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So, I went to amazon.com today, and noticed you can buy 40k stuff from them. Then I noticed the prices. There was stuff on there that was literally half the price of GW's website, and because I'm a prime member, I get free shipping. Even the stuff that wasn't half off was easily reduced in price by a third.

Given that whoever on amazon is presumably selling at a profit, this implies that up to HALF of the price of your GW minis is eaten up in distribution.

Now, I know GW isn't the only company suffering from amazonitis, and that brick-and-mortar stores cost a fortune, but come on. I don't understand how someone can buy direct from GW and still have profits after cutting the price by 50%. Given the infamous problems of getting stuff to Australia (amongst others), it seems that their distribution network is terrible.

So why are they still bothering? Why not just bump their wholesale price by 10% and then let third parties like amazon handle the distribution for them? GW would make more money per unit AND it would be a lot cheaper for the rest of us.

Or am I just crazy?

Occasionally you may see various members make mention of something called the “Games Workshop HHHobby”. This title, specifically the “HHHobby” part, is done to lampoon GW’s attitude towards the greater hobby that is miniature wargaming.

To put it simply, GW would rather their customers not know that alternate games exist. This is why they put so much effort into their own stores and why they put up with the madness of a self-owned retail distribution network. If their stores are one-stop shops then their customers don’t need to go anywhere else (ie. to places that might expose them to other games).

Everything GW does, from their release schedule to their methods of branding, their own trade shows (games days), their lack of participation in non-GW trade shows***, their attitude towards the Internet and their HHHobby magazine, is coloured by this notion that they must not let their customers discover that there’s no such thing as the “Games Worshop HHHobby” but rather Games Workshop products are part of the greater miniature wargaming hobby. To give up their own network and let third parties sell all their models through their own independent stores would cause them to lose this power.

The long and short of it is that GW still tries to operate like it’s the early 90’s ie. that they’re a plucky underdog company with a scrappy hands-on approach to retail, rather than acting as they are, which is as one of if not the industry leader, who’s shadow is slowly getting smaller as their own intrinsic and unmoving attitudes allow them to fall behind their competition

***There is a bit of change in the wind here, but it’s slow going. The Chapterhouse thing has forced GW to re-evaluate some of its more intractable qualities, but at the same time it has made them even more stubborn in other areas, especially the release schedule.

 Ailaros wrote:
So, I went to amazon.com today, and noticed you can buy 40k stuff from them. Then I noticed the prices. There was stuff on there that was literally half the price of GW's website, and because I'm a prime member, I get free shipping. Even the stuff that wasn't half off was easily reduced in price by a third.

Given that whoever on amazon is presumably selling at a profit, this implies that up to HALF of the price of your GW minis is eaten up in distribution.

Now, I know GW isn't the only company suffering from amazonitis, and that brick-and-mortar stores cost a fortune, but come on. I don't understand how someone can buy direct from GW and still have profits after cutting the price by 50%. Given the infamous problems of getting stuff to Australia (amongst others), it seems that their distribution network is terrible.

So why are they still bothering? Why not just bump their wholesale price by 10% and then let third parties like amazon handle the distribution for them? GW would make more money per unit AND it would be a lot cheaper for the rest of us.

Or am I just crazy?

To GW your just crazy. However, buying direct from warhouse is always cheaper and true with anything out there like house materials and the sort. The mark up is also for a larger profit at a brick and mortar store. You raise a good point, but then brick stores would fail around. In my opinion however, and without actual mathematical facts of financial reports i cant not confirm what i guess or believe.

H.B.M.C. wrote:To give up their own network and let third parties sell all their models through their own independent stores would cause them to lose this power.

But... they already do this. The US has a few GW stores and tens of thousands of third party brick-and-mortar independent retailer. In order for me to go to a GW store, I've got to travel some 200 miles away, while there are several non-GW general gaming stores that sell 40k and WHFB stuff, along with having gaming nights.

I mean, if GW already works with independent retailers, then why not also work with ones who are online?

cormadepanda wrote:You raise a good point, but then brick stores would fail around.

Sure, and I'm all about supporting local hobby retailers. They give me a place to play and people to play it with.

That said, if GW's distribution system is really that crappy, then my FLGS should just start buying stuff from amazon and then charging a small markup. The local retailer's cut might well be even larger, despite a lower retail price, if they cut out the crazy inefficient middle-man of GW distributors.

You know, I might just suggest that next time I'm in the store.

Here is what I do not understand. Average cost for a brick and mortar to get GW is 60% of retail.

So if they sold it for 50% off, they would literally be losing money.

Who are these people that sell it new for less, and how do they get this amazing wholesale deal?

I don't know.

I just know that when I looked at the land raider on amazon and saw that it cost $55 and then looked at the land raider on GW's site and saw it cost $110 I thought "huh, half off".

Not everything is that cheap, relatively speaking, but still...

You know, and we're not even into holiday sale prices yet. I bet it gets even cheaper soon.

 Ailaros wrote:
But... they already do this. The US has a few GW stores and tens of thousands of third party brick-and-mortar independent retailer. In order for me to go to a GW store, I've got to travel some 200 miles away, while there are several non-GW general gaming stores that sell 40k and WHFB stuff, along with having gaming nights.

You’re missing a couple of key points here.

1. GW cannot apply their British business model to the United States because compared to the English Isles the US is fething huge. With a massive population scattered across an enormous continent they can’t hope to use the small high-street store method with mainland US. It’s just too big. As such they work with 3rd parties out of necessity rather than by choice. GW’s British method works in Australia because despite having a similar land-mass to the US, Australians don’t live across the entire breadth of the country – our populations are focused almost entirely around the coastline. The same is not true of the US.
2. Keep in mind that there are many, many tales of independents that did very well for a time and then suddenly a GW store opens nearby and that independent has trouble getting stock and all sorts of other ‘honest mistakes’.

 Ailaros wrote:
I mean, if GW already works with independent retailers, then why not also work with ones who are online?

Because the Internet is the one area where they have the least control, therefore it is something to be shunned wherever possible.

Are you looking at the Australia GW site? $110 sounds a bit high for Americans.

What Games Workshop should do is shut down all their stores (keeping open Warhammer World and maybe a few events a year) and slash prices on all their products.

They could stock "popular" kits in mainstream retailers like Argos, which is to say basic troop kits and maybe a few ICs. The rest they could sell online, actively supporting a large online community and organising (paid) events.

You could have an online profile with validated wins/losses. The possibilities are endless really.

 Ailaros wrote:
I just know that when I looked at the land raider on amazon and saw that it cost $55 and then looked at the land raider on GW's site and saw it cost $110 I thought "huh, half off".

You were looking at the Australian GW store, then... because it's not $110 in the US.

If GW caught any store selling at that low a markdown, their supply would be cut off immediately. GW doesn't want anybody undercutting them, even if the retailer itself isn't making any more than they would normally.

We have a GW opening up in Lexington soon, and both the local stores are wondering if it'll have any affect on them, and sadly, it probably will. My main store I played at knew about it a month in advance before the GW regional rep finally mentioned in a roundabout way that there kinda sorta may be one popping up.

He was not pleased.

GW working with online discounters sounds even crazier. I'm suprised they haven't cracked down on Amazon yet to be honest.

Slightly off topic, but can Amazon post Warhammer Products to Aus/Nz?

Still 30% of isn't a bad deal. It is why I buy most of my models from miniature market.

GW produces the models. They then sell them at two different prices. One for retailers, and one for individuals.

The natural result of this is that GW wants an obscene amount of control over their retailers. Because if they don't have that control (like preventing online stores from selling their products in certain countries, preventing people from certain countries buying product from other countries, etc etc) then the retailers that buy their product can undercut the GW stores, and the GW stores will fail.

The result of which, sensibly, should be for GW to stop competing against itself. Either close all GW stores and only have sell to retailers, or refuse to sell at retailers and only sell through their own stores. But closing either avenue is a huge risk with an almost certain short-term financial loss as you completely close of one of those revenue streams, so no one in the head office wants to take that risk. No one wants to be responsible if it doesn't turn around, and no one want to be responsible for the shareholders jumping ship when they get a bad quarterly report.

 MrMoustaffa wrote:
If GW caught any store selling at that low a markdown, their supply would be cut off immediately. GW doesn't want anybody undercutting them, even if the retailer itself isn't making any more than they would normally.

We have a GW opening up in Lexington soon, and both the local stores are wondering if it'll have any affect on them, and sadly, it probably will. My main store I played at knew about it a month in advance before the GW regional rep finally mentioned in a roundabout way that there kinda sorta may be one popping up.

He was not pleased.

GW working with online discounters sounds even crazier. I'm suprised they haven't cracked down on Amazon yet to be honest.

We had a GW store open in Cincinnati and it had virtually no impact on our local gaming stores. They still offered product at a discount, so they were a better choice than the GW store. Unless you want (HAVE) to have something right away, then you go to the GW store for that "one of". Not to mention that the GW store does not foster the same gaming "community" environment that the other stores do.

The local model store (Frontline hobbies) used to stock GW stuff.
Then, 18 years ago, after seeing how much stock this store moved in a given month, they (GW) opened up their own store not quite two blocks away from it.

Frontline then had restrictions on how much they could order, when they could re-order, and more than once, orders that were never delivered. After about a year of this, the owner told them to stick it. It still took them three years to delist him as a stockist of their stuff.

Flashforward and GW have pretty much had Newcastle sewn up for 17 or so years. A new independent opened up last year (Good Games) although they are a couple of suburbs away (but still just down the same road). They only carry a handful of GW stock though, as PP, boardgames and the ccg sell better.

 Ailaros wrote:
I don't know.

I just know that when I looked at the land raider on amazon and saw that it cost $55 and then looked at the land raider on GW's site and saw it cost $110 I thought "huh, half off".

Not everything is that cheap, relatively speaking, but still...

You know, and we're not even into holiday sale prices yet. I bet it gets even cheaper soon.

Goddamnit Ailaros!

You have fallen foul of the Austrailian curse. That price is in AU$.

GW is still expensive though

HBMC's remarks were also very pertinent!

Amazon sells GW at retail value shock.

At least you guys have local game stores. I live in Derby (about 20 mins drive from Warhammer World).

I dont know if its due to the proximity of head office but the ONLY gaming stores i have seen is the local GW which has 2 Realms of Battle tables...and that's it.

I only go in there to buy washes and spend the odd voucher i get for birthday/christmas. Any model kits i tend to go online.

I hve found a local gaming club so i dont have to slog to Warhammer World anytime i want a game, whcih has helped.

 Mr. Burning wrote:

 Ailaros wrote:
I don't know.

I just know that when I looked at the land raider on amazon and saw that it cost $55 and then looked at the land raider on GW's site and saw it cost $110 I thought "huh, half off".

Not everything is that cheap, relatively speaking, but still...

You know, and we're not even into holiday sale prices yet. I bet it gets even cheaper soon.

Goddamnit Ailaros!

You have fallen foul of the Austrailian curse. That price is in AU$.

GW is still expensive though

HBMC's remarks were also very pertinent!

Amazon sells GW at retail value shock.

The fact that US customers see the AU price and don't automatically assume something's wrong speaks volumes about how expensive people believe GW to be now.

 Praxiss wrote:
At least you guys have local game stores. I live in Derby (about 20 mins drive from Warhammer World).

I dont know if its due to the proximity of head office but the ONLY gaming stores i have seen is the local GW which has 2 Realms of Battle tables...and that's it.

I've only ever seen a GW in derby - and that store is tiny...

We used to have at least 4 independant shops in burton and the surrounding area that carried GW - that's all stopped now. I heard about supply issues for them when GW opened but that could've just been rumour from one particular shop...(this was also years ago)
Now we have a GW - I don't mind though...now if I want to buy something I don't have to trawl 4 shops. At worst, I bought 5 jetbikes. One each from 3 and 2 from one (was all they had) - that day was spent on buses in a 5 mile radius...shudder...
But then I suppose I'm GW's perfect customer - I buy impulsively, I've a painting pile to do as big as the cupboard it's in, I know of the existence of other games but I never check them out...etc

But this isn't a moan - if I was going to moan, it'd be about not having enough money for grey plastic crack...

The simple answer: to get new customers. That's it.

Or you guys could live in Australia, where gaming stores are all but myth and you can only find one if you know exactly where to stand during a certain phase of the moon.

Where I live there's a GW store and a "flgs", both about an hours drive away. They both sell the kits at the same-ish price, but the "flgs" would have to be a lot cheaper than GW for me to go there instead of the GW store. First of all, because the "flgs" isn't all that friendly. At least at the GW store the clerks actually want you in their store, welcome you as you come in, and wants to talk to you, even if you're not there to buy anything. Second is the variety of kits stocked. At the "flgs", they have only the most popular kits, and even then, only if someone hasn't been in there before you to buy the one box they had of whatever you wanted. At the GW store, it's a once in a blue moon occurrence that they don't have the kit I'm after.

And living in norway, ordering stuff on the internet internationally is a real pain in the arse, because of the customs limits. Plus, with international shipping from any of the serious capitalist countries (UK and US) is a pain, because the shipping companies are so effing slow, unless you pay almost the value of what you're buying on top to get "express". Which still takes one to two weeks to get here.

Praxiss wrote:At least you guys have local game stores. I live in Derby (about 20 mins drive from Warhammer World).

I dont know if its due to the proximity of head office but the ONLY gaming stores i have seen is the local GW which has 2 Realms of Battle tables...and that's it.

I only go in there to buy washes and spend the odd voucher i get for birthday/christmas. Any model kits i tend to go online.

I hve found a local gaming club so i dont have to slog to Warhammer World anytime i want a game, whcih has helped.

There is a store in lougborough. I don't know if thats closer or not but I go to loughborough uni but never goes to the store, seems like a different communitiy here, i like my old GW shop lol much more friendly.

 H.B.M.C. wrote:
Or you guys could live in Australia, where gaming stores are all but myth and you can only find one if you know exactly where to stand during a certain phase of the moon.

Hardly suprising there isn't many toy shops on a prison island is it?

GW are doing what many manufacturers do and that's supply a premium product (sic) and a discounted one.

Usually the dicounted products are own brand type things In supermarkets with the regular (almost identical) premium product next to it. GW seem to have taken this a step further and not actually mess about with differant packaging etc. So GW stores for finding new gamers and initiates, and discount for vets.

The UK model which has made them the size it is has but has clearly not transferred to the RotW which is why they have been tinkering so much for the last few years (+recession of course).

With the number of locations they have in the UK they will naturally have a distribution set. I don't think you can have a GW the size it is with out the shops/distribution. GW would shrink massively without the shops and without much good will they would be I serious trouble.

 notprop wrote:

 H.B.M.C. wrote:
Or you guys could live in Australia, where gaming stores are all but myth and you can only find one if you know exactly where to stand during a certain phase of the moon.

Hardly suprising there isn't many toy shops on a prison island is it?

This gave me a good laugh. Thanks.

 Praxiss wrote:
At least you guys have local game stores. I live in Derby (about 20 mins drive from Warhammer World).

I dont know if its due to the proximity of head office but the ONLY gaming stores i have seen is the local GW which has 2 Realms of Battle tables...and that's it.

I only go in there to buy washes and spend the odd voucher i get for birthday/christmas. Any model kits i tend to go online.

I hve found a local gaming club so i dont have to slog to Warhammer World anytime i want a game, whcih has helped.

A gaming club in Derby? Where?

The reason they won't work with online retailers is because the loss of profit margin they would see. Think about it, if they make a profit when they sell to the FLGS at 60% of their retail price, that means every model they sell on their online store they make that same profit, plus the 40% that the FLGS would normally get, minus the pittance that free shipping cost them. If they let other online retailers become their main sellers, they would probably see a net loss.

Typical cost from a manufacturer to retailer is 40 -45% off retail, but to a distributor it's 60% off retail, so if Amazon are buying as a distributor even selling at 50% off they are still making a profit. I don't know whether there's a requirement from GW that a distributor services retailers, or whether it's as simple as placing huge orders, but either way it's probably safe to assume Amazon are big enough to get things at that 60% off.

I'm not sure how GW don't work with Internet retailers (assuming they have a b&m location that is), though i note the US checkout issue which is most odd but perculoar to the US.

There seems to be no shortage of discount retailers in operation?

As for big companies buying discount GW have shown themselves to be resilient to this as shown by the lack of deals with Walmart/Argos and the stopping of distribution through WH Smith.