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Is the age of discounts over?
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<blockquote data-quote="Dannyalcatraz" data-source="post: 3617065" data-attributes="member: 19675"><p>Part of the reason for this is that the big box stores can easily cross-subsidize the products that the game & comic book shops with the profits they make off of other products.</p><p></p><p>Several FLGS owners on this site have complained that stores like Amazon are selling RPGs at lower prices than they can buy from their distributors.</p><p></p><p>Example: Big Box store wants to sell as many copies of a computer game based on an RPG. To cross-promote, they sell the RPG as well. Because they are Big Box, they have the buying power to buy in bulk, recieving a typical bulk purchase discount between 5-15% on their order (on all of the above products). They sell the CRPG at MSRP, perhaps with a short-term discounted introductory sale price, but instead of selling the RPG the same way, they discount it deeply (possibly below cost), using it as a loss-leader to get the would-be RPG purchaser into their store (online or brick & mortar) to (hopefully) buy the CRPG as well. The online stores are usually even helpful enough to bundle them together!</p><p></p><p>And as a juicy side benefit, they get to decrease competition.</p><p></p><p>Short term, it means that you get two books instead of three, as someone mentioned above...but the long term without this ruling means that if the Big Box stores become the monopoly or oligopoly in the RPG market, you might only get one instead of two. Assuming an inelastic demand for RPGs, instead of setting the price low to drive off competitors, they'll be able to set prices high to milk you like a money cow.</p><p></p><p>This isn't just a problem with game stores- a similar thing is going on in the US gasoline market. Many independent gas retailers (in TX and CA, at least) are getting charged up to ¢40 more per gallon than the big guys, essentially driving them out of the gas business.</p><p></p><p>According to a friend of mine who is a multiple franchisee for a US convenience store chain, there are only a few products in any such store that are actually profitable in any meaningful sense: tobacco products, alcohol products, lottery tickets, porn and gasoline...and gas is what gets people to stop. (Fancy bottled waters & energy drinks are starting to rise in profitablilty, though.) Everything else is there to increase the likelyhood that you'll buy something on the high-profit list.</p></blockquote><p></p>
[QUOTE="Dannyalcatraz, post: 3617065, member: 19675"] Part of the reason for this is that the big box stores can easily cross-subsidize the products that the game & comic book shops with the profits they make off of other products. Several FLGS owners on this site have complained that stores like Amazon are selling RPGs at lower prices than they can buy from their distributors. Example: Big Box store wants to sell as many copies of a computer game based on an RPG. To cross-promote, they sell the RPG as well. Because they are Big Box, they have the buying power to buy in bulk, recieving a typical bulk purchase discount between 5-15% on their order (on all of the above products). They sell the CRPG at MSRP, perhaps with a short-term discounted introductory sale price, but instead of selling the RPG the same way, they discount it deeply (possibly below cost), using it as a loss-leader to get the would-be RPG purchaser into their store (online or brick & mortar) to (hopefully) buy the CRPG as well. The online stores are usually even helpful enough to bundle them together! And as a juicy side benefit, they get to decrease competition. Short term, it means that you get two books instead of three, as someone mentioned above...but the long term without this ruling means that if the Big Box stores become the monopoly or oligopoly in the RPG market, you might only get one instead of two. Assuming an inelastic demand for RPGs, instead of setting the price low to drive off competitors, they'll be able to set prices high to milk you like a money cow. This isn't just a problem with game stores- a similar thing is going on in the US gasoline market. Many independent gas retailers (in TX and CA, at least) are getting charged up to ¢40 more per gallon than the big guys, essentially driving them out of the gas business. According to a friend of mine who is a multiple franchisee for a US convenience store chain, there are only a few products in any such store that are actually profitable in any meaningful sense: tobacco products, alcohol products, lottery tickets, porn and gasoline...and gas is what gets people to stop. (Fancy bottled waters & energy drinks are starting to rise in profitablilty, though.) Everything else is there to increase the likelyhood that you'll buy something on the high-profit list. [/QUOTE]
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