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![[Post New]](/s/i/i.gif) 2011/05/24 15:09:50
Subject: Why do GW 'brick and mortar' stores exist?
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The Hammer of Witches
A new day, a new time zone.
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Given my experience in FLGS, GW stores are not that hard to figure out. When I first got into the hobby via a LGS, there were some battletech players, a few players for another couple games that I no longer remember, and about four people who played FB/40k. You really couldn't just go for a pick up game of anything because without preplanning, chances were slim you'd meet someone ready to play the same system. There were only a couple of tables for gaming, only one of which really worked for GW. Stock wasn't bad, but for any system it was kind of limited.
Getting multiple people into the same space at the same time who play the same games is going to do more to keep players engaged and motivated with that product.
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"-Nonsense, the Inquisitor and his retinue are our hounoured guests, of course we should invite them to celebrate Four-armed Emperor-day with us..." Thought for the Day - Never use the powerfist hand to wipe. |
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![[Post New]](/s/i/i.gif) 2011/05/24 15:20:00
Subject: Why do GW 'brick and mortar' stores exist?
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Tinkering Tech-Priest
Cambridge, UK
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As much as I detest GW sometimes I think that their reluctance to shut down stores is a testiment to them and it is what keeps them going so well as they don't advertise in any other way
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If your going to do something wrong, do it right!!!!
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![[Post New]](/s/i/i.gif) 2011/05/24 19:11:50
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Steady Space Marine Vet Sergeant
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It just seams to me that GW would do better by working closely and sponsoring FLGS than running the whole store. That is a huge expense to pass onto the customers.
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"I don't have principles, and I consider any comment otherwise to be both threatening and insulting" - Dogma
"No, sorry, synonymous does not mean same".-Dogma
"If I say "I will hug you" I am threatening you" -Dogma |
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![[Post New]](/s/i/i.gif) 2011/05/24 19:48:52
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Servoarm Flailing Magos
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Andrew1975 wrote:It just seams to me that GW would do better by working closely and sponsoring FLGS than running the whole store. That is a huge expense to pass onto the customers.
They could, sure, but they seem to (locally- DC Metro area) have a mix of 'gamer' stores (the new one that opened last weekend, for example) that occupy a similar niche to independent game stores and "Vanity Stores" that are in expensive locations. I know there have been GW stores in many "Mills" mega-malls. These malls tend to have few non-chain stores, the price and requirements to lease space are high (some mall leases specify the tenant must fulfill additional requirements like redoing their store entrance every so often with a specified minimum cost), and the crowd is generally there to shop.
Vanity Store is totally my term, but I think it's somewhat appropriate. These stores are there to get a chance at prospective players who might not be aware of or feel comfortable in a 'traditional' game store. The new player who doesn't know there's such a thing as game stores, or family and friends shopping for a gift. Or even just guys who think the quite store with the Lord of the Rings stuff on the walls is better than following their girlfriend from store to store for another two hours.  For this, they're great as they let people know about games they may never hear of.
I've seen a few smaller shops in malls, but they tend to be uncommon. I don't expect this to get better as 'good' game stores seem to be focusing more on event space, social stuff, and similar over product sales as they just can't compete with the internet for raw prices.
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Working on someting you'll either love or hate. Hopefully to be revealed by November.
Play the games that make you happy. |
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![[Post New]](/s/i/i.gif) 2011/05/24 20:45:26
Subject: Why do GW 'brick and mortar' stores exist?
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Lord of the Fleet
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Creeping Dementia wrote:With the market able to support FLGSs, what is the point of GW stores?
Regardless of whether product is sold in a GW store or in an FLGS, there is still overhead to cover.
In GW stores, all of the retail price goes to GW but they have to cover the overhead.
In an FLGS, only part of the retail price goes to GW but the store owner covers the overhead.
GW stores are only a bad idea if they are considerably less efficient than an FLGS - that is, if the sales are lower relative to the cost of operating the store.
Without detailed figures on the cost of operating the GW stores and the split between GW/ FLGS sales we can't work that out. Automatically Appended Next Post: infinite_array wrote:In the UK, the GW store often seems to BE the FLGS.
Yes and no. They often are the local gaming store. At the same time, the local gaming store is not where most people play - they play in independent clubs.
Andrew1975 wrote:I've never understood GW stores. It appears that they hemorrhage money!
This is based on what?
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This message was edited 1 time. Last update was at 2011/05/24 20:47:50
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![[Post New]](/s/i/i.gif) 2011/05/24 21:10:29
Subject: Why do GW 'brick and mortar' stores exist?
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[MOD]
Anti-piracy Officer
Somewhere in south-central England.
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Scott-S6 wrote:
Andrew1975 wrote:I've never understood GW stores. It appears that they hemorrhage money!
This is based on what?
I don't want to put words in his mouth.
GW have a wopping 76% margin on their products yet they barely make a profit after several years of reducing their retail space, staff levels, and other efficiency savings.
They don't do time travel research to design their models, but something is sucking money out of the company like a Dyson. It could be Mat Ward's pension contribution, or maybe it could be their retail chain.
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![[Post New]](/s/i/i.gif) 2011/05/24 22:51:20
Subject: Why do GW 'brick and mortar' stores exist?
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[ARTICLE MOD]
Fixture of Dakka
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Kilkrazy wrote:
GW have a wopping 76% margin on their products yet they barely make a profit after several years of reducing their retail space, staff levels, and other efficiency savings.
I keep seeing this number bandied about. Where did it come from, or is it a made up internet stat?
I don't even know for sure what the wholesaler discount is, but I have to assume it is over 25%, or the discounters wouldn't make a penny. That's got to account for some of it anyway.
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![[Post New]](/s/i/i.gif) 2011/05/24 22:57:19
Subject: Why do GW 'brick and mortar' stores exist?
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Dakka Veteran
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It's from the GW shareholder's report.
Don't have it on me, but from memory the total revenue from the last yearly report was just shy of 120 million pounds (not including revenue from royalties) and the cost of the product was around 30 million.
They have a whopping 80 something million in operating costs, that wipes all that profit out.
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![[Post New]](/s/i/i.gif) 2011/05/24 23:12:21
Subject: Why do GW 'brick and mortar' stores exist?
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Decrepit Dakkanaut
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Creeping Dementia wrote:I've been wondering this for the past couple years, ever since i first heard of problems GW had with overhead involved in keeping their physical stores afloat. Where I live, there isn't a GW store in hundreds of miles, I'm not sure where the closest one is, but I know there isn't one in my State, and I don't know of one in an adjacent state either. We do have a couple FLGS in the area, with around 6 within an hours drive. These stores have plenty of tables and terrain, hold regular tournaments, and are able to exist and turn a profit without corporate support. Is there something remarkable about GW stores I'm missing?
With the market able to support FLGSs, what is the point of GW stores?
To better channel the hive mind.
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![[Post New]](/s/i/i.gif) 2011/05/24 23:14:59
Subject: Why do GW 'brick and mortar' stores exist?
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Longtime Dakkanaut
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Ugavine wrote:But not everywhere has FLGS. My nearest gaming store is Games Workshop, a 10 minute walk away. There is a FLGS locally but their stocks are VERY limited. The only other FLGS stocks Board Games and RPGs but not GW products.
Mainly GW stores have been simply to promote their presence, High Street advertising if you will.
But the flip side to that, is not everywhere even remotely has a GW store. In fact most places DONT have a GW store within 100s of miles. My nearest one is.....NYC and I'm north. I have 3 crappy FLGS around the area.
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Hope more old fools come to their senses and start giving you their money instead of those Union Jack Blood suckers... |
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![[Post New]](/s/i/i.gif) 2011/05/24 23:21:16
Subject: Why do GW 'brick and mortar' stores exist?
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Fanatic with Madcap Mushrooms
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Another thing to keep in mind is that for those of us who want to play GW games with regularity and the local FLGS doesn't have a huge fanbase, then the GW store becomes a place to look for games. I personally find it a lot easier to find WHFB opponents at the GW than my FLGS, which is usually full of 40k, DnD, and MTG players, as well as Warmahordes groups.
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Some people play to win, some people play for fun. Me? I play to kill toy soldiers.
DR:90S++GMB++IPwh40k206#+D++A++/hWD350R+++T(S)DM+
WHFB, AoS, 40k, WM/H, Starship Troopers Miniatures, FoW
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![[Post New]](/s/i/i.gif) 2011/05/25 00:25:39
Subject: Why do GW 'brick and mortar' stores exist?
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Steady Space Marine Vet Sergeant
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Kilkrazy wrote:Scott-S6 wrote:
Andrew1975 wrote:I've never understood GW stores. It appears that they hemorrhage money!
This is based on what?
I don't want to put words in his mouth.
GW have a wopping 76% margin on their products yet they barely make a profit after several years of reducing their retail space, staff levels, and other efficiency savings.
They don't do time travel research to design their models, but something is sucking money out of the company like a Dyson. It could be Mat Ward's pension contribution, or maybe it could be their retail chain.
That is about right! Their overhead must be huge, I've seen that report and just can't see where that money is going. GW has in the past noted that their stores lose money, but because they bring in new business and increase exposure they believe it is worth the cost.
The old outrider programs really were the best, they needed to expand and improve that program instead of building their own stores.
I don't know about you guys, but I have never had a problem setting up games, isn't that what cell phones are for? Do people really expect to just bring an army to the store and have people just waiting to play?
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This message was edited 2 times. Last update was at 2011/05/25 00:28:48
"I don't have principles, and I consider any comment otherwise to be both threatening and insulting" - Dogma
"No, sorry, synonymous does not mean same".-Dogma
"If I say "I will hug you" I am threatening you" -Dogma |
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![[Post New]](/s/i/i.gif) 2011/05/25 03:08:39
Subject: Why do GW 'brick and mortar' stores exist?
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[ARTICLE MOD]
Fixture of Dakka
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If they're counting physical goods as 'cost of sales' then that makes a lot of sense to me. Salaries and equipment costs (mold production and the like) would account for some of the difference, and operating stores the rest I guess. I don't think that one number in the shareholder report tells the whole picture, and it's misleading to think it does.
You have to look also at "Operating Expenses". Not just Cost of Sales.
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![[Post New]](/s/i/i.gif) 2011/05/25 03:21:02
Subject: Why do GW 'brick and mortar' stores exist?
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Steady Space Marine Vet Sergeant
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Redbeard wrote:If they're counting physical goods as 'cost of sales' then that makes a lot of sense to me. Salaries and equipment costs (mold production and the like) would account for some of the difference, and operating stores the rest I guess. I don't think that one number in the shareholder report tells the whole picture, and it's misleading to think it does.
You have to look also at "Operating Expenses". Not just Cost of Sales.
I think you need to take a look at the financial report. It's pretty clear that the operating expenses are eating most of the profit. Much of that has to be from the stores.
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"I don't have principles, and I consider any comment otherwise to be both threatening and insulting" - Dogma
"No, sorry, synonymous does not mean same".-Dogma
"If I say "I will hug you" I am threatening you" -Dogma |
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![[Post New]](/s/i/i.gif) 2011/05/25 03:34:57
Subject: Why do GW 'brick and mortar' stores exist?
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Fresh-Faced New User
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The more "operating expenses" you can set off against ypour incoming cashflow, the less "profit" is taxable.
If the shareholders thought GW would be turned into a money factory by dumping the stores, that's what would happen.
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![[Post New]](/s/i/i.gif) 2011/05/25 03:42:58
Subject: Why do GW 'brick and mortar' stores exist?
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Steady Space Marine Vet Sergeant
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Lara wrote:The more "operating expenses" you can set off against ypour incoming cashflow, the less "profit" is taxable.
If the shareholders thought GW would be turned into a money factory by dumping the stores, that's what would happen.
That only works to a point and GW has blown it way out of proportion. A good business doesn't intentionally lose a large portion of it profits just for a tax break. It's really poor business.
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"I don't have principles, and I consider any comment otherwise to be both threatening and insulting" - Dogma
"No, sorry, synonymous does not mean same".-Dogma
"If I say "I will hug you" I am threatening you" -Dogma |
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![[Post New]](/s/i/i.gif) 2011/05/25 04:19:54
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Neophyte Undergoing Surgeries
Virginia Beach
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There isn't a GW store anywhere near my home, closest ones are in Washington DC, needless to say not worth the drive. But I was up north awhile back, and found a GW brick and mortar on the way back home and told my girlfriend we should stop. It was in a mall of sorts, I walk in and am immediately assailed by the guy at the counter, now I know the retail game, I worked for 4 years collectively in different kinds and even help out of my FLGS, but this guy...he was relentless, everything I picked up he tried to sell to me and talk about up selling god. All I wanted was a battle force for space marines so I could learn to play with my friend but I'll be damned if he didn't try to shove the whole Space Marine line down my throat. On our way out my girlfriend asked if everyone in this game was like that and I said I hope not.
Story time out of the way, apparently my experience is not uncommon, at least according to my fellow Americans. How is it some of these stores stay in business and is my experience common?
There is helping the customer and there is hounding him. I resolved after that if there is a GW anywhere I am visiting if I wanna see it I am going to pretend I am mute/partially deaf to see how they handle it or if they just leave me alone until i say something.
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750pt
I've seen fake gods and bad gods and demigods and would-be gods; out of all that, out of that whole pantheon, if I believe in one thing... just one thing...and that's... " GW to do something stupid. |
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![[Post New]](/s/i/i.gif) 2011/05/25 04:26:33
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Steady Space Marine Vet Sergeant
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Doktah wrote:There isn't a GW store anywhere near my home, closest ones are in Washington DC, needless to say not worth the drive. But I was up north awhile back, and found a GW brick and mortar on the way back home and told my girlfriend we should stop. It was in a mall of sorts, I walk in and am immediately assailed by the guy at the counter, now I know the retail game, I worked for 4 years collectively in different kinds and even help out of my FLGS, but this guy...he was relentless, everything I picked up he tried to sell to me and talk about up selling god. All I wanted was a battle force for space marines so I could learn to play with my friend but I'll be damned if he didn't try to shove the whole Space Marine line down my throat. On our way out my girlfriend asked if everyone in this game was like that and I said I hope not.
Story time out of the way, apparently my experience is not uncommon, at least according to my fellow Americans. How is it some of these stores stay in business and is my experience common?
There is helping the customer and there is hounding him. I resolved after that if there is a GW anywhere I am visiting if I wanna see it I am going to pretend I am mute/partially deaf to see how they handle it or if they just leave me alone until i say something.
This is generally why the FLGS is better, no real hounding, if you become a regular they may start ordering things for you and setting them aside. It's called customer sales, it generates more sales then "sales tactics" do!
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"I don't have principles, and I consider any comment otherwise to be both threatening and insulting" - Dogma
"No, sorry, synonymous does not mean same".-Dogma
"If I say "I will hug you" I am threatening you" -Dogma |
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![[Post New]](/s/i/i.gif) 2011/05/25 06:35:08
Subject: Why do GW 'brick and mortar' stores exist?
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Trustworthy Shas'vre
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As far as I can tell, GW considers them 'Advertising'. They attract curious people off the street in a much better way than print or TV advertising possibly could.
I think Australia is a bit of a cross between the US and the UK. We have about 25M people spread over the approximate area of the entire US - but something like 75% of that is clustered around the 6 capitol cities. We have a lot of desert. So in a state with population 2M, GW manages to have 3 GW stores in the capitol city of 1M.
Most people I know have seen the main GW store here - its in the heart of the CBD. So their advertising is reasonably effective.
As far as I can estimate from their financials, GW makes pretty much the same level of profit, on average, from their retail stores as from selling to independents. But they get the added bonus of advertising! So if a GW is making somewhere upwards of 30%of RRP profit, after factoring in CoGS, rent, wages, they're actually doing pretty well.
I think there is definitely the need for 'flagship' GW stores. But I don't think they should be supported to the detriment of the Hobby.
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![[Post New]](/s/i/i.gif) 2011/05/25 07:08:17
Subject: Why do GW 'brick and mortar' stores exist?
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Ultramarine Land Raider Pilot on Cruise Control
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GWs best idea with regard to retail was the 'Tiger' store (at least that was its nickname when I worked for GW, can't remember what its actual name was), but sadly it never took off because of the usual GW corporate idiocy.
The idea was to have a gaming club - they rented a warehouse space, stuck a couple of dozen tables in there, a few sofas, drinks machine, etc and had a retail area off to one side that stocked a pretty comprehensive range of GW product (including stuff that even back then was usually direct-only). It was much bigger than a normal GW, provided a better gaming environment, had adequate parking right outside the door and was created with holding events in mind.
There was talk that this would become the 'new model' and that GW would move away from lots of tiny shops that you couldn't play in to fewer bigger (and cheaper, rent and staff-wise) gaming 'hubs' - part GW store, part games club.
I think now as I did then that this was a fantastic idea, but needless to say the experiment failed.
Why? Because GW chose a location (Sheffield) that already had two GW stores, one of which was in walking distance of the 'Tiger'. They wanted it to run events but put it 30 miles north of Warhammer World in Nottingham and 25 miles south of GW Wakefield - one of the biggest stores in the UK and one which has its own gaming hall and regularly runs events.
Coupled with the fact that they (as usual) didn't advertise it and the site couldn't be seen from the road its failure was inevitable.
GW - maintaining the highest standards of Corporate Stupidity since its floatation
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While you sleep, they'll be waiting...
Have you thought about the Axis of Evil pension scheme? |
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![[Post New]](/s/i/i.gif) 2011/05/25 07:22:16
Subject: Why do GW 'brick and mortar' stores exist?
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Preceptor
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alphaomega wrote:Kilkrazy wrote:
The shops are one of the main venues where potential customers can participate in all aspects of the hobby.
The other main venue is clubs run by veterans. The issue that GW have with clubs is that veterans don't play only GW games, so potential customers are exposed to competition.
Another issue is, here in the UK at least Child Protection. For FLGS and even Gaming Clubs to be able to allow members under 18 to play instore is if one of more staff/member is vetted via Criminal Record Bureau Checks (CRB), the process isn't quick or free. GW does this as part of their Employment strategy meaning that young people can freely play/paint/model in their stores.
It isn't far to imagine that similar things are needed across the globe really. And as such The Brick and Mortar Stores exist to grow young ( GW) Hobbyists.
And I know the pain of CRB and stuff for Wargaming is a massive pain in the backside, most clubs I have spoken to don't want the hassle.
here in the usa no not unless the state county or city pass some kind of law and i never heard of such a thing.
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![[Post New]](/s/i/i.gif) 2011/05/25 11:14:05
Subject: Why do GW 'brick and mortar' stores exist?
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[ARTICLE MOD]
Fixture of Dakka
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Andrew1975 wrote:I think you need to take a look at the financial report. It's pretty clear that the operating expenses are eating most of the profit. Much of that has to be from the stores.
I think you need to look at more financial reports in general. Operating Expenses are the largest cost for most companies, and include things like salaries. Yes, Operating Expenses eat into profits, you're right. That doesn't mean that they're something you can just handwave away.
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![[Post New]](/s/i/i.gif) 2011/05/25 15:56:58
Subject: Why do GW 'brick and mortar' stores exist?
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[MOD]
Anti-piracy Officer
Somewhere in south-central England.
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Redbeard wrote:Kilkrazy wrote:
GW have a wopping 76% margin on their products yet they barely make a profit after several years of reducing their retail space, staff levels, and other efficiency savings.
I keep seeing this number bandied about. Where did it come from, or is it a made up internet stat?
I don't even know for sure what the wholesaler discount is, but I have to assume it is over 25%, or the discounters wouldn't make a penny. That's got to account for some of it anyway.
The Gross Margin figures comes from GW's own interim Financial Statement of late last year. I haven't looked to see if they repeat the statement in the recent end of year Statement. I would be very surprised if it changed much, since Kirby was quoted in The Guardian as saying that GW continues to have excellent margins.
Subject to the usual accounting caveats, I believe what GW put in their financial statements and accompanying blurb as there are pretty strict legal penalties for outright lying in such documents.
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![[Post New]](/s/i/i.gif) 2011/05/25 16:16:32
Subject: Why do GW 'brick and mortar' stores exist?
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[ARTICLE MOD]
Fixture of Dakka
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I'm not saying they're lying, I'm saying that simply citing the 'Cost of Sales' or margins relative to cost of sales figures, without also considering the Operating Costs is misleading, and not presenting the whole picture.
Yeah, I'd be pretty ticked off if I knew a company was making 76% profit on stuff they sold me. That seems exploitive.
But that's not true. They might have a 76% margin over the cost of producing the goods from raw materials, but salaries and equipment need to be figured in as well.
As it stands, they made 13 million in profit last year, on a revenue of 121.8 million (GBP). That's not a 76% margin, that's roughly 10%. Looking closer, you see that broken down.
Wages and assorted employee costs (social security, pension, etc): 50 million (40% of revenue goes here).
You can also find numbers for capital expenditures and other operating costs if you read the report in depth. The margins on the product might be good, but that's because the margins on the product also have to cover the salaries and equipment costs. Automatically Appended Next Post: Edit:
I'm not pro-GW or anti-GW really. I am pro-truth though, and pro-supporting positions with facts.
If someone wants to argue that a company making 10% profit, rather than lowering prices is too much, I have no opposition to that argument, because it's based on the truth. I just feel that it is presenting data inaccurately to say that they're running a 76% margin without explaining what that actually means.
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This message was edited 1 time. Last update was at 2011/05/25 16:19:29
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![[Post New]](/s/i/i.gif) 2011/05/25 17:32:58
Subject: Why do GW 'brick and mortar' stores exist?
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Lord Commander in a Plush Chair
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Kilkrazy wrote:I'm not sure that wargame clubs legally have to take CRB checks.
If they do, a lot of adults are already registered from their childrens' schools.
It costs £10 for a CRB check and usually takes about two weeks to complete.
Not in the UK they aren't. Wife just paid £44 for her last one.
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![[Post New]](/s/i/i.gif) 2011/05/25 18:04:09
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Hunter with Harpoon Laucher
Castle Clarkenstein
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Balance wrote:Andrew1975 wrote:It just seams to me that GW would do better by working closely and sponsoring FLGS than running the whole store. That is a huge expense to pass onto the customers.
I've seen a few smaller shops in malls, but they tend to be uncommon. I don't expect this to get better as 'good' game stores seem to be focusing more on event space, social stuff, and similar over product sales as they just can't compete with the internet for raw prices.
GW works with independents, but with any partnership, it takes two sides to make it work. Overall GW is more supportive of LGS than any other manufacturer I know of, with the possible exception of WOTC. WOTC has their huge organized play network, GW helps out more with prizes, racking, etc. Past the basics, the next step is the store working with GW. I know of stores that complain they don't sell much GW, but they don't stock it, have play space, or a paint rack. Not surprising they sell less than stores with those things. At times GW has had some very supportive programs, but it's very hit or miss as to whether or not stores learn from them and increase sales. I think how they are doing things now is good, giving stores support, but also anchoring some areas with company stores.
As to competing with the internet, it's fairly simple: Make your store clean and organized. Have the product your customer wants to buy in the store. Run events or provide play space to bring them in.
Too many stores give up and decide they can't compete with The Interwebs/Warstore/ GW store/Store down the street/etc. You have to do something to make people want to come into your store. Having what they want is a key part of that. Product sales are always the best way to make a store profitable, and you can't sell what you don't have in the store.
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....and lo!.....The Age of Sigmar came to an end when Saint Veetock and his hamster legions smote the false Sigmar and destroyed the bubbleverse and lead the true believers back to the Old World.
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![[Post New]](/s/i/i.gif) 2011/05/25 18:12:48
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Longtime Dakkanaut
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Agreeing with the above, and adding some new details:
The function of the store is as an open front to attract buyers and market the both the Hobby (in this specific sense bearing the meaning of all products, affiliations, games, models, tools, paints and such other things as may not have been mentioned, that are the purview of Games Workshop's store), as well as the hobby. Way back when, miniatures weren't that popular, and even then, it was a very specialist historical thing. GW made it explosive, it made it fun, and let you do whatever you wanted. By fronting a store you give an environment for people to shop and play at. If people come to play a game or two, then they're already there, hey, why not buy that devvy squad I always needed.
Success:
I would say GW has had a substantial amount of success with the stores. While its unpopular, being a store that carries exclusively your own product, you can have a back-up that bounces off of itself, attract someone for fantasy battle, have them get into it, and find out they like 40k more, and vice versa. Its cost effective for advertising, and by being the store that carries what you need and can show you how things work and what you can do with models, then you dont have to order it by phone, mail etc (pre-inturnetz), and you also don't have to pay shipping costs (also pre inurnetz). Given that GW now has a wide penetration of the market, I would say this measure has met great success.
However, GW's hobbies are now... well.. ubiquitous. Most anyone into table-top wargaming will know about GW's product line and games, but the competition, prices as well as a market filled with unwanted models and out-of-production models, the consumer has a wide range of things to select from. A brand new box still has appeal, because its akin to a blank canvass, however, if one is uninterested in creating something different though, or kitbashing, that appeal is almost nil. Between the ubiquity and utilitarian model construction, and other company competition, its hard to argue what real revenue the stores generate. Any person who compares prices will be inclined to get GW product at a discount price. Arguably, GW is still receiving a portion of the money, they are however receiving less. If you look at the difference, a Brick-Mortar GW will not be earning that sale though, and operates at a net loss. This is exacerbated by the fact that if a FLGS has the same prices as GW, but I can also play other games on the tables, the interest in going to GW is doubly less. So?
Well, lets work this out. Lets say the rental fee, with insurance costs, phone lines, directory advertising, etc. for the space at a mall is... hypothetically... $1500 a month. I bet its more, but for arguments sake, we shall leave this amount here. Second, lets account for 2 staff during 'busy' times, and 1 staff during 'off' times. Let's assume its 50/50 split, so we have 1.5 employees working round the clock for, lets say, for an average of 9 hours a day, paid $11/hour. That is about $4600 of time pay. We will assume there is no commission. So far we are at $6100. In a given month, does a GW really make the kind of money to cover that month for month? I'm sure, november, december and january see a surge in sales, and then again wherever tax periods are over. A FLGS might have the same costs, but is less likely to eject you for using non-GW stuff in a GW trademark game. Winter Guard Rifle Corps make nice IG alternatives to vostroyans and valhallans.
On the whole though? GW stores have reached their end. Everything they carry is more expensive than the brand names that have been around for decades. The price of GW brand glue will see you get 3x the ammount from a non-GW brand for the same price. The paint is less, and you pay more, and not as diverse. Even the tools are more expensive. That drives a large portion of the customers away and prevents people from buying. Its no longer a question of buying slowly, because even then, I calculate it out and decide in the long run, better spent elsewhere. Thus, GW stores are incurring a cost, without really generating enough profit on their own. They still work as an advertising front, as well as a tournament location. In theory, the attraction of the discount stores increases the movement of GW product, which should also increase revenue. At this point though, whether or not the B&M GW still exists is utterly irrelevant for all of the reasons I have listed above. All GW stores do, are to give 4 or 5 people a paycheck and incur rental expenses, increasing the overall operating costs.
If they got rid of GW stores today, we wouldn't see a price decrease. Still, we wouldn't be seeing a price increase either for the next four or five years.
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15 successful trades as a buyer;
16 successful trades as a seller;
To glimpse the future, you must look to the past and understand it. Names may change, but human behavior repeats itself. Prophetic insight is nothing more than profound hindsight.
It doesn't matter how bloody far the apple falls from the tree. If the apple fell off of a Granny Smith, that apple is going to grow into a Granny bloody Smith. The only difference is whether that apple grows in the shade of the tree it fell from. |
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![[Post New]](/s/i/i.gif) 2011/05/25 18:27:23
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Hunter with Harpoon Laucher
Castle Clarkenstein
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poda_t wrote:Well, lets work this out. Lets say the rental fee, with insurance costs, phone lines, directory advertising, etc. for the space at a mall is... hypothetically... $1500 a month. I bet its more, but for arguments sake, we shall leave this amount here. Second, lets account for 2 staff during 'busy' times, and 1 staff during 'off' times. Let's assume its 50/50 split, so we have 1.5 employees working round the clock for, lets say, for an average of 9 hours a day, paid $11/hour. That is about $4600 of time pay. We will assume there is no commission. So far we are at $6100. In a given month, does a GW really make the kind of money to cover that month for month? I'm sure, november, december and january see a surge in sales, and then again wherever tax periods are over. A FLGS might have the same costs, but is less likely to eject you for using non-GW stuff in a GW trademark game. Winter Guard Rifle Corps make nice IG alternatives to vostroyans and valhallans.
Good analysis, but I'd put the cost of rental fee, with insurance costs, phone lines, directory advertising, etc. for the space at a mall is... hypothetically... $1500 a month at closer to $6000 a month, for about 1000-1200 square feet. My cost for those items is roughly 10k a month for 2200 square feet of space, in a less expensive mall. In a very good mall, like Mall of America or King of Prussia, that 6k would be closer to 12k. This is one reason GW is getting out of a lot of malls and heading back to strip centers, and dropping to small one man stores. Overhead is a big nut to crack selling toy soldiers.
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....and lo!.....The Age of Sigmar came to an end when Saint Veetock and his hamster legions smote the false Sigmar and destroyed the bubbleverse and lead the true believers back to the Old World.
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![[Post New]](/s/i/i.gif) 2011/05/25 18:30:34
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Fixture of Dakka
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mikhaila wrote:poda_t wrote:Well, lets work this out. Lets say the rental fee, with insurance costs, phone lines, directory advertising, etc. for the space at a mall is... hypothetically... $1500 a month. I bet its more, but for arguments sake, we shall leave this amount here. Second, lets account for 2 staff during 'busy' times, and 1 staff during 'off' times. Let's assume its 50/50 split, so we have 1.5 employees working round the clock for, lets say, for an average of 9 hours a day, paid $11/hour. That is about $4600 of time pay. We will assume there is no commission. So far we are at $6100. In a given month, does a GW really make the kind of money to cover that month for month? I'm sure, november, december and january see a surge in sales, and then again wherever tax periods are over. A FLGS might have the same costs, but is less likely to eject you for using non-GW stuff in a GW trademark game. Winter Guard Rifle Corps make nice IG alternatives to vostroyans and valhallans.
Good analysis, but I'd put the cost of rental fee, with insurance costs, phone lines, directory advertising, etc. for the space at a mall is... hypothetically... $1500 a month at closer to $6000 a month, for about 1000-1200 square feet. My cost for those items is roughly 10k a month for 2200 square feet of space, in a less expensive mall. In a very good mall, like Mall of America or King of Prussia, that 6k would be closer to 12k. This is one reason GW is getting out of a lot of malls and heading back to strip centers, and dropping to small one man stores. Overhead is a big nut to crack selling toy soldiers.
Man, those are some good rates. The gakky mall my shop was originally in (Just a small cart/island) was $1k per month, and $5k for November, and another $5k for December. Remember, this is a cart in a dying mall. A booth at any convention is bigger then it.
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![[Post New]](/s/i/i.gif) 2011/05/25 18:35:58
Subject: Re:Why do GW 'brick and mortar' stores exist?
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Lord of the Fleet
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poda_t wrote:Well, lets work this out. Lets say the rental fee, with insurance costs, phone lines, directory advertising, etc. for the space at a mall is... hypothetically... $1500 a month. I bet its more,
It's a LOT more.
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