Interesting article about Damian Schmitt and Westside Video in the Source, March 13, 2008.
I talked to Damian about a week ago about alot of these issues. The biggest advice I had was....watch out what advice you listen to.
People mean well, but they are almost always cheerleaders in these situations. You'd think, maybe, that there would be plenty of naysayers, people who would warn you of all the pitfalls, but actually it's the opposite. "Go for it!" they'll almost always say. I suppose because they don't want to step on your dreams. (Interestingly, if you decide not to go forward, they'll turn on a dime and say, "Yeah, I thought that might be risky.")
But it is often pretty meaningless advice-- comments like "You can do anything you set your mind to," which aren't helpful. In fact, that's a pretty empty phrase.
Ultimately, it's your head in the vise. Even your biggest vocal supporter will get on with his life pretty quickly. A sad shake of the head, and ten minutes later they're back to being focused on their own issues. They mean you all the best, but they aren't digging for the negatives. Or the positives, for that matter. They just want what's best for you.
So....you really are on your own in weighing all the issues. When I talked to Damian there were a bunch of complicating factors, both positive and negative.
Of course, I'm like everyone else. My first impulse is to say, "Hang in there. Go for it! Do what it takes to make it work!"
I have come to the conclusion that the biggest reason to own your own business is because you want to make the decisions. To be your own boss. To take your fate in your own hands. (Not to get rich, or sit around and eat bon bons all day.) If that motivation means enough to you, I'm fairly convinced that you'll either find a way, or you'll tough it out. But there are certainly no guarantees, and there are historical, technical factors, and there is always both the happy accident -- a new product that brings in the cash, and the lousy luck, carrying something that simply quits selling, having a competitor move in across the street. You just can't ever know for sure.
So you weigh your motivations, and you weigh all the factors, and ultimately, you make a leap of faith.
Which brings up another related issue.
There is one phenomenon that constantly comes up when talking about independents:
That somehow we have a corner on the niche market.
"Well, sure I buy Harry Potter from the Big Guys, but I come to you for obscure movies like The Cube."
My flippant comment back is usually, "Another definition of 'niche' is all those books, movies, cd's or whatever that the Big Boys don't think sell well enough to bother to carry."
Turns out, it's pretty hard to make up for the millions of copies of Harry Potter that sell somewhere else. The old 20/80 rule at work. 20% of the product makes 80% of the profit; so if you buy the 20% from Barnes and Nobles, or Best Buy, or Blockbuster, and buy the other 80% from the independents, you're really telling us to carry a large inventory of slow moving product, just in case you might on an off-beat night want something different.
It can work, but it's hard. I take a very slow and steady process toward becoming a 'long-tail' retail store, but even at Pegasus the 80/20 rule probably applies. I carry the best-sellers along with the niche, even though it's an uphill battle. The thing that's making the long-tail theory work in my store currently is that I've got a relatively high amount of walk-in traffic, and a relatively high amount of impulse buying.
But when I stumble upon a great selling product with decent margins, I get a small whiff of how the other half lives. Of course, when that happens, I also know it's only a matter of time before the Big Boys find out and start carrying twice as much, (a huge display that they return if it doesn't sell) at lower prices, (often as low a price as we actually pay our wholesalers) and with special exclusives, (that little bit extra to encourage you to buy from the Big Guy) and getting weeks earlier, (oops, that wasn't supposed to happen....) At least some of your loyal customers seem to sort of disappear at that point. Remember, you can keep 80% of your customer's loyal, but you're still taking a 20% hit.
It's the lot in life of an independent. I'm not complaining. It actually fits in with my psychology to carry alot of idiosyncratic, quirky stuff.
But I don't mind the occasional best-seller.
4 days ago