Logistics and inventory

Inventory is fun – after all, spending hours every few weeks counting board games again and again is what we were hoping to do. Hopefully, now that we have a better handle on things, we should be able to keep our inventory counts to once a month (maybe even less!) but it’ll still be a chore.

Inventory

Amusingly enough, it’s not even the counting that makes inventory such an interesting business. When we first launched, we had 270 products (board games and role-playing games). We quickly realized that we were selling our board games much faster than role-playing rulebooks and decided to put our major efforts into expanding our inventory there. These days, we have about 450 board games that we try to keep in stock. That’s a 67% increase in our product line.

And we are nowhere near the product line other stores like Funagain have. At some point, we shall have to have a discussion on the best option for our line of games. While the long-tail (i.e. holding stock for every game possible) is a viable plan, it also requires sufficient capital and traffic to make it viable.

Capital

It is also a substantial chunk of our capital – in fact, that is where nearly all our starting capital is tied-up in. At roughly $20 per game, 450 board games means we keep nearly $9,000 tied-up in inventory at any one-time (if all board games are in-stock and we only keep 1 game in-stock!). Rather obviously, that is not the case – while there are a few games we keep only 1 game in-stock for (normally our first test on those games), we normally keep at least 2 games for others and in some cases up to 20 games.

Stock

That makes figuring out how much stock of each board game a running headache. Settlers of Catan might sell 20 copies this month, but next month might only 8. However, Carcassonnesold 4 and 12 copies. So, do we then keep 20 copies of each and hope for the best or maybe only 12 each or 20 of Settlers and 8 of Carcassonne. And because not everyone buys pre-orders, how many orders did we lose while we were out-of-stock?

Logistics

Compounding the problem is our inventory runs. We only have two distributors, both outside of British Columbia and thus we are, at the moment, pulling only 2 restocks per month (and mostly preferring to keep our major restock when we are in Washington to take advantage of the Loonie). Sadly, access to reliable automotive transportation to do pick-ups in Washington continues to be a problem.

As you can guess, all of this is a new and interesting little experiment for us. Unfortunately, as customers you get to feel the brunt of our learning curve! Hopefully, you have seen a marked improvement since we started, and hope you will stay with us as we continue to improve and expand.

4 thoughts on “Logistics and inventory”

  1. I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

  2. Sounds like someone needs to take an Operations Management course! Answers to all your problems will be found there.
    Just because you don’t consistently sell the same number of each game per month, does not mean you should guess at how many to keep in stock the following month (and I assume you aren’t really just guessing). OM will allow you to decide how many of which games to keep in order to maximize profits (ie probability of having games in stock when needed) and cashflow (by minimizing capital in inventory). Personally, I find OM is a little on the boring side, but some people like it.
    Anyway, good job keeping up with the ever growing demand, you’ve been doing well so far! 🙂

  3. Agreed Ryan. The formula you discussed sounds intriguing and I’ll definitely go ask our mighty Google to help find it in the interim.

    Part of the problem is that until now, we don’t have a specific time-line on pick-ups, which complicates it sadly. Fingers crossed, it should be much smoother on that soon and with proper record-keeping as well, it’ll flow smoother.

    Thanks a lot btw! I’m glad to hear that at least one person is happy with our work thus far. And finds my random posts about managing this store interesting.

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