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Gross profit % = (Revenue-Cost of Product)/Cost Of Product

In this case: (30-5)/5 or 500%

$9/box would still be equal to 80% gross profit.

Um... GP% is taken against Revenue, not Cost:

http://en.wikipedia.org/wiki/Gross_profit

Gross Profit = Revenue - Cost of product

http://en.wikipedia.org/wiki/Gross_margin

Gross Margin = (Revenue - Cost) / Revenue

JohnHwangDD wrote:

adamsouza wrote:Another annoyance, already mentioned, was pricing the plastics the same as the metals they replaced.
They are simply setting prices at what they can get for them, not what it costs.
Don't agree ?

No, I don't.

Check out the pricing for WFB cavalry

Check out damn near everything metal in 40K that was replaced with plastic.

Terminators, Carnifex, Hive Tyrant, Dreadnaughts, etc... their plastic incarnations cost the same as the metal

Your calvary example and the new Orks don't follow this trend, but my original point was pricing the plastics the same as the metal they replaced was one of the things that got people heated, and they did so quite frequently.

The cost of producing sprues is such a small part of the cost of retail it’s almost irrelevant. The costs come from inventory management, warehousing and retail, especially retail. When you buy your $50 box you’re paying for a couple of dollars in plastic, a few more in design, a few in shipping and inventory tracking. But most of what you’re paying is being used to cover the costs of running that main street store.

You can love GW or you can hate them. Most of us end loving a little and hating a little. At the end of the day, though, most of us are in this hobby because we saw GW stores on the main street. Those stores are GW’s biggest expense, but they’re also the reason there are so many GW gamers around the place.

I’m not sure if this is the most sensible approach for running a miniatures company. But I’m very certain people on the internet that have (maybe) read the 07 financial report are in no better position to judge GW business strategy than the people within the company.

I think GW should leverage their high street presence by selling more than 40K and WHFB. The re-introduction of Talisman is a step in the right direction.

But most of what you’re paying is being used to cover the costs of running that main street store.

This is exactly right. The problem is for most of the US at least there is little to no value being added by those stores. I don't have one within a 4 hour drive and I live in a metropolitan area. They are "punishing" a large % of their customer base to subsidize the small percentage who frequent and use the stores. So a large portion of the money I pay is "empty" in that it adds no additional value to the product I am getting.

sebster wrote:But most of what you’re paying is being used to cover the costs of running that main street store.

As an American, I see this as a problem.

The overwhelming majority of players in the Americas were brought in via Local Hobby Stores, not "high street" / "main street" stores. Unlike the tiny islands of the UK, America is a big country. The idea that GW could be like McDonalds and have a store in every city / town is ludicrous. A lot of the buying is via Internet, as GW short-sightedly tried to kill off the thriving local stores, driving gaming into garages and basements.

In the Americas, such stores are a luxury that GW can ill afford, and an unwarranted tax imposed upon us from across the Atlantic by people with whom we have no representation. It's like 1776 all over again!

So from an American perspective, GW did just great without any GW stores, so why not go back to being a developer / manufacturer and leave retail to those who know what they're doing?

I heard it used to cost like 50 cents for termis. Now its just a big rip off.

smart_alex wrote:I heard it used to cost like 50 cents for termis. Now its just a big rip off.

I don't know about anywhere else but when I started and termies were metal and came in blisters (Circa 1991) they were about $9-$10 for two.

Actually if you figure inflation in they haven't really gone up much in price at all since then.

JohnHwangDD wrote:

sebster wrote:But most of what you’re paying is being used to cover the costs of running that main street store.

As an American, I see this as a problem.

The overwhelming majority of players in the Americas were brought in via Local Hobby Stores, not "high street" / "main street" stores. Unlike the tiny islands of the UK, America is a big country. The idea that GW could be like McDonalds and have a store in every city / town is ludicrous. A lot of the buying is via Internet, as GW short-sightedly tried to kill off the thriving local stores, driving gaming into garages and basements.

In the Americas, such stores are a luxury that GW can ill afford, and an unwarranted tax imposed upon us from across the Atlantic by people with whom we have no representation. It's like 1776 all over again!

So from an American perspective, GW did just great without any GW stores, so why not go back to being a developer / manufacturer and leave retail to those who know what they're doing?

Not having access to US census data I cannot say why GW may have made such a decision. However I agree with you. The USA is large and the population dispersed so that the catchment area of all but the most optimum stores must be limited compared to the UK.

I think that GW could set up three or four mega hobby centres, perhaps Chicago, New York, Los Angeles and somewhere in the south and attract conventioneers and holidayers such as they get for hobby weekends at the Nottingham centre. Apart from that they should put some GW branded stores in a few major urban centres and rely on FLGSs and the Internet for most of their sales.

This weakens their vertical marketing appeal but may be necessary considering the population distribution in the US.

JohnHwangDD wrote:As an American, I see this as a problem.

The overwhelming majority of players in the Americas were brought in via Local Hobby Stores, not "high street" / "main street" stores.

'High street' stores are generally not that different to a lot of local hobby stores. The term only refers to GW not basing their stores in those hidden away basement locations with the low, low rent. Most hobby stores would be considered 'high street' as much as any GW store.

Unlike the tiny islands of the UK, America is a big country. The idea that GW could be like McDonalds and have a store in every city / town is ludicrous.

GW tried to apply the European/Australian model to the US, and it’s been pretty openly acknowledged the whole thing didn’t work. GW could’t reach a large portion of their potential market for the exact reasons you just mentioned. GW have since changed their strategy for the US market, they’re now being friendlier with independent stores and encouraging more sales through those venues. Now whether or not GW should have known better when entering the American market is a whole other debate...

A lot of the buying is via Internet, as GW short-sightedly tried to kill off the thriving local stores, driving gaming into garages and basements.

GW isn’t trying to kill off internet sales, they’re just trying to stop internet retailers undercutting bricks and mortar stores. I’m critical of GW about all sorts of things, but in trying to maintain sales in bricks and mortar stores (including indpendant stores), they’re right on the money. The internet can bring goods to you cheaper because they don’t have to pay for gaming space… those tables that we can play at that keep the hobby going.

If you let the internet retailers charge lower prices the no-one would shop at the local stores, and then you’d be driving people into their own basements.

In the Americas, such stores are a luxury that GW can ill afford, and an unwarranted tax imposed upon us from across the Atlantic by people with whom we have no representation. It's like 1776 all over again!

Maybe you should get Rackham (the French) to come and save your asses again .

So from an American perspective, GW did just great without any GW stores, so why not go back to being a developer / manufacturer and leave retail to those who know what they're doing?

Because the reason anyone on this forum has ever paid $50 for six pieces of plastic is a retail reason. They’re the biggest fish in the pond by a stupidly large way, because they’re retail methods have proven effective long term. They’ve got issues right now with the sustained drop in sales, but there’s nothing in that to declare they have no idea how to retail their goods.

My hope is that they loose a lot of money so they will be more responsive to their customers. Otherwise, why would they bother fixing what is wrong?

They need to fix:
Poorly written rules.
Oversimplification of the rules.
No FAQs
Slow release schedule
The propping up LoTR as a core game.
Jervis Johnson

Kilkrazy wrote:
Not having access to US census data I cannot say why GW may have made such a decision. However I agree with you. The USA is large and the population dispersed so that the catchment area of all but the most optimum stores must be limited compared to the UK.

I think that GW could set up three or four mega hobby centres, perhaps Chicago, New York, Los Angeles and somewhere in the south and attract conventioneers and holidayers such as they get for hobby weekends at the Nottingham centre. Apart from that they should put some GW branded stores in a few major urban centres and rely on FLGSs and the Internet for most of their sales.

This weakens their vertical marketing appeal but may be necessary considering the population distribution in the US.

From what I have heard that is their plan.

You know, I keep seeing all these posts talking about pricing. Can someone do a comparison of Warmachine or Confrontation figure vs figure, across the board? I think if you do that, you'll see that GW figs are either a little bit cheaper, or comparable ( expect for hideously overpriced commander/special character figures). Or you can trot out the old PS3 or Xbox comparison....

Something else people fail to realize is that if they did price things cheaper, and sold more, they would have to hire more people in their production facilities and shipping offices and ordering offices....and there goes all the profit.

It is an expensive hobby. People just have to realize that. I'd love to have a corvette....I can't afford one. I don't go onto corvette boards and rant about how Chevrolet would sell more corvettes and make more money if they priced them cheaper.

I think what we are seeing is a mentality that people have a "right" to own something, and get angry when that right is limited by production costs. I've worked in a couple of game stores...most of the gamers I met were lower income people who gladly bought their product at a discount elsehwere and did not support the store, and griped when they did have to buy something there.

sebster wrote:

JohnHwangDD wrote:A lot of the buying is via Internet, as GW short-sightedly tried to kill off the thriving local stores, driving gaming into garages and basements.

If you let the internet retailers charge lower prices the no-one would shop at the local stores, and then you’d be driving people into their own basements.

When the local store is good, they'll get the business regardless of what the Internet does. I did most of my shopping with my local store because that's where I played. When I no longer had a local store that really wanted (or deserved) my business, I went to the Internet.

In the Americas, such stores are a luxury that GW can ill afford, and an unwarranted tax imposed upon us from across the Atlantic by people with whom we have no representation. It's like 1776 all over again!

Maybe you should get Rackham (the French) to come and save your asses again .

In many ways (pure competition), they're doing this for us.

smart_alex wrote:I heard it used to cost like 50 cents for termis. Now its just a big rip off.

I heard that they used to come with a free puppy who was already house trained and would never grow up.


Ozymandias, King of Kings

JohnHwangDD wrote:When the local store is good, they'll get the business regardless of what the Internet does. I did most of my shopping with my local store because that's where I played. When I no longer had a local store that really wanted (or deserved) my business, I went to the Internet.

Unfortunately, you aren’t the world. Most people are quite happy to chase the lower internet prices then play at their local store anyway.

In many ways (pure competition), they're doing this for us.

asmith wrote:so really that $50 box costs them $2.00 to make? sounds reasonable to me. I estimated everything on the conservative side in the analysis above.

Wait 4% of profit or gross?

That's how you're supposed to think. I'd appreciate some commas in the future. I DO appreciate your showing your work and adding some commentary on your assumptions.

A-