Pegasus Books. End of year review, #2 & #3.

I'm going to cover both anime and sports cards at the same time, because they were the only two categories that actually saw a decline in sales, and -- not at all coincidentally, -- the only two categories where my main competition quit during the course of the year.

You'd think if my competitor's -- American Sports and Anime Mt. -- were quitting, I would've seen a bump.

But, in fact, whatever downturn finally convinced them to quit also hit me. That is, I've always found that by the time my competitors decide to leave the playing field, my sales are also usually so far down, that it's a big fat, "so what."

I'm convinced after all these years that mature retailing isn't a zero sum game. That the phrase, "A rising tide raises all ships," is absolutely true. If I'm doing my job, then I'm going to get my share of whatever business is available. But if sales are dropping, it doesn't matter how good a job I'm doing sometimes.

Notice I said "mature" retailing. Cut-throating business practices and bad-mouthing and other immature tactics can indeed hurt my business. But these kinds of competitors always self destruct eventually, so it is the overall marketplace that decides whether I make money or not. A strong demand helps everyone, weak demand hurts everyone.

The biggest problem with anime, of course, are those 6 million downloads a week. I am beginning to see that all product with information content -- which includes books, comics, games, and anime -- are all going to face the problem of downloading from the internet, to differing degrees.

Some, like books, probably won't affect my business career much, others like anime and games-- coming soon with 4th Ed. D & D, -- are already having an impact. The music industry is trying to figure it all out now, and I think the dvd industry is next.

Anyway, anime was never a huge part of my business. Still, a 50% drop in sales is pretty significant, and pretty much a sign that either I need to get out completely, or take a very cautious wait and see attitude.

I'll say this, though, the anime people are in danger of sidetracking their hobby, until the internet may be the only place they can get stuff. I doubt that Best Buy, for instance, will wait very long for them to come around. Word is, even the Japanese are having second thoughts about the costs of producing anime for the American market if they can't sell it.

It's a bit of a contradiction I know, but even in this world of too much, customers can get so picky and price conscious that they can force a product to become harder and harder to get. As a store, I figure I can always find stuff to sell, but I'm not willing to work for nothing, and I'm not willing to put up with too much antagonism. Suddenly, the customer finds that a product that always had a lot of service attached, that was easy to find, that was cheap and available, has suddenly become hard to find, without any extras, only in certain formats and prices, if at all.

Meanwhile, sports cards declined again, about 18%. (Sports cards are the best example of the above phenom. Yes, they are still available, but in only in certain formats, and only in a few mass market stores and online. No services attached, and if the customer thinks the product is cheaper, they haven't been paying attention. There were less than 1000 card shops left the last I heard, and almost none of them actively buy and trade.)

The year decline was well within the margin of tolerance. I think maybe if the Blazers had started their little run a little sooner, or if Greg Oden hadn't been hurt, there would've been more activity. Because sports cards for us have dwindled to very expensive boxes, anywhere from 80.00 to 450.00, it only takes a couple of active buyers to push things up, and couple of disappearing customers to push things down.

I'm most discouraged by the huge theft I had at the end of the year. It only takes a couple of people to really ruin something.

But I've decided to hang in there another year, and see what happens. I think if I actually got more involved, offered some singles, maybe kept track of the industry more, there might even be some pent up demand.

But I don't have the heart for it. Easier to just point to the 'hobby' boxes, and hope some people with knowledge will come in. I spent a fair amount of time talking it up the year before last, coddling the collectors, but last year I let them make up their own minds. I'll take an 18% decline as a tradeoff, but of course can't keep taking that kind of decline forever. Really, if the collectors can't figure out for themselves that the hobby boxes are a better deal, I'm not sure that all my talking will make much difference

So, a wait and see on anime, make sure I have Miyazaki movies in stock. And maybe a bit more effort on cards, because the Blazers are starting to interest me again.

But if the customers don't come around, I've got my eyes on that space to increase books and games.