Is the age of discounts over?

[Festivus]

This post I completely agree with. It is in direct odds with your previous post, which is why I questioned that one.

PS

My phrase-ology sucks today for some reason. Even people at my office are saying "Huh?" to me a lot. Must mean I need more coffee.

 

[rgard]

I don't have a source to quote anymore, but there was a report on this pricing scheme where consumers perceived those odd prices as cheaper, even if it wasn't always cheaper... Hence the odd pricing.

That's cool. Thanks for sharing. The perception and reality met in this case. I discounted everything 10% so Walmarts $9.87 beat my $11.69 for the boosters.

I actually had one mother complain to me that I was ripping her kids off relative to Walmart's prices.

Thanks,
Rich

 

[Felix]

My budget remains constant yes, but my buying power is now diminished because I can't get things cheaper at Amazon. Instead of spending $50 and getting three books I get to spend $50 and get two.

Normally I would spend $25 at Amazon and $25 at FLGS. Now, I will likely spend $50 at the FLGS (win for them) and zero at Amazon.com (lose for them). Net result, I get one less book of gamey goodness (lose for me).

Seems to me that unless Amazon (and other deep discount e-tailers) keeps the big discount they stand to lose a lot of business. Hmm, I better check my portfolio for discount online retailers and think about dumping them.

If the demand for gaming products is inelastic (quantity demanded will fall less than prices rise), then in aggregate there won't be much fewer books sold. It is likely more money will be funneled through retailers that will encourage industry growth. The size of the industry grows, the individual purchases of those comprising the targeted demographic don't fall significantly, the industry benefits.

Of course, we must remember that this ruling merely allows publishers the option to discriminate between distributors. It does not mean that the publishers must. If it is the case that the market is elastic and a small price increase will yield a large decrease in purchases, then publishers would be foolish to mandate price floors that don't affect their current revenue and will seriously harm future revenue. Of course, "Your stoopid" is a common enough accusation on the internet...

 

[Flexor the Mighty!]

A sucky ruling IMO. Personally I can't care less about the fate of the LGS. I have very little money to spend of things like gaming books so when I can get a gamebook at 30% off it becomes an attractive buying option, when its 40-50 bucks I won't just save up, I'll not buy it all together. The LGS don't have gaming in their stores so I don't see how they are introducing new players to the hobby. I guess its different in other places. Amazon is my FLGS, along with RPGshop.

 

[Whizbang Dustyboots]

That's cool. Thanks for sharing. The perception and reality met in this case. I discounted everything 10% so Walmarts $9.87 beat my $11.69 for the boosters.

I actually had one mother complain to me that I was ripping her kids off relative to Walmart's prices.

I would not want to go up against Wal-Mart as any sort of retailer.

 

[kenmarable]

That still makes no sense, Brentos. Take Paizo, for example. If they sell Pathfinder and the Gamemastery novels to other retailers, and get X amount from them (a set cost charged to all retailers), they make the profit they budgeted for. If they then sell Pathfinder or Gamemastery novels on their own site, at full price (X + Y), any they sell there, they get all the money.

<snip>

In other words, any producer stupid enough to do this is almost too stupid to deal with anyway, and has probably got a history of thunderous stupidity.

Admittedly, for a niche market like the RPG business, if there is a benefit, then it'll be from the support of FLGS growing the markey (true or not, I don't know and don't have facts to argue).

However, in the broader scope of things beyond the RPG market (or possibly including the big boys like WotC), it is NOT always true that a company sells their product for a set amount to all retailers. That was the standard and in many areas still is, but it can no longer be assumed. One of the many areas Wal-Mart has been able to increase their profits is by telling vendors "I know you sell your products for X to the other retailers, but if you want to sell to Wal-Mart, we'll buy it for 90% of X." [or whatever percentage] They (and I'm sure other major discount retailers as well) use their power as a massive market and demand lower prices from vendors. So it isn't always a set amount to all retailers.

So, maybe you are only talking about RPGs, but in the larger market, it certainly is not stupid to now be able to demand to Wal-Mart and other retailers that you won't lower your prices just for them. They can still refuse to sell your product, but this court ruling does (for good or bad, I dunno) give vendors more backing to demand equal pricing from various retailers.

Again, I have no idea if WotC or any of the hobby industry already face this, but they very well might when dealing with Wal-Mart, Amazon, and a few of the other major discount retailers. This can help them make more money per product.

 

[buzz]

Assume:

Hobby stores grow the market demographic.
Discount retailers do not grow the market demographic.​

As much as I respect Dancey, it's these very assumptions that I'm not sure I buy. If there's any entity bolstering the RPG community, it's the Intarweb. ENWorld Gamedays, Forge Gatherings, Camp Nerdly, etc. (Not that I don't appreciate the FLGSs who offer to host these events; let me be clear about that!)

Even if you do assume these to be true, just because I end up paying the same (or almost) at both Amazon.com and the FLGS, that doesn't mean I'm going to start erring on the side of the FLGS. Amazon.com (and the Web as a whole as a resource) offers me a level of convenience and selection that most FLGSs in existence simply can't. Not to mention, I buy a lot of indie RPGs these days, and most of them are only available direct from the publisher or via a POD/fulfillment service a la IPR.

And there will still be eBay.

I dunno. Regardless of what manufacturers choose to do with this, if the consuming public doesn't like it, they will find a way around it.

 

[2WS-Steve]

My suspicion is that Amazon and Wal-Mart will continue to discount however they want because they've got the negotiating ability to force WotC to cooperate --

-- but places like RPGShop and other, smaller online retailers will be driven out of business since they'll be held to FLGS minimum retail prices, and thus unable to compete with either the FLGS or the big box online retailer.

 

[Felix]

Which very few people participate in.

Do more people game at hobby shops or Wal-Mart?

In fact, I've seen people playing games in the coffee house areas of both B&N and Borders, so long as they're cognizant of the other customers.

And while Borders and B&N have % discounts of their merchandise, their full retail price has been SRP every time I've been in them. They are not a significant part of the discount retailers that publishers may now discriminate againts.

You'll forgive me if I don't get excited about the industry's decades of market research.

It's possible for small retail outlets to be profitable and yet unprofitable for publishers to engage in direct-retailing. Would you refuse to consider that WotC closed their retail outlets when Hasbro, which has been a successful gaming company for a while now, found that direct retailing was unadvisable?

 

[Raven Crowking]

One of the many areas Wal-Mart has been able to increase their profits is by telling vendors "I know you sell your products for X to the other retailers, but if you want to sell to Wal-Mart, we'll buy it for 90% of X." [or whatever percentage]

My understanding of it is that it is actually a lot worse than this.

BIG BOX takes a look at Small Manufacturer. BIG BOX orders 400,000 or more units from Small Manufacturer at a minor discount compared to that of other buyers (say your 90% of X). BIG BOX has a contract with an option to renew, say in August of next year. Small Manufacturer is excited because they've just hit the Big Time!

So next year rolls around and its March. Small Manufacturer wants to settle the new contract. BIG BOX puts it off.

Now it's June. Small Manufacturer has to start planning its production schedule. BIG BOX puts off the contract, but is very, very positive.

Now it's July. Small Manufacturer has to buy things to manufactor in August. It has to invest now if it can make the sale then. BIG BOX is still putting off the contract, but all the reps talk like its a sure thing.

Now it's August. BIG BOX agrees to a new contract only if Small Manufacturer cuts off another 50%. Small Manufacturer has already invested; the only way they can stay in business is by signing the contract.

Oh, yeah, and this is a five-year deal.