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GW seems to be going direct only on many models and kits. This is more true in fantasy than 40k. My question is "how does GW get around a Vertical Monopoly situation?"
For a moment forget about FLGS and supporting a playing space. From a pure manufacturing view I don't understand how this works. The farther they take it the worse it will be for them.
In the case of direct only items, GW owns the manufacturing and the sales. This is clearly a vertical monopoly on these items. Manufacturing will produce X amount of product. X will be determined by their profit maximizing volume. This volume then becomes the sales/stores wings marginal cost. Sales will then order Y amount of product to meet their profit maximizing point. in essence sales will only request a fraction of what manufacturing is looking to produce. This is a losing battle is it not?
basically X does not = Y.
The only valid argument for this would be to control the customer experience at both ends. But every one knows GW shops are not the ideal place to play games. They often have very limited space and want to push through customers ASAP.
This message was edited 2 times. Last update was at 2014/09/29 15:33:36
Why would they need to 'get around it'? A vertical monopoly is not considered anti-competitive as long as others can operate the same type of business. Is GW preventing other companies from making wargames or selling miniatures?
Lots of miniature companies on the market right now are so-called 'vertical monopolies' of their own products. Not every mini manufacturer sells all or any of their products via retailers.
You seem to think that companies shouldn't have a monopoly on their own manufactured items, when in fact they do because it is theirs.
I don't know what your premise is... that it is illegal? or how they are avoiding legal repercussions? Well the answer to that is 'it isn't a monopoly, and isn't illegal'.
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An attempt to maximize profit by getting you hooked on the products available at a discount and then having you pay full retail for your additional purchases.
If they did any market research they could really exploit this system by moving all the units which appear in the top tournament builds to direct only.
BlaxicanX wrote: A young business man named Tom Kirby, who was a pupil of mine until he turned greedy, helped the capitalists hunt down and destroy the wargamers. He betrayed and murdered Games Workshop.
nkelsch wrote: Why would they need to 'get around it'? A vertical monopoly is not considered anti-competitive as long as others can operate the same type of business. Is GW preventing other companies from making wargames or selling miniatures?
Lots of miniature companies on the market right now are so-called 'vertical monopolies' of their own products. Not every mini manufacturer sells all or any of their products via retailers.
You seem to think that companies shouldn't have a monopoly on their own manufactured items, when in fact they do because it is theirs.
I don't know what your premise is... that it is illegal? or how they are avoiding legal repercussions? Well the answer to that is 'it isn't a monopoly, and isn't illegal'.
The OP is questioning the sanity of vertical monopoly as restricting your distribution reduces your abilities to increase sales and recruit.
There is no sanity. It's GW. They don't do research, have no focus groups, don't ask the market what they want because it's "otiose in a niche market". They've stated under oath and penalty of perjury that they believe their customers favorite past times are buying GW products from GW.
Everything has to result in more sales, and they don't care if it screws over everybody else. They are stuck in the 1980s and think that the sun never sets on a GW store.
This message was edited 1 time. Last update was at 2014/09/29 16:40:56
They think that direct only products will force the customer to their stores or website. But convenience is a factor they overlook, it's not convenient or desirable to always go to a GW store or make Internet mail orders. While they must think it forces sales to them as the sole provider, I'm sure they must lose a good chunk due to the inconvenience and the lack of advertising. They probably over estimate the desirability of their product, it's not so great they can force people to solely buy through their website, it's more likely they'll go elsewhere. Which is what appears to have been happening to GW sales of late. I'm not saying that's the only reason for falling sales, but rising prices and product quality are all factors that add up. When your stuff is already overpriced with dubious quality, reducing availability is not a clever move.
I was just trying to get at the economics of the set up. I don't see how it can ever work. I was just wondering if anyone had any idea what GW may be thinking economically.
I think the real reason is to slowly bleed discounters and any FLGS that offers a discount (some offer a small one, even if not the 20% or more that you can find from online only places) because I bet that it gets under their skin that people buy their products at a discount.
Remember this is a company that destroyed unsold copies of a game (Dreadfleet) and chose to write off the production costs as a loss rather than offer any sort of discount to at least make SOME profit, because they felt that a discount of any sort would devalue it.
TBH I'm still surprised that some of their boxed armies offer a good discount.
It's all a desire to A) Control the supply and B) Cut out discounters so you have to pay full retail if you want it, and maybe C) Encourage you go to go your local GW except that most places outside the UK don't have a local GW store.
Basically I think it's because they want to maximize profit. How do they do that? They cut out the middle man. Now, instead of the retailer getting a cut, GW gets it all. Thus they seek to maximize profit it a way that on paper makes sense, but in reality is completely moronic.
They honestly believe that if something isn't available at a retailer, you'll buy it from them directly. I mean, what are you gonna do? Not buy their stuff? Not play their game? If you want "x" but "x" is only available directly from GW, then you'll buy it directly from GW!
I'm not saying it works, and I'm not saying it makes sense, but it's what GW thinks.
It's similar to why they don't do Specialist Games anymore. They believe that if you buy Necromunda, that means you're not buying 40K; furthermore, if you can't buy Necromunda, you'll just say "Oh well!" and buy 40K.
This is also the company whose reps, when asked "So what you're saying is, if someone collects Space Wolves, you think they'll buy Ork Nobz just because the Ork Nobz are 'cool models'?" replied "Absolutely!"
This message was edited 5 times. Last update was at 2014/09/29 17:09:37
RatBot wrote: Basically I think it's because they want to maximize profit. How do they do that? They cut out the middle man. Now, instead of the retailer getting a cut, GW gets it all. Thus they seek to maximize profit it a way that on paper makes sense, but in reality is completely moronic.
They honestly believe that if something isn't available at a retailer, you'll buy it from them directly. I mean, what are you gonna do? Not buy their stuff? Not play their game? If you want "x" but "x" is only available directly from GW, then you'll buy it directly from GW!
I'm not saying it works, and I'm not saying it makes sense, but it's what GW thinks.
It's similar to why they don't do Specialist Games anymore. They believe that if you buy Necromunda, that means you're not buying 40K; furthermore, if you can't buy Necromunda, you'll just say "Oh well!" and buy 40K.
This is also the company whose reps, when asked "So what you're saying is, if someone collects Space Wolves, you think they'll buy Ork Nobz just because the Ork Nobz are 'cool models'?" replied "Absolutely!"
Very interesting point of view. I wonder when/how they got so out of touch. I would call myself a casual player but from what I have read over the years it feels like a great product with poor management. But then again the game has been around and making money for a loooong time. Who am I to judge.
This message was edited 1 time. Last update was at 2014/09/29 17:16:54
RatBot wrote: Basically I think it's because they want to maximize profit. How do they do that? They cut out the middle man. Now, instead of the retailer getting a cut, GW gets it all. Thus they seek to maximize profit it a way that on paper makes sense, but in reality is completely moronic.
They honestly believe that if something isn't available at a retailer, you'll buy it from them directly. I mean, what are you gonna do? Not buy their stuff? Not play their game? If you want "x" but "x" is only available directly from GW, then you'll buy it directly from GW!
I'm not saying it works, and I'm not saying it makes sense, but it's what GW thinks.
It's similar to why they don't do Specialist Games anymore. They believe that if you buy Necromunda, that means you're not buying 40K; furthermore, if you can't buy Necromunda, you'll just say "Oh well!" and buy 40K.
This is also the company whose reps, when asked "So what you're saying is, if someone collects Space Wolves, you think they'll buy Ork Nobz just because the Ork Nobz are 'cool models'?" replied "Absolutely!"
Very interesting point of view. I wonder when/how they got so out of touch. I would call myself a casual player but from what I have read over the years it feels like a great product with poor management. But then again the game has been around and making money for a loooong time. Who am I to judge.
Supposedly it's been for a while, since the end of 2nd edition so almost 15 years ago. I recall reading somewhere with 3rd edition they decided they needed to push people into buying more and more and more, so ever since then it's been a downward spiral encouraging larger armies with bigger models, constant price hikes and now a way (i.e. Unbound) to finally remove faction barriers, which were the one thing remaining that stopped people from buying outside their own armies. They really do seem to think that everyone is going to buy the Dark Eldar codex and models because they look that cool, whether or not they play Dark Eldar, because Unbound lets them use what they bought.
Also while they are technically making money, they are also losing sales and customers. So they are treading down a road where, eventually, it goes off a cliff. They're just walking very slowly and not paying attention to the warning signs saying "DANGER! TURN BACK!". But eventually they're going to reach the edge and fall off the cliff to join the bones of TSR and other companies who also ignored the warnings at the bottom. It's just a matter of time.
What I find most ironic is the blurb in the 7th edition rulebook about how the end of days is coming, and it's the eleventh hour before all is lost. That's a pretty apt analogy for GW itself. They are in their twilight, and it's just a matter of time before the clock strikes midnight.
This message was edited 3 times. Last update was at 2014/09/29 17:30:02
It plays in to their current business strategy of making the most amount of money from the least amount of people. Sure, some people won't buy models if they're direct only, but the ones that do buy it you don't have that pesky middleman of a 3rd party store stealing all your profits.
It's worth noting that a great deal of their profits over the past few years have been due to massive cost-cutting efforts as well. So, while they are fairly profitable, much of that comes from fat-trimming which is not sustainable.
Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope. They stock mostly just the best sellers, new releases and staple needs for your armies.
How many "Lucius the Eternal's" will an average GW sell in a month compared with a box of Tactical Marines. Besides if you want a "Direct only" or "Web Exclusive" model just ask the staff and they will have it ordered and delivered postage free to the shop within the week.
(lol, look at me defending GW direct only policy and I haven't been in the local shop all year. )
Marleymoo wrote: Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope. They stock mostly just the best sellers, new releases and staple needs for your armies.
How many "Lucius the Eternal's" will an average GW sell in a month compared with a box of Tactical Marines. Besides if you want a "Direct only" or "Web Exclusive" model just ask the staff and they will have it ordered and delivered postage free to the shop within the week.
(lol, look at me defending GW direct only policy and I haven't been in the local shop all year. )
What if I told you not everyone has a local GW to do that? Esp. in North America, where the OP is from.
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Marleymoo wrote: Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope. They stock mostly just the best sellers, new releases and staple needs for your armies.
How many "Lucius the Eternal's" will an average GW sell in a month compared with a box of Tactical Marines. Besides if you want a "Direct only" or "Web Exclusive" model just ask the staff and they will have it ordered and delivered postage free to the shop within the week.
(lol, look at me defending GW direct only policy and I haven't been in the local shop all year. )
Yeah.
Brick-and-mortar stores probably aren't losing sleep over having more shelf space for Space Marines, Codices, and other perennial staples, and probably aren't losing a lot of profit on (most) of the "Web exclusive" models, which would probably just gather dust.
Marleymoo wrote: Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope. They stock mostly just the best sellers, new releases and staple needs for your armies.
How many "Lucius the Eternal's" will an average GW sell in a month compared with a box of Tactical Marines. Besides if you want a "Direct only" or "Web Exclusive" model just ask the staff and they will have it ordered and delivered postage free to the shop within the week.
(lol, look at me defending GW direct only policy and I haven't been in the local shop all year. )
Again, this is a Euro-centric view. The closest GW to me is a six hour drive. There are plenty of people in the States who would need to drive even further than that. But, why would we? GW stores are shoe boxes when compared to most independent retailers. One guy running a small store that doesn't have open gaming tables and only sells one line of product? That's pretty much the recipe for a failed business here.
My local store has 17,000 square feet of gaming/retail space and his GW blisters rack was a thing to behold prior to the Finecast debacle. Blisters were $10-15 impulse buys. Now, half the codes are Direct Only. How many impulse buys does that get you? GW fails because it is willfully ignorant of how things work outside of the UK retail bubble. But keep trying to mash that square peg in that round hole, G-Dub...
Marleymoo wrote: Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope. They stock mostly just the best sellers, new releases and staple needs for your armies.
How many "Lucius the Eternal's" will an average GW sell in a month compared with a box of Tactical Marines. Besides if you want a "Direct only" or "Web Exclusive" model just ask the staff and they will have it ordered and delivered postage free to the shop within the week.
(lol, look at me defending GW direct only policy and I haven't been in the local shop all year. )
Again, this is a Euro-centric view. The closest GW to me is a six hour drive. There are plenty of people in the States who would need to drive even further than that. But, why would we? GW stores are shoe boxes when compared to most independent retailers. One guy running a small store that doesn't have open gaming tables and only sells one line of product? That's pretty much the recipe for a failed business here.
My local store has 17,000 square feet of gaming/retail space and his GW blisters rack was a thing to behold prior to the Finecast debacle. Blisters were $10-15 impulse buys. Now, half the codes are Direct Only. How many impulse buys does that get you? GW fails because it is willfully ignorant of how things work outside of the UK retail bubble. But keep trying to mash that square peg in that round hole, G-Dub...
Yet many of the posts above are from a US perspective making absolute claims which when looked at can only be from a local/regional perspective.
RatBot wrote: Basically I think it's because they want to maximize profit. How do they do that? They cut out the middle man. Now, instead of the retailer getting a cut, GW gets it all. Thus they seek to maximize profit it a way that on paper makes sense, but in reality is completely moronic.
They honestly believe that if something isn't available at a retailer, you'll buy it from them directly. I mean, what are you gonna do? Not buy their stuff? Not play their game? If you want "x" but "x" is only available directly from GW, then you'll buy it directly from GW!
I'm not saying it works, and I'm not saying it makes sense, but it's what GW thinks.
It's similar to why they don't do Specialist Games anymore. They believe that if you buy Necromunda, that means you're not buying 40K; furthermore, if you can't buy Necromunda, you'll just say "Oh well!" and buy 40K.
This is also the company whose reps, when asked "So what you're saying is, if someone collects Space Wolves, you think they'll buy Ork Nobz just because the Ork Nobz are 'cool models'?" replied "Absolutely!"
Very interesting point of view. I wonder when/how they got so out of touch. I would call myself a casual player but from what I have read over the years it feels like a great product with poor management. But then again the game has been around and making money for a loooong time. Who am I to judge.
It is worth bearing in mind that GW have been around and making money for a long time, but not purely from 40K and Fantasy.
They built up through various stages over several decades and arguably their worst performance has been the past eight years when they have been increasingly reliant on 40K and Fantasy.
Marleymoo wrote: Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope. They stock mostly just the best sellers, new releases and staple needs for your armies.
How many "Lucius the Eternal's" will an average GW sell in a month compared with a box of Tactical Marines. Besides if you want a "Direct only" or "Web Exclusive" model just ask the staff and they will have it ordered and delivered postage free to the shop within the week.
(lol, look at me defending GW direct only policy and I haven't been in the local shop all year. )
Again, this is a Euro-centric view. The closest GW to me is a six hour drive. There are plenty of people in the States who would need to drive even further than that. But, why would we? GW stores are shoe boxes when compared to most independent retailers. One guy running a small store that doesn't have open gaming tables and only sells one line of product? That's pretty much the recipe for a failed business here.
My local store has 17,000 square feet of gaming/retail space and his GW blisters rack was a thing to behold prior to the Finecast debacle. Blisters were $10-15 impulse buys. Now, half the codes are Direct Only. How many impulse buys does that get you? GW fails because it is willfully ignorant of how things work outside of the UK retail bubble. But keep trying to mash that square peg in that round hole, G-Dub...
Yet many of the posts above are from a US perspective making absolute claims which when looked at can only be from a local/regional perspective.
But that "US perspective" is also apropos to most of GW's markets outside of Great Britain. Large portions of Europe are 50+ miles away from the closest GW store, especially in areas like the Iberian Peninsula, Italy, and almost the entirety of Eastern and Central Europe. Australia has a few areas with several GW stores in close proximity, but then nothing anywhere else. Honestly, outside of Great Britain, pretty much nobody has a significant, nation- or region-wide coverage of GW stores. Even in countries like Germany and France (that probably have the best coverage outside of Great Britain), if you don't live in Berlin or Paris (or similar large city), there's probably not a store near you.
Marleymoo wrote: Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope. They stock mostly just the best sellers, new releases and staple needs for your armies.
How many "Lucius the Eternal's" will an average GW sell in a month compared with a box of Tactical Marines. Besides if you want a "Direct only" or "Web Exclusive" model just ask the staff and they will have it ordered and delivered postage free to the shop within the week.
(lol, look at me defending GW direct only policy and I haven't been in the local shop all year. )
Again, this is a Euro-centric view. The closest GW to me is a six hour drive.
UK-centric. Closest GW to me is a 7.5 hour drive. Well, technically, the closest GW to me would probably be in Aberdeen with a 40 minute flight.
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- Charlie Chaplain.
Devil's advocate, but is it possible that they don't stock the models that sell the least?
If I had a range of products that doesn't really sell that well, I don't see the logic in keeping them on store shelves. I would want to focus on keeping the stock low and could do that more efficiently if the distribution was centralized and predictable.
Marleymoo wrote: Don't look into the politics of it too much. You'll probably find a lot of products are "Direct Only" because the shops simply don't have the space to stock all of the products. Have a look around your local GW, any spare space on the walls, nope.
GW have been using the 'shelf space' excuse since the '90s.
It's not actually true. The GW stores I've been into over the years have all had plenty of room for more stock.
ComTrav wrote: Brick-and-mortar stores probably aren't losing sleep over having more shelf space for Space Marines, Codices, and other perennial staples, and probably aren't losing a lot of profit on (most) of the "Web exclusive" models, which would probably just gather dust.
The Space Marine range currently includes 75 web-exclusive items, including just about all of the Space Marine character models.
I think it's more to tie into their whole idea that everything is a limited collector's piece of wonder or whatever that lamebrain quote was. It gives the idea that they are boutique items that you can only get from an official shop not any old random comic shop run by some fat nerd, no you must go to Games Workshop itself to get what you need.
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