[Musings of a Game Store Owner] Like a Boss Part 7: Burnout Revisited
Burnout is a complicated thing. While customers certainly impact the level of interest and involvement an owner has in the business, there are numerous other factors that can cause issues. My post last week generated some lively discussion (specifically on pacing) and got some great awareness on interactions between owners and customers. In my discussion, I talked about burnout and the things customers do to further that process. There are lots of other things that are not directly customer related can push an owner over the edge. some of these things are things that are completely arbitrary; self-inflicted or just stupid bad luck.
One of the biggest issues that can wipe an owner right out is a problem with distribution. Make it more than one issue and it gets downright mental pretty quickly. Distributors are the keyholders to great games that customers want to buy. Having a good relationship with the companies that help spread gaming cheer is pretty important and makes for much happier owners all around. There are multiple problems within distribution, each making for their own types of headaches.
The first concern that can make TheDude (or any other FLGS head cheese) lose their minds is a bad sales representative. Whether it’s a personality clash, bad time management, horrible accuracy or “product of the week” pushing, a rep that doesn’t mesh with an owner’s style can be a killer. A rep that you’re always arguing with (over bad picks by the warehouse guys, misorders by the rep or “no I do NOT want to be a demo store for XYZ game that no one buys and requires me to spend $3K just to put their product on the shelf”) is a time, energy and emotional drain. Those resources could just as easily be spent on growing the customer base, cleaning the store or demoing something cool that DOES sell. But if an owner is spending all their attention on the phone with a representative that’s a pain in the butt, that leaves precious little for the folks actually trying to buy stuff.
Most of the time, reps are assigned by region; so who you get is predetermined and you can’t really change them because they sell to everyone in your geographic area. There are a couple distributors where whoever answers the phone first when you call in to make your initial order gets to have your business; and this can be either wonderful or horrible entirely dependent on forces beyond your own control. Trying to change who your rep is often cuts into their commission, so they are going to fight you tooth and nail over this kind of change. If you are set on a change, be prepared to do war with both the rep and their boss.
The second part of distribution problems is delivery. I can only tell you that no matter who the company uses (big Brown, FredX or someone else); there WILL be a problem with delivery some time in your ownership of your business. The problem might be simple: they forgot to load a box onto the truck at the warehouse. It might be a lot more complicated: you got the shipment for a store in Singapore instead of yours and you have to do a repack and remittance slip. Delivery might be screwed up because of the weather (last winter was brutal for us) or you might have a new driver. It doesn’t matter, a problem will arise- and how your rep and distributor handle the issue will make or break whether you keep them as a company you order from. Items getting left behind at the distributor is a sub issue of delivery- one company makes you do an entire new shipment (and potentially spending the minimum to avoid a shipping charge) rather than eating the cost of shipping you the small thing they missed the first time. Another gives you a discount on the next order. Again, how they handle it matters.
Another big concern is allocation. Most of the time, allocation is determined by how much and how often you order. As a business person, this makes sense – rewarding your best customers for their accounts is a great way to encourage future sales and generate repeat clients. These kinds of allocations are great for larger or more established operations- they have the customers and the cash flow to support continued purchasing and frequent ordering. It really stinks for companies just starting out. Without a long standing track record or a sales sheet for a rep to rely on to use as a baseline, it leaves very little to judge. The smallest and newest customers rarely get allocations above the lowest numbers.
However, there are allocations that are totally random. For example, this guy showed up last week:
|TheBoy was very happy. His wallet, maybe not.|
We generally have an idea that something like this is coming down the pipeline- but this was a total surprise until it was on the sell sheet. We bought as many as we were allotted, which was a VERY high number for a retailer our size. We can count how many we got on our fingers- but we took it. A couple other stores got higher numbers, but there did not appear to be any rhyme or reason to it at all. Other restrictions seem designed to nickle and dime a store into the poor house by allowing you to pay a premium for additional numbers- usually a HIGH premium.
An issue that often coincides with distribution problems is in manufacturing. If a company can’t make enough XYZ widgets, then a store can’t GET enough widgets. It’s pretty simple. It often happens that TheDude will call his favorite rep on the phone, order something, get promised something, and then the item not show up; simply because the originating company can’t get it produced or shipped properly.
For a while, Fantasy Flight was the number one perpetrator in this regard, specifically with X Wing items. We had customers banging down the doors for new ships, but FF just couldn’t make them fast enough. The current culprit is WizKids. They’ve had an extremely long stretch of either manufacturing issues or shipments stuck in customs, making distributors, owners and customers hopping mad. They’ve been well under demand with HeroClix for a while, and now DiceMasters is the product causing much gnashing of teeth.
|Please don’t ask me when I will get those boosters. I don’t know!|
Problems beyond the distributor are frustrating for every level of the experience. Representatives would love to sell the game, the store owner would love to have it, and so would the customers. When a game isn’t available at any stage, it can really make an owner’s day difficult. Telling customers “no” over and over is almost as taxing as anything else they may have to deal with. (Hello, Cards Against Humanity. You make my life miserable, jerks.)
Something that customers really don’t have any impact on is cash flow. It’s giant not just an issue of sales. Cash flow is a giant juggling act, and understanding how the process of ordering and paying bills works is an important part of this performance. Just because you make $2000 of sales doesn’t mean you have $2000 to spend on games. You have to think about rent, power, phone and trash, as well as payroll (if you have employees) and so forth. You also have to be aware of any items you may have on back order; because most agreements with distribution chains include allowances for them to take the money for back order items when so many items or so many dollars are reached in your “bucket” so they can deliver the items to you. Otherwise you end up holding items that other vendors could sell for an indefinite amount of time and the rep is out of a sale (and commission) and the other store owner is fuming.
Beyond just the basics of managing money for bills and product is the acceptance of credit cards. If you go through your bank, it can be a hugely complicated deal and the rates you pay along with when you pay them and how you get paid is a nightmare for anyone outside of finance to try to figure out and understand. (I work in banking and sell complicated products, and the charts for merchant services terms are worse than a tax guide to me.) That’s where something like Square can be a wonderful tool for businesses.
If you are just starting out, there are very few good reasons not to use this tool. It’s inexpensive, simple to use, and versatile. It offers great access to your money quickly and almost nothing in terms of setup. You also get a LOT of your money. Their swipe fee is very low (usually a set percent per swipe), which makes it a great choice for anyone wanting something simple to use.
But it’s not perfect, and if you already have a merchant services vendor, the contracts are hard to get out of without a penalty or serious cash implications. Accepting credit cards is pretty much a must for any retail business, but knowing when you get the money is an important aspect of the deal. That’s where the cash flow stuff can come in. Depending on your bank, even if the money is deposited into your account on a Monday, you may have to wait for it to actually POST to become available (and that can be the next day or three days later, depending on who you bank with).
Other parts of the picture include taxes, and depending on where you live and how successful you are, this can take a huge part of your life and make money very tight.
Something that is almost entirely the owner’s fault, but causes innumerable headaches is the level of understanding the owner has of the local market. Misunderstanding the market can be due to not doing the best practice homework and research involved in opening a retail business or a fluke of something no one could expect.
It can be not knowing the demographics of the metro area, misidentifying the customer base’s income levels or having bad information on the best media to use for advertising. It can be the wrong approach to the median earners in the area (too high end or not high end enough), using an unfortunate name (either one reminiscent of another store, bad luck or bad memories- anything can go wrong and you never know) or simply bad timing. All of these factors can sour an entire region and customer base on a store before it ever opens its doors. This sort of undercurrent of distrust can be a huge obstacle to overcome.
The time and energy involved in dealing with these obstacles, trying to win customers’ hearts and minds is staggering. There’s no easy way to deal with the stress of these difficulties and how much WORK it can take to start tackling them. That energy and emotion can be such a drain on an owner that it takes away from the ability to give the customers the attention they need. Additionally, it drags right out of anything an owner might want to care about at all.
Location is a subset of this type of problem. Even if you look at a storefront several times, the small stuff can and does add up. The many facets of a location can make an owners’ life misery if the factors are more negative than positive. Things like parking, handicap accessibility, proximity to bus lines and restaurants make huge impacts on the way customers view a business, and the way owners deal with them can make or break both the business and the owner.
Being near weird or loud noises, being in an area that is in the middle of redevelopment, being near a broken down store or having a store with lighting issues, ventilation problems or any number of other things that aren’t inherently obvious about a location at first blush can make an owner completely lose their mind. TheDude and I were less than an hour away from signing a lease on a very large location when we decided that it wasn’t right for us- for a variety of reasons. Looking back, we know we dodged a bullet – the store has been through three owners since we passed on the storefront.
I can promise you that battling your own building and the various complaints about it (because no matter how nice it is, someone will complain about something, and if there’s an issue the complaints will be much louder and more frequent) will completely wreck the morale of just about any proprietor and make them want to quit every single day.
The fire going out can be incredibly demoralizing, and that is another source of frustration and disillusion for the bosses of any business. Adding the various issues together and feeling the weight of all of the pressures can truly wear out the energy of anyone trying to make it, and burnout might feel inevitable.
There is hope, and ways that the fires can be lit again, and we’ll talk about those next week.