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AllSeeingSkink wrote:

 Ravenous D wrote:

AllSeeingSkink wrote:

 Ravenous D wrote:
It costs GW less to throw them away or ship them back, then put them on sale.

{citation needed}

That just sounds like made up BS to me. I don't believe it for a second. Basically every other retailer in the world will put things on sale before actually throwing them out. I think GW just has the deluded idea that if they keep the prices high they'll sell the same number of models as if they had put them on sale, thus they make more money by destroying old models and replacing them with new models than reducing the price of the old ones... ignoring the reality that almost every other retailer in the world follows which is that if something is on sale, the customer is quite likely to buy more stuff.

Then don't believe me, all the dreadfleet boxes and all the dusty unsold models are sitting in a land fill regardless of what you think.

I don't think I ever denied that they DO destroy product, I said that the idea that it costs the less to destroy them than put them on sale sounds like BS.

For quite a few years now GW has been loathed to put anything on sale. I could believe they do it because they are trying to promote an image of a premium product. I could believe they do it because they have a misplaced belief that people will buy the same number of models regardless of the price. I could believe they do it because they don't want customers waiting out for the next release simply so they can get the old stuff cheaper. It costing more to put them on sale rather than destroying them just sounds like a BS excuse they tell store managers as to why they're doing it.

Though if what SeanDrake said is true, that they get tax breaks for destroying them instead of selling them (which sounds crazy, but hey, governments are pretty fething crazy) then I could believe it.

It's a brand value thing. By selling unsold miniatures at a discount you're essentially training your customers to just wait-and-see with new releases, since worst-case scenario they can just buy them at a discount later on. This undercuts the value of your own brand, and in the long-run costs you more money than it would to just eat the loss and hope other product lines sell better.

Pretty standard GW move, just means a new release.

PirateRobotNinjaofDeath wrote:

AllSeeingSkink wrote:

 Ravenous D wrote:

AllSeeingSkink wrote:

 Ravenous D wrote:
It costs GW less to throw them away or ship them back, then put them on sale.

{citation needed}

That just sounds like made up BS to me. I don't believe it for a second. Basically every other retailer in the world will put things on sale before actually throwing them out. I think GW just has the deluded idea that if they keep the prices high they'll sell the same number of models as if they had put them on sale, thus they make more money by destroying old models and replacing them with new models than reducing the price of the old ones... ignoring the reality that almost every other retailer in the world follows which is that if something is on sale, the customer is quite likely to buy more stuff.

Then don't believe me, all the dreadfleet boxes and all the dusty unsold models are sitting in a land fill regardless of what you think.

I don't think I ever denied that they DO destroy product, I said that the idea that it costs the less to destroy them than put them on sale sounds like BS.

For quite a few years now GW has been loathed to put anything on sale. I could believe they do it because they are trying to promote an image of a premium product. I could believe they do it because they have a misplaced belief that people will buy the same number of models regardless of the price. I could believe they do it because they don't want customers waiting out for the next release simply so they can get the old stuff cheaper. It costing more to put them on sale rather than destroying them just sounds like a BS excuse they tell store managers as to why they're doing it.

Though if what SeanDrake said is true, that they get tax breaks for destroying them instead of selling them (which sounds crazy, but hey, governments are pretty fething crazy) then I could believe it.

It's a brand value thing. By selling unsold miniatures at a discount you're essentially training your customers to just wait-and-see with new releases, since worst-case scenario they can just buy them at a discount later on. This undercuts the value of your own brand, and in the long-run costs you more money than it would to just eat the loss and hope other product lines sell better.

I can believe that's what they think. I don't believe it's true, but I could believe that's what they think. In the mid to late 90's local GW stores had sales of buy 2 get 1 free a few times, they were hugely popular. It was also a period of growth for the company (prior to the LOTR bubble).

I think GW have a misplaced belief that they can make themselves a premium product and people will buy the same number of models at a higher price when I believe the reality is there's large swathes of people who would see discounted product as an opportunity to save money and actually end up buying more. I know that's what happened to me back in the days when GW still had sales

Very few people are fooled in to thinking GW is the Ferrari of the wargaming.

Boy am I glad we just did a massive Fantasy order.

AllSeeingSkink wrote:
Very few people are fooled in to thinking GW is the Ferrari of the wargaming.

I blame the Apple for that corporate metality.

 adamsouza wrote:

AllSeeingSkink wrote:
Very few people are fooled in to thinking GW is the Ferrari of the wargaming.

I blame the Apple for that corporate metality.

I believe the case study we used in business school was actually perfume manufacturers. They started doing periodic sales of their products at steep discounts to encourage loyalty to their brand. However what they found was that instead a large portion of their customers began only buying when their products were on sale, and stopped buying regular-price items altogether. What was meant as a method to lure customers away from other manufacturers instead only cannibalized their own customer base.

PirateRobotNinjaofDeath wrote:

 adamsouza wrote:

AllSeeingSkink wrote:
Very few people are fooled in to thinking GW is the Ferrari of the wargaming.

I blame the Apple for that corporate metality.

I believe the case study we used in business school was actually perfume manufacturers. They started doing periodic sales of their products at steep discounts to encourage loyalty to their brand. However what they found was that instead a large portion of their customers began only buying when their products were on sale, and stopped buying regular-price items altogether. What was meant as a method to lure customers away from other manufacturers instead only cannibalized their own customer base.

It obviously depends on the product. I don't think GW is such a product. How often are people going to buy a bottle of perfume from the same manufacturer anyway? I'd suggest less often than your average plastic crack addict would be buying models. I'd also suggest the cost of GW making a single box of models is small compared to the cost of development, distribution and keeping the store open, so selling 1 box at $100 would not be significantly better than selling 2 boxes at $60.

Where as perfume if you sell 2 bottles for $60 you've just given them a larger window where they probably aren't going to buy more perfume from you, I think it's well established when it comes to miniatures people tend to buy more than they can actually paint so when the new shiny release comes out they probably haven't significantly reduced the audience for it.

I think GW is just pricing things as high as they think they can get away with.

It was brought up last year that GW makes the vast majority of sales on any product during it's release, and clears more than enough profit to pay for all costs associated with that product during that window.

Look at the Blood Thirster for example, re-released with new sculpt for TWICE the price. The previous model was finecrap, so they were going to replace it anyways. But it's big and cool looking, and people payed $115 for Nagash, and 40K players payed $140 for Imperial Knights, so what they hell let's charge $116 for a Blood Thirster, they'll pay that much.

 adamsouza wrote:
I think GW is just pricing things as high as they think they can get away with.

It was brought up last year that GW makes the vast majority of sales on any product during it's release, and clears more than enough profit to pay for all costs associated with that product during that window.

Look at the Blood Thirster for example, re-released with new sculpt for TWICE the price. The previous model was finecrap, so they were going to replace it anyways. But it's big and cool looking, and people payed $115 for Nagash, and 40K players payed $140 for Imperial Knights, so what they hell let's charge $116 for a Blood Thirster, they'll pay that much.

The difficult thing is that it's all a sliding scale and it's all subjective. They are charging that much because people are willing to pay it, but how many people? There's a lot of things I would have bought this past year if they were priced slightly lower, or if they had a sale where they were reduced by 30% to bring it to a more reasonable price range.

There's a lot of models I would have bought for armies which I don't even collect just for the sake of assembling it and painting it. Instead I've bought almost nothing from GW this past year, I think I've spent less than $30 on GW models and that was at my FLGS so GW made even less off it.

But then there's people that just lap up the new models regardless of price. Where the balance might be is a tricky question to answer. I think GW have overshot the mark.

AllSeeingSkink wrote:
Where the balance might be is a tricky question to answer. I think GW have overshot the mark.

I'd like that to be true, and for GW to lower the price of their models, but it hasn't happened, yet.

Unfortunately, the magic number for customers who will buy it at the high price point, only needs to be about 33% of the previous base customer.

Here me out, assuming a standard markup of 300% and wholesale discount of 50% and a previously $50 model now selling for $100

$50 Model, wholesales for $25, costs GW about $6.25, so GW makes $17.25 in profit selling to a wholesaler and $42.75 Direct
$100 Model, wholsales for $50, costs GW about $12.50, so GW makes $37.50 selling it wholesale and $87.50 Direct

This explains both GW's price increase and direct sales push.

They only need a fraction of us who would have bought it before, to buy one now at the current price.

Anyone who buys the new model direct is as good as 5 wholesale sales at the old price.
Even buying at your FLGS is worth more than double to GW than it was at the old price.

Less individual sales, means less stock on hand required, less stock shipped and stored, all save GW money.

It all depends on the production costs of the models. Primarily the cost of casting and packing, I doubt distribution costs are as sensitive (as in, you could ship twice as much but it won't cost anywhere near twice as much).

The cost of paying the store keeper, the sculptors, and set up costs aren't going to change if you sell more product at a lower price, only the cost of manufacture and distribution.

I doubt it costs GW anywhere near $6.25 to actually manufacture the $50 kit, package it up and send it off.

There is also the warehousing costs, I couldn't really say whether those are significant for GW or whether they'd increase much if they tried to shift more product at a lower price.

But then I tend to think GW should move to a system of having sales rather than globally reducing the price.

When I was working with my FLGS about 4 years ago, the markup was only 30%, so basically what cast the buyer $50 cost the dealer $35 to stock, and they didn't give discounts like some game stores do, they just sold it for the same price you could buy it off of GW's website. So no, GW is making a decent amount, albeit not as much, off your FLGS owners.

My local store is also sending stock back to GW HQ, but theres some 40k stuff in there too, so i wouldn't look too far into it.

Have we had any news on what exactly is getting sent back?

AllSeeingSkink wrote:
Have we had any news on what exactly is getting sent back?

http://www.belloflostsouls.net/2015/03/warhammer-fantasy-recalled-from-stores.html

So we don't really know exactly what's going, sounds mostly like finecast and stuff that was already direct only + beastmen and tomb kings.

No one has a list?

Should I start panic buying Brettonian Men at arms now?

I haven't heard of a list as of yet. Mostly it's just finecast stuff I think, but when I went to my local GW store they weren't carrying finecast for either WHFB or 40k so I don't really know.