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I was talking to the store manager in the Oxford Street branch of GW today. He reckons that a recent change in the law means GW will no longer be supplying "deep discounters" in the quantities and at the discounts they need to keep their businesses running.

What do people think about how likely this is?

Well UK vs Europe fullretail prices are quite diferent so even if its full retail in UK its ussually a deep discount if you buy from europe.
As for independent stores not being able to get the desired quantities at better prices in the future its going to make them bleed... but biggest impact will be felt at GW...

I doubt it. GW would only be making less money. This isn't the time to push anything that might even possibly hurt sales.

And they simply don't have enough shops to where this would be a good move for them. The only thing they seem to be super protective about is their IP.

Really it depends on the changes in law he was "reckoning" from. Any chance you know a little more about what makes him say this? Maybe that would help us gauge better.

Well, lets see.

Third Party Sales account for a vast slice of GW's bottom line.

The discount the stuff is sold at, to GW, is largely immaterial, as they tend to sell at a flat rate to all non GW Suppliers.

The only thing they are concerned about are online only sellers pricing out the more important LGS. After all, demo games etc cannot be performed by online only stores, and if they are discounting far beyond the LGS, then the bricks and mortar stores are facing an unfair market, and tend to close.

So deep discounting, as long as the website has a LGS attached is hardly GW's concern. Only the seller is losing out on money, NOT GW.

Plus, GW can refuse to serve ANYONE, as per retail law as is. So why would a change in legislation suddenly make this easier? You don't even need a reason to refuse sales.

Contract Law says you can refuse service to anyone, yes, for pretty much anything but racial or sex reasons. I suspect anti-competition rules may be what is behind this.

I was talking about how the Cloudstrike Apoc formation is actually a cheaper way of buying Falcons than buying them separately from Wayland or 40KEmpire. He agreed and advised me that if I wanted to buy stuff from them to do it soon as they will not be in business much longer.

IMO, GW has good enough financial guys to know that the online non-direct sales model will be bringing in revenue by appealing to those like myself who are willing to search out discounts. It is not exactly advanced economics/business sense. It is quite likely that they'll be trying to stem the size of the discounts, maybe though.

For GW, is all down to whether or not your store supports the hobby in the way their own do.

After all, it's having the High Street presence, either their own or third party, that got GW where it is today. Plus, the FLGS *tend* to have been around and established a lot longer than Web stores, so it's also something of loyalty as well.

Are there rumblings of an Internet Sales Tax over there such as there in the US? The Federal government is trying to get some legislation through where you pay a tax on all online purchases. As it is now you pay State sales tax if you purchase from the State you are in. If there is something similiar in the works maybe that was what the person was thinking of as it would increase what one pays.

Would have to disagree with Grotsnick's GW base. I would offer up instead that for GW, it's all about selling models. Prehaps other things may have mattered in the past, but it seems that GW has moved away from supporting hobbyists more toward making money.

Like Apocalypse you mean?

Without the Hobby side of things, GW is stuffed. The more you offer within your games, the more people will find something that appeals. So serve as much as you can, and you have a wider audience.

I'm not saying that your business model is flawed, Grot. I'm saying that it doesn't match GW's. Big difference. I don't buy in much for the hobby side, but I know a lot of people do and indeed, GW says that the hobbyists are their major cash cow. With the competitive gamers being "extreme fringe" or some such according to Jervis.

Nonsense.

They have invested money in making their own brand paints better. The Foundations are useful, and the washes are nothing short of brilliant. Certainly since these, my painting ability has gone up somewhat, simply because they are easier to use.

Same with the tools. Spraygun anyone?

GW are investing in more than just new rules and plastic crack. Without meaning to seem confrontational, can you please explain your statement that they have moved away from supporting hobbyists?

Can't comment about the UK or EU, but there was a case here in the US approx 1 year ago that could have some impact. Basically a manufacturer argued (and WON) that they had the right to establish and control the retail price of their product sold through distribution, because they were able to prove that their control of the price would not restrict or hinder sales and/or customer access (please note that I've paraphrased this quite extensively...actual wording/law/impact can be found here). My take was that if a manufacturer could prove that by controlling the pricing, they would be able to improve/promote the business, they could do so. The analogy is that GW could argue by controlling retail pricing, they could thereby support their B&M outlets (internal and 3rd party), which are at risk from online discounters. The fact they they promote the "hobby" so aggressively, would lend credence to the argument as "online retailers" do not and can not support the "hobby" the way that GW wants.

Not being a legal "anything", I'm not sure of all the various angles the ruling holds. To be honest, I'm surprised that GW hasn't already explored the possibility; I suspect that the potential risk may outweigh the potential gains.

AJC

Given how you started your post, the non-confrontational bit sounds a bit...off. But that's ok.

I would say that they hoave upgraded their paints and tools in order to support their model sales. They realized that hobbyists were purchasing these things from other sources, and attempted to pick up some of that market share by offering some of the same. All of which are over priced compared to other sources, with the possible exception of their sprays. The GW sprays are expensive, but so are other brands of model sprays. Some will jump in and say the walmart brand .89 cent cans do the job just fine, I don't know. I have never tried those on my models and do not intend to. Others can do as they wish. The sprays, as I have said, are open to some debate I think. It is an opinion.

As far as the tools, they are much higher in cost and lower in quality than similar tools from other sources. As far as the lower quality, I believe it is mostly in the metal, from my use of them. However, to be fair, you really don't need super high quality or expensive alloys or exotic materials or processing to produce a modeling tool. This isn't an allen bar we are talking about here, it's a simple modeling tool so lower matel quality is an understandable move in my opinon. Pricing it the way they do is trying to take advantage of lazy shopping. And probably doing a great job of it.

The spray gun. Oh, the spray gun. I can buy a device that performs the same function from other sources, works GREAT, for 5 dollars. I question the need for the spray gun myself. Some may see a need and use for it, that's fine. I think it is a worthless waste of money, but to each his own.

Paints. Great improvements by releasing the Foundations, and upgrading the washes. The washes work a DAMn site better than I thought they would.

They invested money to improve their offerings to the modelers in order to sell them more product. They think they can make a buck off of them, instead of losing those particular bucks by seeing the sale go to anyone of a number of hobby stores, micro mark, harbour frieght, or other sources. That is why they have done these things. Not to "support" the hobbyist. Their pricing on these items are not for superior quality, nor unit quantity differences. They are to make revenue.

My point was, restated a bit, that GW may have at one time in the past been a company run by gamers and/or hobbyists. A company to make money to be sure, but a company with an ideal in mind. In my opinion, over time, that ideal has changed into merely consideration of profit.

I hope that clears up "what I mean" for you. If that doesn't do it, then feel free to ignore my posts and PLEASE feel free to hit me with your ignore button. I would welcome it, because I am tired of typing this out to explain myself, and have reached my limit with how entertaining I find it. Dakka exists, for me, to entertain me and as an information source. Once it ventures outside of those parameters for me, then I move on to something else. Take care.

Ahtman wrote:Are there rumblings of an Internet Sales Tax over there such as there in the US? The Federal government is trying to get some legislation through where you pay a tax on all online purchases. As it is now you pay State sales tax if you purchase from the State you are in. If there is something similiar in the works maybe that was what the person was thinking of as it would increase what one pays.

UK sales tax (VAT) is already payable on all mail order purchases in the UK.

Always has been.

Phazer

What is the law change and what country? I'm assuming UK.

Speaking as a US customer, I'm pretty much at the point where if GW cuts out online discounters, I'm done. Their product is HORRIBLY overpriced anyway. $17 for a character model is stupid. The only thing I have every bought directly from GW is the terminator annihilation force which was a sweet deal. I may consider continuing if they bulk package more like with Apocalypse, which is better than a 20% discount anyway.

Grizgrin, I'm still a little confused matey.

Unless I am reading in the wrong context (entirely possible, being a notorious difficulty on the Interwebs) but it appears you are arguing that they are letting Hobbyists down by offering all the bits you might need in their Hobby Stores.

I just don't follow your logic here. Sure, there are alternatives available. Sure, selling better quality paints than before helps to drive miniature sales.

But surely, if they were ignoring Hobbyists and indeed the Hobby side of, erm, the Hobby, they'd just pull these from the shelves and refer you to your local modelling store?

Now, of the 'new' tools, I would agree the Clippers are inferior to the previous ones (I dread the day my pairs are beyond use!) the rest are, to me, a notable improvement. Sure, things might be deemed overprice, but as a consumer, it is my opinion that GW is a trusted brand (by me if nothing else) so if they have put their monicker to something, like the Spraygun, I can trust it's overall quality. Sure, I could go out and buy a cheaper one, but perhaps seeming snobbish, I am paranoid of anything cheap. Some might say 'cheap and cheerful' but in my experience (ymmv of course) 'cheap and nasty' is by far more common. And whilst not the cheapest tools on the market, GW's are far from being too expensive.

Take the Spraygun. Here, it's £18 pounds. Now, for it's uses, I really don't mind shelling out that money. Mainly because should it be faulty, or collapse within a couple of months, I know I can go back to my GW and see about getting something done about replacing it, with a good chance of a favourable outcome. So Brand Trust and reputation, as ever imho, make the extra price worth paying.

The paints etc again, may not be the highest quality, but I know they are more than up to the job, and I can get hold of them with a minimum of fuss. My mate Paul who is predominantly a painted swears by Vallejo, and having experimented with them, I can see why. But for my level, GW's paint more than do the job.

GW as a company now offer me everything I need to fully partake in the Hobby. If I'm running out of paint, or need some decent brushes, I can nip into town and grab them there and then. Indeed, the quality of them is decent enough that my friend who worked in one of our local artshops would send people down to GW to buy their brushes.

But I digress. GW now offer more Hobby Supplies than ever before, and certainly more than any other wargames company, so I'm a little confused how you can say they aren't terribly fussed for the Hobbyist?

Surely the simple way for GW to cut down on discounts offered by their competitors is to increase their own margin on the stock they sell to 3rd party distributors.

If you drive up the cost of the product, then it reduces the discount which is possible.

Why they'd want to do this is another question, as far as I can tell, the reason GW has massive overheads is their store network, if they can increase independant sales then theey can justify closing stores and reducing overheads and increasing profits.

The stores worked their magic for GW by forcing FLGS' out of business and establishing GW as the only game (store) in town in most places in the UK. now they've done that they're just a millstone around the neck...

discuss

Nah. They are essential to GW.

An active gamer is a spending gamer, and the stores are absolutely essential to keeping gamers active, even if it's just a High Street window showing off the latest models.

Indy sales are already their main source of income, and have been for some time. You see, I believe the wholesale price is something like 60% of RRP. When GW sell this through their Direct Sales or Stores, the overall profit margin (taking into account all the costs) is less than 40%.

But, without their stores, and depending on the FLGs to generate new gamers, there is a lot more competition. Run your own stores, and you can recruit far, far more people than an Indy, simply because there is less competition on the shelves for peoples money.

Hope that makes sense.

Without going into too much detail because I'm tired as hell:

Basically, last year, there was a case in the US where a manufacturer argued for the ability to set a minimum retail price that it's sellers had to abide by. The decision was worded something like "not illegal to do so." This is a step up from what it was before. Many manufacturers are now testing this ruling by trying to put such rules into play with stores and distributors. Mayfair Games (Settlers of Cataan, etc) is one of these. It may become more solid legally, or it may get overturned.

GW is in a bit more delicate position because they are vertically integrated. Meaning they are Manufacturer, Distributor, and Sales Agent. They have to be a bit more careful of how they limit discounting.

Currently, according to the last set of retail agreements, they do not limit discounting at all, but will not sell to stores that do not have a brick and mortar location. I've got two shops, but don't currently sell online. Theoretcially, I could start up a website and sell at 40% off if I wanted to. It's not breaking any agreement that I currently have with GW. (The whole 'work-harder-to-not-make-money' thing sort of keeps me from doing just that.)

I think the comments you heard came from someone wearing a Red Shirt? While they have a grain of truth in them, they also have a big helping of "I'm making a lot of this up, or repeating something someone told me without verifying it."

Off to drink a lot of coffee, and paint Orks.

Thanks for shedding more light on this ruling and how it's being "tested" within the hobby - very much appreciated.

AJC

Mad Doc Grotsnik wrote:Grizgrin, I'm still a little confused matey.

Unless I am reading in the wrong context (entirely possible, being a notorious difficulty on the Interwebs) but it appears you are arguing that they are letting Hobbyists down by offering all the bits you might need in their Hobby Stores.

I just don't follow your logic here. Sure, there are alternatives available. Sure, selling better quality paints than before helps to drive miniature sales.

[snip]

But I digress. GW now offer more Hobby Supplies than ever before, and certainly more than any other wargames company, so I'm a little confused how you can say they aren't terribly fussed for the Hobbyist?

I'll pick up for Gitzgrin here.

Its not that they're "letting down the hobbyist" per se, it is that their motivation isn't to support the hobbyist. It is simply to make money.

Sure, GW could have directed you to any number of third party outlets to get your washes, spray primer, and airbrush. But what did they do? They spent the time, money, and capital to develop, brand, and stock their own shelves (taking up model shelf space - anyone see the blisters becoming sparse?) in order to make a profit, and keep that business for themselves. His point is that at one time, everything GW did was "for gamers, by gamers", but now, their entire business model is to make money - and there is nothing wrong with that. The hobby tools are waay more expensive than where I shop for them, and they're there merely as a "convenience" (and you pay through the nose for that convenience).

If they were "supporting the hobby", they wouldn't duplicate other companies products that are available cheaper (hobby tools), and would instead focus on getting more models out to us, with better rules, and would direct us as to where to find the other stuff.

They're going for a one-stop shop operation, which is fine for what it is, but I don't buy a lick of stuff from them direct, for the above reasons. The only thing I use exclusively is their primer, which I've never had a problem with. And even so, at $18 a can now, I'll be purchasing less primer, which means less models...

I still don't follow. Perhaps I'm just being thick.

But by supplying their own brand Hobbywares, they are positively encouraging the Hobby side, surely?

To strip it out completely from stores, then they would be turning their back on the Hobby side of things, as the impression would be they are only and purely concerned with flogging models and rules?

I think we've taken things a little OT

they encouraged the 'hobby side' of things when they had deodorant stick skimmers shown in WD (the build your own vehicle rules). There were a bunch more 'hobby' type articles in WD before they started to sell all the hobbywares. And people still managed to build and paint models prior to hobbyware. Granted, their paints are pretty much necessary, and the primer, but the rest? Nah.

The impression they give now is that they're only interested in flogging models and hobbyware. The rules suffer. The hobby end of things (in my opinion - been doing this for 10 years) suffers because: 1) there are no bitz (or fewer); 2) every unit, or just about every unit gets a model now (so no cool conversions - see #1), 3) TLOS affects modeling, so again, less conversion. All the terrain is provided by them, so no need to build your own.

Some may see these as good things, because they don't have the time, energy, whatever to make terrain, convert models, etc. But I don't really consider buying a battleboard and gluing flock to it to be "the hobby". To me, the hobby is creativity (conversions, working outside the box), and creating stuff from scratch. Now its all being spoon fed to us (to attract the younger gamer with more disposable income). All the hobbyware is a convenience for mom and pop to get everything they need for little Billie, and for GW to cash in on it. I would venture to say very few 'veterans' buy GW hobbyware.

OR, maybe I'm too cynical

Back OT: I don't usually see online discounts for more than 20% for new stuff. Maybe there is the odd online shop, but my impression was that they were all now B&Ms, but with a web presence. Since that seems to be the defacto online discount anymore, and many B&M's offer it, why would it be in danger of going away? And, if it did, it would just mean I'd buy even less GW product.

While I have more disposeable income now, I spend the less as prices rise. Sad, really. I used to have what I called a 'store' in my dining room - boxes and boxes of shrinkwrapped stuff, I couldn't help myself but buy. Now I can, the prices from GW direct (and the high shipping costs) are a killer.

Mad Doc Grotsnik wrote:I still don't follow. Perhaps I'm just being thick.

But by supplying their own brand Hobbywares, they are positively encouraging the Hobby side, surely?

To strip it out completely from stores, then they would be turning their back on the Hobby side of things, as the impression would be they are only and purely concerned with flogging models and rules?

They should all be Bricks and Mortar with a Web Presence these days. It was something like....6, possibly 7 years ago? No, 2003. I was working Salute and still have the model.

Anyways. Back in 2003, there was a lot of random bitching against GW because they ceased trading with a lot of online only traders. Acording to the wisdom of Portent, this was clearly because GW weren't making enough money and was bully boy tactics to get all online sales through their own website. Which lets face it is paranoid nonsense.

Turn out, GW had been receiving numerous complaints and concerns from FLGS Owners who found former customers abandoning them to buy online at a discount they simply could not match. GW Stepped in, and did the right thing. After all, FLGS drive the hobby, online only stores do not.

So yeah, they should all have a B&M Store that they are based from now.

And your version of the Hobby thing made more sense that time, though i would point towards Apocalypse and stuff, which is a convertors dream come true. Even this months White Dwarf has examples of converted Stompas. But yeah, totally OT.

The way the law in the UK works (I beleive) is that Suppiers (GW) can reccommend a selling price (RRP), but cannot enforce it, as this would be termed 'Price Fixing' and this is illegal in the UK. But, GW have a way around this.

My local independant used to advertise and sell in his shop all GW products with a 20% discount. A GW rep came to the store (as they frequently visit all stores) and warned that if he did not sell at the RRP, they would stop supplying the products to him. This isn't against the law.

I can't see it happening as by doing it, GW will p**** off its major seller of products. The last time they did this, it took them years to recover the trust back with the independants. This was to do with retuning stock that would not sell.

Not entirely sure I believe you there Secret. Or, rather, I'm not sure I believe the bloke who told you.

Selling 20% off doesn't mean GW make 20% less by supplying to you.

Cruentus wrote:Some may see these as good things, because they don't have the time, energy, whatever to make terrain, convert models, etc. But I don't really consider buying a battleboard and gluing flock to it to be "the hobby". To me, the hobby is creativity (conversions, working outside the box), and creating stuff from scratch. Now its all being spoon fed to us (to attract the younger gamer with more disposable income). All the hobbyware is a convenience for mom and pop to get everything they need for little Billie, and for GW to cash in on it. I would venture to say very few 'veterans' buy GW hobbyware.

OR, maybe I'm too cynical

Yep, too cynical. You need to look at all that GW scenery, and as you say, think outside the box. You can kitbash that stuff and use it as bits for a ton of scenery. I've got several pieces I've done up, and several more in progress.

The 40k stuff is exceptionally good. It does save a lot of time, but is still very customizable. I think I opened up and built 10 of the big boxes when it came out, doing about 4 dozen different buildings.

Discounts only last until

Sunday!
Sunday!
Someday!

(The whole 'work-harder-to-not-make-money' thing sort of keeps me from doing just that.)

There used to be a FLGS around here that absolutely refused to offer any discount on GW product, but would others, go figure. When asked about it he quoted GW Propaganda about how much more product he would need to sell to make the same profit.

He's out of buissiness.
The store 45 minutes that would give you a 20% discount if you spent $100 is still in buissiness.
The Warstore is doing quite well giving 20% off all the time.
Bitz Kingdom is doing quite well offering steep discounts.

Walmart undercuts other people by at least $.02 just to be the cheapest, they seem to be doing pretty well.

I'm not saying everyone has to slash prices to stay in buissiness, but when you've got competition and the they sell it cheaper, you better be offering something they can't or people will waste dollars worth of gas to save pennies

If your the only game in town, then you don't really have to worry about it.