What aspects of your business are completely misunderstood by the general public?

I’ve been ruminating on this since the thread on the Parker board appeared attacking a retailer for a lack of real-time inventory integration with their web site. One of my first thoughts was, I bet that’s a really expensive proposition; some people’s (not ITB) seemed to be: how in this day and age can they not have this, forget about what it may cost?

I know I probably think about these types of things more often than most, but it never ceases to amaze me how little people understand about operating any business that isn’t their own and, more importantly, don’t understand how little they know. Usually this revolves around fixed costs that people don’t ever think about, but there are always a bunch of other little things that can be unique to a particular type of business.

So I thought it might be interesting to pull back the curtain a bit, for those who are willing, to try to increase everyone’s (including me) knowledge a bit about various wine businesses.

Since I’m asking others to talk about their business, I’ll start with our business, which is publishing. I don’t think most people have a good grasp of how expensive it can be to generate the content–whether you’re doing it yourself or contracting it out. It seems obvious of course, that really is our product, but some people seem to have an idea that the subscription rate is covering it.

These truly are fixed costs because they are not dependent on the number of subscribers you have, although they will vary depending on the number of issues you do of course. We’re monthly, so it’s probably easiest to understand in those terms. About 1/2 of our monthly costs are simply paying our writers as we mostly use non-staff writers. If we have internal articles, there can be significant travel costs as well.

Thus I’m always amused by the calls from some for all publications to A)accept no advertising and B)accept no assistance from anyone else in traveling around the world and acquiring sometimes extremely expensive wines. I suppose I ought to be clear about this to prevent this from devolving. I am not talking about people who criticize The Wine Advocate for not disclosing or having uneven standards. I’m talking about the people that when that mess exploded, cried a pox on any publication that wasn’t “pure” and accepted anything from anyone in the industry (ads, trips, samples, etc.).

If you’re going to do A, you better either have a ton of subscribers who are all willing to pay above regular market price for your product (even if one issue costs only about $2 per subscriber to print, process and mail, which would be really low for a glossy, you’re still talking about $24 for 12 issues worth just to cover those costs, which by the way are about 1/4 of our monthly costs) or almost no editorial costs (not really pay your writers so you just need to cover the physical costs). If you’re going to do B, you better not be doing A and you might also need to not really be doing any writing or traveling or tasting yourself, or again you’re really going to need to charge quite a bit per issue. We would probably need to charge at least twice as much for a subscription if we wanted to go the “pure” route.

So that’s us, I’d love to hear from retailers, restaurateurs (I could have taken a stab at this one, but would rather leave it to someone working in a restaurant), importers, distributors, and winemakers. When someone is either complaining about your prices or bemoaning some service you don’t offer or just running you down in general, what do you wish they knew?

Not ITB, but an intriguing question. I’d be interested to see some of these things myself.

I copied this thread here to grab some ITB/retailer perspective as well.

RE cost of creating content, this is required viewing: Harlan Elison says “Pay the f-ing WRITER!”

http://philmfreax.com/info/pricing.html

I love that rant. classic Harlan.

One reason I’d like to see some replies to this is that I’m interested in the differing perceptions of ITB vs customer. For example, on the the lack of realtime inventory - part if it is the ‘omg it’s 2009’ thing, but behind that is "if you’re going to sell on the web do it right’ and part of THAT is born from trying to order things online only to be told after the order is placed that they don’t have that wine. People contrast this with their experiences ordering from Amazon, etc and the winery/wine merchant comes up short.

The customer issue isn’t about realtime inventory, it’s about being able to order wines and then being told that the wine is out of stock often enough that the customer mistrusts the store. The feature that people SAY they want is realtime inventory, but what they really want is just to be able to order and get the wine. As is typical, you need to get behind the feature request to the underlying issue and doing that lets you come up with alternate solutions. In this case that could be “provide frequently updated inventory with an online store that marks things as Low Stock below a given stock level.”

Quick take on our retail wine and cigar store:

Though the quantity of wine available (under one case) is listed on the website, consumers order more. Some say they didn’t notice it, others say they figured we had some in reserve. Using an inventory tracking system in a small store with just the two of us, would take up an hour each day manually and point of sale system for tracking isn’t practical given the number of cigars that come and go each day.

Another is the out-of-towner. They walk into the humidor and see the cigar prices and some just plain blow up, accusing us as being ripoffs. They come from states that don’t have a 45.12% tobacco tax, on top of the federal SCHIP tax, compounded with California’s $1000.00 per year tobacco distributor’s license.

There are people who can’t understand that it is illegal to smoke in our store. They see the store as a “cigar” store, not a “wine and cigar” store or “wine bar.” They walk into the store and walk directly to the eight foot high, six foot wide, double arched doors of the wine cellar, open them, see the wine and ask where’s the cigars? We point to the eight foot high glass door marked “Humidor,” with a picture of a box of cigars above the lettering, that they just walked by.

The front door has “No smoking except in designated area” and “No one under 21 allowed.” Yet, people walk in smoking a cigar; pushing a stroller or with kids in tow. It is amazing how many adult people act offended that these rules exist and fix the blame on us. Surprisingly, there have been a fair number of 18 to 20 year olds, that apologize for entering without reading the signs on the door and vow to return as soon as they are old enough.

Those are the brief ones that happen every day.

Randy - a quick comment on the stock issue… does the commerce software not allow you to throw an error when there are 8 bottles and someone enters 9 in the quantity field?

Corrected link to Harlan Elison on getting paid:

Not how we currently have it set up. We use Miva and load from a flat file. I haven’t opted to switch to MySql yet. The flat file is simple and Carrie is familiar with it. I’m not sure how well she would transition to a database, since it would still be manual entry.

Thanks Roberto, I’m going to have to pass that on to everyone here.

Not ITB, but a decent POS software should be able to integrate with online inventory tracking.

can you imagine someone at Walmart manually updating the inventory each day?

The problem is cigars. They don’t come with bar codes.

You could subscribe to http://www.humidortracker.com" onclick="window.open(this.href);return false; and print your own…

Oh shit, that only works with wine

Hmm - odd. It’s not (from a dev standpoint) an issue of how the information is stored, rather it’s a software logic issue. I’d expect a cart to throw some kind of error if I tried to order 9 of something when its inventory indicated there are only 8 available, i.e. it should check how many it has in stock at some point. It could do that with a flat file even. But I’ve not worked on Miva, so…

Most common question from the typical person who wants to give me free advice. “When are you going to charge users and turn your site into a ‘real’ business?”

Not ITB, but a decent POS software should be able to integrate with online inventory tracking.

can you imagine someone at Walmart manually updating the inventory each day? [/quote]

I have never seen such a system and I’ve looked at dozens. Though, granted none in the last few years. I am sure there is a way but I have never seen a system advertised or demonstrated.
JD

John,

Mark’s flippant response really illustrates the point of the thread. Someone who is not ITB just assumes that if it works at store X then it must work for every retail outlet regardless of what products they sell.

And too many wine stores assume they’re special little snowflakes as if wine weren’t simply a product. The issue of POS/website integration isn’t a wine specific issue, it’s one of being a small business. Walmart can simply create the solution they need - they have a great IT operation. I’d bet that most large companies either create custom solutions or that the POS systems they use have integrations that enable things like inventory syncing. For some reason, small business POS systems don’t seem to have this. in other words it’s not a wine shop issues, it’s a small business issue.

Mark’s partially right. There’s zero reason that a POS system wouldn’t update inventory. That’s kind of the reason for it after all. However, having it update the website inventory is a different matter since the site almost certainly has it’s own product database that’s not driven off of the POS system. What large commerce ventures do is either split incoming shipments and allocate X units of product to the site an Y units to the store(s) or they maintain a centralized stock and have software to sync the two “locations.” To do this, though, you’d need to have a software process that takes the POS transactions and updates them to the site inventory (but that differntiates them from actual site transactions so as not to screw up reporting. For a smaller operation with adequate stock space I’d simply split the stock. Get 10 cases of a wine in? Allocate 7 to the POS system and 3 to the site, i.e. enter that quantity into each system. There are other issus with that - if your floor sales person raids the site inventory cases for a sale and doesn’t update things for example.

The frustration from the consumer point of view is that too often shops have an inventory that’s not just not realtime but very out of date. The occasional instance of an out of stock item is OK, but having it happen even semi-regularly isn’t. If you can’t be bothered to do something right, don’t do it.

HAHA! That’s awesome. I’m stealing it…