What's the Deal with GriefCom?

[Dannyalcatraz]

Thanks for the post, Bardsandsages- it was, indeed informative.

Like I said- I have no particular knowledge of WotC's publishing contract clauses- just that royalty clauses in other "entertaiment" contracts have been known to feature subsections that discount or eliminate royalties on discount or promo units.

If they don't have such clauses, that's cool with me. I was just speculating about what possible grievances creative personnel would have against the company.

Cristoph- I believe the earlier speculation may be correct- the difference in what you're seeing and what I'm seeing differs on whether the books were 3Ed or 3.5Ed, so its probably based in a licensing change.

Why should I pay more than I have to?

There is a concept called "Enlightened Self-Interest" which is basically a modern refinement of "Caveat Emptor."

A cheap price on product X today, tomorrow or even all year may look really good, but there may be other facts behind that price that a consumer who is interested in the long run should take into consideration- which vary from product to product.

Assuming we're still talking about RPG books, that price could be a fair price generated by a good deal negotiated by a bulk reseller who passes along those savings to his customer. That is the free market in action.

OTOH, that low price could also be the result of the hypothetical I set out above, predatory pricing, counterfeiting (esp. a recent rise in the subset of counterfeiting intellectual property to support terror groups), resale of stolen merchandise, and so forth- all of which are illegal and ultimately harm the consumer. Maybe not today, but eventually.

In the case of books (and other products), the predatory pricing scenario is the one that is being investigated by several DAs (and other gov't officials) across the USA at this time.

I'm not saying don't buy online. I'm saying keep your eyes and ears open to industry news to make sure that you're not hurting the hobby by doing so.

As I've said before, I don't have any special knowledge here. However, I've heard enough complaints from brick n mortar stores- GOOD ones- about how much lower online retail prices are in comparison to their PURCHASE prices that I'm a bit suspicious.

It could all be legit and just a foreshadowing of the future economics of the gaming industry. There could be shennanigans.

In the meantime, I'm adopting a wait & see attitude, and while doing so, buy very little RPG material online.

 

[Kae'Yoss]

There is a concept called "Enlightened Self-Interest" which is basically a modern refinement of "Caveat Emptor."

A cheap price on product X today, tomorrow or even all year may look really good, but there may be other facts behind that price that a consumer who is interested in the long run should take into consideration- which vary from product to product.

Assuming we're still talking about RPG books, that price could be a fair price generated by a good deal negotiated by a bulk reseller who passes along those savings to his customer. That is the free market in action.

I'm confident that this is the reason for the comparatively low prices I've been paying for my RPG books.

It's a great shop. Never was there, as it is in Hamburg - the other end of Germany - but they do have a B&M shop, but they also ship (they do that themselves, as they're a post office, too). They have phenomenal prices, offer free shipping, are very fast, and are quite friendly people.

They can offer their low prices because they sell well. They sell well because of those prices - and their service. They can offer these prices despite rent and all that stuff. Seems to work.

OTOH, that low price could also be the result of the hypothetical I set out above, predatory pricing, counterfeiting (esp. a recent rise in the subset of counterfeiting intellectual property to support terror groups), resale of stolen merchandise, and so forth- all of which are illegal and ultimately harm the consumer. Maybe not today, but eventually.

I'm positive this is not the case. I've been buying there for years now. I don't think they do the prices only to ruin their competitors, and would then increase their prices.

I think Wizard is doing something similar: They want to keep the B&M stores' competitors down, which makes it easier for those stores to charge higher prices.

 

[Dannyalcatraz]

They want to keep the B&M stores' competitors down, which makes it easier for those stores to charge higher prices.

???

My game stores (I shop at several different locations, representing 4 LGS chains and a couple of national bookstore chains) charge cover price...which for a PHB is $29.97USD. Amazon is currently charging $19.77USD. That's a 30% discount. Even with my discount programs, I rarely get more than 15% off. A 50% greater discount from one retailer than from several others is usually indicative of either MUCH better wholesale deals or predatory pricing. According to the game store owners I know, that $19.77USD retail price at Amazon is lower than the wholesale prices the game stores are paying.

If the online stores are indeed getting a better wholesale deal (perfectly legal), the FLGS will not- indeed CANNOT- charge higher prices for any other reason than covering costs and expect to maintain sales. They're not gouging the customer, THEY are the ones being "kept down."

If the online retailer is engaged in predatory pricing, the result is the same, though the B&M stores would have a cause of action against the online retailer...if they can afford to bring it.

 

[Bardsandsages]

???

My game stores (I shop at several different locations, representing 4 LGS chains and a couple of national bookstore chains) charge cover price...which for a PHB is $29.97USD. Amazon is currently charging $19.77USD. That's a 30% discount. Even with my discount programs, I rarely get more than 15% off. A 50% greater discount from one retailer than from several others is usually indicative of either MUCH better wholesale deals or predatory pricing. According to the game store owners I know, that $19.77USD retail price at Amazon is lower than the wholesale prices the game stores are paying.

One, I would say it is in a store's best interest to NOT ever tell a customer what they really pay for an item. Suddenly people start saying things like, "Well, if you get it for X, then you can sell it to me for Y". And as I've already stated, Y never takes into account actual overhead.

Secondly, if he can't get a minimum of a 35% discount on what he is buying from the distributor, change distributors! That isn't WoTC's fault if the distributor is charging him too much. And I assume he is buying from a distributor, not directly from WoTC. I know shops that stock Neiyar through Alliance and other vendors are getting good discounts, and Neiyar is a print-on-demand title.

Third, I doubt he is buying the volume that Amazon is. All manufacturers in all industries offer discounts on volume. That's how you encourage people to buy volume in the first place. If he is only stocking three or four copies of the book, and Amazon is buying 100, of course Amazon is going to get a better price from a distributor. Distributors want to move volume, not spoon out one or two books at a time.

 

[Barak]

I have a hard time believing that volume is not the reason why Amazon has deep discounts on the books. Heck, there's a reason why older books that probably aren't big sellers do not have the discount anymore, and that when publishers go out of their way to keep Amazon from getting the books (Ptolus and Rappan Athuk, for example), they remove the discount once they realize that they won't get their usual deal on the books.

 

[Flexor the Mighty!]

I have a hard time believing that volume is not the reason why Amazon has deep discounts on the books. Heck, there's a reason why older books that probably aren't big sellers do not have the discount anymore, and that when publishers go out of their way to keep Amazon from getting the books (Ptolus and Rappan Athuk, for example), they remove the discount once they realize that they won't get their usual deal on the books.

Always seemed that way to me too. Amazon probably buys in massive quantities leveraging its nationwide, and worldwide, sales.

And thier shipping rocks too! I ordered a pair of headphones last Thursday night and I had them Tuesday. My 3.5 books were ordered Saturday evening and I got them yesterday. That kind of quick turnaround makes me a loyal customer.

 

[Vocenoctum]

I have a hard time believing that volume is not the reason why Amazon has deep discounts on the books. Heck, there's a reason why older books that probably aren't big sellers do not have the discount anymore, and that when publishers go out of their way to keep Amazon from getting the books (Ptolus and Rappan Athuk, for example), they remove the discount once they realize that they won't get their usual deal on the books.

From what I've read, generally the breakdown is 40% for publisher, 20% for distributor, 40% for retail store. Amazon can buy at a distributor level, sell at 70% of retail and still make 30% of retail vs the store owner selling at 90% to get that same rate of cost.

Sometimes, Amazon must get a book through book trade and pay 60% of retail vs their normal 40% directly from WotC, so they charge more. (RAR, Ptolus, many books from smaller publishers).

At least that's what I've read around over the years.

 

[Dannyalcatraz]

One, I would say it is in a store's best interest to NOT ever tell a customer what they really pay for an item. Suddenly people start saying things like, "Well, if you get it for X, then you can sell it to me for Y". And as I've already stated, Y never takes into account actual overhead.

Well, given my position, I'm pretty sure that when they tell me their wholesale price, they're not lying.

"Y" seldom takes overhead into account, but explaining overhead is pretty simple.

Secondly, if he can't get a minimum of a 35% discount on what he is buying from the distributor, change distributors! That isn't WoTC's fault if the distributor is charging him too much. And I assume he is buying from a distributor, not directly from WoTC. I know shops that stock Neiyar through Alliance and other vendors are getting good discounts, and Neiyar is a print-on-demand title.

The main problem with this is that in some areas, a single distributor has a monopoly on distribution of the product in question- either due to market forces (the monopoly they have is across the board for the product type- not WotC's fault) or contractual reasons (they have negotiated a monopoly in a particular product for a given region- WotC's fault).

This does raise the possibility of "arbitrage"- here, it would mean buying the product from the online retailers who have a retail price lower than the B&M wholesale price- effectively using the online retailer as your "shadow" wholesale distributor.

Of course, the B&M store will still always have a higher price than the online retailer...assuming that they'll even sell to the B&M store in volumes large enough to keep that store supplied.

Third, I doubt he is buying the volume that Amazon is. All manufacturers in all industries offer discounts on volume.

In all likelyhood, only the largest distributors are buying in the volume Amazon is.

I reiterate- I have no problem with the online retailer if that low price is solely the result of advantageous volume discounts. Its the other stuff I worry about.

Here's one example of what I mean:

General Motors is a major purchaser of auto parts- they manufacture very few of their own...most of that is outsourced to specialty companies. Of course, they get HUGE volume discounts.

However, they also have a nasty reputation for not paying their contracts in the agreed-upon time frame, often paying months late. The reason/result is 2-fold: they get the advantage of keeping their money for more time, gaining the extra interest in their accounts (it sounds trivial, but it adds up to millions of dollars a year); and it keeps their suppliers on the edge of failure...often resulting in ADDITIONAL discounts just to get the suppliers' accounts recievable translated into cold hard cash.

The suppliers can't do squat: if they sue or withold parts, GM experiences a slowdown while they dust off their own production facilities and stop outsourcing...leaving the supplier without a buyer at all.

What does this mean to us?

If RPG companies give such advantageous wholesale prices to online retailers that most FLGSs go under, they'll lose bargaining leverage. Those online retailers will become (virtually) the sole outlets for the product, resulting in monopsony/oligopsony- a single or small pool of large wholesale purchasers who then can dictate the price to the product suppliers.

And monopsony/oligopsony is just a step away from monopoly/oligopoly...and dictating prices to consumers.

 

[Kae'Yoss]

If RPG companies give such advantageous wholesale prices to online retailers that most FLGSs go under, they'll lose bargaining leverage. Those online retailers will become (virtually) the sole outlets for the product, resulting in monopsony/oligopsony- a single or small pool of large wholesale purchasers who then can dictate the price to the product suppliers.

And monopsony/oligopsony is just a step away from monopoly/oligopoly...and dictating prices to consumers.

On the other hand, if Wizards doesn't sell to online sellers any more, it's the B&M stores who have the near-monopoly. Now they can dictate the prices. Online sellers would have to form a price cartell to charge high prices - after all, if online seller 1 charges too much, you just use online seller 2.

B&M stores, on the other hand, often don't have to contend with local rivals. You either buy in my store or you drive 200 miles to the next one. So if they charge high prices, you can't just use the next B&M. And I have seen stores that charge really high prices, and heard of more to do the same. If you now take away their major competition - online sellers - those guys will increase the prices further.


Of course, the fact that Wizards seems to be willing to attack online and flea market sellers, while still selling to Amazon, means that the shops still have some competition. The only loser in the whole thing is those online sellers.

And, especially in the case of DDM, Amazon doesn't sell singles.


There has to be a better way to help the B&M stores than killing non-amazon online sellers

 

[Bardsandsages]

There has to be a better way to help the B&M stores than killing non-amazon online sellers

This thread has spun in a completely different direction! But to pick up on this point, B&M stores need to help themselves. There use to be no less than four shops within a 15 mile radius of me, only about a half hour drive in any direction. I have stopped shopping in them long ago. Here are a few reasons why:

I'm a female, professional who like to game. When I walk into a store, I don't want to be gawked at by some 18 year old cashier chewing on his tongue ring while leaning over a counter with a copy of Maxim in plain view. I consider myself pretty average looking to begin with, and I certain am not walking into the shop wearing anything remotely gawkworthy. I don't want to be looked at like a piece of meat.

When I go into a shop, I don't want to be stepping on doritoes and puddles of spilt soda that haven't been cleaned up. This is a business, not you're mother's basement. If you aren't gonna keep the carpet clean, pull it up and put in tile. Dust once in a while.

Many of them are built like closets, not shops. The aisles are so small you have to rub up against people to get around. You can't browse when you have people constantly bumping into you to get around.

Poor selection. Most ONLY carry WoTC, White Wolf, and maybe two or three other publishers. For that, I can sit in my pajamas at home and order from Amazon.

Poor service. Cashiers are generally bored or disinterested in doing anything other than giving you change, and even then they drag their feet.

Over the last few years, all four of the shops have closed down. I don't believe ANY of the closing had to do with a deflating of the RPG community, but had to do with all of the above.