Wednesday, February 28, 2007

Sometimes I envy the simplicity of my wife's store. We started with the mantra, "Keep it simple, stupid." And Linda has managed to stick to that. I know that by now I would have complicated the process no end.

For instance, I was concerned that people were using book credit towards books on tape, when it felt like we needed more tapes and less books. So I thought we should only allow tape trades for tape trades. She nixed that.

I thought we should buy some tapes and cd's online, to supplement our selection. Nope.

I thought it would be a brilliant idea to add used DVD's into the mix. Using the same formula.

I wanted to add literary toys, or notecards, or bookmarks, at least, since the store is called the Bookmark. Say what?

I wanted to open Sundays. Get outa really, get outa here.

I wanted to do a selection of new books. Forget about it.

And so on, probably dozens of suggestions over the last couple of years.

Thing is, she was right and I was wrong.

The focus is on used books, and nothing but used books. You walk in the door, and that's what it's about; nothing else. The trade terms were as simple as we could make them. The filing system is a simple as we could make them. The store layout is clean, and orderly, and bright, and spacious and comfortable. Minimal clutter.

If I was in charge, the ailes would have gotten a little thinner, the walls covered a bit more, and so on.

Yet sales grow at her store at a nice comfortable rate. She can focus on the customers and the books.

Good for her.

Tuesday, February 27, 2007

Second post of the day, because I just read something that made me sit up and take notice.

It was announced at the N.Y. Comicon over the weekend, that for the first time graphic novels have passed comic monthlies in sales.

This is a landmark moment. Graphic novels account for about 40% of my graphic sales. I fully support them, in depth, right down to the most obscure indy's. But most direct comic stores have been a little lax in bringing graphic novels on board. Manga especially has done extremely well in the bookstore market, but manga in particular lends itself to the process of returns, which the bookstores do, and the comics shops don't. So, and here I'm pretty much guessing, but I'd bet I'm pretty darn close, the average presence industry wide in comic shops of graphic novels is probably 25%. From stores that don't carry any, to stores that focus mostly on them.

So roughly speaking, my guess is that about half of the graphic novels that sell in America are sold by bookstores (with manga being a huge chunk of that) and half are sold by comic shops.
Now since there are so many fewer comic shops than there are bookstores, we are selling way more stuff 'per captita' than the Borders and B & N's of the world.

If ever there was a more worthless statistic in sales, it is 'per capita.' Oh, the publishers may understand that our higher per captita sales are a reflection of the depth and knowledge and service support we provide. But guess what, sales are all that really count on the bottom line. The publishers can't quite dismiss our importance; after all, we buy our material and the bookstores are given the option of returning the material. But I have zero doubt that when it eventually turns out, just through normal growth, that the bookstores are selling more overall units than the direct market, I'm convinced we comic shops will be put on the backburner; just the way all the independent bookstores, the independent record stores, the independent toy stores, the independent games stores were.

It's only a matter of time. I see the chainstores lumbering toward me, and if I'm not nimble, I'll be crushed.

So I'll continue to support my 'sidelines' even if they don't quite perform as well as comics and graphic novels do.
Went back for some after-hours work, last night, passed one of the green transit buses being towed away.

A couple of people on the Bend Bubble Blog 2 seemed to confirm my guess that some of the units that sold in the Franklin Crossing were 'in trade.' They're arguing over the terminology of 'sale', but if the intent was to make people believe they were sales, but they didn't technically use the word sale, I don't see much difference. The emperor is still not wearing any clothes....though he may be wearing a ribbon or two.

Been finishing up an inventory update, which means my employee Pat has had total dominance over the computer at the store. Makes me very antsy not to browse the net all day. Had to do my weekly reorders after hours; come to find out it takes me almost 4 hours for a light reorder. Since I do this automatically during the day, usually, I'm not at all conscious that it takes this long.

I came in at almost exactly 100.00 over budget, for the second week in a row, which isn't too awful since I'd spent over 2/3rds of this weeks budget in advance. But 100.00 a week adds up to 5200.00 a year, so I've got to try harder. As I said, last week is the beginning of my new attempt to stay within budget, and I'm going to post how well I do at that each week, so that I have a record -- to myself, at least -- on why or how I succeeded or failed at sticking to it. Chances are, you'll hear some amazing rationalizations, but I'm hoping not.

I've done a preliminary estimate of cost of goods vs. sales so far this year. Not a pretty sight in three of the categories; in fact, I spent more than I made. But a couple of the other categories are doing very well. So well in fact, that I may have to retract my statement that business is "NEVER" any good between mid-Feb to Mid-March; if I haven't just performed a double whammy curse on myself for saying it outloud.

I'm committed to keeping the lower performing categories operational, but I'm also going to slowly let them find the level they would naturally find if they weren't constantly propped up.
That is, every category is starting even, and now it's time to see where they settle. I'm doing it by feel, mostly, because that seems to work best for me. As long as the OVERALL budget comes in, I'm fine will spending more than I should on some and less on others; as long as there feels like a good reason.

New books, tecnically, aren't really bringing in much profit -- but they are bringing in people, the people are staying a browsing longer, and sales are much higher in other parts of the store because of it. Sports cards have had a real down time, lately, after doing well for a year and a half, but I have some much backstock, that if could ever somehow get this stuff selling again, I've got lots of profit potential. (All it may take is a new superstar of the Ichiro, or Shaq caliber.)

Anime and manga have both fallen off a great deal, but at the same time Japanese culture keeps making a bigger impact on our culture. I willing to wait and see where it leads.

Several other of the categories have enough really cool stuff offered, and enough opportunities to pick up stuff at reasonable prices, that I'm willing to just coast.

The categories that are doing well -- comics and graphic novels, are already fully supported, so diverting some of the money that I'm spending on the lower performing items wouldn't really help all that much.

The overall mix just feels right, from a marketing standpoint. No doubt, a MBA graduate would think I'm an idiot, but he can go work for IBM or something. What I do is so small and intuitive that I really have to think for myself.

Monday, February 26, 2007

My mind keeps circling back to the comment by the real estate agent in yesterday's Bulletin article on downtown condo's.

Let's quote it in all it's brazen glory:

"The urbanization we are seeing here is so unique to the community this size, I think we're just going to have to see more inventory and see how that goes before we'll really know.

"No guts, no glory."

This is the very definition of speculation; let's build more and see if they sell.

But she's the real estate agent; of course she wants more inventory to sell. It's not her money at risk.

Dirty little secret of real estate is that the agents want to turnover inventory; they aren't going to hold out for just a little more money. If I have a house I want to sell for 330,000 and I'm getting offers for 300,000, the real estate agent will want to sell. Because the amount of money she can make right now on 300,000 is way more important than the amount she might make at some future date on the other 30,000.

She makes money when something sells, so the more inventory the better.

As I said yesterday, OUR guts, HER Glory.

I've found a little techniques in my store that illustrates the point. If a card buyer is waffling, sometimes all I have to do is reach over and grab a pack at random and open it and go,

"Oh, wow. Look what I got." (Pick the best card in the pack.) Almost always, they'll follow your example. Now I get that product for half as much, and I maybe can sell the contents. So its no big deal for me. I get to show off the product.

The problem is, sometimes later, I get the itch to open a second pack. Now I know from experience that unopened packs are more valuable to my business. They keep the potential, the dream, that something good is inside, whereas an opened pack is just there. It is what it is, and usually it isn't as good as the actual potential. But I get caught up in my own marketing technique.

"Should I open another pack?"

I never get the answer, "No, you should conserve them." It's always, "Yeah, go for it! Open the whole box!"

I call it cheap thrills; the thrill of seeing the other guy spend his money.

So the real estate agent is like that, "Yeah, go for it! Spend millions to build more condo's for me to sell! Why not?"

Meanwhile, buried in the headlines is the comment by Alan Greenspan that a recession is 'likely' this year. He may not be the head of the Fed anymore, but you got to pay attention to what he says.

Nevermind that! Build more condo's!

Sunday, February 25, 2007

There are three really interesting articles in the Bulletin.

The first is about the flurry of condo's being built in downtown Bend.

Are there really a bunch of millionaires who want to live in downtown Bend? Turns out, the developers are banking on it. These projects don't "pencil out" without them.

Does anyone know if the condo's at the Firestation sold, or the condo's in the St. Clair building? I walk by them every night, and I never see any lights.

The more important question is: did they sell at full price to real customers?

Secondly, I have to wonder why the development of the lots on Brooks St. next to the Bend Brewery is taking so long? Is it really only waiting for permits, or is something else is going on?

I think its very telling that the developers of the site next to the Deschutes Brewery on Bond St. have changed their minds for the time being, and are focusing on a project in Redmond. (As I've said before, also reassuring in that they also own the building across from my store.)

All of the developers are hedging their bets by changing some of the floors to office space. But I'm also wondering if the retail space is going to fill quite as fast as the developers are thinking, at least at the rates they are going to want to charge? The Franklin Crossing has very little if any retail that I'm aware of, and they've been open for awhile. A Thai resturant has been announced. (The 2nd within a block of me.)

What's truly interesting to me, is that we have just begun to slow down. I mean, you would've had to make the decision a couple of years ago to go forward with what's coming on the market now. Stuff that's currently being built is going to come on the market in, what, six months? So the spaces available right now aren't selling, but we've got a huge influx coming in at a time when housing prices show every sign of slowing down? They've sold 12 of the 42 units in the Plaza? Now I'm going to make another assumption that there are incentives to buy early, so 27% just 4 months from completion isn't exactly a torrid pace.

At what point can the developers back down, and if they do, are we going to get stuck with vacant lots?

I was extremely skeptical when they announced that they had sold eight of the condo's in the Franklin Crossing, and sure enough it turns out that only three are actually firm. Now, my initial thought was that at least a few of the condo's were probably 'arrangements' of some kind, a sort of 'primer' sale to convince others to come aboard. I can think of several ways to do this; from the owner being technically separate but also owning the corporation that owns to building, to selling to family (and thus keeping it in family), to making deals with people who worked on the building in trade. Or trade of some other kind. Or even just sweethearts deals to prime the pump. We don't really know, but that's the way I would do it. So again, the guestion is; how many condo's sold at full price to real customers?

So it's possible that even the three units that have sold haven't really profited the Franklin Crossing. As a retailer, I can tell you that total sales are meaningless unless there is a profit. So telling you that sells have gone up, as the corporations are wont to do at Christmas, doesn't mean anything. You can, as they say, give away the store. Smoke and mirrors.

But the real estate agent was rah, rah. To quote in all it's wonderful breeziness:

"urbanization we are seeing here is so unique to a community of this size, I think we're just going to have to see some more inventory and we how it goes before we really know."

Yikes! I interpret that to mean, that a community this size usually wouldn't have this much building going on. Shouldn't that be a warning. right there? And just throwing more millions at it and seeing if it works? Never mind the displacement that's going on. Never mind that there were functioning businesses where there are empty lots now. I was in the Mt. View Mall when the empty spots starting showing up; it's a very dangerous game.

I love how she finishes the statement: "No guts, no glory." LOL!

"Our guts, their glory."

So my guestion is; if these projects don't pencil out without the condo's, and the condo's by their own admission aren't selling, why are they going forward?

The second article about the destination resorts really just points to the above argument. That is, what you see on the surface isn't always what is really going on. Turns out that the resort developers make money even if they lose money on the rental units. So the resorts are actually glorified subdivisions.

And the third article is another one about gentrification. I've always thought downtown Bend would be fine with about 1/4th boho businesses, 1/4 high end businesses, and 1/2 middle class businesses. Downtown is already losing the bohemian part; the Ponderfusions, the Gambit Games. They're the canary in the mine. If it starts to lose the middle class part, watch out.

All three article have in common the theme that big money gets what it wants, and if anyone gets in their way, too bad. There is also this underlying assumption that they know what they're doing -- they're rich aren't they? They must have knowledge or facts we aren't aware of. We just aren't smart enough to see it.

I've watched Marvel Comics go bankrupt, I've watched 3 out of 6 major card companies go belly up. I've watched the game industry shrink. I have absolutely no faith that just because somebody has more money than I do, that they know what they are doing...

Saturday, February 24, 2007

Third post of the day. I'm a bloggin' fool.

Have the day off, (well, I should be doing my monthly orders). I wanted to comment on the article in the Source about Sumi, of Kinshinbo Kitchen. She says that she's on a month to month lease, which quite understandably makes her insecure. (Or was it the Bulletin? I don't have it here in front of me: as usual when I speculate, take what I say with a grain of salt.)

I know that because of the construction of the new edifice behind her building, they cut off the exits to the three restaurants, which made it difficult for them to take care of shipments and garbage. I know that one of the restaurants lost seating space because of a reduction of exits. I've heard through the grapevine that at least two of the restaurants are looking to move.

Now I've wondered all along if the owners of building were really all that put out by the building going up next door. I've wondered if they didn't mind the pressure it put on their own tenants. Because, I believe these are the same people who own the St. Clair building, as well as the building that was torn down next the Deschutes Brewery on Bond, so it's pretty clear that they are in a renovating state of mind, and not just rent-collecting.

I was reassured for awhile by the fact that they haven't done anything on the Bond Street site, so maybe they wouldn't be in a hurry to start working on the building across the street. Cause I'm not looking forward to that day. I watched the Teddy Bear shop down the street have to deal with renovations to the left of them, to the right of them, kitty corner from them, and across from them, and into the valley of death. It really hurts, even if it isn't your OWN building that's being worked on.

On the other hand, I've been told that at least two other tenants of the building have longer leases.

So Sumi is on a month to month, (which is almost guaranteed to make her want to move.) So two of the resturants are planning to move. Why would a landlord do that? Why wouldn't the landlord offer a lease that matched the lease to the other tenants? It just doesn't jibe.

Unless -- and here is where my suspicious nature comes in -- the longer leases are somehow going to be broken.

I've known since the day I started that if a Landlord wants you out, they can probably get you out just by making life very, very difficult for you. By enforcing every little letter of the lease contract, by hassling you, by hectoring you, by throwing complications your way. Hell, we have NO CONTROL over how much they charge us for triple net. If they decide they want to --- say, sandblast the side of the building -- and charge you for it, I believe they can. Oops! Did we place that ladder in front of your store and intimidate your customers? Sorry.

So, I just kind of wonder why some tenants have a supposed longer lease, other tenants have been put into uncomfortable positions without any remedy from the owners (that I know of), and yet other tenants have been given month to month leases?

It doesn't make sense to me.
I love getting another store's product by mistake.

I usually get my re-orders on Thursday or Friday. Yesterday, I started tearing into the boxes, and I'm a little mystified. The box is full of expensive graphic novels I didn't order!

Turns out, two of the boxes were for a very famous store in Hollywood, frequented by the Stars.

Now I would never pry, but there it was in front of me, in all its glory. There were 6 Kamandi Archives #2. Six! An obscure character, the second book, costing 49.99! And it's a REORDER! Which means, they probably got even more of them in as their initial order.

And the rest of the box was just as amazing. Multiple copies of every book, 5 and 6 copies of titles that I ordinarily carry one of.

Really makes me feel small and insignificant.

Until Pat spoke up, "Yeah, but you'd have to live in Hollywood....."
Ah, yes. Advertising.

D.K. asked a pertinent guestion about my overhead costs: what about marketing/advertising?

I don't do any advertising. I am listed in the yellow pages under a number of categories, but only as a line listing. Other than that, I rely on 'word of mouth.' Now, in the old days, that would've been enough. People who were interested in what I carried could ask around town and there was a good chance that the person they asked would know about my store and what I carried. Especially if it was a 'fad .'

For instance, when I started carrying Beanie Babies, it was as if every collector told every other collector and they'd magically appear at my door. Fads have amazing conductivity of information. I would almost immediately hear about any new development in sports cards; in fact, one of the dead giveaways that sports cards wasn't the hot thing anymore is when that imformation stopped flowing.

I've often said, that when I first bought the store, No One knew who we were, five years later, Everyone knew who we were, and ten years after that I was back to: "I didn't know you were here." The Bulletin statistic from a few years ago that 75% of the population has been here for less than 5 years explains some of that.

I've tried advertising, of course. Everyone who starts a business thinks that advertising will magically produce customers, and lower prices will magically produce sales. Neither of which are true.

I found that advertising was like throwing a pebble in the middle of a big lake, and hoping the ripples miles away from shore will bring in the driftwood. You could get lucky, you could hit on the magic phrase or formula, but chances are....nothing will happen except your bank account will shrink.

In fact, every month I advertised heavily I was short the EXACT same amount of money as I was being billed for advertising......And the shortage disappeared when I quit advertising. "Doctor, it hurts when I do this." "Then quit doing it!"

I was also taken for a ride by some of the radio stations and other advertisers who charged me top dollar but couldn't deliver. I wasn't experienced or tough enough to get a deal.

As I gained experience, I tried to apply logic. What I came up with is this; my product appeals to at best 3% of the populace. I'm paying the same rates in the newspaper or T.V. as people who have product who appeals to 50 - 100% of the populace. I.E. Clothes, food, shelter, transportation, etc. etc.

Not very effective.

Now if I could come up with an extremely creative and effective ad; and I could find enough creative and effective people locally to create that ad; and I could find a way to come up with the money to run that ad long enough to have an effect? Maybe.

It keeps coming back to the very basic fact that it ain't cost effective.

I've been considering a bit of advertising, lately. (This is not an invitation to advertisers, by the way. I've found if I advertise even a little bit, every marketeer in the frakkin' world comes out of the woodwork.... a small advantage to not advertising.)

Because I'm tired of the comment: "I didn't know you were here!" Or; "I thought all you carried was comics!"

But for 500.00 dollars I could duplicate the top 50 bestselling graphic novels in my store, or I could buy 7 measly 1" ads in the Bulletin, or maybe a bit more in the Source, and then eagerly ask my customers if they saw the ad, and get a 99% negative reaction.

I think I'll buy more graphic novels....

Friday, February 23, 2007


When you winnow it down to essentials, there are 4 numbers I need to pay attention to. The last 3 numbers are predicated on the first number, which is the most unknowable. Thus making the whole enterprise informed guesswork and luck.

1). Sales. I can make a reasonable guess, and then plan, but ultimately I can be surprised by better sales than normal, or worse. I just constantly monitor them on a 3 month trend basis.

2). Fixed Expenses. These are the expenses that I simply can't change, such as rent, utilities, wages, etc. My overhead, essentially, and for me my fixed expenses ARE my overhead.

3.) Profit margin. Also something that I can only slightly change. These are fixed by the wholesalers, and I can influence them only by tiny fractions.

4.) Product purchases.

Sounds simple, doesn't it? Well, it only took 27 years for me to simplify it.

So really, out of the 4 numbers, I really only have total control over the last one.

Let's look more closely at how I buy. If I ascertain my profit margin, (I try for 50%), then I have roughly half of my sales total to spend on product. I split that in two processes; Pre-orders and re-orders.

Pre-orders. Frankly, these are pretty much fixed to within 10%. That is, 90% of what I order on a pre-order basis is stuff I simply must order. Either product that I have made a good faith bargain with my regulars that I will get for them, or product than any and every shop simply must carry. I can't shave Civil War comics too much without breaking that contract with my customers. So, at the end of every months orders, I really only have that 10% to try something new or to order something whimsical that I like.

I reserve 60% of the product budget for re-orders. Probably 10% of that turns out to be stuff I simply can't avoid ordering.

So in the end, the only number that is flexible is the re-order number. This where I either make money or I don't. 30% of my total sales.

I've gotten pretty good at the first number, my estimate. The second number doesn't change very much, because I gotten pretty good at controlling overhead. The third number, I've manipulated my profit margin to as low as I can get it, and it stays pretty consistent. My fourth number, 40% is pretty much fixed.

So it is only in the reorders that I have any real ability to influence things; and it is in this number that I consistently fail. I am always going over budget. I'm always getting the bright idea to bring in a new product line, or increase an old product line. I'm almost incapable of letting a product drop away once I start carrying it, which means that every new product is in addition to what I'm already carrying, which compounds the problem.

If I could ever fix on an amount for reorders -- that 30% of sales figure, and STICK TO IT for a consistent length of time, I'd probably make a decent profit.

I'd planned to do that on July 1, of 2006. Then I added new books. Then I added more games.

I'm ready to start over this March, which means that THIS WEEK's reorders are the first week to impact.

How am I doing? Well, I spent the number I have planned on, and also half of next week's budget.

And so it goes.....

Thursday, February 22, 2007

I've mentioned before that I get a catalog with 5000 lines of items every month. The first third of the book consists of the main four comic publishers, Marvel, DC, Dark Horse and Image. Then there is the so called 'back of the book.' Probably a third of that are things like toys, games, dvd/s, etc.

The other third consists of the 'independents'. Out of this, probably less than 20% are well known titles, with familiar content. 80% is stuff I've never seen or heard of before.

Now, I probably visit 20 comic oriented websites a day. Almost all of them are devoted to the neglected third of the Previews. (The Marvel DC fansites tend to be pretty useless. And I have a pretty good read on what to order in those universes.) Now, these indy minded sites will often show artwork and or review independent comics.

But I still don't know who most of these guys are. The artwork almost always looks intriguing, and Diamond does a fairly good job of weeding out the pure dreck (unlike books, comics are often self-published. It isn't quite the indicator of quality.) An awful lot of it is stuff from Europe. The rest are alternative, non-superhero narratives.

The problem? In my store, at least, almost none of the alternative stuff sells. The European stuff sells probably even less.

Oh, there are the indy superstars; the Strangers in Paradise, the R.Crumbs, the Eightball and Black Holes. But even the prestige publishers, Fantagraphics, Drawn and Quarterly, Top Shelf, produce a ton of stuff that I know will sit on my shelf.

But this is serious stuff; intriguing and thoughtful.

What to do, what to do.

I earmark a portion of my budget to this material, and order the stuff that really leaps out at me. Maybe 10% of my budget is gambled this way. I figure every comic shop in the world has Spider-man and Batman, but my store can have the unusual and strange.

I've been fortunate over the years to usually have one or two regulars who are open to buying this material, and I have a huge advantage in the tourist trade. But still, the average good alternative will sell once or twice. Right now, the only alternative buyers I have are the guys who tell me well in advance what they want. So alternative press that is ordered to put out for sale is almost guaranteed NOT to sell.

Meanwhile, on every one of these 20 websites I go to, there is a total disdain for the 'fanboy' oriented comic shops. I'm living proof of a store that ordinarily wouldn't have the offbeat stuff deeply stocked because of demographics and density.

Guess what? The art snobs are wrong, and the 'short-sighted comic book guy slobs' are right, when it comes to commerce. At least on the surface. In the short run.

Look a little deeper, and almost any shop would be better off in the long run with more selection.
I'm convinced that I need to make my store unigue, that I need to have a constant flow of new material, and not just the same old same old. But I also can't afford to sit on material that, while interesting, doesn't sell, when I could've bought 10 more copies of Civil War.

What to do, what to do?

This art vs commerce dichotomy is always present. But there is a solution. I buy them on sale. I probably shouldn't say this out loud, but if I order off of every week's liquidation lists, at anywhere from an extra 10% to 80% off, and I do it each and every week, and then I order off the seasonal specials, which are offered by Diamond, and I take advantage of every publisher clearance, well, I get a very impressive array of independent material.

I've never said this outloud on the comic bulletin board. Frankly, there are probably only a few of us retailers doing it this way. I'm afraid if I make too good an argument, I'll go to my close-out lists on Thursday morning and everything will be gone. Probably a needless precaution; retailers who are too stupid or too blind to see the advantages, aren't suddenly going to get smart and visionary.

It's become a point of stubborn pride for me. I want to have the most complete store possible. An 'oasis in the desert.' I know from the reactions of the occasional big city 'art snob' guys that I've doing a good job of it. I've been told more than once that I have a better selection than stores that are nationally famous. I take this with a grain of salt, because I know that every store looks 'new' to a 'new' customer.

Still, I'm pretty proud of it.

Wednesday, February 21, 2007

Law of the Sure Thing, continued;

Last entry, people try to sell it to you at any price.

Followed by:

Late adopters, who apparently don't read, have no friends and or computer, and don't have two brain cells to rub together for a spark, buy 'hot' item at a thrift store, and try to sell to you, and get angry when you refuse to take it from them. They need money to 'buy milk for the baby.' They want to leave it on the counter for you to throw away, but you make them take it away.

All the people who ever bought the 'hot' product, deny that they ever really liked; Cabbage Patch Doll, Beanie Babies, Pogs, Pokemon, Sports Cards, etc. etc. etc.

Die hards, independently minded, and just plain deluded buy an occasional item from the little nook in the store at a discount.

All the people who ever bought the 'hot' product actively ridicule said product. You always know when they've reached the little nook by the exclaimations of disgust.

10 - 20 years go by, and suddenly, a warm, fuzzy nostalgia takes hold. The fans are old enough not to worry about whether it's cool. They spend 5 to 10 minutes telling you how much they love......'Transformers, G.I. Joe, Sports Cards, Beanie Babies, etc. Your eyes glaze over. Then they ask, "Are you buying, I have a closet full of them. They must be worth a lot."

They leave, and you take the 'hot' item and throw it in dumpster, otherwise you will spend at least part of every day listening to empty, boring reminisces.

I have yet to see a single hot item ever come back, after 27 years. And even if anything were to come back now, that would've been way too long for anyone to keep the faith. I am no longer a believer in collectibles, Antiques Roadshow notwithstanding.
The Law of the Sure Thing.

If everyone tells you its a sure thing, it ain't.

Ranks up there with, if a trend is profiled on the cover of Time Magazine as the latest thing, it's already over. Or, if your U.P.S. driver tells you to invest in something, get out a quickly as possible.

PS3 turned out not to be a sure thing, after all.

I've noticed a certain story arc in the media for every 'hot' thing.

There are the articles trumpeting the imminent arrival, and the eager anticipation of the fans.

The fans are waiting in line, sometimes for days.

Mad rush of opening hour, immediately followed by announcement of a sell-out.

Rumors that 'hot' item is selling for multiples on the internet.

Article on the guy who has quit his job in order rake in the dough with his garage full of 'hot' item. Followed by article of guy who has already made so much money, he's retired.

Books and articles written on "how to" get in on it.

People come into my store trying to sell it to me at over retail.

Then the downside. It starts with an article about a hijacking or a robbery, followed by 'hot item' being banned in schools or workplace. Kids have their collections stolen.

The early adopters getting out.

The company making the 'hot item' announces it has ramped up production.

Headline stories of people losing their shirts.

People come into my store trying to sell to me at ANY price.

Tuesday, February 20, 2007

So Ghostrider made 55.5 million over the weekend. Go Figure. Of course, everyone in the world who wanted to see it, went to see it.

So if I believe what I said yesterday, about the housing bubble bursting and the disastrous effect it will have on the Bend economy, what do I do about it? How do I put my money where my mouth is?

For one, there isn't a direct one on one correlation between the downturn and my business, like there was with beanie babies, or pogs, or cards, etc. I mean, when sports cards dropped in half, my business dropped in half. If the economy goes south, there's a reasonable expectation that I'll keep most of my customers, who will mostly buy what they've been buying. If the worst happens, it would be more comparable to what happened to Bend in the early 80's.

Secondly, I could be wrong. I mean, drawing a parallel between beanie babies and the housing market might be stretching it a bit. Might be more than a few levels of complexity I'm missing there. Things I'm simply not seeing.

Still, I think the basic reasoning is valid, and I believe the laws of supply and demand are like gravity; eventually anything in the air without anything holding it up, will fall.

The timing, is the biggest problem. It seems like I can often figure out where there is weakness, and it seems like I'm often right.....but it takes much, much longer than I think it will. Things just keep frothing over, taking on a life of their own, providing their own momentum. If the world worked by reason alone, we could figure it out.

And there is often an unexpected resurgence, too. An outside factor that comes along and boosts sales yet again.

But if it happens, and I'm convinced that a slowdown at the very least is inevitable, what do I do?

The irony is that the same steps I need to take to reduce risk, are exactly the same steps I need to take to make money. In other words, if I keep the overhead low, buy carefully at the highest profit margins, and most importantly, keep to a strict budget, I can make money if sales keep going along, or not lose money if sales drop.

What I can't do is keep plowing all the money back into the store for improvements, expansions, etc.

So I just need to follow through on what my plans have been all along. I need to stick to a budget.

Sunday, February 18, 2007

I've thought some more about the housing bubble. It seems to me that Bendites were much more vigilant six months or a year ago, when the national statistics first started coming in and it first became apparent the boom was slowing, than we are now. So now we think we've internalized the fact that there is a slowdown, but nothing seems to have really changed. We aren't really feeling it.

I compare it to the moment in the horror film, when the character is certain that there is something dangerous out there, the tension builds.....and a cat leaps out. Of course, the character relaxes. And THAT'S when the monster jumps out.

I was leery of the sport card boom almost from the beginning. Four years into the boom, 1988, the worst happened, though it didn't become obvious for a couple more years. The cards started showing up in the chain stores, I started to get competition from other shops, it didn't seem like cards were all that hard to get anymore. Supply had caught up to demand. Some of the early collectors were starting to drop out.

I held my breath. Nothing happened. Sales stayed strong. Two more years went by, and I decided I was wrong. Sports cards were for real.

THEN the monster jumped out. By then, I was so over extended, that I got caught flat footed.

I try not to get too far ahead of myself, these days. That's one of the reasons I do so much reordering, instead of ordering it all in advance where I could get an assurance of supply and a better price. Because if more than half of my material is coming in on a weekly reorder basis, more than half of my material can be left unordered if needed. It's the major reason I've kept my credit borrowing to a minimum, why I've tried not to borrow too much money off the equity of the house (though I did borrow some), and why I've tried not to increase the overhead in the downtown store by hiring more employees, or buying a P.O. S. computer, or moving to a bigger, splashier place, or advertising.

Remember, break-even is: FIXED EXPENSES, divided by the % of profit margin, equals gross sales. The lower the fixed expenses, the higher the profit margin, the easier it is to reach.

I have no doubt I could push sales higher, by increasing my fixed expenses and lowering my profit margin, but if there was the slightest slowdown, I'll be stuck.

I think we are in the very dangerous moment. I know this intellectually, while emotionally, I'm not quite ready to accept it. Everything I see and read leads me to believe that we are in the same place as sports cards in 1988. The slide has already begun, but not enough information has been released, those in charge of the information are still able to distract us with words; with smoke and mirrors, and we aren't feeling any pain yet. No one we know has lost their job, though a few people have had their hours cut. It just doesn't seem all that bad.

But I can look at the slowdown in housing starts, the lack of good paying jobs, the fact that some of my major customers are in the building business, that prices have gotten so high that we are pushing our luck with out-of-towners, that other places in the country that used to be growing as fast as us (Florida and Las Vegas) are hurting, and that the prices are starting to soften. On a scale of 1 to 10, we are at an 8 in warning signs. We're probably already hurting, but the pain hasn't quite reached our brains yet.

O.K. I think I've convinced myself. Because that's what it takes. The prevailing mood is almost impossible to break through, which is why these booms keep going long after everyone knows its a bit crazy, and why the downturns are so painful and hard to turn around. I can't emphasize the importance of psychology in all this. It may become difficult to sell a house at ANY price, and at some point, prices will stabilize but sales may stay stagnant. I shudder to think of all the real estate, builders, loan companies, title companies, etc. etc. employees we have around here. I cringe at the number of businesses that I think are being supported by the boom town mentality (either as equity businesses, or as businesses that cater to the boom).

And all those rich folk who think Bend is so great? Given the slightest smell of desperation, and they'll move along, with all those people who cater to them.

It may not happen. I think it will. I hope I'm wrong.
Great example in today's Bulletin about what I was saying about asking sellers how they're doing.

Nationwide, car sales are way down. But not here in Central Oregon. No, sir-ee. Everything is great here! We're different. How do we know that? Because the local car dealers say so.

It may or may not be true. But I can tell you that asking the seller -- any seller, is useless at best, and misleading at worst.

When I was growing up, Mt. Bachelor would broadcast a weather report. If they said there were 'light' winds, you'd best bundle up. If they said there were 'strong' winds, you were in danger of being blown off the chair.

So you have to parse what they say. ANY admission of weakness means that there's something wrong.

I've been so focused on the store and my fiction writing (the floodgates have opened, and I'm working on 3 different projects!), that I haven't been paying much attention to the Bubble Blog 2, or the Bend Economy Board. Read a bunch of it last night.

Well, that was bracing! I'd almost forgotten what a terrible state we're in.

No, really. I do believe we have been undergoing a bubble, and I do believe that we are in danger of collapsing housing prices. Once that psychology changes to negative we're in for a long haul.

But here's the thing; you just can't put your life on hold because everything may go south tomorrow. The older I get, the more I realize that you can't keep putting stuff off forever.

So I'm torn. On one hand, I'm convinced that there is indeed a bubble popping. If nothing else, just the steepness of the graph tells me that something is wrong. And I've had long experience with bubbles and fads.

The following are some of the fads I've gone through, and the percent of business that existed when the fad hit bottom, and how much they have climbed back, if any.

Sports Cars; 3%; have clawed back to a big 5%.

Non-Sports: 1%

Magic; 5%; Has come back as much as 50%; and is currently about 35%, but trending back to base.

Pokemon; .05%

Pogs; 0%

Beanie Babies; 0%

D & D; 0% (because I dropped it.) Has climbed back to about 50% of the best we've done, but I've been focused on it. Remains to be seen what the solid base is.

Anime: 50%, but only because I've spent WAY too much money on it.

Manga: ditto.

Action Figures: 50%, but then I'm carrying probably 500% more inventory.

Books: new and used; never really a fad.

Comics: 50% . Have climbed back to 100% after 10 years, through price increases and new product design. (graphic novels). But only now have gotten back to peak numbers. Counting inflation, we still have a way's to go. Comics alone are still probably only 50% of peak in sales, and MUCH lower in numbers. And I have a much higher level of inventory. Still, it has proven to be a viable product line and kept us alive.

So the BEST we've ever managed to hold onto is 50%.

On the other hand, sales in the store have been going up steadily for about 6 years now, from the valley of the late 90's. Much of is due to my increasing inventory, but it's there, nevertheless.

To me, the housing bubble and the disastrous effect I think that it is going to have on Bend, is a moderating influence. But it doesn't keep me from trying to grow my business. I may regret someday that I didn't hunker down. (There is a nagging voice in the back of my brain that is saying, I will regret someday I didn't hunker down.) But I'm enjoying myself too much right now.

So......cautious optimism. I'm going to try to restrain my buying impulse over the next six months, however, and see where it all leads.

Saturday, February 17, 2007

We are not universally loved and admired. I'm often taken aback by how much some comic fans dislike comic shops. Dislike? More like hate with a passion. The venom and anger exhibited is just really strange. I just came across this comment on the web:

"You know, you look at a direct sales comic shop and its like someone puked comics and comics merchandise from floor to ceiling, all over every inch. I know that profits are trying to be maxe'd out with money spent on store spaces, but it's kind of creepy some of these stores -- no wonder book stores are more attractive places to gain new trade paperback readers."

Ouch. I wince, because we resemble that remark.

I just try to weigh that kind of hostile sentiment against the many and constant compliments we get from customers, especially people from out of town. But this idea that comic shops should just dry up and go away, so that bookstores can take their place is just wrongheaded and obtuse. If the direct market goes away, so does comics, and also most independent graphic novels.

Brian Hibbs, of the Comix Experience in San Fran, does a yearly analysis of bookstore vs. comic store sales. (On Newsarama). It's terribly wonky and dense, but if you're willing the wade through it, has some very revealing stats.

The growth of sales of graphic novels in bookstores has been explosive. And it seems as though the publishers, and even our main supplier, Diamond Comics through their bookstore arm, are focused more at increasing the sales in bookstores than they are at helping the direct market.

Bookstores have a mechanism, through their Point of Sell computers, of keeping track of what books sell. Comic books stores, by contrast, buy their books non-returnable and don't report sales, so basically us comic store owners are the buyers, and doesn't keep track of reorders at all. (About half of my numbers are reorders, for instance, which don't show up at all. ) What seems lost in all the talk about growth in the bookstore market is that that growth is coming from zero, so it looks very impressive. Growth in the direct market is much more mature.

And yet, the growth in the direct market is matching the bookstore market step by step. We both are seeing about 12% growth per year. But that isn't automatically noticeable, unless you really examine the figures.

It reminds me of when I started with zero baseball card sales, and grew by an average of 33% a year for five years straight, until they represented 85% of my sales. What that obscured, however, is that comic sales were also growing by double digit numbers. As it turned out, much of the growth in cards was bubble, and most of the growth in comics was solid.

What's really strange is that all the indy comics elitists, who are angry at most comic shops for carrying mostly Marvel and DC, are cheering for our demise because they think that bookstores will treat them better.

Yet all you have to do is examine the figures and you discover that unless you are one of the top independent titles, most bookstores won't carry you at ALL! So, while it may seem pathetic that only 300 out of 3000 comic shops carry diverse material, those 300 shops are the only thing keeping art comics alive. The real effort should be in increasing the number of comic shops that will carry offbeat material.

Hating comic shops seems really counterproductive to me. It's like a starving man turning down a meal because he doesn't like the seasonings.

Friday, February 16, 2007

I always get such a kick out of when Realtors' talk about how the housing prices have hit bottom and will rebound in the spring.

Let me give you a hint. NEVER listen to the maker-- or seller-- of ANY product when they prognosticate. Most them have convinced themselves that things are great, and some are hoping for the best, and the rest-- hopefully the minority -- are cynical liars.

I've learned that when my sales have dropped on a product line, that if I ask the distributors, the manufacturers or even other retailers how they are doing, they'll always, always say "great.!" And six months later, you'll find out they were hurting. The truth will trickle out. That's why it so important to look at the fundamentals, and to believe your own experience. Even better, analyze the situation; if it doesn't make sense, if it seems too good to be true, if something seems believe it.

Borders Books is carrying the Stephen King comic as well as the Anita Blake comic. They insisted, apparently, even on the same terms we get -- non-returnable.

Now I've come to a vigilant resignation when it comes to the mass market. But this is a bit worrying. I know that every single product that the mass market has gone into full time has been a product that went from being a major income producer for me, to a minor sideline.

There are always other specialty retailers who think that exposure in the mass-market will help sales in the specialty stores, but not to sugarcoat it, those people are fools, quislings, and idiots. We have lost more customers to the mass market, than the mass market has created for us. It has been the common wisdom until now that the B & N's and the Borders wouldn't be interested in comics, and couldn't do them well if they were.

Why not? They've shown themselves to be very adaptive and smart. They've always shown an ability to get a good deal out of the publishers. What would it cost them, 20 sq. ft of linear space? If they carried the top 20% of the comics, They could take away a major chunk of business.

Oh, well, just something more to keep an eye on and adapt to.

On the bright side, the culture at large just keeps moving in our direction. A pop culture store like mine, just by doing what it has always done, is becoming more and more mainstream. (Thus the encroachments mentioned above by mainstream stores.)

When I started, what I would now call pop culture was really only a sideline to my business. We were way too underground to be considered 'pop.' Star Wars and Star Trek were minor components of comics. Toys almost weren't available to me. Books were impossible to do; I'd get the 'latest' SF or Fantasy novel in stock weeks, even months after Waldenbooks got theirs. Geeks and Nerds (I'm not sure we used that terminology back then) were outcasts.

Back then, I'd get a non-comic buyer in the door, and you could see the alarm bloom in their eyes, as they backed out of the store.

Nowadays, I rarely get that reaction. Partly because I've made a major effort to make my store less off putting, but mostly because the average customer isn't surprised or frightened by what I sell, and seems much more comfortable. (It's the same phenomenon I see on T.V. Music that once would have been considered 'hard' noise, is now the background music to stockbroker commercials!)

I mean, we are still a long, long way from total acceptance, but when, in just the last three days, I hear that that Zack Snyder (director of the 300) is well on the way to making the Watchmen, that they are talking about making a Ronin movie, when Ghost Rider of all things seems to be a movie people are looking forward to -- not to mention Spider-man, the 300, etc. I know that we are ideally situated to gain some adherents. This is becoming a very big pool to swim in, and that gives us plenty of diversity.

Besides a middle-aged guy is no longer a nerd -- he's just a middle aged guy.

Baseball cards kicked my butt yesterday. Since the boxes have stopped selling, I decided to break a few boxes to try to sell more packs, and even singles.

Wow, the lettering in the price guides has gotten really SMALL! And my back and neck still hurt from sorting and pricing them. Hard to believe that I used to spent 2/3rds of every every day doing that stuff. I'm trying to keep it simple. I'm taking out only the very best cards and pricing them individually. The rest are getting thrown into a box and being sold for .25 or .50. (I'm not sure I even want to mess with .25 cards, even though they'd probably sell much faster that way.)

I know things are slow when I start dealing with back stock in either cards or comics.....

Thursday, February 15, 2007


I've mentioned before, the time to stock up is during the lulls, not the booms. One of the reasons this happens is because my wholesalers, who are also enduring a lull, are putting out some pretty good product at a discount. If you have the cash -- it's a great time to be a contrarian.

The kicker, for me, is that I need to be certain to pay myself back when business picks up again.

I've also mentioned before that the store, and I believe most specialty stores, needs at least a 40% markup to survive. But I also believe that I don't start making a real profit until I get to more like 50%. Since only about half the product is offered to me at 50%, and since it is the most unpredictable and least efficient sell-through (comics and graphic novels), and since the other half of the product I pre-buy averages out at about 40% markup, my overall markup is more like 45%; assuming I'm not trying to add or build a new product line, and that I'm selling what I'm ordering, and that not too much of it gets damaged or stolen.

In other words, nearly impossible to get 50%, and in fact, usually works out at 40% or less.

So how to make money?

There are two choices. Either I cut back to only that product that makes 50% margins, and I order that very tightly so that it sells out. Obviously, that would cut my sales in half or more. Even at the full 50% this isn't survivable.

Or I actually buy MORE product. The periodic sales that my suppliers offer probably average out at about 60 to 65% margins. But the lists are full of marginal product, mostly stuff I passed on the first time. Why would I buy that?

Because a lot of it will sell, nevertheless. While my store is a reflection of my tastes, my tastes are not a reflection of the overall public.

The best example is one of the first I noticed: I got a t-shirt in by mistake that was the ugliest thing I'd ever seen. In the same shipment I got a t-shirt I did order, that I thought was classy and cool. Guess which one sold first?

That has happened so many times, I learned that there is a ton of stuff out there that I'm simply missing. Yet, it would be pretty dangerous to buy that stuff at full wholesale -- following my own instincts is still the best overall policy.

Something that I thought about trying, but passed on the first time, which is offered for nearly twice the discount? That's worth trying. Because I'm diversified into 8 product lines, I can almost be certain that at least one or two of those lines will be on 'sale' from one of my suppliers on any give week. Overall, this stuff doesn't sell as well as the pre-ordered product (it's on sale for a reason, after all), but just enough of it sells that all things being equal, its a wash. I make about the same, even with the discounts, as I do on the stuff I originally chose.

So why do it? There are five benefits that I can see.

1). It helps to have a constant flow of new material to keep peoples interest. Discounted product can add as much as 25% to what comes in.

2.) Satisfying new customers. Just cause I didn't like it, doesn't mean it isn't someone elses favorite thing. By ordering outside my comfort zone, I sell stuff I wouldn't have sold otherwise.

3) Great way to build inventory at less risk. As I've said before, 80% of the inventory in a store is filler -- the stuff that didn't sell. But you have to have it. Why pay full price? And why not constantly change that filler with new material, even if you have to take the old filler and put it in the basement. I guarantee that 80% of the stuff will sell eventually, even the stuff not actually stocked on the floor. Someone will say, "Gee, I always loved those old S.F. puppet shows like Thunderbird." And I'll say, "Funny you should say that, cause I have a couple of books on that."

4. Great way to discover something that actually does sell well, but which you were unaware. You need to experiment constantly, and if you can do it at a better discount, that reduces the risk. (Most experiments fail.) It's fun to get it in, opening packages is just like have a birthday every week.

5.) There comes a time when higher sales mean I can get the same overall gross profit even with a lesser sell-through. So the risk is somewhat compensated by increase in sales.

My theory is that this helps bring my overall profit margin to closer to 50%. I never quite get there, but I keep thinking someday I will.

Wednesday, February 14, 2007

Someone will come in the Bookmark and ask, "How do you organize your books?"

I''ll usually answer, "By color and size.....just kidding." We organize books just like every other bookstore and library in the world, by author's last name. Admittedly, our categories are fairly loose, because we decided that we didn't want to have to create a sub-section for every type of book. So, for instance, our reference book section includes books about games and word-play, how to write, how to create media, etc.

It's an intuitive process, that seems to work pretty well. People seem to find their way around, usually.

In my store, it isn't quite so simple with graphic novels. Most people know the title or the characters, not the writer or artist. So I have sections for the best-known writers or artists, (The Frank Millers and Alan Moores and Alex Ross) and I have sections separated by subject matter, but mostly, I separate graphic novels by publisher. This is pretty strange, when you think about it -- I'm sure no bookstore would have a Random House section, next to a Simon and Schuster, next to Afred Knoft. But Marvel and DC and Dark Horse and Image are known quantities. Want Spider-man? Look for Marvel. Want Superman? Look in DC.

These lines are starting to blur -- Marvel will do a book like Anita Blake, or The Dark Tower, which is completely non-superhero. Dark Horse and Image are doing all kinds of different genres. So when a customer comes in looking for a particular title, and doesn't know the publisher, it can be a problem.

Fortunately, I probably remember 95% of my titles and where they are. But if I was to get bigger, I couldn't expect my employees to be that up on it. As the number of graphic novels keep increasing, this is going to become a bigger and bigger dilemma. It's still manageable, but just barely.

I've started making categories sections: my 'real' world shelf, with Maus, and Berlin, and Palastine. I just recently, for fun, put in a Zombie shelf. I have a pop-up books shelf, and a goth section, and so on.

But it's very loose and unweildy, partly because I just don't have the space to give each category its own section, and partly because so many title are neither fish nor fowl. Most comics are more hybrids than pure breeds. There are tons and tons of comics with Science Fiction elements, but only a few are pure S.F. It would be a bit of a reach to create a Western, or a Mystery, graphic novel section. I could probably do it, but only if I took some of the books out of the places they are likely to be found.

So it turns into a very subjective, intuitive process. The book goes there because it feels like it ought to go there. Given unlimited space and the funds to duplicate titles so that I could put books in author sections and then genres, and then publisher.

I depend on people asking me where to look. I wish people would. I've had this conversation way too many times: "Couldn't find what you were looking for?"

"I wanted Maus, but you don't have it," the customer says as he's walking out the door.

"Wait! I have it, really I do."

It's a challenge I enjoy, and which I think I'm pretty good at, and which allows me to experiment alot, which is fun.

My Zombie shelf is silly, but I'm thinking about a Pirate shelf next, and then maybe a Ninja shelf. See what happens.

Tuesday, February 13, 2007

We are entering into the slowest four week span of the year: without fail, the middle of Feb. to the middle of March is deadly slow. I've had the occasional busy Jan. and Sept. and Oct. and Nov.; I've had very busy April and Mays. But, never, ever, has this period been good.

So, time to cut back on orders, right?

When I first bought the store, I did the obvious and rational thing and stocked up during summer and Christmas, and cut back on the slow months. There were huge troughs back then, and high peaks; my best month could be as much as twice as good as my slowest month. Part of that was industry induced: the publishers would put of the biggest projects in flush times; baseball cards would lead into summer, toys would arrive in fall for Christmas. The late winter was a dead zone.

But after awhile I began to realize that I was wrong. Thing is, during the peak seasons, lots of different kinds of things sell. Part of it is tourism; after all, to new customers everything in my store is new and fresh. Part of it, is that people seem to be much more willing to buy the alternative to what they came in for, or they exibit the willingness to impulse buy.

Whereas during the slow season, they tend to want that one item they want, and if you don't have it, they don't buy anything.

So in fact, as counter-intuitive as if may seem, the time to build and maintain inventory is during the slow months; the time to draw down inventory is during the peak seasons.

Lets say you go for a buffet dinner. If all anyone eats is steak, and no one ever eats the meat loaf or turkey, if no one ever fills up on bread and salads, it would be pretty hard for a restaurant to make money.

If all I ever sold was the top sellers, it would mean that the rest of my product would just spoil and rot. But there is just enough variation in taste, especially in busy times, that everything will sell eventually. During the slow times, you sell alot more steak, and less meat loaf.

So, over the years, I switched that around. I take advantage of all the sales that are offered during the slow season, I build and maintain my inventory. The peaks and valleys have flattened out much more, as well. Now my low is usually only about 30% lower than my high.

Obviously, that really impacts on the cash-flow. I need to have money in the bank to cover those weeks when I may get more in the door than I sell. If I draw down on my savings, I have to be very, very disciplined and build up the cash reserve during the busy season. So, if I order a bunch of stuff this month, it all has to be paid back during the Spring Break period.

That's where I fall down. I rarely replace the revenue I use. I'm trying to change that this year. We'll see.

Monday, February 12, 2007

Had a sudden realization the other day -- my 'dream store' isn't possible. Because it holds contradictory goals.

My dream store would need to be a minimum of twice the size of my current store, and would need to do at least 1/3rd more business, and I simply couldn't accomplish those goals without hiring a minimum of two more employees. (Once I need two people in the store, I have to hire enough extra manpower to cover all contingencies.)

One thing I know; I don't want to be a manager, constantly trying to find reliable help and training them and then having them leave. I did that once before, found out that I wasn't very good at it. And in order to keep enough good employees, I'd need to raise my payroll and add benefits. Even at minimum wage, I'd need to earn another 3500.00 in sales to pay for one employee. With a competitive wage and benefits, it would work out to 5000.00 in sales.

Basically, even if I earned another 1/3rd more business, it would be completely wiped out by increased costs.

I might be able to find some middle ground; add 1/3rd more space, and another half time employee; that would be an improvement, but it wouldn't be my dream store, would it?

I've been looking at larger locations; 2000 ft or more, along main roads (Hwy 20, 3rd St, Frankin, Greenwood, etc.) and wondering how much business they do. Was checking out a couple of spots at the Forum shopping center. I don't know. They just don't look busy.

I have a few years left in my lease, downtown. I have no intention of leaving early, and if given any kind of opportunity to stay, I'll probably re-up. But it is never too soon to be looking around.

My wife has the absolutely ideal spot. (Corner of 3rd and Greenwood.) We had some doubts about the traffic flow, but that has been a minor drawback. She has great visibility, parking, and lots of open space.

On the other hand, I have real, true walk-by traffic downtown. Maybe for the first time in our existence, we are in a location that actually draws customers.

Oh, well. Just daydreaming at this point.


Article in today's paper confirms that Hi Def T.V.'s are still dropping. They're talking about another 40% drop! Now I'm feeling kind of glad I waited.

I swore I wouldn't comment on movies or t.v.; there are plenty of folk doing that. But I went to see A Night at the Museum yesterday, mostly because I wanted to see why it was making so much money. (Same reason I read the DaVinci Code, which I thought was pure drek.) It was moderately amusing, but so utterly shallow and unambitious that it was disappointing. It's possible to create a good movie out of a comedic high concept; such as Groundhog Day, or the best, Tootsie. This movie just didn't even make an attempt. If they had played the "Can't we just get along?" theme as satire, that might of worked.

Plus it was sloppy. Why does the Roman speak English, but the Huns and Mayans don't? Why are some of the miniatures locked in cases, and other aren't? Hey, how about sign language with the Indian maiden? (Can't spell Sacagagwa) Is there any time that wooly mammoths wouldn't be noticed in Central Park? Sloppy, all in service to the plot, and no one is going to care.

Meanwhile, I saw one of the best episodes I've EVER seen on T.V. last night, in a revival of a shlocky Sci Fi show from the 70's. The Battlestar Galactica show is usually good, but once in a while, they really hit the mark. Last night, a lone crewman, who is already on the outs because he's married to a cylon, suspects a beloved doctor of being a murderous racist. He can't get anyone to believe him, and the more he tries, the more he is ostracized by the other crew members.

You're not sure he's right or wrong until the end. And they don't really go for the cheap theatrics of having the doctor say; "Those damn Saggitarians killed my Mother!" or something. No, he has rationalized and taken to its logical murderous conclusions the same feelings that most of the crew are feeling.

Imagine that; a show about ethics and philosophy that refuses to give easy answers.
(Edited Addition: Whitney Matheson of U.S.A. thought it was the worst episode of the year for Battlestar....interesting....)


Watched the Grammy's last night, which todays critics are calling out of touch, old school, the 'Grannies....'

But I watched it because I wasn't really familiar with most new music. Funny thing is, I like the rap music when I hear it. I like alot of the new groups, Gnarl's Barkeley was great, etc. The only music that really leaves me cold is the damn 'diva' music, with all the meaningless trills and swoons, and music I can't remember a single note of five minutes later. These diva anthems start at such a high note of melodrama, but they have nowhere to go but a flat out scream at the end of the song. Ugh.

I'm talking Beyonce, who's gorgeous, and Timberlake, who looks like he could be behind the counter at McDonald's, and even Mary J. Blige. (By far the best of the diva contingent.)

But I love the Dixie Chicks, so what do I know?

Sunday, February 11, 2007

Bits and pieces:

Admittedly unscientific, but I don't think the prices for HD Tv's are any higher now than they were before Christmas. Maybe the Post-Thanksgiving prices were lower, but not by much. I wonder sometimes if the 'SALES!' at Christmas are really all that much better.

Writing a novel is NOT a daily blog activity, at least not the way I do it.

Watching home renovation shows just makes me tired.

The BAT is still spending a thousand a day on repairs. And I still think a small crew of enterprising fellows in vans could zip around town transporting everyone for cheaper. Or, again, that would pay for 100 ten dollar taxi rides....

There is a generational gap between my customers and I, when it comes to Transformers and G.I. Joe. Those two licenses have absolutely no resonance with me. Not the slightest twinge of nostalgia. But I recognize it when I see it.

I've often wondered how the Beatles and the Doors and Led Zepplin resonate with the young folk who missed it the first time. I wonder if it is like my nostalgia for the 'pulp' era of the 30's and 40's.

Retro-future is going to start doubling in on itself, as more and more predictions and illustrations and stories are proven wrong. Was watching 2001 last night, and the beautiful elegant space stations, and realizing we didn't even come close. But we should have......

Billions upon billions upon billions spent in that hell-hole Iraq, and still no universal health care.

Whether you like the Bush administration or not, I think it is becoming very clear that history is going to be very harsh. The scholarly books just keep coming out (Book T.V.- C-Span.) The Fox channel and the right wing talk radio are ephemeral, these books are going to be forever.

At some point in every fad, it becomes so ridiculously out of control that all you can do is shake your head. Then watch the inevitable decline. I think Bend hit that point late last year, and is still frothing over, but I think many of the developments that are being announced now will never actually be built.

We get these old art books and portfolio's in the BOOKMARK once in awhile, all the way back to the 30's and 40's. Black and white, with color plates. Now, I could buy much better, full color illustrations in almost any modern art book. But there is just something about the yellowed paper and touched-up color that really appeals to me. My mother was an art major in college, so our house was filled with these old books. They aren't worth a thing, and are usually too beat up to sell, so I take them home.

I've noticed that the House-selling scroll on the the local cable clusters like-priced homes together. So one day there might be nothing but 3.5 million homes, and the next there might be under two hundred thou mobile homes. Kind of disorienting. So you watch these 5000 ft. homes and wondered who needs that much space. Then comes a home for ONLY 900 thou, and you think, "That seems more reasonable." my dreams. It's all relative.

Saturday, February 10, 2007

By carrying so many product lines, I've begun to realize that different types of personalities gravitate toward different types of businesses. This a huge generalization, and there are many exceptions, but I have found that:

Game Store owners tend to be the most analytical of owners, but not quite as verbal as comics store owners, and they tend to be more social.

Comic Store owners can be analytical, and are very creative in their use of words and pictures.

Book Store owners tend to stick to themselves. They are probably analytical and verbal, but we'll never know because they'll never tell.

Sports card Store owners are mostly wheeler-dealers, who have zero analytical ability and couldn't tell you if they did.

I've mostly stayed away from commenting on sports cards, because it is the one thing that can still get me riled. What got me thinking today was an announcement from Upper Deck that they will only sell to legitimate wholesalers who sell to legitimate brick and mortor storefronts.

Silly me, I thought that's how they always did it.....

15 years after the collapse of sports cards in my store, I can finally admit to myself that it was a fad, and was going to die no matter what. But, the actions of the wholesalers and retailers and manufacturers certainly pushed it down faster. Too many brands, too high prices. But there were alot of systemic problems that could actually have been solved if;

1.) the industry insiders had been willing to admit there was a problem.

2.) they were willling to do something about it.

The story of sports cards is that they eventually start coming to the right conclusions (about 10 years after I figured them out). But their solutions are always a too little, too late. I'm convinced this is because no one in the sports card business ever sat down and tried to figure out what was happening.

Because it was pretty obvious. I won't go into all of them.

There was an article in the Bulletin the other day that said "grumpy workers could be an asset to the businesses."

I can't tell you how many times the sports card retailers insisted that every thing would be O.K. if a few sour grapes would quit complaining. I'm certain most of those retailers are gone. They were, quite frankly, lemmings. And entire industry of people who couldn't think for themselves.
It was all about sell, sell, sell. They'll sell to you, by god, even if they have to give you money.

I challenge you to find a single site on the internet that deals with sports cards (go ahead, there are 62 million of them on google) that has a single coherent thoughtful appraisal of their business. So it isn't surprising that sports cards are a dead industry, that has only been kept alive through the artificial infusions of games (pokemon, yu gi oh, and magic) and because a there always seems to be another nostolgia addled adult who thinks he's going to recreate his childhood, and thank goodness he has his 30 yr pension from the government....

Friday, February 9, 2007


Lots of interesting news this morning, from the city of Bend suing the broker for the BAT buses, to local housing prices dropping, to the lovely little article about my friends Aaron and Char's keeping romance in a marriage. But what caught my attention was the rotting Polar Bear, and the headline, "Everything has a shelf-life."

Ain't it the truth.

When I first bought Pegasus, I remember making 5 year plans, even 10 year plans. Nowadays, I think making a 3 year plan is pretty daring.

When I first watched some of my competition giving up, I thought I had won. Then I realized they may been the smart ones. No sense being the best 'buggy-whip' maker in the world. I'd watch businesses pop up at the peak of the fad, and then die out at the bottom. Then I realized that for at least a few smart retailers, that is all they intended to do.

When I first started renting, I thought the spot was mine forever, as long as I paid my rent on time. Now, I wonder if even a valid lease is enough if they want to tear the building down around your ears.

When I first started selling comics, it never occurred to me that comics might become obsolete through technology. Or that I'd buy thousands of dollars in anime videos, only to have them become useless.

When I first started selling comics, cards, toys, etc., I thought they were such tiny little sidelines that the big mass market chains would leave us alone. I carried baseball cards for five years before they really entered the mass market, but when they did---they trounced us. For pogs, we had all six months of the fad to ourselves -- I remember walking by KMart and seeing that they had literally reproduced our display right down to the same products on the same shelves, and chuckling to myself because the fad had already died.

Nowadays, we seem to get very little time to ourselves for a new trend. Every year, they seem to be making deeper inroads into my territory. Amazon just announced a huge increase in sales, and at least part of that was graphic novels, apparently, enough so that my wholesaler announced that Amazon is the biggest comic retailer in the world.

So, yeah, I worry about my store becoming a big rotting polar bear. I'm not quite in the same spot as say record stores, or toy stores, or even bookstores. No major 'comic book' chain has opened, for instance. No, it's more like being nibbled to death by ducks. A little nip there, a big chunk here, and so on. Another reason I'm so intent on diversifying, and another reason I try to find offbeat and unusual material.

It's why I don't sell video games, or DVD's (except for anime), and why I'm quite content to sell new books as a sideline. It isn't possible to BEAT Walmart and Barnes and Noble, or even really compete in a meaningful level, but you might be able to find enough funky, strange, and unusual items and stick the best-sellers in the middle of them, and scrape enough business to get by.

Early in my career, I met a guy who's job was to service big main-frame computers. He said, he had two partners, one of which had already retired and the second was about to retire, and that when the last mainframe has weezed to a stop, he would retire. His entire job was predicated on becoming obsolete. But someone had to do it.

My own personal sense of the time line is, that the nibbling has only begun, but I have enough experience and savvy by now to keep avoiding the complete obsolescence of my business. I think that I'll be able to finish my career as a pop-culture retailer.

But my advice to anyone starting out would be to be very, very nimble. Don't get locked into any one product line or way of doing business.


I'm beginning to see a pattern, here. I'll be doing this blog in the morning, and probably try doing work on my Daily Novel blog during the day and evening.

Thursday, February 8, 2007

I know when I'm being bullheaded. When I'm being just flat out stubborn. When I'm trying to impose my will on the consumers. When I'm not backing off my buying in the face of slowdown.

I've always wondered how important willpower is the the success....or failure....of a business. I know that I started morphing the store to meet my own tastes and standards almost from the beginning. It is very easy, when you are fully immersed in a culture, to get ahead of your customer. But if you wait for the customer, it might be too late. A very find line.

For instance, I've been looking at the designer toy movement for quite awhile. The 'urban vinyl' movement are toys that are wild and personal and quirky in design, and limited in numbers. They aren't attached to an particular popular media license, but are one-of-a-kind inventions and inspirations. I even tried to bring some of them in, but was foiled by the prices and the very selective availability. And I found that when the toys were dispersed through the store, they lost any impact they might have had. I backed off.

This month's Previews has an entire new section on designer toys, which means that the art toy movement has finally moved front and center to the rest of the pop culture world. I'm going to be all over it, and finally buy that glass cabinet to display them.

The above scenario has happened over and over again, over the years. I brought in pogs 2 years before they took off. I sat on Pokemon for 6 months before they started selling. I was carrying Beanie Babies 6 months before they took off.

It's all a big drag on my cash-flow, let me tell you. But I'd rather be fully engaged than take the cynical view that I"ll need to wait for my customers.

There aren't any particular brands where this is happening right now, more just the broad range of cool stuff that I think the store should have, but which I know I'm probably going to have to wait for people to find and appreciate.

That's where I'm being stubborn. There have been days in the last two weeks when I could have gold and diamonds on the counter, and selling them for 10%, and I wouldn't have enough people coming the the door to buy them.

Ah, well. As I've said before, I buy when they are available, and just hope and pray that when the busy seasons come, customers will respond. Sometimes it never happens. I have a HUGE number of art books that almost never sell, but I'm still a sucker for them. I guess one way to look at it, is that they are my own personal collection. If I ever have a bigger store, I'll be able to put a larger percentage of them face out. That would be most impressive. As it is, they are all scrunched together, spine out, which is a pretty silly way to sell an 'art' book.


Bit and Pieces: I wrote a second draft of my daily novel last night; which is against the rules I was planning to follow. But since it's the beginning of the book, it'll be rewritten over and over again. In some ways, it's the most important part of the process.

The Stephen King comic came in yesterday, and it's a very impressive production.

Wednesday, February 7, 2007

I've done a really crazy thing. I've started a second blog; THE DAILY NOVEL: THE TIME TRAVEL SHOP. I think you can click my profile and go to it from there.

It's probably been done, but I don't know. I'm going to write everyday on this book, if I can.

I'll be keeping this blog going, as well, but won't be talking about my writing here. This will still be about business and Bend and all that.

What inspired me was, I realized I've probably written over 30,000 words on this damn blog in just a couple of months. Hell, my novels were only about 100,000 to 200,000 words. I've written seven books, and many partials. The first three were published; STAR AXE, 1980; SNOWCASTLES, 1981; and ICETOWERS, 1982. They've been long out of print, but can be found in used bookstores and online.

My 4th and 5th books made the rounds without success. My 6th book, DEVILTREE, kept coming close, but eventually I gave up. My 7th book, SOMETIMES A DRAGON, was my favorite, but I realized it was my least commercial and I barely tried to market it.

Then I got married, had instant family, bought a business and I no longer had the time, energy, or psychic space to write fiction.

But I THINK I'm ready to try again. I've started totally fresh. These are new words, created this morning. I'm as in the dark about where this book is going as anyone. I'm doing it for myself, and my own amusement, but I wouldn't mind being published. But the main thing is to do it. As soon as I can figure it out, I'll be creating a link to the other blog. (And hopefully get the original 'profile' for this blog back. For some reason, the profile I wrote for the new blog ended up here, too.)

Tuesday, February 6, 2007

I almost skipped reorders. It was a very slow week, so I figured with a glance at my sales sheets, that I could take a breather. But I needed to bring in a few shorted or special ordered items, non-direct, so I started on a small order.....that kept growing and growing. Turned out, I needed almost twice as much reorder material as usual.

It's something I've noticed over and over again. When sales are slow, say in Jan. and Feb., a much higher proportion of sales are of what I called 'evergreens'; or material I need to keep in stock. As I've pointed out before, I have to sell an evergreen at least 5 times before I really start to make money. An item I don't replace? I make money on the first sale.

When the store is busy, it seems as though a much broader range of material sells., including stuff that has been gathering dust. People come in from out of town, see an odd item that their store ran out of, and grab it. These one-of-a-kind sales represent my profit, in some ways. When my sales are mostly to regulars, it is usually only the best material that sells; it's much more likely they'll finally start reading the "Fables" or "Preacher" series they've been hearing about. I have more time to talk to them, and to recommend stuff. But the stuff I recommend is, of course, the classics, the evergreens....

Its strange how, as I'm doing reorders, I'll often find that an 'evergreen' is no longer available. I cross that item off my 'evergreen' list, and somewhere in the back of my brain I'm actually relieved. One of the reasons my store is so packed is because I seem to be incapable of dropping an item, once I've carried it. All graphic novels become 'evergreen', under that kind of thinking.
In fact, if it's a good seller, I'm motivated to keep more than one copy in stock.

Add that to the desire to increase my level of new inventory, in hopes a creating a new crew of regulars (currently, new books and games), and it's nearly impossible not to spend too much money on inventory. I have to keep faith that I'll get that extra business at Spring Break, during the Summer, and of course, Christmas.

I can't tell you the number of times I've tried to cut back, and sales dropped the same level I cut. Not the same items I cut, mind you, but it's as if the constomer can read my mind and closes his wallet. Never been able to figure that out. I don't believe in ESP, but the amount of intuitive sensing by the customers comes awfully close.

I guess what I'm trying to say is, I find it impossible to remove risk from my ordering. I get rewarded by being positive in my ordering but spend too much, I get punished when I try to be careful but spend less. All things being equal, its more fun and interesting to be positive.

Monday, February 5, 2007

To clarify my last comment; "Lowering prices are almost always a sign of a downward market."

Well, duh, and no duh, right?

Still, I think there is a tendency to think that all you need to do to sell more product is to lower the price. Taking away that you are working harder to make the same or less profit, it usually doesn't work.

Lowering prices is the first crack in the dam. Customers figure it out pretty quickly, and they will think to themselves, "If you are offering this for a lower price, I bet someone else is offering it for even less!"

And they would usually be right. Because if the market is starting to go down, someone out there is hurting for cash and is willing to sell it for less, at first; at a break-even price later on; and at a loss even later. And as that seller falls away, the next guy in line is there to take his place.

A downward market doesn't have to start with a collapse, just a little tipping over is all it takes. And then, as most producers are in denial, the whole dam starts to break. You don't want to be a ninny and respond to every downturn, so you wait for a pattern to emerge. Or, there is a dead cat bounce of some kind and you are fooled into waiting longer. The point being, that almost everyone waits too long.

It is only the guy who started hedging his bets on the upward side; that is, was willing to make a little less money on the short term in order to lower his risk in the long term, who will come out of this alive, and even he will be hurt.

Who is that guy? The guy who went through the whole thing the last cycle, and who is still around, and believe me that aren't too many of those guys still walking around.

But even in a healthy market, lowering prices isn't the panacea that the average consumer thinks. I can give you a couple of examples.

I have been carrying cardboard cutouts for a number of years. Life-sized standups of Johny Depp as the Pirate, or Darth Vader, or John Wayne.
The suggested retail is 30.00, but I always tried to sell them for 25.00 because there was such price resistance. I'd get an apolgetic tone in my voice and say, "Well, they are kind of expensive, but....."

Finally, I decided that, the damn things were costly to ship, hard to display, sold slowly, and that I was losing money at 25.00. I decided that I'd get 35.00 for them, or drop them completely. I dropped the apologetic tone, and said simply, "They are 35.00." And sales, if anything, increased. It turns out that if a person is willing to pay 25.00, they are willing to pay 35.00. But if they balk at 25.00, 35.00 isn't a lost sale. Not to mention, you really can't get it cheaper even on the web once shipping costs are included.

Another example; someone expresses an mild interest in a product, and in order to encourage the sale, I offer him a lower price. He puts it back immediately, as if to say, "Well, if you want to get rid of it THAT badly...."

I think until I read that article in the paper about the builders lowering their price, there was still some question in my mind whether we were in a true downturn or just a lull. This nails it.