Sunday, December 9, 2007

You just never know how these things are going to play out.

For the last 3 or 4 years, I've been like a kid in a toy store, able to buy anything I wanted. Well, within reason. But, before that, over the two previous decades, I'd never been able to order everything I thought the store needed to do a good job in every category. I always seemed to be short of being able to do the job the way I wanted to do it.

So I started ordering the material I thought we needed to be a great store. Feathering the nest. Not only that, I was adding new categories; board games and new books.

There was almost no downside to ordering so much, as long as I sold enough of the extra to pay for it. The extra needed only to be break-even, because the nut was covered already. So if I ordered an extra 35%, and sold a third of it, I was O.K. Because I was also able to take advantage of clearance sales which padded the margin even more. Little by little, I was able to fill in every category: toys, games, cards, books, comics, and so on.

The only downsides I could see were that the store got fuller and fuller, to the point of clutter. And that I had to pay taxes on the extra inventory, because the IRS saw it as profit. I've mentioned before I seem to sell more stuff the more stuff I have, so the clutter was acceptable. The taxes -- well, as my accountant always says -- it just means you're making a profit, which is the point of the whole thing in the first place.

I had to change my focus a few months ago. I'm ordering what I think the store needs, instead of what I want. Completely different approach. Two major reasons: one, the store was packed, and any 'extra' I brought in was just going to have to displace something I've already paid for, which isn't very cost effective.

And, two, there was a distinct chill in the air. Comics and graphic novels, which had gone through a really strong growth period, were leveling off. Cards are still in a downward spiral, though we are selling quite a bit more than a few years ago because I brought in inventory and with the demise of American Sports. Same thing with games, overall industry slowdown, but an improvement for us because of the demise of Gambit Games.

Still, not a time to keep adding. Add in the potential for a local and or national recession, and I decided it was a time to maintain.

So I cut my preorders to the things I knew we needed.

I fully expected that I'd have to increase my reorder budget as I started to run out of things.

But that isn't what has been happening. My reorder budget has been more than sufficient to cover the shortfalls. The preorder material has been enough, in most cases, to cover demand.

Which just means, I was way over ordering over the last three years. If I hadn't already known, this would just confirm it.

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