To inventory or not to inventory
Two days later, Bryan stood in the Parsons & Sons office and recounted how that spring he and his cousin David had tried to create an inventory system to keep track of the pins. "When we first started, they were stacked to here," he said, leveling his hand over his head. "We dumped all of the Disney stuff onto the floor, and we did inventory. We did that for a good month and a half." With help from Best Fares' art department they scanned pins and assigned them numbers. This had taken Bryan's father by surprise. "My dad said, 'You did inventory? You didn't have to do that!"
Now, Bryan was fuming. Tom had called to report another shipping mix-up: This time, the boys had mailed out the wrong pin, a mistake that Bryan thought could have been avoided with an inventory system. But his dad, Bryan said, with perhaps a trace of sarcasm, "doesn't believe in inventory." In Tom's view, there was too much to catalog--"it would cost me hundreds and hundreds of man-hours," he said later. Instead of accounting for pins individually, Parsons preferred to aggregate them. He figured he paid, on average, $2.77 per pin. "If I get more than three bucks, I'm happy," he said later that day, after he'd arrived in the office. "People ask me, 'How much profit did you make on this pin?' And I say, 'It cost me $2.77. How much did I sell it for?' People can tell me there's a simpler way, but I don't think there is."
Parsons had fired David a few weeks before for laziness and lack of interest. Though Bryan and Aaron approved of this, Bryan thought his cousin was frustrated after their inventory scheme was shot down. "That's what we argued about for so long, my cousin and I, before he got laid off," he said. Today it was Bryan's turn. He had been at it since January and worked full-time for nearly the whole summer, yet in late August his duties were the same as they had been in May. "I think Tom needs to let go and let them learn a little bit more about handling the money--balancing the books, learning the math part of it," Parsons's wife, Jean, told me one morning. "You don't learn unless you fall and bruise yourself a few times. I think they need to be allowed to make a few mistakes."
From Parsons's perspective, though, the kids had no time to absorb new obligations just yet; they were too busy listing and shipping and filing. And he sure wasn't going to spend his time listing, shipping, and filing. "I have never been, myself, the guy who does the legwork," he said at one point. "I come up with the ideas, and then I look for people to fulfill what I want to get done." Even at Best Fares, he showed little patience for administrative obligations. Many staffers recall how turmoil attended the company's rapid growth between 1995 and 2000, when the head count quadrupled. It fell to Jean, now Best Fares' senior vice president of operations, to impose organization on the firm.
At P&S, there were hardly any books to balance, just Parsons's extraordinary recall of figures, although it was also clear that his memory wasn't perfect. The $2.77 figure Parsons channeled was an oddly precise number, especially given that nobody knew how much he had spent to capitalize the firm. Parsons's best guess was that he had forked out $45,000 for inventory, maybe $60,000 if he counted some coins he had purchased separately.
And it was telling that this figure represented the cost of pins sold, not the cost of selling the pins. It excluded a host of expenses--fees assessed by eBay and PayPal, the kids' labor, the office space and equipment provided free of charge by Best Fares--that Parsons never calculated but that probably added $4 or $5 to each pin, which in fact altered the cost structure significantly. And even this did not account for the time Parsons spent shopping the outlets and monitoring hundreds of auctions. But to Parsons's mind, hunting down bargains hardly qualified as work. Quite the opposite: It was an antidote to the long hours he put in at Best Fares. He got exercise; he lost some weight. Even Jean agreed that he seemed happier and healthier.
The few accounting procedures in place at P&S were put there at Jean's insistence. That June she had established an account for the nascent company's revenue, and used it to pay for any obvious eBay-related charges she spotted on her husband's credit card statements. "It drives me crazy when I just see spending and spending but I don't see--I don't think he's turned a profit on it, let's put it that way," she said. "I feel like we're giving the kids seed money, and they should take it from there." Jean hoped that once the new house was finished in October 2004, she would have the time to instill some fiscal discipline on P&S. She anticipated computerizing the books. "I would really like Bryan to see, 'Here's what your labor is costing you, here's what your postage is costing you'--you know, 'how much profit did you make on this particular pin?"
That afternoon, on the way to soccer practice, I asked Bryan if he thought the eBay business was similar to Best Fares. "Isn't every business the same?" he asked. "Of course, Best Fares sells travel tickets; I sell toys. But if my dad doesn't keep his people happy and put in new airfares all the time, he's going to lose business. If we don't keep putting things up and sending people feedback, they're going to get mad, and then we'll lose business."
