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So I was having a discussion with my local store owner, who firmly believes GW does it right by stifling online sales and limiting discounts with a heavy hand so that he can stay in business. Obviously, his perspective is that online retailers don't have his overhead since "none of them" run stores with play space, and that GW's "price protection" policies keep him competitive. He specifically named Privateer as a company that doesn't care about him because they don't give out freebies as GW does, and doesn't stop online retailers from offering large discounts on their products.

There is obviously some truth here; game stores that use space for playing games rather than selling games have a much greater overhead than online discount companies. This store, like most others, make their money on Magic. GW is his second most profitable product line, meaning that he does strongly rely on them to keep the lights on. Of course, he sells at MSRP and keeps very specific stock on the shelves to get his GW freebies every year.

Obviously, the issues with GW run far deeper than their pricing and business practices, and it makes me wonder how the company is going to turn this around. We have just had a flood of players start selling their 40k for "another" tabletop wargame, and it seems that while retailers may get advantages for selling GW, the players are getting sick of them... all the kick backs in the world do you nothing if people don't want to buy the product anymore.

This isn't meant to be a "the sky is falling" post about the imminent doom of GW, they are still profitable for now and are by no means "sunk," but I still believe that this period in GW history differs greatly if only because they don't seem to recognize competition and their pricing model issues as far as the players are concerned.

We have all heard how much the players hate some of these practices, but I will admit it was interesting to hear a seller's perspective.

A number of "online" stores have physical stores with gaming space. Before they went belly up, Maelstrom Games, perhaps the largest international retailer of GW products outside of GW themselves, had a huge physical store, with massive gaming hall.

Exactly - and both of the big UK ones - Wayland and Darksphere have large gaming areas.

In any case the approach is wrong - if you want to encourage gaming spaces, provide a deeper discount to resellers who have public gaming spaces.

The only reason you'd ban online ordering completely would be to drive customers that require online purchasing (which is a lot in a sparsely populated country) to your own site.

I mentioned that, he called me out as wrong. I didn't research it specifically so I placed "none of them" in quotes. I'm a fan of several legit gaming shops that sell online at deep discounts, and they often post pics in their store with the mountains of product they sell. They obviously go for volume, but my local owner said they can't make money that way... despite the fact that I have worked in other industries that did the same thing. Volume can make up for discounts with enough volume

So yeah, I know it works, but some retailers obviously believe that they get more bang for their buck at MSRP.

Having never seen a local retailer offer anything below MSRP, I can agree with that. However in an expensive hobby that just means I'm more inclined to buy at a discount online and only buy small things at the FLGS, because the discount is too good to pass up especially on large purchases where it can easily be an extra kit.

 Moktor wrote:
I mentioned that, he called me out as wrong. I didn't research it specifically so I placed "none of them" in quotes. I'm a fan of several legit gaming shops that sell online at deep discounts, and they often post pics in their store with the mountains of product they sell. They obviously go for volume, but my local owner said they can't make money that way... despite the fact that I have worked in other industries that did the same thing. Volume can make up for discounts with enough volume

So yeah, I know it works, but some retailers obviously believe that they get more bang for their buck at MSRP.

If you're selling at or near cost, no amount of volume will make up the difference. At best, it can be a loss leader to improve sales of other, more profitable products.

The biggest issue with GW's practices is the simultaneous crackdown on online retail and limitation on the amount of product provided to FLGS if there is a nearby GW store.

B&M retailers and online stores can coexist. I don't think GWs scheme of not allowing online shopping carts is the best way of going about things, but 1) that's not something unique to GW and 2) I'm honestly not sure how much of an impact it has on helping B&Ms or GW's own online store to state an informed opinion

I don't envy the work and heartache it takes to run a hobby and gaming store, but they simply have to play to their advantages, diversify their revenue streams, and make smart business decisions. No, they cannot compete on prices with an online retailer, but I also can't hangout at a .com, browse and actually see minis, or play on tables with terrain.

B&Ms are destinations, .coms are convenience stores.

I think the question for a player is whether you are using a B&M store to play at; then you have to ask whether the passed up savings are going to good use for the play space that you are using. Nothing is free, as we all know.

I'd like to hear Mikhaila's commentary on this one...

 Moktor wrote:
I think the question for a player is whether you are using a B&M store to play at; then you have to ask whether the passed up savings are going to good use for the play space that you are using. Nothing is , as we all know.

Honestly for me, the savings trump all. Doubly so for 40k where I would never pay full retail for anything. With Warmachine the temptation to get a 30% discount online and have not only the item virtually guaranteed in stock but get it within a week generally trumps the fact that most game stores here don't carry a large selection of PP products and when they order it, it can take 2 weeks or more if the item is even in stock, and they often won't know (I once ordered a single model and was waiting over 3 weeks with no idea if it was coming or not until I said screw it and ordered it online, got it within 2 days).

WayneTheGame wrote:

 Moktor wrote:
I think the question for a player is whether you are using a B&M store to play at; then you have to ask whether the passed up savings are going to good use for the play space that you are using. Nothing is , as we all know.

Honestly for me, the savings trump all. Doubly so for 40k where I would never pay full retail for anything. With Warmachine the temptation to get a 30% discount online and have not only the item virtually guaranteed in stock but get it within a week generally trumps the fact that most game stores here don't carry a large selection of PP products and when they order it, it can take 2 weeks or more if the item is even in stock, and they often won't know (I once ordered a single model and was waiting over 3 weeks with no idea if it was coming or not until I said screw it and ordered it online, got it within 2 days).

That is really a big deal, and I agree for all those reasons. I feel obligated to support my local shop, but the truth is he can't or won't maintain stock (just battle boxes for PP, which are selling like crazy and basic stock for GW) and special orders take forever... oh, and I get to pay full price.

It comes down to "how bad do we need the store in this environment?" It is a serious question that might get me flamed, but we all think it. Several of my gaming friends have tables at their houses, and while I like the local tournaments it is an uphill battle and standard B&M stores are facing extinction. Would we maybe be better off having a game "store" that charges for use? How much would it take to operate such a thing? My feeling is that it would be a net loss for players.

 Moktor wrote:

That is really a big deal, and I agree for all those reasons. I feel obligated to support my local shop, but the truth is he can't or won't maintain stock (just battle boxes for PP, which are selling like crazy and basic stock for GW) and special orders take forever... oh, and I get to pay full price.

Whether it is can't or won't, that phrase in itself speaks to his competence, and should inform what you were outlining he was saying in your first post.

Ah yes, lets fight progress, that has always worked so well through out history...

the product is not worth MSRP, not even in USA prices.

In canada and australia the MSRP is a bad joke

http://registers.accc.gov.au/content/index.phtml/itemId/1178319/fromItemId/776499/display/submission

The views expressed here by Australian gaming stores, both online and B&M, seem to suggest that GWs business practices are AT BEST blatantly anti competitive.

It seems to me that the Wizkids / Attack Wing method of 'Organised Play' (admittedly, without the blatant one-up-manship of games balance) is probably the best way of keeping stores relevant.

In other words, a games company should stop just thinking about selling products to store but working to sell experiences to stores, that you just can't find online. - Something that gives a store a tangible need to be a store, not just a shopping cart.

If anything, that is the complete inverse of Games Workshops method.

Your local store owner is an idiot. The phrase "great for game stores" can not be applied to a company that is moving more and more of its products to direct-only in an effort to maximize the share of sales going through its own stores at the expense of independent stores.

Plus, your local store owner isn't making money off 40k because of GW's business practices, he's making money off 40k because the local 40k community is giving him charity donations. If he's selling at full retail price the only reason anyone is buying from him is because they want to donate money to the person who provides their gaming space.

 Moktor wrote:
So I was having a discussion with my local store owner, who firmly believes GW does it right by stifling online sales and limiting discounts with a heavy hand so that he can stay in business.

If the only way you can stay in business is through your suppliers stifling competition, something is wrong.

Obviously, his perspective is that online retailers don't have his overhead since "none of them" run stores with play space,...

While this is possibly more or less true within the US due to their 'no shopping carts' policy meaning that online sellers have to source their product from someone other than GW (and so will be unlikely to also have a store), it's certainly not the case in the rest of the world. As others have pointed out, the largest online sellers in the UK have physical stores. Its the same story here in OZ... there are a few online-only sellers, but the majority of them (again, including the largest) have physical stores.


In that environment, all that GW's US policy regarding online sales does is prevent him from being able to compete with online sellers.

... and that GW's "price protection" policies keep him competitive.

You know what else could keep him competitive?

Competitive pricing.

He specifically named Privateer as a company that doesn't care about him because they don't give out freebies as GW does, and doesn't stop online retailers from offering large discounts on their products.

As opposed to GW's policy of not telling him about releases until 3 minutes before they ship, not supplying orders in favour of supplying their own webstore, removing his ability to stock core product as more and more codes go direct-only, and steadily eroding his customer base with policies seemingly designed specifically to annoy the hobby veterans?

Yeah, GW has his back.

There is obviously some truth here; game stores that use space for playing games rather than selling games have a much greater overhead than online discount companies.

Yes, they do. They do so, though, in order to offer an experience that those other businesses can't.

If you can't do that, or it doesn't wind up being profitable, then you need to adapt your business strategy, not expect your suppliers to give you preferential treatment because you and they both refuse to move into the 21st century.

Of course, he sells at MSRP and keeps very specific stock on the shelves to get his GW freebies every year.

I would be curious to know whether the inventory costs of doing that actually balance out the value of the freebies that he gets as a result...

 Peregrine wrote:
Your local store owner is an idiot. The phrase "great for game stores" can not be applied to a company that is moving more and more of its products to direct-only in an effort to maximize the share of sales going through its own stores at the expense of independent stores.

Plus, your local store owner isn't making money off 40k because of GW's business practices, he's making money off 40k because the local 40k community is giving him charity donations. If he's selling at full retail price the only reason anyone is buying from him is because they want to donate money to the person who provides their gaming space.

Got to agree with you on this one. I mean come on.... I reckon those mushroom heads ddi not read on how bad the most recent GW financial report actually was.

Their business model is not working. But Fantasy Flight Games certainly is...

I worked in a games shop in the mid-1980s, long before the internet became mainstream. We used to do a fair bit of trade via mail order as well as over the counter. In those days there were a lot more boxed wargames from the USA -- Avalon Hill, for example -- that were difficult for private buyers to order and import directly. Credit cards were still a new thing in those days so lots of people simply could not do international payments. Trader accounts could do it more efficiently and there was a demand in the market to satisfy.

There is a financial disadvantage in using high street premises rather than an edge of town warehouse. As said by others, a good retailer will turn his location into an advantage by making his shop a value-added destination rather than just a payment and collection point. (Why bother when these days you can get stuff delivered from Amazon to Collect+ pick-up points overnight?)

How to do that is another thing. I would have to sit down for a good long think about it, however I am not a retailer so I will spend my time on something else.

I thought Wayland Games and other online-only sites were being forced to have a B&M store to be able to order GW stock.
It was in the N&R section last year, IIRC.
So a B&M store complaining about online-only sellers isn't staying up-to-date.

Here it is:
http://www.dakkadakka.com/dakkaforum/posts/list/0/535821.page

Saldiven wrote:

 Moktor wrote:
I mentioned that, he called me out as wrong. I didn't research it specifically so I placed "none of them" in quotes. I'm a fan of several legit gaming shops that sell online at deep discounts, and they often post pics in their store with the mountains of product they sell. They obviously go for volume, but my local owner said they can't make money that way... despite the fact that I have worked in other industries that did the same thing. Volume can make up for discounts with enough volume

So yeah, I know it works, but some retailers obviously believe that they get more bang for their buck at MSRP.

If you're selling at or near cost, no amount of volume will make up the difference. At best, it can be a loss leader to improve sales of other, more profitable products.

The biggest issue with GW's practices is the simultaneous crackdown on online retail and limitation on the amount of product provided to FLGS if there is a nearby GW store.

Uhm, what? Costco must doing something wrong then, normally when a store buys huge amounts of product they get volume discount.

 jonolikespie wrote:
http://registers.accc.gov.au/content/index.phtml/itemId/1178319/fromItemId/776499/display/submission

The views expressed here by Australian gaming stores, both online and B&M, seem to suggest that GWs business practices are AT BEST blatantly anti competitive.

I read the mighty ape submission, that guy was switched on. Well worth a read for insight into GWs "excellent business practices".

So in other words, I wasn't completely crazy when I thought he was doing it wrong. He is pretty firmly entrenched in his ways, but none of it made sense. He is a card guy, though, and thinks in terms of card sales. We lost our latest 40k TO and now he runs that... but doesn't actually know the game. It has been pretty brutal. This makes for an interesting discussion, but ultimately he has to make his own business decisions. I am interested to see what he does if PP sales pass GW here.

 Jehan-reznor wrote:

Saldiven wrote:

 Moktor wrote:
I mentioned that, he called me out as wrong. I didn't research it specifically so I placed "none of them" in quotes. I'm a fan of several legit gaming shops that sell online at deep discounts, and they often post pics in their store with the mountains of product they sell. They obviously go for volume, but my local owner said they can't make money that way... despite the fact that I have worked in other industries that did the same thing. Volume can make up for discounts with enough volume

So yeah, I know it works, but some retailers obviously believe that they get more bang for their buck at MSRP.

If you're selling at or near cost, no amount of volume will make up the difference. At best, it can be a loss leader to improve sales of other, more profitable products.

The biggest issue with GW's practices is the simultaneous crackdown on online retail and limitation on the amount of product provided to FLGS if there is a nearby GW store.

Uhm, what? Costco must doing something wrong then, normally when a store buys huge amounts of product they get volume discount.

They do, and you can get by comfortably on 10% profit on millions of dollars a day. Selling miniatures is in a different scale where you can't just ramp up volume to make money.

I think that most B&M have the same problem of survivability trying to survive under a "miniatures first" approach. Regardless of what GW is doing to the online retailers.

Our local store is firmly a comic book store. Then its a card shop. Thirdly, it's a miniatures. He holds very limited stock in GW miniatures, but has a ballooned out section of Flames of War, Heroclix, PP, Bolt Action. He also has about 14 Full sized miniatures tables.

By making all of his money off of cards and comics, anything he makes off of mini's is a nice bonus. He provides ample amount of space, keeps a decent stock of a lot of popular games (Just in case someone has to have it that day) and it's working. Business is booming. You go in any day and people are flooding through the doors. Game nights are always packed and playing.

This to me shows that even though it isn't a miniatures first approach, the B&M is very much alive and well and doesn't really even need to compete with online only retailers.

My two cents.

 FenrisianStuart21 wrote:
I think that most B&M have the same problem of survivability trying to survive under a "miniatures first" approach. Regardless of what GW is doing to the online retailers.

I completely agree. If you build your business on only one or two products or manufacturers, you've set yourself up for failure. Some guys go into business because they know one thing really well--comics, wargaming, roleplaying, or sports cards--then find themselves in trouble when the market changes or a manufacturer goes belly up.

 FenrisianStuart21 wrote:
...You go in any day and people are flooding through the doors. Game nights are always packed and playing.
...

Quick question: on those packed play nights with floods of people are people actually buying stuff (and a lot)? Hopefully, that's the case.
One of the big problems that B&Ms face is people buying their cards and minis at X% off online and then using the store as their personal play venue. To make matters worse, folks who do that are really good at steering other customers toward Joe's Online Discount Gaming site and dissuading them from buying local.

It's always interesting when these threads pop up. I really find the comments interesting. BTW - I own a game store.

Let's talk about the original question: Are GW's business practices great for game stores?

In a general sense, it's a mixed bag. There's some practices that I find frustrating and unhelpful. Their current communications strategy is particularly vexing. As somebody who spent nearly a decade working in marketing and public relations their practices in this area have me banging my head against the wall on a regular basis. They are essentially FORCING me to read all of the rumors I can find to stay up to date. How does this make any sense at all? But I digress.

Price protection. Online sales. That's really want you wanted to know about. Is it great? It doesn't suck. In fact, yeah. I think it's pretty nice. It helps offset some of the frustration that comes with dealing with GW. The issue of price is something that publishers, retailers and consumers are never really going to see eye-to-eye on. If consumers are complaining about the price but still buying the product then retailers and publishers are essentially content. The higher the price that you pay the more of a return that we're seeing. Once people start dropping out of the hobby then it's time to reconsider the price issue.

In any case, there's certainly plenty of games that we sell that have no such protections on and we still do okay with them. Would you believe that our single best-selling game is a game that is nominally available online online - and yet we still sell a ton of them at a considerable markup from the online price? This is true even though we will tell people that they are available cheaper online. Sometimes people just can't be bothered or need to have it now or... you might want to sit down for this as it's likely to blow your mind... they don't shop online at all.

I believe that in-store gaming in an important value-add that B&M stores offer (or SHOULD offer) and many people value that. Loyalty to a game store is something that should not be dismissed. Many times when I see these threads pop up it's because somebody is unhappy with their local store for one reason or another. This appears to be the case in this thread as well. Dissatisfaction leads to thoughts about why it's worth bothering to pay the premium at that store at all. Happy gamers rarely have these complaints. I don't shop at places that make me unhappy either.

The most interesting comments are the ones that proclaim the impending demise of the game store. I'm not sure if those comments come from people who simply don't have a local game store or just choose not to shop at the ones available to them, but I can assure you that this is just not the case. Gamestorepocalypse is not upon us.

 Yonan wrote:

 jonolikespie wrote:
http://registers.accc.gov.au/content/index.phtml/itemId/1178319/fromItemId/776499/display/submission

The views expressed here by Australian gaming stores, both online and B&M, seem to suggest that GWs business practices are AT BEST blatantly anti competitive.

I read the mighty ape submission, that guy was switched on. Well worth a read for insight into GWs "excellent business practices".

The submission from Warpuppy was also very good.


Automatically Appended Next Post:

 Moktor wrote:
We lost our latest 40k TO and now he runs that... but doesn't actually know the game.

That's his next problem then.

Know the product you are selling. Particularly important with miniatures games, as your knowledge of the game is going to directly affect how you order product... something that is getting more critical as GW moves more and more lines to direct-only.