Shifting the dollars.

Oh, Bulletin. Is there no end to your quirky little ways?

Front page of the business section, reports that car dealership sales have "shifted." From trucks and SUV's to smaller cars.

That's like saying that my sales have "shifted" from graphic novels to comics. From boxes of sports cards to packs. From statues to toys. Fine. But if you read the article, it's clear that their overall sales are -- dare I say it? -- down, down, down.

There is a reason the car market has pushed the big trucks and SUV's all these years -- because they make a whole lot more money from them.

From now on, though, I'm not going to say my sales are down, only that they've shifted. I'm not gaining weight anymore, I'm redistributing the pounds. I'm not getting older, I'm processing. I'm not spending money, I'm just moving it to another place.

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Sounds like they came to their senses about the parking lots, and are going after the actual offenders, not the general public.

Must be an election year.

I do have a suggestion, one that I've made to anyone who would listen: give the employees their own lot at minimal fees -- no more than 25.00 a month, and 10.00 or 15.00 would be better -- but make it the second to the top floor of the parking garage. Even better, FREE parking just a block or so off city center.

45.00 a month is a lot for a half-time, minimum wage earner -- close to 10% of their take-home pay. We need to figure out a way to make it easy. Otherwise, they'll just keep playing parking tag. Even if that is foolish, and costs them way more money in the end.

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Diamond; three legged critter.

The is another shoe to drop in the discount levels; I know, that's the third shoe, but Diamond Dist. is a very strange creature.

Now that DC and Marvel have set their discount levels, it's probably time for Diamond to firm up it's discounts levels, as well.

I have a suggestion: count all product.

Our monthly catalog from them comes in at roughly 600 pages and roughly 5500 items. The first 200 pages or so are the big four comic publishers: Marvel, DC, Dark Horse, and Image, who nationally account for about 80% of all comic sales. The next 200 pages are all the other comic publishers.

Followed by separate sections.

Magazines
Books
International Books
Trading Cards
Apparel
Toys, Statues, Models
Designer Toys
Import Toys
Prints and Posters
Novelties
Games
DVD's.

Everything a pop culture store could want.

It's very handy, all in one. Because Diamond is more or less just a distributor, they give us access to a huge amount of material that otherwise would be out of reach, either because of discount levels, minimum orders, or just the sheer work it would take to set up an account with each manufacturer.

The downside is, that I need to order months in advance, and if I miss something, there is not much likelihood that Diamond will have it it stock. I have to grab it as it goes by, so to speak. Only I'm guessing how much I'll need in the future.

I could easily supply my store strictly through Diamond; at about the same discounts as I get otherwise. But something has always made me keep other distributors active. Something inside me rebels at putting all my eggs in one basket.

But Diamond has also made it easy for me to use other distributors. The discount structure is set up so that the 'exclusive' publishers, (most of the comics) which I have to order through Diamond because of their monopoly, usually gets me to a discount level that doesn't budge much with the addition of other product.

The biggest hurdle is that they have a large amount of 'net' product; that is, product without a SRP and without a discount. Almost all the trading cards and DVD's; much of the games and toys; don't have discounts, giving me absolutely no incentive to order through Diamond. Nothing I order that is net counts toward my discount.

I prefer to order more on a 'just in time' basis from other manufacturers for most of that product.

And because the comics have always ensconced me at a certain mid range discount level, I really don't have much incentive to order books from them, either.

So I order all my trading cards, almost all my games, most of my books, from elsewhere.

I do order all my toys from Diamond, because Toy Manufacturers are impossible to deal with; they have huge minimums and lousy discounts.

All this is leading to a suggestion I've made once on Comic Industry Board, where I'm given to understand Diamond lurks.

Make the games and toys and DVD's and trading cards count toward a higher discount, and you might get more of my business.

I don't know if other stores, especially stores that are focused on mostly comics, would much like this idea.

So my second suggestion is to have an opt in, opt out type discount. That is, you can opt in to have the back of the book product count toward your discount, or stick strictly to the front of the catalog.

I'm kind of torn by this suggestion. As I said, I like ordering on a 'just in time' basis, and many of my other distributors have more or less free shipping.

But I wouldn't mind having the option.

The budgeting entry has started a whole string of thoughts.

For instance, one of my pet projects is (are?) art books. I have hundreds of art books, probably close to 1000's. They were lovingly assembled over the years, because I usually only have a short time to get them before they go out of print.

This goes back to the days of my Tolkien Hildibrant calendars (as atrocious as I now think them) and the Frazetta Conan covers.

I started with strictly fantasy and science fiction art. Then weird pop, such as Basil Wolverton and Big Daddy JRoth. Then I added pinups, then Art Nouveau and Art Deco, then Howard Pyle and N.C. Wyeth and Maxfield Parrish and their illustrator brethren, to pre-Raphelite and 19th century art, to impressionism, post-impressionism.

Pulp artists like James Bama and Robert McGinnis and Jack Vettriano.

Anything that has the slightest 'fantasy' flavor -- which turns out to be anything.

Tell me Van Gogh and Cezanne don't fit the bill; or Edward Hopper or Alex Gross. Artists like Gustave Dore and Diego Rivera and Escher and Dali definitely fit the criteria.

My perimeters has broadened to the point where, well, just about any art book is fair game.

Makes sense. My Mom was an art major, and our house was full of art books. I used to spend hours browsing, looking at the art books. Dad had the big history books with illustrations, and as I said, the classic illustrators like Wyeth. I plastered the walls of my bachelor pads with cheap art prints.

When I was young man, I visited a friend in N.Y. who took me to Moma and Met. He had to explain Art Deco to me, and other art movements, and I was sort of embarrassed. I came back and spent a summer reading art history volumes, watching the Shock of the New on PBS.

I found that there was little art I didn't like. I love modern art. And I love classic art.

I'd like to pretend that I immediately recognized the value of comic art. But it took time to realize that I dismissed most comics not because I was sophisticated. But because I was ignorant and biased. I simply didn't know enough to judge.

Eventually, I came to recognize that there was a level of quality that would astound most people, and then it took me even longer to recognize it in the older comic art. I came to see even simple line drawings like Peanuts, and Calvin and Hobbes, and Bone has having a world of expression and artistry.

So when I bought my own store, I was a real sucker for art books. It wasn't a problem at first. There was very little offered to me from the distributors.

Then I found Bud Plant, and that was my downfall. I only had a year or two to order from him before he became a online only, retail only presence. But I was completely taken in by his esthetics's. I'd love to have a brick and mortar version of the Bud Plant catalog. But of course, even Bud Plant doesn't have a B & M version, probably for good reasons.

I believe a store in Portland, for instance, could have a heavy presence of art books and do well. But I'm probably wasting my money in Bend. Maybe in Portland. But it would be cool.

I've done it so slowly, it hasn't really hurt.

But here's where it gets slightly ludicrous. I have 95% of those art books (which aren't cheap, by the way) spine out! How ridiculous is that? Hiding my light under a bushel, for sure.

So, when I triple my bookshelves later this month, I'm going to resist the impulse to immediately fill them with new books, but try a little harder the display the wonderful books I already have.

Damn budgeting.

There is no doubt that this budgeting process has been good for my business.

I can see it in all kinds of ways. My cash flow has easily covered the bills in a timely manner, and the savings has never been threatened. I've paid off one card in full, and I have been making substantial payments on the other. I'm not carrying any balances with my suppliers. And I'm doing at a time of year that is usually my toughest.

So why does it feel so unsatisfying?

First of all, I've never really done it like this before. Or, rather, I've never done this when I didn't absolutely have to, when my back was totally to the wall. I've cut back many times before to raise capital to pay overdue debt or taxes. But that was different somehow. For one thing, I was terrified, and motivated, and adrenalinized.

This time? It's for my own good. Yep, like caster oil. Like going on the wagon. Like dieting. Like exercising. Like taking vitamins, or shaving, or taking out the trash. Like doing the dishes, and pulling weeds. It's a damn chore.

The changes are incremental, and below the surface. Look, say I owe 10k on my credit cards. If I pay off an extra 500.00 a month, I'm making progress, but it may take twenty months. At the end of the day, though, all I feel it is costing me is 500.00.

Here, I'm paying an extra 3 to 4k per month. It still takes me 3 or 4 months, but in the end, in a sense, all I'm saving is that 500.00 payment.

I know, I know. That isn't what is really happening, but that's what it feels like.

I also feel like I'm in sort of in a holding pattern.

I've obviously become a risk junkie; just as bad as climbing mountains, or rolling the dice in Vegas. I just love that feeling.

If I went out right now and bought a 1000.00 worth of stuff, I'd be excited for a week, trying to stock it, display it, show it off, checking it out and exploring it, and -- oh, yeah-- trying to get the money back.

Not spending a 1000.00 bucks? Yawn.

Catching up on bills? Yawn.

In a sense, the money I'm not spending right now isn't the 'keeping the store well stocked' money -- I'm keeping that going. I'm keeping the new material, the best sellers, the basics. Nothing has changed.

No, the money I'm not spending right now is the' play' money, the 'have fun and try something new' money, the 'let's experiment and see if it works' money. It's why I read the trade publications, and peruse the web, and keep my ear to the ground. It's the stuff that intrigues me and interests me. I've already read the Watchmen; so obviously I'll keep that in stock. The store continues to do well because there are still plenty of folk who haven't read the classics yet. But what about material I don't even know about yet?

I'd also like to find the occasional 'Fun Home' which totally surprised me with how good it was; the occasional DMZ or Criminal, that I didn't expect to like so much.

Or the weird looking toy that I know will excite comment, but probably take a long time to sell.

Of course, you probably are saying, I should let go of the 'play' money. Entire books are written on the subject of selling established, proven sellers.

But the exploring, the playing with inventory, is what makes this job worth doing. The trying new things is what keeps me interested. The turning people on to something they've never seen.

What I'm trying to tell myself is that I've been playing in heavy traffic, so to speak. I need to build a fence before I start playing again.

I don't want to overstate my case. Of course, I'm getting new material in every week. Because of the nature of a pop culture store, 'new' is the default position. What separates my store from others is that I've made more of an effort to keep the 'mid-list' quality product, and the outside the normal material.

For example, when I was a kid, my parents subscribed to the New Yorker. I'd read the cartoons every issue. They also had Saturday Evening Post cartoon collections and such. I remember becoming aware that my favorite cartoonist was a guy named Gahan Wilson. Over time, I became aware of other names, such as Charles Addams and Edward Gorey, and Jules Feiffer and Shel Silverstein, and eventually cartoonists who's art I recognize, but not the name, such as Ronald Searle's. One of my projects has been to assembled as many of these cartoonists as possible.

There are modern practitioners of this level, who do 'comics': Troy Nixon, Renee French, Rick Geary, James Kochalka to name a very few.

It's a "I like it so I hope others will like it" effort. Not at all necessary, but fun and completely unique to my store. I'll be going back to it as soon as I've created a firewall. As soon as I'm out of the heavy traffic.

Back to the budget.

At least half to two/thirds the money I save in the budget is going toward debt, and pulling in the slack in my cash flow. I'm addressing a problem I wasn't really feeling. Cash, if there is any, will come at the end, so I don't get to chortle over the money, money, money.

In theory, I'll be able to use the money I normally make at Summer and Christmas as actual, honest to goodness cash profits, instead of just paying the debt I incurred over the previous months.

Almost every year, I would go deeper and deeper in debt to keep the store up, almost accelerating toward the end (the more you owe, the more tempted you are to buy your way out of it.) That may sound crazy, but it has almost always worked. At least, I'm usually caught up at the end of summer and Christmas. But....with little left over for the next off season.

I'm bound and determined to turn that around. It's a great time to do it. There's a slowdown, which creates less outward pressure. My sales are high enough to keep a steady flow of material coming in, even now, at the proper discounts. The store is full. I have almost no competition. I know how to do it. So far, I've been doing it without much real effect on sales.

If not now, when?

I could've done this last year, or even the year before. But business just kept increasing, and I went with the flow. (Despite my deep suspicion of the boom.) What has been the final motivator is the fact that I will need to renegotiate my lease in the not too distance future. I have a few good seasons to prepare. I really can't delay much longer. The idea of a recession is just a further motivator.

I know at the end, I'll be very happy I did it. But right now it's just feels kind of like trudging.

Iron Man musings.

Robert Downing has the bad boy charm, and the soulful eyes to make the character interesting. I'd watch Jeff Bridges read the phone book. There is a robot academy award for best supporting robot. And Gweneth Paltrow is visually ravishing.

They keep saying Iron Man is a secondary character, but I've always thought the secondary characters are more interesting in some ways. I get way more comments on my Green Lantern t-shirt than I do from Batman or Superman, for instance.

And the movie had lots of Mech, which makes it very modern, somehow. But they kept enough of the old clunky armor to give it some steam-punk.

I'm not trying to be a movie reviewer, here, but I think this movie has hit the national zeitgeist somehow. Don't we wish we had a guy who could fly into a village, kill the bad guys without touching the civilians? This isn't just adolescent power fantasy, but power fantasy for all of us. What would we do if we were super rich and super smart? We'd play for awhile, and then we'd get serious.

Ah, well.

Downtown turnover.

“It’s been dead down here,” she said. “It’s like the ’80s.” Linda Torres, owner of the soon to be gone Book Barn.

"Interesting piece. In raw numbers though, it looks like more are leaving than arriving.

(SAYS: I Hate Too Burst Your Bubble.)

And some of the additions see, well...

A hat store?

Nothing but clothing retailers & restaurants.

I've seen what are the beginnings of that Blue Moon Marketplace, and that could be interesting. But the location?

Far & Away the most interesting quote is the highlighted one by Torres.

How bad is it Dunc? I thought I heard you rolling your estimates down over the course of this year.

Anyway, a decent piece on what looks to be a pretty heavy net outflow from the downtown core, with a partial replacement by some total noobs."


Duncan's Answer:

If you don't mind, a 'yes, but we're different answer.'

On a scale of 1 to 10 for walk-by traffic, Pegasus has spent most of it's existence at a 2 or less.
For the last three or four years, that shot up to a 7 or 8.

Meanwhile, the Book Bark probably has been in the 7 or 8 range for many, many years.

Now? We may have dropped to a 5 or 6 in foot traffic, and so has the Book Barn, probably. So while I'm still doing way more foot traffic than I was accustomed, Linda (Torres, by the way, not my wife-- already had someone make that mistake) has probably seen an overall drop.

We also have maintained the 70 or 80% destination by regulars status, whereas most downtown stores are probably the reverse of that.

You can sort of feel it, as I've said before, just by the number of parking spots outside that are open. I can sort of feel it when I walk to the parking garage and see the restaurants don't seem very busy. And there are still stores that I walk by every day that never seem to have customers.

Pegasus has gotten a bit lucky. Pop culture has surged to the fore -- the Iron Man movie being an example. I'm optimistic. We had a HUGE turnout for FCBD.

But yeah, our sales are down from a year ago, and I had been guessing that other downtown stores were feeling it. As bad as the 80's? Oh, that was -- shoot a cannon down the middle of the sidewalk and not hit anyone -- bad. If it ever gets that bad, most of these noobs won't last a month.

I have to say, I think the number of new restaurants and new clothing stores is simply nuts.

New stores don't mean much, except the the downtown is a desirable location. It doesn't mean everyone is thriving. Just that there is another noob for everyone that leaves. I don't expect this to change for awhile, yet. So far, I haven't seen any boutique location stay vacant very long on Minnesota or Wall.

The Life of a Small Business.

When someone comes in and tells me that a new business is doing great, I usually refrain from answering.

Could be, could be. More likely, not so much.

Anyone with an ounce of effort can look successful in the first two to three years. Obviously, based on results, most people aren't. If their overhead is just the lightest bit too much, their margins just the slightest bit too little, their sales just the slightest bit too low, then they could be bleeding internally and not really know it.

I've always said that most people can do two out of the following three things; overhead, old product, and new product. Few people can do all three things consistently month after month, year after year.

Some of the words I'm going to use to describe phases in business may sound pretty negative. But remember there are all kinds of positives going on at the same time. You are your own boss, you're (hopefully) having fun and being challenged. The following are the downward pressures on a business. So try to keep both concepts in mind at the same time, O.K?

(Notice also, that I'm talking about motivation more than money, because it is at least as important, maybe more so. Strong motivation has more of a chance to overcome lack of money than money has to overcome lack of motivation, in my opinion.)

Disillusionment: So....any one can appear to be successful for 2 or 3 years. But there may be creeping dry rot underneath that takes time to become apparent. About 3 years in, there isn't quite as much money at the end of the month, you've spent your beginning funds and maybe even resorted to extra credit, the product and fixtures are getting run down and stale, the overhead is taking a bit longer to pay and getting more expensive, unexpected expenses come along on a regular basis, and you can't quite afford enough of the new product to satisfy demand.

This is the first crunch moment. Most people start making wrong choices and bad decisions around here. They might raise their overhead, thinking the infrastructure is at fault. More advertising, for instance.

Or they might lower their margins, thinking that if they are cheaper, people will buy more.

If you make the wrong decisions, you're toast around the year Five. Anyone with an option, like a better job, will opt out around here.

Burnout: But let's say you make the right decisions. You lower overhead, you promote your store through guerrilla marketing, you keep your margins strong, you adjust your inventory so it sells better.

At around year Seven, you reach the next crunch point. Because all those things you did to survive probably added mightily to your workload. You are on the verge of Burnout.

So, if you haven't bailed out in the 3rd year, the 5th year, and you make it through the 7th year, you are an 'established' business. Ironically, this is the stage that the public things most well-appointed businesses are already at, but very few are.

Boredom: At around the 10th year you face the next hurdle, boredom.

You've finally got around to treating your business as a business, instead of a hobby. You begin to realize that this isn't some after-college lark, but a friggen career! And once you've gone to your donut shop every day for 10 years, you can barely stand the sight of donuts.

Here you either suck it up and treat it as work, or you do what I do and start experimenting or playing with your business -- which puts you back onto the battlefield.

Now you are a battle-scarred veteran. Most successful businesses reach this point somewhere around 10 years, I've heard. You can actually afford to take time off, you may be savvy enough to be able to expand and so on. I've always heard that Sam Walton was well into middle age before he figured it all out. And, from my observation, very few people get to this stage -- businesses do more than owners, as they are passed off on the next entrepreneur, but very few get here.

In my own business, it took more like 20 years to reach this point, because I kept getting knocked back down to the bottom of the hill. Beware the bubble. Beware the premature expansions!

The final phase? The dangers haven't gone away, of course. You're just much more aware of them

If you make it to 20 years, you can even become the 'old codger' like me, dispensing advice that no one listens to.