JohnNephew
First Post
on mail order from manufacturers
A couple of folks have been wondering about the economics of publishing.
First off, the breakdown. Typically the publisher gets 40-45% of the retail price; the retailer gets 40-50%; and the distributor gets whatever is left in between.
On to the question of mail order, and why don't we discount. Let me be clear that in a perfect world, we'd never do any mail order. (In fact, on Monday we'll be announcing something that will in a way bring that perfect world closer.) As a manufacturer, it's nice to get the extra profit from selling at full price -- but in reality, it costs us money. If I take time to calculate shipping, pack an order, process a credit card, stand in line at the post office, and then deal with customer service when the post office or UPS loses a package (even if it's insured there's paperwork) -- well, there goes all that extra profit.
The reality is that business success comes from specializing. Filling mail orders is not a publisher's specialty -- there are trained professionals who do that! Having retailers sell your product, and be compensated fairly for doing it, is not much different from, say, hiring someone to do your taxes or repair your office wiring. Sure, you can learn to do those things, but is that really what your business is about? Is that the best way to spend your time? (Instead of filling that mail order, I could have been working on getting a new book out on time!)
Why do mail order at all? Customer service. Not everyone has a game store. Not every game store carries every product, or offers special orders. Doing mail order is in many respects a marketing expense. There's no good reason to discount, as a manufacturer -- after all, you don't want to compete with the retailers out there; you want to be available as a last resort for the sake of the end customer. For this reason, I think it's really essential for a publisher to make everything in print available through mail order. Every manufacturer mail order sale, in some way, represents a catch in the safety net -- a sale that should have been made by someone else but couldn't be.
Plus, if I discount, I'm ticking off the retailers -- the people I need to survive. Sure, I could sell at 60% off retail, in theory, to consumers as well as to wholesalers. But how many will I sell total if retailers rightly conclude it's not worth carrying my product, since they can't compete with my discounting? How many people will never be able to pick up a game on an impulse, or to browse it in a store before buying it, or to point it out to a friend while shopping, etc.? Even if I'm very successful, I'll have to hire a lot more staff and pay them to fill small orders -- and that will eat into my profits in a hurry. (Retailers are almost like employees on a commission -- they risk their own investment dollars on our products, and they get paid out of the proceeds after doing the work to sell them. What a great deal for us!)
So, anyhow, manufacturers have a lot of good reasons for NOT selling by mail order at a discount. I've got no problem with people looking for a deal, whether it's a discount on closeout merchandise or a used or damaged book or whatever. (Heaven knows I'm always looking for a bargain, personally.) But manufacturers looking to their future health tend to realize that discounting their own goods for direct sale does more harm than good.
A couple of folks have been wondering about the economics of publishing.
First off, the breakdown. Typically the publisher gets 40-45% of the retail price; the retailer gets 40-50%; and the distributor gets whatever is left in between.
On to the question of mail order, and why don't we discount. Let me be clear that in a perfect world, we'd never do any mail order. (In fact, on Monday we'll be announcing something that will in a way bring that perfect world closer.) As a manufacturer, it's nice to get the extra profit from selling at full price -- but in reality, it costs us money. If I take time to calculate shipping, pack an order, process a credit card, stand in line at the post office, and then deal with customer service when the post office or UPS loses a package (even if it's insured there's paperwork) -- well, there goes all that extra profit.
The reality is that business success comes from specializing. Filling mail orders is not a publisher's specialty -- there are trained professionals who do that! Having retailers sell your product, and be compensated fairly for doing it, is not much different from, say, hiring someone to do your taxes or repair your office wiring. Sure, you can learn to do those things, but is that really what your business is about? Is that the best way to spend your time? (Instead of filling that mail order, I could have been working on getting a new book out on time!)
Why do mail order at all? Customer service. Not everyone has a game store. Not every game store carries every product, or offers special orders. Doing mail order is in many respects a marketing expense. There's no good reason to discount, as a manufacturer -- after all, you don't want to compete with the retailers out there; you want to be available as a last resort for the sake of the end customer. For this reason, I think it's really essential for a publisher to make everything in print available through mail order. Every manufacturer mail order sale, in some way, represents a catch in the safety net -- a sale that should have been made by someone else but couldn't be.
Plus, if I discount, I'm ticking off the retailers -- the people I need to survive. Sure, I could sell at 60% off retail, in theory, to consumers as well as to wholesalers. But how many will I sell total if retailers rightly conclude it's not worth carrying my product, since they can't compete with my discounting? How many people will never be able to pick up a game on an impulse, or to browse it in a store before buying it, or to point it out to a friend while shopping, etc.? Even if I'm very successful, I'll have to hire a lot more staff and pay them to fill small orders -- and that will eat into my profits in a hurry. (Retailers are almost like employees on a commission -- they risk their own investment dollars on our products, and they get paid out of the proceeds after doing the work to sell them. What a great deal for us!)
So, anyhow, manufacturers have a lot of good reasons for NOT selling by mail order at a discount. I've got no problem with people looking for a deal, whether it's a discount on closeout merchandise or a used or damaged book or whatever. (Heaven knows I'm always looking for a bargain, personally.) But manufacturers looking to their future health tend to realize that discounting their own goods for direct sale does more harm than good.
*is kidding* Seriously any chance you can do a nice little sale pitch for Occult Lore? Also what's up for the Summer/Fall of 02? I haven't seem much for May and June.
