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I am a brick and mortar store owner, and I was at a seminar at GAMA for GW when the new policy was read to those in attendance. The room was silent. The majority of those in the room were brick and mortar owners and they were shocked. Shocked that GW took the same steps that most of the gaming industry has taken to insure the health of brick and mortars. Deep discounts are not sustainable for any great length of time in brick and mortar hobby gaming industry. Most of us live on a 10% margin. What I mean is that at msrp your gross profit is 45 cents on a dollar. But that is not your real profit, after paying rent, payroll, electric, water, insurance, mall fees, cleaning supplies, advertising, and any other operating costs, a healthy/successful store makes about 10 cents on a dollar in actual profit. If you discount 10%, you make no profit. Anything beyond that is a loss. Most of the costs I outlined are not a as much a factor to an online company. What I mean by this is that often online stores have fewer employees, less rent, generally less overhead. Some of the larger ones can become distributors, and then they get an even better discount from the manufacturer. The game industry as a whole have decided that brick and mortal stores are vital to their success. That is why Privateer Press, Asmodee (including FFG, Days of Wonder, Plaid Hat, and many of their products like Settlers of Catan), Iello, and GW have created this maximum discount. Other companies are giving brick and mortars early access to products rather than limiting discounts. Now either all of these multimillion dollar companies are run by idiots, or they actually know something about what is healthy for this industry. I know everybody wants to buy cheaper, but when that is applied to the way you make money, it is not so appealing. Pay Firemen based on their success, give them money for every home and person they save, subtract money every time someone dies or a home burns. Is that fair? Not everything can be cheap. It is easy to devalue the way others make a living, but when it happens to you it is very different.

Without discounting your experience, though, it's clearly possible for brick and mortar stores to operate a competitive online presence... because some are doing it, and have been for years.

However they were spun, GW's sales restrictions weren't for the benefit of the B&M store. They just funneled online sales either directly to GW, or to those sellers who were still operating online regardless of the policy.

Smellingsalts wrote:
The room was silent.

Your argument is that this is a good thing, but it's weird that the room was silent. Shouldn't this have been something the room was happy to hear?

 insaniak wrote:
Without discounting your experience, though, it's clearly possible for brick and mortar stores to operate a competitive online presence... because some are doing it, and have been for years.

I think at this point of time, most people who will be buying online will probably stick with the existing online stores with a good reputation instead of risking a new online store unless they're familiar with the brick and mortar location (and then why buy online?).

Makes me wonder if bitz stores will come back. I need the biggest thunderwolf tail I can get. and maybe 2 of Yvraine's lynx cat thing....

 KingmanHighborn wrote:
Makes me wonder if bitz stores will come back. I need the biggest thunderwolf tail I can get. and maybe 2 of Yvraine's lynx cat thing....

Unlikely to happen in any substantial fashion, I would think. The trading rules were only a minor inconvenience for bits sellers (I never had a trading account, just bought from discount sellers or eBay)... what killed off bits sellers is that it's a huge amount of work that gets increasingly harder to juggle as the range keeps growing. Keeping it profitable while balancing prices of high- vs low- demand parts, trying to maintain enough stock of the parts everyone wants while not getting drowned under a pile of assorted crap, and keeping up with changing trends require some really clever handling and a certain amount of luck, and most of those who try it go into it thinking it's an easy way to make boatloads of money and very quickly run smack-bang into a great big wall of difficultness.

It is interesting that Warlord Games fulfills and ships their orders internationally from their U.K. office.

 H.B.M.C. wrote:
Your argument is that this is a good thing, but it's weird that the room was silent. Shouldn't this have been something the room was happy to hear?

According to the same poster, a 10% discount eliminates all profitability. So I would have thought that GW announcing a 15% discount ceiling iwould be bad news? But yeah then he went on to talk glowingly about GW doing this ...

 Ghaz wrote:
most people who will be buying online will probably stick with the existing online stores with a good reputation instead of risking a new online store

Disagree. There is a lot more room for competition among online retailers. The big ones seem to focus on brand recognition these days so that they are top of mind when a gamer has the urge to spend. But I am more than willing to make a test purchase from any reasonably professional looking store if the deal is sweeter. The other issue is, there is such a diversity of product - none of the more established online retailers carry everything.

But one thing is for sure: Even without considering discounts, online retailers are often able to carry more product lines than just about any LGS. For me, it's hardly worthwhile to step into a LGS because I am not interested in the top 5 ICv2 product lines other than some GW releases - and there is a GW retail location with a much more extensive inventory to compete with the LGS on that score. Getting back to the 15% - if GW allows online retailers to offer this plus the convenience of shopping cart style customer UI then competition against the LGS just got that much steeper. Between carrying a larger amount of products direct-only, opening retail stores, and warming up to online retail, it's a wonder that any LGS owners can really buy that GW is committed to preserving their 80s-style LGS business model.

 Phobos wrote:
It is interesting that Warlord Games fulfills and ships their orders internationally from their U.K. office.

At a guess, without counting, I'd say it's the standard thing for wargaming and plastic model companies to allow shipping internationally.

Manchu wrote:
But I am more than willing to make a test purchase from any reasonably professional looking store if the deal is sweeter.

With GW capping the discount at 15%, what can a store do other than offer free shipping that the others do as well?

Manchu wrote:
The other issue is, there is such a diversity of product - none of the more established online retailers carry everything.

If a store already had the diversity of product to support a webstore before and didn't have one, I don't see GW's new policy changing that for more than a few of them. I just don't think we'll see a flood of new online stores out of this.

Smellingsalts wrote:
I am a brick and mortar store owner, and I was at a seminar at GAMA for GW when the new policy was read to those in attendance. The room was silent. The majority of those in the room were brick and mortar owners and they were shocked. Shocked that GW took the same steps that most of the gaming industry has taken to insure the health of brick and mortars. Deep discounts are not sustainable for any great length of time in brick and mortar hobby gaming industry. Most of us live on a 10% margin. What I mean is that at msrp your gross profit is 45 cents on a dollar. But that is not your real profit, after paying rent, payroll, electric, water, insurance, mall fees, cleaning supplies, advertising, and any other operating costs, a healthy/successful store makes about 10 cents on a dollar in actual profit. If you discount 10%, you make no profit. Anything beyond that is a loss. Most of the costs I outlined are not a as much a factor to an online company. What I mean by this is that often online stores have fewer employees, less rent, generally less overhead. Some of the larger ones can become distributors, and then they get an even better discount from the manufacturer. The game industry as a whole have decided that brick and mortal stores are vital to their success. That is why Privateer Press, Asmodee (including FFG, Days of Wonder, Plaid Hat, and many of their products like Settlers of Catan), Iello, and GW have created this maximum discount. Other companies are giving brick and mortars early access to products rather than limiting discounts. Now either all of these multimillion dollar companies are run by idiots, or they actually know something about what is healthy for this industry. I know everybody wants to buy cheaper, but when that is applied to the way you make money, it is not so appealing. Pay Firemen based on their success, give them money for every home and person they save, subtract money every time someone dies or a home burns. Is that fair? Not everything can be cheap. It is easy to devalue the way others make a living, but when it happens to you it is very different.

Just so I understand this, does the new policy primarily hurt the brick and mortar LGS which now has to compete with online web only stores?

Cause either way GW sells the product right?

 KiloFiX wrote:
Just so I understand this, does the new policy primarily hurt the brick and mortar LGS which now has to compete with online web only stores?

It hurts in so much as B&M now have more competition because online stores can use carts again, but it helps them in those online stores can't offer more than 15% discount.

Most stores seem to be in the 10-15% discount range anyway.

Cause either way GW sells the product right?

Ideally from the GW perspective, they want to shift sales to their own webstores where they make the most profit. They only make (roughly) $60 on a $100 kit if it's sold through an independent, but make the full $100 (minus packing and shipping costs) for sales through their own webstore.

Limiting the discount to 15% should somewhat reduces the incentive for people to buy from independent online stores and thus maybe will increase GW's own webstore sales, maybe.

 Ghaz wrote:
I just don't think we'll see a flood of new online stores out of this.

Yes, I definitely agree with that. This is part of the reason I don't believe - and am sad to see anyone buying into - the line that discount caps are about protecting the LGS. There is a lot more than discounting retail prices that stores - whether physical or digital or both - can do to be competitive. Some companies force their retailers to do this kind of stuff just to reliably get the product (e.g., WotC).

AllSeeingSkink wrote:
Most stores seem to be in the 10-15% discount range anyway.

But see

Smellingsalts wrote:
If you discount 10%, you make no profit.

AllSeeingSkink wrote:
Limiting the discount to 15% should somewhat reduces the incentive for people to buy from independent online stores and thus maybe will increase GW's own webstore sales, maybe.

But how?

Keep in mind that the current situation in the US is, online retailers cannot sell GW product through customer-friendly UIs. GW forced online retailers to make online shopping inconvenient. The big news isn't the 15% discount cap - it's that US customers of GW will now be able to enjoy the conveniences of shopping with online discount retailers. The alleged "face of the enemy" (Frontline Gaming) was only offering 10%-20% off non-preorders. Limiting this to 15% is not going to kill Frontline - if anything, allowing Frontline to sell GW products with a customer-friendly UI at 15% discounts is going to help Frontline, as long as Frontline can stay competitive with big name online retailers like MM, which ditched GW over their previous rules.

If GW wanted to drive direct sales, they would expand their direct-only line. Oh wait, that has already happened. That's not what's going on here. I think this is about driving overall volumes, probably with an eye to moving product back into national chain stores.

Wow! Awesome!

It's almost like the new CEO understands that you need to sell your product in order to be successful.

AllSeeingSkink wrote:

 KiloFiX wrote:
Just so I understand this, does the new policy primarily hurt the brick and mortar LGS which now has to compete with online web only stores?

It hurts in so much as B&M now have more competition because online stores can use carts again, but it helps them in those online stores can't offer more than 15% discount.

Most stores seem to be in the 10-15% discount range anyway.

Cause either way GW sells the product right?

Ideally from the GW perspective, they want to shift sales to their own webstores where they make the most profit. They only make (roughly) $60 on a $100 kit if it's sold through an independent, but make the full $100 (minus packing and shipping costs) for sales through their own webstore.

Limiting the discount to 15% should somewhat reduces the incentive for people to buy from independent online stores and thus maybe will increase GW's own webstore sales, maybe.

But at 15% discount, wouldn't people automatically buy from web / online instead of brick LGS or directly from GW? Unless it's just stock that's the issue.

I'm sure all of this has been gone over before but I appreciate the insight / recap.

 KiloFiX wrote:


Just so I understand this, does the new policy primarily hurt the brick and mortar LGS which now has to compete with online web only stores?

The brick and mortar stores already had to compete with online only stores... except under the old policy they couldn't, because they weren't allowed to sell online. Now they can.

 KiloFiX wrote:
But at 15% discount, wouldn't people automatically buy from web / online instead of brick LGS or directly from GW?

All other things being equal, a customer will buy something for 15% off MSRP rather than MSRP. But the first clause of that sentence assumes a lot. For example, GW previously forced online retailers to make online shopping meaningfully inconvenient for American and Canadian customers. Did this policy encourage customers to buy from a LGS that doesn't offer discounts? Probably not. I would guess it just damaged GW's overall volume. Was the idea ever actually to promote LGS sales? Also probably not. Keep in mind that during the same period, GW made more and more of its products direct only. What was really going on here was, GW wanted to make its own web sales competitive by making it harder for customers to deal with other online retailers. But again, the result seems to have been lower volume overall. So now online retailers can offer convenient service and a discount. So you tell me, how does the LGS benefit?

 KiloFiX wrote:
But at 15% discount, wouldn't people automatically buy from web / online instead of brick LGS or directly from GW? Unless it's just stock that's the issue..

Some people will go for whichever store is cheaper. Some will choose to pay more in order to support their local store. Again, nothing has changed there with the new policy.


Just to be clear, discount product has been available online for the entire time that this US shopping cart ban has been in place. People who wanted to sell online found ways to do so, by using eBay aliases, or sourcing product from distributors rather than directly from GW, or by doing deals with other account holders... or just be not being from the US (GW still hasn't managed to wrap their heads around the fact that anyone can access websites located in any part of the internet from any other part of the world).

The only thing that this new policy changes is to open up the market for those B&M stores who want to also sell online. Giving stores more potential ways to sell product and to widen broaden their customer base is a good thing.



Automatically Appended Next Post:

Manchu wrote:
Was the idea ever actually to promote LGS sales? Also probably not. Keep in mind that during the same period, GW made more and more of its products direct only. What was really going on here was, GW wanted to make its own web sales competitive by making it harder for customers to deal with other online retailers.

Indeed... The idea that it was ever intended to help B&M independents is laughable in the face of the fact that GW continued to sell online through their own webstore and shifted an ever-increasing portion of their product range to webstore exclusive. I very strongly suspect that the whole driver behind the no-webcart policy was that independent accounts in the US were doing really well, and the GW US online store wasn't, and so this was implemented as a way to cannibalise sales from the independent channel and funnel them to the webstore to make the balance sheet look better overall.

I'll be buying from whatever online store has free shipping and either a customer loyalty program or preorder discount program that is still eligible under gw new rules. If I can find one that doesn't charge tax either that be great. However none of the 3 stores within 15min of me that sell gw offer any discount anymore so I'd likely won't be picking up from them regardless. Only in the rare spontaneous purchase.

insaniak, GW never really kaiboshed online sales altogether - the issue was, it couldn't be convenient. You can see the logic here: online shopping is popular because it's convenient so you attack the convenience part of it. What you would have to do was call up the retailer during business hours and place your order over the phone. Or you could fill out a form and send it in to them. MM used to have spreadsheets of available stock and prices that you could request to make up your order, which you would place by phone.

Right now there are three or four online retailers that offer 20% off standard on GW stuff, so this rule shouldn't create a race to the bottom.

I don't think people understand the new rules. Even in the case of ffg when xwing went into this change.
Online retailers have to have a standard 15% discount however they can have occasional sales and still have loyalty reward programs. I believe something like frontlinegaming may still be able to offer thier preorder discount.

 MasterSlowPoke wrote:
Right now there are three or four online retailers that offer 20% off standard on GW stuff

The problem I have run into is, product availability/shipping delays/poor communication. Overall, I like the prospect of more reliable online retailers selling at 15% off then fly by night outfits selling at 20%. (Please note, I'm not talking about Frontline here.) I do think GW should allow leeway for retailers, digital and physical and both, to offer pre-order discounts exceeding 15%.

I find it interesting that when PP did the 10% cap it was the deathknell of online stores, but GW doing a 15% cap is the death knell of brick and mortar. I wonder where the line is drawn.

 AduroT wrote:
when PP did the 10% cap it was the deathknell of online stores

Huh? Nah, it was the death knell for PP's sales volume. Well the first toll of that bell, anyway.

Places that offer customer rewards or points can easily skirt the 15% rule.

If MM sells GW again, all at 15% off, they could also offer triple points, or something similar on those GW products. Raising the overall discount to 20% or more, and still be within the rules.

MM does so much volume, I doubt selling at 20%-25% off would even bother them.

There's a little hole in the wall shop near me that sells at 20% off, and they certainly aren't counting on volume. It's not like rent is cheap here, either.

There are several reasons that I tend to buy from online stores - beyond the difference in price.

Number one is that online stores tend to have wider selection - the closest B&M store to me is primarily focused on anime - RPGs and miniatures are a sideline. (Nice folks - but they like what they like.)

Number two is that if I am going to have to special order, then I might as well order online, and combine what would have been several trips to the store into a single order.

But the biggest is simply that it is easier for me to use an online cart from the comfort of home, instead of making the trip to the friendly, not quite so local, game store, in the hopes that they will have what I want in stock.

When GW started preventing the use of carts, my reaction was not to buy direct from GW - it was to not buy GW at all.

While this may seem a baby step, it means that I am... well, honestly not all that likely to buy much from GW, anyway, but more likely than I was before, at any rate. (I might buy the repackaged Island of Blood, for example.)

It does get rid of one of the walls that GW had put in the path of my buying anything at all from them, at least.

The Auld Grump - The War Store, FRP Games, and Miniatures Market, mostly.

 insaniak wrote:

 Dakka Flakka Flame wrote:

Slightly off-topic, do gaming clubs ever start their own stores under some type of co-op model?

It's been done, but it rarely lasts very long as the people running it discover how much work it is, or get everything they need and move on. It used to be a thing down here, before GW started insisting on accounts having a physical store location.

I can see how that would tend to happen. I was thinking more along the lines of a club forming a store as a way to pay rent on their clubhouse, not as a way to get dealer discount miniatures, but it would still probably be a whole lot of work.

Manchu wrote:

AllSeeingSkink wrote:
Most stores seem to be in the 10-15% discount range anyway.

But see

Smellingsalts wrote:

If you discount 10%, you make no profit.

Well that's smellingsalt's opinion, but it seems to me most places offer 10-15% discount. There's a couple of places that offer more, but it doesn't seem all that common. There's one FLGS nearby that doesn't offer a discount, but they also don't actively try and sell 40k/WHFB, it just sits in the corner at full price That place is just down the road from an official GW and it seems they don't try and compete with the GW on GW products but rather offer a more complete service to gamers.

AllSeeingSkink wrote:
Limiting the discount to 15% should somewhat reduces the incentive for people to buy from independent online stores and thus maybe will increase GW's own webstore sales, maybe.

But how?

Well I said "maybe" twice in that sentence, so you probably could have guessed I'm not overly convinced it would But as I said, it reduces incentive to buy from independents. If you want a direct only item, you're more likely to be buying it from GW direct anyway, so when you buy that direct only item and you also want that other non-direct $50 kit, you're also more likely to buy it from GW anyway in the same order if it would only save you $7.50 to split the order and buy it elsewhere.

Also some people are going to consider buying from the official site safer (and not necessarily for bad reasons), and if they aren't saving as much money buying from a discounter they'll have more incentive just to buy from the source.

Keep in mind that the current situation in the US is, online retailers cannot sell GW product through customer-friendly UIs.

I think on this end GW just realised it's a bad policy to make it so hard for people to buy/sell their stuff, there's a fine line between reducing the incentive to buy from a 3rd party so more people buy from your own webstore and just putting people off so much they don't buy anything.

Obviously GW would PREFER if people bought from their own webstore, but the most important thing is people are buying GW product to begin with, shifting them to buying from their own webstore is a secondary concern.