Thursday, December 21, 2006

Big day at the store. I could wish that all the big Christmas shopping didn't come down to the last few days, but I'll take it when I can. Not quite a big enough day to bring me to my original projections, but we'll beat last year, at least. Would have been an even better day if my regular shipment of comics had actually shown up. For the second time this month, it went to....

Redmond. Why, is a mystery.

To go back to my theme of competition: I've always maintained that a store owner has to do a minimum of three things; 1.) Buy new product. 2.) Replace sold but evergreen product. 3.) Pay overhead. (Actually, I think that bringing in new product lines is a 4th, and capital expenditures to replace infrastructure is a 5th.)

What I've noticed over the years, almost all mom and pop stores can do 2 out of 3 . Because of the competition and razor thin margins in todays retail, it is almost impossible to do all three well.

So you begin to notice a competitors' focus and interest by which 2 of the 3 minimums they choose to do best.

Store #1 always has lots of the newest stuff, and keeps in stock most of the evergreens, but the fixtures are used, the boss makes minimum wage, and the carpet is a little frayed.

Store #2 always has lots of the newest stuff, the store looks shiny and new, but always seems to be sold out of basic inventory.

Store #3 has lots of basic (but aging) inventory, and the store looks shiny and new, (actually, this kind of store quickly begins to look run down), but never gets any of the new stuff.

I put myself in the Store #1 category, because I figure I can always try to keep my store neat and tidy, and I can always paint an old fixure, and as long as I keep getting great inventory, most people won't notice the dents and scratches on the cash register. I'm willing to take a minimum wage to keep the store up to speed, because I figure that as long as the store keeps improving, I have a decent chance of a payoff some day.

Anyway, not doing all 3 minimums eventually drags a store down, and soon enough, they start doing only 1 out of 3 things well, and so on.

The demise of such stores is revealing. Some stores just stop getting anything new as the owner gets grumpier and grumpier about how nobody is buying his stuff, and he'll be damned if he'll buy new stuff until the old stuff has sold. Another owner will just keep buying more and more inventory, look as though he's doing gangbuster business, and then suddenly, without warning closes, because in the background he hasn't paid his creditors or landlords in months. Another owner will keep drawing his salary, and paying a manager, as the store gets more and more run down, then he'll close cheerfully (he took money out the whole time and socked it away,) and leave his landlords and creditors scrambling for the leftovers.

It takes quite a bit of compromise and discipline to try to keep all three minimums at decent standards. And I think that is why owning a store, even in the field you love, eventually becomes work.

2 comments:

Heather said...

From a grumpy store owner, on the other side of the world, I love hearing this stuff. It ain't easy. Love or money right? But we want it all. It is hard to do everything well. I struggle to find the balance and at the end of the day, you can never keep EVERYONE happy. I'll keep reading.

Merry Christmas.

dunc said...

There's a reason the grumpy store owner is such a cliche. Deal with the public long enough and you're likely to get a bit testy. I always have to remind myself every morning to try to be understanding, but it still slips out.