Penny Wise and Pound Foolish

Post topics about the business side of magic.

Postby Guest » 01/23/04 12:08 PM

Someone will always be able to make something a little worse and sell it a little cheaper, but that person will always be at the mercy of the price shopper. Baskin Robbins

The Law of Unintended Consequences. That's what is at work in the magic business these days. The Internet has been a huge boon to magicians, providing instant access to articles, gossip, product reviews, books and, of course, tricks. You can even see online video demos and performances, which is a huge boon to those who live far away from major metropolitan areas, and therefore from magic shops.

Wholesalers love this, as it gives them access to far more retail customers and offers huge new possibilities for trick, book and video distribution. As a result, we've seen a deluge of new products on the market, especially with advent of DVDs.

Combine this with a major demographic fact - well-to-do Baby Boomers, buying what they couldn't afford as kids - and you have the potential for huge profits in magic dealing. Dealers should be fat and happy. Instead, they're closing their doors left and right. Why?

Under the surface of all this activity, trouble has been brewing for years. At first, the online shops had it easy. Unburdened by the expense of a brick-and-mortar storefront, they were able to undercut regular dealers' prices and gain business. But as more magicians decided to open their own online shops, each carrying the same products, they had to cut prices to compete. The result is a business in which products are commoditized, customers trained to look only at price, and in which online stores are playing a deadly game of "musical discounts," hoping to be the last one left when the music stops.

Put simply, those discounters are wiping out the quality dealers, and then disappearing. And as the dealers disappear, there will be less and less incentive for anyone for write a book, market a trick or make a video. Some of us have awakened to the fact that soon there will be fewer stores and fewer choices for magicians.

I think it has to do with a fundamental misunderstanding on the part of magicians. Many think that it's all about the tricks (or the tricks on video), and all they need to do is buy the latest thing at the cheapest price and voila - they're a magician. In this world, nothing matters but getting it fast and getting it cheap.

But the best magic shops have always done much more than just sell tricks. They have served as community centers for magicians, where ideas could be shared and arcane knowledge passed down personally from one generation to the next. By sponsoring lectures and club meetings, local magic shops have helped round out our magical education.

But their greatest service is something than simply cannot be duplicated online: personal advice. Over the years, the best magic dealers get to know their customers, and are honest about telling a customer when a trick is wrong for them, suggesting overlooked tricks that fit their act, or guiding them past the fool's gold of the latest hot trick to the Mother Lode of the great books of magic.

Why would anyone do this? In a word: loyalty. By treating customers with care, the best magic dealers know they can build up a long-term relationship of mutual respect. Whenever a magician calls up their local dealer and asks about something they saw in a magazine, and says, "Can you get that for me?" they are really saying, "I'd like to buy it from you."

At least thats the way it used to work. Yesterday, a dealer told me about a customer who was bragging about buying a trick online and saving twenty bucks. He admitted that the item was a piece of garbage that he would never actually use. But he was so excited about saving twenty bucks off the retail price that he couldnt see that he had really wasted forty bucks buying the thing in the first place!

Penny wise and pound foolish. That's what I want to say whenever someone tells me how much money they saved buying some piece of magic junk they will never use from some online dealer who will soon vanish in a puff of smoke. Even the wholesalers are starting to wise up, realizing that established shops are their best long-term customers, even as they have helped wipe out those same shops.

I would not be half the magician I am today were it not for the care and advice of folks like Al Cohen, Barry Taylor and Denny Haney, to name just a few. And when the local shops close, not everyone will be living in Philadelphia, where Marc DeSouza has taken the local magicians under his wing at great personal expense. There just arent enough Marc DeSouzas around. The rest of us will lose what we grew up taking for granted.

Do we really want world of pushbutton magic shops, where only price matters? Do we really, as Dilbert creator Scott Adams says, want better products for free? If we vote online with our dollars to kill off the local magic shops, it wont be free. Itll be very costly indeed.

That's the view from here. Your mileage may vary.
Cheers,
Eric Henning
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Postby Guest » 01/23/04 12:18 PM

Eric,
If you haven't already, you might want to check the previous thread, "Are magic shops obsolete", I think in the "columns" dept.
Note: I know of one magic publisher, who recently has avoided having his product sold to "the discounters". If they are online, fine. If they make a practice of discounting their stock, below retail, no.
Guest
 

Postby Guest » 03/09/04 10:30 AM

Eric,

How true! The problem (as I see it) is pervasive. It doesn't only exist in the world of retail magic dealers but it spill over into the world of working magicians. Undercutting the competition is a business technique that is proliferated throughout the magic community. It's the magician who charges fifty bucks for a show worth four times that price because its not the way he earns his living and it's the Internet magic shop that undercuts the brick and mortar shops because they lack overhead.

There is no simple answer. We will only miss what we are losing when it is gone! Honesty and integrity in the magic business is elusive at best (after all, we are deceivers by nature). It's rare to find the type of honesty and helpfulness that the likes of Denny Haney provide. I do my best to support they business of those people who have given me guidance with my purchases and have gone the extra mile to make me an informed consumer, but I fear that their extinction is inevitable without broad based support. I live 2 hours from the nearest real magic shop, so often I must rely on what Im told over the phone. I have yet to find anyone nearly as ethical as Denny.

Unfortunately we are instant consumers. We want it now and as cheaply as possible without regard for the people standing behind the sale. Its a reflection of our times.

Whenever a business becomes solely about profit, whenever a business looses the human touch the consumer suffers in the long run.
Guest
 

Postby Rick Schulz » 03/09/04 03:35 PM

I believe the original quote came from John Ruskin: "There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey."

Many years ago this quote was often found posted in Baskin Robbins Ice Cream stores (perhaps to justify their higher prices). The original quote indicates it is the person who looks only at the price tag that is the ultimate victim, not the shop keeper.

The brick and mortar magic stores have always provided so much than mere merchandise. Of course, so did the local mom-and-pop hardware stores, which have been largely replaced by Home Depot, Lowe's and WalMart.
Rick Schulz
 
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Postby Guest » 04/12/04 06:39 AM

Great post, Eric. I also live 2 hours from the nearest shop, so I tend to order online. However, I try to order quality products from respected dealers - not just the lowest priced dealer.
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