Goblin Graphs

• Posted on 3 September 2020
• By Joey
• Posted in Goblin Games, Joey
• 1

"We worried about you all during the shutdown" 

"We are glad you opened back up, we couldn't imagine if you shutdown forever" 

"Can I just donate you all some money? I want to make sure you stay open." 

I am most definitely not trying to brag here, just making a point. We’ve noticed a trend in your comments to us at the shop lately. Many of our customers are worried, hopeful, thankful, scared. Keeping the doors shut was unsettling for everyone. It still feels weird without in-store play, but opening the doors to retail shopping felt like a breath of fresh air.

It’s humbling. It’s heavy. It’s scary, too-- to matter to people . 

It is our responsibility to always listen, always improve, always work to deserve your support. 

We like to say that we’re all part of a big goblin family. If that is to be believed, we need to be transparent. We’re going to throw some numbers at you, and lay out some of the crunchy operational stuff that business owners don’t often share.
The hope here is to give a bit of an idea on how you can actually help.
(tl;dr the solution is to buy our stuff, but I’m going to draw it out longer)

We want to communicate simultaneously, we're going to be fine and oh no please help. We hope you take this information into consideration the next time you are looking to spend some money in the shop, and try to remember us when you see something cool online or in a big box store… or as you are last minute emergency shopping for a birthday gift. We’re good for those.

MATH! GRAPHS!

Keeping the shop’s wheels rolling takes a fair bit of money every month. Payroll. Electricity.  Internet. Advertising. Rent.
We have an SBA loan we took out to renovate the spot we are in currently that we are paying off. 
I won’t get into the weeds here, but we need to pay around $14,000 a month to keep the doors open and this thing running “normally.”

Our average margin per item is 42%.  That means from the $100 item you buy:

The item probably cost us about $58.00

We charge you $108.95

Uncle Sam gets $8.95

We "make" $42.00

These numbers are average, I will break into some maths later and tell you where we make our money. This is also not including credit card transaction fees or additional shipping costs from distributors, which vary.

In order to keep the doors open, pay our staff, and our taxes, we need customers to spend $36,300 every month.

(Spoilers: we did not hit that number in April, May, June or July).

That's before the cost of inventory.
Oftentimes for small game stores, the struggle isn’t having customers to sell product to - it’s having the product to sell. This means maintaining enough liquid capital - or a good enough line of credit - to write $15,000 checks when there’s a new Magic: The Gathering release. Or when Games Workshop says you’re allowed to buy up to 45 Indomitus boxes, you need to be able to buy 45 Indomitus boxes. People like having options, so you need to stock variety. Sometimes you need to stock things you don’t even ever expect to sell just because a thing is impressive and fun to look at, or to dream about owning. We spend anywhere from $2,000 to $8,000 on a typical week of restocks if there aren’t any new fancy things to buy. Some of this expense we expect to recoup quickly; on inventory that we have to order in larger quantities up front or on specialty items that are high interest but slow to move, the investment can be sunk for months before we see a return.

Those are big numbers.  We are a big place. We fell into this starting with almost nothing and little experience. Imagining that to be our goal when we started 6 years ago it would have seemed preposterous, but it works. Because of all of you. 

With that being said I would like to share some real life sales numbers.

January and February were 2 of the biggest sales months we have ever had. I don't really know why. I can remember some retailer forums had shared similar experiences around that same time. These months are better than November and December 2019 (Holiday season). Super wacky, and great for us. Our industry as a whole was booming. March was on track to be another good month. Things were already starting to slow down in the shop for organized play the last few weeks of March and we shut our doors the last week, during which we only did $1,800 in sales. We could feel the shutdown upon us those last few days we were open; People were choosing to stay home.

While we were shut down, we were doing everything we could to keep sales going. For a few weeks we had to do deliveries while even curbside was not allowed. This whole time we were working out of a back room and a shipping container while contractors tore up our floors. These were crazy times. We scrambled to get kinks worked out of our website and trained our technology averse customers to use it. Our floors hit many snags along the way and, honestly, if the shutdown wasn’t happening we would have kicked the contractors out and probably would have unfinished concrete floors right now, but that’s a different blog post. Heavy sigh.

Our first day back open was Indomitus release (July 25). It seemed clear to me that this product was Games-Workshop doing us (and themselves) a favor to try and keep the money flowing. This box has around $500 worth of models in a box we could sell for $199. Since the beginning of August, our numbers have been very similar to pre-shutdown numbers, even without in-store events, largely thanks to Indomitus and Magic’s newest Masters Set, Double Masters.

We were very, very lucky and received the PPP and EIDL loans.

The PPP (Payroll Protection Program) covered our payroll for 2.5 months. This allowed us to keep our staff paid. I'm very happy to say we kept paying all of our employees this entire time that didn't qualify for unemployment. It ended up being 4 months, not 2.5, but this government program saved us and our employees.

The EIDL (Economic Injury and Disaster Loan) is low interest and basically just designed to give us money to pay for things as shit hits the fan. We haven't really touched it yet but it's there when we need it. We hate debt. We like paying our bills off. We are looking at it as a good safety net, but if we use it, it will need to be paid back.

We are very fortunate that the government has helped us a lot, but what keeps our business alive long term won't be bailouts and loans.  It's you.  We are a store where you can buy things.  I encourage you all to keep buying the things we sell.  That is what will keep us open. We have done our best to keep you all engaged and entertained through this shutdown and we will continue to try new things.  

I have made a list of some of the margins on typical products we sell and some direct examples.  The reason I want to share this is because when you want to support us, some things put more money in our bank account than others. The bigger the red part, the better for us!

Typically board games, we pay between 50-60% of sticker price.




We sell these for $45, a bit under MSRP ($49.95), so we can be more competitive with big book sellers. Honestly, we won’t be mad if you use PDFs. Just buy all your dice from us ;)

This is a “keystone” markup which means we paid half of the sticker price. Most things in the industry are considered “good” markups if they are close to this. This is nice. Buy lots of dice. We like it when you buy dice.

Alright margin all the way across their line, and with as much flac as they have gotten as a company over the years, I have had very few issues in the past 4 years.  

Puzzles are a new line we brought in last year.  They have a decent margin along the same line as board games.  We need to stock a lot to get the variety people want. I’ll talk about these again later, but for now, we’ll just say we are glad we had them during shutdown!

These are actually the worst markup in the store.  For some reason the Internet has decided that this is going to be the item that everyone price matches and battles to be the cheapest on.  It’s pretty lame. We sell a lot. It’s okay, we get Magic players on the singles.

Magic Singles.
This one is very hard to calculate numbers. We spend hours and hours on labor sorting and picking cards.  We negotiate and trade for almost every expensive card we acquire, but I can tell you because of trading and our bulk picking, anytime you spend dollars on Magic singles it is one of our best margins in the shop.  Keep buying your singles from us.  Trade your cards back in. We want them. 




Puzzles!  Big winners of shutdown. We are very glad we started stocking puzzles last year. I think the number in June and July would be comparable to April and May, but the puzzle manufacturers can’t make them fast enough, and our restock orders have been delayed and cancelled and an all around debacle while the big companies figure out how to make them faster.

This one confuses me a bit. Board games seem like a thing that should have done better during shutdown. For small groups and families it makes sense to use board games as a way to stay sane while being shut in. I think much of this decline is an inability to impulse purchase during lockdown.  No weekly board game night to incentivise impulse purchases also hurts these sales. I assumed that these numbers would pick up after we reopened but they seem very stagnated. These sales numbers don’t reflect how important board games are to us. One of the things we will try to do going forward is engage more in building a board game culture, and we are very open to suggestions and comments on how to accomplish this while in-store play is suspended. We love board games, and want them to flourish here!

These products still moved during shutdown pretty well. I think the whole month of April their warehouse wasn’t shipping at all. The month of July being bananas is due to Indomitus (mentioned above), $6,368 of that number is just Indomitus boxes. People are all riled up for this new edition and even without a lot of new codices, painting and modeling is for sure one of the biggest hobbies of shutdown. I think 40k players will be abundant for the next few years since lots of people picked it back up or finally took the dive and got started while locked down.

This is probably the scariest graph I have today. Magic singles pay the bills. Going from $15,000 in sales in January to $400 a few months later is terrifying. Yikes.

I love graphs and hope you have taken away something about our shop that can resonate with you. Our whole business is based on being a fun place to pal around and meet new people and get to play the games you love.  We can’t do that right now and won't be able to do that in the same capacity for the foreseeable future.

These times are crazy and we will continue to do our best to navigate what is safe and sustainable. Tables are in our future, but we just don’t know when. This world we live in is wacky right now but we will be here through it and I expect us to come out the other side stronger.  Because of you. 

-Joey


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