State of the Store.

We're ahead of last year in the first five months by 20%. At this rate, this will be a record year. I don't know what to make of that. Especially with all the uncertainty on the national level.

Some of that is because I decided to go harder on making sure the store was inventoried to the very highest level possible. Some of that is the popularity of Pokemon. 

We've also tried hard to pay more attention to back issue comics, which really paid off this month. I've opened up the Dungeon room downstairs. It's not organized, but that's part of it's appeal. Instead of setting a price before the customers go downstairs, I tell them, "We'll negotiate at the cash register. I promise I'll try to be generous..."

Books continue to climb, though not quite at the rate they were for the first four years since Covid. Games and toys have more or less slowed down. I'm not trying terribly hard to goose them. I'm maintaining, at this point.

I believe I've made a lot of decisions that have turned out well. I went all in on Pokemon and Magic at a time when they seemed on the verge of becoming a fad. I'm willing to risk that it could all come to abrupt halt because I know that the product will still be viable years from now. Meanwhile, sales are rocketing. I've played this "shortage, FOMO" game before. Lots of experience and it's paying off. 

I've now got accounts with four out of the six most important publishers: the Big Five and Scholastic. I'm going to hook up with MacMillan as soon as I've figured out all the kinks with Simon and Shuster and Harper Collins. Their systems are somewhat antiquated, not entirely easy to deal with. But for the extra ten to fifteen percent discount, it's worth the effort. I think.

I'm trading ease and timeliness for discounts. But it will become easier over time, I assume. And since I'm now ordering a constant flow of books from different sources, I'm not sure the timeliness is quite as important, plus I can always order the "hot" current book from Ingram while waiting for it to arrive from the publisher. 

Instead of "practicing retirement," as Sabrina suggested, I seem to be fully engaged. 

I came home really tired last Sunday, and after resting awhile, I started ordering books. I realized that ordering books is relaxing for me. It's not a chore, I find it fun and interesting--and I can do so in a quiet, peaceful way. 

Everyone has work they like and work they don't like I guess. In helping Hannah with her store, I've realized that what works for me won't necessarily work for her and vice versa. Obvious, I suppose, but I do things that I absolutely KNOW work and I want to pass that along.

For instance, I figure that half the books we sell are books that are facing out: part of this is because the books are already hot and we want people to see them. But a large part of it is that seeing the cover is the trigger.

I asked Sabrina what percent of the books we sell are face out, and she said, "Maybe half...?" Which was the exact percentage I landed on. Hannah has decided she wants her books more orderly looking and who's to say she's wrong?

Anyway, feeling energized. I'd like to say I'm being cautious, but the very spurt we're getting right now can pay for whatever crash happens, so no reason not to keep being aggressive.  I'm 72 years old and I feel like I do this for another twenty years. But...time (and Sabrina and Linda) disagrees. 

Trying to get down to 170 for my yearly doctor appointment next week. Why it matters, I'm not sure.

170.4 this morning.

I was very disciplined yesterday. I'm more or less turning to my "Sandwich Diet." That is, I have a sandwich (300) calories at Noon, 2:00, 4:00, 6:00, with a salad (300) in-between (sandwiched, as it were.) I allow myself to switch out one sandwich for 300 calories of snacks. (I often am not hungry until 2:00, so I can skip the noon. Or I can skip the 8:00 one. The point is to not ever really get hungry. Two sandwiches within two hours of each other gets me through. 

This gets old pretty fast, but for a week or two, it's very effective. 

What are you trying to prove?

 

I'm 40% the way through a long book and I'm suddenly losing interest. 

Years ago, I tried reading The Art of Motorcycle Maintenance. The premise I took away from it was that if one was the own and ride a motorcycle, it behooves you to know all about how a motorcycle works and to be able to fix it yourself. And that should apply to all aspects of your life.

Hooey. 

Screw that. I just want to ride a motorcycle. If I want it fixed, I'll take it to an expert. And that applies to all aspects of my life. I'll earn my money in my area of expertise and pay people for their area of expertise. That's more or less the definition of an economy. 

So I'm reading the book, "A Walk in the Park," about a complete walk-through the Grand Canyon, something that apparently few people have done. The first part of the book talks about the geology, the wildlife, the history and other interesting stuff about the area.

But about 40% of the way through, it suddenly becomes Extreme Sport, and boy, that turns me off.  

There's a recent picture of the traffic jam at the top of Mt. Everest. Why the fuck would anyone want to climb Mt. Everest now? Inexplicable to me. 

I'm not interested in super-techies, or super athletes, celebrity culture, etc.  Normal life and normal living, that the life for me. For fucks sake.

Are Pokemon and Magic becoming a bubble?

The thing about a bubble is that it's very difficult to know. Almost by definition, you're inside the bubble. You have to do a mental jujitsu where you purposely place yourself outside the bubble, which is easier said than done. But I'm going to try.

There are distinct signs of a bubble. Increasing brands, increasing gimmicks, increasing prices. People hoarding product, speculators, sell-outs when offered, influencers trying to get everyone excited, and so on. 

But the biggest indication of a bubble is more intuitive. Simply put: does this seem completely off-the-wall, batshit crazy?

Thing is, you really DO know it when you see it. 

For instance, the housing prices in Central Oregon are high and are rising. But, whereas I just KNEW there was a housing bubble in the early aughts that continued to get crazier and crazier, I don't think prices alone are an indication of a bubble. I think there is high demand currently in Central Oregon, and while the market is obviously being manipulated to some extent, it's nowhere near as nuts as it was back then.

Prices pretty much need to double and triple and quadruple in a short time for something to be a bubble to me. For instance, in early 1994, I realized that my comic orders were double in cost than what I'd earned in retail the previous year. (In other words, I was ordering 4 times the product to fill the presumed demand.)

I should have trusted my instincts.

I'd already been through one bubble in the late 80s. Sports cards had doubled each year for four years in a row, and then--for us at least--it collapsed. That was my first bubble. I always say, everyone gets one bubble that isn't their fault. All bubbles after that are on your own head.  

After the comic collapse, I got pretty canny about how to deal with bubbles. We did very well with pogs, beanie babies, and the first incarnation of Pokemon, because I understand the dynamics and was able to benefit without being hurt. 

Since then, while I've seen hot product come and go, I don't believe we've experienced a bubble since.

So far I'm coming down on the side of Magic and Pokemon being very hot, but I won't be entirely surprised if the market collapses. The difference is, like comics, there were be a continued demand for Pokemon and Magic, though perhaps at a much more steady pace.

I'm good with a steady pace. If I have to absorb the overstock for the next couple years--or even let Sabrina get the benefit later on--we'll be fine. We have the resources to withstand a collapse. 

Meanwhile, I admit I'm just as much a gambler as some of my customers; I just have more experience at it.

Mr. Know-it-All.

I decided for my last two years of owning Pegasus Books that I'd stick to a strict budget per week for product. It occurred to me the other day that there should be a way to keep track of this. The term "running average" came to mind and out of curiosity, I looked it up.  

Turns out, there's something called a "rolling average," exactly what I was looking for. 

Now I've tried to stick to budget for 40 years and never really succeeded. The way I did it was set the budget, write it down, and subtract until it was gone. But that only accounted for that week. Any time I spent less or more, slid under the radar. 

And of course, I often spent more (and sometimes less) so that way of accounting didn't really work.

The rolling average is such a simple concept, I'm stunned that I didn't think of it years ago. (I realize how stupid this makes me sound...)

My point is: how much don't I know? What simple formulas am I missing? 

For instance, would I have ever figured out the Break-Even point equation on my own? (Fixed overhead divided by profit margin. duh.) I was sort of doing this crudely when I was handed the equation by the guy up at COCC. I've used that equation ever since. 

So I'm sure there are plenty of useful business tricks that I simply don't understand. It took me years to figure out how to measure cash-flow for instance. I mean, I sort of understood it instinctively, but never really put all the parts together. Basically, you can say this about everything I know about business. I understand a hazy intuitive version of the truth which is enough to help me survive, but not the precise mechanisms to make it easy. At least, not at first.

Such stuff seems utterly obvious in hindsight, but I have had to figure them out all by myself. (One of the first things I had to learn was that just because everyone else seemed to be doing something didn't mean it would work for me.)

Would taking business classes or reading business books have helped? Based on my experience with business books, I doubt it. Sure, every 100th idea would be applicable to what I do, but I wouldn't know which idea works until I've already experienced it.

I had that experience with the only business book I ever felt helped me: "Growing a Business," by Paul Hawken. But even then, I only understood the book's value because I'd already experienced many of the pitfalls he was pointing out. 

The business guy up at COCC said I had a "primitive sophistication." I think this figuring stuff out on my own stuff is exactly that. But I don't know what I don't know.

My basic approach has been to to simplify everything as much as possible. When I look out at the world of bookstores, it seems like everyone else is taking the opposite approach. I'm comfortable with what I'm doing and it's working well--the last five years have been the best years by far. 

I'm an old dog, and I'm not really looking for new tricks now. But I really wish someone out there could cut through all the BS that business books and classes put out and give newcomers the simple equations and procedures that would help them survive. 

My guess is that not enough small business owners would buy such a book. 

Because we're all "Mr. Know-it-Alls."

My reservoir of back issue comics; and organized mess.

Strangest thing. The basement at my store is full of stuff again.

A few years ago I set out to empty the basement, even if it meant giving things away. First thing I did was sell all the sports cards for fractions of a penny to someone who so loaded up a U-Haul, that it was nearly dragging on the ground. Half a million cards? Supposedly, he was going to use the cards to paper the walls of a restaurant. (Crazy idea--the thought of applying each card to the wall gave me shudders. Besides which, all those cards were "commons" which I warned him about.

Then I sold all the comics in the basement to another dealer. Tens of thousands of comics for pennies on the dollar. There was some value there, but I simply didn't have the time or space to deal with them.

Finally, I sold all the non-sports cards I had. I'm willing to bet that I probably had more of these cards than anyone in the country. Tens of thousands? Incomplete sets and boxes and boxes of individual cards.

And so, I had a basement that was cleared out. I didn't miss any of it. In all three cases, the cream had already been taken and it would have required time, space, and effort to sell any of the rest.

 

So I'm feeling proud of myself. But then back issues started selling again.

You see, when I started 41 years ago, back issues were a major part of my business. The crash of the comics bubble in the mid-90s pretty put an end to that. I kept the readers as customers but lost the so-called "collectors." Of course everyone buying comics were also collectors, but unless you had something truly extraordinary, they didn't want back issues.

But over the last decade, collecting has become more of a thing again. And I simply didn't have enough of the strong titles or "key" issues to do much about it.

So I saw a longterm customer who was going to sell his collection at a garage sale because he was moving. I knew what this customer had been buying, Spider-mans and X-Men and so on and knew the price he was offering was really good.

I called him up and said, "At the price you quoted, I'll buy them all."

It took me nearly a year to go through those 40 boxes. I decided I would extract the titles I knew would sell and bag and board them all. Eventually, I simply replaced the back issues I had upstairs with a fraction of the comics I'd bought. 

So...sales went up. They went up enough to add a button to the register to distinguish back issues from new. Nothing spectacular, but more than enough to pay for the collection I bought and still have most of the comics leftover. 

So I thought to myself, "Don't turn down offers automatically. Inquire about what the seller wants. Or even ask if they want to "contribute" comics to the general cause. So comics started coming back in, a few boxes at a time.

Then I got a call from someone who apparently had a garage full of comics and was willing to give them to me if I would haul them away.

Turns out, these were the comics I left in my mall store back in 1997, which had been stored in someone's back garage. Weird to see my own tags and prices, but there was good stuff in there. I gave the owner a bit of money because I didn't feel great about taking them for free, but the truth was, I wasn't going to be able to get to them for a long time. Another 40 boxes or more.

Then...well, after offering the boxes of used books and fixtures from Linda's bookstore, The Bookmark, someone finally took me up on it. That emptied the basement somewhat, but the comics have continued to flow in the door. We apparently have enough goodwill in the community that people want to leave their comics with us. Got another 2500 comics last week, some decent stuff in there.

 

Here's the problem. There is plenty of salable stuff in the basement, but it's like a reservoir of oil that can't be accessed without extreme effort. I've got enough oil flowing through the pumps that it's worthwhile, but the vast majority of salable comics are out of sight. 

I know people will point out that I could sell them online, but I'm just not set up for that. Frankly, I'm not inclined. One of the reasons I quit pursuing back issues in the first place was the constant need to justify prices, the constant haggling, dealing with difficult customers. The way it's being done now is, I plunk a price on a comic, the customer can see the condition themselves, and all is well. 

The other possibility is letting people down in the basement one by one to check it out, but the problem is, I'm still months if not years away from separating the wheat from the chaff. I know from past experience that people will cherry pick what's there. 

Oh, well. It's a nice problem to have. We have plenty of "key" issues now to put on the wall. We have plenty of good runs on the most important characters, all the Avengers, Batmans, Supermans, Spider-mans, X-men, etc. 

I've taken another step back from the store. Dylan, an employee from a few years ago has come back and I'm giving up most of my hours so he has enough. So I can amuse myself by going through all the rest of the comics, extract the good titles, bag and board and price them, and leave Sabrina with an organized...what should I say? 

An organized mess.

Too soon to react?

Doing this week's orders--and stopped midway. 

I need to think about this.

The stock market is crashing. 

So my dilemma is this: when I order from Ingram, I get books in a very timely manner, in no more than two days, and I know exactly what I've spent. However, the discount I get from them is a full 10% less than what I get directly from the publishers.

However, when I order from the publishers, it can take anywhere from ten days to two weeks to arrive, sometimes even longer. The books also come in piecemeal, and I don't know in advance which books they won't have in stock. 

It's Timeliness vs Discount, simple as that.

Here's what I've learned in the past...

 In an insecure and uncertain market, you need to know exactly what you're spending and when the product will arrive.

In other words, when given the choice, timeliness over discount. 

We've been doing very well up to this moment; a record year so far. So I've been trying to do both. I order extremely hot material from both the distributor and the publishers. 

It's been a record keeping chore and has complicated the cash flow, but when the overall market is functioning, it evens out and we do fine. 

Now?

That's the question. Is it too early to take drastic measures? 

Again, what I've learned in the past is...trust your instincts. When there's a falling market, you almost can't be too quick to take action.  If you're wrong, you can always amp back up again. But if you're wrong about holding course and the market keeps falling, then you can easily start spending more than you're earning.

I think people are under-reacting. Maybe they aren't paying attention. Maybe they're in shock. Maybe they're resigned. Maybe they're afraid of overreacting.

I need to change course and start being more conservative.