Last week I spent a lot of time on the butterfly effect and not a lot of time on logistics and the business structure. This time I want to move in the other direction and we'll see how this article works out.
Part 2: Never Chandler, or "What if DSG had never moved its main store to Chandler?"
We first looked at 3875 W. Ray Road waaaaaay back in early 2016, believe it or not. Nothing came of those forays at the time, but it opened the relationship with the McRay owner/landlord that ended up making the move possible when the Gilbert lease finally expired in mid-2017, and obviated the matter of what we would do with the DSG Tempe location, formerly Tempe Comics, when its lease expired outright a couple of months later.
Tempe Comics was located on Apache Boulevard halfway between McClintock and Rural roads, about two miles southeast of the ASU Main campus. The light rail passed immediately in front of the store. Abundant bus options existed. The rent costed next to nothing.
And despite all that, you need to believe me when I tell you that it was about the worst location we could possibly have had, and I would never on my life have signed a new lease for it. Nobody who had lived their entire life in this part of the Valley would have. The Mesa Comics / Tempe Comics owners who leased that spot did not have that same amount of background, and were apparently unaware of factors that made that location less viable.
See, regardless of what looked like useful geography, there was no close, convenient, or even useful freeway access to the store. This is a car town. Freeway proximity is gigantic. Moreover, the light rail was a double-edged sword making getting in and out of the plaza troublesome from the east, and it was already bad from the west because of the train tracks and peculiar configuration of the westward neighborhoods and plazas on the south side of Apache.
But that's not all. It's in Tempe's highest-crime area, which we got to experience firsthand with our Easter 2017 burglary. It's next to halfway houses, behavioral health adult foster homes, homeless shelters, trailer parks and so on. Don't get the wrong idea, I'm actually not saying the people living in those demographics are bad, or even that they are bad for business. I am saying that they are bad for the luxury hobby tabletop game business. If we were operating an eatery, convenience store, salon, or any of a number of other small businesses, we would be delighted to serve that customer base, as our offering would be much more closely aligned with their needs, and we could have thrived.
Due to the aspects described above, there is virtually zero accidental shopping traffic in the Tempe Comics plaza. It's the polar opposite of, say, the San Tan Village Mall. And that will never change, not in our business lifetime. In this weblog I have described and explained in exhaustive detail the need to reach a blue ocean of mainstream customers. Desert Sky Games and Comics Tempe was never going to be able to do that. Ever. No matter what we did. Because of attributes inextricably entwined with its location.
Accordingly, we knew it was a matter of running out the clock on DSG Tempe and fleeing for greener pastures, and that informed our decision in summer 2017 to sign our lease in Chandler.
(Cue warping noises, swirlies appear on screen, a dimensional aperture marks the breach, ascetics furiously calculate while technicians burn incense in prayer, and I see a glimpse of what might have been.)
Accordingly, we knew the cost and risk of Chandler were great, while a realignment of our business in Tempe took a lot of that risk away. That informed our decision in summer 2017 to stand pat at DSG Tempe, exercising our option to extend the lease through November 2019, and allow the DSG Gilbert lease to terminate out on time in August. But all decisions come with costs.
Tempe was 3600 square feet and that is enough room to do a lot of things, while being roughly half of what we would have ended up with in Chandler. But despite space to do a lot of things, we no longer had the audience to do a lot of things. And that meant cuts and reinvestment of resources.
Warhammer and miniature wargames overall were the first to go, and that makes this scenario so much different from the one posited last week. All that about demographics? How much do you think you can talk a minimum wage worker, living in a double-wide, into buying a bunch of plastic soldiers for $150 and then spending another $75 on glue, primer, paint, and varnish? Then another $50 on a rulebook for that army. And then another... oh, let's just say $300 on more models, to make that army competitive. And here's the cinch: We wouldn't have had a choice. Games Workshop provides its trade accounts with a five-mile exclusivity, and DSG Tempe was less than two miles away from Game Depot. So right away, we'd have liquidated a bunch of plastic and given away some game tables.
Board games are something that I never wanted to get too far away from in this business because it's a part of tabletop that's elemental to the definition of what tabletop is. But again, less than two miles away from the second-biggest board game store in town? One that had been open for more than thirty years? And facing a local shopper demographic that would surely have used us as a destination store for tournaments, much of which is irrelevant to the boxed game consumer? Nope. I am a board game player personally, but I saw the necessity to exit the category. Unlike Warhammer, where we pulled the plug before we even got started at DSG Unified Tempe, for board games we kept things going for 90 days to see if a community for it would materialize. None did.
Comics. Ah, comics. I've probably spent more ASCII on those in the past couple months here on the Backstage Pass than any other topic. But our DSG Tempe plan flipped the script. We had a whole bunch of cheap floor and with minis and tabletop out of the picture, not very much to do with it. Offering a massive comic back-issue library was simplicity itself, and the store's location was within the expectations for typical comic book treasure-hunters. With Critical Threat Comics at ASU closing down, we captured the Tempe comic reader base, for the most part. Ash Avenue continued serving its eclectic niche, but Monster Comic Books bowed out a year sooner, 2017 instead of 2018, when DSG Tempe ascended in the category. With plenty of halo miles between DSG and Samurai Comics, the two businesses continued to coexist enjoyably.
We stuck around in the various anime card games but just like in the main timeline, only Pokemon ended up being worthwhile. The rest went to the dustbin.
That left Magic, and Magic was an interesting case for us at DSG Tempe because if there's one thing you can do with a lot of cheap square footage, it's max out the online business. Not that we didn't put resources into it in Gilbert and then Chandler in the main timeline; as of this writing around 80% of all singles sales DSG makes are through TCGPlayer, despite those buyers paying a 20% higher price than our local market. But with little to do in that space, little danger of being unable to pay for that space no matter what business we transact, and all kinds of physical space along the main axis of the room, it made sense for us to use Gilbert's fixture base to create an entire sectional office and mini-warehouse of sorts.
The big benefit of online Magic singles sales is that it scales well with personnel. Even the existing tool base, imperfect solutions such as Crystal Commerce, TCG Pro, ION, eBay, Amazon, and so forth, functions adequately for this specific business structure much of the time. We have user permissions. We have logging. We have integration. We have pick and pull framework. The storage situation is solved. Frankly, I could do a lot more in the main timeline than I presently do, and have it mostly snap right into place. But that would take space away from the game room, which we aren't really needing to do right now.
With comics and Magic both on cruise control, I had a decision to make about video games. I don't want to be in business and not be selling video games, but that part of town is saturated for the category: in one direction we are two miles from Fallout Games, which is a great store; in another direction, three miles away from Gaming Zone, another great store. A mile north and three miles east there exist smaller, inconsequential video game shops, and there we are. Aside from comic back issues, and especially with the crime element, DSG Unified Tempe wants product largely off the floor and behind counters. We run video games, but it doesn't take off until the branch stores in Payson and, would you believe it, Gilbert open in late 2018 and early 2019.
Without any particular need or urgency to move on in my career, I happily guide DSG through the opening of a series of branch locations featuring Magic, video games, and comics. Around 2024, I drop stone dead to heart failure, and my family has the asset value of the company plus a sizable life insurance disbursement to keep them taken care of for decades to come. I never believed in ghosts until I became one, and I delighted in haunting people who defraud others and consider it to be nothing more than "wheeling and dealing."
(The warp rift opens. A version of me jumps out, but... what is this? Silk shirt, fit and trim body, smile on his face, thousand-dollar watch? "It seemed like you messed up. But you didn't!")
Accordingly, we knew the Chandler option was an all-in plan, and all-in plans have this disturbing tendency to crash the entire enterprise if they come up short. We imagined a scenario that would finally set us free, and lo and behold, it did. We renewed Tempe and let Gilbert finish out, and never moved to Chandler. Abandoning the entire southeast Valley seemed like a colossal mistake, and the fans of other area stores, especially Amazing Discoveries, didn't let us forget it. But what they failed to do was to see two moves ahead.
At first I thought that this rift was going to show me a different version of the Unified Tempe outcome. But in reality it just skips to a later point in the story.
Magic online became big business even faster than in the main timeline. I ended up Grand Prix vending, something I don't see much value in doing in the main timeline, purely out of a need to fuel the massive singles throughput that the online channels slurp up in their eternal hunger. Before long my staff solely for online sales grew from four, to six, to ten, and we're now perpetually hiring as it has caught up to the rate of attrition.
Having massive singles pull is even more powerful when you're in a central location. DSG Chandler has some amount of that in the main timeline, but the US-60 freeway is a psychological barrier and until we do something on the west side we'll never truly reach that market in terms of local players. When you're right in mid-Tempe, that barrier isn't a concern, you're only truly far away from Surprise, north Scottsdale, and San Tan Valley. The closer Magic stores starved out first due to our relentless growth and our ability to discount at will thanks to paying bottom rent. Further to the east, AD had enough support from Tucson to keep going, but the rest had to turn to other games and product lines to keep afloat. The reality struck all that the Valley actually had a Channel-Fireball-scale singles vendor, one that had literally nothing better to do and nowhere else to focus. More than one competitor grumbled under their breath and wished that Bahr had wasted more time and money trying to grow other categories. Nope, sorry, this time I went all in on Magic and it paid off. From dust we are and to dust we shall return, and DSG grew out of the consequentia of my backpack dealing in MTG in the late 2000s, and like riding a bicycle, you never really forget how it's done.
By late 2018, many of my fellow retailer peers were looking to get into video games, and I reached a pivot point. I realized the day-to-day operations at DSG Tempe were well handled by the managers and staff, except that video games now were the fiddliest things and I had not been able to find an expert to manage the category. I could always just hook a brother up and bail out? I realized this was the opening I had sought, a chance to step away from the wheel and let it glide, and return to the professional workforce. I sold the entire video game business to a store farther east, and now I just show up at the store every week or two to cut the checks and take a look at any sweet high-end cards that have come in.
Passing the bar exam again was also like riding a bicycle, and in this hypothetical timeline I was back in the legal industry for good by the beginning of 2020. It wouldn't have made sense to do it in any other scenario imaginable, but Griffin and I renewed the lease in Tempe for another two-year stint with two years of option. If Magic died in the meanwhile, we could just push it all into a lake. Meanwhile? Griffin is back in software and spends two weeks every spring living in a suite at the Wynn, and I get to abandon Arizona entirely for the second half of August and sit on a beach in Maui with my family. I still die in like 2024 though. Actuarial science is a harsh mistress.
...
So there's the hypothetical for Never Chandler. The great thing from a "what if" perspective is that the progression seen in this hypothetical is not off the table entirely in Chandler; we just get some additional options, such as true accidental shopper traffic, the ability to have a Games Workshop trade account still open, and slight economic pressure as we're still paying for the move and our rent isn't quite as cheap as it was in Tempe. I don't plan to be back in comics in the future as I am happy with the deal we made with Samurai Comics, and I don't plan to be out of video games as that is the industry where I think I can monetize a lot of technical skill and expertise. But putting overwhelming levels of attention into Magic? Like, more than the considerable amount it already gets from me? If I ever start getting my autistic hyperfocus tunnel-vision pointed in that direction, clear the decks, because things might be about to get really interesting.
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