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#34: The Game Isn't the Only Thing

st_gulik

Ben Woerner - WunderWerks
Validated User
ross_winn said:
Most small retail businesses are run the same way. Hell I ran the largest retail luggage store in California for three years. To many of the people in this industry I have no experience; which just goes to show you that some people are just pig-headed.

I appreciste your comments.
So let's show them how it's done. ;)

I plan on using part of my share of the family business (when I can, and not for a few more years), to really have a business smart publishing company that sells direct to retailers, doesn't allow it's products to be undercut (via the net, and unscrupulous dealers), and cares about quality both in it's product and in it's customer service.

What was it that Henry Ford said?
"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible."
 

Hippopotamus Rex

King Hippo
Validated User
st_gulik said:
So let's show them how it's done. ;)
Feel free to show us how it's done.

But a few things you should know about Ross's column first.

1) Distributors do not care one little bit about companies selling direct at conventions like Origins or GenCon. In fact we encourage it. Those shows are for the consumers, and more often then not the vendors don't make any money with the direct sales. Most publishers are just looking to break even.

2) All distributors are using computers. In fact I'll be willing to bet I have more money in my inventory control platform then 90% of the RPG publishers have invested in their entire company. To suggest that we are using pen and paper to track, sell, and reorder inventory is misinformed at best. I mean really, I have over 32,000 SKU's in my system right now. Pen and paper? The sales team not knowing what the warehouse is doing? I'm in Fresno and I can see what is going on with my Madison warehouse right now. In real time inventory status.

3) Distributors should keep 6 months of inventory on hand? Excuse me? That's not realistic at all. Currently I have over 4 million in inventory between two warehouses. And to be honest that's too much. If a distributor kept 6 months of inventory on hand he would be out of business by month 7. The idea at this level is to turn your product as much as possible. Reorders are placed with vendors every week to 4 weeks depending on the turn rate for that line.

Ross's column indicates to me that he has little to no understanding of how the distribution system in this industry works. I'm not claiming that it's perfect. It's not. There is always room for improvement. But his suggestion that we are incompentant and leeching off the hard working publishers is just wrong.

Distrubution serves a key role in the industry. Do you really think that retailers are going to order from 60, 70, or more suppliers? And better still, who is going to extend all that credit. Wizards of the Coast doesn't extend credit to stores, do you really think a small press RPG publisher is going to?

In short the article is drawing conclusions from faulty information. Distribution simply isn't the way Mr. Winn thinks it is.
 

st_gulik

Ben Woerner - WunderWerks
Validated User
Hippopotamus Rex said:
Feel free to show us how it's done.
Distrubution serves a key role in the industry. Do you really think that retailers are going to order from 60, 70, or more suppliers? And better still, who is going to extend all that credit. Wizards of the Coast doesn't extend credit to stores, do you really think a small press RPG publisher is going to?

In short the article is drawing conclusions from faulty information. Distribution simply isn't the way Mr. Winn thinks it is.
Well I just popped open my Vendor list on my computer system here in my store, and we have 67 vendors. It's no big deal for us. I enter everything into inventory, print out price tags, and enter everything all the bills into quickbooks. I don't see how it's that difficult to track really. I mean that stuff is only a small part of my work every day. I bet you a simple mom and pop operation could easily handle it. Hell, my dad and grandfather DID handle it when they first started my family's store. It's No big Deal, and working with that many suppliers gives you the opportunity to get the best price for something.

As far as credit goes, sure we have 30 day set-ups with a lot of our vendors and we pay off a bunch of our bills at the end of the month when we get statements, but I think as the industry matures you will see more and more companies offering terms, especially if it means they can sell direct.

Oh, and another thing, if you can't get credit from game company XYZ, then you pay with your Business Account AmEx and use it as your defacto credit supplier...that only gets you finance charges if you leave anything on it after a month. Many new businesses in the jewelry industry work that way until they can establish enough of a relationship with a company to gain credit, and in fact, we actually still use it as our credit with some simply because our terms with AmEx are better than what a specific supplier would ever offer.


So, you may think he is off base, but your distribution model isn't the end all be all that you may think it is, and could probably be easily replaced by faster more streamlined suppliers and retailers who don't give a rats ass about the bloated middlemen who seem to provide more headaches than help on both sides of this industry.

You made a comment about how Publishers realy just break even at conventions like Gama...well duh, those are showcases for new product, and places where new relationships are built. It's silly to think that Bob Publisher and Jim Game Store Owner are going to become fast friends and then when they go to enter a deal they call Louie the Distributor over so that they each actually make seperate deals with Louie instead of each other. It's asinine and pointless. What real service do Massive distrubtors provide that can't be done better by either the retailer or the publisher?
 

Hippopotamus Rex

King Hippo
Validated User
st_gulik said:
Well I just popped open my Vendor list on my computer system here in my store, and we have 67 vendors. It's no big deal for us. I enter everything into inventory, print out price tags, and enter everything all the bills into quickbooks. I don't see how it's that difficult to track really. I mean that stuff is only a small part of my work every day. I bet you a simple mom and pop operation could easily handle it. Hell, my dad and grandfather DID handle it when they first started my family's store. It's No big Deal, and working with that many suppliers gives you the opportunity to get the best price for something.

As far as credit goes, sure we have 30 day set-ups with a lot of our vendors and we pay off a bunch of our bills at the end of the month when we get statements, but I think as the industry matures you will see more and more companies offering terms, especially if it means they can sell direct.
Knock your self out. I don't care if you do business direct. I'm not going to argue with you about or try and change your mind. If you don't have anything better to do with your time then spend it on the phone all day with suppliers then go ahead.



st_gulik said:
So, you may think he is off base, but your distribution model isn't the end all be all that you may think it is, and could probably be easily replaced by faster more streamlined suppliers and retailers who don't give a rats ass about the bloated middlemen who seem to provide more headaches than help on both sides of this industry.
I don't think he's off base. I know it. I've got 11 years in this industry, the last 6 of them in distribution. When I tell you that our operation doesn't bare even the faintest resemblance to what Ross describes, it isn't my opinion. It's a fact. And once again I don't really care if you believe it or not. But the model Ross talks about in his column is not one that distribution uses.


st_gulik said:
You made a comment about how Publishers realy just break even at conventions like Gama...?
No, I made a comment about shows like Origins. The fact that you don't know the difference between the two doesn't exactly lend a whole lot of credability to your arguements.
st_gulik said:
What real service do Massive distrubtors provide that can't be done better by either the retailer or the publisher?
Extention of credit and consolidation of product. If you don't think those are important then don't use us.
 

ross_winn

freelance geek
2) All distributors are using computers. In fact I'll be willing to bet I have more money in my inventory control platform then 90% of the RPG publishers have invested in their entire company. To suggest that we are using pen and paper to track, sell, and reorder inventory is misinformed at best. I mean really, I have over 32,000 SKU's in my system right now. Pen and paper? The sales team not knowing what the warehouse is doing? I'm in Fresno and I can see what is going on with my Madison warehouse right now. In real time inventory status.
So you are insisting you have an end to end integrated inventory system with customer management and shipping integration? Just like Amazon and Target? Come on, no one has in hobby distribution, ever. You may be closer than most, but you have not hit the mark yet.

3) Distributors should keep 6 months of inventory on hand? Excuse me? That's not realistic at all. Currently I have over 4 million in inventory between two warehouses. And to be honest that's too much. If a distributor kept 6 months of inventory on hand he would be out of business by month 7. The idea at this level is to turn your product as much as possible. Reorders are placed with vendors every week to 4 weeks depending on the turn rate for that line.
The core issue is that the distribution channel does not generally stock enough for any sizable spike in sales. This has happened with several products. Were your merchandise fully returnable I am sure that your buying patterns whould change significantly. Compared to other large distribution companies in the US hobby game inventory is tiny and your fill rates are reprehensible. Distribution constantly runs out of product and constantly under-orders from manufacturing. Then they blame the publisher when they reorder products that run out of stock because no one anticipated demand.

Ross's column indicates to me that he has little to no understanding of how the distribution system in this industry works. I'm not claiming that it's perfect. It's not. There is always room for improvement. But his suggestion that we are incompentant and leeching off the hard working publishers is just wrong.
If distribution is doing as poor a job as I say then the distributors will one by one go out of business, just like they have over the last ten years. The fact that most game stores only carry lines from ten to twenty publishers put a much different cast on the 'hardships' of ordering direct.

Distrubution serves a key role in the industry. Do you really think that retailers are going to order from 60, 70, or more suppliers? And better still, who is going to extend all that credit. Wizards of the Coast doesn't extend credit to stores, do you really think a small press RPG publisher is going to?
Small press RPG publishers have already moved to a direct sales model. Distribution has zero impact on their model. No one carries full lines from 70 manufacturers any more. No one can afford to.
 
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Hippopotamus Rex

King Hippo
Validated User
ross_winn said:
So you are insisting you have an end to end integrated inventory system with customer management and shipping integration? Just like Amazon and Target? Come on, no one has in hobby distribution, ever. You may be closer than most, but you have not hit the mark yet.
I'm not insisting on anything. I told you flat out. The fact that you don't believe me doesn't change a thing. Is it just like Target? No. Why the hell would it be be? I don't sell to end users. Only to stores. I don't need a retail style POS system. Like I said earlier, we run a real time ICP, I can view our inventory status from either warehouse from from office or even my house. And yes, it is integrated with our shipping software. And the fact that you would challenge that once again shows you really know very little about the distribution side of things.

ross_winn said:
The core issue is that the distribution channel does not generally stock enough for any sizable spike in sales. This has happened with several products. Were your merchandise fully returnable I am sure that your buying patterns whould change significantly. Compared to other large distribution companies in the US hobby game inventory is tiny and your fill rates are reprehensible. Distribution constantly runs out of product and constantly under-orders from manufacturing. Then they blame the publisher when they reorder products that run out of stock because no one anticipated demand.
Just because you keep insisting this doesn't make it true.

ross_winn said:
If distribution is doing as poor a job as I say then the distributors will one by one go out of business, just like they have over the last ten years. The fact that most game stores only carry lines from ten to twenty publishers put a much different cast on the 'hardships' of ordering direct.
Most game stores don't just carry 10-20 publishers. And the distributors that went out of business went out for a variety of reasons. Yes, some of them were pretty bad. But others, like War Games West, went out of business because the owner retired.

ross_winn said:
Small press RPG publishers have already moved to a direct sales model. Distribution has zero impact on their model. No one carries full lines from 70 manufacturers any more. No one can afford to.
Small press has always had a problem with distribution, with notable exceptions. It usually stems from the fact that we dont' order the quantity that they are thinking we should. But I'm not about a take a risk on every single product that comes down the line. I can't. With the advent of desk top publishing too many people are out there putting out product, and 90% of it is crap. We have to picky about what new lines we pick up. That's just the way it is. As for stores not carry 70+ manufacturers? Well they do. At least some of them do. Otherwise I would have over 150 vendors I order product from, and over 26,000 active SKU's in my warehouses.

I would also be interested to hear where you are getting your information from?
 

ross_winn

freelance geek
I'm not insisting on anything. I told you flat out. The fact that you don't believe me doesn't change a thing. Is it just like Target? No. Why the hell would it be be? I don't sell to end users. Only to stores. I don't need a retail style POS system. Like I said earlier, we run a real time ICP, I can view our inventory status from either warehouse from from office or even my house. And yes, it is integrated with our shipping software. And the fact that you would challenge that once again shows you really know very little about the distribution side of things.
I didn't say you needed a retail POS system. I said you needed end-to-end business integration. CRM, Sales, Invoicing, Inventory, Accounting, Forecasting, Shipping, and Receiving. You don't have it, Amazon does, Target does, and a lot of other companies do.

Just because you keep insisting this doesn't make it true.
Similarly, just because you are selective in making rebuttals doesn't make me wrong. I have gotten emails telling me how right I am, from people I respect.

Most game stores don't just carry 10-20 publishers. And the distributors that went out of business went out for a variety of reasons. Yes, some of them were pretty bad. But others, like War Games West, went out of business because the owner retired.
Well yes, one company chose to close rather than invest the time and money necessary to stay competetive. All of the ones who went out of business (and I did not mention those who had simply closed, you did) did so because they were poorly run, poorly managed, and poorly funded.

Small press has always had a problem with distribution, with notable exceptions. It usually stems from the fact that we dont' order the quantity that they are thinking we should. But I'm not about a take a risk on every single product that comes down the line. I can't. With the advent of desk top publishing too many people are out there putting out product, and 90% of it is crap. We have to picky about what new lines we pick up. That's just the way it is. As for stores not carry 70+ manufacturers? Well they do. At least some of them do. Otherwise I would have over 150 vendors I order product from, and over 26,000 active SKU's in my warehouses.
Closer to 99% is crap. No one said you couldn't be picky, but you don't carry adequate depth on the products you choose to carry. I am not talking about products on allocation either, and small press games don't even come in to the mix. If you can't take the risk, ask for consignment and returnability. Even if you are doing 100% of the best job that you can, you aren't the whole company; and you must admit that across the board distribution is failing. Small distributors may have employees just as dedicated as you, but if the owner is an idiot three weeks from bankruptcy they are doomed.

I would also be interested to hear where you are getting your information from?
I am sure you would, however not everyone is willing to risk there job to impress you.
 

Hippopotamus Rex

King Hippo
Validated User
ross_winn said:
I didn't say you needed a retail POS system. I said you needed end-to-end business integration. CRM, Sales, Invoicing, Inventory, Accounting, Forecasting, Shipping, and Receiving. You don't have it, Amazon does, Target does, and a lot of other companies do. .
You're right Ross, you got me. I don't run MAS200. I can't run accounting, purchasing, inventory, invoicing, shipping and receiving, amd GL from that app. Can't do it at all.

This is absurd. I cannot belive that you are trying to tell me what my ICP can and cannot do. You don't have any clue what you are talking about here.

ross_winn said:
Similarly, just because you are selective in making rebuttals doesn't make me wrong. I have gotten emails telling me how right I am, from people I respect.

Good for you. I really don't care who you have gotten emails from. Nothing impresses me less in this industry then name droppping.

ross_winn said:
Well yes, one company chose to close rather than invest the time and money necessary to stay competetive. All of the ones who went out of business (and I did not mention those who had simply closed, you did) did so because they were poorly run, poorly managed, and poorly funded.
Whatever Ross. Wayne choose to close WGW after his last heart attack. The stress was getting to be too much.

As for the rest, well they went out for a variety of reasons. Chief reason for many was losing WOC rights. It usually didn't have anything to do funding. Poorly managed I'll grant you in certain cases.

ross_winn said:
Closer to 99% is crap. No one said you couldn't be picky, but you don't carry adequate depth on the products you choose to carry. I am not talking about products on allocation either, and small press games don't even come in to the mix. If you can't take the risk, ask for consignment and returnability. Even if you are doing 100% of the best job that you can, you aren't the whole company; and you must admit that across the board distribution is failing. Small distributors may have employees just as dedicated as you, but if the owner is an idiot three weeks from bankruptcy they are doomed. .
The fact of the matter is you have no idea what the depth of my product selection is. You are relying on second hand information at best. And once again you bringing up like suggestions like consigment and returnablity tell me you are probably working with information that is either years old, or you are just making up stuff. We have several floored accounts and have had them for years.

And, no I don't think that distribution is failing across the board. I think people who have an axe to gring think that.

ross_winn said:
I am sure you would, however not everyone is willing to risk there job to impress you.
:rolleyes:

And we're done. This just pretty much seals it for me that you are flat out making this up as you go.
 

st_gulik

Ben Woerner - WunderWerks
Validated User
Hippopotamus Rex said:
Knock your self out. I don't care if you do business direct. I'm not going to argue with you about or try and change your mind. If you don't have anything better to do with your time then spend it on the phone all day with suppliers then go ahead.
Your supposition that I am on the phone with suppliers all day is as dishonest as it is foolish, especially after I stated in an earlier post that a tiny fraction of my day is taken care of dealing with suppliers. Again, I have a plethora of suppliers, and all are independent except one distributor who deals in nothing but repair supplies for our bench. The great irony is that you assume that I will be using that great holdover of the 20th century the phone. Jewelry is notorious for being archaic in its technology implementation, yet the vast majority of my invoices come via my email every morning.

I don't think he's off base. I know it. I've got 11 years in this industry, the last 6 of them in distribution. When I tell you that our operation doesn't bare even the faintest resemblance to what Ross describes, it isn't my opinion. It's a fact. And once again I don't really care if you believe it or not. But the model Ross talks about in his column is not one that distribution uses.
The other irony is that I was speaking of how other industries, like jewelry have moved away from distribution models. I actually had a long winded discussion with my old man just yesterday about where our industry is going and he mentioned how jewelry basically sloughed off the dead skin of distribution models ten years ago. I'm not arguing with you about whether Ross is right or you're right in distribution. I've seen how it works myself, and I know people on both sides (Publishers and FLGS Owners who've given me every tale in the book). Your policy of just trying to rip Ross and myself up without defending the industry is telling.

No, I made a comment about shows like Origins. The fact that you don't know the difference between the two doesn't exactly lend a whole lot of credability to your arguements.
I do know the difference, I mentioned GAMA because that is what I was aiming for in the first place. GAMA is where Retailers and Publishers meet and sell, much like the JCK Jewelry show in Vegas (go check out it out via Google), and the AGTA Show in Tucson (which is mostly open to the public) is like Origins and GenCon and all the other Fan based shows. I know the difference, my original point that it's foolish for FLGS Owners to go to GAMA or Origins (because business can be done anywhere, but primarily at a show intended for those purposes (la GAMA)) so they can make deals DIRECTLY not have to work through some third party who just charges more money to everyone.

Extention of credit and consolidation of product. If you don't think those are important then don't use us.
I still fail to see how a consolidation of product (when it is limited in supply), and questionable in quality is any sort of plus. And don't give me another Cock and Bull story about distributors having enough or Ross doesn't know what he's talking about. Back in the late 90's I had to wait months for Farkin' Warp Spiders for Warhammer, and it never changed through the years, just last year I had to wait many more months before a distributor would re-supply my FLGS with the Warmachine mini's I wanted.

Extension of credit can be had elsewhere for better rates and with safer fallbacks (AmEx), or even more directly through the Publisher at more limited rates, but if there is a reasonable return and exchange system in place I don't see why a publisher wouldn't offer limited credit (Net 30, etc.).

My final say on this whole thing: Nothing ever dies, it just smells that way. Distribution won't ever completely go away. There will be someone who will figure out how to offer a system to people who really need it, and it will continue, in some form. However, large portions of Industry have been moving away from that model with the expanding and globalizing of the world economy in the recent decades, just like a man breathing, so do our economies shift. The small size of hobby gaming just means it reacts slower to these market shifts than others. People will see that they don't need to be chained to these distributors and that it is just as easy to buy direct from the publishers as it is to buy from the distributors.

Ross may not know everything, but your view from the inside out seems myopic at best.

edit: for silly spelling mistakes
 
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Hippopotamus Rex

King Hippo
Validated User
st_gulik said:
Your supposition that I am on the phone with suppliers all day is as dishonest as it is foolish, especially after I stated in an earlier post that a tiny fraction of my day is taken care of dealing with suppliers. Again, I have a plethora of suppliers, and all are independent except one distributor who deals in nothing but repair supplies for our bench. The great irony is that you assume that I will be using that great holdover of the 20th century the phone. Jewelry is notorious for being archaic in its technology implementation, yet the vast majority of my invoices come via my email every morning.
Good for you. I have three full time buyers to manage my inventory here. 26,000 thousand active SKU's in my system. Of course I wouldn't expect a store to be carry even half that. But let's say they just carry 10% That's 2600 items. You're going to knock t hat out on a Monday? OK. Even assuming that you do now you've turned one or two invoices into 50 or 60. A week. Extra. And you think that's good business?

When you actually have some revelent experiances to share about this industry, not the jewelry industry, I'll be listening.




st_gulik said:
The other irony is that I was speaking of how other industries, like jewelry have moved away from distribution models. I actually had a long winded discussion with my old man just yesterday about where our industry is going and he mentioned how jewelry basically sloughed off the dead skin of distribution models ten years ago. I'm not arguing with you about whether Ross is right or you're right in distribution. I've seen how it works myself, and I know people on both sides (Publishers and FLGS Owners who've given me every tale in the book). Your policy of just trying to rip Ross and myself up without defending the industry is telling.
Once again, we're talking about the games industry, not the jewelry industry. I don't care about your experiances there. Yes, there are generalizations that run through all distribution channels. But that's not what the issuse here is. It's Ross making wild claims about distributon in the games industry that are not true.



st_gulik said:
I do know the difference, I mentioned GAMA because that is what I was aiming for in the first place. GAMA is where Retailers and Publishers meet and sell, much like the JCK Jewelry show in Vegas (go check out it out via Google), and the AGTA Show in Tucson (which is mostly open to the public) is like Origins and GenCon and all the other Fan based shows. I know the difference, my original point that it's foolish for FLGS Owners to go to GAMA or Origins (because business can be done anywhere, but primarily at a show intended for those purposes (la GAMA)) so they can make deals DIRECTLY not have to work through some third party who just charges more money to everyone.
Well, good luck with that.



st_gulik said:
I still fail to see how a consolidation of product (when it is limited in supply), and questionable in quality is any sort of plus. And don't give me another Cock and Bull story about distributors having enough or Ross doesn't know what he's talking about. Back in the late 90's I had to wait months for Farkin' Warp Spiders for Warhammer, and it never changed through the years, just last year I had to wait many more months before a distributor would re-supply my FLGS with the Warmachine mini's I wanted.
Cock and Bull story? Whatever you say. Look it's simple. Your personal experiances about not getting product do not policy make. Especially when one of the companies, Games Workshop, isn't in distribution in any sort of large capasacity. They pulled out sometime around '95. And Privateer has been running behind on production since WarMachine launched. ACD has been upping numbers on initial releases since the game came out. It wasn't enough. We were ording upwards of 20 times our preorder numbers. At some point you have to stop rolling the dice like that.

st_gulik said:
Extension of credit can be had elsewhere for better rates and with safer fallbacks (AmEx), or even more directly through the Publisher at more limited rates, but if there is a reasonable return and exchange system in place I don't see why a publisher wouldn't offer limited credit (Net 30, etc.).
We don't charge interest for our net customers. Find a better rate then that. And publishers in this industry don't offer net terms. So if you buy direct you can pay with a credit card, or get it COD. COD tags run $8.50 right now.

And that's assuming the publisher in question will deal direct. Most will, sure, especially the smaller ones. A lot of the medium sized and larger ones will not.

st_gulik said:
My final say on this whole thing: Nothing ever dies, it just smells that way. Distribution won't ever completely go away. There will be someone who will figure out how to offer a system to people who really need it, and it will continue, in some form. However, large portions of Industry have been moving away from that model with the expanding and globalizing of the world economy in the recent decades, just like a man breathing, so do our economies shift. The small size of hobby gaming just means it reacts slower to these market shifts than others. People will see that they don't need to be chained to these distributors and that it is just as easy to buy direct from the publishers as it is to buy from the distributors.
Like I said, good luck with that.

Do you really think that we are sitting back with a Mai Tai laughing about how we take our cut for nothing? Like we're the Gaming Mafia? ACD is constantly looking for new services to offer our customers. New and more efficent ways to do business. We're not running around do our buying and selling with a legal pad and a pencil like has been suggested.

st_gulik said:
Ross may not know everything, but your view from the inside out seems myopic at best.

I'm sure that Ross is a great guy. He just doesn't know how this end of the industry works.

And as far as my view goes, well you have no idea how it goes. Because the only thing I've said in this thread is that Ross's ideas about distribution are incorrect.

And in responce I've been told that I don't know what I'm talking about, that i even don't know what my ICP can and cannot do, from someone who won't name their sources and someone whose dad owns a jewelry store.

I've never claimed that distribution is perfect. I know there is room for improvement. There always is. And the fact that the last two years have been the worst I have ever seen for the industry adds to everyone being a little cranky I think. Yes, I get defensive when see people slamming distribution. Because they usually have no idea what they are talking about.

I'm happy to answer any questions about what do here and how we do it. But please don't sit here and tell me I'm wrong when I say something about how we operate. We've spent a lot of time, effort and money at ACD to make this company an industry leader. We've risen from just another regional in the late 90's to the second largest distributor in the country. That doesn't happen because of a sense of entitlement, and that's what seems to be suggested here. It happens because we are bringing a service to the industry. It happens because retailers and manufacturers alike see value in using us.
 
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