Sunday, December 31, 2006

It you want to know how a business is doing, about the last person you should ask is the owner. A more flinty-eyed, savvy, canny group you'll never meet. Almost all business owners I talk to prefer to keep information to themselves, to hold their cards close to their chest.

It's understandable. I know that whenever I've complained about my business, at least some people take it that my store is in trouble, when all it really shows is my propensity to complain. Maybe because I fell into this business, I'm not the business 'type.'

I've learned that even if another business owner is willing to talk, it's hard to tell what's really going on. It is almost better to observe from a distance, to gauge for yourself what's happening.

I figure its 50/50 whether being closed-mouth is more valuable than being forthright and candid. It 's just easier for me to be the latter. I treasure information, and wish that we store owners could exchange news and tips. Sigh. In the end, you run your business alone.

Except -- thank goodness, I have two bulletin boards that I frequent; one made up of comic shop owners, the other of game store owners.

There are roughly 2500 comic shops in America. Of those shops, maybe 250 belong to the forum, and of those, maybe 25 actually post messages.
So....one percent -- 1% !! -- of the store owners in America are willing to take the chance of being forthright and candid, to exchange information.

But it's a very high-powered group. Movers and shakers in our little corner of the world. I constantly have to remind myself not to try to compare myself with shops in Boston, N.Y., San Fran, and L.A. Apples and oranges. They are a very in-touch, analytical group of owners. Smart and successful. Everyday -- every single day of the year -- I learn something valuable from the forums, which helps my business.

And yet, 90% of the store owners of America can't be bothered to join and 99% can't be bothered to participate. Very strange.

There are many things in my store that I don't do that I suspect might help my business, but I have pretty strong and legitimate reasons why I don't do them.

I simply can't think of a strong and legitimate reason not to go to the forums. I repeat -- I learn something every single day which makes money for my business.

Why wouldn't you do that?

Saturday, December 30, 2006

Just to show that I can never be satisfied, this is going to be a record month, just beating out August of this year. Yet, I'm a little disappointed. Our comic sales are flat right now, while just about everything else is way up.

Every Christmas my regular comic customers pull a bit of a disappearing act, while they shop for family. (Hey, you can shop here! I say, and I can see in their faces that they are thinking, No, this is MY shop; my family has nothing to do with it.....) Normally, out-of-towners buy enough comics to make up the difference, but not this year. Why?

Late comics.

Late comics were a big part of the collapse of the comic biz back in the mid-90's. If interest in waning, lateness is just the nail in the coffin. We built back from those days, by creating great comics and selling them on the basis of the art and story, instead of on the 'speculative' urge. Graphic novels (I include comic collections in tradepaperback in that term) became a bigger and bigger part of my business, until they are nearly half of my graphics sales. Movies started to give us a bit of credibility, not just in the superhero realm, but in the mainstream.

But we've started to drift into bad habits. Huge crossover events which always start out with a bang, but become harder and harder to maintain momentum. When lateness becomes part of the equation, we have a problem. I just cancelled three of my subscribers who were almost exclusively buying Marvel's big Civil War event.

I'm not worried, actually. We'll right this ship. The movie '300' is coming out and is going to be a big deal. SPIDER MAN (with that crowd favorite Venom) is coming out, of course, the FANTASTIC FOUR (with that crowd favorite Silver Surfer) is on the way and so on....Meanwhile, great comics are being produced. But for this season, at least, they dropped the ball.

To change the subject: Had a couple of young customers come in yesterday and say, "Are you going out of business?" "NO!" I say, "You're thinking of Gambit Games...."

I think this is the problem with talking about downtown and the rents and the tenants being forced out: my store becomes conflated, conjoined and comingled with those events, even though MY STORE IS DOING FINE!
Arggghh.

I think that the problems Downtown can become OVERstated. Most businesses, after all, are still there and still doing business. Yes, the pressures are strong, but the foot-traffic downtown is to die for. I can remember looking out my door and thinking I could fire a cannon down the street and not hit anyone. What's going on today is much preferable.

Friday, December 29, 2006

I'll be doing my pre-orders for February, 2007 this weekend.

After the 'comic wars' of 1995, (when 2500 comic shops survived out of 12,000; when Marvel went bankrupt Chapter 11; when my own business proceeded to endure a 3 year downturn), there was a single national wholesaler left standing. Diamond Distributors has 'exclusive' rights to sell Marvel, DC, Dark Horse, and Image comics, or roughly 85% of the comics produced.

This has actually proven to be a monopoly that works. Diamond is a sort of 'benign tyrant', who really does seem to have the comic businesses welfare at heart. Almost anything a comic shop could ever need is listed, including games, toys, dvd's, posters, art books, etc. etc. They allow us to buy a quantity of just ONE of many items and titles.

Each month I get a phone-book sized catelog, with roughly 5000 line items. If I was to spend even 30 seconds on each listing, it would take me 42 hours just to read the damn thing. You learn to quickly make snap decisions, and even then it takes me 2 full days to make my orders.

I wish every customer who ever wondered; "Why the hell did you order (or not order) THAT?!. understood the difficulty. That plus trying to guess 2 to 3 months in advance what the customer will want, compounded by constant late or changed product. There is always that 'Ah, Hah!' moment when the product actually arrives, and you realize that you made a huge mistake; either by way overordering a dud, or way underordering a winner. Probably the most important decision I make every month is trying to decide on a reasonable budget , and then trying to squeeze the product into that budget.

Fortunately, I enjoy doing it. It could've been sheer drudgery, I suppose, but I like daydreaming about all the cool stuff, and trying to figure out what will sell and what won't. I have to be careful to fit it into a real budget, because whenever I go through the 'wish list' and order everything I THINK will sell, it comes out two or three times what I'm likely to actually sell.

There were a few rough years when I didn't ask myself; "Will this sell?" but asked myself: "If I don't order this, will anyone notice?" I have to luxury nowadays of actually including about 10 or 20% or my budget for whimsy, or what I like, or just to experiment and play around. I know I can sell most things, eventually. Of course, I'll lose this freedom if I make too many bad decisions.

These preorders actually end up being only about 35% of my total budget, because I do constant 'just-in-time' reorders, and I actively order books, games, and comics from about 10 other distributors.

But it is a make or break time of the month.

Thursday, December 28, 2006

THE PARKING GARAGE.

Hey, I'll admit when I'm wrong. I really thought the garage would be a disaster, but it has proven to be very beneficial. Easy to use, you just pull in, park and walk away. Only half a block from my store. Occasionally, the first few levels will fill up -- somebody is having a big meeting -- but mostly, there is a spot. I haven't even checked the 4th and 5th levels, but assume there is plenty of parking there.

I don't know if the garage is paying for itself, but I do hope most of the downtown merchants are using it, and enough of the customers. It costs to park all day, but the first 2 hours are free.

There is some fine-tuning the city could do. Most of my customers hardly seem aware of the garage, and most assume that it costs money. I know that I thought there would be the hassle of tags and attendents, etc., so I assume the public thinks so too. We haven't done a very good job of telling people about the garage.

I also think that the monthly parking fees might be a little high for minimum wage, part-time employees. Most middle-aged, middle-class merchants and city officials have probably forgotten what it feels like to live on minimum wage. Sure, it will cost a young person more money in the long-run to play 'parking tag' than to just buy a parking permit. But that logic doesn't hold up when a parking permit costs maybe 10% of a paycheck. I'd suggest that the 4th level be cheaper for downtown employees since that level isn't used as much.

So when I express skepticism over the Transportation System, and over white elephants like the Tower Theatre, and less than enthusiasm for most of the 'Festivals' that close downtown streets, remember that I was willing to admit I was wrong.....this once.

Wednesday, December 27, 2006

It's official; Gambit Games is closing on Jan. 1, 2007. I've known this was coming for awhile, but because I could be considered a competitor of Gambit, I didn't feel like I could comment.

It was an interesting syncronicity that the same page in the Bulletin that talked about my blog contained the article about Gambit.

We were never direct competitors; but there was some crossover. I carry the card games, like Pokemon and Yugi-oh and, the original, Magic the Gathering. I carry Role-Playing games, with the extra's like dice. And I carry the pre-packaged miniature games like Star Wars.

I don't carry board games, or traditional games like chess and monopoly, and the biggest difference is that I don't carry the Games Workshop material.

Most of the article about Gambit was referring to games they carry from a company called Games Workshop. Let me say this; GW produces some great figures, and I suspect the game is alot of fun. I don't blame Brad for carrying the game or the players for playing the game. I was tempted myself.

But I actively dislike just about everything else about the Games Workshop. I hate that the game seems to depend on how much money you spend; that the company demands you keep in a huge inventory; that GW will make that product obsolete requiring that you completely rebuild your armies; that you have to constantly promote and demo; that you have to have a large space in the store to play the game. Games Workshop itself is very pushy. "You need more product." "No, I'm fine." "What's wrong with you, everyone else is selling way more...." (This is my actual last conversation with a GW rep. I pulled the plug immediately after.) Games Workshop has also tried to eliminate the middle-man distributers, who are necessary to the strength of the hobby, and they have a very nasty habit of opening company stores exactly in the places where independent games stores were doing well. With friends like this.....

A couple of subtexts to the Bulletin article are worth commenting on. First, I got the impression that Brad was saying that his move to a bigger location in downtown Bend had been costly. I've said before, it is rare for comic shops or game stores to be in high end locations because our customer base is pretty small and our merchandise is pretty specialized.

Brad is one of the 'smart' competitors I talked about a few days ago. But I think that games have had a good run and are now in a more difficult place. I can't speak for Brad, but it looks to me like he is having a lot more fun doing his poker thing. As I've always said, if you have a viable alternative, owning a downtown store becomes even more problematic.

Another subtext to the article was that all these players were being orphaned; that there wasn't going to be a place to gather or play tournaments, etc.

Time for Pegasus to step into the breach? Well, no. I've thought long and hard about it. I'm skeptical of any business model that requires a space that isn't being used to sell merchandise. Brad has been pretty good about maintaining his customers' loyalty, but even he no doubt had customers who would use his free space but buy elsewhere.

Games Workshop requires an enormous investment; not just of money, but also time, space and energy.

The very loyalty of Brad's customers is the other problem. I'm skeptical that his customers would transfer to my store. They had already chosen Brad's store over mine, and for whatever reason, are unlikely to change their minds. It isn't necessary to chose sides, but customers seem to feel the need.

More likely, one of the customers will attempt to open a spot in a cheaper location where the gamers can hang out. There is a figure that floats around on some of the comic and game boards I visit; 15%. At most, you will gain 15% of a competitors' customers when he closes. What happens to the other 85%? It's a mystery. They sink without a trace into the sand.

I'm going to try to carry more of the games I already carry, and I'm looking into buying more board games like 'Ticket to Ride' and 'Settlers of Cataan.' I have an active account with a game distributer, and will be happy to special order.

I may even miss Gambit games because it did a good job of promoting and supporting the games. Not sure if customers will keep their interest in the games without them around. The internet is a very poor substitute to a good, full-service shop. We'll see.

Tuesday, December 26, 2006

AFTER CHRISTMAS SALE? bah!

I've never been partial to sales.

First, by way of explanation, I'm a 'just in time' and a 'one of a kind' kind of store. People will say, "Would you put a copy of this aside for me?", as if I have a back room with multiple copies of everything. But I prefer to have as many different items as possible, instead of having money tied up in extras.

Thing is, I can get just about anything I want within the week, and very few items have the kind of sales volume that require I carry multiple copies. I suppose I lose the occasional sale, but I love the flexibility of being able to re-order every week. I'm willing to pay the penalty of extra postage.

If I don't have an item, I'll say, "I'll have it for you by next Thursday." And then, and here is the neat trick, I DO IT! Sometimes I think people have been told, "I'll special order it for you..." so many times, and then not have the store deliver, that they've become very skeptical.

So I don't ask for money, I just tell them I'll get it (if I confirm it's available) and then I make absolutely certain that I do order. I find that most people actually do come back, and it is always kind of fun to watch their eyes light up when they ask, "You wouldn't happen to have gotten in..." And I'm able to say, "It's right here waiting for you."

Do that a couple of times, and you have a regular customer.

So, except for a few best-sellers, I tend of have one copy of just about everything, and a get-it-within-a-week-reorder system. So what good is a sale? It's hard enough to pay for good inventory without giving it away.

I do have clunkers in the store, but I've found that almost anything will sell eventually. I just wait until someone expresses an interest, and offer them a discount right there. That way, the person most interested gets it for cheaper.

I suppose I might be missing the promotional aspects of sales. But do people really respond to 10 or 20% off sales? If all I'm really offering is the junk, even at 40 or 50% off, doesn't that have a 'bait and switch' kind of smell to it? I just don't see the point of a decimated store, which I would then have to go through the painful process of restocking, when I can have a store with great stuff all the time.

So come on in today, and I can promise you that the store is almost as well stocked as it was a couple of weeks ago. And if I don't have it, I can get it for you by Thursday.

Sunday, December 24, 2006

CHRISTMAS -- Short and Sweet....

One of the more alarming things that happened when I bought the store was that the Christmas spirit just disappeared. (Bear with me, this won't be a downer.) Now Christmas was a very big deal in my family, with the tree trimming, the lights, the cookie decorating, and the enormous bounty of gifts. When I married Linda, and the boys, Todd and Toby, Christmas revolved around church.

Those first few years, before I realized that Christmas wasn't going to be as huge for my type of store as it is for other stores, I'd probably order too much, and then spend most of the season in anxiety because I was afraid no one would show up. The Sheriff of Nottingham would always threaten to "cancel Christmas," but he never has.

Then, came Christmas Eve, and the locking of the doors. And this overwhelming feeling of peace and satisfaction would wash over me. It was a major endorphin rush, and it still happens every year. Short and sweet.

Now, Linda and I have a new tradition. After we lock the doors, we go through the store and allow ourselves to take at least one or two things we really want. And we shop for the family. I suppose this is cheap on our part, but fortunately, everyone in the family likes the kind of stuff we have, and we are able to be very generous with what we have.

I take nothing home over the year. It was a decision I made early on, that I wouldn't compete with myself. It would be way too easy take the best stuff, and at the same time I really don't want to clutter my house with the same kinds of things I'm surrounded by each and every day. My office is actually pretty spartan, on purpose.

Other than setting aside a Bettie Page calendar for myself, I usually allow myself one big item per year. What is amazing is that the item I have my eyes on is almost always there at the end of the season. This year it is a 14" Stikfas figure, (a kind of huge Lego, only with 360 degrees of articulation in every joint. You can really give the figure all kinds of anthropomorphic attitude, man.) And I'll take home the latest Alan Moore opus, Lost Girls, which is this huge deluxe graphic novel.

We are going to go ahead an open early this Sunday, and stay open until at least 4:00, but I suspect not much is going to happen today.

Have a wonderful Christmas Eve!

Saturday, December 23, 2006

A record sales day at the store, and a big sigh of relief. We are almost up to projections now, despite a horribly slow first half of the month. What is even more encouraging, is that so many of the sales are due to the changes I made in the store. I feel as though my changes have been validated. Hooray for me.

I'm also completely knackered. I have all of January (and February) to recoup, so just have to bull on through.

I've always felt the week after Christmas is more indicative of how the store is doing than the week before. People have their own money to spend, and if they spend it with you it's because they want to.

For a couple of weeks there I was thinking I'd just done one of my periodic blow-ups. You see, it only takes a day--a few minutes actually--to spend so much money, that it takes months and months of slogging to recoup.

All the logic in the world doesn't keep you from reacting emotionally. Personality trumps reason.

At the height of Napoleon's powers, he wrote a letter detailing all the reasons it would be folly to invade Russia. Later, when Russia dared to challenge his blockade of England, he got miffed, invaded Russia, and everything he detailed in his letter proceeded to happen. He knew, but he couldn't help himself.

So most of the time, I realize I'm probably making a decision based on feeling and intuition, and my logical reasons are there to rationalize what I wanted to do anyway.

I keep telling myself that one of these days I've got to grow up, keep a cold, beady eye on the bottomline, and try to actually make some money beyond the minimum wage thing. But then I get interested in doing something, and bang, I'm back to scrambling for money again.

I justify this to myself because I know that the reason I like to go to work everyday is because I allow myself the room to experiment and create. There are only two reasons to do something at the store; because it's fun, or because it make money. I have consistently chosen the former over the latter. Hence the title of my blog.

Friday, December 22, 2006

The Best Book I've Read This Year: FUN HOME, by Alison Bechdel.

WIDGETS AND DOO-DADS

When I started this blog, I thought of being anonymous, and substituting generic words like widgets for specific words like comics. Then I could say anything I like and not worry about the consequences.

Well, I haven't felt restrained at all, except by trying to be reasonable. (Two of my customers have commented that I'm more 'mild' on the blog than I am in real life, but I think that is just a function of being able to examine what I'm saying before I push the "PUBLISH" button.)

As it turns out, I'm not inclined to talk much about comics or toys or games, except as they relate to business. It turns out I'm most interested in the topic of business itself.

But today, I'm going to talk about the best book I've read this year; FUN HOME, by Alison Bechdel. Now I love graphic novels, but this is the first year I could say that a graphic novel was the BEST thing I've read. It was powerfully affecting, wonderfully done. It surprised me, and I'm open to the idea that a mere graphic novel has the potential to have the best content of any book.

I'm always saying, "Form doesn't dictate content. Imagine, if you will, that Picasso and Hemingway got together and created a graphic novel. Why not?"

Yesterday, TIME.COM named FUN HOME its Best Book of the Year. Apparently, it surprised the author who says: "I'm still a bit flummoxed by it. I mean, FUN HOME, is an odd little book....Go figure."

I bought my business because I was interested in fantasy, and because the store was available, but not because I was a comic reader. It took me several years to begin to appreciate comics at all, and a few more years before I became a real convert. But it isn't 'in the blood', the way SF and Fantasy is 'in the blood.' I had to learn from scratch, and so I tend to appreciate the art form more than simply swim in it.

To this day, when I read everynight, it's usually a mystery or a good SF book. Not because I like them better, but because, ironically, a novel is easier for me to read than a graphic novel. I actually need to pay more attention to a good graphic novel than a book, because it is doubly complex with both words and pictures; maybe even triply complex because of the interplay between the two.

Authors like Alan Moore and Neal Gaiman and Frank Miller are as good as anyone who writes, period, and when you combine that wonderful writing with great artists (and make no mistake, these aren't clunky comic artists of old, but sophisticated illustraters), you really have a vibrant and interesting art form, that isn't appreciated by the general public. Think of it this way; if every one had turned off their TV 35 years ago, they would be astounded by what's been created.

Anyway, I throw this out to anyone who is still reading. The best book I've read all year is FUN HOME, by Alison Bechdel.

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.

Wednesday, December 20, 2006

First, a little pop quiz.

How many times do I have to buy a 10.00 item, with a 40% profit margin, to make a 10.00 profit, and also keep the item in stock?

The average customer probably believes I make 10.00 when I sell that item, a more knowledgeable customer may think 2 or 3 times.

The answer is 5 times. (5xcog's6.00=30.00;4xsrp10.00=40.00;4000-30.00=10.00;+1xinventory)And not very many products sell 5 times in my store, at least not in the short run.

It is humoungously expensive to add a new product line; either you invest your money and recoup over the long run, or you add one or two items to your weekly orders and pay for it through your profit margin and take forever to get there.

I've done both. I actually prefer to do it over the long run, but by doing it slowly, I miss sales during the run-up. On the other hand, investing is lost income through interest, either because you spend money you have, or more likely, you borrow money and pay interest.

Anyway, this Fall I've been adding new books to my store at a rapid rate. New novels, lots of art and pop-culture books, whimsical and gothic books, pop-up books, lots of cartoon books, just neat stuff. As the bills have come due, and sales have been stagnant, I've been kicking myself.

Until yesterday. Yesterday I had average sales, which 6 days before Christmas, isn't what I was hoping for. But at the end of the day, an interesting pattern developed, sales in my main product line, 00.00. Sales in sidelines, 25%. Sales in my new product lines, 75%. In other words, if I hadn't added the new product over the last few months, my sales overall would've been down 75%. If I was so specialized that I only carried my main product line, sales would've been zero 6 days before Christmas! (Of course, people tend to buy what you Have, but you get the point.) Through no fault of my own, the publishers of my main product line (comics) have fumbled the ball. My new products have taken up the slack, just as I hoped they would.

I'm a great believer in diversity. I carry 8 product lines in my store, all of them with significant inventory. Yet, 6 of those product lines are sidelines, which account, on an average, to less than 8% of sales (each). They take up lots of room, energy and time as well as money.

Not only that, but I'm constantly shifting my focus, hopefully ahead of where I think my customers will be in a year or two. I think this is the biggest reason why we've been in business for 26 years, because I'm constantly trying to adapt to new realities, thinking for myself, and most importantly, getting ahead of the customer. My goal is to have an established product line at about the same time as new customers discover them. (My wife commented, "You've reinvented the store so many times, I've lost count.)

Here's the problem. When you constantly change your inventory, it is almost impossible to make an extra profit. The irony to me is that by trying to have a vibrant, relevant store, I probably make LESS money that I would if I stayed static. (At least in the short run.) I've always told myself that eventually I'd reached a point where I wouldn't have to change all the time.

Yet I've always made that choice, because this is the Best Minimum Wage Job a Middle Aged guy Ever Had.

Tuesday, December 19, 2006

Speaking of competition. I go shopping about once a year. Just not something I do. I will get a 200.00 gift cert. from Fred Meyer, buy a year's worth of wardrobe, and I'm done.

Went to Fred Meyer yesterday, and couldn 't find a thing I wanted to buy. Ended up using my gift cert. for groceries. All I can say is, thank god other people aren't like me, or I'd have no business.

Anyway, I can't even go into one of these places unless I go with my calm and collected wife. I feel completely overwhelmed, I can barely orient myself, and its seems to exhaust me. I could barely make it from the couch to bed last night, and an hour earlier than usual.

I probably need to go out more often.

Competition? There's no competition. The chainstores have won, and we little guys are being left with slim pickings. While at Costgo I saw 3 new bestsellers I wanted for my store, the latest Tony Hillerman mystery, THE SHAPE SHIFTER ; the latest Micheal Crichton, NEXT; and the latest Hiassen mystery, NATURE GIRL. The prices at Costgo were EXACTLY what I will have to pay my distributer, plus wait a few days. I almost bought them, then put them back. I have to put my money where my mouth is.

I've never spent a dime in Walmart or Target, and I never will. But my political thoughts were already developed before they came to town. Meanwhile, though, I have pretty much given up trying to convince people to support the little guys, because even I can't do it consistently.

I stood for 15 minutes looking at the Big Screen TV's at Costgo. If I ever pull the trigger, (and I think I've talked myself out of it for this year, because sales have been slow), it will be the first big purchase I've made in....I really can't remember anything else. But even the middle sized places like Radio Shack, McMahons, and Fred Meyer didn't have the really big, huge TV I've got my eyes on. My choices seem to be Best Buy or Costgo. I suppose, to be consistent, I should check with Johnson Brothers, or someone else local, but even I weary of the choices.

How can I blame my customers for doing the same thing?

Monday, December 18, 2006

COMPETITION

This is a subject where being anon. might have been helpful.

I've always maintained that I'd rather have a good competitor, than a bad competitor, because a good competitor lives by the same rules I do. There really isn't any secret formula to business, despite the way the media tries to make stars out of some businesses and bums out of others. We all have rent and overhead. We all have choices between taking money out or reinvesting, where to locate, how to price our product.

For instance, the location of a business can be a make or break choice. But....there is no right or wrong way to go about it. You can pick an expensive location with high foot traffic, or an off the beaten track location for cheaper rent, or a store on the busy road with no foot-traffic, but plenty of drive-by traffic. All of these are valid choices. You just have to tailor your business to your choice.

For instance, you pick a location on Division, and your rent is .85 a foot. Your space is 500 sq. ft. You only have to make a little over 1000.00 a month to pay for that spot. But because you are off the beaten track, you won't be getting much drive-by and/foot-traffic. On the other hand, you could have a space that is twice as expensive, but the variable is that you have more foot-traffic. The results to the bottom line might be the same for both stores.

The variables between each business may be somewhat different, but the same basic problems are there for all of us. People like to pretend they've invented a better mousetrap, but that is pretty rare.

No. I have rent, you have rent. I have employees, you have employees. I have to take a living income out of my store, you have to take a living income out of your store. If you are selling the same product I am, the differences may come down to simple character issues like, honesty, reliability, steadiness, people skills, promotional skills, display skills. But the product is costing you pretty much the same, the prices you will need to charge will be pretty much the same, your overhead is going to cost you pretty much the same, and so on.

So it is easy to see, almost immediately, if a competitor is living by the same rules as you are, and if they aren't.....they probably won't last very long. There are certain key phrases I hear that tell me that they are probably not serious competitors: "I don't need to make money." "I'm just trying this out, and if it doesn't work, I just go back to what I was doing." "I don't charge retail. I sell for half, and make up for it by volume."

There are certain early decisions that tell me if they have a chance. Renting a spot way too big and expensive for the product is one, hiring a manager from the beginning instead of working the store themselves, is another. Splashing the media with ads, and having constant SALES is another. Spending too much money early on frills....and so on.

The biggest factor, and the most unknowable, is the motivation of the owner. When things get tough, (and they always get tough), will the owner be able to knuckle down and survive?

So you add up all the variables, and it turns out most every mom and pop type business is going to make just about enough to earn a living for the owner/s; (I exclude both service businesses and resturants from this, cause they have a whole different set of rules) Some businesses will make more money than others, based on how much the start-up costs, and so on. But a comic store is a comic store is a comic store, and there aren't any rich comic store owners.

This is a huge, subject, and I'm going to visit it over the next few days.

Sunday, December 17, 2006

When we opened our store in Sisters (now long gone), we had to go through the city to approve our signs. I submitted a design that had the title PEGASUS highlighted, and below, in regular letters, Books, Games, Toys, Comics. Something like that.

"Oh, no." The sign lady said. "All letters must be highlighted."

I just laughed in disbelief. "If all letters are highlighted, NO letters are highlighted."

All I got was a blank look.

I know she wasn't stupid, she just didn't see the irony in the request. I knew what she was really saying was, "We want a uniform style for the city, and the style we have chosen is that all letters must be highlighted."

But underneath that thought is a wealth of contradictions. AS IF EVERY LETTER WAS CAPITALIZED IN ORDER TO MAKE A POINT. EVERY STINKING LETTER, WHETHER IT IS IMPORTANT OR NOT! NICE DAY OUTSIDE. I JUST ATE LUNCH. LOOK A BIRD. THE WORLD IS ENDING.

Or like requesting that a house be painted Red, so that it stands out, and then requesting that every other building be painted Red, as well. In a nutshell, that is the bureaucratic mind.

I actually understand the need for these kinds of rules. Judging each situation on it's own merits leaves too much space for individualistic and subjective judgements. But ....it also leaves NO room for individualistic and subjective judgements. It creates a uniformness and blandness.

Except that, because people are wonderfully adept at following the letter of the law, but finding loopholes, you get these strange situations where the business owner has a sign that blends in with everyone else, but has painted his building a bright pink.
Or the house is painted the same color as every other house, but the owner has filled is lawn with pink flamingoes.

So the city tries to legislate taste, but taste is individual. On the other hand, without somes of these rules we end up with streets filled with ugly, overblown, and view-blocking signs.

It is a conundrum that is fun to think about.

Saturday, December 16, 2006

WELCOME TO THE BEND, OREGON MONORAIL!

I just can't resist commenting on the bus fiasco in Bend. My employee, Pat, was the one who remembered the Simpson's monorail episode, which made me laugh.

Wikipedia: "...Marge discovers the public transportaton system was a dangerous scam.
"Back in Springfield, the monorail has already started its maiden voyage and malfunctions begin almost immediately..."

For years, everyone who looked at putting a bus system into place in Bend, couldn't figure out a way to make it work. If memory serves, we got a new ' transit expert' who promised that she could put a workable system in place for a very affordable price.

I remember at the time thinking that it sounded fishy.

The statistics I'm using are rough, but I think the points are valid.

First off, if the system is truly getting only 75 riders per day, I'm pretty sure we could hire a cab for every rider, and probably save money. If they have truly spent 71,000.00 on repairs alone, that would work at to about 1000.00 per day! That would be (100 ) ten dollar cab rides! Not counting the original cost of the buses, the infrastructure, the cost of the drivers and other employees, and on and on. (The city of Bend has 1.5 million for transportation.)

A boondoogle.

Come on, with 6 buses, you're looking at maybe one and 1/2 riders per hour. If we double that, we're looking at 3 riders per hour. Quadruple that, and we're looking at 6 riders per hour!

Tell you what, give me 1000.00 a day, and I'll zip around town in my Toyota and transport everyone anywhere they want to go! I'll hire a couple of friends to help me out. We'll get it done!

So, we rushed out and bought 200,000.00 buses for 35,000.00 (that were DISCARDED BY ANOTHER TOWN for 1500.00) and we didn't question it? (Hey, kid. I got this here 2000.00 Rolex you can have f0r 350.00!) We forego the 80% of federal money we could've gotten. If a new bus costs 200,000 and we pay 20%, a NEW bus costs 40,000. Instead, we buy used buses for 35,000? (Not just any used buses, but 10 yr old lemons.)

I'm pretty sure that most of these systems are paid for by transit districts, set up with bonds and tax incentives. We thought we could do it on the cheap.

I probably should be outraged, but I find it amusing.

Friday, December 15, 2006

Had a friend and customer, (hey, Paul C.!), come in and say he was enjoying the blog -- but now I had him worried.

One of the things that happens when you write about problems is that people tend to identify you with those problems. But I'll let you in on a little secret I've learned. It's the guys who don't talk about the problems, who tell you everytime you ask, "We're doing GREAT!", that you have to worry about.

I've tried to be consistent. Over the years when we've struggled, I've not been shy about talking about it. But I've also tried to tell people when things are going well.

Things are going well. But I'm a firm believer that only the paranoid survive; it is smart and prudent to be looking at the future, and trying to see problems in the marketplace in advance. I have a few years left in my lease. I see two different factors in my next lease negotiations: the actual level of business, and the percieved level of business.

1.) Both the real level and the percieved level of sales are high. If the rent goes up significantly, I may decide it is worth it. Or I may be doing well enough to change venue, for something bigger or more visible. Ir the landlord may want the space to build something bigger, but I'll have made enough money to move effectively.

2.) The real level is high, but the percieved level is low. Best of all scenario's, and the most unlikely.

3.) The real level is low, but the percieved level is high. The most dangerous of the possibilities, and very possible. That is the one I need to be prepared for, by being in a position to adjust.

4.) The real level is low, and the percieved level is low. This usually takes a few years to develop after an actual downturn. Don't know if there is enough time for that, but if so, then hopefully rents and such will have moderated.

I tend to believe these things work out for the best. All four scenarios have their pluses and minus's. Whatever happens, I've become pretty good at shlupping my way through.

Thursday, December 14, 2006

HENCE, THE TITLE OF MY BLOG

I used to read books about business, and subscribe to magazines like INC. or ENTREPRENUER, until I realized that when these guys talked about small business, they were talking about businesses with dozens, if not hundreds of employees. What my store really is, is a Mom and Pop business, (or, in my case, a Pop business, with a half-time employee) and there are little or no books and articles about us. Probably no money in it, just as there is no money in Mom and Pop businesses.

The biggest problem is that all Mom and Pop businesses are so unique that it is almost impossible to draw any broad conclusions. Each store is strongly affected by the personality of the owner, his or her motivations, resources, individual skills. One owner might be great at ordering, but horrible at people skills; another might be a great store layout designer, but unable to stick to a budget. One may be a great wheeler-dealer, the other may be a steady, reliable presence.

These books and magazines (which really exist to just sell more magazines), can be actually dangerous to the small guy. One of the worst business decisions I ever made was to create an incentive program for my employees based on an article I read. Complete disaster.

You begin to realize that all the common wisdom is suspect.

1.) Half of all businesses go out of business within 2 years. Well, it seems to me that most all business last 2 years, even if they are failing from day one. Spread that figure out to 75% of all business fail within 8 years, and I'd believe it.

2.) You should have 3 months (or 6 months or two years) income saved up. Yeah, right.

3.) You should expect to lose money for the first 2 years. Also, yeah, right. Look, if you have enough money saved for 6 months income, and can afford to lose money for two years, why are you opening a mom and pop business? It will take a decade or more just to get back to even. Whatever you were doing before that was giving you those kinds of resources, you should keep doing!

4.) Advertising. Like throwing money into the ocean, but every newbie bites.

5.) Lower your prices to sell more! Cut prices in half and make up for it in volume! Only if you're Walmart, kiddoe.

6.) Or the opposite of #5, you should Keystone, be able to get double your investment. Not in the same world as Walmart, kiddoe.

7.) Turn your inventory at least 5 times a year. These days I feel lucky to turn my inventory over ONCE a year.

And on and on. Almost all the common wisdom about small business is suspect. To me, at least.

The best book I ever read about a 'small' business was, GROWING A BUSINESS, by Paul Hawkens. His basic premise was that you start small and cheap, learn your business, and then grow.

That isn't what's happening downtown. These stores are starting as fully developed concepts, with all the inventory, fixtures and storefronts shiny and new. Looks great. Except the owner really doesn't know what is going to happen, does he/she? Estimates of sales are going to probably be too high or too low, and he/she will have to adjust. If the basic concept is flawed, so much money will have already been sunk into the business that it will probably be too late to change -- that is, if the owner actually catches on to the flaws soon enough and, even more importantly, is willing to make the hard decisions.

Making these necessary changes is difficult for any owner, but nearly impossible for an absentee owner. One of the dead giveaways as to whether a Mom/Pop business has a chance to succeed is whether the owner actually works in the store. I will challenge any small business to survive if the owner isn't there at least 40 hrs a week, (Minimum!). It's a Mom/Pop business, which are by their very nature designed to support a Mom and a Pop! (Hence the title of my blog.)

I want them to succeed, but I fear they will be disappointed in the results.

Wednesday, December 13, 2006

SUMMIT FEVER

I may have overreached a bit, this Christmas. I was so close to completely stocking my store, in every category, that I went for it. But I think I may have gotten a little ahead of the actual level of business.

I'm not sorry I did it. The store is extremely satisfying to me, right now. I know what I've accomplished. It will be much easier to maintain the current levels, then it was to build to these levels. There are still small improvements to be made, there are always new products being offered, but there isn't a section in the store that I've had to delay fixing up.

I've done fixed them.

However, I've known from past expansions that it usually takes 6 months before we really start to see the benefits.

Christmas has been slow so far. I don't find myself surprised. I usually try to make a bit of extra profit at Christmas, because I need that money to cover the cash-flow for the much slower, Jan. through June period. My attitude is actually pretty good, considering that sales are nowhere near what I envisioned them.

It just means I'll have to be more careful about my budgeting next year, but that should be much, much easier with the store fully inventoried. I had an image in my mind 23 years ago of the store that I wanted, and if anything, I've surpassed that. The trade-0ff of the satisfaction of a job well done, versus actually making money, is one I'm always struggling with. I always tell myself that I'll try to make money next year, but right now,
I'd like to start carrying.....say....new books. And there goes my profits for another 6 months.

But I prefer having too many options than not having any options. There was a time in the mid to late 90's when every single product line in my store went down in sales, month after month. There wasn't a thing I could do about it. I looked around for product to replace the falling product, and there wasn't anything I could find that fit my store. It was a scary time as sales got closer and closer to my break-even point.

The store I have now is a reaction to the helpless feeling I had at that time. I have one main product line, where I try to have just about everything (comics and graphic novels), and then I have a bunch of products where I have tried to have almost everything. (sports cards, toys, games, anime, manga, used books, new books, art books.)

I used to tell myself that there was never a finishing line, that I would never get all the way to the summit. But, you know what, I feel in some ways that I have indeed reached to top of my capabilities.

I've also reached a physical limit. There simply isn't a sq. ft. in the store that isn't being used. So, from now on, I keep my eyes open for anything new, I refresh every category with new product, be certain to replace the 'evergreen' product, and look for opportunities and bargains. Every category can be incrimentally improved, of course. But I'm very proud of my store right now, and when I walk in every morning, I feel a great satisfaction.

Tuesday, December 12, 2006

SMALL TOWN/BIG TOWN

I don't want anyone to think I'm totally anti-growth. As I've said before, I couldn't have the store I currently have if Bend was still the small town it was when I started. The store, to me at least, is much more varied and cosmopolitan and interesting than the side street nerdy store of 20 years ago.

But there is good growth and bad growth. I believe that the first couple of waves of newcomers to Bend, adapted to the town. They slowed down a bit, dressed down a bit, appreciated what was here. They didn't have to numbers to overcome the small town ethos, and I don't think they had the inclination.

If there was a golden age for local business, it was around 1990. We had clawed our way back from the devastation of the Raygun recession. Little did we know that Walmart and Target and the Outlet Malls and Fred Meyer and Shopko and a seemingly every other big box chain was about to stomp into town.

I liken us small businesses to the mammals in the age of dinosaurs. It isn't so much that we are being hunted, as that the big thrashing dinosaurs might squash us without noticing. We run from niche to niche, hoping to survive.

One of the more astonishing things I ever heard from a tourist was; "I can now move to Bend because you have a Pier One Imports." Huh? Don't they have one of those where you came from? If you drew a curtain around the Forum shopping center, so that you couldn't see Pilot Butter or the Cascades, could you really tell where it was?

So the latter, bigger wave of newcomers totally overwhelmed us. They brought their attitudes and expectations with them, and expected us to adapt to them.

But they also brought numbers and money.

On the other hand, small towns also have their drawbacks. At the peak of the golden age, I had expanded to 4 stores. One in Sisters, one in Redmond, one in the Mountain View Mall, and the one in downtown Bend.

When we first opened in Sisters and Redmond, we were welcomed. People seemed glad to see us. But, even though the sales were barely sustainable even when I had the monopoly, I immediately had competition, opening across the street or just down the street. Suddenly, to the small town mentality of Redmond and Sisters, I was the 'big' Bend store, a carpet-bagger, while my competition was a local, who attended the same church, who's kids attended the same schools.

I put up with that for awhile, and then just left. The competition folded within months, and I spent the next 5 years listening to my former customers asking up to come back. But I learned my lesson.

Smaller towns get just as much competition as bigger towns, if not more. And in a smaller town, one cliche of customers can put you out of business overnight if they decide en masse to go to the other guy.

There is a safety in numbers. One wave of customers leaves, another wave shows up. You don't have to please everyone; just do your job and trust that enough people will appreciate it.

I went from the small town expectation of needing to sell to almost everyone who came in the door and to needing to be almost the sole provider of niche product -- to being one among many, to NOT expecting to sell to most people who come in the door. But...enough people are coming in the door to make us viable. I know that some retailers prefer a small group of dedicated, loyal, hardcore customers, but I prefer a much larger group of customers, dedicated and loyal if possible, but I don't mind the occasional, casual customer either.

Monday, December 11, 2006

How did this come to pass? How did we end up with a town that has new houses built into every crevice, every commercial building quadrupiling in size, huge big box stores offering everything we never needed, apartment buildings spilling into the street?

I'm no expert on the legal mechanisms that might have been employed to slow down growth. Because it never really mattered. There was never any political WILL to slow growth, control growth, much less stop growth. I don't believe a serious anti-growth candidate could be elected, even now. We've had plenty of chances.

Well, if you were here in 1980, you'd know why.

When I went off to college in the mid 70's Bend was still a sleepy little town. But every time I came home for the holiday's, it seemed like there was another growth spurt. First one mall was built, then almost immediately, a second mall. New subdivisions sprang up. We got our own bookstore, finally, and really hit the big time with our very own T.V. station! A sewer system was installed. A kind of mini boom that didn't seem mini at the time.

And then the Reagon was elected, Paul Volcker jacked up interest rates to try to stop inflation. Bend spiraled into more of a depression than a recession. All the construction jobs dried up. We had a full ten year span from 1982 to 1992 when no new major retail came to town, very little building went on. The new malls never reached profitability, the downtown emptied out.

I swear there were FOR SALE signs, or a u-haul in the driveway, of every other house.

It was bad.

While the rest of the country had "Morning in America", Bend had poverty with a view. I don't believe I really felt we had even gotten back to square one until the very late eighties.

So when signs of life began to appear in the early nineties, no one was in a mood to try to slow it down. We were hoping for more. When building sped up in the mid-90's, we were all hoping it would continue.

Looking back, the time to step back and take a breath would've been around then. Before Walmart and Target flattened the terrain and they put in their cheapest, ugliest versions of big box.

But we still didn't trust that it would continue. We kept cheering for growth, until that day when we realized that it took twice as long to get across town as it used to, until one too many S.U.V.'s cut us off in traffic, until Masterston's Hardware was replaced not only by Home Depot, but also Lowes; until Cascade Stationary was displaced not only by Staples, but by Office Max, until it tipped over into ridiculously over-retailed.

The door to growth hadn't just been pried open, as we'd struggled to do for years, but kicked open and blown off its hinges.

So we find ourselves where we are today.

Sunday, December 10, 2006

THE CHANGING FACE OF DOWNTOWN

The article in the Bulletin showed up in today's paper. I was quoted for a few paragraphs, (and she mentions this blog!), which is about what I expected. Of course, what I actually said was much more extensive and some ways nuanced.

I have to quibble with the first paragraph my store is mentioned: "Duncan McGeary has owned Pegasus Books in downtown Bend since 1984. At that time, the Minnesota Avenue surroundings lacked the clusters of funky businesses that fill the old buildings today."

Actually, what I tried to say is that my little corner of downtown used to HAVE the funky businesses; such as Masterson St. Clair Hardware, the The Sole Shop, etc. Where the misunderstanding comes in probably is that it wasn't a strong retail part of downtown, but more a mix of service and retail. But the area around the corner of Bond and Minnesota did change to a more funky retail mix over the last 20 years. The problem, I tried to point out, is that the funky retail IS being replaced by high end dress shops and jewelry stores and home furnishings and art galleries. The funk factor is what I was talking about in my first entries on this blog.

What I tried to say was that there is both good and bad in the changes downtown. That the store I currently own wouldn't have survived in the downtown Bend of 10 or 15 years ago; that I've tried to adapt my store to the current environment. But it is a natural event, and inevitable. The rugged individualists, the risk-takers, are gone, replaced by people who are, well, almost by definition, followers. That is a completely different mindset. Meanwhile, like weeds, the bo ho crowd will move somewhere else.

There are three separate issues.

1.) Lifestyle. Obviously, a block that contains a hardware store, a shoe repair shop, an engraving store, a bike shop, and a comic shop has a completely different flavor from a block that contains the ubiquitous high end furnishings shop, a high end dress shop, a high end jewelry store and art galleries. The very funkiness that attracted people to downtown is being lost. I hear the comment from locals all the time, "I don't shop downtown because it is too expensive..." True, or not, that is the perception.

2.) Architecture. When every building is built in a faux 'craftsmans' syle, instead of an eclectic mix of styles, old and new, then the look become homogenized. And to me boring and tasteless. When every single story building is replaced by 3, 4 and 5 story buildings, the 'small town' atmosphere is obviously lost. (Not to mention the sunlight.)

3.) The economics. Rents look to be getting way too high. I will stake 26 years of experience in downtown Bend to say this: if you rent any space in downtown Bend for 2.50 a foot, (plus triple net, which is the equivelent of another .25 to .75 a foot) it will be extremely difficult for you to make money. Period.

The landlords have a choice of sustaining viable long-term businesses at reasonable rents, or they can encourage mayfly-type, here today, gone tomorrow businesses, at the rents that are being quoted. (Yes, they may fill the spots, but not for long. Being an equity sink with constant turnover can't be healthy.)

In the long run, reality will set in. If rents are too high, spaces will stay unrented. Or the shops will split in the middle of the night owing months of rent, or it will become obvious to everyone that even though most spaces are rented, the turnover rate makes it a killing zone.

We are in a dangerous time, here, because I think reality is on its way, but it may take a few years. I'm afraid we are going to lose alot of viable business before the right equilibrium is established. I hope the landlords will be smart enough to be flexible with the few long-term businesses that are left, or downtown Bend will turn into nothing but a tourist trap, and that would be a shame.

ADDED LATER:

I thought I should explain why even the slightest increase in rent can be significant for a small business, just so's you know we aren't just a bunch of complainers.

Specialty stores, by their very natures, need higher profit margins. We don't ordinarily sell by volume, but by specialness, therefore every sale counts. But in the a retail world dominated by mass market discounters, it can be very, very difficult to maintain your margins. Sure, you try to offer more service, selection, knowledge, etc. but PRICE is king. Always was, always will be, despite what the consumer might say.

I was told early on that I would need about a 40% markup to stay in business, and I have found this to be generally true. But over the last few years, as my product has begun to show up more and more in the mass market, the margins on many of my items has dropped to more like 30 - 35%. (This is not counting the stuff damaged, stolen, or that just sits on the shelf and never sells.) At the same time, all expenses in Bend have risen, until we are one of the most expensive places in Oregon.

So the landlord raises your rent 1.00, and adds a .35 triple net. On a thousand square foot space, that would be 1350.00 more in rent. That's pretty hard to take, but in reality you need to make 1350.00 divided by your profit margin. So if your margin is 35%, you need to earn 3857.14 more per month, of 128.57 more each and every day of the month.

Believe me, if I knew where to make another 128.57 a day, I'd be doing it. And that figure seems even more intimidating on a cold, snowy, wet blustery Tuesday in February, when you've had 5 people in the door all day.

So, you say, it must be that the higher end stores must sell more, or make higher margins? Why? Margins are always close to edge of survivability or someone else will come along and be cheaper than you. Selling more? At higher prices? Maybe. But I suspect that they sell more at higher prices, LESS OFTEN. So it evens out. The higher the cost of inventory, the more risk. There just isn't any free lunch, and I haven't noticed that higher end stores last any longer than your average funky store. In fact, the opposite. Most businesses that I have seen survive downtown over the LONG run have been modest business, with nice but not overly expensive product. I have seen a huge number of 'high end' business come and go.

Saturday, December 9, 2006

OUR GROWTH, YOUR GROWTH

The subject of growth and change often comes up in conversations with tourists. They will almost always nod their head knowingly, and say; "It's happening where I come from, too."

Well, no. Not at the pace that Bend has seen. While growth and change are happening throughout America, very few places have gone through what Bend has gone through.

Yesterday, I had a young family come in and say, "We asked all over town, where are you located! We asked five different people on Wall Street, and none of them knew!"

How can that be? How could a store, which has been in the same location for 25 years, become lost? It's not like downtown Bend is Siberia, and our store is located almost smack dab in the middle of all the new development.

When we first purchased the store, we were fairly unknown. 10 years later, after a sport card boom, and a comic boom, it seemed as though everyone in town knew who we were. I couldn't walk down the street without someone yelling, "PEGASUS!" That was followed by hordes of customers buying beanie babies, magic, pogs, etc.

Yet 10 years after that
it seems like no one knows where we are again.

The Bulletin published a statistic that sort of explains it; 75% of all residents of Bend have been here less than 5 years. And since that was published a few years ago, that percentage has probably gone up.

At what point is it the responsibility of a newcomer, to acquaint themselves with their chosen hometown? I've taken to pulling out the phone book and saying in a folksy voice, "Hey, they have this newfangled invention called the Yellow Pages where you can actually look up businesses! And if that is too retro for you, they have this magical thing called Google!"

Sometimes I sort of test the customer: Do you know where the Pine Tavern is? Have you ever been to Dandy's resturant? Have you been to the top of Pilot Butte? Do you know the streets, Greenwood, Franklin, Division, Newport? I'm fascinated by the lack of knowledge. Why do they bother to live here? Is it like when I lived in Eugene for a few years after college, but never read the newspaper because I knew I wasn't going to stay? Are these newcomers actually a transient population, how deep are they going to plant their roots?

Now some could say, it is YOUR responsibility, through advertising, or marketing, or promotions, to let people know you are here, and I wouldn't argue. (Though I have my doubts about the effectiveness of advertising, especially for niche businesses.)

But at some point, I think a civic duty on the part of any resident to try to get to know their town.

Don't you think?

Friday, December 8, 2006

Finally woke up on a morning, without feeling like my tail is dragging. 3 nights of moving fixtures and putting up shelving really knocked the stuffing out of me. The store looks great, and I'm hoping that I'm finished with all the changes for awhile.

Used to be, I'd routinely put that much physical labor into the store, and it would hardly affect me. Which brings me in a roundabout way to the title of this blog -- the 'best job' part and the 'middle aged' part, and the 'minimum wage' part.

Most of my regular customers are 15 to 25 years younger than I am. Ironically, that was true when I started at 31 years old, still true now that I'm 54 years old, and I'm suspecting that I'll be a 64 year old guy selling comics to 45 year olds.

Just really don't see kids buying comics (or books) these days. Kids are pretty much the same as they were when I started, except for that one thing. For a person who can no more imagine not reading than I can not breathing, it seems very strange. One of these days I'd like to talk about why I think kids don't read (video games!), but back to the age thing.

So in some ways, by constantly talking to customers younger than me, I've never really felt my age. (I know that's a cliche.) I'm very up on pop culture, not just because of my business, but because it's my inclination. Let's face it, I'm a nerd. If I could go back to my high school days, I'd tell my younger self; "Embrace you're inner nerdism! Quit trying to be different, you can't NOT be different."

So in a way, my store has become my little clubhouse. Those people who like what I'm doing, come back, those that don't, don't. As I've matured, I've tried to broaden the appeal of the store...after all, I've always been interested lots of things, not just the nerdy things. My eyes glaze over at most talk about super-hero's, or Star Trek, or someone's D & D game, but I love to talk about who might be the best current writer who carries on the tradition of Dashiel Hammett, or Raymond Chandler, or whether the new James Bond movie is the closest to the book. Politics, religion, books, movies, comics, business, all are fair game for discussion.

So I enjoy my store. I figured out early on that there are only two reasons to own a business -- for the fun, or for the money. If you aren't getting either, then look for something else.

I've always had fun, if nothing else I've enjoyed being in charge of my own destiny. But it is easy to accept a minimum wage when you are 34 years old, it's a little annoying to still be making minimum wage at 44, but at 54 for it starts to become alarming.

It is possible to live pretty close to a middle class life at minimum wage, if your wife is also earning an income, if you live very, very modestly. We lucked out and were able to put a down payment on a house a few years ago, just before the current run-up on prices. I drive a 1990 Toyota, my wife drives a 91 Toyota. We don't eat out, our recreation is walking, Luckily, my reading and entertainment are pretty much taken care of. I'm really not complaining.

Thing is, the store has always had tons of potential. If such and such happened, if things went right for that amount of time, and so on....The store STILL has tons of potential. There is money to be made, and if it isn't being made, it's because of choices I'm making. I'm still hoping I'm won't be a 64 year old earning minimum wage. But I'm willing to take the chance. because of the "BEST JOB" part.

Thursday, December 7, 2006

I decided going in, that I wouldn't talk about the daily ups and downs of sales. Or the every day aggravations. But, to not talk about them, at least a little bit, isn't being candid or honest, either.

Yesterday, my main weekly shipment from my main supplier didn't show up. Bad enough, followed by the trepidation that it may not show up today either. So, my regular crew, the most loyal customers who come in every Wednesday, found nothing on their shelves. I usually have a 20% off sale on days like these, but the faithful regulars usually already know what they want and are willing to buy it, discount or not.

Meanwhile, my employee, who I schedule for extra hours on shipping days, is mostly standing around, and I have to bring him in on his day off, today. We lose a day of sales, pretty much.
It seems to happen every Christmas, just when we need to make money the most.

I figure there are probably temps working at the printers, the distributers, the shipping companies......in other words, all the way through the system. The wonderful, cheap American economy has the weakest links in the system at the most stressful time, because the wonderful, cheap American economy doesn't want to pay experienced, qualified employees full time.

The public seems to want the cheapest prices, at the same time as they want: helpful, experienced, knowledgeable employees. The two things are probably mutually exclusive, wouldn't you think?

Wednesday, December 6, 2006

I was interviewed by a Bulletin reporter yesterday about the changes downtown. I don't want to step on her article by talking about that until it comes out. Never know what is going to be written about.

One last night of putting up shelving. I'm really sore this morning.

Used my new power saw yesterday. No matter how old I get, I still have kid tapes. I've always stayed away from power tools because I always have that worry in my head that I'll cut my fingers off, or something. It's my version of the CHRISTMAS STORY's , "You can't have a BB gun....you'll shoot your eye out!"

All that work, and the new shelves easily absorbed the excess inventory. It will takes weeks, even months, before the space is used most efficiently -- there is a intuitive, natural process of finding just the right spot for just the right product. In the meanwhile, it has forced me to move around a bunch of stuff, and so I'm hoping that some of it will get noticed.

All these changes, and all the new product, recharge my batteries. I'm enthused, I come to work thinking, "I really like my store. This is the store I wanted when I started." This is the closest that I've ever come to fully inventorying my store in every category. I'd love to have more room to display everything properly, but it requires alot of creativity to make do with the space you have. I find that there is almost always a solution if I think about it long enough.

Tuesday, December 5, 2006

I was up late again, putting up more shelving in the back of my store. Amazing to realize that I probably stayed late at the store about every other night for the first 10 years I was in business, before I decided that, if I can't get a job done during store hours don't even start.

But for renovations, there is no choice but to stay late. I love planning changes, I almost always like the results of changes, but actually doing them is stressful. Fixtures don't quite fit, (usually by a maddening half an inch or so), product falls all over, and every time I reach for the tape-measure, it's missing.

I believe I have now completely, utterly filled every inch of my store. But I'm going to have 69 feet of shelving to put my toys on, which will create a bunch of room in the front of the store. I've got one more night of hard work, and then it will probably take a couple of weeks for product to find their proper niches.

One of the reasons I know that my circumstances are different that most downtown owners, is the amount of set-up time these new owners give themselves. They put paper in their windows, and two or three months later THEY STILL HAVEN'T OPENED. It is unfathomable to me that they have enough money to eat rent like that.

There is a saying in business, that one should expect to not make money for two years.

Huh?

I have ALWAYS needed to make money, from the day I opened. It was all or nothing. I've always said that anyone who owns a small business who has a viable alternative, will eventually take the alternative. Knowing that it is all of nothing has a way of focusing the effort. If a guy doesn't have money to fall back on, if he knows that working for Walmart is the alternative, then he is going to fight and claw to survive.

I've decided that everyone's business is hard; if it was easy, someone would've come along and sliced the margins a little thinner. Therefore, business is always on the edge, which is an uncomfortable place to be. You have to work harder, stay longer, have better ideas than the other guy. So, after a while, your little dream business is no longer the fun you thought it would be. In fact, it is even more work than the job you left, and for less money!

I actually like that challenge. And I really don't believe I'm suitable to work anywhere else. It is comforting to me that all of us live by the same rules -- and that having tons of funding for your store can be as much a drawback as an asset. In other words, you can't buy your way to success. Eventually you have to get down in the trenches with the rest of us poor shlubs.

Monday, December 4, 2006

THE FUNK CONTINUES:

Of course, the funkiest part of old downtown were the owners. When the viable shops downtown fled to the malls, it was 40% vacant. That feels like a bomb zone. So what happens?

Like weeds, a scruffy bunch of bo ho's move downtown for the cheap rents. Little by little we build it into something unique and special. Others come along, and say to themselves, "I want to be part of that." Rents start to rise, buildings are sold and tenants evicted. A classier group of businesses come downtown.

And the funk is lost.

I always comment the Jackson Pollack went the Hamptons BECAUSE IT WAS CHEAP! Before that, artist congregated in Greenwich Village, and then SoHo. In Portland, it was the Pearl District.

The Bulletin just did a glowing story about Joyce, of the Curiosity Shoppe. Joyce was a downtown institution before she was forced to leave. My next door neighbor for 20 years, Jerry of the Sole Shop, was what would be known as a 'character'. Rena at Birkenstocks has retired.
In fact, there is almost no one left from when I started.

The casual customer doesn't realize that almost everyone downtown has been there for a relatively short span. These aren't the trailblazers, the risk-takers, the individualists that brought downtown Bend back from the brink.

A real estate agent was recently quoted as saying, "It wasn't the Mom and Pop businesses that brought downtown Bend back, it was the beautiful old buildings and the river."

Well, the river was there when downtown was tottering, and the old buildings were there (though they are rapidly disappearing.) It was nip and tuck, for awhile. In hindsight, it looks like downtown Bend coming back was a sure thing, but if you lived through it, it was far from certain.

I miss it.
BRING BACK THE FUNK! WE WANT THE FUNK!

First, on the personal. I spent 7 hours last night moving bookshelves from one end of the store to the other. Tripping over tons of books littering the floor. At the end, I gained....one measly bookshelf, or roughly 12 linear feet of room. But every square inch of space is gold, anymore. I really need a space about 3 times bigger than I have, but now that the downtown has matured around me, and I have an affordable lease for a few more years, I want to stay and take advantage.

The funk. Downtown Bend has had a mix of old and new, nice and junky, ever since I can remember. As far as I'm concerned, the mix gave the area character. The first wave of investors downtown after the Reagan Recession, in the mid-1980's, actually made the effort to RESTORE the look of the buildings they bought. The Old Postoffice, the O'Kane building, were brought back to life looking like their old selves.

What are we getting now? One faux 'craftsman' building after another. There is something really monstrous about turning an architecture style that was meant for bungalows into giant edifaces. And when every building downtown looks like the St. Clair building, or Franklin Crossing, than how are we any different than Old Mill? It's fake, and boring. The Firestation kept a few bricks in front, but is essentially a different building. I suspect when they are done with the building across from me (and one benefit to this slowdown is maybe they won't get to it during my current lease) and the building next the the Brewery on Bond, and that awful building that is being planned for Brooks Street, but which is so far a pile of rubble, we'll have a nice uniform style that will look dated in 20 years and we'll have to start all over.

Sunday, December 3, 2006

TOURISM

I never got around to talking about Bend tourism yesterday, so here it is;

Growing up in Bend, it was pretty much a 1 and 1/2 industry town. Lumber was king, and tourism was a far second. I started skiing up at Bachelor Butte (as it was called back when we weren't quite so grandiose) the year it opened. The lodge and the parking lot was tiny, and the lifts were a t-bar, a rope tow and poma lift.

Meanwhile, Brooks Scanlan and other smaller mills provided most of the employment in Bend.
(It is has always been amusing to me that the "OLD MILL" district has tried to create some sort of nostalgia about the mills. They were ugly, smelly, dirty, dangerous, noisy and toxic. Anything but charming. The 'bungalows' on the west side was were the poor people lived, the rich (such as there were, doctors, lawyers, businessmen) lived along Drake Park or the West Hills.

40 years later, we are still a 1 and 1/2 industry town. Tourism is king, and I'd have to say the combination of construction and resort/retirement industry is second.

Couple of problems with this: Tourism doesn't pay all that well. And if anything, it is even more vulnerable to economic shocks. After 9/11, the sales in my store dropped over 20% for three straight months, almost exactly the same drop that the Redmond airport saw.

The construction industry seem to me an industry that is chasing it's tail. If the growth of Bend depends on construction, but construction if based on the growth of Bend...well, you see the problem. I shudder to think of all the bank, mortgage, title, insurance, and contracters jobs there are in Bend.

Still, tourism is important to my business. I make money four months out of the year,; July, August, December and June/or March. I break-even four months out of the year; Sept., April, May, and March/or June. I pretty much lose money four months out of the year. Oct., Nov., Jan. and Feb.

Without tourism, we'd probably trend toward breaking even five or six months out of the year and lose money four or five months out of the year, and maybe make money one or two months of the year. My store would be much, much smaller, with much less inventory. I might be able to survive, at Minimum Wage, but it would be tough.

Resort or retirement living? Well, I keep hearing that there are some very wealthy people here, and I do believe it. But I NEVER see them! I suspect that if they are older, they are past their funky consumer years, or if they are young and wealthy they probably buy in the cities or online. Who knows? All I know is that almost all my customers are of humble means. So when I look at all the fancy stores downtown that seem to be designed to cater to the whims of the wealthy, I just wonder how much success they are having.

The look of prosperity is extremely misleading. In my building, we lost 3 long-term, established businesses (a shoe repair shop, 25 years, an engraving, trophy shop, 22 years, and a bike shop, 5 years.) They were replaced by a fragrance shop, and art gallery, and a jewelry store, all of which LOOKED more properous. Yet the fragrance shop and art gallery are already gone, replaced by the expansion of the jewelry store and a new dress shop, which look even more prosperous than the last businesses, and so on.

I call it failing upward. It is happening all over downtown. Meanwhile, we are losing the old funky good feeling that was attracting people to downtown in the first place. That's what I want to talk about tomorrow.

Saturday, December 2, 2006

POP CULTURE. POP POP. POP CULTURE.

Much as I like writing my little essays, I'm beginning to realize that might be some heavy going for casual visitors. I'm going to split this blog into two parts every day. The first will be about what's going on in my business (or my life, which is usually the same thing.) The second part will be one of many of my hobby horses. Anyone who has been a customer of mine for long has probably already heard my screed.

The fun thing that is happening at the store, is that I have been adding NEW books. I've got limited space, so I'm picking the very best books I can; books I've read and loved, books that get enthusiastic recommendations from readers, books that have a cult following. I've established accounts with a couple of new distributers, which has opened up a whole new world of possibilites.

I've always been partial to fantasy art, from the first time I saw the Frazetta cover of a Conan book and the first Hildebrant Lord of the Rings Calendar. But it used to be extremely difficult to find much. I slowly accumulated about 500 coffee table art books, which sold rarely, and once sold were difficult if not impossible to replace. Suddenly, with access to mainstream book distributers, the floodgates have opened.

I moved from fantasy art to pin-up art, to pulp fiction art, to retro-futuristic art, pop-bot art, to cartoonists like Edward Gorey and Charles Addams, to children's books, and so on. I've got a category of books that I've been trying to figure out a name for: goth books, funky books, whimsy? My best selling series right now, for instance, is ME WRITE BOOK, and IN ME OWN WORDS, by Bigfoot. I just know what I like when I see it, or hear about it.

Impossible to organize. By artist? By category? By author? By publishing imprint?

I've been trying to be intuitive about it, but most of the material is being overlooked even by customers who I know would like it. Having a store four times my size would be one answer, but I'm reluctant to leave downtown now that is actually works as a retail center. So the vast majority of this wonderful pop-culture material is sitting on my shelves, spine out, being ignored by my regulars and by casual browsers alike. Frustrating.

I'm noticing an interesting reaction by the customers. New books like LISEY'S STORY, by Stephen King, THE RUINS, by Scott Smith, and THE ROAD, by Cormac McCarthy are considered mainstream by most people, although by any real definition they are genre books.

For instance, I was talking to a customer yesterday about JONATHON STRANGE AND MR. NORRELL, a book which she loved, and which I was lukewarm about. But when I called it a fantasy, she objected. "I don't read fantasy."

So: I don't read fantasy.

I read JONATHON STRANGE.

Therefore JONATHON STRANGE isn't fantasy.

I've been trying for years to break through these pre-conceptions, without much success. As far as I'm concerned, it is all one big continuum, from books with all words and no pictures, to books with all pictures and no words, to everything in between. WHERE THE WILD THINGS ARE, is as great a read for an open-minded adult as it is for a kid. The Carl Bark's UNCLE SCROOGES read almost better for an adult than for a kid; in any event, it is pure overlooked genius.

So I try to convince people to being open-minded, and at the same time try to remind myself to be open-minded.

Friday, December 1, 2006

Gosh, nothing is more exciting than talking about the population of Bend! But I started the darn topic, and I'm going to finish it.

When I say that some of the stores in downtown Bend are TOO specialized, I'm really talking about simple math. If it takes 8000 customers a year to keep your store alive, and you attract 5% of the population of Deschutes county, you are going to come up 500 customers too short. That is, your store will come up short a couple customers a day -- day after day, week after week, month after month.

There are always exceptions; owners who out-perform the market through dint of efforts or charm, or marketing. But eventually, all business owners want to get away from 60 work weeks, or the need to be super charming, or the efforts to find another ingenious guerrilla marketing scheme. The exceptions just don't prove the rule. (Though, if you look closely at almost any business in Bend that has lasted longer than 8 years, they are almost all exceptional businesses. Average retail doesn't survive in Bend.)

By sheer math, my store should be fine. There are 3500 comic shops in America, so the 150,000 population of Deschutes County ought to be enough to make me at least average in sales. But, even after all these years, I come up about 1/3rd short of that number. (From the day I bought the store, comics alone haven't been enough to carry my store to profitability. I've added 7 other product lines, since, most of which I would term 'sidelines', but all of them together account for almost 50% of my total sales.)

Why?

Excluding the possibility that I'm just doing a lousy job, (I see all kinds of shortcomings, which I'm trying to deal with) I've come up with a few reasons.

1.) Isolation. Go 100 miles in any direction and you hit sagebrush or pine. Despite the mass media and the internet, it still takes the locals a couple of extra months to catch onto product that is super hot everywhere else. (Which is better than 20 years ago when the time-lag was more like 6 months to a year.)

In all my years of operation, I've never been visited by a rep from any of the products I sell; the same reps who routinely visit other pop culture stores. It makes sense; they would have drive all the way over the mountains, to visit one measly shop, when in the same time span they could visit dozens of shops along I-5. Which brings me to reason number....

2). No interstate. Highway 97 is much improved from a few years ago. But the route extends from Bigg's Junction, to Madras, to Bend, to Klamath Falls. Compare that to I-5, which extends from Portland, to Salem, to Eugene, to Medford, with shouting distance to Corvallis, etc.

3.) No real 4 year college, and/or military base. Add either of those to Bend, and my demographic base probably doubles.

4.) Demographics. My prime audience is 20 - 35 year old guys, the more educated the better. For a while, a significant percentage of my graphic sales were to the guys who work at the local Sony development group. Young, hip, and urban. Instead, Bend is heavily weighted toward retired and wealthy, or young families, both of which I have a pretty hard time selling to. I've turned almost half my store into an effort to attract the non-core customers, without great success. I have to turn my store into more of a 'general pop culture' store, rather than a specialized 'comic and graphic novel' store.

5.) Synergy. There are no cross currents in Bend, like you might find in Portland. No way to generate excitement in one store, which travels to another store, is amplified and moves back. It is hard to explain, but I suspect that if my customer base is 2% and static, that the bigger the population base the more energetic the interaction and the more likely a new customer will develop.

During the peak of the baseball card boom, I had a store in Sisters and Redmond, a store in the Mt. View mall, and the store downtown. What I discovered was, the smaller the town, the more dependent you are on a small group of customers. I discovered that having two stores in Bend actually made more sense than having all of Redmond to myself.

What all the reasons above mean to me is that there is a glass ceiling to how big my store can become. The same store in Portland for 26 years, run well, would have a chance of taking more than it's average share of the customer base. Here in Bend, even being the only comic shop, I'm limited by the math.

The one saving grace for my store, and for most retail in Bend, is tourism. Which I'd like to talk about tomorrow.