Actually, I think I'll talk about the types of books I'm going to buy over on the Pegasus Blog, but my business strategy and tactics over here.
At any one time in my business planning, I'm surveying the terrain, trying to figure out which product lines to support, which to let slide, and which to try to increase.
Preferably I want product that both sells and makes a decent profit.
Some product sells well, but without a decent profit.
Some product has a decent profit, but doesn't sell well.
Ideally, you'd like to have both.
But of the two, selling is the most important. That's why you can trap yourself into a situation where you fill your store with 'in demand' product that has lousy profit margins: which in effect means you're just working harder for less.
But without any sales at all, you're nowhere.
My basement is full of product that if I could sell it would be 100% profit, but I don't even bother to display because no one wants it.
Anyway, back to the top of the post. I'm trying to be savvy and canny and smart about how, what, and when I buy stuff. This isn't meant to brag, but to explain.
This is where experience really kicks in.
For instance, the first time I saw a product begin a precipitous decline was sports cards. Someone one day just turned off the spigot. Panic set in. All my competitors were cheaper than me; I couldn't figure out how they were making any money, but I lowered my prices to catch up.
Following losers right down the rabbit hole. The answer was they weren't making money; suicidal competition. And by following them, I insured that I wouldn't make money either.
I finally woke up one day, came to the store, lowered my orders, raised my prices.
The difference was dramatic. I stopped losing money. That very week, I noticed it. I stopped bleeding red ink. I had the product in stock, when it sold I actually earned a profit, and I didn't have to constantly expend money to get more.
Of course, sales dropped dramatically, too. But I learned you don't lose money on stuff you don't sale, you lose money on stuff you order and sell for too little, or the stuff you order and don't sell at all.
It's a fine difference. You want to have a going concern, which means having product that you can sell.
Anyone who has been in my store will know that my own solution was to diversify, diversify, diversify. I have filled my store with 8 or 10 different types of product, any of which could have been a store in itself. A pop culture consortium, if you will.
The only time I ever felt helpless (both my successes and my failures are all mine) was between 1995 and 1998 when everything I was selling was on the downside, and I couldn't find any realistic product to bring in. Graphic novels had barely begun, the only toys available were mass market, the book market was impossible because the wholesalers were useless to me, and so on.
Hard to imagine now that there was a shortage of product back then.
I make certain that I earn at least a minimum profit margin on everything in the store. If that means a product line slows down, fine, I just maintain it by making sure I get the new, good stuff and an adequate selection of the old good stuff, and turn my attention elsewhere.
I've always had the practice of diverting at least some of the profits from hot product and/or flush times into shoring up weaker products, or adding a new product. Which is why, I think, that I actually tend to turn a profit when things slow down instead of when things are going well. Because I'm constantly preparing for the next downturn.
It's very difficult to add new product lines through cash flow. Either you borrow money to get to a credible level, or you have other product supporting you while you are slowly building. I've gotten really good at that.
Which is why I'm more comfortable this time around, because all my lines are fully stocked, and I just need to maintain them.
Except for books.
Books were brought in almost as a lark. You get asked enough times for a book like DUNE, and you don't have it used, and it finally occurs to you that maybe they would buy it new if you had it.
So far, I've been able to stock the store with favorites, classics, and 'cult' books -- that is, books that have a following, that are passed along lovingly to each person.
I'm pretty sure that if I make an effort to have 'core' product in each area of fiction, but then spend most of the money on the 'cult' books I have a going concern.
I can carry more books than I have now, and it was such a success this summer, and I have so many people walking in the door who will never buy a comic or card or toy, that it just seems like a really good idea to bring in more books.
Every single person I've told this to has said, "Where are you going to put them."
Well, I have it all mapped out. And, if they sell extremely well, I can always find dead product to put in the basement.
Plus it's fun and exciting. A new adventure.
Coming Next Week: 5/22/13
6 days ago