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Distributors like Alliance and Southern Hobby Supply (are they even still around?)

Yes, of course they are. And a quick check of the Internet (the big connected computers thing this forum is on) shows that.
http://www.alliance-games.com/Home/11/1/79/1156
http://www.southernhobby.com/

For now at least, retailers buying their product from distributors rather than directly from GW are unaffected.

This is my Opinion.

At the end of the day, GW makes the call on who and how much you can sell thier products for.. but I agree, this "no online sales idea" might just be the opening volley that cuts out the LFGS. They are not supporting tourneys really anymore, have exclusive books that the retailer can't have and I am sure they are dealing with games stores going out of business left and right.. so they may be thinking long term... everything going to direct sales online.

Cutting out bitz resellers and worrying about recasters? A $200 million dollar company with a 20+ million profit in 2012? I don't think so...

No, this is a set up for a whole new way to business. They see the stores are dying, the economy is suffering and they want to pull an Amazon.

From the GW June investors report.. From the Chairman:

Looking closely at the trend lines reveals interesting strategic information. The gradient of the US growth changed dramatically when we switched from using distributors to going direct to retailers;

And when the LFGS Retail stores start closing? I'll bet we get a, "We had no choice but to go direct with the consumers. The retail shops failed us.."

The bitz stuff, the recasting police, the lack of support for the stores, controlling the stores discounts.. these are just the opening volleys.

Don't get me wrong, I love the GW stuff, I love the fluff and I grew up with it.. but at the end of the day, change is coming.

Most independent FLGS I've run across in the US don't seem to rely on GW products near as much as they did 10 years ago. I'd go so far as to assert that even though the FLGS doesn't want to loose the sales, they'll survive without it.

I don't think GW needs to wait to change to a directly only model. However, they will need to plan that well. Something they have never done regarding retail operations. Not that it won't stop them from trying. If the correct answer is shut down all their own stores in the USA and distribute to the USA FLGS, GW is sure to do the exact opposite. Then wonder why it didn't work. If they mess that up then they'll no longer be able to subsidize their UK retail operation with overseas revenue at least at the same level they do now from the US operations. That will bring GW down like a house of cards much faster than the worst GW hater could imagine.

What I'm getting at is the FLGS can live without GW. But does anyone really know if GW can survive in the US without the FLGS?

Mini War Gaming just put this up
http://www.youtube.com/watch?v=EnPpfs120DA

26 minutes. Yikes.

thanks for embedding

Never heard of these guys or this site, but his analysis is very much grounded in reasonable criticism based upon business specifics and not rage-filled hyperbole.

I find that I agree with his analysis that GW has the right to this and that GW thinks it will increase their profits... and I think his exceptions on why it won't work are also reasonable. Boils down to until it happens and the numbers crunch, we won't know the impact.

I very much agree with his commentary of 'full retail' and deep discounts. But he is right in regards to people without FLGS where it is not always mutually exclusive.

It is worth 26 minutes of your life to watch it. Better than reading this thread

He's right about the retail stores. I live in a small town and have zero local options for Games Workshop anything. I have to drive 2.5 hours to find anything.

 pretre wrote:

 Balance wrote:
Of course, some companies are happy to place the most requested weapons and such up for individual order... (There's probably other companies I'm leaving out...)

GW is hiring a Bits Warehouse manager apparently, so you may be able to add a link to GW to that list...

When they're live.

...And actually, GW has for a while, they've just done the rather underwhelming 'bits packs' that were a step down from the era when nearly every cast piece or plastic sprue could be ordered individually if you wanted to pay.

It takes about 18 minutes for us to get a more human reaction from him. I like his tone throughout though.

nkelsch wrote:
Never heard of these guys or this site, but his analysis is very much grounded in reasonable criticism based upon business specifics and not rage-filled hyperbole.

I find that I agree with his analysis that GW has the right to this and that GW thinks it will increase their profits... and I think his exceptions on why it won't work are also reasonable. Boils down to until it happens and the numbers crunch, we won't know the impact.

I very much agree with his commentary of 'full retail' and deep discounts. But he is right in regards to people without FLGS where it is not always mutually exclusive.

It is worth 26 minutes of your life to watch it. Better than reading this thread

Completely agree. It's a well-reasoned and properly explained position.

I'm at work. Can anyone do me the favor of running down what matt talks about?

 Balance wrote:
...And actually, GW has for a while, they've just done the rather underwhelming 'bits packs' that were a step down from the era when nearly every cast piece or plastic sprue could be ordered individually if you wanted to pay.

Oh, I remember those days. I remember them with so much fondness.

Much of the cool bits of my SOB army were bought through GW's bit service. (Swooping Hawk wings for Seraphim, redemptionists, etc.)

I was sad when it went away.

 poda_t wrote:
I'm at work. Can anyone do me the favor of running down what matt talks about?

Basically goes through the document already discussed: internet sales, exporting, Bitz.

The only new thing is that 'direct sales' is being limited to 500$ per month for trade partners, and apparently a lot of NEW RELEASES are being 'direct sales' only right out of the gate like Hobbit heroes and Chaos heroes. And his trade Rep's response was "We don't want stores stocking direct sales items."

Which his response was, "I'm not stocking them, I have 2500 to 5000$ of requests from customers for direct orders a month." to which he has not gotten a response.

So you get a situation where customers are being funneled to a FLGS, want to give the FLGS money to buy an item GW just released and the FLGS can't sell it to them as they cannot order more than 500$

(this is all 'new' and on the heels of the DftS issue)

At least that is what I took away from the video.

I loved going through the catalogs to order bitz and plan conversions. They made a pretty penny off my back with that, back in the day.

 poda_t wrote:
I'm at work. Can anyone do me the favor of running down what matt talks about?

Really a run down of the trade agreement, and how the "reasons" given by GW in the agreement fall short of reasoned thought. Each of the reasons have been more or less covered here already, but it is a clear effect of the new terms and how it will impact things moving forward.

I really don't think GW thought this one through very thoroughly. First, it doesn't support it's customer base, because it only allows direct sales through its own website, which is a direct contradiction of supporting B&M stores since customers will want to support their own local B&M store, but, can't for obvious reasons. Bits services are probably going to drop and maybe increase in expense even though GW's not losing a penny off of the bits trade since they abandoned their own bits service a decade ago, and people are not willing to buy an entire box just to get one flashy part, and end up with 50% useless plastic/resin kits. With another price increase on the horizon for bad decisions and the prosecution of an ill advised and botched law suit, it's likely that people will be unwilling to continue spending on GW. If that's the case, there's a high chance that these people will be quitting and trying to earn a buck back, and sell off their second-hand armies... That in turn again cuts into GW's profits. As I see it, trying to kill the second hand market only fuels it further.....

I am guessing that GW did think about things already, and have come to a differrent conclusion.

In particular, if half of MWG customers go to GWs store, then GW ends up being at about a wash on the numbers at the end of the year, even if the other half quit GW entirely. It is even more beneficial if the customer is from Australia or other country outside the US or Canada due to higher prices they will be pushed into (or VAT collected unnescessarily so it equates to a 20% bonus).

Bits need an even lower turnover rate to end up with the same sales figures in terms of value.

 pretre wrote:



26 minutes. Yikes.

It's a really good point about the website. Six years ago, when I started wargaming, I remember going through the macragge.games-workshop.com, skullpass.games-workshop.com (I think) and moria.games-workshop.com sites. They provided a basic overview of the game, and it helped me get started. Since they removed them, Miniwargaming has helped me get a feel for Warmachine and Fantasy. It's pretty damn shortsighted.

Even the various things like Black Gobbo that were run from within the constrants of the core website. One month of Black Gobbo articles had more than a years worth of the current sites format.

Edited by Manchu

No company is ever been arrogant or "confident" enough to pull stunts like this over and over again... and still survive.

Im done with GW, not even ebay or discount sellers (if they still exist later)

Edited by Manchu

No company is ever been arrogant or "confident" enough to pull stunts like this over and over again... and still survive.

Except for all the companies that do... There are plenty of companies with ridiculously protective agreements for their product that are successful. How's Apple doing nowadays, I forget... Does that make it the right thing to do? Hell no, but it doesn't mean that it doesn't work.

As has been said, multiple times, in this thread: This makes no difference for bits sellers, as they don't buy from GW directly, makes little difference to anyone in the US (since the online thing was in effect since 2003) and only really changes things for folks in Canada (who now follow the same rules as the US). (Even the export business really doesn't change because that only restricts export for resale and not export to consumers.) It is a silly move on GW's part but that is more because it is essentially toothless and no big change to business as usual. Even the MWG guy says that them closing really has more to do with their business than GW.

Pretre said it better and more reasonably than me.

 pretre wrote:



26 minutes. Yikes.

This needs to be front page and spread to every corner on the wargaming world.

 pretre wrote:

As has been said, multiple times, in this thread: This makes no difference for bits sellers, as they don't buy from GW directly, makes little difference to anyone in the US (since the online thing was in effect since 2003) and only really changes things for folks in Canada (who now follow the same rules as the US).

Well, whether it affects bits sellers or not will depend on their intent and how far they're willing to take it. If they just intended to harm larger stores selling cheap bits, it'll probably do that. If they intend to stop most bits sales altogether, that's possible but it depends on how far they're willing to take it. Not much will change on that front if nobody feels threatened. They'd have to be willing to cut off a few of their biggest distributors and stores to make an example of them, if they plan to stifle most of the bits market.

We'll just have to wait and see.

 pretre wrote:
[(Even the export business really doesn't change because that only restricts export for resale and not export to consumers.)

Except that doesn't seem to be the case. The first line of the paragraph about domestic sales is "North American Retailers are only authorized to resell GAMES WORKSHOP products domestically in their respective countries of origin."

I think that pretty clearly means you can't export.

I'm not a lawyer but that sentence looks to have a few gaping loopholes. But maybe it's because I'm not a lawyer

 Hulksmash wrote:
Pretre said it better and more reasonably than me.

You mean other than where he is flat wrong?

 pretre wrote:

No company is ever been arrogant or "confident" enough to pull stunts like this over and over again... and still survive.

Except for all the companies that do... There are plenty of companies with ridiculously protective agreements for their product that are successful. How's Apple doing nowadays, I forget... Does that make it the right thing to do? Hell no, but it doesn't mean that it doesn't work.

Apple actually began its boom when they stopped their protective agreements and allowed big box stores to carry their products and online retailers to begin discounting. From Walmart to Amazon - the reason for their growth has nothing to do with protective trade agreements.

More to the point though, things like GW products depend on a growing user base not a shrinking one. It doesn't make a difference if you are the only person in your town who owns an Apple - you don't need another iThing to use it. GW products depend on a broad user base in order to maintain and grow the business. Tactics like what GW have been implementing have been causing their user base to shrink, all the while other game systems have been growing in terms of units sold and popularity of the systems.

 pretre wrote:

Lets see what audacious excuse GW and the fans can pull our from their arse this time.

As has been said, multiple times, in this thread: This makes no difference for bits sellers, as they don't buy from GW directly, makes little difference to anyone in the US (since the online thing was in effect since 2003) and only really changes things for folks in Canada (who now follow the same rules as the US). (Even the export business really doesn't change because that only restricts export for resale and not export to consumers.) It is a silly move on GW's part but that is more because it is essentially toothless and no big change to business as usual. Even the MWG guy says that them closing really has more to do with their business than GW.

Except that it does stop export to consumers:

C. POLICY REGARDING DOMESTIC SALES ONLY
North American Retailers are only authorized to resell GAMES WORKSHOP products domestically in their respective countries of origin. Accordingly, United States Retailers are prohibited from exporting GAMES WORKSHOP products for purposes resale to Consumers located outside of the United States. Similarly, Canadian Retailers are prohibited from exporting GAMES WORKSHOP products for purposes resale to Consumers located outside of Canada. Foreign sales of GAMES WORKSHOP products by Retailers can be disruptive to GAMES WORKSHOP’S vertical distribution networks in other countries.

Pretty clear. So, the poster who lived in Brazil can now only order through GW. A gamer who lives in South Africa can only order from GW. Australians are stuck paying the ludicrous prices that exist through GW Australia.

It also matters to bits sellers, as retailers can no longer sell to them based on the terms of the new contract and distributors can not sell to anyone who parts out products. While there will no doubt be some who continue to buy under the table - it is a definite change, and at the very least it will impact several of the larger dealers who actually have wholesale accounts with GW or a distributor.

What MWG actually says it isn't only because of GW, but it has a lot to do with GW. In fact what he actually says is that "It is not completely Games Workshop's fault. We've analyzed our numbers and over the past few years of doing this business and unfortunately the margins have just been too small and the investment has been too high, whereas other parts of our business like the MiniWar Gaming Vault have grown significantly and they require some of our attention as well and some of our investment. But the store has been eating up a lot of that investment. But we weren't going to shut down the store until Games Workshop updated their trade agreement which would probably effectively cut off 70-80% of our Games Workshop sales, which would make the store not just barely profitable but actually become in the negative".

Now, I think he was trying to be gracious in saying it wasn't just GW's new terms that caused them to decide to close the doors - but the reasoning which was given after he said "not completely" GW's fault pretty well demonstrates that...it was completely GW's new trade terms.

The teeth as always is the threat to cut off your supply of GW products. If a person has to think if they should risk selling to a customer who has been regular and loyal for a long time versus potentially having a major supplier stop supplying them with products - they would not be at fault for deciding to cease doing business with them. It doesn't matter if they are selling to them at full retail price or not, the terms forbid a store from selling to another business. If they do, and GW were to catch wind of it - GW can cancel their contract. That could push a lot of stores that depend on GW products over the edge and force them to shut down entirely. If they depend on their game business as their livelihood - there are some definite teeth to the contract.

 Sean_OBrien wrote:
Apple actually began its boom when they stopped their protective agreements and allowed big box stores to carry their products and online retailers to begin discounting. From Walmart to Amazon - the reason for their growth has nothing to do with protective trade agreements.

And yet they were successful (and are still successful) with protective agreements. I wasn't just talking about big box store agreements. Although I'm sure you'll find there are quite a few caveats to all of those.

More to the point though, things like GW products depend on a growing user base not a shrinking one.

I agree

Tactics like what GW have been implementing have been causing their user base to shrink,

Unsupported statement. Where is the data that GW user bases have been shrinking?

Except that it does stop export to consumers:

C. POLICY REGARDING DOMESTIC SALES ONLY
North American Retailers are only authorized to resell GAMES WORKSHOP products domestically in their respective countries of origin. Accordingly, United States Retailers are prohibited from exporting GAMES WORKSHOP products for purposes resale to Consumers located outside of the United States. Similarly, Canadian Retailers are prohibited from exporting GAMES WORKSHOP products for purposes resale to Consumers located outside of Canada. Foreign sales of GAMES WORKSHOP products by Retailers can be disruptive to GAMES WORKSHOP’S vertical distribution networks in other countries.

I underlined the part I'm talking about. As long as the person in the other country is not reselling, you're golden.

The teeth as always is the threat to cut off your supply of GW products.

Except the people, as we said, who run bits stores, don't buy directly from GW for the most part. Those that do will fall out, those that don't don't care. See EmpChild's posts on the subject.

 pretre wrote:
I underlined the part I'm talking about. As long as the person in the other country is not reselling, you're golden.

The sentence immediately before that one says that sellers can only sell domestically.

The part about the customer reselling is redundant, since if you can't sell to anyone outside the US or Canada anyway, it makes no difference whether or not they are intending to sell the product onwards.