State of War Episode 5

Almost 2 years ago my frustration with getting certain miniature brands not available in Romania led to the creation of Wargames Romania. It was never intended for this business to make lots of money however being able to sustain itself was a nice milestone that i wanted to reach. To that end i gave a long thought to what i would be bringing in. From the beginning the direction of the shop was split between Model kits and Wargaming miniatures, sometimes certain brands or products bridging that small gap.

Model kits are complex affairs and the main drive and appeal to its products is the realistic reproduction of existing vehicles. The target audience is extremely interested in both common and rare vehicles (tanks: Tiger, M4, T-34, etc, airplanes: Bf-109, Me-262, Spitfire, P-51, etc) on a wide array of scales (1/35, 1/48, 1/56, 1/72, 1/87, etc). The key word here is how accurate the kits are compared to their real life counterparts. The kits also tend to be more expensive then what you would think, especially in the case of uber detailed models or where you buy lots of parts to customize each rivet and other details.

Wargaming miniatures are much more widely spread in regards of genre, range and scale. Combining Historical, Modern and Sci-Fi as genres together with an astounding number of factions available in all periods and varied scales (although right now the most popular are 28mm and 15mm) leads to an enormous range offering. Deciding which to supply is a tricky proposition as the target audience tends to stick to certain guns that are usually determined by group play (how many people are playing that specific system). I sticked to WW2 15mm as my main line of work simply because i knew the models and i liked Flames of War. It’s a good idea to work with stuff that you understand.

My starting orders were balanced in regards of what i wanted to bring in the shop. I had split my efforts between both ranges and tried to appeal as much as possible to a broad range of customers. In hindsight that was a mistake. It is much more effective to focus your time and energy (and mostly money) to a strong and focused direction in order to become a specialized retailer and be recognized as such. Model kits were not generating much traction while wargaming supplies were selling on the premise that they were finally available in Romania. This was helped also due to my policy of making available deals that were simply cheaper then ordering directly to the producer. When ordering from PSC for example you would pay (as a Romanian customer) the cost plus the added shipping while Wargames-Romania would simply offer it at cost and without shipping.

State of War Episode 5

As you can see in the attached picture my sales are strongly divided between 3 core categories. Model kits as a category was swiftly overtaken by Diecast models (of tanks and airplanes) that collectors were simply hungry for. My main distributor here is Easy Model and this range continues to sell well and generate interest from allot of different people, be it either a wife looking for a good gift for her World of Tanks playing husband, to the old tanker that actually served on a T-34/85 and the diehard collector of course that simply has to have all the models.

15mm WW2 Company A and B perform pretty well also. I’m not going to name names here but you can pretty much guess who they are. The system that they both support is mainly Flames of War but you can use the minis with other rule sets without a problem. Although with a combined 39% of sales the risk here is that when the system will fall so will sales and stock will remain pretty much unused.

The remaining 23% encompass all other stock categories (Ancient 28mm, Sci-Fi 28mm, Model kits, etc) but none is worthy of mention here as they don’t go over 4-5% each.

Conclusions? Diecast tanks are my leading best seller and by noting down customer base it is also the item that appeals to the broader public. People are drawn to the nice little detailed Tigers even if they haven’t actively searched for them. Thumbs up on a good product to have!

State of War Episode 5

Month by month sales are also a KPI that i track in my business. Every month worth of data refines what i ultimately believe is a major indicator of customer spending habits. You can’t ignore the fact that summer is much more lenient in regards of customers (maybe people are busy going in holidays instead of spending their cash on miniatures) and you can clearly see an ascending trend starting from September and going well into February-March. What this actually means? Starting September i am much more likely to restock certain ranges, counting on the influx of cash that is imminent. Knowing what to restock falls into the first KPI, and clearly Diecast tanks are worth investing in (which i did).

That’s all nice and dandy but these are major indicators that can indicate trends and give you a strategic view of your direction. What about tactical decisions?

Well, i certainly use the “Average net profit” figure to determine what range has the best profit % for the amount of money spent. Let me elaborate a bit. Item A costs 15 Euros when purchased and you can sell it with 20 Euros. That’s a 25% profit margin. Item B costs only 9 Euros but you sell it with 10. That’s only 10% margin. Ideally you would want to stock items that have a high profit %. In other words, you want your time and invested money to get their worth back.

“Items sold per brand per X” (where is X is a week, a month, a year) is used to determine on average how many items from a certain range i sell in a certain amount of time. Obviously you want to stock items that sell fast. The faster they sell the faster you can turn your money around.

And both of the above together can give you an efficient tool to estimate which range is more profitable. Example bellow:

Range A sells 10 items per week. Items cost 15 Euros and sell on 20 Euros.
Range B sells 50 items per week. Items cost 9 Euros and sell on 10 Euros.

Range A will generate an average of 50 Euros profit per week while Range B will also generate 50 Euros per week. You’d be temped to say that both ranges are equally profitable. That would be correct if you’re looking just at the raw profit however there are several other invisible costs such as:

1. The amount of work it takes to sell 50 items instead of 10. Trust me, unless you have done packing for a business you don’t know what it means to ship 5-10-20 items per day.
2. The investment required. Range A actually generates 50 Euros profit on a 150 Euro investment while Range B requires 450 Euros worth of investment.

I know that the above is nothing major and actually pretty much amateur work in regards of keeping track of one’s business. It’s just common sense stuff that i discovered through trial and error but i found it has helped me immensely in keeping my business afloat and actually getting bigger, step by step.

Do you keep track of your business?

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