旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � HomeCraft's Small Business Journal 넴 � SPECIAL ISSUE 넴 � The 1992 Summer Shareware Seminar 넴 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸� 賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽� 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 � 넴 � DISTRIBUTOR'S TRACK SESSIONS 넴 � 넴 � Rack Vending 넴 � 넴 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸� 賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽賽� MODERATOR: Bill Dixon from Shareable Software, next to him we have Paul Jacobsen from Digital by Design, then Jim Green from Shareware Testing Laboratories - and a slight program change - Jim Perkins from Gold Medallion Software. Probably the best thing to do at the start is to have each of them give a brief explanation of their company and how they got started. BILL DIXON: What we've done... We've taken a couple of different angles. The other title to this panel is "Shareware to the Masses". We're pursuing several different avenues to that end, along with working with Gold Medallion in the rackware area. In addition to the other things we do, as in publishing other author's programs. So we have another perspective to the whole concept of fairness to the author, yet selling a product and getting a product out there. PAUL JACOBSEN: My name is Paul Jacobsen. I own a company called Softsource. Digital by Design happens to be a registered trademark of Softsource, Inc. I started writing shareware programs in 1983. Sort of fell into disk vending by accident in 1985 while I was in grad school. Since that time, we've evolved through the mail order routine - we were in rack vending for quite some time - managed to find placement for shareware products in about 15,000 retail stores. In the last several months, we have moved from rack vending shareware to the commercial publishing arena. Although at the same time about 80% of our intellectual talent are shareware authors. JIM GREEN: Jim Green, Shareware Testing Laboratories. I started off a number of years ago, sitting in a vendor cart in the middle of one of the largest malls in Indianapolis, creating software on the spot and then distributing it. It turned out that I had a partner who was very happy that we were just in one spot. He didn't want to grow, he didn't want to go anywhere. But just by sitting out there in the mall, I was able to make a lot of contacts. A lot of people came to know who I was. They were intrigued by it, because they hadn't seen anything like that before, and they said, "Well, if ever you want to make a change - if ever you want to do something - come and talk to me." Well, there got to be a time when I did, because I wanted to grow. I found some other partners. We have, since then, escalated. They had the financial backing, and we became Shareware Testing Laboratories. One of our customers, for example, is the largest distributor to Christian bookstores in the country. We've got a number of other major distributors. But that took real capital. You can start small, you can make a very comfortable living out there in the middle of the mall, but rack vending is where it's going to be in the next couple of years; it's going to grow and we want to be part of it. JIM PERKINS: My name is Jim Perkins. I'm with Gold Medallion Software. We established our company after about a year and a half of research into racking shareware and distributing software on racks -- affordable software that is. We did about a year and a half of investigation and then established the company a couple of months ago to solely provide raw materials for shareware vendors to rack themselves. We decided there was a tremendous opportunity in the marketplace -- obviously -- but we also realized that there were some barriers to entry. The barriers to entry for a lot of folks were the initial cost of producing all the materials - the art work - and we're literally talking about hundreds of thousands of dollars to get a program rolling on a national and international basis. So our company was based on the fact that we could put those resources together and produce raw materials for shareware vendors, distributors and rackers throughout the world, and provide them with an easier entry into racking shareware. MODERATOR: The first topic in the program is listed as "What, Where, When, Why, and How Much?" Pretty broad, pretty broad. You might want to talk about who you see as your target market, how you price your software, how you determine your pricing... Probably some advertising information would be pretty helpful too. PANELIST: I'd like to touch on something first before we get heavy into the rack aspect of all this, and that's the "shareware to the masses" aspect. What we've done, we've been banging on a lot of doors to get massive distribution of shareware programs. We're talking up in the range of 3.3 million copies of a single program out there to the public. This can be done a lot of different ways. This has nothing to do with vendors. This is what you, as authors, can do all by yourself. It's just a matter of calling the people: the hardware manufacturers, others, retail stores, anybody that might have an interest - anybody that has anything related to software. You have an advantage as a shareware author: you are the boss. With shareware, you can do virtually anything you want. Commercial people, with their software, wouldn't even dare to do half the things that you will. You know, take a nickel for half a million copies of your program? Would they do that? Probably not. Would you do that? Well, I sure would. So that's the quick aspect there. Dream about it, because it will happen and does happen. You just got to get out there. You've got to call people and knock on doors. They do it, and they are becoming more and more interested in it as shareware becomes widely known. ANOTHER PANELIST: The fact is that 99% of the people out there don't get shareware catalogs and they don't have modems to download software. The purpose of rack vending is to bring good software to anybody who has a PC, and bring it to people in the venue where they shop every day. I'm talking about department stores, drug stores, convenience stores, video stores -- any place where anybody shops is a potential place for people to set up a rack and sell their software. And that's the purpose of doing this, or at least that's the motivation that Gold Medallion has in putting up racks and selling affordable software. As far as price is concerned, the market is perfect because we can offer the software -- due to the way shareware works -- we can offer the software for people to try it for anywhere between $1.00 and $10.00 -- a little less than $10.00. We decided that the middle of that range, a little in the higher range was a good point because it was an impulse buy. There was no barrier for those people to pick up a couple pieces of software and leave with some change. The price of paperback books is more than what this software is now. The price of some magazines is equal, many are more, than what the price of the software is. So for anybody who has a PC, there's really no barrier to them purchasing the product. ANOTHER PANELIST: I think there's no doubt that there's a market for impulse priced software. I think that's a reasonably well established fact. I think the issue for shareware authors -- and this is going to become an important issue for shareware authors over the next few months and probably the next 18 months -- is the fact that you have opportunities. We liken shareware to any other form of intellectual property. That is: music, paperback books. There are 70 million PC's in the United States. According to Software Publishers Association, there's 15 to 20 million PC's in homes. Our strategy is quite simple: if you offer software at a price that is commensurate with other forms of intellectual property in the mass market -- that is paperback books or music -- consumers will respond in a volume way. Now, doesn't it make sense that, given that fact - and that is a fact - that you as shareware authors should be compensated directly by the publishing firm that represents you just as any other artist. With one significant difference, that is that unlike other forms of intellectual property, music, poetry, and so on, the worth of your product is not subjective. It has objective value. It has measurable value, therefore, when you are solicited by publishing companies like Softsource - or others that will come along - with regard to your material, you should not allow yourself to be treated as a starving artist. Again, your property has objective, measurable value in the mass market. Your talents are valued in other arenas. In other words, if you're an accomplished assembly programmer, or C programmer or Pascal programmer, you have alternatives. You can take those skills and take to them to the bank in a corporate environment. We understand that; we are software people -- that's our background. You are all - all of the authors in this room - are going to have tremendous opportunities to be traditionally published and you should look very carefully over the alternatives that are presented to you. Look very carefully -- does the company have established distribution? How is your product going to get into WallMart? How is it going to get into Sears? Is the company there already? These are some of the questions you're going to have to ask yourself during the next 12 months. NEXT PANELIST: Rack vending has a tremendous opportunity. Your product may not be one that fits, traditionally, the mass market. With rack vending, we can target smaller segments of the market. I'm not going to have the same mix in a Christian bookstore that I'm going to have in a drugstore; that I'm going in a hardware store; that we're going to have in a college bookstore. If all a rack vendor has, for example, is 40 titles and you have a specialized product, what is the chance of your product getting on one of those racks? You have to find a rack vendor that is going to work to the specialty markets where your product is targeted. Unfortunately, as rack vendors, we can't put 400 titles out there like the mail order guys can do. What we can do is -- of the titles that we have on the rack -- we can put in some kind of literature saying, "Okay, now you have this one game. Look at all the other games that are available." We can do that. But you have to find a rack vendor who is willing to do those kinds of things. Rack vending reaches an entirely new audience that's going to be separate from mail order. So this is a whole new field for you people to experience new registrations and it's going to be: You've got two things to do: you've got to create the software and then you have to create incentives for registration. If you don't have those, regardless of how good it is, unfortunately, you just won't receive those registrations. MODERATOR: We've got a question over here. QUESTION FROM THE FLOOR: <> MODERATOR: The question was that we're gearing our conversation a little bit too much towards authors versus talking about our experiences as rack vendors -- gearing the conversation toward vendors. PANELIST: Our experience was good; we sold a lot of shareware from racks. PANELIST: I'd like to take a stab at the compensation issue for a second. I agree with Paul that, as authors -- and this does apply to vendors too because it's an issue that we have to consider for compensation for the authors -- it is an issue that you have to very carefully weigh. But at the same time you have to just get out your calculator and do some mathematics. If somebody offered to give away 3.3 million copies of registered version of your program that you could at a later date send out upgrades for, are you going to take it or are you not? QUESTION FROM THE FLOOR: <> SAME PANELIST: They have everything. You put on that disk what you want to put on that disk. I'm talking about shareware to the masses here. It may not be a new concept, but it's something a little bit different than a typical shareware disk out there. You're taking your product, making it available to somebody who distributes millions of copies. It is a registered version. Those people that end up with that product in their hands are now going to use that forever and ever and ever. PERSON ON THE FLOOR: But if it meets their needs, and I as an author don't have their name and address, I as an author might as well flush them down the toilet. SAME PANELIST: Okay, you're not quite following me. SAME PERSON ON THE FLOOR: I understand your argument. You're saying they're going to want something better and that they'll get in touch with me. I'm not sure that holds water, particularly in the commercial marketplace where they think they've gotten a real steal on a piece of software for five bucks. SAME PANELIST: The way this is structured, you will get their names. MODERATOR: Can we hold the questions until after the panel is done and we'll have a... PANELIST: I'd like to switch the topic for a second and try to address some of the things that will allow you as vendors out there to get into the rack vending business. There's a few key points you have to consider before getting into the rack vending business. First of all, it's like any other commercial product. You're not competing with other shareware in the store. You're competing with the customer going in and buying a magazine, or a paperback, or something else -- a movie. You're wanting them to buy shareware. You're wanting them to buy from your rack. So you are competing with those other items that look very good on the shelf and that customers are attracted to. So the first key is that the packaging must be superior. It must grab their attention; it must hold their attention; and it must get them to the point where they purchase something at the cash register. So the product packaging must be good and the value the customer is perceiving at the time is very, very important. The second most important thing is, when the customer gets home, they realize that the value is an excellent value. So the products that are in that product line must be extremely good, and the purpose of doing that is: #1) to get them to register so that they can take advantage of the incentives that the authors are offering for registering. And #2) that they will go back to the rack and buy more or recommend them to their friends. So the two key elements - just to summarize - when you're starting out: look for good packaging, and make sure you've got good products in your line. QUESTION FROM THE FLOOR: How about informing the customer about what Shareware really is? What kind of lengths do you guys go to do that? What kind of education? PANELIST: I think it's very important, because it addresses something that could become a problem. If you don't tell the customer that they're buying shareware, they're going to get home and they're going to be a little, possibly a lot, ticked off. You've got to tell them right on the package, up front, before they purchase the product, that it is shareware - and if they decide to use it, they should register the product. On our packaging we make sure that we inform the customer that there are incentives in many of these packages for registering -- like more games or additional products that are available to them through the registration process. ANOTHER PANELIST: You've got to make it absolutely clear. We, literally, put the registration fee right in the program description. When we are certain of what the user will get, we put that right in the description. We put two paragraphs about shareware on the back. Then, of course, the ASP wording that shareware requires separate payment and so on. There is some difficulty, though, in the mass market -- unlike in the catalog business when people tend to study these things, and look through and read -- in the mass market you're basically dealing with a decision that's made almost instantaneously. But what the customer's really seeing in that KROGER store and that WALLMART -- they're seeing a "Wow, computer software for X.95". It says shareware and all this other stuff, but do you really read all this other stuff that's on a bag of Oreo cookies? Ultimately, the information, the attention span, the ability that you have to inform the purchaser at the point of purchase, is limited, and it's a concern. ANOTHER PANELIST: Because it's such a non-traditional way, usually if you pay $7 for something, it's yours. PREVIOUS PANELIST: You've bought it, yeah. It is unique. Shareware always has been unique, in many ways, but... PANELIST TWO: How many complaints have you had from customers who say, "We bought this, but we didn't understand what it was. Therefore, we're angry." PREVIOUS PANELIST: Well, we've had some. I would never say that we didn't. PANELIST TWO: But not to any great proportion? PREVIOUS PANELIST: Not to any great proportion. Very, very few as a matter of fact. ANOTHER PANELIST: Well, would that come back to the vendor or would that come back to the author? PREVIOUS PANELIST: Either or both. Usually it comes back to us. For example, we've had a couple of cases over, what, three years. ANOTHER PANELIST: Literally, that's about the size of it. What the point is - shareware is so novel. When you open up a bag of Oreos, you just don't find a message inside that says, "Hey, I'm Nabisco, send me another $20.00." <> "If you use them after 30 days." "Or give me back my cookies." "We'll send you the enhanced version, or something." SAME PANELIST: But I think if you opened up that box of Oreo cookies and in there they offered a coupon, you would take that coupon and go buy another box of Oreo cookies. So it's very important - it may just come down to offering registration incentives to make sure that they know they're getting some value when they register. Because it is a very novel concept. And it's important the customer understands that. Maybe we don't get any complaints when the customer's not happy - even after they registered and sent this voluntary money in - because they just don't buy again. It's the customers you don't hear about that maybe are not very happy. So it's very important on the package to inform the customer about shareware -- and Paul's right, they may not read it, but if you get a reputation for offering good registration incentives, like Apogee does, I think the customer will be very happy and they'll shop your rack constantly. ANOTHER PANELIST: That's it. From a vendor's point of view, the only way that rack is going to maintain permanent placement in that location is if you make the real estate it's sitting on valuable. When you're talking about an impulse item of any sort -- and that means multiple purchases off that display -- the only way you're going to generate that response from your customers is to be up front. Because if you let them down, they're not going to come back and buy another one. QUESTION FROM THE FLOOR: The impression I get from some of the reactions I'm hearing in the audience - I assume from authors - is that authors are not exactly too thrilled with the racking concept. That the mind-set of people buying from a rack in a drugstore is that they are getting a steal on a software package, even with adequate notices on there, in regards to ASP regulations, let's say. Have you found that most or a great percentage of authors might be in that realm of thought? PANELIST: Our feeling and our experience has been that the authors are thrilled with what's happening with the rack vending. It's because there's an extra 20 to 30 million disks being distributed of their product every year. ANOTHER PANELIST: That's what I would think: it's just a numbers game. PREVIOUS PANELIST: Yes, it's a numbers game. You're offering it to a larger clientele. You have an opportunity to make a lot more money in terms of registrations. We're not selling software or shareware any differently than the catalogs are offering it. It's a fact that the awareness of the general public that [they] may not understand shareware. Every time they open their shareware catalog, they read that you should register and that there's all sorts of things you should do when you buy shareware. We don't have the opportunity to present that type of information every time in such detail. We have an opportunity to present it on the package. If the customer decides to register, for whatever reason, then that's fine. I think that as more racks get out there, it will become well known what customers can do, and it will become well known what authors or whose games or whose educational software offers the best registration incentives, and there will be no problem. ANOTHER PANELIST: Well, let me address that as well. When STL announced at the Summer Shareware Seminar last year that we were going into rack vending, I think the line of authors that stood there with their disks in hand and said, "Jim, how do I get on your rack?" -- including some of the big ones -- speaks for itself. SAME PERSON ON THE FLOOR: All right, this is my first, so I might not have been familiar with that. Also, Jim Perkins, your package does work. I just bought it about 45 minutes ago during break just so I could get your address and ask you the next question. I have seen a few racks in New York City and New Jersey, where I'm from -- not many, but some. Most have what I consider inadequate packaging. So I'd like to know: how do you locate and who do you use to do your packaging? PANELIST: Well, I should explain what Gold Medallion really does. We provide the packaging to the vendors that want to go out and do racking. The person that put the rack in the store here - in the hotel - they're a distributor of Gold Medallion Software -- they're a licensee of Gold Medallion Software. I'm not involved in putting that there or putting it in any store. I'm providing you, as the rack vendors, the raw materials to build a package. All you have to do is add a disk and assemble the package and take it to distributors, or take to it chains, or take it to stores and put it there, and you make your money from that point on. So as far as looking for good packaging, you can consider Gold Medallion as a possible supplier of good packaging for you. ANOTHER PANELIST: Or you can go to any advertising agency and they can - even the smallest advertising agency - can put together a package -- the kind we're talking about. It's not high science. PREVIOUS PANELIST: That's very true; it's not high science at all. That's very true. What we're trying to do, though, is offer it to you so that you can avoid those costs of doing the production, four-color art work. Buying clam shells in quantities of one million may not be the most economical way of going about it. But there's no science, I mean, we're going to have people copying this in a matter of months. But we'll continue to improve that packaging. FROM THE FLOOR: Yes, I have a few brief comments to make. First of all... As a consumer, when I walked into the store -- around the corner in the lobby -- the first day that I was here -- and saw your rack, I was concerned. I took a look at the package and it had the description of shareware on the back. But the huge sign that's on the top, that has the price - as a consumer, it implies to me that that's really all they have to do -- even though the full description of Shareware's on the back. Okay, now I'll put on a different hat. I'll put on my ASP Board Member hat -- and I know that you're not an ASP-approved vendor, but I still need to make the statement for people that are here: rack vending was a very difficult issue for the Board during this last go-around because of the disclosure problems. Because of the disclosure problems we've had in the past with "$5.95" in two-inch type, with nothing else on there and having fine-print somewhere else. This gives a profound message. The profound message is that it costs $5.95 and that's it. People don't read the fine print that's on the back. Something has to be done to the $5.95 to get the message to Nancy Smith who's in line at the grocery store -- to get the message across to her when she walks up to the cash register that the $5.95 has a string attached to it. PANELIST: There's two ways that can happen. One is you can let the market take its course. That is, you can let the market sort out rack vendors that are fully informing customers versus those that are not. Or shareware authors have the right -- well, they have the option -- to propagate rules. So it's either going to be a market phenomena -- where customers aren't informed and are going to stop buying from that display -- or the author community propagates rules. SAME PERSON ON THE FLOOR: But what I'm trying to address is your earlier observation that what gets into the mind at the impulse situation at the cash register, is what is in the largest type. That's what they remember. That's what the image is. And when they go home and they turn it over, they see the fine print. Or the author has a beg screen when the thing starts up. That's a problem because it wasn't in large type. PANELIST: Just so that you know - so other people who may be interested in rack vending know - literally, we went to the point where we were saying so much about shareware on the packs, the registration fee was one of the first things that you saw. You know, "This program requires another $25," right after the title. Just so that you know -- it didn't have any influence on sales velocity whatsoever. There's this issue: marketers always put their product in the best light possible at the point of purchase, but it had no influence on sales velocity, and we know -- we did it. SAME PERSON ON THE FLOOR: And then one final comment as an author... Yes, I'm excited about the idea that I should be compensated for the intellectual worth of my product, as opposed to being treated like a starving artist. PANELIST: Yeah, that's going to be a topic on the next panel, I believe, too. Royalties and compensation. <> ANOTHER PANELIST: I'd like to just address the sign issue -- meaning we're offering something and we're telling them that they're buying PC Software. It's not called PC Shareware, because most people don't have a clue what Shareware is - so it's Software. We offer a price of $5.95 and $6.95 and there are no strings attached for that consumer. That consumer can walk out with that package for $6.95 or $5.95. I mean, the fact that they can register and get extra things and get all sorts of value for registering, is a way of marketing shareware, but there are no strings attached. ANOTHER PERSON: Ah, but there is. Most of the shareware out there says, "You only have the right to use it for 30 days, then you have to register." PREVIOUS PANELIST: Oh, I understand that, but there's no strings attached for that person walking out of that store with that software. He can buy that software, she can buy that software, for $5.95. The clerk in the store can't grab their arm and say, "You can't walk out of there." There's no strings attached at the retail level. There are strings attached, I understand, in the software. When they're buying software and when they get it home and are using it on an ongoing basis, but we point that out, okay. PERSON IN THE AUDIENCE: That's my whole point. It just isn't clear enough on that display. QUESTION FROM THE FLOOR: Yeah, that final string is very, very important to the author. It serves the starving artist from right there in the front. If we're talking numbers like two million copies out there, one of the reasons that the authors are upset is: they see you making a dollar a disk or whatever - they want a piece of that. What piece [of the action] is affordable for the rack vendor to provide to them, and how do the authors work with you to get that? 25 cents a disk? 50 cents a disk? PANELIST: What are the catalogs paying you to put your product in their catalogs? SAME PERSON ON THE FLOOR: Excuse me? PANELIST: I would love to compensate you for the packages that we put on the rack, but I think we're doing that because we're paying the advertising fee to get your product registered and get your product known in the marketplace. We work the same as the shareware catalogs. Are you being paid by the shareware catalogs for every disk they send out of your software? SAME PERSON ON THE FLOOR: I propose that also. MODERATOR: I know this is a hot topic. PANELIST: That's not the topic of this... MODERATOR: Yeah, it's a hot topic, and anybody who wants to stick around for the next session -- which will be in this room -- I know that's going to be discussed more. NEW PERSON FROM THE FLOOR: I would like to know a little bit more about what you were going to start talking about: the packaging -- what kind of packages you've come up with. I've seen Jim's. The rest of you, if you have an example with you -- just one box for us to look at, to see what kinds of things you're doing, and... PANELIST: I think you'll find that most of the major shareware distributors are doing it one of two ways. Either "clam shells", like Jim -- and that's what STL does. Paul, do you have a sample of yours? PAUL JACOBSEN: Well, we really don't do shareware, any more. We've gone to a traditional box with royalties to authors, no beg messages, and so on. PREVIOUS PANELIST: Okay, we're clam shells. We're heat sealed for virus protection, and looks somewhat similar to Micro Star or some of these other rack vendors out there. MODERATOR: Have any of you actually done tests using both color with screen shots, versus just descriptions? PANELIST: Well, we just have descriptions right now, on ours. We've been put up against Micro Star in a number of stores -- head to head with them -- and outsold them four or five to one. Why that is, we don't quite understand, because it would seem logical that "Hey, it's the pretty screen shot that's going to sell it." We haven't found, so far, that that's the case. We're doing very well. QUESTION FROM THE FLOOR: The type of stores that you're going to get most of the racks in, I guess -- retail stores that would sell paperback books -- those would be targets. What percentage of those stores have racks right now, and how quickly do you think that will reach 100% or whatever? PANELIST: Well - except I'm not going to speak for Toronto now - but the market is wide open as far as the United States is concerned. SAME PERSON ON THE FLOOR: Right, so there's not many then? SAME PANELIST: There's not many. Toronto, by the end of this year, is going to have a whole lot. MODERATOR: Are computer stores a good market? PANELIST: Computer stores are a great prospect for the rack software. You'll see in computer stores many different types of racked products, and they go head-to-head against the competition. They've got a little more floor space than maybe a convenience store or 7-11 type store, where they're limited in space and they may be only able to carry one type of racked product. QUESTION FROM THE FLOOR: Hi, my name's Al Barnett. I'm a rack vendor from Boston. I'd be interested to find out what your experience in stock turns, inventory turns, is right now. We're doing about 10 percent. Our rack turns every week about ten percent. I'd be interested in finding out what your inventory turn would be. It's a very important factor for retailing, as you know. PANELIST: Retailers really want those quick turns, and they want, obviously, every piece of margin that they can get. But they want those quick turns. They want that rack not only to sell fast, but to be restocked quickly -- immediately -- because, if you leave it empty, you're going to see pantyhose and batteries on the same rack as... SAME PERSON ON THE FLOOR: I understand, but what is your experience in an inventory turn? What are we talking about? SAME PANELIST: Okay, in [those terms], every store is different. In terms of a computer store, our experience is that they're moving about 90 units every two days, which is half of the rack. Half the rack every two days. Video stores, it's about the same. Bookstores, we have experience where it tells us about 110 units per week out of the 192 on the wire racks. So they're turning, on average... The whole rack is turning over completely every week and a half to two weeks. SAME PERSON ON THE FLOOR: That's extraordinary, because milk doesn't turn that fast - that's almost like milk. I mean I think your statistics... That's pretty unusual. SAME PANELIST: It is. We were shocked. We were shocked. Block Buster Video found that shareware was the top selling product in their store. Period. SAME PERSON ON THE FLOOR: Well, I have a rack. My rack is 400 titles. We're in a hundred stores. We're only doing 10 percent. So I don't understand that, but that's great, though, on your part. I'd like to be able to share with that. I'd like to be able to turn that percentage, but we're only doing 10 percent on a weekly basis, and in terms of retailing. If you equate that, that's five turns a year which is pretty damn good for retailing. If you look at the retail averages for turns, anything over four turns is a good turn in inventory for a retail store. So we're doing five and that's only 10 percent. If you're doing 50 percent, you're doing 25 turns a year which is extraordinary. PANELIST: What's your price? SAME PERSON ON THE FLOOR: Our price is only $3.50. We're going to $3.95. I used to have clam shell, and the reason I stopped clam shell is because people were opening up the boxes. Retailers were complaining about the clam shell -- that disks were being taken out of the store. So we went to a poly bag sealed. It also saves us a little bit more money now. We don't have to pay 22 cents on the clam shell. But it's the security of the thing. I think the sealing is a better thing. It keeps it more comfortable for the consumer knowing it's a sealed package and for the retailer also. I'd like your help on just one other thing: on the signage and the pricing. Since I get involved in signage too, I think you've got to understand that in terms of retailing, it's very, very important that you have to have the signage a little bit different than you have to anywhere else in shareware. As a rack person, we're also under the constraints of the retailers. They've got certain specifications that they require in terms of signage. So you also have to realize that in the retail store you're trying to capture the customer's attention. It's an impulse item. By putting the price up, there is a very large item -- consumers don't always read all the wording on the signage -- they do look at the pricing; they do look at what it is. And if you describe the shareware concept on the back of the package, like Gold Medallion does, I think that's pretty adequate in terms of a retail distribution method. I also support racks because it's a very good way of distribution to the masses. There are thousands and thousands of retail stores. There are not thousands and thousands of flea-markets and things like that. That's one of the reasons why I went into the rack vendor business. PANELIST: Thank you. You may consider a couple of other issues in terms of selling a lot of product off of your racks -- increasing the turns, in other words. Location in the stores is critical. I'll be honest with you. When we were putting it in this one video store, we had it so everyone had to trip over the rack to get into the store. I mean, it was very important that we put it right in the front of the store and people saw that rack. Positioning is critical, so that's very, very important. Packaging is important. Pricing is not important. I don't find that pricing and the flexibility of pricing is an issue as much as everybody may think it would be, including myself. In fact, if the price is a little higher, the perceived value is higher and the customer's more comfortable with the purchase. The other place you want, to be sure to increase turns, is to put it in a very high-traffic area -- obviously. Just pick the highest traffic area you possibly can, and put it right there. MODERATOR: We're running kind of short on time, so maybe if we take one more question, and if you've got other questions, you can talk to the guys. QUESTION FROM THE FLOOR: I'm still back to the similar question. I'm glad to see that you feel that the price is not that big of a factor. So, if authors can't take 25 cents a piece out of your disk price, how about raising it by 25 cents and giving that to the author? PANELIST: The problem is, if a rack vendor gets paid 25 cents, that gets multiplied three to five times by the way it works itself through the chain. So you're talking about 25 cents to you and a dollar or more that it ends up increasing the retail price. There's not 25 cents worth of profit a rack vendor going to a major distributor can just give you and not try to recoup somewhere. It's got to come by an increase in price to our distributors. Unfortunately, that's just the way it works. There isn't one heck of a lot of margin in this business. << end of session >>