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@insaniak, I'm trying to use 'fair price' in the economic sense, meaning that you won't buy the product if it's not at a fair price. Grumble and complain that it's too expensive, but if you buy it you obviously wanted it more than your money.
But you're right, it wasn't a well thought-out sentence.

Trasvi wrote:
Grumble and complain that it's too expensive, but if you buy it you obviously wanted it more than your money.

Sure. But if next time you go to buy that item you discover that some stores are selling it for a much lower price, is it surprising for you to be less happy with that previously 'fair' price?

It depends on how much you want it.
Think about the absolute maximum price you'd spend on an item. Would you buy a kit of plastic space marines for $50? $100? $200? $1000?
...


I'm just trying to point out *why* GW is acting the way they are, why they can't just drop prices in Australia overnight. I'm not taking their side... but it would be very bad for them in their current state to drastically reduce retail or wholesale prices.

Trasvi wrote:
It depends on how much you want it.
Think about the absolute maximum price you'd spend on an item. Would you buy a kit of plastic space marines for $50? $100? $200? $1000?
...

The maximum I would spend is irrelevant. When I go to buy it, I'm going to buy it from whoever will give me the best deal. That's not solely to do with price... I've paid more at times for the sake of getting my purchase quicker. But that's a choice that I have made as a consumer. Having a company tell me that I can only buy from shops that charge over a set amount because they want to charge certain customers more than others removes that choice.

I'm not really sure what we're debating anymore tbh. What you say is mostly correct - you're perfectly justified in trying to seek out the best deal you can. IMO it's probably in GW's best interest to let you do this, so that people who currently *are* at their maximum can continue in the hobby for a while longer: thats why other companies have sales and discount coupons in the first place.

GW can't discount the stock in their stores significantly - they won't see many extra sales, and they're not/barely breaking even as is.
On the other hand, an independent that is breaking even could significantly undercut GW if GW offered them US wholesale prices AND GW would lose revenue from them, a lose/lose for GW.

When you say GW is not/barely breaking even, are you suggesting they're losing money on sales?

Sure, GW stores lose money. They lose money here in the states too. GW should just chock it all up to a marketing expense and not worry about it, or close their stores. It looks like in many cases that they are choosing the latter.

 Lorizael wrote:
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..?

Slim to none. There won't be the typical "here's a list of new prices for everything" like they've done before. Instead, the price changes are happening through the release schedule. Meaning, in January DA went up. This month Tau goes up. Next month... you get the picture.

It's easier, and causes much less blowback, to slip a price increase for a certain line as part of an army release than doing a full SKU update.

Trasvi wrote:
So decreasing costs to independents lets them undercut GW stores quite significantly when GW is still 'paying off' their fixed costs.

This doesn't make sense though, it doesn't let them undercut GW stores any more than they do in any other market. The wholesale price should be representative of the cost of getting the models to the store, with shipping and distribution channels the way they are, the increase for Oz relative to the rest of the world isn't that much (in my numbers I just randomly picked $5 on $20, or 25% more). Then the difference between wholesale price and the RRP should be representative of the actual costs involved in running a store, and should be similar for both a FLGS and a GW store since they are both running similar stores in the same country.

That fact doesn't magically change because it's Australia instead of the US or the UK, the difference between wholesale and RRP should be somewhat higher to cover higher running costs, and the wholesale itself should be *slightly* higher to cover higher distribution costs. I accept that, as I said in my post, I don't expect neither independent stores nor GW themselves to compete dollar for dollar with international stores and frankly they don't have to compete dollar for dollar... they just have to not be massively unbalanced like they are now.

I have no illusion about the fact that if I buy locally from a GW in Oz, the $50 more than I'm paying goes almost entirely in to the coffers of GW not the FLGS who is actually having to pay much higher running costs to sustain themselves.

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.

If they aren't turning a profit in Australia it's their own fault for trying to over expand or poor management. Australia is the smallest of their big markets, I accept that, but it's still one of their big markets, accounting for 9% of their revenue despite the fact it hasn't seen a lot of growth in the past few years (comparatively, North America is 29% of their total revenue).

If they have to charge FLGS's higher wholesale price, that again is a flaw in their own business model and doesn't make me feel any happier about it.

Essentially: GW can't treat independents better because the GW stores themselves aren't making a profit.

At a quick glance I couldn't see profit in Australia explicitly listed. But even if they aren't, why should that make me change my mind? Not making profits isn't just a symptom of "oh damn, we aren't charging these people enough money!", it's a symptom of poor management as much as anything else.

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.

You do keep bringing up this point and I know where you're coming from but I respectfully disagree. They might have THOUGHT $X was a fair price, many years ago, but that doesn't mean the new price of $Y which = $X + price increases - competition from other companies +/- wider market factors +/- changes in exchange rate and whatever else has come up means that the perception of fairness of what is now $Y is the same perception of fairness of what was previously $X.

So many factors affect fair price perception beyond what you are talking about. Even just the fact that 15 years ago I could walk into an FLGS and see only GW stuff and a couple of board games in the "table top wargaming" section where as now I walk in and see GW stuff on a tiny shelf in the back with half a dozen other games surrounding them is a big hit on perceived value of a product.

I don't think anyone thinks GW should slash prices in half and expect to get 5 times the sales to maintain profit. But they're digging their own grave and the graves of their independent stockists and the graves of consumer sentiment by continuing down the road they have been. They don't even have to match international prices as I've been saying multiple times, and hell, maybe in a year or two they will have raised prices across the globe and across their entire range to match Australia, and lets see how well that works out for them, IMO GW customers aren't nearly as price insensitive as GW would like to believe.

I stand by the principle of "you catch more flies with honey" approach, and this WAS an approach GW used to have back in their prime anyway. You say GW can't slash prices and I don't think they should have to either, but back in the day when they had the largest growth, they DID have sales in Oz where you could typically save 33% and the stores were packed and the registers running constantly. Did they make as much revenue as they are making now? I have no idea, but IMO it's not a terrible business practice to make your customers happy instead of making your customers pissed off.


Automatically Appended Next Post:
It is interesting to note, looking at the awesomely stupid "one click bundles" that are a good indicator of the cost of an entire army seeing as how they don't save you any money. Comparing the Tyranid one click bundle to the Tau one click bundle, the Tyranid one is 58% more expensive in Oz, the Tau one is only 32% more expensive in Oz.

AllSeeingSkink wrote:

Trasvi wrote:
So decreasing costs to independents lets them undercut GW stores quite significantly when GW is still 'paying off' their fixed costs.

This doesn't make sense though, it doesn't let them undercut GW stores any more than they do in any other market. The wholesale price should be representative of the cost of getting the models to the store, with shipping and distribution channels the way they are, the increase for Oz relative to the rest of the world isn't that much (in my numbers I just randomly picked $5 on $20, or 25% more). Then the difference between wholesale price and the RRP should be representative of the actual costs involved in running a store, and should be similar for both a FLGS and a GW store since they are both running similar stores in the same country.

Wayland Games (before the embargo) could send me individual orders, direct to my house, with free shipping, for less than the GW wholesale cost to retailers here, and still make a profit.
Distribution costs aren't that high.
But, you are right: distribution costs for GW and FLGS should be effectively the same, if both acquired their boxes from the same source.


Lets say, at some exchange rate (year 2000 1 USD = 2 AUD) where all Australian prices are set at complete exchange parity to overseas; a product costs $100 AUD but $50 USD. It costs 12.5 USD/25AUD to make, and wholesales for 27.5 USD / 55 AUD. We'll imagine that GW kits are made in the US because it makes the numbers easier.
GW stores in Australia buy the product for $25 AUD. The FLGS buys for $55 AUD. They both have a steady customer base and are just breaking even.

Now the exchange rate changes, and 1 USD = 1 AUD (2009).
The GW store can now buy product for only 12.5 AUD. Their margins increase, but more importantly they become amazingly profitable; the amount they need to sell to become profitable decreases by ~15%, and every kit they sell above break even earns *double* the profit (in USD).
If GW doesn't change the wholesale amount to the FLGS, the FLGS just operates as usual (assuming that customers can't source their product from overseas). GW however now makes 55 AUD = 55 USD, - 12.5 USD = 42.5 USD profit on each sale to them, instead of the previous 55AUD = 27.5 USD, - 12.5 USD = 15 USD profit. GW makes 180% more from each wholesale sale.
If GW does change the wholesale amount, and the FLGS can purchase wholesale from the US, then their wholesale price drops to $27.5 AUD. Now, they could just keep the extra margin and make more profit: OR, they could decrease their prices by $27.5 AUD to make the same profit per transaction and stay at break-even.
Because GW was spending less on product, they save less on product when the exchange rate turns. They can only drop their prices by $12.5 AUD and still stay at the same level of profit in AUD. the FLGS now undercuts them by 20%!


This only works while GW is making low levels of sales. Because their concern about profit is back home in the US, they actually need to sell only half as much product as before because it is twice as profitable. Once GW gets into higher number of units sold, they could significantly decrease their sale price and still maintain the same level of profit on the company financials. They just don't appear to be at that level yet. The last time we heard about GWs distribution split, it was about half GW and half independent (some financials about 5 years ago, can't remember exactly). The independent side is practically all profit, so if GW AUS as a whole is hovering around break-even in Australia, that pretty much means their retail stores are making a loss, right?


Now, I'm not an economist or an accountant or even a business owner. Just a wargamer with a spreadsheet. So I may have done something completely wrong. And this is using a pretty massive example of doubling the exchange rate.
But it seems to me that a FLGS could significantly undercut GW stores if they were willing to not make extra profit on the discounted wholesale rates.

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.

You do keep bringing up this point and I know where you're coming from but I respectfully disagree. They might have THOUGHT $X was a fair price, many years ago, but that doesn't mean the new price of $Y which = $X + price increases - competition from other companies +/- wider market factors +/- changes in exchange rate and whatever else has come up means that the perception of fairness of what is now $Y is the same perception of fairness of what was previously $X.

So many factors affect fair price perception beyond what you are talking about. Even just the fact that 15 years ago I could walk into an FLGS and see only GW stuff and a couple of board games in the "table top wargaming" section where as now I walk in and see GW stuff on a tiny shelf in the back with half a dozen other games surrounding them is a big hit on perceived value of a product.

Imagine GW actually succeeds in making it completely impossible to acquire their products from overseas. The government signs it into law that we can't purchase from anywhere other than Australian retailers. Then we won't have the ability to take advantage of the cheaper prices and our perception of fairness/value for money returns to its historical position; and in that situation, whining that US gets it for cheaper does you just as much good as whining that Broken Hill has cheaper rent than Bondi. This is what GW is trying to do (well, not getting it made into law (except they would accept that if offered ))
In this situation, the exchange rate factor just completely disappears. Obviously perception of price fairness will adjust due to greater competition from other companies, but this topic is really about the exchange rate factor.

Trasvi wrote:

AllSeeingSkink wrote:

Trasvi wrote:
So decreasing costs to independents lets them undercut GW stores quite significantly when GW is still 'paying off' their fixed costs.

This doesn't make sense though, it doesn't let them undercut GW stores any more than they do in any other market. The wholesale price should be representative of the cost of getting the models to the store, with shipping and distribution channels the way they are, the increase for Oz relative to the rest of the world isn't that much (in my numbers I just randomly picked $5 on $20, or 25% more). Then the difference between wholesale price and the RRP should be representative of the actual costs involved in running a store, and should be similar for both a FLGS and a GW store since they are both running similar stores in the same country.

Wayland Games (before the embargo) could send me individual orders, direct to my house, with free shipping, for less than the GW wholesale cost to retailers here, and still make a profit.
Distribution costs aren't that high.
But, you are right: distribution costs for GW and FLGS should be effectively the same, if both acquired their boxes from the same source.


Lets say, at some exchange rate (year 2000 1 USD = 2 AUD) where all Australian prices are set at complete exchange parity to overseas; a product costs $100 AUD but $50 USD. It costs 12.5 USD/25AUD to make, and wholesales for 27.5 USD / 55 AUD. We'll imagine that GW kits are made in the US because it makes the numbers easier.
GW stores in Australia buy the product for $25 AUD. The FLGS buys for $55 AUD. They both have a steady customer base and are just breaking even.

Now the exchange rate changes, and 1 USD = 1 AUD (2009).
The GW store can now buy product for only 12.5 AUD. Their margins increase, but more importantly they become amazingly profitable; the amount they need to sell to become profitable decreases by ~15%, and every kit they sell above break even earns *double* the profit (in USD).
If GW doesn't change the wholesale amount to the FLGS, the FLGS just operates as usual (assuming that customers can't source their product from overseas). GW however now makes 55 AUD = 55 USD, - 12.5 USD = 42.5 USD profit on each sale to them, instead of the previous 55AUD = 27.5 USD, - 12.5 USD = 15 USD profit. GW makes 180% more from each wholesale sale.
If GW does change the wholesale amount, and the FLGS can purchase wholesale from the US, then their wholesale price drops to $27.5 AUD. Now, they could just keep the extra margin and make more profit: OR, they could decrease their prices by $27.5 AUD to make the same profit per transaction and stay at break-even.
Because GW was spending less on product, they save less on product when the exchange rate turns. They can only drop their prices by $12.5 AUD and still stay at the same level of profit in AUD. the FLGS now undercuts them by 20%!

Ok, so using your example, I'm only going to work in AUD and convert at the end because I can't be bothered expressing everything twice, product is $100AUD, wholesale $55AUD, manufacture/distribution is $25AUD. Lets call running costs $30AUD for convenience.

Exchange rate is 0.5..
Final RRPt: $100
Wholesale: $55
Manufacture: $25

FLGS sells product, FLGS makes: $45 - 30 = $15
FLGS sells product, GW makes: $30

GW sells product, GW makes: $75 - 30 = $45

So in USD, GW makes $15USD off an FLGS sale and $22.5USD off a GW sale.

Now, exchange rate changes to parity, all other things being equal (GW don't lower RRP or wholesale), manufacture cost drops to 12.5AUD

Final RRP: $100
Wholesale: $55
Manufacture: $12.5

FLGS sells product, FLGS makes: $45 - 30 = $15
FLGS sells product, GW makes: $42.5

GW sells product, GW makes: $87.5 - 15 = 72.5

So in USD, GW makes $45.2USD off an FLGS sale and $72.5USD off a GW sale.

Their profits (in USD) increase by 300% and 320% respectively.

FLGS profits remain the same, but now their wholesale is less than US retail and they are no longer internationally competitive, people want to buy from overseas.

Now, if the market was globally dynamic (and I don't think anyone expects it to be, but we would like to see SOME effort on GW's part). Manufacturing cost (in USD) remains the same and local running costs (in AUD) remain the same.

Final RRP: $72.5
Wholesale: $27.5
Manufacture: $12.5

FLGS sells product, FLGS makes: $45 - 30 = $15
FLGS sells product, GW makes: $15

GW sells product, GW makes: $60 - 30 = 30

So in USD, GW makes $15USD off an FLGS sale and $30USD off a GW sale.

So the FLGS is now internationally competitive, customers are happier, GW is making the same money off an FLGS sale (which would be expected for a local company selling to a 3rd party exporter) and if GW make a sale themselves, they actually come out 33% better off.

The FLGS still only has $15 they can play with to undercut GW stores, as they did initially, and Oz prices are still higher than US prices but it is less appealing to buy from the US than when the price difference was 100%.

GW AUS as a whole is hovering around break-even in Australia, that pretty much means their retail stores are making a loss, right?

GW Oz has the lowest profits/revenue of any market. Now, I'm sure SOME of this is to do with higher running costs of stores in Oz, but I think it equally has to do with GW expanding stores beyond their means, expecting that they wouldn't be losing customers and market share as they raised the prices.

Now, I'm not an economist or an accountant or even a business owner. Just a wargamer with a spreadsheet. So I may have done something completely wrong.

Nor am I, and I've been doing maths all day so maybe I buggered up something in those numbers, I just pounded them out quickly before I go to bed.

But it seems to me that a FLGS could significantly undercut GW stores if they were willing to not make extra profit on the discounted wholesale rates.

Only if GW want to maintain RRP relative to old exchange rates (I'm not going to say maintain RRP in an absolute sense, as they have been raising prices against a favourable exchange rate for exporters shipping to Oz).

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.

You do keep bringing up this point and I know where you're coming from but I respectfully disagree. They might have THOUGHT $X was a fair price, many years ago, but that doesn't mean the new price of $Y which = $X + price increases - competition from other companies +/- wider market factors +/- changes in exchange rate and whatever else has come up means that the perception of fairness of what is now $Y is the same perception of fairness of what was previously $X.

So many factors affect fair price perception beyond what you are talking about. Even just the fact that 15 years ago I could walk into an FLGS and see only GW stuff and a couple of board games in the "table top wargaming" section where as now I walk in and see GW stuff on a tiny shelf in the back with half a dozen other games surrounding them is a big hit on perceived value of a product.

Imagine GW actually succeeds in making it completely impossible to acquire their products from overseas. The government signs it into law that we can't purchase from anywhere other than Australian retailers. Then we won't have the ability to take advantage of the cheaper prices and our perception of fairness/value for money returns to its historical position; and in that situation, whining that US gets it for cheaper does you just as much good as whining that Broken Hill has cheaper rent than Bondi. This is what GW is trying to do (well, not getting it made into law (except they would accept that if offered ))
In this situation, the exchange rate factor just completely disappears. Obviously perception of price fairness will adjust due to greater competition from other companies, but this topic is really about the exchange rate factor.

I have been following this topic on Warseer for a lot longer than this particular thread has been going on.

Bottom line to me is that GW really is screwing its customers over in OZ because they run their empire like a mom and pop conveinence store. They need to catch up with the modern world of international commerce.

AllSeeingSkink wrote:

Ok, so using your example, I'm only going to work in AUD and convert at the end because I can't be bothered expressing everything twice, product is $100AUD, wholesale $55AUD, manufacture/distribution is $25AUD. Lets call running costs $30AUD for convenience.

Exchange rate is 0.5..
Final RRPt: $100
Wholesale: $55
Manufacture: $25

FLGS sells product, FLGS makes: ($100 - 55) - 30 = $15
FLGS sells product, GW makes: $55-25 = $30

GW sells product, GW makes: ($100 - 25) - 30 = $45

So in USD, GW makes $15USD off an FLGS sale and $22.5USD off a GW sale.

Now, exchange rate changes to parity, all other things being equal (GW don't lower RRP or wholesale), manufacture cost drops to 12.5AUD

Final RRP: $100
Wholesale: $55
Manufacture: $12.5

FLGS sells product, FLGS makes: ($100-55) - 30 = $15
FLGS sells product, GW makes: $55 - 12.5 = $42.5

GW sells product, GW makes: ($100 - 12.5) - 30 = 57.5

So in USD, GW makes $42.5USD off an FLGS sale and $57.5USD off a GW sale.

Their profits (in USD) increase by 280% and 255% respectively.

FLGS profits remain the same, but now their wholesale is less than US retail and they are no longer internationally competitive, people want to buy from overseas.

Now, if the market was globally dynamic (and I don't think anyone expects it to be, but we would like to see SOME effort on GW's part). Manufacturing cost (in USD) remains the same and local running costs (in AUD) remain the same.

Final RRP: $72.5
Wholesale: $27.5
Manufacture: $12.5

FLGS sells product, FLGS makes: ($72.5 - 27.5) - 30 = $15
FLGS sells product, GW makes: $15

GW sells product, GW makes: ($72.5-12.5) - 30 = 30

So in USD, GW makes $15USD off an FLGS sale and $30USD off a GW sale.

So the FLGS is now internationally competitive, customers are happier, GW is making the same money off an FLGS sale (which would be expected for a local company selling to a 3rd party exporter) and if GW make a sale themselves, they actually come out 33% better off.

The FLGS still only has $15 they can play with to undercut GW stores, as they did initially, and Oz prices are still higher than US prices but it is less appealing to buy from the US than when the price difference was 100%.

Fixed some math: You accidentally halved GW cost of operations at one point.

I think we're getting drastically different results because of the way we're treating operating cost.

IMO a flat $30 per item sold really doesn't make much sense. By far your largest costs as a GW/FLGS would be fixed, so should be averaged over your number of sales; alternatively (because we don't know the number of sales) you can split it into 'revenue needed to break even' and 'revenue with no fixed costs'. The dynamic of how you operate as a store/company significantly changes once you get into profitability; and splitting the sales numbers shows that you need a minimum amount of sales to make a profit. Your method on the other hand doesn't take into account not making a profit.
I'm assuming the FLGS is making a profit - because if they weren't they wont be in business for long. Conversely, the evidence suggests that most Aus GW stores are not making a profit, but are being propped up by other regions.
Think how would your numbers above change if GW's amortized costs were $50 rather than $30?


As a reference for costs:
Each individual GW store in Australia would probably have above $150,000 in fixed costs in Australia. Rent+Outgoings at a popular Westfield mall average around $1800/sqm annually, and a GW store would be at least 30 sqm; plus two employees at $40,000 and any other stuff I don't know about....
With GW having 36 stores in Australia and $6.66M in running expenses, this seems like a good ballpark figure. With a $25 cost on a $100 item this puts them at $20000 of revenue to break even (probably a lot more with taxes and stuff)... again with $11M in revenue between 36 GW stores all their 50+ independents this seems ballpark reasonable. (Figures from GW 2011-12 financials; GW Aus made 700k loss for this period)


Also looking at your above numbers: If GW changes their retail cost under your numbers, and there is 1 GW and one FLGS selling in equal volumes GW stands to make $45 total. Without changing the retail price, they make $100. If they can successfully prevent customers from buying overseas, will half of them quit? Reality seems to suggest no.

My understanding is that GW UK sells to GW A-P at a higher price than it does to GW USA.

They do this for two reasons:

1) A-P has shown acceptance of a higher sticker price so sales are not markedly affected

2) this creates profit in UK which is more tax efficient than recognising it in Australia. Effectively they manage GW A-P to long term zero profitability avoiding higher corporate tax on profits and leaving costly tax credits due to losses

Well that's just mean. How are us armchair economists supposed to predict doom and gloom if they're using creative accounting practices?

I would have thought the very first assumption would have been creative accounting practices. They are a business after all.

Ugh. I guess I could work it out via their average margin, revenues in Aus and internal revenues... seems difficult right now.

Trasvi wrote:

Each individual GW store in Australia would probably have above $150,000 in fixed costs in Australia. Rent+Outgoings at a popular Westfield mall average around $1800/sqm annually, and a GW store would be at least 30 sqm; plus two employees at $40,000 and any other stuff I don't know about....
With GW having 36 stores in Australia and $6.66M in running expenses, this seems like a good ballpark figure. With a $25 cost on a $100 item this puts them at $20000 of revenue to break even (probably a lot more with taxes and stuff)... again with $11M in revenue between 36 GW stores all their 50+ independents this seems ballpark reasonable. (Figures from GW 2011-12 financials; GW Aus made 700k loss for this period)

Just pointing out, GWs are all moving to 1 man stores around the corner from Westfields, not inside.

Yes, sorry, using a unit-dependent running cost I was assuming the shop doesn't change the number of units they shift.

The ACTUAL math is far more convoluted and I hate economics math because it makes way too many assumptions that IMO you can't make. If you COULD make the assumptions economists like to make, we wouldn't be in such a poo hole of an economy and businesses wouldn't die so easily.

As for half quitting, the numbers aren't that simple. My observation in Oz is that the hobby as a whole is growing, so even if GW's numbers are steady, it means they are losing some customers as prices rise to maintain the same revenue AND they are massively losing market share.

Again, this is just anecdotal, because I know of no numbers that describe the hobby as a whole in Oz, but when I started the hobby, it was easy to get a game of either Fantasy or 40k. 40k was more popular, but you could easily get a game of either and there weren't too many people playing other games.

These days, you can still get a game of 40k, you're likely to be playing against snot nosed kids though, it's harder to find people playing Fantasy and it's easier to find people playing any other random game (I won't say GW is less than any one of those games, but as a whole, it's shrunk relative to the "other" games).

So how many people are in GW games now relative to the total hobby, I could easily believe THAT number is half or even less than half of what it was when I started playing. But it's anecdotal because I don't actually have any numbers.

People being less likely to take up GW games isn't from price alone, which is why I think it's hard to make your discussion of "perceived value" due to exchange rate alone. GW have pissed people off in many ways and the market has grown which reduces the value of their products and as a proportion of the hobby market as a whole, GW are far less appealing now than they were several years ago. Trying to shut down overseas sales and charging retailers wholesale prices above international retail prices are just another kick in the balls in a line of many.

I maintain that if GW adjusted wholesale price to make retailers happier and adjusted RRP to reflect running costs in Australia vs the rest of the world, GW stores would be able to compete with FLGS stores as they do now and any losses relative to the rest of the world would be due to GW's poor business practices more than an inability to compete.

They may, of course, be doing that by raising international prices to match Oz prices rather than vice versa, the Tau bundle as a whole is only 20-30% cheaper while the Tyranid bundle as a whole was more like 50-60% cheaper (can't remember exact numbers and too busy at the moment to check).

 jonolikespie wrote:

Trasvi wrote:

Each individual GW store in Australia would probably have above $150,000 in fixed costs in Australia. Rent+Outgoings at a popular Westfield mall average around $1800/sqm annually, and a GW store would be at least 30 sqm; plus two employees at $40,000 and any other stuff I don't know about....
With GW having 36 stores in Australia and $6.66M in running expenses, this seems like a good ballpark figure. With a $25 cost on a $100 item this puts them at $20000 of revenue to break even (probably a lot more with taxes and stuff)... again with $11M in revenue between 36 GW stores all their 50+ independents this seems ballpark reasonable. (Figures from GW 2011-12 financials; GW Aus made 700k loss for this period)

Just pointing out, GWs are all moving to 1 man stores around the corner from Westfields, not inside.

Some stores are running with 1 employee only now I believe.

It does not bode well.

 jonolikespie wrote:

Trasvi wrote:

Each individual GW store in Australia would probably have above $150,000 in fixed costs in Australia. Rent+Outgoings at a popular Westfield mall average around $1800/sqm annually, and a GW store would be at least 30 sqm; plus two employees at $40,000 and any other stuff I don't know about....
With GW having 36 stores in Australia and $6.66M in running expenses, this seems like a good ballpark figure. With a $25 cost on a $100 item this puts them at $20000 of revenue to break even (probably a lot more with taxes and stuff)... again with $11M in revenue between 36 GW stores all their 50+ independents this seems ballpark reasonable. (Figures from GW 2011-12 financials; GW Aus made 700k loss for this period)

Just pointing out, GWs are all moving to 1 man stores around the corner from Westfields, not inside.

Which is why I also pulled data from their financials: 6.666M in operating expenses across 36 stores is about 185k in operating expenses average per store, so my very crude estimate of rent+wages is in the right area.
1-man stores are a pretty good example of 'penny smart dollar stupid'. Similarly with moving out of the shopping complexes. The entire reason for GW stores existing is to capitalise on foot traffic. Moving out of a major centre just turns them into a FLGS with worse variety.

EDIT: 6.66M GBP = 10M AUD. So their Australian costs are even higher than I estimated.

 Scipio Africanus wrote:

Riquende wrote:
I'll admit to being not too clued up on the whole Oz/GW prices thing, but I do wonder is it unique to GW? What sort of markup (if any) would an Aussie pay on an average product from Mantic, Warlord, Privateer Press etc?

As a rule, things are usually 170~% higher here than in the states.

There are a number of reasons for this:

1. Centerlink. Everyone has a lot of money to go around (well, not a lot, but for some it's enough that they don't seem to feel the need to work.), so they can usually afford the prices.
2. The dollar was low 10 years ago. Not really an excuse anymore, but many large companies stick to their guns that we must pay $100 for new games instead of the US standard $60. Even if they let us pay $60 for every CoD release, they'd still make more, purchase for purchase than they do right now.
3. We don't stop buying.

Globalisation: there is a fact many ignore. in a country like AU there is lacking infrastructure, and we have a skilled work shortage, mainly attributed by an influx of foreign workers and coupled with the fact the majority of our manufaturing is done in asia. as well as the fact that many jobs (like in the US and elsewhere) has moved offshore. it is a cost cutting trend in response to the GFC/ETS. it is their way of still making a profit, at the same time many people lose their jobs. add in the "no end in sight" of refugee's meaning once they are processed there is even less work (as priority goes to fresh out of HS or foreigners. if you are unable or unwilling to work in say cleaning toilets, then some asian chap will, and most likely at a cheaper hourly rate.

there are many who are labelled as slack dole bludgers. it is a notion held by those lucky enough to be able to hold onto secure employment, for the many who don't have such luck, they sit at home bored out of their minds. is it a crime to spend so-called excess on a hobby or liesure item when they forgo a more expensive item of food (thus neglecting good proper nutition). Remember folks people on the dole are considered "below global poverty". so buying miniatures here or there is much the same as to some a holiday oversea's. and since everyone disregards the fact that only skilled workers are required, yet those who do said course to gain said job, find there is no job once they complete whatever course needed. it's an endless circle of blame. one i am tired of. so you have a job? good for you. many do not and would like for that to change but unless their own circumstances or those of society change then how are they expected to do anything but sit around in a lazy manner (percievably by someone who doesn't share the others life style choices or experience)


Automatically Appended Next Post:
sorry for appearing to go OT. this REALLY needed to be said though