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Home > Archive > Misc Chess games topics > February 2006 > A bit confused about USCF book sales - from the USCF Forum
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A bit confused about USCF book sales - from the USCF Forum
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| Sam Sloan 2006-02-26, 7:37 pm |
| Posted: Sat Feb 18, 2006 6:10 am by Sam Sloan
A bit confused about USCF book sale.
I sell books through Amazon. I get about $25 per month, although some
times when things are really good I get $30.
Still, that is a bit less than the $3,500,000 that the USCF used to
receive per year before Bill Goichberg gave away the USCF's books and
equipment business.
Many book sellers now refuse to sell through Amazon. This is because
Amazon only pays the book seller 45% and then discounts the book so
that a buyer can get a cheaper price through Amazon than from the
seller. I just spoke to a book seller yesteday who said that he no
longer sells thorough Amazon for that reason.
Sam Sloan
PostPosted: Sat Feb 18, 2006 10:47 am by Mike Nolan
The USCF's book and equipment gross sales (before cost of goods or
expenses) surpassed $3.5 million just twice in its history, in 1994-95
and 1995-96.
We now know that those gross sales figures included several hundred
thousand dollars in postage and handling fees.
The net profit from B&E sales was probably no more than 10% of the
gross sales in those years, and by 2000 the USCF was almost certainly
losing over a quarter of a million dollars a year on B&E.
Outsourcing B&E enabled the USCF to trim well over over a quarter of a
million dollars in annual cash outlays and with other cutbacks
probably saved the USCF from bankruptcy.
Sam is right about one thing, Amazon's 'partners' get a pittance.
PostPosted: Sun Feb 19, 2006 8:56 am by Sam Sloan
Mike Nolan's response, while appreciated, overlooks some very serious
management problems we have had. It should be obvious that if we
consistently sold more than $3 million in boioks and equipment per
year we had to be making a lot of money unless there was employee
theft or perhaps merely stupidity or exceptional incompetence.
There have been many scandals. Here just a few that we happen to know
about. No doubt there were many more that we do not know about.
1. The USCF published a series of books by "Chester Nemitz"
(pronounced chess tournaments) which were highly elaborate and
expensive to produce but were for pre-beginners to teach them a few of
the legal moves of chess. It should have been obvious that these books
were unlikely to be suitable for any member of the USCF. Nevertheless,
we paid the publication costs. We sold a grand total of three copies
of these books. To add insult to injury, the author threatened a suit
for his royalties. I do not know what happened to the rest of the
books. Probably, they were eventually thrown out with the trash. The
loss? Probably around $30,000.
2. The USCF bought a bunch of Chess in the Schools t-shirts from Chess
in the Schools. We paid something like $20 per shirt, more than we
could ever possibly sell them for. I think we ate the shirts and never
sold any of them. The loss? Over $20,000.
3. The USCF bought a bunch of chess calendars, amazingly thinking we
could sell them even though the year had already started. We sold zero
calendars. The loss? Nobody will say.
4. For many years, the USCF paid a MONTHLY fee to an agency who
promised to increase our newsstand sales of Chess Life magazine. Our
sales did not increase. The loss? Certainly more than $100,000, but
nobody really knows.
What can we say? Has our management just been stupid, or were they
bribed? I do not know but I would like to find out.
Sam Sloan
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| Ray Gordon 2006-02-26, 7:37 pm |
| Because you're a XXXXing moron. Where did you get your degree? Dumb
XXXX University?
All your buddies are corrupt.
| |
| Mike Nolan 2006-02-26, 7:37 pm |
| sloan@ishipress.com (Sam Sloan) writes:
quote:
>Mike Nolan's response, while appreciated, overlooks some very serious
>management problems we have had.
No, it doesn't overlook them, that was not relevant within the context
of your post. You claimed sales were $3.5 million a year. While that
was true for a period of two years A DECADE AGO, by 2000 that was no
longer the case.
quote:
> It should be obvious that if we
>consistently sold more than $3 million in boioks and equipment per
>year we had to be making a lot of money unless there was employee
>theft or perhaps merely stupidity or exceptional incompetence.
We were making money in the 1990's when we had Al Lawrence running the B&E
operation, Al's own estimate was that we were probably netting about 10%
on gross sales in the early and mid 1990's.
The DeFeis decision to downsize the catalog (without downsizing costs
significantly, the USCF payroll actually went UP that year) led to a
HUGE decrease in sales, from $3 million in 1999-2000 to $1.8 million
in 2001-02.
My analysis of USCF operations in 2002-03 suggested that our breakeven
point at that time was somewhere around $3 million in sales. High labor
and overhead costs were two of the factors leading to such a high breakeven
point. Bad management (little or no marketing expertise on staff or
on the Board), poor stocking decisions (some of which were made even
during the good years, like overpurchasing of Informants), inventory problems
due to obsolete stock, damage and shrinkage, and a complete failure to
embrace web sales or update the computer software to provide realtime
inventory data to the phone sales staff were other problems.
Frank Nero showed that it was still possible to rebuild USCF's B&E sales,
he increased sales by about $1 million in a single year, though not without
problems. (There were several hundred thousand catalogs piled up in
the basement of the building in New Windsor when he resigned, the USCF
didn't mail them because it couldn't pay the postage costs.)
Had the USCF had the capital to rebuild a B&E operation and been willing
(and able) to find someone who could run it, I think the other problems
were solveable. But when I went to New Windsor in August of 2003 the USCF
was literally within a few hours of not meeting the upcoming payroll, and
did not have the capital to buy the Christmas inventory, much less the
expertise to know what to buy or how to market it.
--
Mike Nolan
| |
| Chess Freak 2006-02-26, 7:37 pm |
|
"Sam Sloan" <sloan@ishipress.com> wrote in message
news:43f87960.38282484@ca.news.verio.net...
quote:
>
> I sell books through Amazon. I get about $25 per month, although some
> times when things are really good I get $30.
>
I guess that statement qualifies you as an expert in book selling!
- CF
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| parrthenon@cs.com 2006-02-26, 7:37 pm |
| BRIEF HISTORY LESSON
Mike Nolan's recital raises the interesting
issue of the loss of expertise. Nothing has more
ensured this outcome than the move to Cross-to-Bear
and the long-term contract with ChessCafe. The Cafe
now has a permanent hammerlock on sales because the
Federation will never be able to take back the
business. The kind of people we need are likely
unobtainable under the new dispensation.
I was in the Federation during some of the good
years. The breakeven point was almost certainly not
$3 million. The program was making money in the late
1980s, I believe, and sales were below that level.
The secret was two words: expertise and effort.
Al Lawrence had a lot of that expertise, but there
were a number of pretty sharp people whom Al and, in a
certain sense, I had trained (some of them moved
between CL and the sales program). The expertise did
not disappear overnight; it took about two years as I
predicted in postings at the time. Al's machine did
not break down right away, but break down it did.
The Federation had some "bad luck," if that is
quite the phrase beginning in the late 1990s. Tim
Redman had been a pretty fair president directly
before Steve Doyle took over in 1984. Back then,he
had had the good sense to do nearly nothing. He
filled an office and ratified what the executive
director did. That was smart.
When Tim became president a second time, doing
nothing had become impossible. He was committed to a
program -- an academic who believes in old-fashioned
corporatist economics (not corporate economics, that's
far different) was set loose in the American
marketplace. Phew!
Don Schultz was unfortunate. He and Al were
like oil and water, a fact that I was exceedingly
surprised to learn one day in 1995 or early 1996. Up
to that point, I had never understood the real
relationship between the two men as it existed at that
time. My view is that Mr. Schultz might NOT have run
for the USCF president in 1996 if he had realized
either that he would lose Al as ED or if he had had
the foresight to comprehend what the man's departure
would mean in the USCF business scheme of things.
The Federation then made the error in electing
a "strong woman" to the presidency. Beatriz Marinello
proved to be half plodder, half plotter. She
personalized nearly every decision, including the
disastrous move to Cross-to-Bear which has ended up
with the Federation in a buiding that will cost about
$1 million to bring up to a proper size if the USCF
ever recovers. The loss of expertise in the office is
nearly total, and the kind of staff that once existed
is no longer. The loss of top people will make itself
felt in the next couple of years, just as Al's loss and
the breakdown of his sales machine made itself felt.
One hope is that Hanon Russell has learned
some business lessons. He may yet prove to be the
great pleasant surprise. He is to blame for his own
sales breakdown because he would not listen to advice,
so far as I have been able to understand the
situation, regarding marketing and advertising.
Perhaps he will now let his undoubted brains take over
from his ego, and he may yet do well by the Federation.
| |
| John J. 2006-02-26, 7:37 pm |
| I don't know much about the move issue but I was totally surprised when I
heard the USCF was moving to Crossville and even more surprised that they
were building a new structure.
I was a licensed Real Estate Agent and, for the life of me, can't understand
why the USCF couldn't find an existing structure to purchase or
lease-purchase, if the move was, indeed, necessary.
<parrthenon@cs.com> wrote in message
news:1140407036.114477.138020@g44g2000cwa.googlegroups.com...
quote:
> BRIEF HISTORY LESSON
>
> Mike Nolan's recital raises the interesting
> issue of the loss of expertise. Nothing has more
> ensured this outcome than the move to Cross-to-Bear
> and the long-term contract with ChessCafe. The Cafe
> now has a permanent hammerlock on sales because the
> Federation will never be able to take back the
> business. The kind of people we need are likely
> unobtainable under the new dispensation.
>
> I was in the Federation during some of the good
> years. The breakeven point was almost certainly not
> $3 million. The program was making money in the late
> 1980s, I believe, and sales were below that level.
>
> The secret was two words: expertise and effort.
> Al Lawrence had a lot of that expertise, but there
> were a number of pretty sharp people whom Al and, in a
> certain sense, I had trained (some of them moved
> between CL and the sales program). The expertise did
> not disappear overnight; it took about two years as I
> predicted in postings at the time. Al's machine did
> not break down right away, but break down it did.
>
> The Federation had some "bad luck," if that is
> quite the phrase beginning in the late 1990s. Tim
> Redman had been a pretty fair president directly
> before Steve Doyle took over in 1984. Back then,he
> had had the good sense to do nearly nothing. He
> filled an office and ratified what the executive
> director did. That was smart.
>
> When Tim became president a second time, doing
> nothing had become impossible. He was committed to a
> program -- an academic who believes in old-fashioned
> corporatist economics (not corporate economics, that's
> far different) was set loose in the American
> marketplace. Phew!
>
> Don Schultz was unfortunate. He and Al were
> like oil and water, a fact that I was exceedingly
> surprised to learn one day in 1995 or early 1996. Up
> to that point, I had never understood the real
> relationship between the two men as it existed at that
> time. My view is that Mr. Schultz might NOT have run
> for the USCF president in 1996 if he had realized
> either that he would lose Al as ED or if he had had
> the foresight to comprehend what the man's departure
> would mean in the USCF business scheme of things.
>
> The Federation then made the error in electing
> a "strong woman" to the presidency. Beatriz Marinello
> proved to be half plodder, half plotter. She
> personalized nearly every decision, including the
> disastrous move to Cross-to-Bear which has ended up
> with the Federation in a buiding that will cost about
> $1 million to bring up to a proper size if the USCF
> ever recovers. The loss of expertise in the office is
> nearly total, and the kind of staff that once existed
> is no longer. The loss of top people will make itself
> felt in the next couple of years, just as Al's loss and
> the breakdown of his sales machine made itself felt.
>
> One hope is that Hanon Russell has learned
> some business lessons. He may yet prove to be the
> great pleasant surprise. He is to blame for his own
> sales breakdown because he would not listen to advice,
> so far as I have been able to understand the
> situation, regarding marketing and advertising.
> Perhaps he will now let his undoubted brains take over
> from his ego, and he may yet do well by the Federation.
>
| |
| Mike Nolan 2006-02-26, 7:37 pm |
| "parrthenon@cs.com" <parrthenon@cs.com> writes:
quote:
> BRIEF HISTORY LESSON
quote:
> I was in the Federation during some of the good
>years. The breakeven point was almost certainly not
>$3 million. The program was making money in the late
>1980s, I believe, and sales were below that level.
Yes, and payroll expenses were substantially lower when you were the editor,
Larry, as were shipping expenses, printing and mailing costs, utility costs,
real estate taxes, and just about everything else.
Here is some data I compiled from USCF audited financials:
Personnel Personnel
FYR B&E Sales Dues Revenue Personnel as % of B&E as % of Dues
1990-91 $2,112,580 $1,177,958 $959,682 45% 81%
1991-92 $2,412,101 $1,171,832 $1,049,508 43% 90%
1992-93 $2,574,686 $1,273,948 $1,129,565 44% 87%
1993-94 $2,901,214 $1,316,616 $1,193,645 41% 91%
1994-95 $3,506,032 $1,603,712 $1,455,966 42% 91%
1995-96 $3,600,283 $1,738.265 $1,504,942 42% 87%
1996-97* $3,121,785 $1,645,093 $1,439,112 46% 87%
1997-98 $3,455,110 $1,759,056 $1,561,224 45% 89%
1998-99 $3,427,575 $1,760,631 $1,648,879 48% 94%
1999-00 $3,000,787 $1,649,488 $1,550,009 52% 94%
2000-01 $2,533,506 $1,759,789 $1,528,829 60% 87%
2001-02 $1,826,956 $1,910,976 $1,562,523 86% 82%
1996-97 was an 11 month year since that's the year the USCF changed when
its fiscal year ended from June 30th to May 31st.
Notice that in 2001-02, the year the sales fell through the floor as a
result of the decision to downsize the catalog, the total USCF payroll
actually went up. I think the USCF made quite a bit of money on B&E until
about 1995, that it continued to make money on B&E until around 2000,
but after that it lost money on B&E, LOTS of money.
--
Mike Nolan
| |
| Tom Martinak 2006-02-26, 7:37 pm |
| > I was in the Federation during some of the good
quote:
>years. The breakeven point was almost certainly not
>$3 million. The program was making money in the late
>1980s, I believe, and sales were below that level.
Are you taking into account inflation?
If the break-even point was $3 million in 2003, then that would be
equivalent to $2,119,129.75 in 1990 or $1,776,036.31 in 1985.
(courtesy of http://www.westegg.com/inflation/)
- Tom Martinak
| |
| parrthenon@cs.com 2006-02-26, 7:37 pm |
| STUPID MOVE TO CROSSVILLE
<I was a licensed Real Estate Agent and, for the life of me, can't
understand
why the USCF couldn't find an existing structure to purchase or
lease-purchase, if the move was, indeed, necessary.> -- John J
Mike Nolan and I appear to be largely in
agreement. I might quibble about whether money was
made on the sales program in 1999 or 2000. I received
some messages back in 2000 and don't recollect
whether I posted the info or not. My source, who was
in the office, claimed that the Federation lost money
on sales in either 1999 or 2000. I can't recollect.
Still, the point is a minor one. The numbers
speak for themselves. I imagine that if Al Lawrence or
someone like him had remained at the Federation, costs
would somehow have been cut. Better deals would have
been made with suppliers, and Al would have been in
the warehouse making sure in a reasonably ruthless
manner that work was getting done.
Look, it comes down to this: people are either
stepping lively or they are not. Some people run a
business and make the employees run rather than
amble; others run it, and the employees sashay.
It's too bad that Don Schultz is not part of
this conversation. I would like him to answer this
question: if you had known in advance that Al would
not stay and that the sales program would go down
largely because of his leaving, would you have run for
USCF president?
I had no special insight into what would happen
beyond what I wrote at the time: you don't lose
someone who is fanatically poring over some page of
the sales catalogue for the 28th time -- driving
himself and the art director partially nuts -- and
expect that such lost effort will not eventually be
reflected in the marketplace.
One other point: Mike Nolan rightly notes that
even in palmier days wrong decisions were made. Too
many Informants were purchased, for example. The other
side of the coin is that some INSPIRED purchasing decisions
were also made, including some highly profitable chess tables
and sets from, if memory serves, India. Al moved the
Federation into computers and electronic devices
seamlessly. Into the early and mid-1990s, there were
few wrongheaded purchases. If Al had remained and
accomplished the same seamless integration with the
Internet, the Federation would be the global 800-lb
chess gorilla.
To their credit, both Tom Dorsch and Jim Eade
hectored about the Internet. Sam Sloan noted that
they could have done more than merely speaking up,
but Sam forgets that Eade was in the political minority.
You can argue that Dorsch and Eade might have been
more conciliatory and sweet-talked a lot more, and there
is some truth in the argument. But really, the majority
has to take the blame, not the minority, which diagnosed
correctly what had to be done.
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