Tuesday, May 10, 2011

Building a levee.

If my store budget was like a levee on the Mississippi, the flood waters have reached the top of the levee several times since the dam burst upstream.

I have a total in mind that is an optimized number at Pegasus Books; that is, I can do my job without stress. Pay the bills, pay myself, and keep the store up.

We are running around 20% below that number on the slow months; about 10% overall averaged throughout the year.

The 20% below number is where the flood waters are lapping at the top of the levee. I watch carefully, but it sort of just threatens to surmount the top, and then recedes.

This lower number is enough to do my job; keep employees, pay the bills, and pay myself enough to get by.

Anyway, the point of this blog is to say that I decided this year to continue to shore up the levee, even though it is costing me money in the short run. My extra inventory is like sandbags on top of the levee -- keeping the store a little safer, but at a little extra cost.

Much of the cost is absorbed by savings -- on postage and discount levels. But some of it is also coming from spending money, and hoping that the new product will pay for itself.

If I can extend the analogy just a little more. My thinking is -- if the levee were to ever break, it would take months, maybe years to rebuild it. A little spending now, and I might be able to save myself from that time and expense.

I have more or less decided to PUSH for the optimized number -- even though trends are working against me. I have the second half of this year to keep trying to push those numbers up, and a good chance of -- at the least -- covering the cost.

It's almost a matter of willpower. But also of intent -- that is, by setting that goal, and constantly adjusting how and when and what I buy in product, I'm betting I can push that sales total to the optimized level.

Building a levee, if you will, that is strong and high.


Anonymous said...

I really don't like the levee analogy dunc, as nobody or anything is trying to get in yet, of course in a few years, Bend could be like 'soylent green'.

IMHO your selling cheap entertainment and we're in a recession. Read the other day that the middle class and lower USA folk are now killing their TV signal. Trying to save that $20-$200/month.

Like I said 4+ years ago, in my opinion your gig is selling $1 books. We're in a long term depression. Just like the last depression folks made good money selling nickel entertainment. You can sell books and games for a few bucks. I think electricity and battery's will go astro. Eventually parents will pull the plug on PS2&3 or PS360 or what ever nintendo, .. electronic gaming is just too expensive if you don't have a job or money for food or housing.

If I were you I would market your shop, as a return to the good old times where the whole family can enjoy candle light evenings playing games and reading books and NOT spending a dime.

I was raised by depression parents, and they always referred to it as the best of times and the worst of times, the worst because they saw baby's die, the best because folks really took care of each other and the shitty greed ( homer calls grifting ) didn't exist.

I think your shop has an excellent chance of being part of tomorrows Bend Community, maybe downtown will even have a hardware store. :)

I think you already have the stock, e.g. cheap low power entertainment for the poor masses of Bend. You just got to tell them you have it, with low cost marketing.

H. Bruce Miller said...

"a return to the good old times where the whole family can enjoy candle light evenings playing games and reading books"

Compared to the cost of candles, electric light is a bargain.

Anonymous said...

hbm bend tourists can be rendered for their tallow, essentially providing free lighting.