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Tuesday, February 7, 2017

Increment By Increment

Sunday night, we saw the greatest comeback in football history.  No team had ever overcome a 25-point deficit to win a Super Bowl, but the New England Patriots did just that in their overtime win over the Atlanta Falcons.  The remarkable thing is how the Patriots achieved that comeback.  Trailing 28-3 early in the second half, many teams would be heaving desperation shots, low-percentage plays that stood little chance of helping reestablish control of the game.  The Patriots instead methodically and painstakingly marched one drive after another, putting up a touchdown to close within 28-9, a field goal to make it 28-12, then after a huge turnover, a touchdown and conversion to make it 28-20, and then again to tie the game.  In overtime, Tom Brady dismantled the weary Falcons' defense and James White punched in his third touchdown to seal the deal.

image credit (C)2017 Akron Beacon-Journal

What does this have to do with the comic and hobby game business?  Everything.  Methodical, gradual, incremental gain over excruciatingly long periods of time are the way of the world in a trade where there simply isn't enough money in play to brute-force a programming upheaval or a facility renovation or a massive product line deployment overnight.  Apple does their big store upgrades during dark hours and slow seasons to the delight of fans, but it's a staggering outlay of resources and coordination to achieve that so quickly and seamlessly.

The most important time when incremental, patient persistence counts is when the clock is ticking.  Rent is coming due.  Maybe big terms payments are coming due.  Most often, one or more of these things overlap with payroll or sales tax.  Even a great sales day isn't going to cover that bill in one shot, and if you are like me and still get the heebie-jeebies from seeing invoices for enough money to buy a new car with options, it can be demoralizing and overwhelming to realize you have to come up with that in how many days?  Wait, did you say days?!?

The only way to build to it is to string together solid days of business.  That may mean hustling for sales, which I found myself doing quite a bit during the winter market malaise we've been in since around October, not counting those great two weeks or so at the end of December when everything looked easy again.  Rent and payroll come together next week as well as terms?  Let's say I'm on the hook for $18k, to use an outdated example.  Whatever our running bankroll is, since we keep money around all the time for buys, we need $18k more by the middle of the following week to hit all the bills.  Eighteen thousand dollars!  In nine days!

But wait, that's only $2000 per day.  We have averaged more than that for a while now.  Cooler heads prevail; this is achievable.  Some of our daily yield is store credit redeemed rather than moneydollars received, and while Friday and Saturday totals tend to be well in excess of that average, sometimes those gains are partly offset by a $1200 Tuesday.  So what do we do to make sure we get ahead of that two-pound-a-day pace?  I push a few items to eBay a little more aggressively than I otherwise might.  I check the Crystal Commerce channel sync to make sure everything that's being shared is showing in stock, by means of spot-checking a random few of the thousands of items listed.  I might go ahead and run a 90-day sales report on a product line and see if there's anything to discontinue; a clearance sale with even a deep discount of 50% or more can quickly raise several thousand dollars if I'm sitting on a lot of product, and since that product won't be replaced, the entire yield can be allocated directly to the upcoming expenses.  Whatever I want to push, I make sure to boost a Facebook photo of it, targeted at the audience demographics I hope will give a damn.

In essence, I buckle down and make incremental gains.  A little bit today, a little tomorrow, setting up to buff the upcoming weekend just a little bit more.  Before you know it we've not only raised the eighteen large, but we've kept buying cards and video games all the while, replenishing our resource base for the next time we have to build extra bankroll on short notice.

Most importantly, I don't make desperation heaves into triple coverage.  I don't put Underground Seas on eBay at 80% of TCG Market.  I don't sell booster boxes at cost just to "get out from under them."  That stuff has value!  Not only am I cheating myself out of value if I set that stuff on fire, to use insider lingo, but I'm also training the public to wait until I'm desperate and scoop up merchandise at a fraction of the price.  Nobody would pay $2k for a tricked-out iMac if they knew it would be in the Fry's Electronics Tuesday circular for 38% off sticker every month or two.  There is certainly room to use pricing as a tool to turn some quick sales, but it needs to be done deliberately and with laser focus.  Pick specific things you want liquidated, make sure they are good candidates for liquidation, and then strike fast strike hard no mercy sir.  Get that stuff turned into cash Now.  And don't dither for a moment.

Incremental gains work in other regards as well.  The gargantuan addition of millions of Magic cards to our Crystal Commerce inventory continues apace, with a full-time dedicated staff member working on that primarily, everyone else on staff contributing during periods of slow customer arrivals, and management and myself coordinating, taking our turns at entry, and even taking our turns at card sorting.  Sorting cards is the great equalizer at DSG: Everyone does it at least some of the time, from the owners on down to the newest hire.  (Owners don't do it that often; we're not here to play this game on beginner mode.)  Importantly, this massive project includes keeping up with the ingestion, intake, administration, reconciliation, retrieval, packaging, shipping, and verification of existing stock as cards are bought and sold to pay our bills every day.  To date we've still only inventoried cards printed from roughly 2011 forward.  Some of Modern and virtually all of Legacy and Vintage remain in processing, except what has been reprinted in Masters and Command Zone sets and whatever we've purchased from the public on actual buy tickets in the point-of-sale.  The sales snowballed quickly once we got a very modest amount of cards entered.  A positive problem to have.

One of my longest-term projects, one that has been taking so long I think it's going to outlive the facility it was started for, is to configure the Gilbert store's fixturization so that everything is completely off the floor and we can use floor-cleaning appliances like motorized mops and waxers.  You can't do that if you have merchandise on the floor (heresy!) or close enough that splash damage is a thing (blasphemy!) or you're using light-duty fixtures that aren't rugged enough to withstand commercial-grade janitorial labor (abomination!).  The next building I set up is going to be ready for this right from the start, if I have my druthers, or as soon as possible after that.  We're not at scale to have concrete and metal everywhere like a Sam's Costco, but part of why boutiques get so dirty and granular is that their physical plant sorely lacks durability.  DSG needs to do better.  And that has meant a meticulous and systematic replacement of fixtures and floor usage with the deployment you see now, which has only a few trouble spots remaining and most of those backstage.

There are other projects I only get to revisit every once in a great while.  Our graphic and logo assets still need to be redone. Our arcade restorations are ongoing.  Product lines I'm working on adding.  Repairs on consoles that came in and were bought non-working.  Taxes, for that matter.  There's always something, many things.

I can't do it all in one day or even one week.  But we do need to get it done.  Inexorably, one bite at a time every chance we get, we gain ground on the longer-term objectives, until one day I wake up and suddenly it's finished.   And that's when we start enjoying the payoff.

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