You want it cheap, or you want it good?

It's always interesting to me when people balk at the price of quality product. I'm not talking about your everyday commodity; I'm talking about something that is nicely made, isn't generally available, and isn't discounted by anyone else.

I just have to shrug. Either the quality is worth paying for, or it isn't. But what it says to me is that some of these people just don't buy UNLESS it's on sale or cheap, and quality isn't really the point.

I suppose I never noticed this as much because until recently, I never really tried for that higher quality market. Most of my product was in the 1.00 to 50.00 range, with a few exceptions. I stayed in that zone, mostly, because I hit so much price resistance in the past.

But as my store has filled out, I've realized the only way to get some of the nicest material is to get it at the higher prices. So I've slowly morphed in that direction. Frankly, I have limited space, so I need product that can produce more dollars per foot. One of the consequences of the high rents.

Still, I kind of like it. Nothing super fancy, mind you. But nice.

Games like Settlers of Catan are just made better than your average Monopoly set. You can feel the quality in the heft of it, the packaging, the contents, the colors, the thickness of the cardboard, and so on. Just the sheer pleasing design of it.

Same with the "deluxe" editions of classic graphic novels like Sandman or Watchmen, or the wonderful reprints of Peanuts, or Dick Tracy, or Little Orphan Annie.

I'll have people pass over these wonderfully solid hardcover books, which cost in the range of 30.00 to 50.00, even though they are obviously attracted to them; and then they'll buy (they'll settle for, if you will) a 10.99 paperback of Pearls Before Swine, or Get Fuzzy. (I'm not knocking it, just wishing they could see their way to buying the nicer books....)

Same with 'designer toys.' An artist created it, and it is usually produced in smaller quantities -- so small, that I estimate that about half of the designer toys I order are 'canceled'; which means they didn't even make it to my wholesaler before they sold out.

But they cost quite a bit more than your average toy. I pass on most of the $100.00 and more toys, but I have a fair number in the 30.00 to $80.00 range, and when I quote the price, people put them back quickly.

"What does this belong to," they'll ask. (You know, what movie, what cartoon...?)

And I'll say, "Nothing. It's an object that is esthetically pleasing in it's own right."

I might as well be talking Greek.

"Oh," they'll say. "Do you have any Spider-man toys?"

So it's the very quirkiness of the artist toys that attracts me to them, and which drives the average customer away. Problem is -- weirdly enough for a comic store -- I just can't get decent Spider-man toys at a decent price. And when I do, they sell for even cheaper at Walmart. I'm almost forced (gladly, in this case) to carry the unusual, the weird, the wonderful -- and often that comes with a higher price tag.

And, well, it comes with a need to sell to people who think for themselves, who know what they like, and aren't just following the herd. Even designer toys hinge a little too much on the name value of the maker than the actual object, but there it is. If you buy this toy, you may be the only person within 300 square miles who has it...

I always want to ask, "Do you really like it? Isn't it a bit better than the average? Wouldn't you like having it around, long after you forgot what you paid for it?"

I don't know -- buy less cheap crap, and a few higher quality items and you'll spend about the same.

Walmart and the Dollar Stores are doing great, so I hear.

O.K. I can understand it. But it does make me wonder about the vaunted 'rich' demographic of Bend, though, because I know this stuff sells like crazy in bigger cities.

(***Sidenote, because it deals with comics. But as illustration of Bend's difference...
I recently read a message from a dealer who was asked about his sell-through on a certain title. "Oh, pretty slow," he says. "I've sold about 60% of what I ordered, about 225 copies."

Which made me do a double-take, because I got 10 of the same item. Total. So, he ordered something like 400 copies!!!

I see this over and over again, and it makes me realize that for all the talk, Bend is still a pretty small town.***)

Eventually, if 'designer toys' really take off, you'll see them everywhere and they will become a commodity and they will be discounted. "Ugly Dolls" are already reaching that point.

Eventually, Walmart will convince the makers of Settlers to use thinner cardboard, and eliminate some of the extra pieces, and so on, and the game will play the same and most people will only see that it's cheaper....

The irony being, the longer I'm in business, the less inclined I am to discount; and the longer I'm in business, the more people seem to expect discounts. But the way I look at it; I have a nice store, full of nice things, and you found me because I'm in a nice district of town with high rents. (And if my profit margin is adequate, I can get even more nice stuff and make an even nicer store.)

I'm going to wait for the people who really want something enough to pay for it.

So it goes....

All this is a long lead-in to my real point.

12 years ago, when we had the mall store, probably 80% of the people who came in the door weren't really interested in buying anything. It was the nature of the mall. Lots and lots of people.

Meanwhile, at my store downtown, probably 80% of the people who came in the door were customers, because my store was a destination. I was off the beaten track.

I almost couldn't work the mall store because my expectations were all out of whack.

Now, more than a decade later, my downtown store has turned into something very similar to the old mall store. 80% of the people who come in the door aren't really all that interested in what I have. But there are lots and lots of people.

I'm glad I recognized this trend a few years back and tried my best to carry material that would both fit into my store and also attract the average person off the street. Books, obviously. Family boardgames, too. But also toys and just knick-knacks. Comics and cards and manga and anime are still pretty specialized, but I pick up a bit from the sheer numbers.

I'm not responsible for this change. I stayed in the same location while the world around me changed...

I know it exists. I saw it on Urban Myth.com!!

It's amazing how often kids send parents and grandparents on fool's errands.

They come in an ask innocently for something I've never seen, or seen once in twenty years, or I quote them a price and their eyes get as big as saucers.

Just saying.

Not sure if the kids know they are doing this, or don't care.

Always a little amusing to me to see how miffed some of the parents are that I don't have what they are looking for, and when I patiently explain that it is extremely unlikely that they'll find it just laying around, they obviously don't believe me.

But patiently explain, I do, and if they choose not to believe me and continue their search for Junior's desire, so be it.

But it's the retail equivalent of urban myth. "Well, Junior saw 5 of them at regular price at Walmart!"

"O.....K......" Never argue with Junior through doting grandparents.

Or....."I have 5 of them already, and I'm just looking for a 6th." (This comes from not knowing what they have. There have been, Oh, 10 different Superman #1 reprints. There have been 100's of #1's with Superman in the title. I've never seen a Superman #1, nor do I ever expect to.... Or....I've never seen a legit of the era Babe Ruth card, or Joe DiMaggio, and I've seen one Jackie Robinson....and believe me when I tell you, that there was a 5 year span when I saw just about everything readily available -- dozens of Mickey Mantles, etc. But no Babe Ruths...)

Really.

Then there is the, "I sent my money off for 5 of them, but they haven't arrived yet...."

Holding your breath for a refund?

But the classic is: "I figured you didn't. They only printed 5 of them, and 3 of them are in museums! But it never hurts to look!"

Yes. Yes it does, when you have me searching for 10 minutes...

Anyway, when I try to tell people that certain product is extremely difficult to get, I can see that people don't believe me. The internet has only aggravated this process.

"Oh, it's for sale," they'll say. "I KNOW it is....I saw it on such and such a website."

"Really?" I answer. "Did you know I sell a unicorn on my website? Sorry, you can't find him here at the store, but he's available at Pegasus.com....."

Some people get what I'm saying, most just look at me weird.

Unfortunately, I am wrong just often enough that I must go through the motions, usually. There always is that really, really off chance that I'm the only store left in the country selling that particular item for regular price... Or, more likely, that an item has been released, and I somehow missed it.

I have enough knowledge in my fields, though, that I can usually make short work of it.

And I've decided to not take offense at their skeptical looks. They just don't know any better.

Outlasting your mentor.

Well, kinda.

The only business book I ever found that I thought was worth reading was Growing a Business, by Paul Hawken, who started a little gardening store.

Which grew into a giant gardening store, apparently.

From KeyPoint Partner's Retail Roundup:

"Smith & Hawken will call in the liquidators for its 56 stores unless the corporate parent of the premium gardening chain and catalog company reaches a last-minute deal with potential buyers, according to sources close to the negotiations."

Looks like Mr. Hawken cashed out long ago, however, since it's owned by conglomerate, Scotts.

**********

Interesting to me how much my business parallels both motel room tax receipts and airport debarking.

I first noticed this during the 9/11 aftermath when my store dropped almost exactly the same as the Redmond airport.

According to this mornings Bulletin: "Bend room-tax collections fell 19.5 percent below May 2008..." "For the fiscal year to date, from July 1, 2008 through May, collections are off 14.8 percent..."

I'll be willing to bet that if you took July and August and September out of those numbers, it would be closer to 20% than 15%, which is almost exactly my results.

Makes sense -- you can't make money from people who never showed up....

**********

Still too early for someone to make the statement, "I believe it's flattened -- it won't recover tomorrow -- but it won't get any worse as far as real estate pricing..." Scott Baklenko, co-founder and managering director of Castle Advisors.

I'd advise him to come down out of his ivory 'Castle' and look around.

Or just go to Bend Economy Bulletin Board and check the daily listings of price changes. Pretty much universally downward, still.

He gives himself a five year timeline, which MIGHT be enough, but it'll be close.

On the other hand, he did buy Tuscany Pines for $2.75, down just.....a tad...just a bit from the 11.4 million that original owners paid. (I'm unclear if that 11.4 million was before or after development.)

Just a little bit, you know....something like 75%. But as I always say to myself when ordering at the store, it doesn't matter how cheap something is if no one buys it.

Somebody took a shave cut that took off most of the top of their head. Hell, it took their head and half their trunk. Why do I keep hearing the name Umpqua Bank in these money losing deals....?

I don't know, somehow their "boutique" bank at Northwest Crossing offended my puritan leanings.

I don't buy it.

The explanation why Crown Point National Bank wasn't approved.

Oh, I'm sure FDIC turned them down, but I suspect it was because they didn't raise enough money. Or, perhaps, what would have been enough money in normal times and in a normal location didn't seem sufficient to the FDIC. And it's hard to argue with that logic.

A couple of telling quotes from this morning's Bulletin; "...the bank doesn't have enough operating funds to wait out the recession, noting that by the time the economy improves, a new application will likely be necessary."

Also: "The delays have taken a toll on our seed money and it's unfortunate if the word was going to be 'non' that it came this late in the process."

And finally, "Crown Point organizers had hoped to raise $30 million to $40 million in capital before opening. Gerlicher wouldn't say how much the bank did raise, but said it was not a factor in the FDIC's decision.

Hummmmmm....

So all we know for sure is that they started with four million. For that, they had four employees and had renovated a 'leased' downtown bank building. (I'd assumed they bought it....) That plus legal fees.....sounds like they were using up the original money.

Just guessing here. But they sure weren't trumpeting how much money they raised. Such as "We hoped to raise $30 to $40 million and we passed that....or.....we came awfully close."

Nope. It was no comment.

Actually, what I'm saying here doesn't directly contradict the comments on the article -- except in emphasis. The article emphasizes the 'local conditions' and the bureaucratic wranglings, and I suspect the underlying reason is -- there just isn't enough money to pull it off.

Stress Puppies.

Something I've noticed about the small business blogs I like to read -- the owners are all stress puppies.

Constant sturm and drang with suppliers, with landlords, with customers, with employees. Rarely is the course smooth in love and war -- and small business. (A great sage of failure once said, "Only dead fish go with the flow...')

(Note: I'm not talking about puff blogs, who talk only about how great they are, and then announce a few months later that they're closing to "spend more time with the family...")

No, the interesting blogs are about real working stores, and about how day to day business works.

So either:

A.) Stress puppies start small businesses.

B.) Small businesses turn people into stress puppies.

C.) Small businesses owned by stress puppies start blogs....

The answer, of course, is all of the above.

But mostly B.

I don't think you can run a real business without running into constant problems that have to be solved. It's what you do every day. So it's what you blog about.

Hopefully, we also keep a sense of humor about it.

**********

Speaking of future stresses -- Linda said that Micheal Powell was on NPR talking about Kindle. His take was that it was too expensive, that books would always have a place, and so on....

Which seems to me to miss the point.

It isn't that Kindle will take away 100% of the book business. But how about 30% or 20% or even 10%? What with Barnes and Nobles and Borders and Amazon and Costgo, independent bookstores are obviously under a lot of stress...

So 10% could be significant. 20% even more so.

Put another way; say you keep 80% of your wages, but have to give up 20%?

My store is almost designed to live on the fringes of these things...I only carry fiction, for instance, already forgoing all non-fiction because I don't have room. And so on...

But most new bookstores can't be affording to lose elements of their business.

No more putting off summer....

Day to day. Yesterday, Sunday, was another 4 hour day. I had about 20% less people than Saturday, and made 6 times more money again.

The lesson, I think, is to close the store on the 4th of July from now on. It was a complete waste of time.

Back on track for my daily average.

I think my diagnosis is right -- tons of product + tons of foot-traffic = average sales.

I spent my maximum budget for July by the first of the month, or halfway through the time period allowed. Well, to be honest, I spent over the original maximum and then spent the revised maximum. (I boosted the budget when I saw the 'Summer Sale' from my wholesaler.)

But no harm done if I reach my daily average, and I can avoid another week of spending money. (I made it through last week.) That is one of the gold stars I give myself every day I don't spend money.

One thing I would like to avoid is spending any of the next month's budget before the period starts. No borrowing a few hundred. That's cheating, even if it evens out in the end. It puts the next month at a disadvantage and I'd like the find out if I can keep a steady flow coming in under budget.

If I take the "Sale" product out of the equation, I was under my original budget. And it's just hard to kick myself over getting material at half the original price. It doesn't always show up in the short-run results, but I think it definitely helps the bottom line in the long run.

Sorry, but this summer is pretty much going to be a horserace, and my attention will be on that.

Third down, and three yards....

I don't think the 4th of July falling on a Saturday did us any favors.

I showed up at noon, yesterday, and worked until 4:00. I had nearly 100 people in the door. Now I consider 100 people a benchmark for busy on an 8 hour day, much less a 4 hour day. And this is avoiding most of the parade traffic.

But the 100 people probably spent the lowest per customer average I can ever remember having. To put it in perspective, I had 15% less customers on Thursday last week, and did 6 times the business.

Anyway, I've already done my full budget for July, I've placed my bets and rolled the dice, and now we'll see.

In about a week to ten days, I'll start spending my August budget.

Right now, I'm not sure what to think. I just don't think I've seen any of what I'd call real tourist business. Lots of people, to be sure. But not the kind of spending I'm used to seeing in the summer.

I actually do less business with regulars during the summer, as they go off and spend money on other things and at other places. But generally, this is more than compensated for by tourism. Same is true at Christmas.

But I still haven't seen a clear signs this is going to happen. Like I said, the 4th of July falling on a Saturday really muddied the waters.

It's not too late. We're just about that point late in the third quarter when your team is behind, but can still win the game if they can put together a scoring drive....You know what I mean? I would prefer to be ahead about 20 points, right now, but not all is lost.

So I'll be watching the next ten days closely, and if business still hasn't picked up, I'll make a mid-course correction and change how I budget August.

I'm going to make a profit in any event, but I'd rather make a bigger profit than a smaller profit.