirely unlike what I imagine it would be like to work at a theme park.

You know what?  I'm already tired of reminiscing about the cart.  I'm not even going to stay on topic for the rest of this article.  I thought the cart would hold up for a full-length article because anyone who was part of the Arizona Gamer inside circle back then remembers the cart so prominently.  It was this really unusual way to run a game store, or an advert for a game store, or kind of a convention booth that never closed?  I'm not even sure what the hell it was.  I kind of want to try it now, except that like everything else, it doesn't rate a spot on my priority list, which is utterly dominated by the store move until I have no damned idea when.  Hopefully soon.

If you want to make sure you have every good idea on the planet, just be busy enough with an overwhelming deliverable that you have no time to allocate to anything new.  Inspiration will spring forth.  A geyser of profitable ideas has been flooding in basically all year, starting right about when I finalized DSG's previous lease with the existing landlord and concluded that renewal was simply off the table in any realistic way.

I really, really want to punch the person responsible for the abortive attempt to build out the Chandler suite before we got to it.  Every day is a new adventure in discovery.  Oh that floor covering?  It's actually stucco and is proving hideously difficult to remove.  The drop ceiling above the restrooms?  No, they didn't dismantle it, they just cut all the beams flush at the edges.  Tile glue?  Oh, don't we wish.  No, they used tar, because of course they did.  There's Cat5e run everywhere that we don't need any and never will.  I'm fully ready to discover a chupacabra nest somewhere under the electrical panel.  (Which was a hideous mess and cost us almost four figures in labor to have our electrician fully refit.)  It's like that movie The Money Pit, except without the charm of Tom Hanks and Shelley Long in their prime.

Concurrent with this insane behind-schedule buildout, I'm going to have to assemble the store while contractors continue work, and aim to get all our ducks in a row quickly enough to avoid downtime.  If you asked me today what the odds are, I'd say 50/50 at best that we close Gilbert and open Chandler without skipping a beat.  And this is a ton of up-front expense that doesn't go toward inventory or other stuff we use to generate revenue... no, it's just a sunk cost that amortizes out over five years.

It's enough to make a guy want to abandon the entire plan and just open a mall cart.

Tuesday, September 5, 2017

Muddle Through Somehow

Twice in the past week, I've had days where by whatever combination of fatigue, stress, focus, or other factors, I was not effective to the standard I expect of myself.  I did not punch my weight class as an owner.  And as a result of these days, there was some effect on revenue, though it's speculative how much.

At a lot of jobs, including those I've held in the past, if you're just not dialed in, you can dog it for a shift and maybe have nothing happen, or you can get into a heap of trouble with the boss if he or she is observant and sees that you aren't participating.

It's a little different now.  My boss(1) is the ownership group, and my boss(2) is the consumer public. So basically I answer to nobody, but I also answer to everybody, which means there's really nowhere to hide.

Moreover, the consequences could be immediate or could occur on a delayed blast, and it might not be obvious to me which has occurred.  If I slip up and upset a customer and they put an item down and leave without buying it, well, that's pretty obvious cause and effect.  It is rare for the consequences to be on such evident display, however.  More often when I've run low-octane, what I've done is slowed down the process of advancing infrastructure projects that multiply revenue, and therefore I have slowed the process of the compounding revenue from those vectors.  The process of getting all of a store's singles listed on TCGPlayer, for example, provides an almost logarithmic ROI.  Any time I slow down the process of fueling that engine, I lose both speed and acceleration.  An hour spent out-of-sorts on Wednesday the 11th might end up making a $50 revenue shortfall on Friday the 27th, or it might make a $500 revenue shortfall.  Both are within normal parameters.  For one hour of me being off-task.  It's the kind of thing that haunts you at night.  Fear is a motivator.

The good news when you run your own business is this: It works both ways.  Going the extra yard and working it harder and cleaner can erase a multitude of sins and make up lost ground.

There are more days when I am running sharp than running dull, so in the aggregate I offset to the positive, I am fairly certain.  The ongoing challenge is digging out of a sub-par session.

One very simple answer is to work more.  It's not a universal sovereign but it works more often than it doesn't.  Within the limits of avoiding physical burnout, pulling an evening shift or going in earlier in a morning can provide an opportunity to focus well in the quiet of the hour.  I am rarely upset to have "gone in for a little longer" on any given day... it's true that I gave up a chance to log an hour or two in the catharsis of Ori, but I always end up creating value within the business and that makes me happier.

When I'm having focus issues due to digestive or blood sugar or protein problems, an unfortunate reality for post-bariatrics like me, I like to revert to tasks I know will generate income, but are solved processes, no judgment required.  Lately this has been parsing through the loose video games and creating proxy cases for them so they can be shopped more effectively.  Sometimes it's as simple as sorting cards.  That task is the great equalizer and nobody in the organization should consider it beneath them to do it.

What not to do when trying to banish the drag-a-lags is buying.  Buying is where my money is made or lost, and the judgment in setting pre-orders and other procurement is so absolutely vital to the health of the enterprise that I dare not engage in it when I am not cold and crisp.  Secondarily, any other judgment-heavy activity such as personnel reviews or tax planning is right out.

The stakes are high, and I'm manipulating live wires, which means I can make high-voltage moves, but also get shocked hard.  Would I trade this for a nice secure desk where I no longer controlled my own destiny?  Well, it would have to be a hell of a paycheck.  So until we're speaking in those kind of figures, I'm going to stick with the capitalism plan.

Tuesday, August 29, 2017

Please Stand By For Departure

This stage was the worst last time around, and it's the worst this time as well.  We have our lease finalized, construction is underway, our opening is held up solely by however long it takes everything to get ready, and yet we can't start assembling the store in earnest until the contractors are done.  Fortunately, the external services are done.  Power is on, water is on, cable turns on in a few days so our internet pipe will go live, et cetera.

And the contractors are moving quickly, as far as contractors go!  Yet I'm here bouncing up and down, looking in on the store every morning and night, tracking every inch of progress and planning for how soon I can start the ball rolling on the next deliverables.

For example, I have a fairly significant amount of material stowed at Tempe, at Gilbert, and in my garage at home, that simply needs to be staged so we can get to using it later.  But that all can't be moved to Chandler until the floor is done, and the floor is pending completion of drywall, which is pending completion of other construction elements that are higher-priority.  We're basically getting a great deal on the buildout, and that means that as anxious as I am, I put a sock in it and let the builders do their thing and do my best to stay out from underfoot.

My commercial-grade disc resurfacer should arrive later this week, so I can finally dive into the several hundred game discs that could be in stock this very moment if they weren't scratched up.  The unit is even compatible with Gamecube minidiscs, blu-ray discs, and double-layered discs.  I'm reasonably excited to get it on deck.  Where will I set it up?  Lord, who knows.  There isn't any room in the store to put anything right now.  There will be, once I move some things to Chandler.  But that's pending the floor, which is pending the other construction, and so on...

We're overdue for some floor expansion for event seating, because Friday Night Magics and even some of the normal weeknights have seen every table full.  I can make that room once I dispatch furniture that isn't going to have a connected event on the calendar until after the move.  I can do that once the floor is ready, and you know where we go from here.

Card operations are the least changed.  They don't take a ton of room right now relative to the sales they generate, so I'm going to do the rest of the work "around" the staff's continued administration of that retail activity.  Miniatures is much more cumbersome but we have nothing happening on deck except product throughput until the move, so at least it will be as compressed as it can be.  Comics?  We have a lot of work to do with those at Chandler.

This is going to be the most cost-efficient move ever achieved.  From completion of base construction, after which we can work while the low-voltage guys and the HVAC guys do their thing, I am going to be smurfing van-loads of material from all of the existing business component locations to the Chandler suite. Day by day, a few times each day if needed, I'm just going lug what needs lugging.  Doesn't get any less expensive than that.  Maybe I'll even sweat off a few pounds.

Once the alarm has conveyed, we'll get the new safe bolted to the floor and start moving valuables over.  Around that time is when I actually get a moving truck and take the oversized gear from Gilbert at least; there will likely be a day of closure while we move "the head of the robot" without detaching it from its power supply.  The oversized stuff from Tempe that isn't staying in Tempe can come in the same truck rental.  It's fortunate that Gilbert has a whole pile of cash register terminals up and running, because I can just split them up and have them working in both locations at the same time.  That overlap is going to end up being one of the saving graces.  My own workstation will shift over right about then.

Without completely bombing out payroll, there's going to be at some point a mass conveyance of main work over to Chandler, including online shipping operations, while some hardy souls stand vigil at Gilbert over the remainder of our business there until we close the site.  The rest of the crew will then cease work at Gilbert and begin assembly of Chandler in situ, while we're already soft-opened for business.  The fortunate thing is that we have all the space in the world to work with, and that helps mitigate the labor load.  Stuff can just wait backstage while a crew member stages the public space elements fixture by fixture.  Worst case scenario, a customer wants a product that isn't merchandised yet, our point-of-sale software should tell us that we have it, and we fetch from whichever stack or rack of boxes it's sitting in.  I don't see that happening much, though.  Everything has a price tag on it and it will all ring up in the system, so even if we have to just have tables full of merch until they're situated on fixtures, people can still shop the goods.  Which I guess means it won't sit backstage.  You can see the quandaries I'm up against... I could start sorting this all out, but can't move just yet.

I'm relishing every opportunity to complete any prep that conveys over to Chandler.  I finished building some video game product gondolas that are going to be taken over exactly as they are.  That's time spent now and saved later.  I've made huge progress on the numeric-index video game stock that puts the games back out where they can be shopped, an overdue change from having them all behind the counter.  Couldn't do that until I worked on the racks.  Couldn't do the racks until I was able to clear a few things from Gilbert to my garage.  It's like Tetris being played on three screens at once.  But we're getting there.  The video game stock project is gonna take a lot longer and won't even be fully complete when we move, but once finished it will be an amazingly shoppable layout that we saw fully in action at Wii Play Games in Las Vegas and knew we had to mimic here.

Other prep that is going to stay with us includes updating the branding and graphics, a process I've been working on myself now that we have our logo fixed.  Still have the playmats, sleeves, and so forth to order; new employee uniform shirts, window vinyls, general signage, and this ties into advertising, which we're going to be doing a lot more of once the move is done.  I've stalwartly refused to spend more than a modicum to get people to visit DSG Gilbert, because I'm just going to have to redirect them.  But once the grill is all fired up, metaphorically, on Ray Road, I want everyone and their brother to know to come play games with us.

This new location has been in the works for literally over a year and I wish we could have moved over sooner, but that's water under the bridge now.  We had an ownership composition change last summer, and another at the top of the year, that both led the company to a better position than it had.  Given that and improving process and execution since then, it's just as well we are moving now, because we are doing a better job of it.  But let me tell you, the day it's over and we're up and going full blast with our long-term home, it's going to be celebration time for the DSG organization.  We're going to be relieved and recuperating and happy.  And then, with the 2017 holiday shopping season on deck, the next level of real work will begin!