A couple weeks ago I made a crack in one of the retailer groups that went something like this.
"I think ordering is easy. I just spend twenty hours a week researching new products."
It was slightly funny, highly accurate, and probably underselling how I spend my time, but it also doesn't begin to address the real issues when it comes to ordering, any kind of ordering. Sometimes we talk about new release ordering exclusively, but the dearth of stock on an evergreen can be just as painful for us, just look at the current stock levels of Catan around retail stores (including my own) that didn't realize we were about to have stock issues with it. (Or any Marfair title right now, but that's a different thing totally.)
When we're placing orders we're using a strange combination of sales history, predictive algorithms, this ephemeral thing we can refer to as 'customer buzz', and hopefully, the expertise of like-minded retailers who run similar stores and are willing to talk about these things with you. When you add in budgetary concerns, because very few of us can buy every product we want without considering the financial implications, and things like publisher trust, you end up with a true disaster of thought processes that can make ordering, and re-ordering, a challenge of nigh epic proportions.
There are so many concerns we have to think about when we place an order, and as a product line ages we have to think about those things in a different light. I loathe calling out specific companies in this space, but we need to use real world examples to make the case somethings.
Test Case One Star Wars Destiny
This CCG from Fantasy Flight released with a huge amount of hype, but it also released with supply problems that utterly crippled the ability to build a community of players. The first set was allocated heavily at release, sold out instantly in most cases, and then was impossible to acquire for a period of time that caused many players to move on to other things.
The second set suffered similar problems, but the demand had dropped because the first set shortages had caused players to lose interest.
The third set is out now, and I got every box I ordered, and was able to reorder. This was a case where my crystal ball was in good working order. I was able to properly predict the demand within my four walls to not end up with this product on my shelves. I sold what I thought I would, and can now just keep a couple of boxes in.
Not everyone had a fully working crystal ball though, and if you look at eBay you'll discover that many retailers missed out the fact that hype had died due to product shortages. I can currently buy Awakenings, Empire at War, and Legacies, all for prices that violate the Asmodee MAP policy.
The moral of the story here is simple; early shortages (especially of a collectible game) can cause players to lose interest before those shortages can even be addressed. Star Wars Destiny is not the first time we have seen this either, many of us witnessed this phenomenon with DiceMasters, another game that saw shortages of its initial release.
These two games have another thing in common as well, as they both suffered from a gross lack of preorder numbers from retailers. DiceMasters was met with a collective 'meh' from many of my retail colleagues, while Destiny was met with groans about it being collectible from many people I discussed it with in the early days.
We, as retailers, butchered the potential of these games, so I hope everyone has reacted properly as we move forward. Collectible games are a horrifically difficult market these days, and every time a publishing partner begins pushing on towards us I struggle. I am one of the people who kind of giggled at DiceMasters, I helped put a pillow over its face while it was still in the cradle. At the same time, I ordered early and deep on Destiny, because Star Wars...duh.
Both of these games should have had a much better run, but the development cycle and lead time needed for printing really means that publishers need preorder numbers from us months before we currently are doing that, and in order to get them good preorder numbers at a time that they can affect printing numbers means we're preordering products we don't have enough information on. That makes this very difficult on both ends, retail and publishing.
Test Case Two Scythe
If you knew Scythe was going to be a hit I envy the heck out of you. My crystal ball saw nothing but murk on this title. It was released at a time that "I'll take two" was my standard response on any new release. I ordered two, and got allocated to one. I sold the one on release day, and it was months before I saw it again. When the second wave hit there were further allocations, but when the game was going for two or three times its retail price through online resellers people were willing to wait for it. I feel like, and I could be wrong, it was the fourth printing of Scythe before we could really get however many we wanted.
And the price tanked.
No, seriously, this game went from "Oh My God! Why Is This So Expensive!" to "please take these copies at thirty percent off" within the period of a week or two. Retailers who saw the 'next hot thing' from nine months ago overbought, and then dumped like crazy to pay their rent on time when they realized that Scythe wasn't the current hot thing, but the thing that people wanted months ago.
It truly did require not only a crystal ball, but a better understanding of the retail supply chain, to properly order each wave of this product in that case. I missed out on a TON of dollars because I didn't catch Scythe early enough, but these days I'm happy to keep a copy or two around and sell it to people who are still looking for it.
Scythe is only one of many examples of this type of behavior in the retail/publisher chain. When a product is plentiful the price online plummets, in many cases because retailers ordered too many and crippled their cash flow. When product is scarce the prices skyrocket, which can send a message to publishers that retailers NEED MOAR COPIES, but then too many copies are printed, the demand is gone, and publishers are stuck with the cash flow issue.
We've seen this behavior recently with Gloomhaven as well. On release day people wanted above retail for it. Now I can buy it for well below retail in several places, because retailers saw 'hot thing' and ordered more than their cash flow and customer base would allow them to sell. I watched one retailer advertise Gloomhaven for twenty bucks over retail, and then a week later for retail, and then a week later for twenty bucks under retail...
Test Case Three Iconic Masters
I don't know how much I can say here. If I go look at eBay today I see the following.
Modern Masters 2017 - $245ish Modern Masters 2015 - $230ish Modern Masters 2013 - $300ish Eternal Masters - $200ish Iconic Masters - $140ish
I can't see what Hasbro printed of the most recent set. All I can tell you is that spoilers were available literal months in advance of the set release, and were available as we went through an entire other release cycle before Iconic Masters was finally released.
Numerous retailers saw "Masters" printed on a box and visions of dollar signs danced in their heads. They failed to read that ephemeral thing I called 'customer buzz' previously, and overbought this product to the death of their bank accounts. When you add in the "MTG Finance" schmucks you ended up with a product that barely worth wholesale.
I don't know that it's possible to read the tea leaves well enough to understand that this product was going to be a dud, and I won't pretend I did, I ordered too much of this product by about 20%, and just recently finally sold our final boosters packs of it. Between lackluster responses to spoilers and the completely asinine things said by those "finance bros" all over the internet Iconic Masters was handled poorly in every way, shape, and form, by every tier of this industry. Hasbro released too much information early and then sat on the product for months, allowing hype to die. Distribution took too much of it, and when their bills came due they started selling it cheaper than usual to clear out inventory. I can still buy this product from every distributor I use, as well as from Hasbro direct.
This is yet another case where cash flow was crippled for many stores, because it was the first time that it wasn't easy to sell your entire allotment of a "limited" product. There's a useful lesson here, everything Hasbro makes for Magic is no longer a home run. You could argue that it was the early spoilers followed by a later release (I believe this contributed), you could argue that the overly aggressive release schedule of 2017 is to blame (this also contributed), and you could blame one more thing.
I'm going to take a moment to blame one more thing, just for the record.
This number is miserable. We should probably stop pretending that it's more expensive to print these Masters sets, and we should just admit that this price point, and the higher wholesale price that comes with it, is a shameless cash grab by Hasbro. At the same time, I think we should accept our portion of the blame for that cash grab. Due to scarcity with the original Modern Masters retailers immediately got $10 or $12 a pack, which showed Hasbro they could get $10 a pack.
We really are our own worst enemies sometimes. I even know of a non-collectible case where the retail price was raised because retailers had decided the product was worth more than retail, and the publisher raised MSRP to get their half of that price increase. I was proud of them.
Ordering for our stores is more complicated than ever, just by the sheer number of products coming out in each category. This year will see the release of Song of Ice & Fire, Fallout, and Star Wars Legion, three major licenses entering a crowded and difficult miniatures space, where the cost of entry frequently frightens new players out of that space.
The CCG market will not only see more Magic product than it rightfully needs, but new entrants like the Munchkin CCG from Steve Jackson games. Fiiguring out what's the right answer for your store, both in the "do I carry this or not" and with "how much of this new product can I buy and sell" can be the difference between long-term success and short-term fire sales to pay the bills.
The board game market will see something like 2,000 new entrants this year, and that number might be low. This category might be the most difficult to place orders in. Frequently we aren't given enough time to plan preorders, the huge number of products makes it hard for us to figure out the right and wrong orders, and length of time it takes for a print run to reach the States means that publisher numbers are set in stone way before we really know how many we want, so products go from 'we have plenty' to 'damn, allocated', frequently.
So, yeah, I joked that ordering is easy, but I think most things are easy if you're willing to do the work. Ordering is how we live and die though, not organized play, despite what some companies may tell you. If you're willing to put the time in with this project your business will get better, your profit margins will get better, and your cash flow will get better.
It is better to miss out on 20% of sales but make full margin on all the sales you make, than it is to order 20% too much, cripple your cash flow, and be forced to make 10% margins to pay the bills.
Proper ordering is about working on your business rather than in your business, and we know the value of working on our businesses. Spend time learning your clientele, understanding what you can sell, how each purchase affects your cash flow, and you can have success doing this for a long time.