Kid Charlemagne
I am the Very Model of a Modern Moderator
PaulofCthulhu said:
Wow - that seems a short-sighted way to approach things.
How profitable is D&D 4E for a retailer?
Wow - that seems a short-sighted way to approach things.
Cergorach
The Laughing One
I'm not even really talking about local stores, I'm talking about web stores not even being able to keep up. i haven't set foot in a local game store (besides the local GW store) in years, many year. It takes me too much time with public transportation for nothing in return. I generally know more about the product(s) I buy then the bloke behind the counter, I don't play there (might consider playing at the GW store), so for me the local store has absolutely no added benefit. But that's not why I started this discussion. ;-)
it's generally known that the local game stores are loosing the battle against the web stores, particularly the larger ones (like amazon). But now even web stores are deep discounting the new books so far that there's hardly any profit (if any at all). While some of the 'blame' can be laid at the feet of large sellers like amazon, I currently lay the blame with WotC Europe. If the MSRP in the US is $105 and the MSRP in the UK is 60 Pounds, why is the MSRP in Europe €105? The distributers are also dependant on WotC for their pricing, so I can't really fault them (maybe actively pursue a lower buying rate with WotC Europe). It's currently cheaper to buy from an oversea source then it is to buy from a local one, which is getting pretty ridicules. The market for english RPG products in Europe is already pretty slim, making it virtually unprofitable for EU based stores to sell these products isn't doing WotC any favors, nor the D&D brand.
it's generally known that the local game stores are loosing the battle against the web stores, particularly the larger ones (like amazon). But now even web stores are deep discounting the new books so far that there's hardly any profit (if any at all). While some of the 'blame' can be laid at the feet of large sellers like amazon, I currently lay the blame with WotC Europe. If the MSRP in the US is $105 and the MSRP in the UK is 60 Pounds, why is the MSRP in Europe €105? The distributers are also dependant on WotC for their pricing, so I can't really fault them (maybe actively pursue a lower buying rate with WotC Europe). It's currently cheaper to buy from an oversea source then it is to buy from a local one, which is getting pretty ridicules. The market for english RPG products in Europe is already pretty slim, making it virtually unprofitable for EU based stores to sell these products isn't doing WotC any favors, nor the D&D brand.
I learned a hell of a lot during my time running my own small business. It was a huge learning curve that had I the knowledge I do now, I wouldn't have gone into.
Part of that learning curve is a general sense for what would make a decent, profitable business. RPG's (from a hobby-store perspective) are definitely not on that list
In fact, I honestly feel sorry for a lot of small business owners of many types. Already we're seeing technology do to small business what it did to manufacturing. I think we'll continue to see many types of small business slowly go the way of the dinosaur over the next ten to twenty years.
I truly believe that hobby stores that don't adapt and diversify in some manner, like offering a complimentary service or product as a profit-generator, will face financial ruin as more and more people turn to online shopping and other resources.
Part of that learning curve is a general sense for what would make a decent, profitable business. RPG's (from a hobby-store perspective) are definitely not on that list
In fact, I honestly feel sorry for a lot of small business owners of many types. Already we're seeing technology do to small business what it did to manufacturing. I think we'll continue to see many types of small business slowly go the way of the dinosaur over the next ten to twenty years.
I truly believe that hobby stores that don't adapt and diversify in some manner, like offering a complimentary service or product as a profit-generator, will face financial ruin as more and more people turn to online shopping and other resources.
Dragon Snack
First Post
I've said the same thing before myself. WotC doesn't give a hoot about the LGS. If they did they would have cracked down on Amazon or Buy.com (we'll see what they do about the early shipping). Instead they let them undercut everyone at prices they can't match. It gets them lots of short term sales though...
This was one of the reasons a LGS just went under (well, they moved and became a comic only shop), the owner couldn't get the core books from his distributor cheaper than Amazon...
This was one of the reasons a LGS just went under (well, they moved and became a comic only shop), the owner couldn't get the core books from his distributor cheaper than Amazon...
Thunderfoot
Hero
I robbed Peter to pay Paul, I bought my family all of their PHBs on Amazon for Christmas, but I bought my gift set from my FLGS through a pre-order. It saved me a bit of money I couldn't spare and I still helped out my FLGS.
As for web distributors, small business is dead except for the music business, the one industry that is going the other direction due to technology. Anyone can record, produce and distribute their own music via the web now and its killing my industry (sort of). Of course it's also flooding the market with a bunch of really crappy artists (in every genre), so who knows, maybe there is a fix out there somewhere?
As for web distributors, small business is dead except for the music business, the one industry that is going the other direction due to technology. Anyone can record, produce and distribute their own music via the web now and its killing my industry (sort of). Of course it's also flooding the market with a bunch of really crappy artists (in every genre), so who knows, maybe there is a fix out there somewhere?
Dragon Snack
First Post
Smack the distributors if they have to (but I'm betting Amazon is it's own distributor, so they shouldn't have to play that game). They cracked down on internet sales of DDM a couple of years ago, so there is precedence.Kzach said:
Sure, they don't want to lose the sales that Amazon is bringing in, but if the lower price is the only reason that something is selling...
BSF
Explorer
Assuming the pricing model hasn't changed too much in the last decade or so...
Wholesale/Distribution costs will be about 52% of list price. That equates to a 48% discount from list price. To acquire that discount level, you just need to purchase sufficient quantity.
Amazon is able to buy that quantity! Barnes & Noble is also able to buy that quantity. Most small game shops are not able to buy that quantity.
Most small game shops need to go to a distributor that buys in quantity and then sells to smaller companies that have a smaller customer base. The distribution channel provides a valuable service. Without the distribution channel, most small stores wouldn't even be able to sell the books without having a distribution channel. Who would they buy it from?
See, it isn't in WotC's interests to sell small quantities. That is not their core business. Sure, it would be nice if WotC would be able to sell at wholesale prices to non-wholesale customers. At least, in theory. But that would require that they create an entire sales division to manage customer relationships. They would need to increase their shipping division to handle a large quantity of small shipments. They would increase their operating expenses, and that would increase the price of the books.
If WotC were going to go that route, they would need to seriously consider selling directly to the customer and cutting out all the middlemen. That way, they could eliminate all the discount structures and support the sales & shipping organizations without increasing the price of the books.
Of course, that would pretty much eliminate any discounting to the customer. It would kill a lot of the local gaming stores. WotC would be managing the game channel at that point. There would be a lot of moaning and groaning that it was now a price-fixed monopoly. Other games would have even less shelf space since there would be fewer shelves.
It would be a bad thing for the hobby in general I think.
Crack down on Amazon? WotC could cut them off as a customer I suppose. Not sell to them at all? Can you do that? Can you tell a company that you won't sell to them because their business model works and they are able to undercut the prices of their competitors? Can you do that, legally? WotC couldn't tell Amazon that they have to sell at a specific price. So, how do you crack down on Amazon for being successful at what they do?
I suppose the alternative is to stop selling in the book trade at all. Pull back on that distribution channel and only sell through the distribution trade channels. Of course, that runs counter to trying to get the game on more mainstream shelves. If WotC wants to sell to Barnes & Noble and other bookstores, they need to keep selling to Amazon. Amazon is successful at what they do and it puts a big squeeze on the local gaming store. Capitalism at work.
If game stores want to compete, they need to offer services that bring in customers that Amazon cannot offer. That is the best way to compete. It isn't always about price. Good service can still win. But if you want to compete with Amazon in terms of price only, you have a tough battle before you.
Wholesale/Distribution costs will be about 52% of list price. That equates to a 48% discount from list price. To acquire that discount level, you just need to purchase sufficient quantity.
Amazon is able to buy that quantity! Barnes & Noble is also able to buy that quantity. Most small game shops are not able to buy that quantity.
Most small game shops need to go to a distributor that buys in quantity and then sells to smaller companies that have a smaller customer base. The distribution channel provides a valuable service. Without the distribution channel, most small stores wouldn't even be able to sell the books without having a distribution channel. Who would they buy it from?
See, it isn't in WotC's interests to sell small quantities. That is not their core business. Sure, it would be nice if WotC would be able to sell at wholesale prices to non-wholesale customers. At least, in theory. But that would require that they create an entire sales division to manage customer relationships. They would need to increase their shipping division to handle a large quantity of small shipments. They would increase their operating expenses, and that would increase the price of the books.
If WotC were going to go that route, they would need to seriously consider selling directly to the customer and cutting out all the middlemen. That way, they could eliminate all the discount structures and support the sales & shipping organizations without increasing the price of the books.
Of course, that would pretty much eliminate any discounting to the customer. It would kill a lot of the local gaming stores. WotC would be managing the game channel at that point. There would be a lot of moaning and groaning that it was now a price-fixed monopoly. Other games would have even less shelf space since there would be fewer shelves.
It would be a bad thing for the hobby in general I think.
Crack down on Amazon? WotC could cut them off as a customer I suppose. Not sell to them at all? Can you do that? Can you tell a company that you won't sell to them because their business model works and they are able to undercut the prices of their competitors? Can you do that, legally? WotC couldn't tell Amazon that they have to sell at a specific price. So, how do you crack down on Amazon for being successful at what they do?
I suppose the alternative is to stop selling in the book trade at all. Pull back on that distribution channel and only sell through the distribution trade channels. Of course, that runs counter to trying to get the game on more mainstream shelves. If WotC wants to sell to Barnes & Noble and other bookstores, they need to keep selling to Amazon. Amazon is successful at what they do and it puts a big squeeze on the local gaming store. Capitalism at work.
If game stores want to compete, they need to offer services that bring in customers that Amazon cannot offer. That is the best way to compete. It isn't always about price. Good service can still win. But if you want to compete with Amazon in terms of price only, you have a tough battle before you.
Yeah, like I said, the small stores are going to have to diversify and offer different services that help support the store as a whole, whether they compliment the existing structure or not.BSF said:
A good example of this is someone I know who owns a discount DVD rental store. Aside from having an absolutely awesome range of titles, most of which can't be found elsewhere, he set up a small area at the back of the store as an internet cafe.
Neither business made enough to live on, however with the two complimenting each other (people came in to get a DVD, used the printing services or went online, or people who came in to do printing or go online got a DVD), combined they worked to make him a decent profit.
Borders is ahead of the game here by offering seating and coffee. The small retailers will need to do something similar or I reckon we'll see them all going out of business within the next five to ten years.
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