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I'm cheap as hell, plus I hate GW as a company so I buy most of my stuff off of Ebay or Element Games, who offer a reduced rate on pretty much all products. How do they do that? Surely, if they were buying it wholesale from GW then the trucks would stop as soon as the high-ups discovered their business was being stolen.

Third party retail accounts for around 40% of GW's income. If they stopped supplying, even they know that not all of that 40% would switch to direct purchasing.

They're doing their best to squeeze third party as much as possible, but they know they need them on some level.


Automatically Appended Next Post:
Although, if you "hate" GW, you really should just buy stuff from other companies, no money to GW > some money to GW.

 Azreal13 wrote:
Third party retail accounts for around 40% of GW's income. If they stopped supplying, even they know that not all of that 40% would switch to direct purchasing.

They're doing their best to squeeze third party as much as possible, but they know they need them on some level.


Automatically Appended Next Post:
Although, if you "hate" GW, you really should just buy stuff from other companies, no money to GW > some money to GW.

Oh WOW. Can I get a citation for that 40%? It's not that I don't believe you I'm just genuinely surprised it's that much. If that's true they really need to stop dicking around so much with all their third party retailers.

36% for the 2013-14 period (which is pretty much close enough to 40%). Which can be found here: http://investor.games-workshop.com/2014/07/29/annual-report-2013-14/ on page 7.

The latest half-yearly results put it about par with the actual gw store sales, but no percentages there and my brain is too fuzzy to do math at the moment.

edit: lag post duplication, removed duplicate.

Yeah, the price that you buy from GW as a retailer is a tiered system.
For maximum discount you must carry certain items and provide certain services.

I want to reiterate the first reply: if you hate GW, buy from other companies, or buy second hand on eBay. GW sees none of that. The eBay thing is a grey area, but he other person was buying it already no matter what. So GW got that money. But they wouldn't see any of yours. Still, cutting away from them completely is your best choice if you hate them completely.

I always love the theory that buying gw products from elsewhere hurts gw, they make it, they have all the rights to it, they gain no matter where you buy it.

Ebays different if course, but unless you never update your rulebooks some money has to go to them eventually.

I do have a question though; if you 'hate' gw why play their games when there are numerous other companies out there?

Buying from a third party does hurt GW, relative to buying from them directly, they realise less than half the RRP before VAT, which is obviously substantially less revenue for them.

If you wish to convey your displeasure with what they're doing, then no sale is better than any sale, of course, but half the money is better than all of the money if you're looking for a compromise.

 Azreal13 wrote:
Buying from a third party does hurt GW, relative to buying from them directly, they realise less than half the RRP before VAT, which is obviously substantially less revenue for them.

Not really, wider distribution is never a bad thing. It also means more immediate cashflow in bulk rather than waiting on individual consumer pick up. Cash is king after all.

Also it's the whole market concept again, but rather than making separate "budget" brand or "own" brand products like a supermarket for example, they enable discounted purchasing to increase market share.

If you wish to convey your displeasure with what they're doing, then no sale is better than any sale, of course, but half the money is better than all of the money if you're looking for a compromise.

Hate and compromise aren't two words I would necessarily associate but the Op is certain trying his best to have his cake and eat it.

No, it really does.

GW sold ~£20m in the first half of this year to third parties. That same amount of product, sold directly at full RRP, would have netted them somewhere in the region of another £20m.

I cannot see how you can argue £40m is not better than £20m.

Of course, this makes the assumption that all of the sales would migrate if they shut down third parties overnight, which likely wouldn't happen, but it doesn't detract from the fact that a direct sale is essentially twice as profitable as a wholesale sale.

As for cash flow, I don't really agree there either, consumers are paying for product at point of sale, sometimes even beforehand, and if they don't pay, they don't receive their product. Trade accounts may be on monthly, or even quarterly, terms, and may not pay on time or in full.

Bottom line, I get why GW would want to eliminate trade accounts, they're a lot more hassle to administer than selling to customers, but most businesses are capable of seeing the benefits (such as the wider distribution you mention) go a long way to offsetting the drawbacks.

GW repeatedly appear to demonstrate they're not that sort of company.

To use your example;

GW sold £20M to distributors. They bulk shipped a huge chunk of their turnover in a limited number of large loads. The point of sale generates the Tax date and in whatever terms the actual cash will be in account. Music to accountants ears.

So that's a chunk of turnover that you have not had distribute in small loads to individual stores or post direct, no storage (it can go straight from factory with a release date), less effect on overhead, takes up no store space, exploits areas of the market that will not buy direct from GW stores or online etc.

So distributers get product at lower % because it generates turnover and lowers cost per unit overall, plus cash in the bank.

But yeah no benefit for a company that wants to deal in scale.

Firstly, I think you're going to struggle to make all the advantages you list amount to an effective doubling of gross profit.

Additionally you seem to be basing those advantages on GW moving product out to a small number of distributors? AFAIK they deal directly with most of their third parties directly, in the UK at least, so the logistical costs of a third party account dealing directly are going to be similar to their own stores, the existence of which essentially negates any of the potential savings you mention, as they're going to be costs they need to meet anyway, and while maybe needing 25% less storage space if they were just catering to their own stores may mitigate some of the cost, it certainly wouldn't eliminate it.