My Week as a Filthy Discounter, Part I: Lessons Learned

Just over a month ago, I realized that I was doing the right thing by protecting the value of Magic: The Gathering products in my store and being consistently punished for it. I resolved to blow a bunch of this stuff out at market price and change my ordering behavior going forward to better reflect the new reality.

I embraced the salt for my advertising campaign. It was a lot of fun.

Lessons learned:

  • Even at below-market prices, demand is not infinite. We put a bunch of stuff out on the table, but the centerpiece was 20 of my 30 remaining Modern Masters 2017 booster boxes, marked at $175 plus tax. In a week and a half, with lots of paid advertising, we sold 11 of the 20 boxes.
  • Bad transactions drive away good transactions. A customer came in looking to buy two non-discounted Standard booster boxes and a Bundle (Fat Pack) but decided to buy one of our discounted Modern Masters boxes instead. Several days after the sale ended, a customer came in looking to buy two of the discounted MM17 booster boxes, but finding that they were no longer on sale, chose instead to spend $400 on singles. Which transactions would YOU rather encourage?
  • They’ll always want just a little bit more. Several customers became quite grumpy that we wouldn’t, for example, sell them four booster boxes at $150 each. Everyone gets this sort of negative customer interaction once in a while, but we had more of them during this sale than we’d had in months prior.
  • Opportunists will seek ways to take advantage. A couple of our purchases involved a customer buying a box, sitting down to bust the packs, bringing all the rares to the counter to trade them in, and becoming dismayed that we’d dramatically dropped the trade value on the set’s singles in anticipation of this sort of behavior. More negative customer interactions. More disappointment. Some retailers will throw around the #notmycustomer hashtag, but it remains that my relationship got worse with people whose money I’d like to have in the future, and the blame lies with me for sending inconsistent messages about our value proposition.
  • The performance of the product was irreparably harmed after the sale. We’ve sold zero MM17 booster boxes since the end of the sale, and last month’s sales of MM17 booster packs dropped by 70%. If the product was a poor performer before the sale, it’s a total dog now.

We still have about 18 booster boxes of Modern Masters 2017. At this rate, we should run out in early 2019. To think: I could have had 100+ more boxes! The publisher and my distributors would have gleefully enabled my bankruptcy. It’s not their jobs to look after retailers, and we must remember that.

In Part II, I’ll talk about the way to move forward. The obvious answer seems to be, “Don’t order as much stuff.” There’s a little more to it, and some helpful resources that will help you know when to tread cautiously.

Self-Deception and Breakfast in Your Bathrooms

This weekend I heard through a friend-of-a-friend chain of messages about a non-retailer who was travelling and stopped in to see a highly-recommended local game store. The visiting gamer had one primary takeaway from the experience: The bathrooms were gross. Of all the things that could have been memorable about this store, which is somebody’s livelihood, the thing that will be remembered by this customer is that the floor was nasty and the place smelled like pee. I wasn’t told which store was visited, but I’m assured that I would know the name.

“Clean your bathrooms” is so basic and often-repeated that it’s a cliche. Wizards of the Coast actually includes it in their literature about how to run a great Magic tournament. Why do so many stores fail to meet this very basic standard?

Cleaning bathrooms is not fun. It’s unglamorous and it sucks up time we’d rather be spending doing almost anything else. And if you think that cleaning bathrooms is gross, you’ll REALLY hate the mess you make learning how to manage people so that your bathrooms get cleaned regularly by employees.

Because it’s a crappy task and we don’t want to do it, our brains will convince themselves either that our bathrooms are not that bad, or that having really clean bathrooms is not important. But I think we can all agree on the following three premises: Having clean bathrooms IS important. Our bathrooms ARE that bad. Finally, something other than our own willpower and discipline is necessary, because so far our willpower and discipline have not been enough.

Almost nobody will do this, but the ones who do will have clean bathrooms: Next week, pick a random morning to come in early. You want to get this done early enough that your employees won’t find you doing this, because they’ll think you’re a crazy person. Treat yourself, and pick up something nice for breakfast on your way to your business. Let yourself into your store and lock the door behind you. Make sure once again that nobody is in the store.

Choose a bathroom. The worse or more frequently-used one is the correct choice. I think you know in your heart which one you need to choose. Don’t take the easy, more comfortable choice. That’s how you got here in the first place, remember? Take your breakfast into the bathroom and have a seat. Not on the toilet, you animal. On the floor.

Don’t bring headphones, read a magazine, or play on your phone. Chew your breakfast thoughtfully and contemplate your bathroom. Look in the corners. Look at the base of toilets and at the undersides of the bowl. Look at the disordered supply storage and the empty towel dispenser. You pay the same rent per square foot in this room as you do for your best-selling merchandise display area or your cash wrap. Many of your walk-in customers will spend as much time in this room as they will anywhere else in your store. Your regular customers and employees will visit this room five to ten times per week. Why are you here? How did you let it get this far?

You will not be able to deceive yourself about the state of your bathroom when you’re having breakfast on the bathroom floor.

I made a table for myself out of a box of drum liners. I’m not some kind of savage.

If you have employees, and you have a nightly bathroom cleaning checklist, and they learn that the boss occasionally has breakfast on the bathroom floor, they will clean your bathrooms. If you’re a one-person shop, you may need to put this on your calendar monthly or quarterly and commit to doing it on a regular basis. Doing so will ensure that clean bathrooms are something that stay on your mind.

Today was the first time I’ve done this, but our bathrooms are clean. Nobody has used this bathroom since my employees cleaned it last night before close. It was mopped with the whole store yesterday morning, and someone hit it again with a wet-Swiffer in the evening. A clean bathroom meant that this was a pleasant, though unconventional morning, instead of a gross time of self-shame.

You may scoff or laugh at me, but if your bathrooms are in need of more attention than they’re getting, this post is deadly serious. What is it that you do for a living? Why aren’t you doing the things that are required to make your store a great place for your customers? Do you want a successful business that improves your life and the lives of your employees, or are you farting around in your clubhouse until the money runs out?

Yes, eating a Spicy Chicken Biscuit on the floor of your game store bathroom is ridiculous, but it’s not as ridiculous as being the owner of a gross public bathroom.

Professional Islands, Leaving Them, and Returning To Them

I purchased my store in July 2011. At the time it was a failing tabletop game store. With a little luck and a lot of hard work, we diversified it and turned it into a successful thing. I operated quite happily, but aside from a few excellent blogs I didn’t pursue any professional development or relationships with other retailers. I was on my own little island, doing my thing.

In mid-2015, the loneliness got to me and I started wondering if there was more. I joined the larger retailer social media groups. I friended a boatload of retailers on Facebook. I started attending trade shows. This felt great! I was around my people! Turns out that most of my people were broke, but that’s okay! We could all learn from each other! I was sure that at any moment I’d be introduced to all the folks who were making great livings doing this.

What I discovered as I visited other stores and talked with other retailers was that operating on my professional island was absolutely the best thing I could have done when starting out. The inefficiency of “reinventing the wheel” doesn’t look so dumb when the existing wheels are mostly triangular, seemingly designed to cause maximum resistance to movement and momentum. As we struggled through those formative years, there were a ton of nearly industry-ubiquitous mistakes that I was too ignorant to make. There are entire retail categories and activity classifications that I examined early and dismissed as impractical. Something something, the road less traveled by, and all the difference, etc.

When I started stepping into other game stores and talking to other retailers, many of them expressed shock that I would just ignore some of the things they had been told were essential to the operation of a successful game store. At first this threw me into a crisis of confidence: What if I was completely wrong? I mean, I’m making money, but what if I’m holding myself back from much wider success by not following the examples of others?

As I look back on the last two years of industry engagement, I’m left with what I believe to be the following unhappy truths:

  • The tabletop game industry has a retail tier that is small and mostly bad. There are a few standout exceptions that I hate to offend by lumping them in with the others, but in aggregate, the statement stands.
  • My tabletop game store, in the sense that my store has a set of categories that qualify as tabletop games that can be considered independently of all other categories, is small and bad. In fact, it’s smaller and more bad than even some of the smallest and baddest non-hybrid tabletop game stores.
  • This makes me uniquely unqualified to offer advice to tabletop game retailers, and makes the advice given to me by even the exemplars in the field frustrating at best.
  • Whatever success I have as a retailer comes from running three to five mediocre businesses under one roof.
  • The success of my hybrid model is an accident of a location that I did not choose, a brand I did not design, and a set of skills that I developed with no knowledge that they’d be useful running this kind of business.
  • This means that it is difficult or impossible for many tabletop game store owners to apply my model to their businesses.

Many of the above truths merit blog posts of their own.

Tristan da Cunha, part of the most remote inhabited archipelago in the world. Photo taken from the International Space Station, and in the public domain.

About a month ago, I began the process of moving back to my island. Here’s what it looks like for now:

I’ve left most of the industry retailer groups. I’m still a member and admin of the Hybrid Theory group for retailers running hybrid stores or looking to hybridize by adding Video Games, but I’m less active. All I was doing in the larger groups was fighting with bad retailers. I told myself that I was being a voice of reason for the new retailers who were watching, undecided about whether they should be professionals or not. Ultimately, even if that was true, it didn’t benefit my business, and I don’t believe that it added much more than entertainment value for many of the bystanders.

I’ve been blogging less. I thought that I might quit blogging altogether, but I think instead I will unapologetically shift my focus to things that I find interesting and important. I will continue talking about how bad the tabletop game industry is, because hey, that’s pretty easy and it’s fun to be the heel. I will continue talking about Video Games, because as a category I still believe that it offers a lifeline to a fraction of the non-hybrid tabletop stores and literally nobody else is writing about it. I will continue talking about processes, procedures, and the mindset of running a professional and profitable small business, because talking about those things causes my staff and friends to hold me accountable when I don’t practice what I preach. Just don’t expect me to fix your board game store.

I’ve cancelled any plans I had to attend future trade shows. I’m not averse to attending them, but the shows are all for tabletop retailers and I think that I’m a distraction there: Popular, perhaps, but not useful. If someone pays my way to one and gives me something interesting to do, attending them again isn’t out of the question.

I’ve also cancelled most plans that I had to visit other game stores. I’m still willing to visit your store and help you with anything I’m qualified to help with. Unless you’re my friend, I will probably ask you to pay for my travel expenses or time. If you’re my friend on Facebook, you qualify for the buddy exemption. If I’ve offered to come to your store for free and you’re still interested, reach out to me and I will still make it happen.

In summary, I’m choosing for now to return to my professional island and work quietly there to make a better life. I’m curtailing all professional activities that don’t make use of my core competency of having nothing to lose. Things could change. Nothing is written in stone except for the imperative that I make a good living without going crazy, but I have to remember that enriching the community is not the same as me being enriched. I’m going to be a little more selfish moving forward.

How We Do It: Storing Discs

Today I’ll show you how we store discs for used disc-based games. We’ll start with a tour of the system for selling a game, and then I’ll give you a process instruction list for use in your store. Then I’ll give you links to the supplies you’ll need, then we’ll talk about the advantages and challenges of this system.

Process for selling a disc-based game:

Dragon Age: Inquisition. For eight bucks, this is a lot of entertainment! The case is displayed empty, of course.

On the back of the case is a label with a number written on it. We should find the disc in envelope #938.

These cabinets behind the counter hold all of the envelopes. I see in the photo that someone has used their foot to close one of my very expensive drawers. Hmm.

Hooray! Here’s the disc. Actually it’s two discs for this game.

After the discs are removed, the empty envelope goes into a giant unsorted pile of empties and is available to use again.

Process for receiving incoming trades:

  • Start with your big pile of disc-based games in their cases. We usually don’t sort them by system or sort them at all for this step. They’re just discs in cases in a stack.
  • After cleaning the outside of the cases if needed, flip each on over onto its front and put a white label on the back. Don’t write anything yet.
  • Once you’ve labelled all of the cases, get your pile of envelopes out. There’s no need to sort them.
  • For each game, open up the case, remove the discs, put them into the envelope, and write the number that is on the envelope onto the label. It’s very important to do this entire step all at once for each disc. Don’t try to be cute and do several at once. You will inevitably mess up the order, record the wrong numbers on the label, and hate yourself later.
  • Aside for multiple discs: Two discs can safely fit inside a sleeve. I would never advise a customer to do this at home, but these envelopes will almost never be handled, so the discs-rubbing-together issue isn’t a big deal. For more than two discs, add another envelope behind the first, and rubber-band them together. It doesn’t matter what number is on the additional attached envelopes. Just go by the number on the front-facing one.
  • Put the numbered envelopes with the discs inside into your CD storage apparatus of choice, in order.
  • Price-label your games if you haven’t done so already, and put them out on the shelf.

What you’ll need:

  • An apparatus to store discs. When you’re just getting started you can use a row of properly-sized boxes. We started out with these snap-together boxes. They worked until we had about 1,200 discs, then the space requirements became too much. Eventually we bought some $2,000+ media storage cabinets from Gaylord Archival. The model we have (Russ Bassett 5 Drawer Locking Lateral CD/DVD Cabinet AV-LD-5-8-LK) isn’t on their site anymore, though they do have some taller ones. If you know anyone who bought fixtures from Hastings last year, they’ll have some CD/DVD cabinets in a great modular form factor. I’ve got ten three-drawer units in a shed behind my house that can be yours if the price is right.
  • CD/DVD sleeves. You definitely want the ones with the window on the front.
  • Labels for the backs of the game cases. I like these from Avery. I probably wouldn’t cheap out on these: If they fall off regularly, you will have a bad time.

Pros, Cons, and Alternatives:

The most common failure of this system is caused by human error, usually by someone new who thinks that they can improve the process by numbering multiple games at once. The biggest downside of this system is that errors are catastrophic: That is, if you have four thousand discs in numbered sleeves, and a customer brings a game case with the wrong number or no number at all, you are totally hosed. When you’ve got only a few hundred games, you can spent a while sorting through your envelopes and eventually find it. At any volume, that process breaks down and it’s hard to make a customer understand that the $3 game you said you had in stock IS in the cabinet someplace, but they can’t have it. Bad.

If someone shoplifts a game case, we don’t have an easy way to recover that case’s sleeved disc from the cabinet. This means that we probably have a few dozen orphaned games in the cabinet. I’ve learned to be serene about these sorts of inefficiencies, knowing that a perfectly-solved system would probably cost me a lot of time that I’d rather use making money.

There are variations that I’ve seen on this process, like keeping a separate numbering scheme for each console category. This lowers the number of envelopes to sort through when an error occurs, but I feel that it also adds more complexity to the process of putting trades out for sale.

There’s other ways. In high school I worked at a game store that had clear plastic CD cases on racks behind the counter. When we put out trade, we’d write the game name on the edge of the CD case and rack it in alphabetical order. Re-using the cases involved copious amount of solvents, and was the primary reason behind the added expense of a linen service at the store. It was time-consuming and required a lot of space. I was recently in that store. They’ve switched to the numbered sleeves.

It’s not a perfect system, but it’s good enough, and it scales reasonably well. It’s one of those things that I’ve been doing so long that I take it for granted. Thanks to those of you who asked for a post about it.

The race to the bottom: Shiny. Let’s be bad guys.

I woke up this morning ticked off.

You see, I’ve spent the last two weeks going through everything in my tiny store. One thing that I combed through is my Magic overstock cabinet. It’s full of Magic booster boxes. Some of these are Standard boosters, which I historically ordered deep at the beginning of the set. We haven’t had a shortage of current Magic stock in years, but my post-Return to Ravnica hoarding hasn’t changed.

A lot of it is product that was released in the last year that was supposed to be hot and limited-allocation. Eternal Masters. Planechase Anthology. Modern Masters. From the Vault: Lore.

I have been standing firm at MSRP for these products, because it’s my belief that discounting is a bad business model. It’s low return on capital and labor. It damages the consumer perception of the brand. It harms everyone up the chain, blowing money out of the machine like a disconnected air conditioning duct under your house.

All the retailers who discounted these products got their tiny pile of money back and are preparing for the next desperate, profitless sprint. Wizards sold all of their product to distributors or retailers and could care less what happens to it now. The customers in my area bought the discounted product elsewhere, and are playing with it in my store while glaring at the greedy prices on my shelf.

I played fair. I protected the value of the brand. I looked out for the other players in the industry by not doing anything to hurt the profitability of the product for my partners. It seems to me like I’m the one who consistently lost as a result.

My reward is that my customers hate my over-market MSRP pricing, my peers laugh at me while throwing away their youths chasing slim margins, and the publisher and distributors? Well, they say nothing, because they already got their money. They’ve realized that they have an unlimited supply of suckers who want to effectively sell their product for free. That must be great.

So next week we’re running a sale. We’re going to sell a bunch of this stuff at market price, margins be damned.

Don’t get me wrong: Discounting is a terrible way to try to make a living. I don’t intend to do it again. The way I intend to avoid that is by cutting my initial orders dramatically. The potential downside to this approach is that a limited-allocation product could hit, and I could miss out by not having enough of the product on my shelves. Reflecting on the product releases over the past two years tells me that I shouldn’t bet on hot unobtainium releases from Wizards in the near future. How many times does the ball have to land on red before you figure that something is up and stop betting on black?

My future orders will be for what I know I can sell. It works that way for every other product I carry, and Wizards of the Coast is no longer immune.

Discounters, you were right. You’re still idiots, but you’re not as dumb as I was for fighting the tide. Wizards has set up the incentives, and people always respond to incentives. They’re under no legal or ethical obligation to be judicious in their distribution of their product, but I’m certainly not obligated to be a punching bag while I try to defend it, either.

I’m a retailer, not a speculator. Nearly every time retailers start to fancy themselves investors, they lose. I won’t play that game anymore.


Gift Horse Dental Care

My professional life has been chaotic the past few weeks, mostly due to some dramatic and humbling staffing shakeups at my store. We’re okay, and the store will be better for it in the long-term, but I have gone from 20 hours a week to 70 this month, and as a result I haven’t had the brainpower to talk about bigger-picture stuff. I have been taking notes about future entries as they’ve come to mind, so when my muse comes stumbling home, I will write more.

Modern Masters was, well… I could say that it was over-printed, or that players are suffering wallet fatigue, or that non-Standard Magic is a bubble built on “MTG Finance” speculators that don’t represent as many players as their dollars would seem to represent. It might be a little of everything, but the takeaway is that I was sadly right:

Over the past few weeks the price has more or less settled at $190 a box. At that price, and assuming the most favorable pricing commonly possible from WOTC direct, the COGS on Modern Masters 2017 boxes is 66.8%. This is very close to the COGS of a regular box of non-allocated Magic product sold at $110, which is 69.2%. (Those selling boxes for $100 face a COGS of 75.9%.)

For years, I’ve treated the “X Masters” and other limited-allocation products as sure bets. I’ve bought as much of them as I possibly could, because I knew that the margins would be great and I’d sell through them very reliably. I came to think of them as love-gifts from Wizards of the Coast to the WPN locations which provide a place to play their cards.

I just did a stock check on Modern Masters 2017. Having stood firmly at MSRP out of principle, I have sold 25% of my product. I will eventually sell it all a pack at a time, but man, that’s a long run for a short slide.

There are no more sure bets on the horizon. With premium releases becoming more like regular releases, and regular releases becoming more like, well, Kaijudo, I can no longer blindly order the maximum allocation on anything. We cut our Amonkhet order pretty dramatically. I haven’t even decided if I want to carry the Commander Anthology in quantities greater than one or two. If I’m wrong, these products will be in short supply and I’ll lose money by not having them.

This isn’t to say that we’re giving up on Magic. It’s still about 20% of my business, and still important. We’re doing events all weekend and we’re busting a case of singles on livestream tonight. As a store we’re doubling down on the enthusiasm. As a buyer, I’m going to work on limiting my potential losses.

Perhaps this is the way I should always have treated Magic. It was just so much easier to take it for granted and work harder on the things that needed more attention to sell. That’s bad retailing, but the price I will pay as a diversified store will be small. What will be the butcher’s bill when the finances settle for all the one-brand card shops out there?

Layman’s Conjecture on Modern Masters 2017 Supply

I call myself a layman, because I am not a Magic player, my store is not a majority-Magic business (though it briefly was when I opened), and though I’ve been open for only six years, I am not a distribution expert.

It’s been a bad couple of sets for Magic. Wizards needs a home run. Most of distribution is crunched for cash and needs at least a base hit. Many Magic-heavy retailers are not in a great cash position, judging from how many of them went out of business following the Red October outages.

My gut feeling after witnessing the unexpected Eternal Masters reprint was that Modern Masters 2017 was going to be printed heavily.

When spoiler season arrived, and the set became more and more ridiculous, I became more fearful as other retailers rejoiced. The set was too good. Acknowledging that I’m probably a little jaded, I expressed some concerns that it might be a cash grab. If the value of your product lies mostly in a back catalog of valuable IP that you can release whenever you want, the correct play would seem to be to restrict it to a steady, modest flow. To suddenly throw the lever all the way over and allow the value to gush out seems to send the same signal as a store throwing a sudden 50% off sale: The customers will rejoice, but partners in the business may see the blood in the water.

My allocation from Wizards was modest, but Distribution told me that I could get more. A lot more. In fact, I haven’t talked to anyone who wasn’t offered at least double their official allocation. Almost everyone I know took it. I didn’t.

Release day. Prices in my neck of the woods were driven down by area competitors selling the $240 MSRP boxes for $200 and $188. That’s sometimes advertised as the tax-included price, which is illegal in this state and hints at wider misbehavior, but that’s the norm. This matches the online price, which at the time of this writing is about $200.

Here’s something to ponder: Look at the industry-standard discount applied to booster boxes of regular sets. My store and many others sell a Standard booster box for $110. This is not an exciting sale for us. The profit from a booster box at that price will pay my payroll for about 39 minutes, assuming my pay as an owner is zero. If you apply that same discount to a box of Modern Masters, then you’d expect the demand curve to meet the supply at a price of about $195. Is Modern Masters supposed to be just another set? No? Then why does it appear to be printed like one?

On Friday, the weekly product list emails from Wizards went out. After rumors of an eight-box restock offer, we were all surprised to see that the offer was twenty additional boxes. If you were Wizards, and you had or intended to print a few more trailer-loads of this product, but you didn’t want to let on that supply was infinite, what would you offer as a first-week restock? One hundred would certainly cause a panic. Even 32 is more than many retailers were allocated, for all that those allocation numbers mattered. Twenty seems right. Many retailers I’ve seen talking about this hurried to get in their restock orders as early as possible. Every restock order is being filled. None have been turned away.

Wizards, being a subsidiary of Hasbro, a publicly-traded company, is not doing anything wrong, and is accountable to shareholders who demand profit maximization. Ultimately Wizards doesn’t, shouldn’t, and legally can’t care whether the margin on their products at market price is 42% or 12%. Their wholesale price is the price they get, so the only question is how many boxes they can ship at that price. I’ve stated elsewhere that the supply of young adults happy to throw the best years of their lives away running unprofitable game stores seems nearly infinite. If you had such a resource, your shareholders would require you to use it.

I want very badly to be wrong about this launch. Many of my dearest friends went deep on this product. If I’m wrong, then I will blow through my allocation at MSRP and be unable to get more. I will have made a good bit of money while watching my friends make a lot of money. If I’m right, then I guess I’ll have the prestige of having called it correctly, but I’ll struggle to sell my product at MSRP among the throngs of retailers desperately dumping the product so that they can pay their terms.

So far I’ve sold one booster box and sixteen boosters. I have heard from other retailers that are selling lots of product and seem to be doing great. There is still time for me to be wrong. Please, let me be wrong.

Jump Ship Carefully

I’m going to make this very brief, because it’s super-late and I am EXHAUSTED.

TCGPlayer just announced TCGPlayer Pro. It looks to be a hastily-designed Crystal Commerce killer. The limitations so far are that it does not have a POS solution, and it does not support multi-channel integration, meaning that you can’t use it to sell on Amazon or eBay.

For many small stores, however, this is just the thing.

Image may contain: one or more people and indoor

The retailer forum threads predictably caught on fire and are still burning brightly at 200+ posts. Many of the posts are from retailers saying that they are getting up early tomorrow morning to go into work and switch immediately to TCGPlayer Pro. I have some advice for my tier:

  • DON’T jump immediately. You have waited this long, so you can wait three or four more days. The next 48 hours are going to be the sort of madness you can only get by announcing a major rollout and declaring that it’s available RIGHT NOW. You don’t have to do anything right now. You can afford to wait to make sure you’re doing it right.
  • DO immediately do a backup/export of your inventory and sales data. Assume that your Crystal Commerce data could become temporarily or permanently unavailable at any time. This is going to be a period of fundamental change for Crystal Commerce, and whether they will survive it is an open question. I will say only that I backed up my data in 2012 before I told Crystal Commerce that I was intending to leave, and I wound up being very happy that I did so.
  • DO remember to be a professional and a human being. From a business perspective, a company has to do a lot of things wrong to get to the point where 150+ of their customers will sit in a conference room and cheer their demise. Crystal Commerce did it to themselves. From a personal perspective, these are real people with real needs and fears. Not everyone at that company made the decisions that caused you to hate them. PLEASE be professional in your contacts with them, because you’re a professional. If that appeal doesn’t resonate, I’d ask you to treat them humanely, because you’re both humans. Your business has nothing to gain from you kicking them on your way out the door.
  • DO talk to your TCGPlayer onboarding person about your POS options. Right now those aren’t there. I don’t know if TCGPlayer is planning a POS rollout, but my hope is that they would move toward openness in allowing others to integrate with their platform. That would allow me to keep using my point of sale software. It would allow IMP POS to pivot into a POS solution that works great for retailers. It would allow retailers still on software like Lightspeed to have modules developed that allow for integration. Your voice will matter for this. They are listening. (Also, tell them that Paul from Too Lazy To Fail wants to fly out to them and talk to them about their plans for Video Game integration. We can make a lot of money together, guys! Let’s do this.)

GAMA Trade Show 2017 Tips

Next week is the GAMA Trade Show in Las Vegas. It’ll be my second year attending. Vegas is just about the most anti-Paul place I can imagine, but the amount of education and networking I got at the show last year means that I wasn’t going to miss a second helping of it this year. Some tips if you’re making the trip for the first time this year:

  • Bring a fan, white noise machine, ear plugs, or all three. The nightclub thumps permeate everything late at night, and even if you’ve upgraded to a nicer room, you’ll want them if you like to sleep.
  • If you’re not from the desert, bring a baseball cap, eye drops, lip balm, and sunscreen. No convenience store there is selling sunscreen this time of year, and it’s important, especially if you’re planning to drive to Phoenix in a convertible after the show. Ask me how I know. Ugh.
  • Wear comfortable shoes. Last year I brought dress shoes and sneakers. I switched to the sneakers halfway through the first day.
  • Dress code: There are no rules, but I will silently judge you if you wear cargo shorts and a dragon shirt. In my opinion, a company-branded T-shirt is bare minimum, and a polo or button-down shirt is better. You don’t have to wear a suit. Would you say that you are a professional? Then dress somewhat professionally.
  • Don’t take bottled water from people on the street. Be aware of the many scams and cons being run and protect yourself. Carry your wallet and phone in a front pocket.
  • If you think you’ll want a car, consider Silvercar. They run a promotion for first-time customers that is very enticing: I got an Audi A4 for the week for $250. They’re in the app store of your smartphone.
  • If you want the box-o-free-stuff from GAMA, you’ll need to attend one of the Premier Presentations in every time slot. These are the pitches from publishers, and they are of variable quality. Last year I went to every one, and I wish I hadn’t. This year I am going to the ones that I have an interest in, and focusing on talking with other retailers the rest of the time. The free stuff just wasn’t worth it for me. If you’re bringing an employee, it might be worth throwing them under the bus to get the freebies.
  • Attend every retailer seminar that you can. These are the reason that I go to this show.
  • Meet as many retailers as you can, seek out the ones that are professionals running profitable businesses, and try to get some face time with them. It’s particularly important to me to talk to the folks who are clearly doing it right while also clearly doing it differently than the way I do things. This is how learning and improvement occur.

I hope that you’ll consider attending the presentation that Michael Bahr and I are giving on Tuesday and Thursday, which is simply “Video Games” on the schedule. It is very generous for GAMA to give us a presentation slot, given that they self-describe as an association centered around the non-electronic game industry. Used video games are a high-volume, high-margin category that mix very well with the non-electronic games that I sell, and I’d like to help you get there as well. I’ve sold used video games professionally across multiple jobs for about 12 years combined, and Michael is a more traditional game store owner who diversified into video games last year. You’ll hear the perspective of a video game store that also does non-electronic games, and a non-electronic game store that diversified into video games.

If you see me out and about at the show, I’d like to at least shake your hand and hear about your store. If you catch me and ask, I’ll give you a free bracelet that will help you remember what matters in your business. These can also be used with a small zip tie to make a loop that is handy on your keychain. If you’d like to meet with me while we’re both in town, email me or send me a Facebook message. A note on Facebook: I’m very selective about accepting friend requests and I try to keep my current count below a certain number. Just because I don’t accept your friend request doesn’t mean I don’t want to talk to you or meet with you.

Monday is looking very busy, but I’m available and eager to chat on Tuesday afternoon and evening, all day Wednesday, Thursday afternoon and evening, and Friday afternoon and evening. Offers of coffee, cheeseburgers, and small numbers of adult beverages are welcome bribes. I am not much of a party-goer, gambler, or sight-seer, but I definitely want to talk about our businesses.

Discounting, Disintermediation, and the Death of the Professional Card Shop


This week I counted four 100+ comment threads in game retail Facebook groups about Magic booster discounting, and I’m not even in most of those groups.

The new Magic set, Aether Revolt, is not selling terribly well. This, on the heels of a winter weather event that caused shipping delays and business slowdowns during what for many is a critical post-holiday cash crunch, means that many sellers large and small are dumping quantities of Magic product onto the marketplace at pennies above wholesale cost. For some retailers it is currently as cheap to buy Kaladesh boxes from StarCityGames as through distribution.

This is an acute moment in what many retailers believe to be the industry’s chronic condition. Many stores, including stores much larger and better than mine, have seen Magic sealed product sales drop to near-zero levels. We’re fortunate to be a diversified store, but the bulk of game stores are actually card shops, and a dip in Magic frequently results in a wave of store closings. When customers can buy their product online for near-wholesale prices, store owners who never made much money may run out of cash altogether, and store owners with more profitable businesses may find that there are better uses of their time.

Leaving aside for the moment that you can always count on intermediaries to be firmly against disintermediation, the evaporation of the middleman in this particular industry matters more than most, since it’s at the middleman’s tables that Magic: The Gathering is played. If you can’t find someone with whom to play, you may soon give up your Magic habit. If there’s no shop to centralize that activity, it’ll be easier for you to play Hearthstone instead.

That’s the conventional wisdom among retailers: “Discounting will lead to the death of Magic!”

I think they’re wrong.

The barriers to entry in the card-shop business are essentially zero: You can get in with a thousand square feet of questionably-zoned space, some tables and chairs from Sams Club, and $1,500 for some stuff to sell. Since Magic product has a turn-rate that is fantastic, this non-business-plan sort of works out in the same way that IKEA furniture is a good deal when you don’t value your time or the result’s durability.

This compounds that online discounting problem by adding to the mix inexperienced business owners who, very recently having been mere consumers, know of only one way to grow their business: discounting. “I’m buying customers,” they say, as they sell unprofitable product to attract players to unprofitable events, or maybe the other way around.

So they chug along, working six days a week, until the end is brought on by the ballooning lease they signed without the help of an attorney, or the need to buy groceries, or the end of their spouse’s patience with their lack of progress. They close their store or sell it at an escape-with-your-life price to some other fool (this is how I bought my store) and then, presumably, they go join a local co-op and start teaching workshops about running a startup.

When the hamster dies, another is waiting to defer its student loans and take the wheel.

And when a card shop fails, like a fairy getting its wings, another poor dumb bastard gets a commercial lease, and commences throwing the best years of their life down an unprofitable well without so much as an index-card business plan. Hakuna matata, it’s the circle of mediocrity, and it moves us all through despair and hope. There’s always a place to play Magic, because there’s always someone willing to sign a two or three year lease to run a clubhouse that keeps the lights on without much left over. Last I checked we are making underemployed twenty-somethings at a pretty steady pace, so I don’t see the cannon fodder drying up any time soon.

Wizards of the Coast will of course insist that they want clean, professionally-run stores, but the resources dedicated to that are mostly a team of web developers and maybe one or two sacrificial lambs that herd cats in the WPN Retailer Facebook group. Wizards doesn’t appear to be doing anything about the race to the bottom resulting in a cycle of mediocre, unprofitable clubhouses because to Wizards, it’s not really a problem. If you accept that their responsibility is to create shareholder value, it shouldn’t be: If you had a nearly-unlimited supply of free labor facilitating the movement of your product out of your warehouses, would you really care if your free labor is making 5% or 40% margin? Would your shareholders allow you to care?

This is all very cynical, perhaps more cynical than I intended it to be. Magic is about a quarter of my business and I don’t see it going away entirely anytime soon. I do anticipate my peer group getting smaller over the course of the next year. Magic is so very sweet when times are good, but running a dedicated card shop is like depending on the only person who knows where you live to keep bringing you food. My hope is that some who will remain will diversify soon and build a cash buffer so that they can survive and thrive and, just maybe, provide a play space for Magic players that doesn’t have big holes in the floor.