Friday, December 30, 2016

Not Quite There Yet

January 1st, 2017 was set to be the date that three other Valley stores raised the Desert Sky Games and Comics coat of arms on their flags and the clock started ticking on three additional locations to come.  Alas, this will not happen quite yet, nor quite like that.

The expansion/merger is still underway, but we ran into a few wrinkles.  Not all business deals unfold exactly as planned.  As such, we're going to need a little more time to bring this to fruition.  Stay tuned throughout Q1 2017 as we nail down the specifics and finally, ultimately, go live with the changeover in whatever its final form shall be.

Product Mix
As I wrote and wrote again right here on the Backstage Pass, I don't think comics are working for DSG right now, in particular at DSG Gilbert.  However, we have a use case that they might still be meeting metrics at the Tempe location, which is currently doing business as Tempe Comics.  While it is still likely that comics are entering a sunset cycle, I consider it a worthy effort to continue to serve that customer base while it is still feasible for us to do so.  We're going to leave this door open for the time being, while the phase-out of comics in main stock at Gilbert gets underway (we've got all trade paperbacks at 50% off right now, for example).

False Start
One of the stores that was set to be absorbed into the new DSG was Tempe's Critical Threat Comics, right in the heart of the ASU campus.  Jessica and Jeremy built a rich and vivid community at the "See-Tee-See," and unfortunately the passing of the baton amongst all involved simply didn't work out.  CTC has closed, and DSG "Prime" did not quite have deep pockets to an extent that could have floated it home, though not for lack of interest in doing so.  This is one of those things that will be chalked up in retrospect as missed opportunity due to timing.  Had a bunch of things played out differently, there would have been a DSG behind the Chuck Box starting Sunday.

Schrodinger's Suite
DSG's lease option in Chandler doesn't extend forever, and part of the problem with losing CTC was that we had allocated resources to supercharge CTC's bottom line in advance of the handover, and when that didn't work out, we ended up neither having a comprehensive recoupment, nor a profit output.  We needed one or the other under our calculus to ramp into a buildout for our west Chandler opportunity.  This isn't off the table yet, it just got a lot more difficult.  We're exploring a number of options for continuing this part of the expansion plan.  It may miss its projected time-frame.

Springs Forward
The good news is that we are under no such constraints with our Superstition Springs Center location plan.  They have quite a few vacancies, the rent they offered us is good, and the critical resource in that case is more of ownership attention than anything else.  Our original announcement slotted East Mesa into the late spring or early summer of 2017 because we expected to be stuck in permit hell and/or construction prep for the Chandler location, and didn't want to find ourselves idle.  Essentially once we've addressed other parts of the merger, we should be free to build this location.  Still happening, we're just leaving it loose to move around the calendar as circumstances dictate.  If some competitor beats us to the punch, oh well.

Highway 87 Beckons
We announced a moonshot for opening in Payson in early 2018, and we're just going to leave that plan the way it is for now.  My folks live near Payson and I'm there pretty regularly.  It will not be especially expensive or difficult for me to make that location happen, because travel won't present the same cost or logistical hassle to me that it would for a competitor having to do it as a remote project.  Our primary limiting factor right now remains as it was a month ago: We don't currently have someone on deck to operate the place.  Nobody is going to commute from the Valley to Rim Country.  Someone's going to have to live there, either on a career opportunity or because they are already local to the area.

(A)bort (R)etry (F)ail
Business deals sometimes don't work out.  While it would not be anyone's preference, it is possible that the expansion plan ends up terminating out, and the involved existing stores go on with the status quo ante.  By comparison to some of the gargantuan business acquisitions and mergers you hear about in the news, our little project is tiny, a footnote, a rounding error.  This experience has been a huge education to me in the sheer scope of massive business entity transactions.

So, that's a roundup of where the expansion is right now.  DSG Tempe and DSG Ironwood each can exist, but how this is all going to unfold is still pending ongoing developments.  So, again, stay tuned.  The expansion/merger will not complete on time as expected on January 1st, but we are still moving forward with it.

Saturday, December 24, 2016

My Festivus Airing of Grievances

I hope you all are having a pleasant Festivus (or other holiday). My regular Tuesday post will come later in the week for reasons that will become clear. As such I thought this would be a good opportunity for some bonus content. Core to the Festivus celebration is the Airing of Grievances around the Festivus Pole. Without further ado, here we go!

I'm dismayed at the continued market devaluation of product and the direction it has forced me to move to keep my business solvent, as I have written at length here on this blog before. In keeping with my studies of Objectivist principles and concepts, I have stopped merely hoping for the trend to reverse and/or following social pathways to bolster that value, and instead accepted the prevailing wind and done my best to sail with it.

In essence either a manufacturer establishes vertical brand reinforcement or they don't. Because so few do, my business has become more and more of a pawnshop now. I don't think a pawnshop is an evil thing, but it's not the business I sought to get into, as I wrote here earlier this year. It limits a lot of what I can do logistically and impedes my ability to surprise and delight my customers with cutting-edge software and infrastructure as the store was originally envisioned by myself and Girard back in 2011-2012. He and I had planned to build the Apple Store of tabletop and it's just not remotely feasible with the economics of the game trade today.

Our software situation is so frustrating that Girard threw in the towel last month and closed his store. I respect the sentiment, though I am not in a position to need to close at this point.

The ambitious expansion/merger announced here at the end of November ran into some snags, such as one of the inbound stores, Critical Threat Comics in Tempe, unexpectedly closing forever. Thus, the business plan is in flux and we're still working to nail down the particulars and see if we are even well-situated to proceed at all, and if so, to what extent. This is among the issues I will likely address in the next blog post. I accept that doing what is right for the business trumps emotional or personal considerations, such as what I wanted to do. Fortunately, part of the expansion plan coincides with what I was needing to do for my lease situation in Gilbert anyway.

I don't mind having to come forward and announce that the whole deal isn't going to come to pass as planned; not all business deals work out, that's life. However in the course of making this move, I got to see a lot of hate bubble to the surface that had not been as evident before. That's lousy. That's part of why the tabletop community in Arizona, from Magic to other subcommunities, is as unhealthy as it is. I've done what I can to set the right examples, deal fairly with people at arm's length, and in general to say what I'm doing and do what I've said. Not everybody wants to live that way.

Dovetailing onto #2. Not everyone has to be a dealer. The positive side of Amazon and eBay and Craigslist is that it has made it possible for goods and services to circulate more efficiently than ever before. Remember when you had to take out a classified ad in the newspaper? (Millennials: you'll want to look those words up on mobile Wikipedia.) But the negative side is that everyone wants to be a reseller now. Only a fraction of the community actually buys things to consume, use, and enjoy. Everyone else has resale or speculation on their minds. These bubbles have risen and popped before but nobody cares, they figure it won't happen to them, and meanwhile they drip poison into the well for everyone else.

We have become a world of things, not people and experiences and happiness. I can't point the finger because I enjoy things sometimes too. But if there's one positive I can take out of having to deal with sharps wasting my time every day with their competing business interests, it's that I will achieve the maximum Expected Value out of all my personal purchases and possessions if I buy what I actually want for myself, and keep it. As Tyler Durden taught, we work hundreds of hours to buy things we don't need, and our things end up owning us. I think I enjoy my games a lot more when I buy them expecting my bookshelf to be the end of the ownership chain. Consistently my happiest customers are those who sell to me infrequently. Not necessarily "never," because everyone sometimes has stuff to trade in. But where it's a rare occasion. Those people are doing it right.

Dovetailing onto #3. Not everyone has to open a store! We had 12 store closures in metro Phoenix in 2016, and yet we are somehow ahead by a net plus two stores since then. I'm updating the Mega Article this week to take that into account (and to include some deep background that some helpful folks sent me regarding the stores currently on the article). Having said that, it's a slowdown compared to the booming explosion of stores in 2015.

I see a new store in the area, especially one run by a neophyte, and I have no fear for my own viability, because I know they will go through the same trial-and-error learning process I did in years past, and they don't really affect my ability to reach customers anyway. But their arrival absorbs up a lot of low-hanging fruit that we incumbents have worked hard to harvest. If the game trade were an MMORPG, they'd be kill stealing.

So if you're a newcomer wondering why you sometimes get a frosty vibe from the established stores, that's why. It's not that we aren't willing to have you in the community and be good neighbors, and it's not that we think you're actually going to put us under (as I've written in the past, it is very, very difficult to do that, unless the existing store is already in rough shape). It's that you crashed the wedding party without an invitation and you went right out to the dance floor and started hitting on our daughters.

Loot crates and their imitators. Come on, people. They're leftovers and closeout product sweetened up with a designed exclusive here or there. You're being suckered. Don't be a sucker.

[End of list]

I've been on a lot of down notes lately here on the Backstage Pass, basically ever since the big up-note of the expansion/merger from a month ago. And I don't want to set the tone that it's always doom and gloom because the reality is that it's not. So after airing five grievances above, I think it's only fair that I air five times five things that are good and make being a part of the game trade wonderful. 

  1. My employees are absolutely outstanding and have cultivated a deeply positive store culture. 
  2. Every day people come to my business to get away from the grind and enjoy themselves, and I love the fact that they get to have fun because of DSG being here. 
  3. I have people who started off as customers and have genuinely become friends at this point, more people looking out for me than I ever realized or expected, and I value them tremendously. 
  4. It feels great to be back in the video game business for good. Everything from experiencing some of the newer stuff for the first time, to some of the great buys I have been getting on rare or older or unusual gear, to the upside potential of repairs, video mods, and like such. I love it. 
  5. I get phenomenal support from my distributor reps at GTS and Alliance. 
  6. There are professional retailers in the industry doing strong things with their stores and businesses and they have given freely of themselves and their guidance to show me their ways. 
  7. There are professional publishers in the industry who fully recognize the landscape we retailers face and tailor their product vectors to ensure that the stores who promote their games in good faith are in a position to compete and thrive. 
  8. There are neighbor stores and owners right here in my metro that are excellent establishments and excellent people, whom I am proud to know and to whom I am proud to make referrals. 
  9. Supply issues notwithstanding, it's nice to have products so nuclear hot that they sell out at full price the moment they hit the shelves. Final Fantasy TCG, Star Wars Destiny, Pokemon 20th special sets, and so on. 
  10. Accessory manufacturers are getting better. They are figuring out what we need and want almost before we need and want it. There has been at least one new accessory every month or so that as soon as I saw the solicitation, I knew it would be an evergreen product for us. 
  11. Miniatures, the category that caused me headaches earlier this year, turned sharply positive and started punching its weight this month. Our store's miniatures community has been increasing in quality at a noticeable rate. 
  12. Magic: the Gathering content is at an all-time quality high. 
  13. More young players are enjoying the Pokemon TCG than I have ever seen. 
  14. FFG is on a hot streak for general content quality between Destiny, the current Netrunner cycle, and games like Mansions of Madness 2.0 and New Angeles. 
  15. Even as I prepare to move away from it, the comics category continues to churn revenue. It didn't hit the metrics I needed, but it is still a draw, day in and day out. 
  16. Christmas sales got good. It took until the week before, but they got there. 
  17. Every now and then, not often, but once in a while, I make a buy in good faith on what I believe to be a fair payout, and then upon digging into it I discover jackpot value. Sometimes I have to work for it a little further, whether repairs or what have you, but still. Just gotta keep making solid buys and let the law of large numbers send those my way. 
  18. I love when I see our players putting a lot of time into modeling and painting up an army and it comes out looking terrific. The entire process from seeing them painting away an afternoon to seeing the troops and vehicles spread across a table is really healthy, they made that game an expression of themselves, and you can see the payoff in their smiles. 
  19. I love it when one of the long-time players from the trenches prevails and wins a qualifier, especially when they have to win through the hardest-bitten grinders to do it. Score one for the good guys. 
  20. I have close allies in the trade who have helped me in my hour of need or opportunity and I look forward to a chance to make good on that for them. 
  21. It is a genuine blessing to have a livelihood where I am able to leave on a moment's notice in case something serious comes up or I am otherwise needed all of a sudden. 
  22. I have a ten-minute commute, if that. Not a negligible thing as the brutal downtown commute was a significant part of what made me want to leave government service. 
  23. I am getting the best support ever from my family as I prepare to undergo the process of getting back into the legal industry in 2017-2018. 
  24. I am having the best time ever seeing my kids enjoy the fruits of my labors. 
  25. Every day I get a great photo of Jeff Goldblum in my Facebook feed. 

 Have a wonderful holiday weekend, everyone!

Monday, December 19, 2016

More Regarding Our Move Away from Comics

I knew some of the regular readers here would take interest in my announcement last week that Desert Sky Games is getting out of the comics business.  I did not expect the greater comics media to take notice of our move, as observed by this article and this other article from Comics Beat, as well as a mention in Bleeding Cool that I found bewildering given that it appears they reached out for information or comment to everybody except me.  I am rather central to DSG's policy decisions -- rumor has it they are entirely my doing -- and I am not that difficult to reach.  I guess I must not understand journalism.

Given the commentary from the articles, on social media, and in-store, there are a few topics that I think would be well served by some additional attention here.

It is easy to assume that since DSG only carried comics from 2013 to 2016, we merely dabbled in the category and did not commit to it fully.  The underlying assumption is that comics did not fail for us, we failed comics by not going the distance.

Let me dispose of the first part of that right away.  Comics did not fail us.  They are, even now in the doldrums, producing substantial gross revenue.  I believe the trend line has turned negative on us in this market specifically and under current conditions specifically, but as I have said before, I do not think the end is nigh for comics overall.  DSG made a lot of money on comics in three years.  A great deal went right.  What we're seeing now is a downturn in which too many misses on content, rising costs of business, and a glut of product have left our hybrid store poorly positioned to continue in the category.  It is possible to be making money on a product line and still have it be the correct move to exit that product line.  Dollar for dollar, we are better off allocating those resources to Magic: the Gathering, for example.

It is fair to state that the most successful comic businesses are those that commit to comics and basically nothing else.  When you look at the laundry list of the top dogs, they are either comics-first (by a lot) or comics-only.  Mile High Comics.  Midtown Comics.  Graham Cracker Comics.  Here in Arizona, we have Samurai Comics and Jesse James Comics.  Products in the greater game trade are either an afterthought or absent entirely from those stores.  With consolidation comes economy of scale, and with that comes a greater ability to ride out downturns.

The comics category punishes dabblers.  No comic collector will take a store seriously and consider opening a subscription pull box if they do not see essentially all relevant new releases on that wall every week.  A store does not need to explore the farthest reaches of the indie wilderness, but the top books from Marvel, DC, and Image must be present, along with anything else that's hot Right Now and a smattering of other recognizable titles.  DSG regularly stocked virtually every Marvel and DC product, and the frontlists from many indie publishers.  We did not have the breadth of Jesse or the depth of Samurai, but by and large we had the goods.  Make no mistake, with comics, we were in it to win it.  Our comic clientele deserved no less than that level of professionalism and focus.

Diamond Comic Distributors
A common refrain in the comic trade is how difficult it is dealing with Diamond, the exclusive wholesale supplier for essentially all comic product.  I recognize the scale Diamond works at and I know some of the inefficiencies they have are simply not curable.  Diamond accepts damage reports, overship and undership reports, and so forth, and usually takes corrective action, though it takes extra time, labor, and attention to report the problem and then to babysit incoming orders to make sure the problem got taken care of.  Multiply that by the total number of problems and it becomes evident why many comic stores just write off such losses in the margins.  And yet again, this is another huge part of carrying the comics category where massive, scaled, laser-focused stores and chains have a substantial economic advantage over small hybrid stores and store groupings like DSG.  On the game side of the trade, there's a lot of talk lately that tiny stores and massive stores (or chains) are positioned to survive in a way that midrange "Mario" stores are not.  It appears this may be true in comic retail as well.

In the wake of the massive Hastings bankruptcy, Diamond reportedly tightened credit terms across its account base.  I can only repeat this as hearsay as our account has not seen any changes or adjustments in as long as I can remember.

Diamond is not enough of an obstacle by itself to make a store want to get out of comics.  They do enough right for the category to function, and enough wrong to make it treacherous for those who are not adept.  They are a company run by humans, and humans are fallible.  Diamond is in many respects like a bull.  It's going to do largely what it wants, and you can predict some of that based on how bulls tend to behave.  A bull is indifferent to your personal needs or preferences.  It's up to you not to get gored or trampled by the bull if it wanders your way.  If you can "manage" the bull well enough, it may produce good results with your cows.

Marvel's Social Justice Agenda
I have heard Marvel's current content called this, and in truth I believe it is a misdiagnosis as the cause of the downturn in Marvel sales.  The raw demographic trends are numbers that do not lie.  The Millennial generation is one-third nonwhite.  Its successor, Generation Z, is expected to be even more nonwhite as its numbers and statistics solidify.  Gender norms have liberalized to an unprecedented degree in western culture today, even in more conservative demographic areas, compared to even only a decade or two ago.  The vast ocean of potential readership growth is a diverse one, and to engage that audience, stories must depict a world in which a diverse society exists -- including protagonists and antagonists.

Setting and character identity is not the problem.  Story is the problem, and more specifically story delivery is the problem.  A certain amount of writing hackery is accepted in comics due to ever-tightening deadlines forcing writers to do some reaching at times they might otherwise have reworked a plot point.  But overall the writers understand story structure, at least once they reach employment with the House of Mouse.  They know what story beats go where to make a formula work.  Thus, even a slipshod plot is going to be engaging if delivered coherently.  And that is where Marvel is off its game right now.  Working so many event sequences, crossover sequences, and subsets into the line-up, a line-up that keeps getting reboots and new #1 issues, makes a reader's or collector's attempt to follow what the hell is going on into an exercise in futility.  At this rate just start calling each reboot Season 2017 Episode 01 or something.

DC's Relentless Ratchet
Meanwhile DC is trying to entertain us at such breakneck pace I wonder when we'll ever have time to slow down and find out what happened in the story.  The two-week issue cadence has simply been too much for our boxholders.  I can see the business case for it.  The incremental production delta is probably extremely small for two issues in a month versus one.  It allows an effective monthly cover price of $5.98 without DC having to come right out and say it.  The incremental receiving and resale delta is significant, it's about the same as simply doubling the title count.  More work for us, for less gross and net per tree corpse sold.  I'm not sure we all recognized from the get-go that the negative effects would fall almost entirely on the retail tier, but that is how it went.

Story still trumps all.  Ultimately, if the content had held up, we all would have shut our mouths and sold dem books.  Star Wars and Darth Vader pushed a lot of content in 2015 and the reader public was like Billy Idol, it just wanted more, more, more.  We're treadmill-weary of DC Rebirth and the two-week issue cadence because the stories aren't resonating enough to pack an emotional punch.

Rising Costs of Business
This was the last straw, essentially, given the high labor load for comics as a category and Arizona's 20% increase in minimum wage due to take effect at the end of the month.  The minimum wage increases another 20% over two years.  I do not believe that a hybrid store can pay $12-$14 per hour for employees to work on comics, the end.  (Keep in mind about half that much again is eaten up in payroll taxes and administrative costs and fees on top of the hourly salary we pay.)

I think a cost per hour in the teens of dollars for labor is beyond what the product characteristics and value equation can support.  I think the evidence is on my side, with comic stores in $15/hour minimum wage localities forced to resort to digital panhandling to survive.  Maybe later in the I-hope-it-does future where a higher minimum wage has lifted recreational spending across the table.  But not now, and not for a while, and while I usually think long-term, I work in the now and the near while.

I fully expected a higher minimum wage to arrive, as I've written before on this blog.  I expected it to be the edict of a President Hillary, not the result of an Arizona voter initiative, but here we are.  My staff generally is diligent and industrious and is well worth paying above the minimum, but now that baseline has shot up a substantial amount.  It's a reality of the money not being there, or if it is there, taking so much from the bottom line that continuing to operate represents a poor investment, a poor use of capital.

I have been hedging everywhere I can toward lightening the labor load and reducing the service mix of DSG, such as with the installation of a kiosk and mirrored web store for TCG singles shopping, and moving away from the board game category where so much content depends on being hand-sold.  Comics requires not only meticulous and extensive ingestion of incoming orders, but also meticulous and extensive monitoring of subscriptions and customer accounts.  My media manager, Dustin, is an expert's own expert at doing this because of his experience managing a ledger of student accounts as an college academic counselor.  You might say DSG had the best possible personnel in place to make this work and it still gradually metastasized to the point where it simply required too much labor relative to its net sales.

Tree Corpse Media Won't "Die"
Comic books as an art form and the intellectual property based on comic stories are not going away.  They are too significant a part of our culture and the humanities of our times.  They will be studied for centuries.  They have existed since cuneiform and hieroglyphics.  Comics aren't going to "die."

Four-dollar (ish) limited prints of artwork on pressed barkskin to the tune of twenty pages?  That "comic magazine" will "die" in that it will probably diminish in every meaningful market respect.  It's gross indulgence.  I don't have a problem with gross indulgence, I'm a guy who modified his Nintendo 64 so it would output a 240p RGB signal directly from the VDAC chip through a THS7314 amplification chip onto a SCART adapter connected to a PVM medical monitor, because the resulting image looks more authentic.  But it absolutely is gross indulgence, and let's not kid ourselves, that's where we are with comic magazines.  In scathing self-reflection we must concede that we're really not that different from the hipster buying artisanal dog treats at this point.

Trade paperbacks?  Don't make me laugh.  If Amazon and Barnes & Noble don't get those sales offering them at roughly our cost, Kindle and iBooks and whatever other electronic delivery platforms will.  Heck, I have TPBs via iBooks.  And I own a comic book store.  Just as I think jukeboxes are cool as hell but I no longer use physical media to play music, we will find that obsolescence will eventually do its thing, and that the comic magazine will hold on as an artifact, but ultimately become a market afterthought.  Just as non-comic magazines have.  And books.

But comics won't die.  I can buy a 33rpm vinyl LP full of music right now, today, from a respectable variety of sources local and virtual, despite the product being, again, gross indulgence, obsolete and unnecessary.  It's a heritage art form now.  And as it is such, so also as such are comics unto us.

Tuesday, December 13, 2016

Discontinuing Comics After Three Years

It seems like only three months ago that I set forth the case for comics at a game store.  Little did I realize before the year was out that I would be exiting the category.
I wrote before that the main reasons to stay in the category were money now, the bounceback effect, and the attraction of crossover.  This stood against the negatives of immediate cost, space load, labor load, Diamond frustration, and the simple reality of dead tree media being on its way out.

Right around the end of September, the bottom fell out on comic sales.  The category has been in free fall ever since, but with regular weekly revenue and the ordinary seasonal downturn, the weakness of the category didn't become clear until I ran a bunch of numbers earlier this month.  If I were a superstitious man, I might point to the article as having "jinxed it," but as I don't believe in such hokum, I chalk it up to a coincidence of timing.

I do a lot of doomsaying here on the Backstage Pass, and that's not really where I want to go with this.  We all know comics has a sunset on the horizon.  We also don't think it's happening right now.  (If it is, you all can thank me for being the harbinger.)  I have stated before that I think it's likely a few years out.  However, the Pacific Southwest has proven to be what I am calling an "economically hypersensitive" consumer market.  We can't see canaries in coal mines from out here, because we are the canaries.  So if the earliest furtive tremors of the end of dead-tree media comics as we know them are in fact shaking, I absolutely believe they may be shaking here.

What is more likely is that the current comics downturn, the existence of which there is much less disagreement about within the industry, is sufficiently harsh for a store in my position that it turns too many of the factors negative at the same time, and triggers a core dump.  Comic stores operating at greater scale can weather the downturn.  Comic stores in less economically sensitive areas can weather it.  Comic stores with deeper subscriber box rosters can weather it.  Comic stores that auto-tap credit cards are probably better off to weather it.  My stores are none of those things.

We've been closing about a dozen subscriber boxes a week lately.  The shine of the DC Rebirth apple wore off, and nothing Marvel is doing right now matters.  I'm in a trackless suburban waste where we can't create our own hits, so nothing indie matters once you pass The Walking Dead.  Gamestop got their special deal on Kotobukiya/ARTFX+ so they can sell some of the best statues and figures at basically our cost from Diamond, to anyone who walks in the door, and that has ground sales of those items to a halt here.  We saw interest in Funko POPs drop again, despite carrying literally more than we ever have before.  There are probably things we are doing wrong in terms of merchandising and promoting the product.  For hand-selling and direct promotion, though, comics have been getting more love than anything else, and our comic staff has been diligent and industrious.  In the absence of a more concrete idea what we may be doing wrong, I have to assume we're busy firing Nerf bullets here, and they aren't punching through the target's armor.

The labor load issue isn't the biggest factor against comics right now, but it's about to become that on January 1st, due to a scheduled 20% increase in the local minimum wage and the anticipated even higher amounts that I will be paying because merit raises will remain at least proportionately in place.  About 10% of DSG Gilbert's payroll is a directly attributable increment servicing the comics category alone.  And that doesn't count the gargantuan amount of comic work that simply doesn't get done, mostly having to do with back issue curation and merchandising.  None of that counts the ordinary work of the staffer on duty ringing up a comic sale.  That sale could have been anything and would not have been significantly different.  With the other 90% of DSG's payroll about to increase by 20% in cost, that pretty much wipes out the available budget for the comics increment.  I think in a situation without the minimum wage increase, I might fight to keep comics alive at DSG.

The space load issue used to be a big factor against comics, and stopped being that.  Even now with closing one of the newly-acquired stores because its financial fundamentals were too far gone and its lease wasn't tenable, I still have gained enough space that it more than mitigates the every-square-inch-counts reality at DSG Gilbert.  I think in a situation where I had acquired more inexpensive space sooner, I might fight to keep comics alive at DSG.

The effective margin on my comics category has been among the worst in the store since at least the changeover to Crystal Commerce in June.  The best it got was 30% just as the summer ended.  For November is was in the negatives, actually cash-flow negative.  In the meanwhile the TCG singles category has become healthier and healthier and is sustainable and pushing volume.  Video games is lower on volume but makes TCG singles look like comics by comparison.  The opportunity cost of a dollar invested is kind of absurd unless I use it for TCGs or video games.  I can get miniatures, accessories, or some modicum of board games to round out the offering, but comics is about the worst option.  I think in a situation where I didn't have such far better opportunity spends available to me, I might fight to keep comics alive at DSG.

Ultimately it became a question of whether to keep comics alive at DSG, rather than me simply asserting that there were greater problems rotting the $1.2bn comics trade from its core.  God help us if I'm actually right about that.  But let's suppose I am not, and that the case for comics simply no longer favors them in my specific region and deployment.  You can safely disregard what I have done and keep on truckin' those funnybooks wherever your store is located.  I want to see my peers do well, to be healthy and prosperous.  I truly do.

I am sad to see comics go, and I am sad to be closing my University location as a result, as comics were all it really had left and it was impossible to sustain with the existing lease.  The first comic store I ever visited was at ASU, and it was beyond my wildest childhood dreams that I might own a comic store right in the heart of Sun Devil Country.  I guess I only got to have that for three weeks.  It was still pretty great, even for that brief time.

I move forward now once again as Desert Sky Games.  I won't use the old logo in the future as it did not translate well when not colored in, and reads "deh-ZERT-skee."  But at least my marquee sign, which in that original logo says only "Desert Sky Games," will now go back to being wholly and unambiguously true.

Tuesday, December 6, 2016

You're Welcome (Amended for Magic: the Gathering Retailers)

I see what's happening here
You're face-to-face with business, and it's strange
You don't even know how you feel
It's adorable!
Well, it's nice to see retailers never change

Open your eyes, let's begin
Yes, it's really me, it's Magic: breathe it in!
I know it's a lot: the rules look hard
When you're staring at a trading card!

What can I say except You're Welcome
For card sorting that'll take eternity
Hey, it's okay, it's okay, You're Welcome
I'm just an ordinary TCG

Hey! What has two thumbs that pulled up the trade
When customers burned out on role play?
This game! 

When the sales got cold
Who paid your rent from down below
You're lookin' at him, yo

Oh, then I sent players in your doors
You're Welcome!
To crack the packs for EV scores

Also I harnessed their wills
You're Welcome!
To fill your seats but not your tills!

So what can I say except You're Welcome!
For Trop Islands and Underground Seas
There's cash or there's trade, it's okay You're Welcome!
Ha, but can you turn enough to pay a lease?
You're Welcome! You're Welcome!

Well, come to think of it
Kid, honestly I can go on and on
I can explain every industry going-on
The dumping, the spikes, the crashes, yeah
Just Magic Finance there kicking your asses

I opened a store
Just me and my spouse
We run FNM and now we're a clubhouse!

What is the lesson
What is it WOTC said?
Who needs net income when you can burn overhead!

And the resellers dumping at cost?
We got full wholesale, there's nothing we've lost
Can't keep it up?
Can't make better sales happen?
Pay 'em to play so they don't have to spend to be tappin'!

Well, anyway let me say You're Welcome
For a small-business game no one wins
Hey, it's okay, it's okay, You're Welcome!
As long as there's gross revenue up ins!

Hey, it's your day to say You're Welcome
'Cause Hasbro's gotta pay dividends
Keep investing away, away, You're Welcome!
'Cause Magic just replaces you in the end!

You're Welcome!
You're Welcome!
And thank you!

-Image and original lyrics (C)2016 the Walt Disney Company.  Used in accordance with 17 U.S.C. § 107.