The Iron Fist: How Games Workshop Put A Stranglehold On The Australian Market

Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you:

No adverts like this in the forums anymore.
Times and dates in your local timezone.
Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance.
Email notifications for threads you want to watch closely.
Being a part of the oldest wargaming community on the net.

If you are already a member then feel free to login now.

**Bossk_Hogg**

Kilkrazy wrote:
The solution is for Australian players to stop buying any GW products. A year off would do it. The results would be clearly visible in GW's accounts. As long as you keep buying the stuff at sky high prices, GW will sell it at sky high prices.

This. Also once GW realizes Australia is closer tp chinese recasters they will rethink their BS policies.

**Morachi**

Bossk_Hogg wrote:
Kilkrazy wrote:
The solution is for Australian players to stop buying any GW products. A year off would do it. The results would be clearly visible in GW's accounts. As long as you keep buying the stuff at sky high prices, GW will sell it at sky high prices.

This. Also once GW realizes Australia is closer tp chinese recasters they will rethink their BS policies.

Oh they know about the Chinese recasters, they've tried MANY times to shut them down unsuccessfully. They have them and 3D printers to contend with now... good luck undoing all the bad will they've thrown around the past three years... which has been ramping up like mad in that period.

**Banicks**

Trasvi wrote:
Pretty damn sure I put in the post that "yes, you can get it off ebay but timmy doesn't know that". Anyone in Australia who is savvy enough to know where to get discount stuff, is buying from overseas, and so their part in this discussion is pretty pointless.

@ "You only need the rules to play". Whilst that's a nice sentiment, it is again rather pointless. Yes, we can play with lego or green army men or cardboard cutouts. So what? People don't actually do that, they don't want to do that. While we're at it, you could download the rules or play Tomorrow's War.
Secondly... there aren't that many cheap alternatives in wargaming miniatures, especially for humanoid aliens. There are a few plastic manufacturers of human miniatures to substitute for IG or marines, but little in the way of aliens and even less in the way of vehicles. If we're going to say we could play with those, we may as well also play Tau using Space Marine rules for cheaper.

@ Other ways to get the rules: while we're talking about not paying for things, we could also steal someone else's army....

@Hobby starter set. It is possible to get other supplies, but other brand paints (Vallejo, P3) aren't actually much cheaper around here; GW brushes are pretty good quality for the price; and clippers, glue etc because you need them and that is what will get sold as 'essential' to starting the army. You could maybe save $30 if you went to a hardware store for the other stuff, but to get 10 starter colours its going to be $50 or so no matter what you do.

In short: yes, you can cut costs in a myriad of ways if you want. I haven't bough a full-priced GW set in over five years. That wasn't the point of my post. It was simply to provide a reference; what stuff costs in Australia.

Now, I can get on with the second part of my post.
Prices in Australia are.... prices in Australia. They are just as acceptable, or unacceptable, as they've always been. It is fairly established theory that prices for anything and everything are related to the overall amount of money in the system, so (in general) prices for stuff in Australia are higher than in the UK, US, Thailand, wherever. Minimum wage doesn't really have anything to do with it, except as a comparison point to show how much more Australians earn - very very few people are buying niche luxury toys like GW minis on minimum wage.

The thing here is that Australians are acclimatised to paying X amount for Y product. The price war determined a number of years ago, and people have been paying it. They're ok with paying it. It doesn't actually matter what the price is overseas or in the next town over: the price is the price, and if you thought you were getting value for money yesterday and nothing changes in your local area, then you are still getting value for money tomorrow no matter what happens to the price in the next state.

We see this with products which aren't easily transferable to other areas. Labour; entertainment and dining out; quickly perishable goods; rental prices. You can't very well rent a house a thousand miles away from your work just because it is cheaper. It doesn't matter to us what people in London pay for coffee if we live in Sydney.

However, we then add in the internet and globalization. Suddenly, many goods are transferable between places. How do we resolve this? If I was happy to pay $10 for an item today, and I'm in exactly the same situation tomorrow, why shouldn't I be happy to pay $10 for it? Yet I can get it cheaper... consumer surplus! Yay! Great for the consumer, but not for the business selling in Australia. See, they've been making presumably similar margins to their overseas competition: they pay $500 rent, $200 in wages and bring in $1000 revenue for $300 profit. But in order to compete with the people selling online, you have to compete with them on price but you are unable to compete with them on your non-transferable expenses (revenue, wages). You slash prices in half to match your competition, but don't bring in significantly more customers because now you're only competitive, not cheap. So you go broke. Damn.

This doesn't happen with all products. Restaurants aren't anywhere near as affected by internet retailers as clothing stores are, because restaurants sell non-transferable products. As above, some things you just can't sell over the internet; hot food, labour, property. The best things to sell over the internet are small; easily posted, light, non-perishable, non-regional. It needs to be mass-produced so you know exactly what you are getting It needs to arrive quickly (most people won't wait 6 months in order to save $5) but at the same time it can't be for urgent purchases you need today. It needs to be for items that are relatively pricey, and where the savings including shipping are a considerable percentage of that: you won't buy a pack of post-its overseas even if you save 75%, and you won't buy a TV overseas if you only save $10 after shipping. Items that fit this category include books, clothes, electronics, cosmetics... and Warhammer. They're fairly well (badly) placed to be hurt by regional pricing.
So, in order to not suffer, GW has only a few real options:
1) To keep their products the same price, and make their products unattainable outside of their intended regions
2) To considerably increase costs in Australia, so that those people unwilling or without knowledge to purchase on the internet have no choice but to pay the high price (or quit)
3) Substantially lower their prices in Australia and hope they can gain enough new customers with the lowered prices to offset the massive loss in revenue.
4) Pull out of Australia retail entirely.

#3 isn't really viable for them. They're part of a niche market, competing against lego and videogames and being 'cool'. For a 30% drop in prices, they would need to sell more than *double* the amount they currently do to maintain the same margin, which is quite unlikely especially given evidence of relatively few people leaving as price increases.
So they went with #1 and #2. Smart choices? Maybe not. But they don't really have many to choose from.

It is VERY important to note that GW isn't the only company doing this. Many companies have regional websites which actively prevent you from ordering to Australia if you use Australian payment systems or addresses. I remember a sports clothes company (Adidas?) was selling jerseys for the New Zealand rugby team for twice the price in New Zealand as they did in America, and they were quite unapologetic about it. Some companies (Apple) have enough turnover that they can effectively sell in Australia for prices that are very competitive with overseas prices - especially when companies like HP go the GW route of price hikes and embargoes, making Apple look like an even better deal. Some just eat the losses; some increase their in-store service to make something really special. Some close down (Borders books). Even in Wargaming they're not the only ones: Privateer Press is a fair bit more expensive here, and the price hikes Fantasy Flight puts on Dust Warfare stuff makes GW prices look good!

Its a changing retail environment that we live in. Online shopping is finally becoming mainstream and acceptable. And currencies fluctuate all the time. If the Aussie dollar should happen to fall below the US in the next 5 years as is expected, that will significantly change the dynamic of when it is appropriate to buy from overseas. Should GW pull out if they could be back in business by then?

I guess the only thing you should do is that trite phrase: vote with your wallet. Behave like a rational consumer and not a brainwashed fanboy. If you like GW stuff, get it off the internet wherever you can: GW can't shut down companies who operate through distributors or eBay. If you're annoyed at GW, try a different game. Nothing will change unless the money tells GW to.

Myself, I'm getting the bare minimum of Tau stuff bought through a US online store and brought back to Australia by family who are visiting the US, while I sit at home and paint through my backlog of Tau, Trollbloods, Blutkreuz, and Britannia armies.

// end rant. phew....

Edit:
@ Taxes. GW products sold in Australia will be subject to, I believe, 10% GST and 5% import tax on toys... which put together is still less than the VAT.
@ Minimum wage: Sorry, USA. Your minimum wage is ridiculously low. It seems amazingly pointless to me to have a minimum wage that is not a living wage: it would be far better IMO to have less people employed but self-sustaining, than slightly more people employed but all still below the poverty line. But that's another discussion.

But GW don't have to rent the shop, or the fittings, that is all the operators responsibility. All they do is sell stock to them, initially it's why my confusion comes about to what GW really is in Australia. It seems more like a franchise to me. Ultimately Australia is just profit to GW, even including taxes and whatever else, there is still a huge amount of % remaining that is simply rip-off gravy to them because what other options do we have now they have eliminated all other possible online methods of obtaining warhammer for cheaper. I bet come mid year prices on Australian units will rise 5-10%.

Minimum wage is crap in USA, but you forget that is why there is practically a mandatory tipping system over there. In Australia tipping does not exist, and people on minimum wage don't live off the tips. They live off of 17.50 minimum per hour. Slightly less I believe if they are considered "disabled" - from memory that came up to $16 from $12 a while ago - but take that figure with salt.

Regardless, putting all of that aside, manufacturing, taxes, shipping is all basically the same costing to send to Australia as it is USA and Canada based off our own investigations as a consumer. That doesn't include business shipping bulk discounts, etc. There is no justification for the massive percentage difference, and if you want more proof just look at GW Head Office who have not said a single word as to why there is such a discrepancy. Any PR spiel they came out with won't hold up gumption, so if there is no truth or believable BS to say, they say nothing at all.

Ugh this is making me angry and doubting whether to even get into the hobby now.

**Trasvi**

Banicks wrote:
But GW don't have to rent the shop, or the fittings, that is all the operators responsibility. All they do is sell stock to them, initially it's why my confusion comes about to what GW really is in Australia. It seems more like a franchise to me. Ultimately Australia is just profit to GW, even including taxes and whatever else, there is still a huge amount of % remaining that is simply rip-off gravy to them because what other options do we have now they have eliminated all other possible online methods of obtaining warhammer for cheaper. I bet come mid year prices on Australian units will rise 5-10%.

Minimum wage is crap in USA, but you forget that is why there is practically a mandatory tipping system over there. In Australia tipping does not exist, and people on minimum wage don't live off the tips. They live off of 17.50 minimum per hour. Slightly less I believe if they are considered "disabled" - from memory that came up to $16 from $12 a while ago - but take that figure with salt.

Regardless, putting all of that aside, manufacturing, taxes, shipping is all basically the same costing to send to Australia as it is USA and Canada based off our own investigations as a consumer. That doesn't include business shipping bulk discounts, etc. There is no justification for the massive percentage difference, and if you want more proof just look at GW Head Office who have not said a single word as to why there is such a discrepancy. Any PR spiel they came out with won't hold up gumption, so if there is no truth or believable BS to say, they say nothing at all..

GW stores are not franchises. They are run by GW, and GW pays for the rent, fittings and wages. They still need to 'buy' the stock from themselves.
GW is not just profit to Australia - they've made a loss the last few reports, and when they posted over the last 3-4 years they haven't been large.
The justification for the high prices is simply that we will pay them. If we don't pay them, GW will either lower the prices or shut its doors. It is really that simple. They put spin on it because people don't like to hear 'we charge what you will pay', but its the truth.

Spoiler:

**Azreal13**

Trasvi wrote:
Banicks wrote:
But GW don't have to rent the shop, or the fittings, that is all the operators responsibility. All they do is sell stock to them, initially it's why my confusion comes about to what GW really is in Australia. It seems more like a franchise to me. Ultimately Australia is just profit to GW, even including taxes and whatever else, there is still a huge amount of % remaining that is simply rip-off gravy to them because what other options do we have now they have eliminated all other possible online methods of obtaining warhammer for cheaper. I bet come mid year prices on Australian units will rise 5-10%.

Minimum wage is crap in USA, but you forget that is why there is practically a mandatory tipping system over there. In Australia tipping does not exist, and people on minimum wage don't live off the tips. They live off of 17.50 minimum per hour. Slightly less I believe if they are considered "disabled" - from memory that came up to $16 from $12 a while ago - but take that figure with salt.

Regardless, putting all of that aside, manufacturing, taxes, shipping is all basically the same costing to send to Australia as it is USA and Canada based off our own investigations as a consumer. That doesn't include business shipping bulk discounts, etc. There is no justification for the massive percentage difference, and if you want more proof just look at GW Head Office who have not said a single word as to why there is such a discrepancy. Any PR spiel they came out with won't hold up gumption, so if there is no truth or believable BS to say, they say nothing at all..

GW stores are not franchises. They are run by GW, and GW pays for the rent, fittings and wages. They still need to 'buy' the stock from themselves.
GW is not just profit to Australia - they've made a loss the last few reports, and when they posted over the last 3-4 years they haven't been large.
The justification for the high prices is simply that we will pay them. If we don't pay them, GW will either lower the prices or shut its doors. It is really that simple. They put spin on it because people don't like to hear 'we charge what you will pay', but its the truth.

Spoiler:

RE: minimum wage. Tipping is only 'mandatory' for service jobs like waiting tables; people at Walmart etc work minimum wage for no tips. Wait staff commonly earn below minimum wage and make up the difference (and then some) in tips, but the thing they don't tell you often is that if you make below minimum wage including tips, your employer needs to make up the difference.

As the property costs and wages are not an issue if the business is an independent stockist, surely the answer, if the costs are indeed the issue, is to charge a lower wholesale cost to allow a more sensible rrp and withdraw their own retail ops from Oz?

**Trasvi**

Quite possibly. That applies all over the world, not just Australia. With a bit of back-calculation from their financials you can already see that indie stockists make the more money than their own stores.

There are multiple problems with that though, primarily that prospective buyers are introduced to multiple other wargames rather than just GW. It's hard to sell Timmy a $500 bare-bones Warhammer starter bundle when a bare-bones Hordes starter bundle runs only $150.
The other part is that most indie stockists (here, at least) tend to be quite out of the way. The main GW store in my city is in the busiest mall in the state. That is a ton of opportunity for new people to walk past and buy, without knowing the cost of alternative games.

**Azreal13**

What, you mean they'd have to concentrate on making a product that stood on its own two feet in the marketplace and would have to combine nice models with reasonable prices and a tight rule set that people actually actively wanted to play alongside or above other systems?

But that would be haaaard! *pouty orkmoticon*

**AllSeeingSkink**

There's a little bit a logic fail though as a large part of the reason prices are high is GW sells to retailers at a wholesale price that is higher than the rest of the world. If it had to do with things like wages and rent and running costs being higher, then GW should be selling to retailers at a price where the retailers can attempt to compete internationally given whatever their running costs might be (given people would buy locally if the difference were small and attributable to higher store running costs instead of simply being absurdly high).

Automatically Appended Next Post:

Trasvi wrote:
However, we then add in the internet and globalization. Suddenly, many goods are transferable between places. How do we resolve this? If I was happy to pay $10 for an item today, and I'm in exactly the same situation tomorrow, why shouldn't I be happy to pay $10 for it? Yet I can get it cheaper... consumer surplus! Yay! Great for the consumer, but not for the business selling in Australia.

I wanted to comment on this point as well. GW prices have still been rising in Oz, it's not like what you could get for $10 yesterday you get for $10 today. You go in to a store and see a box of Hormagaunts for $48AUD and think "crap, couldn't I buy that for $42 the other day?", which then drives you to international sales. Back in the day when GW had a bitz store I'd occasionally buy from the UK and shipping to Oz, and it was cheaper than buying in Oz, but it wasn't worth my while doing it on every single purchase, but with all the price increases, now it is.

I might agree with your points if GW were supplying stores at internationally competitive prices and thus allowing the stores themselves to compete internationally instead of ripping off the stores and wondering why people are more inclined to buy internationally despite shipping and wait times.

**Banicks**

Exactly. I'm up for a trip to UK soon, and at this rate I think I might just wait, and buy my CSM fill over there in a few months. I know that's extreme and wouldn't be the solution for anyone, it just happens I'm heading over.

That said, I still think GW are taking a risk doing this. Yes their online store and in-store may get slightly more revenue and traffic from people who have no alternative now, but this may also have the effect that players are completely turned away or just never get into it. There was a reason in the first place that people go, GW sell it for X, that's alot, oh Indie sells it for Y - you have my money.

It also shows that if the indie can do a discount, why is GW so hesitant to show love to it it's base. Money sure, but I don't think I've heard as much negative PR about something this much as GW in a long time. PR is everything in the long run (I mean look at me, just starting and already thinking about chucking it in if GW pull dirties like forced upgrades per edition and juicing percentages), it might not have mattered in the past, but as MWG said, things are changing and they need to begin adapting or falter into decline and downsizing.

**Lorizael**

Didn't GW exclude Australia from it's annual price rise last year?
What do you think the chances are that Australia will escape again this year..?

Just thinking, because we all know that GW will never, ever lower prices: they believe the product has a value and that to lower the price would devalue it and make it seem as if they don't have confidence in it's value.
Maybe they'll let autralia sit out a few years of price rises until they fit in more with the rest of the world..?

Of course prices will never match exactly because they rarely do with any company across the world- exchange rates and products being price for different standards of living will always happen.

**Trasvi**

AllSeeingSkink wrote:
There's a little bit a logic fail though as a large part of the reason prices are high is GW sells to retailers at a wholesale price that is higher than the rest of the world. If it had to do with things like wages and rent and running costs being higher, then GW should be selling to retailers at a price where the retailers can attempt to compete internationally given whatever their running costs might be (given people would buy locally if the difference were small and attributable to higher store running costs instead of simply being absurdly high).

The wholesale price to independents is high because GW needs to compete in Australia against their stockists.
If GW needs to sell an item for $100 retail in their own stores to stay afloat, they need to sell it to independents at $55 so that they don't get drastically undercut. If they independent could buy for UK wholesale price (lets say that converts to $25) they could sell the product for $70 and still make the same margin.
The other side is again, retailers are used to paying $55 for that product. $55 is a fair price (in the absence of the internet).

Trasvi wrote:
However, we then add in the internet and globalization. Suddenly, many goods are transferable between places. How do we resolve this? If I was happy to pay $10 for an item today, and I'm in exactly the same situation tomorrow, why shouldn't I be happy to pay $10 for it? Yet I can get it cheaper... consumer surplus! Yay! Great for the consumer, but not for the business selling in Australia.

I wanted to comment on this point as well. GW prices have still been rising in Oz, it's not like what you could get for $10 yesterday you get for $10 today. You go in to a store and see a box of Hormagaunts for $48AUD and think "crap, couldn't I buy that for $42 the other day?", which then drives you to international sales. Back in the day when GW had a bitz store I'd occasionally buy from the UK and shipping to Oz, and it was cheaper than buying in Oz, but it wasn't worth my while doing it on every single purchase, but with all the price increases, now it is.

Absolutely true. If you thought $42 was a fair price yesterday, it is entirely likely you would think $48 was not a fair price today, and that would drive you to look elsewhere or stop purchasing; and the amount of the discount would affect how much difficulty you were willing to put up with to get it. I still buy paints (Vallejo) in stores, because even though I might save $1.50 a bottle ordering from overseas I would have to wait 3 weeks and I need the paint now. Some of the Tau releases I will be buying from discounters in Australia rather than the US, because the difference is only $5 on a $90 model which is easily eaten up in shipping costs. The point was, if the price doesn't change, that should mean your perception of fairness of price doesn't change; you might go looking for other places which offer you more value (consumer surplus) but the maximum price point at which you quit buying won't change if a newer cheaper seller becomes available.

* This is assuming about perfectly rational consumers, which of course don't exist. Real people are likely to stop buying simply out of protest at price disparities; they might buy locally to 'support the flgs', or they might never stop buying because the incremental cost of continuing to play isn't as much as the buy-in cost of another game. There is also the factors of networked goods: GW stuff is the leader of the market because it is the leader of the market. Few other games have the ability of GWs to be picked up and played nearly anywhere around the world, and so GW games are worth more than an identical product for a different game.

**Orktavius**

Trasvi...your comments and replies are sensible and well explained, I only wish I had the expertise to say what you said as eloquently as you did. I understand the general concepts of why GW is making the choices they are and know enough that it's the smart business move for them but I clearly do not have your level of understanding and I commend you for an excellent set of posts explaining why prices are higher in Australia.

Online discounters can give discounts because they cut into their own profit margin to do it. On top of that they avoid they are able to avoid plenty of the overhead costs. Maelstrom games is a GREAT example of what happens to these webstores if you do it wrong. Basically every sale puts you deeper into debt and you need more buyers to fill orders, in other words....Maelstrom games was essentially a ponzi scheme. As Trasvi said, GW's independent stockists very well make them more money than the corporate stores...so why should GW allow 100 or so online discounters threaten the business of thousands of other independents with no online presence? Why should GW leave every Australian independent out to dry for a sake of a few online retailers in the US or Europe? GW made the right call as far as business decisions go, it's not one everyone's going to like obviously but at the end of the day it protects the bottom line...and the bottom line is what keeps the hobby going. Privateer press sure as hell wouldn't sell you models at a loss or at an unsustainably low price, why would GW be any different?

To others though....you can't just dismiss labor costs and bulk shipping as having no effect on price. A ship with a couple containers full of mini's going from England to the East coast of North America is going to be significantly cheaper than freight going through the Suez Canal or around Cape horn. It's not like GW can supply an entire continent entirely through air freight.

**Azreal13**

Actually, far from being a ponzi scheme, MG appears to have gone down in part because the ROW embargo cut a significant percentage of their core business almost overnight, in part because they had over invested in what eventually became Mierce Miniatures without making provision for a disaster like the embargo and in part because they didn't take strong e ough action soon enough (such as redundancies)

Internet stores run at a lower margin simply because they can run with lower overheads and reach a massive consumer base so can trade in volume, nothing more complicated than that.

So, in short, GW are at least partly responsible for their demise, just like they are partly responsible for Miniwargaming and no doubt a number of lower profile stores, through actions such as those discussed in this thread.

Orktavius 517898 5463885 wrote:
To others though....you can't just dismiss labor costs and bulk shipping as having no effect on price. A ship with a couple containers full of mini's going from England to the East coast of North America is going to be significantly cheaper than freight going through the Suez Canal or around Cape horn. It's not like GW can supply an entire continent entirely through air freight.

Not entirely, no, but have you seen how many containers those ships carry? Or the capacity of each of those containers? If you average the shipping cost per unit of stock transported, it is going to be a very small amount of the RRP

**H.B.M.C.**

Exactly. As I said already, shipping doesn't more than double the cost of items.

And on another note, Maelstrom wasn't just an internet store with no B&M presence. They had a massive store, with over 100 tables and a food annex!

**AllSeeingSkink**

Trasvi wrote:
AllSeeingSkink wrote:
There's a little bit a logic fail though as a large part of the reason prices are high is GW sells to retailers at a wholesale price that is higher than the rest of the world. If it had to do with things like wages and rent and running costs being higher, then GW should be selling to retailers at a price where the retailers can attempt to compete internationally given whatever their running costs might be (given people would buy locally if the difference were small and attributable to higher store running costs instead of simply being absurdly high).

The wholesale price to independents is high because GW needs to compete in Australia against their stockists.
If GW needs to sell an item for $100 retail in their own stores to stay afloat, they need to sell it to independents at $55 so that they don't get drastically undercut. If they independent could buy for UK wholesale price (lets say that converts to $25) they could sell the product for $70 and still make the same margin.
The other side is again, retailers are used to paying $55 for that product. $55 is a fair price (in the absence of the internet).

Again, we have a logic fail here.

GW stores don't have to pay wholesale prices to themselves, the FLGS do. If an FLGS could be internationally competitive if only they were charged an international wholesale price, then so could GW, because all the prices involved in running the shop itself exist both for the FLGS and the GW store, but the GW store (in Australia) get their product at far lower prices.

I'm gonna make up some numbers to illustrate (the proportions I'm sure are off, but the principle applies).

Lets say it costs GW $20 to produce and distribute product to stores (not including the costs of running the retail store themselves). So they wholesale it to a US store for $40, and stick an RRP of $60 on it.

So in the US...
FLGS sells product for $60, GW makes $20 but has no running costs, FLGS makes $20 minus running costs.

GW store sells product for $60, GW makes $40 minus running costs.

Now we come to Australia where product is 50% more expensive. So GW still only costs $20 to produce and distribute product, maybe a couple of bucks extra for shipping and taxes, lets call it $25. They sell to the store at a wholesale of $60 with an RRP sticker of $90.

FLGS sells product for $90, GW makes $35 and has no running costs, FLGS makes $30 minus running costs, more than the US store but has to cover higher running costs.

GW store also sells product for $90, GW makes $65 minus running costs, despite having much the same running costs as the FLGS!

This is where the logic fail comes in with your argument. By GW charging significantly higher wholesale in Oz, the FLGS has a double kick in the balls, not only aren't they getting stock at a competitive price, they have to run a store on significantly less profit per product than a GW store and have higher running costs than international stores.

So not only is GW kicking gamers in the teeth, they're kicking FLGS's in the balls too.

The only reason why they are raising prices is to milk more from the market, not because they need to do it to be competitive or to make money. And as you yourself said a few posts ago, GW growth in Oz is somewhere between stagnant and low where the market (the hobby in general) is increasing, so they're pushing the limit of what they can do which only proves to piss off customers and make things worse. Instead of trying to offer a competitive product at a competitive price, they are trying to get their hands in the pockets of both FLGS's and customers while saying "oh no, don't look over there and see how much we're screwing you, focus on the pretty lights over here".

A business is a business and I accept that. But I do not accept the business practices of screwing both retailers and consumers to make a quick buck and it does affect my purchases.

GW aren't the only ones doing it, yes, and as long as I can get product from overseas reasonably easy I won't care too much about it, if getting product overseas becomes impossible from GW trade agreements, they've lost me. The video game industry does the same thing, and I import video games too at the expense of local video game stores (and occasionally buy them locally when I don't want to wait). Tyre manufacturers do the same thing as well and are terrible and I have little to no respect for them because of it, because many international manufacturers have trade agreements with retailers to not ship tyres to Oz and interfere with their fleecing of Australian consumers and retailers.

Trasvi wrote:
Absolutely true. If you thought $42 was a fair price yesterday, it is entirely likely you would think $48 was not a fair price today, and that would drive you to look elsewhere or stop purchasing; and the amount of the discount would affect how much difficulty you were willing to put up with to get it. I still buy paints (Vallejo) in stores, because even though I might save $1.50 a bottle ordering from overseas I would have to wait 3 weeks and I need the paint now. Some of the Tau releases I will be buying from discounters in Australia rather than the US, because the difference is only $5 on a $90 model which is easily eaten up in shipping costs. The point was, if the price doesn't change, that should mean your perception of fairness of price doesn't change; you might go looking for other places which offer you more value (consumer surplus) but the maximum price point at which you quit buying won't change if a newer cheaper seller becomes available.

Yes, unfortunately the perception of fairness of price within the market even ignoring external factors is (IMO) falling as well as the international disparity is causing even more of a decrease in perception of fairness, ESPECIALLY when you hear that not only do consumers get an international disparity, retailers can't get products at prices that are competitive.

Personally, I don't support my FLGS by buying GW products because I know they are being screwed by GW and after lowering prices to be competitive don't have margins anywhere near what a GW store will have, so I'm not going to support my FLGS by paying a large amount of which the FLGS only makes a small amount and GW make a lion share.

I do, however, support my FLGS by buying paints and glues and tools, as typically such accessories have better margins for them (and I typically don't buy the GW branded ones) and also by buying traded products. My local FLGS trades miniatures and the owner has told me they make far more off that than actual brand new GW products (of which he has severely cut his distribution for over the years), so I'm happy to support him like that and get models a few bucks cheaper than buying them new anyway.

I'm not going to support my FLGS by buying a $90 product that can be gotten internationally for $60 and the lion share of the price difference goes to GW and not my FLGS anyway.

**insaniak**

Orktavius wrote:
Online discounters can give discounts because they cut into their own profit margin to do it. On top of that they avoid they are able to avoid plenty of the overhead costs. Maelstrom games is a GREAT example of what happens to these webstores if you do it wrong.

It's amusing that you are still completely ignoring the fact that most of the larger internet discounters also have B&M stores.

It's even more amusing that you would do that in the same paragraph as you hold up Maelstrom Games as an example of an internet discounter... given that they had a massive B&M store.

It wasn't discounting that killed Maelstrom. It was having a very large chunk of their sales ripped out from under them by GW's anti-competitive policies. The GW that is 'protecting the LGS' killed that particular LGS.

...so why should GW allow 100 or so online discounters threaten the business of thousands of other independents with no online presence?

What's stopping those thousands of other independants from building an online presence? Aside from, of course, GW's refusal to allow them to do so...?

Why should GW leave every Australian independent out to dry for a sake of a few online retailers in the US or Europe?

Why indeed, when all they need to do to fix the problem is drop the wholesale price to a level where Oz retail prices can be adjusted to match overseas prices?

Rather than fostering ill will within their customer base by dictating to them who and where they are allowed to buy from, they could have just removed any desire to purchase from overseas in one stroke. instead of being cranky that they can no longer purchase from overseas at a fair price, Oz customers would have been happy that GW was obviously listening to their concerns, and that they can now support their local stores without feeling like they were being reamed. Oz sales go up, customer satisfaction goes up, LGSs remain in business, and everyone wins.

Instead, we have the current mess.

**AllSeeingSkink**

insaniak wrote:
Why should GW leave every Australian independent out to dry for a sake of a few online retailers in the US or Europe?

Why indeed, when all they need to do to fix the problem is drop the wholesale price to a level where Oz retail prices can be adjust to match overseas prices?

What amazes me is some people actually think, we, the consumers, are doing the FLGS wrong by buying overseas or online when the reality is that GW are leaving retailers out in the cold by charging them higher wholesale and not allowing them to compete. GW aren't doing the FLGS in Australia any favours.

IMO it's quite simple, if GW charged retailers internationally competitive rates, Australian retailers may still not be able to compete dollar for dollar with international retailers due to higher running costs in Oz, but nor would they have to compete dollar for dollar. If they could get their products wholesale at a price that was competitive + a bit for international shipping and then sold them at a "slightly" higher price to cover their running costs, customers would have little to no desire to buy internationally.

People will be more inclined to support their local FLGS and also save themselves time shipping internationally if they would only save $20-30 on $200 worth of product, where as now you're more likely to save $70-90 on $200 worth of product, making not supporting the local store and having to wait weeks to get a product far more bearable.

**-Loki-**

AllSeeingSkink wrote:
insaniak wrote:
Why should GW leave every Australian independent out to dry for a sake of a few online retailers in the US or Europe?

Why indeed, when all they need to do to fix the problem is drop the wholesale price to a level where Oz retail prices can be adjust to match overseas prices?
What amazes me is some people actually think, we, the consumers, are doing the FLGS wrong by buying overseas or online when the reality is that GW are leaving retailers out in the cold by charging them higher wholesale and not allowing them to compete. GW aren't doing the FLGS in Australia any favours.

GW aren't doing them favours, but when people start buying online, they won't stick to just GW products. The FLGS's will lose sales of any other gaming systems that can be had cheaper online, which is a lot of them.

GW doing something to help keep the sales in the stores is admirable - if that's what they were actually doing, rather than just trying to keep us paying their high prices.

**IdentifyZero**

I think the problem is nobody is taking economics into account when they look at the prices in one country or the other.

A Big Mac also costs almost twice as much in Australlia.

I don't agree with the GW prices but this is a small example of why we need a global economy. Globalism is the future.

When we all have one economy, it won't matter what country you are in; we will all pay the same.

**insaniak**

IdentifyZero wrote:
I think the problem is nobody is taking economics into account when they look at the prices in one country or the other.

That's because anyone who isn't an economist doesn't care about economics.

I couldn't give a rat's jigglies why a business charges different prices in different stores. As a customer, I just care about getting the best deal... which is exactly how the system is supposed to work. I don't have a responsibility to support GW's chosen business model.

**AllSeeingSkink**

IdentifyZero wrote:
I think the problem is nobody is taking economics into account when they look at the prices in one country or the other.

I disagree, people are taking economics in to consideration. I know I am considering economics when I say I think GW are giving both FLGS's and customers the shaft, in fact I couldn't make that statement if I weren't considering the global and local economics.

Automatically Appended Next Post:

insaniak wrote:
IdentifyZero wrote:
I think the problem is nobody is taking economics into account when they look at the prices in one country or the other.

That's because anyone who isn't an economist doesn't care about economics.

I couldn't give a rat's jigglies why a business charges different prices in different stores. As a customer, I just care about getting the best deal... which is exactly how the system is supposed to work. I don't have a responsibility to support GW's chosen business model.

I feel people are taking economics in to account when discussing the topic and being disgusted at GW's business model.

Where people cease to take economics in to account is when they have resolved to make a purchase and then deciding how that purchase will be made.

**H.B.M.C.**

IdentifyZero wrote:
I think the problem is nobody is taking economics into account when they look at the prices in one country or the other.

A Big Mac also costs almost twice as much in Australlia.

I don't agree with the GW prices but this is a small example of why we need a global economy. Globalism is the future.

When we all have one economy, it won't matter what country you are in; we will all pay the same.

And a Big Mac in Noumea was twice the price of an Australian big mac. And Brazil's minimum wage is 1/8th that of the US (or 1/4th... one of the two) yet they pay close to Aussie prices for their GW stuff. And neither of these things are at all relevant.

You cannot simplify this down to "Everything in Australia is more expensive!" because it isn't. It's about as accurate as the minimum wage fallacy.

**Maddermax**

IdentifyZero wrote:
I think the problem is nobody is taking economics into account when they look at the prices in one country or the other.

A Big Mac also costs almost twice as much in Australlia.

No, it doesn't. In the uk, it's about $4usd, here it's about $5usd (with some variability, as different stores have different rates), which fits into the 20-30% higher bracket most things do (understandable with higher costs for labour ect, in Australia). If GW kept to that sort of difference, there would be far far fewer complaints about them, and people would be far more willing to buy locally. GW marks up far far beyond that level, however.

**Vaktathi**

As an actual economist, here's an actual source on the big mac index http://www.economist.com/content/big-mac-index

As of January 2013 according the The Economist's data, a Big Mac in Australia averaged $4.90 USD ($4.70 AUS), compared with $4.37 USD in the US. A ~ 12% increase.

So based on the Big Mac index, GW's prices are still flat out insane.

**Trasvi**

AllSeeingSkink wrote:
Again, we have a logic fail here.
GW stores don't have to pay wholesale prices to themselves, the FLGS do. If an FLGS could be internationally competitive if only they were charged an international wholesale price, then so could GW, because all the prices involved in running the shop itself exist both for the FLGS and the GW store, but the GW store (in Australia) get their product at far lower prices.

I'm writing something long and complicated as a response but confusing myself with numbers and don't want to post something that will instantly be derided.
The moral of the story is that: GW stores are profit machines after break even point, at a stronger-than-historical Australian dollar, as most of their costs are fixed in the nation of sale.
Letting independents in Australia use overseas wholesale rates potentially decreases the independent's cost's by a much larger amount than it decreases GW's costs: with the numbers I'm using, GW needs to sell 15% less to reach break even while the independent needs to sell 37% less. At the same time, keeping independents buying at a % of Australian retail potentially increases GW revenue through independents by up to 150% with currency changes.
So decreasing costs to independents lets them undercut GW stores quite significantly when GW is still 'paying off' their fixed costs.
However, once a GW store gets into significant profit, they can make a *LOT* of money very quickly with a strong Aussie dollar - primarily because their profit needs to reported in the UK, rather than Aus. The independent on the other hand falls behind quickly and has to make more Australian dollars to post the same profit figures.
At the moment, I suspect GW stores in Australia are making losses across the board: GW as a whole posted barely 500k GBP profit last statement and made a loss before that. They're before the break even point, which means that independents can still undercut them.

Essentially: GW can't treat independents better because the GW stores themselves aren't making a profit.
I'll post the actual numbers when I'm mostly sure they're not wrong.

Then there is the point I was trying to make before: The FLGS was previously paying $X for product. They obviously think that is a fair price. Why the hell would GW go discounting that to $X/2 for them? Sales aren't elastic enough for that to increase GW's revenue. If the FLGS was paying that price, that is what GW will continue to charge them, plain and simple.

**DexKivuli**

I live in Melbourne, Australia. I regularly buy models from my FLGS (called Mind Games) because their prices are actually lower than the GW prices (both shops are within a 5 minute walk of each other). I only buy models from Mind Games BECAUSE they are cheaper, and I can get them IMMEDIATELY.

When I'm feeling patient, I buy models off eBay. I'd imagine the changed terms won't reduce eBay supply at all. Some of these people probably just buy retail in the US and then post to us. Also, I have a US post box, so I can always get GW to ship to that.

We Australians - as a whole - are doing very well, globally speaking. We have a lot more discretionary spending, meaning that some people (myself included) don't mind spending a bit extra every so often. If I want to have my model ready for the weekend game against my mates, I don't mind forking out extra.

My point is that I - and many other Australians - am willing to pay a price premium to get a model straight away. And if we're feeling patient, there is very little GW can do to stop people.

GW can do whatever they want. And people will continue to buy their products (I know that my friends and I will). It's not malicious, GW are just going about business. They don't owe us anything, nor are they being less generous than other companies. It's just that other hobby companies either don't have the infrastructure to price like GW does, or they feel that they are best served - commercially - by not price discriminating.

**Trasvi**

H.B.M.C. wrote:

And a Big Mac in Noumea was twice the price of an Australian big mac. And Brazil's minimum wage is 1/8th that of the US (or 1/4th... one of the two) yet they pay close to Aussie prices for their GW stuff. And neither of these things are at all relevant.
You cannot simplify this down to "Everything in Australia is more expensive!" because it isn't. It's about as accurate as the minimum wage fallacy.

Anything imported in Brazil is expensive, including food. Not many people go to McDonalds when they're out and about - instead, go to a beans'n'rice buffet and pay $3 per kilo of food.
I posted before: the amount of money available in a system is very closely related to the prices of everything, which is why governments don't simply print money (anymore) (without good reason). Obviously prices aren't tied to minimum wage, but to say that money supply has *nothing* to do with any prices in a country is demonstrably wrong.

@DexKivuli: Willingness to wait is definitely a thing. I'll wait 2 weeks for the Tau codex to save nearly $50 on the sticker price; but I won't wait 2 weeks to save $1 on paint. Depends how badly you want it and how much your time is worth.
However, GW *IS* trying their best to stop you from doing this, and that's what this thread is about. Soon when we can't order from many US stockists, we have to start looking to eBay or less-discounted sellers who get their GW stuff though distributors rather than GW themselves.

regarding other companies: GW is in a position to dictate terms. If (eg) Spartan Games tried to tell my FLGS who they could and couldn't sell to, my store would just refuse to sell them at all, Spartan would be out of pocket but my FLGS would only lose 1% of revenue. When GW come along and try the same thing, they represent 50% of the store revenue and so can pretty much twist their arms to agreeing to anything [legal]. Most of the smaller players in the industry would have < 20 staff total, so they really don't have the time or money to dedicate to this kind of legal wrangling.

**masterdoobie**

I just care about getting the best deal... which is exactly how the system is supposed to work. I don't have a responsibility to support GW's chosen business model.

Truth.

BTW insaniak, can I just say your conversions are awesome. I recognized them from ebay a whiles back.

Okay, resume hating on GW policies everyone.

**insaniak**

Then there is the point I was trying to make before: The FLGS was previously paying $X for product. They obviously think that is a fair price. Why the hell would GW go discounting that to $X/2 for them? Sales aren't elastic enough for that to increase GW's revenue. If the FLGS was paying that price, that is what GW will continue to charge them, plain and

There are a while bunch of things wrong with that.

For one, many FLGSs didn't think that the prices were fair before. They just put up with them because they didn't really have a choice if they wanted to sell GWs games.

For two, any of them who may have felt that the prices were once fair are certainly not obligated to think so forever.

And for three, the FLGS thinking the price is fair is ultimately far less important than the customer thinking the price is fair. And the customer will go wherever they can currently get the best deal.

**The Shadow**

Kilkrazy wrote:
The solution is for Australian players to stop buying any GW products. A year off would do it. The results would be clearly visible in GW's accounts. As long as you keep buying the stuff at sky high prices, GW will sell it at sky high prices.

This is never going to happen because, we, as the savvy forum members we are, are a very small minority of wargamers. Most wargamers don't have a clue about what's happening and what GW are doing and will buy direct from GW because they think there's no alternative.