Wednesday, October 31, 2007

Well, now I've been called Chicken Little to my face....well, not really. More like a sniper attack.

Older couple was looking at books, but I was so busy I didn't even see them until they were on their way out. The older man looks me in the eye as he passes and says, "There he is, Chicken Little."

And the wife says, "Yep, there he is, Chicken Little."

I'm too surprised to say anything, as they walk out the door.

Reminds me of the first Charlie Brown strip. Couple of kids sitting on the curb. The boy says, "Well! Here comes ol' Charlie Brown!"

As Charlie Brown gets closer, he says, "Good ol' Charlie Brown...yes, sir!"

As Charlie Brown passes by, he says, "Good ol' Charlie Brown."

He frowns. "How I hate him!"
I've been trying to imagine what this town is going to look like in ten years. The announcement of yet another major department store is coming to Bend, (where Jakes used to be) along with tens of thousands of retail square footage, is like the other shoe dropping. There seemed to be a short pause in the new retail there for awhile, especially on Third Street, but it looks like we're off to the races again.

While downtown has never really stopped growing, there certainly has been a sudden surge. Answering the question of who was going to inhabit all these new buildings.

And then there is the contempt a local developer has for our laws in cutting down all the trees he wanted for land he won't even be building on for a long time to come. He's might be fined 50k. What? The timber is probably worth more than that!

With the housing bubble really kicking in, all this is hard to explain. The only analogy I can come up with is the way the Russian Army handled minefields in WWII. They simply sent waves of soldiers over the mines until they were exploded.

As I mentioned the other day, new retail appears ready to open whether it makes any sense or not. Some of them are going to explode mines, but the army will get to the other side.

Like I said, charging the enemy with a couple of other soldiers is insane. But if everyone else in the division joins you, it has a chance of success. The machine guns will mow alot of men down, but the army moves on.

Tuesday, October 30, 2007

Listening to NPR, and they do a story on the "two year old housing drop."


Seems like only last summer most experts said there wasn't any housing drop. How did we suddenly get to "two year old?"

Is this just another ploy by the housing market to try to convince everyone that the damage is done, it's over, time to buy?

Just weird.
Jacoby Ellsbury. Had a couple of guys from Madras come in and ask for a Jacoby Ellsbury baseball card. I very knowledgeably told them that -- starting in 2006,-- a baseball player can't have a rookie card until they are actually a rookie, but to look online.

After they left, I looked it up on the internet. Looks like Ellsbury had a card in a few of the 2005 Updates sets, that is, he got in before the rule change.

I have two full boxes of Topps Updates, for 99.99. And one box of Topps Chrone for 119.99. Unfortunately, I can't figure out any way to extract Ellsbury without charging ten times the book value.

I've noticed that his prices have pretty much doubled overnight, even nationwide. He made a bit too big of a splash for a local dealer like me to buy a bunch and turn around and sell them for a bit more.

So, I'll be pointing Ellsbury rookie card seekers toward my unopened boxes, but telling them they might do better online.

Meanwhile, am I the only guy who's getting sick of Jerry Seinfield and the Bee Movie? He's been so relentless, I'm going to boycott the damn thing.

Most of this year's new shows have dropped off my viewing list. Chuck is O.K., but already becoming a formula. Pushing Daisies is almost too cute; Linda likes it, so we'll keep watching. The one show I've adopted is a show I hadn't even thought about until I stumbled across it: Life. I'm also getting a kick out of C.S.I. New York Weird this year, but still can't stomach C.S.I. Bikini. Dropping Criminal Minds altogether. Smallville makes me squirm, it's gotten so bad.

Keeping Heroes, C.S.I Quirky Vegas, (but not watching Vegas or C.S.I. Navy light), and was disappointed in Viva Laughlin, but a moot point) watching the Amazing Mrs. ....what's it...on Masterpiece Theater. Waiting for Battlestar Galactica and Lost.

Every year I worry there'll be too many new good shows, every year they solve the problem by cancelling the shows I like. (Love seeing Kristen Bell on Heroes, but wish more people had watched Veronica Mars....)
Fun with stats.

What if I were to tell you that Pegasus Books has seen double digit growth so far this year? Sounds good, doesn't it? Especially for a business in it's 27th year of operation. Especially following four other years of double digit growth.

Ah, yes, but what if I were to tell you our sales were down 1.4% in the third quarter? Not a disaster by any means, especially for a small store. 1.4% could be as simple as having a couple of big customers go on vacation.

As the Proprietor, I have a much more nuanced view of all this. The double digit growth was all but purchased by me through extra inventory. That is, I spent so much money that growth in sales was all but inevitable. I established two new product lines, new books and board games, since last summer, starting from scratch. I filled in fully every other product line, to the point that my store simply ran out of room.

So, starting in April, I cut back. Excess material continued to flow into the store over the next 3 months; indeed, some material is still showing up. Back in the salad days of March, I somehow got it into my head that it would fun to buy an expensive raygun for the store. A 700.00 toy, which is showing up this week. Just goes to show what my thinking was like back then.

Scratch under the surface a little more, and some other stats emerge. Most of the dropoff in sales began in the middle of August. Almost exactly the same week as the credit crisis surfaced in the national news. At the time, I mentioned that I didn't think the drop was attributable to that, but from a distance, it looks much more suspicious. Especially since slow sales continued on. That factored in to my decision not to open a second store, along with the problems with timing I had with the landlord. It looks like I may have dodged a bullet there....more like a bazooka shell.

Meanwhile, I've continued to moderate my spending, so the 1.4% drop is meaningless. It turned out we needed another 5k to pay off our federal taxes (Linda had mixed up the employee taxes and our own taxes in her preliminary record keeping, so she hadn't paid as much as we thought.) We paid it off in full through our cash flow, which is a pretty good indication of health. (In years past, I probably would've made a payment schedule with the I.R.S., or at the least, would've had to dip into savings.)

I've thought about this post for about a week. How upfront can and should I be? But since the store is doing well overall, I thought it wouldn't hurt to be candid.

However -- I only tell you this because of my manly manlyness ,(that is, the fundamental stability of my business), that sales over the last 3 months are down 7.5% (July's sales were so good, they pretty much brought the whole quarter up.) That I don't like.
That requires some mid-course corrections. I usually won't change my policies until I see a full quarter under my belt, but the last week of August was so bad, I jumped the gun and started cutting my November pre-orders. That will start coming into effect next week. Good timing.

Still, even these stats are somewhat misleading. I made the most net profit in my store's entire history in August, even though sales were down. By cutting back on the extra inventory. We have Christmas coming up, and I'm fairly certain I can go into next year with zero balances in my credit cards and lines of credit, and still have the savings I started the summer with intact.

Not the huge extra flow of cash I was hoping for. But we are above the original daily sales goal I set out to reach 3 years ago, relatively low on debt, and have a fairly large cushion to cover overhead.

I'm looking out the window and seeing empty parking spots, my customers seem to want to cut down on their comic lists, and Monday's and Tuesday's are turning into morgue.

Just like the old days. Kind of like an old, familiar but unwanted friend.

Monday, October 29, 2007

I've been reading on a local game site about the desire for a game store in Bend, specifically a Games Workshop type game store. Got me thinking about whether such a store would succeed. To broaden the question, could a game store in Bend succeed (Games Workshop, but also rpg's, board games, ccg's, and everything else) ?

The short answer is, yes, possibly.

The long answer is; not if you want to have a life and turn a profit.

I believe the only way a game store would work in Bend would be for it to be insanely labor intensive. That is, the owner would basically have to live the store, day and night, for years. the owner would have to be willing to work 60, 70, 80 hour weeks. He'd probably have to make a huge investment, which would take years to recoup. And he'd have to find a prime location, which is large, cheap but presentable, and easily found.

The expense of having a viable store in Bend, would almost preclude anyone from trying who understood that it might take many many years to get back his investment. In fact, anyone who has that kind of money would be better served to go to a bigger town. A small, side-street store, run on a shoe string, wouldn't bring in enough money these days to be worthwhile in my opinion. It would have to be a fanboy shop, and those never last for long.

If you wanted to do it right, the biggest expense of all would be time and labor. Guerrilla marketing in all its forms. Tournaments and presentations and open tables (which would either require a second employee to implement or would run the owner ragged.) It might be fun to play magic every day for a year of so, but then the second year comes around and the third and the fourth, and it's the donut shop example. Can't eat donuts every day without a consequence. And it wouldn't just be magic, it would be pokemon, and Settlers of Catan, and Warhammer, and Star Wars miniatures, and just about every other game.

So, the answer is yes, a game store might succeed in Bend, but at such a cost that 'burn-out' is almost inevitable.

Don't underestimate the cost of your own time!

I'll repeat that. Don't underestimate the cost of your own time and effort!

I can't tell you the number of people over the years who tell me about their success at conventions, or online, but when you scratch under the surface, they simply haven't taken into account the costs of their own time and labor. Almost always, it turns out to be a short term enthusiasm.

I see more stores close because the owner simply took on more than he could handle than for any other reason (besides not making money, of course, but who admits to that?)

To me, having to expend 20 extra hours a week on labor in order to break even is the same as going in the hole, at minimum wage, 150.00. Worse, in a way, because of the wear and tear.

My own rule of thumb is -- don't take on any new tasks that you won't be willing to do for the rest of your career.

My store looks very complicated. And yet, despite having multiple product lines, I've more or less simplified it.

1.) Always go with S.R.P. If not, then always have a percentage in mind you need. In the case of my store, it's a minimum of 40% markup, which means multiplying the cost by 1.6666 on the calculator.

2.) Don't do any consignment. Consignment is really complicated, especially if prices change. Lots of room for mistakes and misunderstanding. A record keeping nightmare.

3.) Buy only from wholesalers. I've dropped buying off the street. I've all but dropped the 'collectible' aspect altogether. I know what I'm getting, the price is set. Trying to negotiate with a passionate fan is never fun, and if you get the price you need, the collector will almost always feel screwed. Not worth it.

4.) No interactive events. Just don't have the time and space. Don't want to babysit kids or adults. Not interested in having the same people around all day.

5.) No advertising.

6.) Special order for the store. That is, I don't take money upfront from the customer, I take their request and tell them I'll order it 'next week.' Sometimes I'll set the product aside, but they pay when they come in.

7.) We are a cash business. That is, people pay for the product when they come in. We don't have an 'accounts receivable.'

8.) Simplified systems and routines. Make reorders on the same days, with the same budget. Right down the crucial info, but leave the smaller details out. And so on.

9.) I don't sell at conventions, I don't do mail order, and I don't sell online. Every time I've done those things, I've worked out that my time and labor cost more than what I got back.

10.) No sales. I keep the product until I sell it. I will make individual deals on the spot.

And so on. Many other ways that I've tried to find to simplify. I simply shudder when I see some other stores open, because in my mind I'm calculating the complications.

I always see the day....which comes to all of us, -- when the owner will say to himself: "Is this really worth doing?"

Sunday, October 28, 2007

"Tanks for showing up. Of course, I don't have
to tell ya, we ain't here. If anyone finds out, call it an 'executive' session. "

"Boss, we've been screwed by dem California bums. "

"Hey, fuggeddabout it!.

"No, really. The vig is too much. We think he eats alone."

"Get the hell outtaheah!"

"We need a little spring cleaning. We need someone to do a message job. "

"It's given me Agita, I tell you."

"I'd like to bring in a friend of ours. Ron "The Eskimo" Garzini."


"Tanks for comin, Garzini. I hope you can appreciate the facts, Garzini. Conditions have changed. Some people have gotten too powerful. I want you to take care of it personally, do it yourself...."


"It's taken care of, Boss. I told them "Try this again and I will kill your mothers, fuck your sisters, and turn your brothers into eunuchs."

"Good job, Garzini. What we owe ya."

"Truth is, I like my work. I would've done it for nothing."

Saturday, October 27, 2007

I have for some time now been carrying around the notion that the commercial surge I see downtown, the new stores and restaurants and hotels, will carry so far into the housing downturn, that it will simply overlap past the ensuing plateau and deliver us safely to the other side. Stores will come and go, but there is so much activity that I don't believe we'll have any dead zones for years to come.

If the housing downturn is a 5 or 6 year process, of which the first year it nearly complete, and the bottom is around year 3 or 4, then we really needed to see business growth for at least the next two years or so.

I never thought it very likely that we'd empty out. I thought there would be a 3 steps forward, 2 steps back progression. But I need only look around.

The new buildings coming on the market, and the 8 new restaurants, the new motel next to the parking garage, and all the other developments almost guarantee it.

See, from my perspective, I need to concern myself with my own store, whether or not I can sustain my business, and the vitality of the surrounding commercial district. All these new developments are going to create vitality for the near future.

Notice, all you bubble busters, I'm not saying these new businesses are going to do well, or even turn a profit. I'm not sanguine about their longterm prospects, and I'm even less hopeful that some of the existing restaurants are going to do well.

But as I've said before, I think any business which is well enough capitalized to even open downtown these days is probably strong enough to last a couple years or more. They may be bleeding red ink all along, but they won't show it from the outside.

And from a bottom line perspective, I don't care if they're losing money in the short run. Some will make mid-course corrections, others will quit, others will sell out. But all that is several years down the road.

So there are going to be all these new shiny businesses opening over the next couple of years, and then at least another couple of years as they mature.

This is mostly good news for my store. Normally, I have to pay a lot of money to connect to that kind of hustle and bustle. But it has suddenly emerged in the surrounding blocks over the last 3 years, and looks to get even more busy over the next 3 years, and here I am in the middle of it.

I'm no longer in the hinterlands, no longer a half block past the foot traffic.

I'll need to continue the process of becoming more mainstream, more new books and games and toys, while trying not to lose my niche credentials.

I used to worry a lot more about the parking, but I've found that most regulars manage to make it, and strangely, the more parking spots are filled, the busier downtown is. I figure that two of the new restaurants are taking the place of existing locations, and that we've lost at least 4 other restaurants recently, so the trade off may not be as bad as I initially thought.

The only bad news is that it makes it less likely that my own landlord will moderate my rent, or at least moderate my rent increase. I can hope he'll be happy to have a tenant that is approaching 30 years in downtown. I can hope he'll want us to stay, and understand that just because downtown is full doesn't mean everyone is doing well.

But, I have a couple of years of heavy traffic I think I can count on, and it's my job to tap into that market as much as I can.

Friday, October 26, 2007

Eight new restaurants in downtown Bend. Three new independent bookstores in Central Oregon.

What can I say?

I can just shake my head.

I really don't know what to think. I'm told I'm cynical and acidic, but I've never thought of myself that way. I'm just trying to be realistic.

Who knows? Maybe....I can't believe I'm saying this....they know something I don't. Maybe Bend's different. Maybe this little housing bubble is a blip, and easily ignored. Maybe so much new money has come to Bend, that we'll live off the fat of the land for a while.

I know there are 3000 indy bookstores in America, or roughly one per 100k. We now have 6 bookstores servicing 200k. I have no idea if 8 new restaurants are too much....but, well, it seems like overkill to me.

But what do I know?

The public accepts them. They exist. Therefore they must deserve to exist.

I've always told myself if another comic shop came to Bend, or another game store, or another card shop, etc. that they would be living under the same rules as me; rents, employees, discounts, market.

But the big danger to me would be someone who had more money than sense. Sure, in the long run, they would have to adjust to reality. But in the short run, they could really hurt. Like I said, the public just accepts that they must be viable because they exist. If a store opens with half a million dollars worth of expensive but hard to sell pop culture statues and toys, the average customer assume the product mix must sell, because -- after all -- they exist.

If they come by a year or two later, they are surprised that the store closed with padlocks from the bank on the door. They were interested, (a year later, too late to help) so the store must be viable.

Oh, well.

How can I argue with that?

I'm tired of trying to figure it out.

Thursday, October 25, 2007

A while back, in discussing my decision not to host game tournaments in my store, I mentioned the incident where a guy mentioned he was looking for a tournament, and then told me he bought online. The same guy left a comment that I was dumbass to be making such big decisions on such little evidence.

After my initial defensive response of, "Well, you weren't the first to say that, and you won't be the last," I decided that the comment required a longer response.

If you'll pardon my blogging, a much longer response.

What reminded me of this was a small incident yesterday. I had a young fellow and his Mom come in looking for a single Star Wars figure, one of the Jedi with the right colored saber.

I told him that we had packs for sale, and he might get one in there.

His Mom said she'd buy one for him, and they whispered a bit. Finally, he asked, "Are you selling for 14.99 or 12.50?"

SRP is 14.99, so I said told him that.

He walked away.

No big deal. I was selling a ton of S.W. miniatures six months ago, and then they stopped selling. If I drop my price to 12.50, I drop my margin from 40% to 28%, and I'd rather spend my money on something else.

It also means that there is even less chance that I'll have the individual figure for him.
(If I may digress, I find that singles are only profitable if they are part of the whole package; customers buying packs, price guides and singles....otherwise, you're best moving on.)

So on such little evidence, I'm assuming that someone in town is selling SW packs for 12.50. That plus the fact they haven't been selling, either as packs or singles, means that I'll order the minimal quantity of the next wave.

On such little evidence?

It may be the only evidence I'll get.
That plus my own instincts has to be enough.

In my first 10 or 15 years of business, I used to freak out about drops in sales on a fairly constant basis. Nowadays, I realize that brands and products have cycles; moving from cold, to warm, to hot, to warm, to cold. If you're lucky the product will settle back to warm and stay there.

I also have a much more nuanced appraisal of cycles. I divide them into different categories. The product, and where it is on the cycle, whether changes have been made, or the creators have changed. The industry, and where it is on the cycle, whether there have been shipping problems, late product, etc. The store, and whether it is facing some new challenge, like construction or competition. The downtown, and the town as a whole. And of course the national economy.

But back then, I often only knew that sales were dropping, and it freaked me out. I'd call around and ask other stores if they were seeing the same thing.

Here's the thing. Not once when I called another store did they admit there was a problem.

So I'd feel like it was all me. Later though, maybe six months or a year later, I'd find out that not only were the other stores having problems at around the same time I was, but often they were in much worse shape. I'd find out because they'd be trying to sell, or they'd close, or they'd finally admit to it.

I even came up was an axiom. If I'm feeling the downturn, chances are the other guy is feeling it even worse.

Because if you can look around the store and know that you haven't done anything wrong or completely different, the chances are the product itself is at fault. But if you wait for a confirmation, it's way too late.

So on little bits of evidence, and your own instincts, are such decisions made.
Everyone does it.

Announces sales figures., as if sales are the only figures that matter.

Amazon just announced that they had a 41% increase in sales! Billions of dollars!

I read the announcement. Not once in the entire article is the word "profit" actually used. Instead they use, to me, weird terminology like "free cash flow," and the ever trusty "net" income. Is this net income after cost of goods? Is it net after cost of goods and operating expenses? Why isn't the word profit used? Maybe cause legally you can't use it unless you actually had one?

I can't tell through all the gobbledeekgook whether Amazon actually made any money. Since they sold Harry Potter for cost, I kind of doubt it.

Let me tell you a secret. Sales don't really mean anything, without knowing the costs. I'm always amazed by how often the public is fooled by this. Even banks and the stock market often seem mislead by this. Announce sales figures with a huge fanfare. Later in the week or month mention those pesky costs in a low key manner. Hiding those costs under weasel words and lame explanations. But look at those SALES!

The other trick I see constantly is comparing sales from one month to the other. That is, making a fanfare when sales are higher, hardly mentioning when they are lower. I tell you what, a great depression could set in between May and July, and my July sales would still be higher. Seasonality is that important.

Pay no attention unless they compare year to year, September. to September. Apples to Apples.

No one mentions inflation, because we supposedly have that under control. Yet Magic cards have gone from 3.29 to 3.89 in the last year or so, comics are averaging over 3.00 from 2.75 last year, and so on. Sales increases of 3 to 6% probably only mean you're keeping even.

I always read Trading for the Masses entries on Bendblogs, where he gives us revealing snippets from other news sites, and try to figure out all the jargon, and I just know that the damn jargon is hiding most of the real truth. I find it fascinating what is included and what is left out, but the common denominator is the crazy spin.

What brings about these musing is this:

The rumor is that a big builder, one that moved here from the valley a few years ago, is about to go Chapter 11. This hasn't been confirmed, so I won't use the name. If true, all the bubble busters will be crowing. It would seem to be confirmation of all we've been saying.

But it's too soon. If this guy is already cracking, he had to have been insanely self-delusional and over-extended to go down this quickly. In fact, I would suspect he was probably already in trouble before he even got here and tried to spend his way out of trouble. Still, this guy was announcing positive sales figures not too long ago.

I figure -- obviously!-- that most of the housing news is being stage managed. We're being given the news and the figures in a way that is spun to look most positive. I know, for instance, that I could easily arrange to put some sales into one month instead of another, some costs into one month instead of another. There is nothing illegal and unethical about it, just a bit of management. I could easily increase sales dramatically between now and Christmas simply by ordering much more material. Since I wouldn't have to pay for most of it until after the holiday season, I could have a damn fine year. Of course, next year would be hell. But, let's say I'm a middle manager that is moving on next year; or let's say, I figure that there is going to be a ton of bad news next year from all the other stores and I can just join them. Or I figure I can try to make up for it in the second half of next year. And so on....

I don't bother because I try to be reality based, I have no stock-holders to please, and I don't see any reason to try to play with the figures.

Merril Lynch recently announced a huge drop. A week or so earlier they had hinted that it was going to be bad, but when the figures came out, they were worse. The explanation: they decided to dump a bunch of the bad debt into this announcement, to clear the decks. Hell, if they were going to take a hit, might as well get all the bad news out at once.

I suspect we'll see a lot of this. Which will suddenly make everything look very, very dire. It's just stage management, and what it means to me is -- they were withholding the bad news for as long as possible, and now that they can't spin it out any longer, they are going to really dump the bad news. The bad news is real, has been there all along, and the fact that they are finally revealing it means they know that it isn't going to turn around any time soon.

This is going to take a long time to play out.

Wednesday, October 24, 2007

"Er, Ray, we have to lay you off until sometime next year. Early in Spring. Maybe April or May.....or June."

"Lay me off?"

"Yeah, you know the manager who hired you? He's gone. But that's not the real reason, Ray. We have some....problems. The state has told us we have to pave the road in front of the store....."

"But you asked them to pave the road in front of the store. You've always known they were going to pave the road."

"Yeah, but who knew they'd actually agree? We asked them for a letter, and they said, "Sure. We're going to need to pave that road someday...." Wow! You see the problem. So, you know, we'll call you back....when we're ready...."

"But what do I do in the meanwhile? You don't really want me anymore, do you?"

"Oh sure we do. We agreed to pay you a huge bonus if we ever fired you! So, you just trundle on home and we'll call you in some day... Of course, you can always QUIT. Not that we're hinting that you QUIT or anything." (QUIT!)

" choice is to sit around for the rest of my career, or quit and lose my bonus?"

"Thing is Ray, all the other employees are threatening to QUIT. Not that we are suggesting that you QUIT! We don't really have the money for the bonus. (QUIT!). So as long as the state is playing hardball, what can we do? (QUIT!)

"I'll get you for this! I'll never quit!"

"QUIT?" Whoever asked you to QUIT, Ray? Why would we ask you to QUIT?"

"This isn't the end of this! I'm going to see my lawyer!"

"Fine, we wouldn't want you to QUIT or anything, Ray....."

Tuesday, October 23, 2007

Starting to get the occasional day like today that remind me of the old days.

Had a customer return a used paperback because 2.00 was too much. I couldn't help but mutter..., "But it's only two dollars....!"

I guess I could throw away those old books like most bookstores do. Because if I have to get .17 cents for a .35 book, I just don't have a room.

A book of poetry, by Alexander Pope.

Most people don't object when I say, I have a minimum of a dollar. Because any less than that, and I would have to discard it. I would have no choice. Because I have no end of 8.00 cover price mysteries and S.F. and romance and fiction to put out. I just can't see not letting someone get a book of poetry by a classic author for a dollar....or, gasp, even two!

I raised the price to 3.00 and put it back. Classic Laurel Edition. I'm sure it's actually worth more. But I'd really like someone to read it.

Odds are, I'll sell it to the next interested customer. And even better odds that today's customer never does read a book of poetry by Alexander Pope.

What I'm trying to say, is that he wasn't looking at the chance to buy a poetry book for 2.00, which I'm pretty sure he would have to look long and hard to find another, he just saw the original .35 price and thought I should sell it to him for .17, I guess. Not to mention not having any realization that I simply couldn't have a bookstore in downtown Bend if I sold books for less than 1.00.

It only happens about once a year, but I'm always surprised when it does.

When Linda and I first opened the Bookmark, we were really concerned that we would get an avalanche of old, tired books. But it really hasn't happened, and the only explanation I have is that those old 60's, 70's, 80's paperbacks have already been weeded out, and discarded.

A shame really, because a copy of the Great Gatsby published in 1970 for a couple of dollars is just as readable as a 12.00 copy today. But bookstores run into customers like the above and say the hell with it and chuck it into the trash.

Linda has her " Knock-About Books" section, for .50 each, and she has a saying;

"They're well experienced, they've been around the block a few times, they know how to be read."

Unfortunately, my square footage is so dear downtown, I can't afford to do that.

Like I said, it's only the rare person who won't pay 1.00 or 2.00; but they always leave me flummoxed.

Monday, October 22, 2007

“I am unable to understand how a man of honor could take a newspaper in his hands without a shudder of disgust.” - BAUDELAIRE

“If one wishes to know the real power of the press, one should pay attention, not to what it says, but to the way in which it is listened to. There are times when its very heat is a symptom of weakness and prophesies its end. Its clamors and its fears often speak in the same voice. It only cries so loud because its audience is becoming deaf.” - TOCQUEVILLE

“My business is to teach my aspirations to confirm themselves to fact, not to try and make facts harmonize with my aspirations.” - T. H. HUXLEY

From The Viking Book of Aphorisms, by W. H. Auden and Louis Kronenberger, Viking Press, 1962.

I'm so far behind my comic reading, that every time I sit down to read, I spend half a day just putting the comics in order, and finding that I'm missing a crucial issue in the middle. Then I have time to read just a few comics.

I've decided to stack my comics on my office coffee table, so that I need only put the newest title on top, and start from the bottom. If I ever want my office to become uncluttered, I've got to start really digging in.

Last night I read Umbrella Academy 1 and 2. It's written by Gerald Way, who is a member of the rock group, My Chemical Romance, which I'm not familiar with. A fun story about 7 young kids (with and without funky superpowers) taken under the wing of the Monocle (ultra rich and ultra British billionaire who is really an alien) to teach them the 'save the world.' Both the writing and the art are very reminiscent of Hellboy, and that's not a bad model.

Read Streets of Glory, an ultra violent Western written by the very reliably ultra violent Garth Ennis.

Caught up with DMZ with the third graphic novel. Really well written stories, about loyalty and torture and the commercialization of war.

Read the first of three story arcs of Astro City the Dark Ages. Set in the 1960's, and told (as ever with Astro City) mostly from the viewpoint of the man on the street, to whom the battles and concerns of superheroes seem Olympian. This is the best Super-hero comic in existence, in my opinion.

Stacked on my table are all the Conan's, Wolverines, Punisher, Runaways, Astonishing X-Men, and Ex Machina I haven't read. 100's of issues.

Sunday, October 21, 2007


Big plans. Hey, let's build a ballpark in the middle of a corn field! Build it and they will come! A little voice told me so!

Works in the movies.

So lets build a humongous Fairgrounds that will sit empty most of the year! Let's take a crappy old theater that no one has been able to make profitable in years, and renovate it! Let's have a film festival! Before you know it we'll be another Sundance!

Most of the festivals we have downtown have the same tired vendors, year after year. I'm still sweeping up the straw from the bales in front of my store last month. Sweeping up straw and horse shit is a pretty good metaphor for the aftermath of one of these events. Cascade Festival is usually begging for money. Tower is usually coming up short. A museum gift shop in downtown Bend bleeds money.

But nothing happens without dreamers. Trouble is, you can't chain the founders to the event they created. The woman who started the Bend Film Fest. Apparently a real ball of fire. But she's moved on. The motivating force for almost all these public venues has moved on, leaving it to the next in line, for whom it is simply a job, not a passion. Or the next in line, who's job is to try to revive the event. Or the next in line who baby sits it's demise.

Not saying it's impossible. But no one ever seems to look very closely at the underlying numbers. The long term.

It's -- "Hey, I got a great idea. Come on, Mickey and Judy, let's put on a musical!"

Usually, it's the public that is left holding the bag.

You know, for worthy venues like the Tower Theater, I don't actually mind. I'm conflicted about it. I guess I believe that most art won't be supported voluntarily. Unfortunately. So we have these stealth projects. Sure the Tower will be self-supporting (when Pigs Fly.) But, it's something Bend NEEDS TO HAVE! So, if a little deluded optimism is what it takes, it's all for the cause!

I'm not sure what the answer is. It's just interesting to see these projects lose their bloom, almost always because the extraordinary individual who spearheaded the project has moved on. I suppose Bend is lucky to attract these people. I've looked at some other towns around the NW where those people never showed up, and you can tell. I suppose it's like a business, with a motivated owner. The difference is, you can't just walk away from a business after a couple of years and expect it to survive.

A few do survive long enough to become institutions. Others seem to struggle, year after year.

I suspect that if the backers of the Tower came to the people and said, this little theater will look great, and we'll have all kinds of interesting arty shows, but it will always lose a little money. Will you pay for it? Not in a million years. So, instead, they hope for the best.

I guess, even though I'm conflicted, that I have come around to thinking that transparency is best. If the project falls through, so be it. Private individuals, such as the folk behind the Les Schwab theater, or McMenimins, will do something similar for profit. Either that, or get public financing with the understanding that it won't really pay for itself.

Saturday, October 20, 2007

Blogging is making me crazy (er).

I find myself checking for comments, way too often. I find myself checking other blogs and their comments way too often.

I find myself wanting to respond to subjects I don't really care all that much about, while taking so long to respond to subjects I do care about that I never get around to posting.

I find myself friendly with people I don't even know, who might not even like me and might be disappointed in me, and vice versa.

I find that people who meet me or know me are less likely to read my blog than people I haven't met, and people who might live far away.

I find there is always a danger that I'll not say things I want to say, and say things I don't want to say.

I find that honest is most interesting, but because I don't know who's reading, I have to be careful.

I find that most everyone else is anonymous and I'm right there, name and all.

I find that brevity is the soul of wit, but am constantly tempted to pontificate.

I find I start the day with nothing to blog about, and end the day restraining myself to no more than 3 entries.

I find I want to constantly go back and change my posts.

I find, for some reason, I don't used swear words much. Though in real life, even in my store, I can get pretty blue.

I find this "I find" structure clunky.

I find the stuff I know, that I think everyone knows, is sometimes the stuff everyone else is interested in, and stuff I just discovered is old news to everyone else.

I find most blogs pretty uninteresting, yet somehow expect people to read mine.

I find I think most people blog, when lots of people don't even know what a blog is.

I find myself making endless and pointless lists that I could probably carrying on forever.
As you might be able to tell, I don't mind complainin'. Especially if I think it might actually have an effect.

One thing I rarely complain about, is corporate behavior. Like complaining about a scorpion stinging you.

Oh, I have general complaints about the "industry" and how short sighted some of the decisions are, but I don't point out any particular company. The differences are pretty subtle, and usually depend on how much the company thinks it needs you, or whether it gives the slightest damn what you think.

In sports cards for instance, Topps has always had an Olympian approach to card shops. Sort of like barely acknowledging our existence. Which was fine with me, because at least it's the same all the time and easy to predict. Upper Deck, on the other hand, would tell you anything you wanted to hear, and then do what it wanted anyway. There was even a book written about the company, detailing it's underhanded ways. So you can always count on Upper Deck screwing you, after reassuring you.

What brought this to mind was a complaint by another retailer about yet another Yugi Oh 'exclusive' for Walmart.

Upper Deck has always been this way, from their inception in 1991. Stinkers.

They've chosen the path of screwing everyone, and simply finding the next thing to promote. Run out of victims in sports cards? Move over the card games and get lucky with the Yugi-oh license. Someday they'll run out of product lines to bilk, or make a bad decision, and there will be a zero reservoir of good will, but until then, you can count on them screwing you.

I took the emotion out of this years ago. If Upper Deck has product you want to sell, go ahead an buy it. Just don't expect them to do you any favors.

It looked for a while as though Upper Deck was going to buy Topps. If they had, I think I probably would've thrown in the towel on all sports cards. But Micheal Eisner of Disney fame (another notorious bastard) bought Topps instead, so I'll wait to see. Maybe he's the promotional genius he thinks he is.

But I'm always surprised when customers act as though the big boys care about them. They buy into the happy face, the customer is always right, advertising. Whereas, I tend to believe that if Walmart or Target could create a machine that turned you upside down at the entrance and shook all the money out of your pocket, they'd do it. And maybe have the old guy at the door to pat you on the back as you leave.

Friday, October 19, 2007

Not too long ago, another retailer on a bulletin board I go to, asked the question (the kind of open-ended essay question that gets asked when nothing much is happening.) :

"What do you think is the most important characteristic of a successful business?"

The answers were many and varied, but none of them was the answer I came up with. An answer that was immediate and obvious, to me.

The ability to think for oneself.

The ability to look at all the available facts and come up with your own conclusions. The ability to go against the grain, if need be.

Every single product line, given enough time, will make a wrong turn. Like lemmings headed for a cliff, just about everyone in the industry falls into some delusion. If you can't move to the side, and think, everyone else is wrong, we're headed for a cliff, you will just be part of the herd.

Safe practices will protect you, to some extent. But even more effective is to avoid the damn cliff in the first place.

I realize this probably sounds arrogant. I'm right and everyone else is wrong. But that's not what it's about. It's about making decisions that are in your own best interest. It's about responding to your own instincts.

To me, it's never been all that difficult to realize that we're headed for a cliff. I used to think, "Wait a minute. Could I be wrong? How can it be so obvious to me, and yet almost no one else see it?"

Usually that doubt is something that builds and builds inside until it becomes a certainty. I don't react to the first moment of doubt, or the second, but there comes that moment when you have to take action based on your own instincts.

Sadly, knowing that an industry is headed for a cliff doesn't help you save your sales, but you can start to make plans, fall back positions, limit your risk. The sales will probably disappear, but if you aren't sitting on a pile of product or bills, or you have brought a different product in to take it's place, you'll survive.

It can be kind of lonely. Everyone is saying and doing one thing, while you are doing the opposite. I usually don't try to convince everyone else, because it doesn't do any good.

Several times, I've looked another store owner in the eye, and said: "You realize this product is going down." I've all but said to them, look out! Look for something else to sell! Instead, I just wait for a couple of years, and then....they're gone.

So, think for yourself. Beware of the herd.

Thursday, October 18, 2007

Looking across the street at the eight stores going west from Trivia Antiques, 4 out of 8 locations are currently empty, with the strong rumor that at least one other is leaving soon.

I think it is truly a coincidence and not a sign of doom. One of the spots I know has been rented already, and at least 3 of the spots were vacated on purpose by the landlord.

Still, it's an interesting thing to see.

Wednesday, October 17, 2007

Anybody here play board games like Settlers of Catan, Carcassone, or Ticket to Ride as a family or couple?

If not, anyone play games like Monopoly or Risk as a family?

Had a writer for Bend Living in who was doing an article on "Family Game Night." I told her all about the European games, but couldn't come up with any names. I just sell them and they walk out the door.

Still, my store might get mentioned if she can find anyone who plays.

Her e-mail is Her name is Lee Lewis Husk.

Put in a good word for us.
How I order. Part II

It seems to me that a specialty store needs to be special.

I'm never going to be bigger than Barnes and Noble. I'll never be cheaper than Costco. I'll never have the selection and convenience of Amazon.

How do I compete?

By having a selection that is unique and interesting and different and idiosyncratic and whimsical -- you know, special.

Lets face it, some product is a commodity. That is, it's the same for every one. B & N sells the same Harry Potter book that Borders sells, that Walmart sells, that I sell. The same book. When that happens, a smaller store will often get left in the dust. Often stores try to distinguish the commodity through price. (Never mind the irony that the difference disappears as soon as the other guy also discounts....)

When sports cards became a commodity, I nearly lost my business. I had the same damn cards as Walmart, only they were selling them for cost.

Oh, there was tons of talk about making the difference through service and selection and convenience. Yes, a small store must provide all that. But in my experience it won't be enough to make up for the difference in price for most customers. Price difference will pull just enough people away to make the product difficult. 20% 50% 80%. ?? It's enough.

So we are a niche business. We carry the stuff that is too complicated and low priced to interest the chainstores, such as comics. Or is so unique that they can't figure out how to 'mass' market them, such as Stikfas or standups. Or are either 'before' or 'after' their hot selling date.

I've been selling Watchmen for years. Very well, in fact. But I know that when the movie approaches that Barnes and Noble will probably sell more Watchmen than I could ever dream to sell. But give it another year, and B & N will cut the display back, maybe carry one copy or none, and I'll sell Watchmen for many more years.

I always say, a 'niche' product is a product the mass market ignores -- with all the implications.

For instance, I sell a board game called Settlers of Catan. It's a word of mouth game, passed on from person to person. For a niche product, it sells pretty well. I fully expect it to finally reach B & N 's consciousness, one of these days. So I'll just move on to the next unique product that is under the radar.

Obviously, this requires huge effort. Constant awareness. Often difficult paths to identify and track down and get such product. Only to have it taken away in the end.

But until it's taken away, it makes you 'special.'

The other advantage to letting yourself buy a certain percentage on whim is that because you are the one who ordered it, you can translate your enthusiasm into selling. Not something you'll find at Walmart.

Don't get me wrong. The majority of your product still needs to carry the mainstream stuff that everyone recognizes. You still need to have Harry Potter if you're a bookstore. You still need to have Amazing Spider-man if you're a comic store. You still need to have Apples to Apples, if you're a game store.

But let's say I can sell 5 Harry Potter books for every 500 that Barnes and Nobles sells. Why not order 3 Harry Potters to start with, and reserve the money that you would have spent on the other two to buy a couple of copies of The Road, by McCarthy, that you just read and can highly recommend. Buy more Harry Potter when you need to, but take a chance on something different.

Eventually, if enough people come in often enough, the 'special' nature of your store will come through.
How I order.

Of course, it's more an art than a science. The Point of Sale computer isn't going to change that.

A good third of my orders are automatic -- either because they are ordered for customers on a regular basis, or are so important they simply must be ordered. I need to order 25 copies of
Amazing Spider-man every month. I simply must order the new League of Extraordinary Gentlemen Hardcover. Not only because I think they'll sell, but because they are important titles, people will expect me to have them.

Probably another third are nearly automatic, because they are classics or evergreens, and every good store must have them. If I sell Maus, even if it took a year, I need to reorder it because it's always number one or two on lists of the best graphic novels ever done, and because it won the Pulitzer Prize. If I sell any of the Preacher series, or Sin City, or Hellboy, or Y - the Last Man, or Fables. It's automatic.

Of the final third, most are newer titles that look the be future classics. I read reviews, I try to make my best guess. So that leaves me with maybe 10 to 20% of material that I can pick and choose.

I tell customers that I "try" to have every good graphic novel ever written and drawn. Of course, that's impossible. But I do "try".

When I'm increasing my inventory, I actively seek suggestions, I actively read the trade publications and websites, I keep my ears to the ground to hear the drum beat. When I'm just maintaining my inventory, I sort of let the most important new titles percolate to the top of my consciousness. If I read review after review of the same title, I'm more likely to order it.

And if I'm actually trying to save money, or even cut my inventory I ask myself, "If I didn't order this, would anyone notice?"

Even the evergreen and committed product can be cut a bit if need be. I can cut Amazing Spider-man to 24, say, and have 3 copies left to put on the counter instead of 4. I can keep one copy of Preacher in stock, instead of 2 or 3, and risk that I might be out for a few days.

The choice of having a leaner inventory, a mile wide but an inch deep, goes along with my decision to make reorders every week. I could probably save a couple hundred dollars a month on postage if I just made orders off the monthly order form, or let it ship through normal channels, but I would either risk being sold out for several weeks instead of several days, or I would have to stockpile inventory in order to have enough to last.

There was a time when making huge reorders made sense because I got higher discounts or because material wasn't available on reorder. That hasn't been true over the last couple of years, but my wholesaler is reconfiguring their discounts plateaus so it may become a factor again in the future.

As I said, I keep back 10 to 20% of my budget for whim. Instead of devoting every dime to product I absolutely know will sell, which is usually the same product they'll find in every other store and even in stores like Barnes and Noble, I like to get material that appeals to me, that I think has something extra, but which isn't obvious. It gives my store just enough of a unique, idiosyncratic nature that no one will be able to quite duplicate it.

Especially because I approach all ten product lines that way, my store is always going to have something different.

I also try to reserve a certain percentage of my budget for 'sale' product. Not just because it's cheaper, but because it gives me a chance to experiment. It gives me a chance to try something new.

I'm probably going to order a certain way because of my own bias, and I like to try to shake that up once in a while.

I've authorized Patrick to make orders every week within a budget, and I'm always interested to see what choices he makes. He's trying to keep the manga inventory up much more than I would, for instance, and I'm letting him do it because he's getting results.

My store is better stocked than I ever thought possible. Indeed, probably most of my profit is tied up in the inventory. Because I take pride in the store, I'd rather leave some of the profit where I work everyday instead taking it home but having a place I'd rather not work in. If that makes any sense.

There is no end of product. Even in my little industry. So I'm trying to tell myself to be reasonable. It's impossible to have every good title. I probably shouldn't even "try". But so far I've enjoyed being able to say, "I try to have every good title" and mean it.

Tuesday, October 16, 2007

My original plans were to keep on expanding my inventory and diversity through June of 2006, and then just maintaining. Instead, I got caught up in the idea of carrying new books and board games (having heard that Gambit was probably going to close.)

I continued to grow through the first three months of 2007, then tried to squeeze out the excess in the second quarter. Then my plan was to maintain whatever level I reached by July, 2007.

Still, I've allowed myself some flexibility. I've allowed myself to buy anything that I think will sell. I've replaced most of what has sold. So, I'm still probably spending more than I should.

At the end of summer, I cut back on my pre-orders, as I've said, but kept my reorders high.

Now, I'm even rethinking that.

Watching Brooks Resources bail on their projects, putting them in hibernation, has spurred me to rethink it yet again.

You have to realize, probably 80 to 90% of locals have never been through a downturn in Bend. Maybe even more than that many businesses have never been through it.

I have. I have no excuses not to react to my experience and instincts.

Brooks Resources has also been through this before. My exposure is nowhere near what theirs is, I'm just a tiny little business, but it wouldn't take as much to hurt me either.

I'm going to keep my budget at current levels through Christmas, but I'm also going to be watching Brooks Resource's moves. Because I figure they have a much larger pool of data than I do. For them to be reacting the way they are, they have probably been feeling it for six months or a year, been planning how to deal with it for a few months, and are going ahead because they've got enough reservations about the future -- and enough experience of the past -- to make the moves now.

Either they are smarter than everyone else, have more information and experiences than everyone else, are more decisive than everyone else -- or they're more desperate. Either way, it's an interesting wrinkle.

My guess is that they have ways of putting projects to sleep; put the project manager on half time through the end of the year, quit building anything that isn't pre-bought, let go the extra staff at the real estate offices, unload any properties that they aren't committed to, and so on. Their actual exposure may not be as bad as it looks. They owned the land already, afterall.

It may be they are sitting on a pile of cash, and can wait 18 or 24 months and buy back all the land they want.

Or maybe they're really hurting. Hard to know.

I think they understand though that the actual circumstances are more important than Bullshit P.R. That's a major difference between them and just about everyone else. Sure, Hollern says something about 'real' houses (what with him and the word real?) are selling to real people. But it's a bit of a fig leaf.

At this point, I don't think they care how it looks, because they know there is so much fluff and exuberance still in the market to get away with it. Believe it or not, from what I observe and hear at the store, the sentiment still hasn't turned negative, just slightly concerned.

I'm in a bit of the same position -- as long as everyone else is still thinking its a cold, I can bundle up and try to avoid pneumonia.

I've already cut my future exposure. The only question I have to deal with, really, is whether I should be cutting further my current exposure.

Monday, October 15, 2007

Across the Universe.

I went in all prepared to love it. I love musicals. I love over the top effects. I love the Beatles.

And sure enough, every time a Beatles song came on, the movie took flight. I especially liked the simpler love songs, the reinterpretation of meanings and tones, but also the beautiful melodies applied to a love story. The gospel Let It Be, the schoolboy Little Help From My Friends. The special effects songs were -- interesting. Over the top for sure.

I came back and googled all the Rotten Tomatoes reviews, and took umbrage at the negative reviews.

Woke up this morning and realized that the reviews were partly right. It was a very cliched story. I was amazed that the songs fit so well, but....well, the 60's were more messy than that.

What's the saying, if you remember the 60's you weren't there? Drugs weren't all fun and play and beautiful colors. Living in a rat trap was a bit dirtier and messier. And so on.

Still, it made me come home and put on the Beatles.

Makes me wonder how the younger generations will take to this movie. There were quite a few teenagers there. I know from my experience in the store that the generations following the baby boomers often take a contrarian view of the Beatles, like "quit shoving these guys down our throat."

Hard to imagine disliking all the Beatles.

Anyway, I thought the movie was beautiful, the songs were great, and the love story was moving at times.
Well, our taxes are done. Let's just say I don't have to change the title of my blog.

Linda did quite a bit better. And I can tell myself that her store wouldn't have been possible without my store. Sigh.

It comes down to the fact that I just don't spend money. I know people say that, but I really mean it. I brown bag it every day. Eating out less than once a month, more likely to be fast food than an actual sit down restaurant. Movies, occasionally. Clothing once a year, a couple pairs of pants, a shirt or two, which last half a decade. A 1990 Toyota Corolla, which I don't have to fill with gas more than once a month, or so.

Fortunately, I don't feel deprived. I have all the books and comics a man could want. Cable hook-up and internet. Walks in the woods. Long drives.

Linda pays for the occasional trips (new this year) and long drives and most of the other incidental stuff. I pay the mortgage, bought when houses were still reasonable, and insurances. That's it.

It's the best minimum wage job a middle aged guy ever had.

Sunday, October 14, 2007

This owning a house thing is sort of inconvenient. You can't just call your landlord. Our water heater has gone out; only thing I know how to do is flip the circuit breaker. It flips back with a spark. Oh, oh, that can't be good.

I google it up, and there in bright red letters are Electricity and Water don't mix!

I call an electrician, who tells me it sounds like a plumbing problem.

I call a plumber, who tells me it sounds like a electrical problem. I insist on getting some answer out of all my calling around, he tells me to take off the top plate and press the red button to reset.

I take off the top plate, and it's wet.

Game over. No way I'm pressing any electrical buttons with water around. I guess it's cold showers for awhile.

I think we're going to replace our tank with the 'tankless' type, which are a bit more expensive. Yes, it's a tankless job.

My wife has taken the little hidey hole under that stairs where the water heater is, and made a little 'Prayer Room." Sometimes she disappears and the house is silent, and I know she in there communing. So making a little more room makes sense.

A few weeks again, my wife heard a racket up on our roof. She goes out on the deck and there are dozens of ravens pulling up the staples out of the shingles on our roof! You can see the staples against the skyline. I'm hoping I can just go up and hammer them back in. We're still a couple of years from having to replace the roof.

Anybody heard of such a thing.

It's weird how many animal's misbehaving we seem to have. We're east of town, and I think in a fairly settled area (Williamson Park), but I've seen deer, and skunk, and rock chucks (many, many rock chucks) and squirrels and we have a couple crowds of quail and raven love the area. We've fought off woodpeckers and now it looks like ravens are out to get us.

The other day I found a roofing specialist flyer on my doornob. I figure the roofing company is training ravens to go out and dissassemble roofs. "And don't forget to leave one our flyers," the boss yells, as they fly off.

Saturday, October 13, 2007

This weekend would have been the last possible moment for me to get in and start setting up for my second location. Drove by the location yesterday and while a flurry of activity has taken place on the outside, the inside still looks barely framed, without walls, etc.

The interesting thing about this whole thing to me has been the landlord's time line. When I first checked out the place in mid-July, he talked about being ready in September. I laughed, thinking he was joking. I'm not a developer, but I know the old saws; renovation will take twice as long and cost twice as much as you expect. (Or is it one third? Whatever, longer and costlier for sure.)

See, my original idea was to go in on the first of the year. He wanted me to to in on the first of October. We settled on the first of November.

By the time he finally got a lease to me, a month had passed, and it was clear to me that even the first of November was optimistic. One of the appeals of the idea was that I would have plenty of time; I wasn't looking to be a stress puppy. For instance, my wife still hasn't got her full quota of bookshelves, and I would have needed even more of them. So I wanted plenty of time to absorb all the misadventures and miscalculations.

I asked for a December 1 starting date on my rent, BUT with the understanding that I'd want to open a couple of days before Thanksgiving. Once he insisted on me renting before the first of the year, I became enamoured of the idea of setting up in time to scoop up some Christmas booty.

He presented me with a November 1 starting date.

So that's the confusion for me. How can I, who have none of the inside info on permits and contractors, etc. realize clearly that there was no way it was going to happen, and the landlord, who supposedly wants a viable client, not see?

It turned out to be a moot point, really, because he stuck in that nasty 6 month buyout for 3k clause, which I would've been crazy to accept.

But if he had offered me the December 1 date, I would have at least inquired if the buyout clause was negotiable. Who knows.

So the clock is ticking. When will it be fully finished? When will it be fully leased?

It will be ironic if it turns out to be later than Jan.1, 2008.

Speaking of Developers. If I was the guy who bid 3.5 million for the land on the corner of Greenwood and Wall, and I saw that my competitor had offered 1.4 million, and the Bend Urban Renewal Agency told me that the price of the land wasn't the most important factor, wouldn't I just lower my offer by, oh, 1 and a half million dollars or so? And if I was the cheaper guy, wouldn't I up my offer by half a million or so? Aren't we, the taxpayers of Bend, likely to end up with a bid around 2 million instead of 3.5 ?

Good job.

Friday, October 12, 2007

A couple of days ago, I was asked if there wasn't a way to increase sales locally. (good question, jeff.)

The short answer is; yes.

The long answer is; no, at least not in a sustainable and cost effective way.

There are two reasons for this. One practical, and one philosophical.

The Philosophical reason first.

I believe that business happens in cycles and rhythm. That there are waves. That you are best off riding the wave, adapting to the cycles, and falling into the rhythm. Accepting the level of business you are given.

This goes against the go-getter, hard-charging perception of American capitalism.

To break it down further, I believe there are salesmen/dealmakers....and then there are shopkeepers. And they aren't the same thing.

I've gotten to be a damn good salesman after all these years. But I don't utilize those skills with every customer. I want each customer to get what he wants and needs, not what I want him to want and need. When I'm on, I can get people to buy stuff they don't really want, or more than they want.

Like a bartender, I don't want to sell too much potency to a single customer at a single sitting. I want him to come back, day after day, getting a moderate dose. I don't want him to have a buying hangover, a buyer's remorse.

Like triage, I try to use my skills where they are most needed. I size up the customer and try to figure out if they are casual, hardcore, or just looking. Sure, I might by dent of sheer skill and effort, be able to sell something to that guy just looking, or sell more to the casual customer than they expected to buy, and so on. But that is very short term thinking.

I can't tell you the number of store owners (dealmakers, actually) I talked to over the years that were proud of getting an extra 5.00 out of a customer in a trade. (I don't trade anymore at all, by the way, because it's a 'service' that seems to lead to bad feelings way too often.)

"Were they a regular customer?"


"Then why would you burn them over 5.00?"

It's why you sell your last item to a regular, even though you know you could get more on ebay. It's why you sell your own copy to a regular, even if you wanted it yourself. It's why you don't buy 'hot' product to the exclusion of mid-list product that your regulars want. It's why you don't jump on every customer who walks in the door and aggressively try to sell them something. And so on.

I've reached deadlines before where I need to scratch up some cash, and I've found that if I really put a full court press on everyone that walks in the door, including dealmaking and sales, I can often come up with the cash.

But I would face burn-out very quickly if I tried that every day. Burn out both personally, and burn out of customer good will.

So you get the rhythm down and go with it.

The second reason is more practical. For the past 3 to 5 years I've been adding inventory; new product lines, fuller product lines. Over the last 3 years I've probably been buying several thousand dollars worth of material a month, and trying to break even on it. (If I buy 5k extra, retail, and sell 3k of it at 40% margins, I don't lose money.)

I've been fine with that. It has helped sales, established new lines, evened out the level of sales.

As long as I had money in the bank and could cover short-term cash flow, it made sense to do it.

Until this summer.

I don't have another inch to spare.

Anything I buy extra would have to take the place of something I've already bought, which wouldn't be very cost effective.

It had to happen eventually.

But of course if I'm not getting an extra 5k of product every month, my sales are going to decline. It almost has to. But my profits should actually be a bit better.

So, I'm watching the cycle, the rhythm, looking for another wave to ride.
A young woman and her mom came in yesterday and asked for my advice about opening a dress shop (a women's clothing store.....) on Minnesota.

Imagine my surprise ~~~~~~

"Er, you know I'm pretty skeptical of high end businesses?"

"Oh, yes. My sister" (a good customer of mine who'd obviously overheard one of my rants) "suggested that I get the negative side from you."

Heh. Nothing like having a reputation....

"I see. Well, how do I put this in a way that won't I squash your little heart? You see, we in Bend like to take your money, spank you, thank you, and send you on your way...."

Well, that's what I wanted to say. Here's what I actually said.

"You realize there are already 6 dress shops on this street?

"You realize that Bend relies on tourism, especially downtown, and that we see that tourism mostly in 4 months?

"You realize that Bend has a population of only 78k and most of them don't shop for dresses in downtown Bend?"

"You realize that most of my longterm neighbors left because they thought rents were too high?"

"You realize that most downtown businesses are relatively new and aren't proven moneymakers yet?"

"You realize that there has been a high rate of turnover in the downtown area?"

And so on. Gently trying the Socratic method of enlightenment.

But a store owner will do what a store owner wants to do, or they'd never be store owners in the first place.

I sent her next door to the jewelry guy John who is still pretty positive after 3.5 years. And I sent her down to the road to a long established dress shop where I know one of the owners and thought there was a decent chance that if they mentioned that "Duncan sent me," that they might get some information they could use.

I read once, that the Small Business administration up at the college felt they were doing their job if they put prospective owners through the mill and made them realize on their own that maybe their business plan wasn't workable.

Maybe I should've been cruel to be kind.

Then again, maybe she's a genius that will surmount all obstacles and become Chanel number 6 and tell interviewers in decades hence about that awful little man who told her she wouldn't make it....

It's a lot easier to make advice to the cyberworld than to have some eager young person ask you to your face.
There is a model of game stores that allows for game space and tournaments. It was THE ANSWER for a couple of years, but having been through similar ANSWERS before, I was skeptical.

When Gambit closed, the town was left without a game playing space. I thought about trying to squeeze in just enough movable fixtures to create just enough space to have modest sized tournaments.

I thought about it for about 2 days.

On the afternoon of the second day, I had a guy come in and say, "I'm new to town. Where do you guys play tournaments?"

"Funny you should ask that, because we were thinking about doing it. In the meantime, we have all the brands in stock."

"Oh," he snorts dismissively. "I only buy online."

End of my dalliance with game space.

That may seem like an over reaction, but what it was was a bracing reminder to me of why I didn't go that route in the first place. And a reminder that Gambit Games, in the end, didn't have as much loyalty from the player base as it needed.

In every surge, there is that initial golden age when customers buy your product at full retail without any complaints. Indeed, they seem happy you have it. You expand your services which causes even greater happiness. Then, somewhere around the peak of the surge, the customer who has always bought from you will come in and not buy anything and talk about the new product knowledgeably. Oh, oh, you think.

Then , the next trip they'll finally let slip, they bought it somewhere else, online or brick and mortar. But don't worry, they still love the services you offer.

Uh,uh. The services are there because you buy.

So you start to scale back.

When Gambit closed, I upped my order on the next release of magic, and probably sold it -- slightly -- better. Not dramatically, though.

A local group developed that played at private houses. Had a couple of representatives of that group come in last week and ask if we were going to have a sale on magic.

"I always sell the magic boxes cheaper the first week. We'll be charging 100.00."

"Great! We're going to need several boxes."

So I get on the phone and up my order by 4 boxes.

Yesterday afternoon, I get a call from one of those guys. "We were thinking about buying a case of magic (6 boxes) for 450.00 online. But we thought we'd check with you first. I believe in buying locally."

That's 75.00 a box, folks. Or roughly our COG's since we buy from a distributer.

So the guy wants to buy locally, as long as we give it to him.

I just told him, thanks but no thanks, and our boxes are 100.00 and thanks for thinking of us.

I've been down that road before, and it doesn't lead to a good place. I'm better off not even starting down that road.

Even if I was buying directly from the company, the largest profit I would make would be about 5.00 a box, or a grand total of 30.00.

On the other hand, if I sell 8 packs for 4.00, regular retail, I make 2.00 more and still have 208 packs left.

We've entered the suicidally competitive phase (again) of magic, and the end result is the product will be so devalued that nobody but the online shysters can do it. Game stores will continue to drop like flies. And game customers will continue to wonder why they can't find any place to play.

I'm not actually mad about it. It's human nature. But it is why I've constructed my store the way I have, with 10 product lines. I take what the customer is willing to give me, but I won't cut my throat right in front of them to gain their business.

Thursday, October 11, 2007

A plateau that looks like the Matterhorn.

Apparently, the Bulletin has absolutely no sense of irony. Check the headline on the left hand side of the business page: Market Looks to be on Plateau for Now.

Then look at the graph to the immediately right. The red graph of Bend home sales. A straight cartoon picture of a mountain, with a very steep slope up, and and equally steep slope down.

But ignore that. Never mind the 30% cancellation rates, it isn't as bad as it looks. "It sure doesn't feel that way," DuBois said.

Whew. Now I can quit worrying.

Wednesday, October 10, 2007

Intuition in small business is so important, and yet so unreliable.

I've often made the comment: My mood is directly proportional to how much money I made that day. Give me three or four good days in a row, and even if the overall trend line is down, I still feel pretty good, and vice versa.

At the same time, I've often had the feeling of things being slow, even with business being good, and vice versa. Mood versus feeling, if you get the distinction. The trend line is probably most important, but I've let feeling trump that more than once.

When business fell, from 1995 to 1997, there didn't seem to be anything I could do about it. I reacted strictly to the numbers, but eventually reached such a low ebb that another six months we would've been out of business. When I had a woman come in and offer to sell me her excess Beanie Babies, it was both intuition and desperation that made me leap at the chance.

That saved us for another year, by the time Beanie Babies started to slide, I looked around me and tried to find something else to push. The only corner of the store that I felt had any chance of coming back were the card games. I took a chance and reinvested.

A few months later, Pokemon hit.

So a combination of looking around and trying to find the one product line that had potential, and pure intuition, led me to making the right decision.

It can't be pure luck when I keep finding the one product line that will bring in income.

Right now I'm trying to decide if it's gotten slower because of the internal dynamics of the store (not ordering lots of extra material has got to impact), or whether it is the comic industry, (getting reports from other stores that have seen the same kind of increases I have over the years who are also slowing down), or whether it is local economy, (there are empty parking spots in front of my store, and regulars are making noises about cutting back), or whether it is the national economy (the possibility of recession.)

Totally made up apportionment of blame would be; 50% store, 20% industry, 20% local economy, 10% national economy.

On the other hand, the downturn is so small so far, it might just be normal variation.

My intuition, though, is to be careful. And I think all the facts back up the intuition.

As I was writing this, I've been watching a gray squirrel, (a very young squirrel, it looks like), a new resident of our backyard, scurrying around. He scratched a hole in the ground, buried something, and ran off. Not 30 seconds later, a blue jay landed at the same spot, dug up whatever the squirrel buried and flew off.

Oh, yes. I know it well. Cut throat competition.

Tuesday, October 9, 2007

Had a fourth/fifth grade class from Highland (or what used to be Kenwood, my old school, why did they change a perfectly good name?) come into the store yesterday. The teacher, Kami Green (spelling?), had been shocked that not only didn't the kids read comics, they basically didn't know what they were. She mentioned she wanted me to talk about 'superheroes'.

I had thought about preparing a talk of some kind, but when I started preparing, I realized that I had all the info in my brain and thought I would wing it. If nothing else, I thought, I could hope they had questions.

At 1:00 in walks 32 kids! with 4 adults!. My store was packed like sardines while 32 little faces looked at me with innocent expectation. It was a little overwhelming, and I felt a little flustered.

So I started my little lecture....oh, oh, I'm losing them! Silver age, golden age, smoolden age...they didn't care. In desperation I throw the floor open to questions.

That at least hold their attention, if nothing else my flailing around trying to answer probably entertained them.

The teacher asks me the 'significance' of superheroes. Why are they so popular?

Good question. I draw a blank, I mumbled something about 'archetypes' -- to fourth graders.

All in all, I thought I rather botched it. Not completely, but I'll certainly try to be better prepared next time.

The one smart thing I did was to lay out a stack of free comics from Free Comic Book Day. Made sure they were appropriately aged.

Some stores actively seek out such events, whereas I felt it was my duty....but frankly would rather avoid. Still, it was interesting.

Asked at one point how many of the kids read the comic strips in newspapers, and almost every kid raised their hands. All four adults broke at laughing, and said, "No way....."

I rather lamely said, several times, "You should try reading comics. You might really like them."
But I don't really expect to create any new converts. Takes more of that. Takes a cultural change, of kids roaming around, finding comics, reading them. A culture that existed....oh, 20 years ago....

Monday, October 8, 2007

Did my taxes over the weekend. I just throw every receipt into a box, then once a year lay them out on the living room floor, add it all up, and go see my accountant. Went in to see Gary this morning, and as usual, feel this huge sense of relief that it's done.

For the past 4 years, my wife has been going in with me. With her taxes, all neatly accounted in rows from her laptop computer. Turns out, she a better business person than me. Turns out, she makes better money than me.

Last year, apparently, she went into the accountant's office and proclaimed, "I don't want to do this catching up thing anymore. I want to pay estimated taxes."

So, surprise, surprise, we are probably caught up on taxes for the first time in my 24 year career.

I asked her if she wants to take over my business, too.

Sunday, October 7, 2007

I'd love to be able to take the Bulletin's article on Bend's economic growth at face value. Nothing would be better for my business than the picture they paint. But it's almost like I've been trained by past articles to look for the hidden darkside.

The most obvious problem is that it talks about the growth in the GDP from '01 to '05, which I'm afraid is a little like talking about the stock market growth from 1925 to 1929 -- when its 1931.
A glimpse into the bubble isn't going to tell us much about what's happening today, is it? It's the past. What's likely to happen in the future?

Secondly, I've never had much doubt we were attracting some wealthy people to Bend. How much of the GDP is attributable to the wealth they brought with them, even the wealth that was created because of the wealth they brought with them? That is, can they sustain that wealth now that they actually live in Bend? I think that remains to be seen. I sure hope so.

Will they leave if they can't sustain that level of growth? I doubt most of them will, which means that most of them will have to accustom themselves to a different level of growth and sustainability. If they can sustain even a major portion of that wealth, then Bend will have accomplished a transformation that will be in the textbooks. It's possible, but not likely.

Meanwhile, a third of the job growth in Bend is housing related industries. I suspect it is much higher than that, not to mention how many jobs are dependent on the money generated by those relatively high paying jobs. (I'm not clear, for instance, if financial services are included in that third, if not they should be.) I suspect that much of that work is in abeyance, and that we'll see a pretty high layoff rate in that group.

My guess is that much of the GDP that the economists are talking about is churned money, brought in from the outside. If you bring 10k from somewhere else, and enter it into the Bend economy, that enters into the GDP growth. But is it generating any money, or just being used up and spit out.? Because I think that if Bend has a genius industry, it's taking other people's money and creating buildings like the Old Cigar Building (a beautiful corpse) and letting birds of a feather lose their money together.

Saturday, October 6, 2007

To crank, or not to crank.

I have a friend who started warning me about the eminent collapse of the American economy about 25 years ago.

His reasons were many and varied, but they were well thought out, logical and rational. He is an educated man, with common sense, who ran a business in Bend for years and sold it for a profit.

25 years later, the reasons for an eminent collapse of the American economy are different, but just as compelling.

Someday, he'll be right. But as John Maynard Keynes is said to have said, "Someday, we'll all be dead."

When I first stumbled across the first BendBubbleBlog, it only confirmed what I'd been thinking for a couple of years. But in a way, the purpose of that first blog was to argue that there was a bubble, in the face of seeming prosperity. When the founder of the blog quit, (was that BEM?), he made the logically consistent point that the bubble was proved, and there was no further point talking about it.

As I've said before, either you think there is a bubble, and there is no real way to reason out the ways and wherefores, or you still think you can reason them out, which means in your heart of heart, you don't really believe in a bubble.

Still, with the jobs reports coming in strong, the stock market reaching new highs, I find myself slipping into the 'crank' camp. Because I keep looking at the local conditions and I can't imagine we are going to escape unscathed.

I've always thought the stock market was a different phenomena -- it goes up because people want it to. I've always thought the national economy was likely to shake off the effect of the housing bubble, and I've always thought there was a good chance that Bend would escape dire consequences simply by wearing blinders and bulling on through.

I guess where it stands for me, is one more major economic shock -- stock market falling, terrorist attack, China pulling the rug out from under us, some 'Black Swan' event, something like that, and we are in big trouble.

Otherwise, we'll just humbug and huff and puff and change the subject and look for the silver lining and so on....

Because, despite all the good reasons to be careful, humans have a great capacity to just keep on truckin....

Friday, October 5, 2007

You can't outsmart a bubble, because there is no smart in bubble.

A bubble will wear you down. It will last so long, and seem so strong, that even skeptics will start to look for reasons. They will see people seemingly getting rich, and the desire to join in gets stronger and stronger.

Even when the bubble pops, people will stay wedded to the illogic.

But the mostly coldly logical guy will come out ahead. The guy who is willing to cut his losses, to sit on the sideline and wait and wait for the bottom, and then buy when the psychology is worst. How many people can do that? Not many.

But I can at least try to sidestep the bubble. By constantly reminding myself that while I can't do anything about the bubble or its bursting, I can try to deal with the consequences. And the best way for that is to take my worst case scenario, and double it. (I have to do that because....despite everything you might think....I'm really an optimist. Optimism being the triumph of hope over experience.)

Rather alarmist sounding, I realize. I'm not saying we should build bomb shelters. I'm just saying, try to imagine a world without the bubble. You're in the bubble, so it's like Sherlock Holmes trying to imagine Arthur Conan Doyle, but try.

And realize its a bubble and has not reason. Don't try to outsmart it.
I hate to harp on this, but it's almost like the bubble bloggers don't really get the bubble.

A bubble has nothing to do with reality. It's a bubble, an illusion, and when it bursts, it disappears.

There is an inner core to every bubble, an inner reality. The bigger the bubble, the further you are from that core, the harder it is to see, the more the bubble distorts.

The bigger the bubble, the more it is going to hurt.

I could make the case that Bend, Oregon has had the BIGGEST bubble in a huge national bubble.

So, NOW you want to talk about supply and demand? About land and material prices?

What part of bubble don't you get?
Real estate folk are nothing if not persistent. Housing prices collapse? It's a buying opportunity!

The latest thing I'm hearing is that we need to create more buildable land, thus should extend the UBG boundaries. More land would lower housing prices.

I just can't see this.

If the price of the land was the main component of housing prices, then all those houses that were built before land prices went up should be cheaper still. Hell, any houses built with cheaper materials, with cheaper financial services. That isn't happening, because the main component to housing prices is.....the going rate. I don't believe that when I had my house appraised last time, they asked either the original land price....or for that matter, the price I paid for the house.

Ask yourself this. If supply and demand were strictly functional, wouldn't the huge supply already be bringing down prices? I think they are, but the prices are sticky, and people don't want to sell for less if they can help it. More land wouldn't change that psychology in the slightest.

Only if the government absolutely mandated the prices be held artificially low. They'd have to create a lottery system for buyers, because who wouldn't buy a house that was 1/3 lower?

Well, lots of people. Because again, the psychology of the buyers and sellers. I've heard complaints for years that sports cards were too expensive, yet every single time a cheaper brand has been created, it has been rejected by the consumer. "That's junk," the customer will say. "But why do prices have to be so high on these other brands I want?" Hey, I got news for you, buddy. All cards are made of paper, and all have pictures of players on them. The 'value' is created by the marketplace, not by the frakken material.

What would happen if another 500 houses were suddenly created on lower cost land? What's more likely, that those houses would sell significantly below the going rate, and that would force the other 2000 or 3000 houses to lower their prices? Or that the 500 houses would be near the median price, pricing themselves at the going rate? I'd be willing to bet that prices would be dictated by comparable prices, and not the other way around.

So you have to admire the real estate people for trying to create an even bigger glut of housing. Takes real hubris.