Variable Trade Value (Fair Payouts, Great Stuff)

This is a super-crunchy, kinda mathy post, but if you hang in there, you might find yourself making a lot more money running a much better business.

When I started this post I wasn’t really sure who it was for. Really it’s most useful to those who are developing point-of-sale solutions for game stores, but there’s not many of those people, and most of my current readers are game store owners. I suppose that this is still useful to them as both an introduction to what I think is an important concept, and an idea of a feature in their Point of Sale solution that they didn’t know they were missing. Customers of POS vendors: You need to be asking for this.

I’m going to talk about the problem in terms of video games for the most part, because that’s where it started for me and it’s where I think examples will be the most relatable. I’ve now come to see that this is every bit as essential if you’re dealing in Magic: The Gathering singles.

The Problem: Feasts of garbage and famines of quality

When I first started out, I paid a flat 50% cash on all games. My point of sale system didn’t have an elegant store credit solution, and I knew that I couldn’t kludge one together out of index cards or spreadsheets, so we just paid cash for everything. As time went on, I realized that I was getting far too many of some categories (Playstation 2) and far too few of others (Xbox 360, which was still current-gen at the time). I changed our price update routine so that some systems had different payouts. For example, I paid 25% for a long time on NES games.

This was still bad. For NES, I was paying over a buck for Captain Skyhawk and Silent Service, which are two garbage bulk games that few people actually want. Meanwhile, I was making trade-in customers of games like Final Fantasy and Kirby’s Adventure very, very angry. I had a LOT of inventory on the shelves, but it was mostly crap and I paid too much for almost all of it. What little high-quality merchandise I had on hand was the result of us inadvertently taking advantage of someone who didn’t know what they had, or me making exceptions to try to account for the shortcomings of our trade offers.

(Systematizing All The Things is always the goal, because it corrects for the deficiencies of your lackeys and of your frail meatbag brain. I’ll make a blog post on it.)

The Solution: VTV – Variable Trade Value

There are junk games for which you only want to pay a pittance. There are great games for which you’ll happily pay a premium. Even if you were relying on your judgment (which you shouldn’t do), you’d be able to make these calls easily. What about everything in-between? Some systems allow for pricing rules on trade-ins that will allow you to create a stair-step tiered trade-value regime, but even those involve a lot of fiddling, and take a lot of labor to adjust. Here’s the component parts of what I figured out and has worked well for me for four years:

  • LowPercentage – This is the percentage of your sell price that you’ll pay out in store credit on the low-end chaff.
  • HighPercentage – This is the percentage of your sell price that you’ll pay out in store credit for the high-end, desirable items.
  • LowThreshold – At or below this price, you pay out the LowPercentage trade value.
  • HighThreshold – At or above this price, you pay out the HighPercentage trade value.
  • CashPenalty – The percentage taken off the trade value if the customer wants cash instead of store credit.

Everything in between the LowThreshold and HighThreshold price has its trade value determined by a straight line that runs between the LowPercentage and HighPercentage numbers. It looks like this:


This photo was taken while eating a sandwich at Desert Sky Games in Arizona the week after GAMA 2016. I taught them video games, they taught me comics. I think I got the better end of the trade.

Moving the inflection points of this graph give you a lot of flexibility and power. For categories where the line between good stuff and junk is very fine, you could make the slope of the center line vertical or nearly so. If you want to pay out a flat percentage on a category, you can still do so by setting the low and high percentages to the same number. For categories where the desirability and sales velocity of the items increase steadily as value increases, you could set the LowPercentage/LowThreshold very low and the HighPercentage/HighThreshold very high.

Implementation of this is basically impossible if you’re not running a POS that was designed for game stores. If you look up your prices with a spreadsheet you could probably write this into it, but it would be a pain. In my perfect world, both IMP POS and the Dumpster-Fire Goliath POS solutions would implement this.

Basically, what you want is the formula of a line. This is what it looks like in our system:

Make Money, Improve Life

This is not purposeless fiddling: Very little else in my business changed in the year that I moved to VTV. My total dollars spent on trade-ins dropped by a third, the total volume of my trades increased, and the quality of the inventory I was buying dramatically improved, which meant that sales shot up. My net income jumped by something like 30%. I bought a new vehicle for the first time about six months after I switched this on. These improvements in business process are life-changing.

Examples: Super Nintendo

LowPercentage: 30%
HighPercentage: 65%
LowThreshold: $1.00
HighThreshold: $20.00
CashPenalty: 20%

If you sit down and think about the Super Nintendo games on the used market, you’ll probably come to the conclusion that there’s a handful of garbage low-end titles, a handful of high-value games, and quite a few desirable mid-value games in-between. We’ll look at three examples with their current payouts, and I’ll show you some sales numbers for each going back to the implementation of this software in February 2013 so you can see the larger story for each title and how our pricing has changed.

NHLPA Hockey ’93 – Sell $3.00, Trade $0.70, Buy $0.56

This game is bad. We want some copies of it, but if we paid 50% we’d attract dozens of them. At this payout we’re currently sitting on six copies.

Chrono Trigger – Sell $122.00, Trade $79.30, Buy $63.44

Chrono Trigger is an amazing game, and even if we marked it well above market value, a copy in good condition would be drooled over frequently and eventually sold. We want to give a fair payout for this game, because most people who are getting rid of it know that they could get $120 if they were only willing to deal with the hassle of eBay. If we were paying out a flat 30%, we’d be offering $36.60, which is not a fair trade offer and would upset sellers. We currently have one copy. In the report below you can see how the value of this title has shot up over the last few years.

Super Mario World – Sell $17.00, Trade $10.11, Buy $8.09

This is a common, bread-and-butter game that everybody wants, and I could probably get $25 per copy for it without too much trouble. We are currently sold-out in the post-Christmas crush. You can see from the history that it tends to move a little too quickly, meaning that I should think about adjust the pricing manually for both sales and payouts.

Extra Crunchy Extra Credit

If you’ve got a high enough volume in either games or cards, you can go a little further to protect yourself from anomalies in the trade flow. We haven’t even turned this on in our system yet, but as volume increases it may be useful. For each category we have the following fields in addition to the ones listed above:

  • default_optimal: Each item has an optimal quantity number. This is the default for that field. For most video games that’s 12. For Magic singles it might be 8, or 16, or 32, depending on how deep you want to stock. You can always adjust this for individual items if the need for an exception strikes.
  • over_optimal_penalty: This is the percentage taken off of a trade if you have over the optimal quantity.
  • default_excessive: This is the default for the excessive quantity, which is like optimal quantity but far higher. This is the “hey, there’s something wrong” number. For video games that’s 20 for us.
  • over_excessive_penalty: A very high percentage taken off if the quantity in stock is over the excessive number.

Because I Love You: Our category spreadsheet

Here’s the category spreadsheet with all of our values. You can see that many of them are the same. This is one of those 80/20 things where you get the most impact from a relatively small amount of effort. If I wanted to fiddle with it more I could probably squeeze out more efficiencies, but I am trying very hard not to fiddle for a living. It isn’t a super-pretty spreadsheet, with lots of depreciated categories and placeholder values on categories that aren’t price updated regularly, but if you’re data-minded this will help. Video Game pricing comes from PriceCharting and MTG pricing comes from exports of TCGPlayer‘s price data via Gatherer Extractor, since they won’t give out API access to stores for love or money.

I hope this helps someone.

The Incompetence Trap

How do I say this in a way that is not legally actionable?

I think that Crystal Commerce is awful.

We attempted a migration to Crystal Commerce in 2012. Promised features were not present, and promised development did not take place. We cancelled our service, and it did not go over well. Someone called during dinner to ask me to apologize to their CEO, because apparently he was really upset and it was hard to get anything done in the office. I avoid them at trade shows.

After that disaster, I was able to finally put my Computer Science degree to use, creating a point of sale system that isn’t very good but which my employees adore. It should be a foretaste of what I’m going to say about the state of game retail technology that it made more sense for me to spend hundreds of hours developing software for my one 1,700-square-foot store than to make someone else’s solution work.

Of course, almost nobody was in the fortunate situation I was in.

See, it’s my considered opinion that the entire tabletop game retail scene is propped up by Magic: The Gathering. That isn’t the impression you’d get from looking at pictures of game stores, or from talking to the owners at trade shows. They’re not talking about Magic. They’re talking about Third Place theory and board game nights and hand-selling the new hotness in the short space of time between it getting popular and it getting sold dollars over wholesale on Amazon. Some of these guys are seriously good at running game stores, but if you poke them in the chest long enough and listen to the little bits of information that slip through the cracks, you’ll learn or infer that the biggest category for most of them is Magic. It’s been Magic for years. Hundreds of people who call themselves board game store owners walk the halls of GAMA, hoping that nobody finds out that a pie chart of their sales categories look like a Pac-Man named Magic is about to devour the rest of their business model.

Not that there’s anything wrong with that, but I want to make sure you understand that most of these people have to make Magic move through their cabinets, or they will have to go get real jobs.

If you want to make money in Magic, you probably have to deal in singles, which is a kind way of saying that you sling used cardboard for a living. If you want to deal in singles beyond the four walls of your store, you are almost required to deal with If you want to sell on TCGPlayer at any kind of scale, you have to have a way of making mass updates to your inventory. You can either manually enter this data on a regular basis (and give up on having unified cabinet/online inventory), or you need a point of sale system that integrates with TCGPlayer.

Do you want a point of sale system that integrates with TCGPlayer? You have to use Crystal Commerce.

TCGPlayer used to advertise that they offered integration with outside software, but now they tell you to just get a Crystal Commerce account. Nobody in retail is quite sure why this is. I figure that either they are under some sort of contractual agreement giving their existing partners exclusivity, there’s some deep-seated underlying dysfunction over at TCGPlayer, or they’re unwilling to go any further down the rabbit hole of crushingly-bad game store technology than they’ve already been dragged.

There’s at least one upstart competitor. He’s a friend of mine, and though he’s developed something that seems like it should do the job, TCGPlayer doesn’t return his calls. I don’t know his work well enough to know if it scales, but I know that he’s mentioned in threads daily on retailer discussion boards, and the repeated refrain from frustrated Crystal Commerce customers is, “I hate this, but until someone else integrates with TCGPlayer, I am stuck with Crystal Commerce.”

I believe that it speaks to the larger state of the industry:


Most retailers are stuck with a dumpster fire solution that has literally had days of downtime for even basic point-of-sale in the last six weeks. They despise it, but they can’t leave. The most promising alternative is from one guy coding in the back of his game store. He’s got pluck, and he’s doing good work, but he’s a small operation. There is no big software company looking to pick up the challenge and run with it, because there is not much money to be made there. I fear for my friend for the same reason that I refuse to sell my own POS solution to other stores: Precious few in our industry are making enough money to pay what a good solution is worth. An enterprise-level solution to this problem would cost six figures, but retailers will balk at a $199-a-month service package. Have a look at the support board for the existing solution, and ask yourself how much of that you’d be willing to put up with for the paltry amount that most retailers would be willing to spend.

Game retail is small because it’s mostly bad. It’s mostly bad in part because it’s got a shortage of well-developed process and technology. It’s got a shortage of well-developed process and technology because there’s no money. There’s no money because game retail is mostly bad.

Welcome to the Incompetence Trap. I don’t have a solution, but I admire the perfection of the problem.

Will somebody deliver us from this body of death? Will we escape the Incompetence Trap before the eventual end of Magic makes it a moot point? I don’t know, but while we wait to find out, there’s lots of great TV.


The Only Thing That Matters

Your customers don’t matter.

The number and happiness of your employees doesn’t matter.

Having nice shelving and a freshly-waxed floor doesn’t matter.

Having clean bathrooms doesn’t matter.

Being satisfied with your business doesn’t matter.

Your health doesn’t matter.

What kind of car you drive doesn’t matter.

Your great location doesn’t matter.

Your store’s community doesn’t matter.

Your house doesn’t matter.

It doesn’t matter how often your kids get to see you.

Your gross sales figure doesn’t matter.

Nobody gives a flying flip whether you’re doing what you love.

The number of your peers that want to talk to you at a trade show doesn’t matter.

Your charitable contributions don’t matter.

How much cash you have in the bank doesn’t matter.

Your products don’t matter.

Your Point of Sale system doesn’t matter.

How many locations you operate doesn’t matter.

The only thing that matters is net income.

Until you have sorted out your net income, none of the other stuff matters, because you will lose that anyway. If you think that you might have to pick something–anything–over net income, then you need to get out of your business and get a real job. At a real job there’s work-life balance, and your employer is nominally prohibited from taking away whatever that thing is that you think is more important than your current business’s generation of net income.

As it is, you can’t have two number-one priorities. Choose this day whom you will serve. All of the things in the list above are awesome and super-important, but if you’re in business for yourself then the first and only question must be: What is your take after all expenses have been met, and what can you do to get that net income number to an acceptable level?

If you’re carrying the products you love and only those products, but you’re not making money, you’re not going to be carrying any products soon.

If you’re building a great community in your store but you’re not making money, that community will soon be gone.

If you’ve got lots of clever ideas and get featured on websites but you’re not making money, you’re going to lose your store. Not very clever.

If you’re able to take off whenever you want and spend lots of weekends with your kids, but you’re not making money, then you’re going to lose that control over your life when your store goes out of business and your personal bills start coming due.

Only after your net income is present and accounted for can you start asking what else might matter. This is a tough thing to require of yourself, and it wouldn’t be wrong to shrug it off and go get a jobby-job. Business ownership is a tough racket (NSFW). There is no net. You have no employer to be understanding when you phone it in for a month because of something else that’s going on in your life.

Let’s review. What’s important? Net income.

Say it with me: Net income.

I know that you just read that instead of saying it out loud. Try again, even under your breath. Come on. Ready? Net income.

It’s ten o’clock. Do you know what your net income is this month? What are you going to do about it?



(Acknowledgement: When this post was a draft at about 60% completion and languishing far down on my to-do list, Gary at Black Diamond Games did something similar but different.)



Stop Closing Early (You Must Be Present to Win)

It’s 4pm on a Tuesday. You’ve done a total of $18 in sales today, and you’re working alone because you don’t have any employees or they’re all off work. You’d normally close at 9pm, but you decide that if you don’t break $100 before then, you’re going to close at 7pm.

It’s Halloween and you’d like to spend the evening with your family, so you close early.

You’re not feeling well on a Monday morning, so you post on Facebook that the store is opening at 2pm today instead of 10am.

Your employee calls in sick on the day you were going to go fishing with your friend. Rather than stand your buddy up, you close the store.

Your business has been doing poorly and you’re not sure week-to-week when you can get the store open.qnalr0s

There’s a video game coming out that you know everyone will want to play. You know that this will lead to a crappy sales day, so you just close that day.

You’re a fool, and I’ll tell you why.

Every time that a customer pulls on your door during your normal business hours and finds that it’s locked, you are not only losing whatever sale you were about to make that day. You also degrade the reputation and reliability of your business in the mind of that customer and their friends, forever. The next time they think about making a trip out to give you their money, they will wonder whether you are going to be there. Yes, I know that they could just call before they visit or check your Facebook page, but you know that they won’t, and in your heart you also know that they shouldn’t have to.

We are open seven days a week. We are open on Veteran’s Day, because it’s a school holiday and we’d be fools not to be available for that. We are open when a new World of Warcraft expansion hits, because our employees can play that night after work, and not all of our customers play WoW. We are open on snow days as long as the store has electricity, even if that means that I have to put my truck in 4WD and work the shift myself, alone. We are open when nobody appears to be buying, because there is always work to do and we don’t have perfect knowledge of who will come in.

If there’s some question in the minds of even a minority of our customers about whether we will be open, we will be open. We’re closed on Thanksgiving Day and Christmas Day, but if we thought we would even do modest business on those days, we’d be open.

We are reliably open because we’re professionals and we don’t want our customers to worry about whether or not we’ll be there when they need us.

Be open.

Emergency Used Video Game FAQ



I suppose it’s some combination of election-season jitters, a lackluster Magic release, and normal October retail awfulness, but a bunch of my retailer friends are in distress, and well over a dozen of them have contacted me in the last two weeks about video games. I’ll be giving a presentation in March at the GAMA Trade Show about diversifying your game store into video games, but here’s a FAQ post containing the most common questions that I’m receiving. I’m still happy to answer your questions if this doesn’t cover them, so leave them in the comments.

Where do you get new games?

I don’t. I deal in used games, consoles, and accessories. I buy some new accessories from Hyperkin, who are awesome. New games and consoles are terrible, low-margin, high-risk sellers. A $60 video game typically wholesales for $52-$54, and if it’s a turd the market price can drop to $40 or $20 without warning. You will not be able to negotiate price guarantees or returnability for your independent game store. I have been selling used-only for five years. It’s possible and easy to do.

How much money can video games make me?

I’m more willing to discuss specific numbers privately than I am to post them on Al Gore’s Internet for everyone to see, but suffice to say that I could keep my doors open, pay a couple of part timers, keep the lights on, pay the rent in a very good location, and pay myself a very modest salary. I would not be in just the video game business, but in combination with tabletop games and electronics repair, I make an excellent living and provide for a bunch of people.

How do you price your games? How do you get this stuff into your Point of Sale?

PriceCharting provides an excellent price guide that you can look up game-by-game or download as a big spreadsheet. I have a subscription to the price guide and my point of sale downloads the new prices automagically every night. You may be able to import this price guide directly into your POS system. If you have CrystalCommerce, and your admin panel isn’t currently on fire, they have pricing data and covers and stuff. Nate Peterson’s IMP POS is an upstart alternative that shows potential and also takes care of pricing for you.

How much do you pay for games?

I started off paying 50%, cash or credit, for everything. This grew my inventory quickly but resulted in a lot of low-value junk. What if you gave a quarter for any Magic rare? Yeah, it’s like that. We ended up going with a variable trade value scheme that changes the percentage we pay for a game based on the sell price. This prevents the problem where you have to choose between paying a too-high rate on cheap bulk games and a too-low rate on valuable high-end games. My rates vary between 20% and 80%, but most games are under 50%.

Don’t people try to sell you stolen stuff?

Yes. Take ID and make a record of every trade-in. If your point of sale system doesn’t allow you to attach customers to transactions in order to track them, you’ll want to fix that. Don’t take trades from people who creep you out, and don’t hesitate to call your local constabulary if you feel that something fishy is going on. I deal with this perhaps three or four times a year.

Won’t it change the culture of my game store to have all these video gamers come in?

You are going to get a wider variety of customers than you are used to, but it’s an opportunity, not a liability. I thought you wanted muggles to come in to your store for conversion into meeples? I never thought that store owners would be concerned about lots of new customers, but I have gotten this several times.

For overall civility, I would say that your average video game customer rates with or just a hair below your nicest Magic players, and much higher than your average Yugioh player. (Haters gonna hate.)

How much space do I need? How do I display this stuff?

Figure on devoting 300-600 square feet of shoppable retail space to the category, in addition to two four-foot display counters and maybe a small closet’s worth of extra storage and supplies. More is better, but you don’t need much on the whole. Gridwall or slatwall displays will work. Bookshelves will not work.

How much do I need to invest up front?

Not counting fixtures? Figure on making a $500-$800 Hyperkin order first thing. You’ll also need to spend a couple hundred bucks on some solution for storing CD/DVD media behind the counter. You need a small TV to test systems. You need to be ready to spend several thousand dollars in cash buying games and systems off the street, and you need to spend some money advertising on Facebook that you’re the buyer with CASH IN HAND for their video games. When I open my second store next year I plan to spend five grand over three months getting the word out.

Can I get effective results on a near-zero budget?

No. I can only help you be a professional retailer. I don’t know how to help hobbyists.

How do I get into this category in time to be effective for Christmas?

You don’t. It’s October 27th at the time of this post, and it’s too late to bring in enough inventory from the street to be anything other than pathetic for the holidays. After the holidays is tax refund season, where sales continue to be strong and trade activity scarce. When everyone runs out of tax refund money in April or so, trade-in season starts. That’s when you want to strike.

Of course, it’s possible to either overpay for inventory on eBay or buy out a closing store. If you’re buying out a store, avoid the deal if the store has been running any kind of pre-close clearance sale. You can get started with garbage inventory, but you shouldn’t. You’ll regret it.

I can’t make my November rent payment and I need to make a change in the next six weeks, or else.

I can’t help you if it’s gotten this far. Go to a quiet place tonight after you close tonight, look at your store’s profitability over the last six months, and determine whether you’re collapsing or merely failing. If you don’t have a plan for making expenses other than hoping for a miracle, it’s time to be a grown-up and start moving toward responsible closure.

As a totally heartless aside, I buy out closing stores. Contact me, and maybe I can help you get out without losing your shirt.

Maintaining Adequacy and Suffering Surprises Only Once

This is a quick, lazy post, but I wanted to share something that seems obvious to me but would help a lot of store owners that struggle in two areas: The amount of time spent scrambling to restock supplies when they run out, and the difficulty in doing the cleaning that needs to be done less frequently than every day.

It’s lists. Sorry, that’s boring, but it’s just lists. What’s important is that the staff knows that we go through these lists EVERY WEEK, without fail.

We call ours the “Sunday Supply Checklist” and the “Wednesday Cleaning Checklist”.

The Supply Checklist tells the user where to find the items that need to be counted, and how low to let the supply dwindle before contacting the appropriate person for reorder or addition to the shopping list. The idea is that, any time we run out of something and it becomes a phone call to the owner at home during dinner, that will be the LAST time we are surprised by that particular item. Nobody is angry or scared when this happens, because they know what happens next: It goes on the list, and it’s never an emergency again.

Similarly, the Cleaning Checklist means I never have to hound my employees about occasionally checking the air freshener refills or wiping down door trim. The first time I get annoyed that nobody else has noticed the smudges on the fronts of the supply cabinets, I add that as a thing to be checked, and it’s the last time I have to worry about it. What’s fun about this list is that, as my managers have taken more control of the day-to-day operations of the store, the list has been mysteriously growing with items that I hadn’t thought of. It’s a great feeling.

The result ends up being that many issues are magically solved in our store. There are always more rolls of receipt paper. The drawer under the register is always neat and orderly. This process does what all good processes do: It accepts the fallible, imperfect nature of human attention, and makes the result perfect or near-perfect anyway.

Here’s the lists. Maybe reading them will inspire you.

Sunday Supply Checklist

Toilet paper at least 20 rolls, men’s/women’s room
Paper towels at least 15 rolls, men’s/women’s room
Toilet cleaner At least two full spare bottles, men’s room shelf
Mop cleaner At least one full bottle, under mop sink
Bleach At least one full refill bottle, located under mop sink
Windex At least one full refill bottle, located under mop sink
Clorox wipes At least two full containers, on men’s room shelf
Q-tips At least half a box, located in large front cabinet
Alcohol At least half a bottle, located in large front cabinet
Swiffer wipes At least 24 wipes, located on men’s room shelves
Gloves at least one full box, men’s room shelf (Paul)
Large black trash bags, at least one full roll, men’s room shelf
Small white trash bags, at least one full roll, men’s room shelf
CD sleeves at least 4 bundles, bottom CD cabinet drawer (Paul)
Price gun labels, at least six rolls, bottom CD cabinet drawer (Paul)
Price gun ink, at least two refills, bottom CD cabinet drawer (Paul)
Disc buffer replacement jugs (Paul)
Receipt paper, at least 15 rolls, bottom CD cabinet drawer, extras in office supplies cabinet in back (Paul)
Post it notes, at least 6 pads, bottom CD cabinet drawer
Label printer rolls, at least 6 rolls, in the bottom CD cabinet drawer (Paul)
At least two refills of GOJO hand soap, men’s room shelf
Sharpies, at least 6, front/back pen holders
Pens, at least one spare box of pens, office shelf
Gift cards, at least 15, in the point of sale drawer (Paul)
Microfiber towels
Denture brushes
Free FNM Entry cards, at least 10, in the point of sale drawer
Rubber bands, at least one full bag, in the large front cabinet or a CD cabinet drawer (Paul)
Penny Sleeves, at least 20 packs, in the large front cabinet
“Grocery bag” bags, at least one full box, in the large front cabinet and/or back closet.
Copier/Printer Paper, at least 3 full reams, office supplies cabinet
Small number labels for game cases

Wednesday Cleaning Checklist

– Wipe down everything on the cash register cabinet with a damp towel. Look for dirt in crevices. Make sure you examine it from the customer side of the counter to see what looks dirty.
– Spend 10 minutes dusting. Try to find new cobwebs and dust to destroy.
– Clean the inside front glass everywhere you can reach. Squeegie the glass outside.
– Wipe down the aluminum trim outside and inside. Clean the door handles.
– Pick up the trash in the parking lot.
– Check around the dumpster. Clean up any trash that could belong to us, (neighbor), or (neighbor). Report spilled (restaurant neighbor) trash to Paul.
– Empty the cigarette bin.
– Sweep cigarette butts out of the sidewalk cracks.
– Make sure the supply shelves in the bathrooms are orderly.
– Re-stock bathrooms with paper goods.
– Tidy up the back closet. Try to get everything into boxes and on shelves.
– Tidy the office. Use the air duster everywhere. Clean the glass desk top.
– Look through all the food in the office. Throw out anything that is expired or gross.
– Clean the inside of office fridge and microwave as needed.
– Wipe the office chair down with a wet towel. Sweep the floor. Try to get into corners.
– Replace the four air freshener bottles as needed.
– Clean out Disc buffer machine. Clean anywhere the buffer machine splatters (surrounding consoles, fan, counter, etc.)
– Wipe down all cabinet fronts with Clorox wipe.
– Wipe down all trash cans with a Clorox wipe.
– Wipe down any footprints/scuffs on inside of bathroom doors.

Defining Game Store Success, Survival, Failure, and Collapse

I’m working on a post about clubhouse stores, but I’ve decided that it is unfair to identify clubhouses without also talking about how the owners might escape clubhouse status. The problem is that escaping clubhouse status is hard, requiring resources that most clubhouse owners don’t have. Thus, the inevitable second part of that post has to turn to accepting reality and leaving the game trade.

So before I talk about clubhouses I have to talk about means of escape, and that escape might be closing the business. But how does one know when it’s time to get out?

The easier question to start with is, why did you get in?

I was a police officer before I bought my store. The politics of policing in the American South were not quite as complex as they are today, and the economy was worse. There were so many applicants that there was an 18-month wait at my department for jobs that had awful hours in dangerous conditions and paid $26,000 a year. I looked around at my respected peers, and realized that they almost without exception had spouses working as well to make ends meet. The Chief of Police at the time was making $66,000 annually. That wasn’t the future I wanted for my family, so I saw the opportunity to buy a business as a potential escape from a job I loved that didn’t love me back. I defined success at the time as replacing my cop income, while allowing me to have one or two part-time employees for a couple days off a week and the occasional vacation. I was wrong. That is not what success looks like.

I will not claim a perfect understanding of life and business, but that understanding certainly feels more developed after five years in this business. Your view may differ, but here’s what success, survival, failure, and collapse look like to me these days:

Success: The owner makes enough money to pay taxes, drive cars that are not breaking down, live in decent housing, pay off debts, and save for the future. He or she is not a slave to the counter, though working it is an option if the owner finds joy in it. The owner has enough employees that he or she can leave town on short notice for business or pleasure, and those employees are paid enough that they consider themselves lucky to work there. Because of the relatively high wages, the owner is able to be more discerning, and ends up with good people that are well-liked and well-cared-for. There is enough slack in the owner’s resources that he or she can take on extraordinary projects that benefit the business and jump at time-sensitive opportunities. There’s plenty in the budget for new product, so an extra Magic release or hot new limited product is an opportunity, not a financial trial. The owner’s spouse is not required to work, and may find themselves filling the role of administrative assistant or marketing director, allowing the small company to punch above its weight for professional presentation and outreach.

Survival: A store that is surviving pays its owner what would be considered in the area to be a living wage, though the pay comes unevenly throughout the year as the business booms and lags. There’s enough extra to pay for twenty to forty hours a week of part-time help at minimum wage. This allows the business to be open for predictable hours while allowing the owner a day or two off and gives them permission to do things like catch the flu. The bills are almost always paid on time, though careful planning goes into the timing of the outgoing payments to ensure there are dollars in the account to cover them. The owner drives an older but reliable car. There’s no extra to invest into marketing or R&D, and trying new things frequently has to be done in a way that can most charitably be described as “plucky.” If a new Magic set and a new Pokemon set come out at the same time, there might not be enough Pokemon product on hand because of cash flow difficulties. The owner’s spouse probably works a full-time job. Rob’s record store in High Fidelity is a survival-mode store.


“I lost it. I lost it all. Faith, dignity, about 15 pounds…”

Failure: A store that is failing is not paying its owner a living wage. In all too many cases, the owner has never received a consistent paycheck from the business. The store is doing enough business to pay the rent and utilities, though it is frequently late making those payments. Employees are a happy fantasy, though the store might have flunkies sorting cards or running events in exchange for product or store credit, all under the table and untaxed. The exact financial status of the business is hard to nail down because the owner frequently buys groceries out of the till. This store will not survive an audit, but isn’t likely to be the subject of one since there’s nothing to take. New Magic releases are ordered in box quantities instead of case quantities, and the phrase “sorry, no cash, only store credit” causes a heartbreaking number of trade-ins to walk back out the door. The owner drives a car that is not long for this world, with breakdowns resulting in “Surprise! We’re closed today.” posts on the store’s Facebook page. The spouse’s full-time job is paying the owner’s living expenses, with early optimism turning to resentment as the years drag on with no change in the financial prospects of the business.

Collapse: The owner is probably benefiting more from the business than he or she ever has, but it’s done by shuffling goods and fixtures out the back door to sell before creditors can change the locks on the store. The store has completely abandoned any attempt at regular hours, and posts on Facebook are the best way to determine when they’ll be open this week. Everything is late. There is no new product because last month’s product was never paid for. This is usually the time when a hastily-composed GoFundMe or Kickstarter campaign will be launched. The owner doesn’t understand that even $10,000 of free money will not save his or her business. Nobody donates, anyway. Depending on how the owner is handling things, their spouse is either relieved that it will soon be over, or is moving back in with Mom for a while.

This is what the various states look like, but the definitions should be more personal and concrete for each owner. When I say concrete, I mean that you should determine what the operating profit (which will determine things like number of employees) and net income (which will determine which car you drive) numbers are for success, survival, and failure. Write these numbers down under each heading, then figure out where your store’s state falls in that list. Nobody is looking over your shoulder, so you can, and must, be brutally honest with yourself.

If your store is succeeding, then there’s more to be done than ever. You thought that you would have it made, but now you’ve got something to lose, so in a lot of ways it’s even worse. The days of your friends and customers seeing and appreciating your hard work are over, because most of it is now behind the scenes. You just traded all your small business glory for a little more money. Tough. There’s people counting on you to feed their kids. Get back to work.

If your store is surviving, then you’re not alone. Most game stores that make it exist at this level. You certainly shouldn’t give up, but you should definitely examine your options. If you’ve got an education and career prospects that will lead to a better financial future for your family, you should consider a graceful end to the business. Or you could find some poor sucker with an inheritance to buy it from you, I suppose.

If your store is failing, then you have hard decisions to make, but it’s not a disaster unless you wallow in mediocrity for years or allow it to collapse. Most stores that didn’t start with plentiful capital were in this state, at least at first. If you just started, you may be able to doggedly ride the momentum up into survival, and then possibly into success. If you’ve been stuck here for a while, though, the prudent thing is to arrange for a timely, dignified closure. If you met your obligations to your creditors, and didn’t leave your building in shambles on your way out, then there is nothing wrong with closing a business because it didn’t work out. You can shake everyone’s hand and still be an adult when you lock the door for the last time.

If your store is collapsing, then now is not the time to try to execute a Hail Mary play for success. If small business success is in your future, it’s not in this iteration of your business. Do your best to close without hosing anyone, then rebuild your personal and financial life and decide what’s best for the future of your family. This is your opportunity to do the right thing. Don’t miss it.


Cards Against Humanity Did Nothing Wrong

Let’s talk about independent retailers and Cards Against Humanity. I’m not here to discuss the merits of the game, because the market doesn’t care about whether you or I think it’s a good game, or a sophisticated game, or whatever. It’s a game that people want to buy, and that’s what should be important to retailers.

Cards Against Humanity

Cards Against Humanity does not sell their game through distributors like Alliance and GTS. They sell direct to a very few brick-and-mortar stores, but the vast majority of their product is sold direct through Amazon. It has been so hot that I and many other independent retailers buy the game on Amazon, mark it up above MSRP, and sell it in our stores. It sells anyway. Recently they’ve made waves on my side of the industry by bypassing independents almost entirely and partnering with Target. In so doing they’ve probably killed the side-channel cash-cow of the marked-up copies sold at your local game store.

There’s a lot of hate among independent retailers for Cards Against Humanity, but the discussion of it is frequently disingenuous. Apparently they showed up at GAMA in 2014 and announced that they would be taking applications from stores to sell their game. They started small, signing with just a few retailers seemingly at random, and then suddenly started telling retailers that they were not approving any further applications for the indefinite future.

soup-nazi_320And why would they? We are, on the whole, awful. The barriers to entry on the retail side of our industry are essentially nothing, and some among us are pleased to sell games for 15% over wholesale online. Trying to enforce Minimum Advertised Price is like herding cats, with recent ongoing attempts requiring the clout of some of the largest publishers in our industry, who surely can’t be certain yet of the outcome. Some retailers wail bitterly about what lying, dishonest jerks CAH are for taking clean, indisputably legal steps to protect the value of their product, and that evening will post about how awful it is that other publishers allow scumbag online discounters to drive margins down to nothing.

Cards Against Humanity is the Soup Nazi of the tabletop gaming industry. They have a product that is so in-demand that they can decide exactly what stores get to do business with them. They have learned their lesson about independent retailers from their final trade show appearance and the backlash that continues in retailer forums to this day. If I were in their position, with a product so popular that I could freely choose my partners, I wouldn’t want to do business with us either.

It makes me wonder about what place the independent retailer has in the tabletop gaming business. Many of my well-respected and successful peers insist that the local game store has an important role as a driver of enthusiasm for new games. We demo and sell games locally which creates community, they say, and drives sales for the new thing across the entire ecosystem.

Whether you think that that’s true or not, and whether or not you believe that publishers will need us in ten years, you can’t deny what Cards Against Humanity has demonstrated: If your product is good enough, you can make lots of money while cutting out the petulant middle-man. Then, when you’re ready to try something bigger, there are mass-market retailers who are willing to sit down with you and do business like professionals.

Publishers, perforce, will continue to say reassuring things to us at trade shows. All we have to know is that Walgreens is getting their own Munchkin exclusive to understand that, right or wrong, we may not be considered indispensable forever. I can’t blame them, either way. Walk circumspectly, retailers.

Spotting Counterfeit Pokemon, Fire Emblem, and Zelda GBA Games

Today I was at the store, sitting in our closet-sized office, doing end-of-the-month admin stuff, when I heard what sounded like happy noises from the front counter, including one of my managers saying, “That’s great! We can ALWAYS use more of those!” I asked what we bought, and she answered that we had just bought basically the entire set of GBA Pokemon games.

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My stomach sank. I’m always scouring eBay, looking for big lots of video games that I can part out and sell at retail for a profit. I remembered seeing lots of these:

2016-09-05 16_18_28-gba pokemon lot _ eBay

2016-09-05 17_25_59-savelarge2016 _ eBay

Don’t Do It

Let’s get this out of the way first: Selling counterfeit goods is illegal. Yes, it’s even illegal if you tell the buyer that they’re counterfeit. At the very least, the code running these games is owned by someone who is not getting paid for the counterfeit games, so at the very least “repro” carts are copyright and trademark infringement. If you are a store owner, do not mess with this. It’s morally wrong, legally prohibited, and practically it’s not a great idea to bet your business on selling black market goods. I want to feed my family and provide jobs for my employees with the knowledge that I didn’t have to cheat to do so.

Spotting Counterfeits

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The above are all counterfeit games. Pokemon and Fire Emblem games are ridiculously hot right now so I’m sold out, but I do have a legitimate copy of Pokemon Sapphire in my workshop that is waiting for a battery replacement, so we can do a comparison.

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Some things to notice: The battery on legitimate games is there to run a clock, rather than to keep memory intact. When the battery dies on these games, you are given a warning that the game will still work, but that time-related functions will not work. These functions include berry growth, which is helpful and fun but not required for the main part of the game. When starting the bootleg game, which has no battery and thus can’t keep time without being powered by the Game Boy, no warning is given. It is my expectation that the code has been hacked to circumvent the clock-check at the start of the game, and that berries do not grow. I don’t have a ROM dumper to check the former and can’t really be bothered to check the latter, but there is no reasonable way to implement time-based functions without, you know, a way to track time.

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The backs of these games are clearly different when you have them side-by-side, but I’d have trouble telling if you just handed me one. The screw on the bootleg was silver-colored instead of gold-colored, but my experience with Chinese manufacturers indicates that this is not going to be consistent enough to be an easy tell.

The easiest way to tell the difference without taking the games apart is to look at the top-right corner of the blessedly-transparent cases. On the legitimate games you’ll see the edge of the battery. On bootleg carts you will see a chip on the top-right corner.

One final tell: There’s usually some letters and numbers physically imprinted on legitimate games near the Nintendo Seal of Quality. It’s too subtle to capture with my camera, but you can easily see it in good light. If there’s no imprinting, I would immediately be suspicious.

2016-09-05 16_19_28-5 GBA SP DS Lot Emerald Ruby Sapphire FireRed LeafGreen Pokemon Games Best _ eBa

Take a look at the Pokemon Emerald cart above. Even in the seller’s photo you can see the chip in the upper-right corner where the battery should be. The legitimate card DOES have a chip near that location, but it’s not all the way up in the corner, and it’s mostly obscured by the battery.

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Both of the above are counterfeit Fire Emblem games. These could be MUCH harder to spot since the cases aren’t transparent, but frequently the details are wrong on the labels since the games aren’t popular enough to get the same scrutiny. This Fire Emblem game is missing the Nintendo Seal of Quality altogether. Of course, if you open up the cases, the poor-quality boards and cheap blob-chip (these are chips printed directly onto the board and then covered with black epoxy to save cost) are giveaways. These particular copies don’t even make an attempt at having the Nintendo model numbers printed on board or using the “correct” chip model numbers, though of course that could change in later revisions.

What Now?

Well, I can’t sell these. I’ll keep them around for training purposes, but I would never sell them to a customer for legal and ethical reasons explained above. The employee who took these in wasn’t to blame, since he’d never been trained on spotting the fakes. I’ll point employees to this post in hopes that we won’t get burned again. I’ll place a note on the customer’s account to double-check the validity of games that he brings in from now on, but I won’t immediately ban him, because it’s very possible that he didn’t know they were fake. The eBay listings that are currently up don’t give any explicit indication that they’re aftermarket, and not everyone is informed enough to be suspicious of games below market prices shipping directly from China.

But now YOU are informed, so you’ve got no excuse. Go, and sin no more.

Update: My friend Michael from Desert Sky Games and Comics sends me an image one of of his copies of Fire Red:

Sure enough, more sleuthing determines that some of these games (which don’t need real-time clocks) don’t have batteries. From elsewhere:

Counterfeit on the left, legitimate game on the right.

If in doubt, it may be worth having known-legitimate games on hand for side-by-side comparison. That extreme-upper-right chip, the blob-on-board IC, and the lack of embossed letters on the Seal of Quality seem to be dead giveaways for fakes.

You Need a Lackey

If you’re standing at your front counter at an empty game store reading my blog, then this one is for you.

You need a lackey. Right now. As in, as soon as you can reasonably do so. Ideally they should start training this afternoon.

You can’t be in two places at once, and you can’t reasonably do more than a couple of things at one time. Employees amplify the will of their employer, requiring only modest pay and humane treatment. An individual without employees is just a guy or gal who has a commercial lease. If you punch them in the nose, the business is probably closed for the rest of the day. An individual with good employees is like a person with a superpower. They’re stoppable, but they are orders of magnitude more capable than the lone guy or gal.lackeys

Getting employees is pretty easy, though managing them is a different challenge from the one you’ve traditionally faced. You’ll be pretty bad at it at first. I probably squandered what could have been an excellent first employee by alternately being too generous and too demanding. The second employee stuck around and learned with me.

The first objection is always that the store owner can’t afford an employee. If your goal is to have a profitable business, and you’re netting so little that you can’t afford someone to cover you while you take a day off, then you haven’t bought a business. You haven’t even bought a job. Jobs have days off. It’s a tough reality: There exists a state where the business has entered a death spiral. Without the resources to grow, no growth occurs, and nothing awaits but a miracle, eventual dawning of the realization that it’s a lost cause, or a long, mediocre slog that ends in the welcome release of death. The young man who owned my store before me had a fortune cookie fortune stuck to his monitor that said, “Good things come to those who wait.” It’s not true, so don’t wait for it to come to that. If you’re in this situation, then start making dramatic changes to what you’re doing, or start looking for a way out.

Downsides: Having an employee forces you to articulate to another human being how and why you do the things that you do in your store. This will hurt. It will expose all the lazy things that you allow yourself to get away with when you see an employee doing them and it makes you angry. It will cause you to start seeking easier, simpler ways of doing things, not because you can’t do complex tasks, but because the jobs that need doing must be made teachable. You will have to swallow what pride hasn’t been beaten out of you by the game industry and make the changes. It will be worth it, I promise.

Even at a lower income, your life is almost immeasurably better once you have two or three days off every week. Eventually you’ll pick up a second employee, which will save you from having to work 12 days in a row if someone gets sick. Once you’ve got enough employees that you are liberated from the requirement to be behind the counter, your entire life will change. You get to start doing things like hunting for closeout inventory and fixtures, going to trade shows to learn to build a better store, and maybe seeking opportunities to expand or multiply your business. I have seven employees, I’m sitting at the library typing away in peace, and I’m going to have dinner at home tonight. I’ll be away from the store during Friday Night Magic! It would have been unthinkable four years ago.

When you add employees to the mix, you remove the limits placed on the business by your frail, pathetic meatbag body. The new limits are determined by your ability to create good process, hire excellent people, and keep destructive hubris at bay. Furthermore, there are mental limits that can be circumnavigated with the right employees. If you got good ones, you will start to discover that your lackeys are better than you at all the things you’re bad at. I’m starting to get to the point where even my managers get to work on the business  rather than just in the business some of the time. That is a terrifying development, but if I’ve done my job well, it’ll be amazing for everybody.

You need a lackey. Go get one.