Sunday, August 3, 2008

We beat last year, by .04%.

Statistically insignificant, but still an increase is an increase. This is only the second time since August of 2007. Now we're rolling over on the months where the declines started, so we might be able to match them more often.

Several other months have been almost even, and a few have been absolutely awful.

We're down about 12% this year in sales; which for a corporation would be horrible and huge, but for a Mom and Pop business, not so much. Much more adaptable, we little guys. So much so that I don't consider anything less than 20% down to be harmful, as long as my spending is right. (Not fun, and somewhat discouraging, but not something that can't be handled.)

I keep hearing from others that sales are down about 25%; and I think if I had the same product mix as 2 years ago, I would be down that much too. Fortunately, new books and board games have been making up for the slack. Pat turned to me the other day and said, "We need more new books!" Sales are outstripping my ordering, which is a good sign but also dangerous. I don't need much encouragement to go crazy ordering. I'd like to see what the fall and spring bring us with new book sales....

We've made much more profit this year, by cutting our spending.

In the last couple of months, I've started buying again; but trying to be canny about it. This week's invoice, for instance, came in at a full 10% cheaper than last year's average. I'm probably averaging a good 5% better Cost of Goods this year. Part of this is not paying the huge 'reship' costs, and part is from looking for bargains. We're getting into the rhythm of buying on a 10-20 day delay, instead of a 2 to 10 day delay.

Got a call from a dealer in Texas who was thinking about adding used books. While giving him my sage advice, he casually mentioned how many comics he sells. Easily double what I sell. I'm always so frustrated by that. I think I've got a well stocked store, and yet I've never been able to get comics more than 2/3rds of the level I think they should be. His rent was less than 1.00 a foot; mine is well over double, almost triple his, per foot, and likely to go up.

Oh, well. I live in paradise, right? I have the best minimum wage job in Bend a middle aged guy could ever have, right?

Finally, I can't help but comment on the "3 builders" article in today's Bulletin.

I hope that what they are saying for public consumption isn't what they are really thinking. They are projecting 'best case' scenario's which I think are wildly optimistic. In fact, the scenario that one of the builders said would create more problems for him -- his 'worst case' -- seems to me to be a certainty. Based on what has happened in California and Florida, I think two years is too short a time, especially if they time it from mid-2006. (Sure isn't what they were saying in mid-2006.)

So mid-2007 is a more realistic date to when they started to get religion. And I believe a two to three year slide from there, a bump along the bottom for another year or two, and maybe a 2 year slow rise. More a 6 to 7 year process before they can really cash in on surviving.

At least, that's what I'd be planning for, if I were them. And a middle scenario of 3 to 4 years. High, middle and low. That's the way to plan for contingencies.

Planning your business on the absolute best case is a dangerous, dangerous thing to do. I'll assume that they have some brains and are only saying this out loud, and meanwhile planning for a more dire scenario.

5 comments:

Duncan McGeary said...

I'm putting this in the comments section, but I've got to say, the Flashback Cruz is a complete flop for us. Down 80% in sales from Friday, and less than half our average daily.

I don't think people looking at old cars are buying books, games, toys or comics.

I can't believe they're in the market for anything else, either.

The promoter of this event is a fierce defender, and has expressed her unhappiness with me in person that I'm just not delighted with the whole thing.

And, also in the comment section, because I'm not wishing ill on any of the 'athlete" business people, but it was pretty hard not to notice they all started their businesses from 2004 to 2007, or the bubble years.

I don't believe those years are going to prove representative. I think the retail and or commercial bill still has to be paid, and will probably follow the housing bust by a couple of years....I wish them luck. They are seem like motivated and tenacious people, which is what you need....

Longtime Bendite said...

Business for me sucks. Down 60% YTD,no bottom in sight. SURPRISE,not construction or real estate.
Give yourself a big hug,you are a retail GOD.
Have seen some really bad times in the early 80's,but,nothing even remotely close to this.
Will the business survive? That is a big maybe. One thing for sure, myself and my family WILL survive.I learned long ago money does not buy happiness, it just helps it along.

RDC said...

I will have to disagree with on comment that a 12% decline would be huge to a corporation, but not to a mom and pop.

Not dramatically different in either case. Impact in both cases depends upon financial resources, planning, ability to adjust, etc. Some do it well, some do not. In either case those that fail are the ones that got blindsided, while over extended, or just did not have the ability of financial resources to adjust.

Duncan McGeary said...

I have a level of business that I could survive at, that is far below what I'm doing.

But...and this is a big but...you don't get to that level except by ratcheting down, because you're forced to by circumstances. In other words, each down month that causes you to cut your spending is probably a month that you lost money.

If it takes you six months to reach the new level, fine -- if you haven't lost money getting there.

The alternative of simply spending at that level in advance, would be pulling the plug on your possibilities.

So you try to guess a moderate decrease and spend there and allow yourself to spend more if it doesn't happen.

It's all very tricky. Especially if you've never been there before.

Duncan McGeary said...

Longtime Bendite.

Ouch. That hurts. I hope you can hang in there.