Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

That's an interesting take, given the price increase is in direct reaction to a change made by GW, and that the change more or less precisely mirrors the difference in wholesale cost that GW have implemented.

 Azreal13 wrote:
That's an interesting take, given the price increase is in direct reaction to a change made by GW, and that the change more or less precisely mirrors the difference in wholesale cost that GW have implemented.

Except it doesn't precisely mirror it, that's the point.

It's within a pound on a £100 purchase, which, like I've said already, is more than likely an artefact of keeping to round figures for discount rather than offering 16.4% off or something equally bizarre in order to precisely maintain the same margin to avoid accusations of chicanery from no-norts on the internet.

The independents could have swelled this increase if it weren’t the squeeze on all their other costs so in reality these factors play into them having to increase their prices. Nothing is ever as simple as it seems.

I assume you mean swallowed the increase? If so that's an awfully big assumption based on little cited evidence.

The increase in energy costs etc have, of course, been significant for everyone, especially as businesses don't benefit from a cost cap like domestic customers, but you cannot realistically make an assessment on the impact of those costs on a per sale basis, which will be massively impacted by the number of units a given retailer is moving.

I'd be quite happy to accept that the big online presence sites are shifting enough that the energy costs are a dramatically smaller amount per unit sold than 6% direct increase in wholesale cost.

The people I feel bad for is mostly the stores that didn't have a large discount to begin with. They don't really have anywhere to go in terms of increasing prices to pass the cost along to customers.

AllSeeingSkink wrote:
The people I feel bad for is mostly the stores that didn't have a large discount to begin with. They don't really have anywhere to go in terms of increasing prices to pass the cost along to customers.

Which means less sales, which converts to less reason to stock the product. GW is shearing whatever foot they had left, again.

 McDougall Designs wrote:

AllSeeingSkink wrote:
The people I feel bad for is mostly the stores that didn't have a large discount to begin with. They don't really have anywhere to go in terms of increasing prices to pass the cost along to customers.

Which means less sales, which converts to less reason to stock the product. GW is shearing whatever foot they had left, again.

I wonder if GW is hoping that since the squeezed out independent has already hooked in the customers, any closures will drive them to GW direct?

As discussed in a prior thread, that could have an impact on GW negatively.


Factor in that they ship for free over £40, that's another overhead that gets added into the mix on fairly smallish orders if they are around that £40 mark.

Effectively, it could mean they make less profit via taking relatively smaller orders direct than via selling bulk orders to third parties, especially if that leads to having to hire more staff to cover the orders, as it's quicker and cheaper (shipping cost wise) to pack and ship 100 items in one order (to a FLGS) than it is to pack and ship 100 separate orders.

Then there's the impact of it being your sale, so you have to provide the customer service aspect etc...

Obviously, hard data would be needed to confirm if that were the case, and it probably isn't the case in all likelihood to be honest, but just a thought.

They are making 100% retail on direct sales and that’s grossly overpriced for what they put into their stuff. If shipping costs eat too much, boop! and suddenly the free shipping price point increases on their site.

Warlord, for instance, has an excessively high free shipping point if you’re US ($80); so way more market owning GW can either absorb the shipping at X or just raise it to Warlord level and more for free shipping.

I'm sure GW would rather sell direct to each individual customer if they could do so without losing sales volume.

AllSeeingSkink wrote:
I'm sure GW would rather sell direct to each individual customer if they could do so without losing sales volume.

That's the goal of ANY company.

Sure they get paid no matter where you buy, but it's much better for them if they don't have to sell to a distributor for 40%-50% of what it's listed for.

Everything you buy is, on average, 40%-50% more than what the guy selling it to you paid.

If GW asks for 50% of the MSRP, then what you pay at full price is not 50% more than the seller paid, it’s 100% more.

 TalonZahn wrote:

AllSeeingSkink wrote:
I'm sure GW would rather sell direct to each individual customer if they could do so without losing sales volume.

That's the goal of ANY company.

Actually, a manufacturer also being a retailer and a wholesaler is a relatively unusual state of affairs and generates a unique tension within their business.

Selling directly to the public is in reality on the agenda of very few manufacturing companies.

 Azreal13 wrote:

 TalonZahn wrote:

AllSeeingSkink wrote:
I'm sure GW would rather sell direct to each individual customer if they could do so without losing sales volume.

That's the goal of ANY company.

Actually, a manufacturer also being a retailer and a wholesaler is a relatively unusual state of affairs and generates a unique tension within their business.

Selling directly to the public is in reality on the agenda of very few manufacturing companies.

In the U.S. many manufacturers sell direct unless it is legislated otherwise, as in the case of cars.

Relative to the number of companies, the number of manufacturers actively running their own retail business I'd imagine is still quite small.

For clarification, I don't mean just whacking their products up on a website at full RRP and skimming a few sales, or maintaining a handful of stores in flagship locations, I mean actively engaged in a full blown retail operation. Apple would be a relatively good example, but you're not going to see "Bobs copper piping and valves" opening their own chain of shops all that often.

 Azreal13 wrote:
Relative to the number of companies, the number of manufacturers actively running their own retail business I'd imagine is still quite small.

For clarification, I don't mean just whacking their products up on a website at full RRP and skimming a few sales, or maintaining a handful of stores in flagship locations, I mean actively engaged in a full blown retail operation. Apple would be a relatively good example, but you're not going to see "Bobs copper piping and valves" opening their own chain of shops all that often.

Now you're pushing into the area of splitting hairs.

A copper pipe is an end product, but it's not, because copper pipes are in all kinds of other things manufactured. There are absolutely stores, mom & pop and chain stores, selling copper pipes, as well as direct from manufacturers.

GW doesn't sell mid-range/mid-step items. We're talking finished product.

Walmart doesn't make corn or cans, but they sure sell Walmart Corn in a can. They sell other types of corn in the can, but they make more and want you to buy theirs more.

GW is a major brand in their industry and in turn; Apple, Tesla, Walmart, Target, Krogers, Shell, BP, Costco, etc. etc....

They all have stores with their branded items that they manufacture and make more money on selling direct because they own the majority of the production chain.

Branded =\= manufactured.

Games Workshop is vertically integrated, it owns the means of production, the distribution and the retail elements of it's business. Where the tension arises it also supplies its own competitors.

 Azreal13 wrote:
Branded =\= manufactured.

Games Workshop is vertically integrated, it owns the means of production, the distribution and the retail elements of it's business. Where the tension arises it also supplies its own competitors.

You'll have to dig deeper. Walmart, Target, most of Kroger, Shell, etc... are vertically integrated as well.

[Edit] And yes, you can find their products at competitors; other gas stations, dollar stores, etc.

Most large firms are vertical to some degree, it makes economic sense.

Once they've paid the white label firm to make their USB cable or whatever, the they're free to do what they want to it, but they overwhelmingly frequently don't own the factory, and therefore aren't a manufacturer.

There are even some instances where they'll be a company's only customer, but that still doesn't make them a manufacturer.

GW doesn't own their shipping chain in the U.S so does that mean they aren't truly integrated?

The point still remains that a manufacturer that has the ability to sell to you direct over going through a retailer will do so eagerly.

No. They. Won't.

Some might

Most manufacturers are enormous faceless buildings on industrial estates miles from anywhere in provinces in China or India merrily churning out whatever it is they make to fulfil orders in the thousands to millions of units and they have absolutely zero interest in selling one to you directly. Many of those won't even be making things that are ever sold to a consumer directly and will in fact be making bits of other things that then go on to another factory to be incorporated into something else.

We don't have GW delivery vans in Europe/UK either, I'm not sure what the point is you're trying to make, that companies don't "count" as vertically integrated unless they're literally pulling raw materials out of the dirt? Feels like things are getting a little straw clutchy.

You're the one that's been moving the goalposts, not me.

You said GW owned the distribution, and they clearly don't. They don't own the distributors and they don't own the shipping.

So now you're leaning on manufacturing and retail.

I pointed out that several manufacturers do own both. Even more own the manufacturing, like GW.

It's not "some", that meet your criteria that you set out for GW, it's many more than you are either aware of or are willing to admit.

Logistics=\= distribution.

But the only reason you think you have an argument is because you obviously have very little knowledge of the subject, it's not my job to educate you, we're done here.

 Azreal13 wrote:
Logistics=\= distribution.

But the only reason you think you have an argument is because you obviously have very little knowledge of the subject, it's not my job to educate you, we're done here.

You're wrong as I've noted on your points, I've given examples, and you "quit" so, whatever.

I'm "wrong" in the sense that your definition of "right" isn't itself correct. But you don't realise this because you don't know enough about the subject.

I'm suddenly reminded of something I said in the locked previous thread:

"We just need Azreal13 to come back into the thread for the coup de grace."

Ha!

Of all the people to pick a fight with on matters of business.

Oh look, HBMC is here to pile on.

You can cry all you want Az, but there are MANY MANY Manufacturers that would, and do, sell straight to their customers.

And gladly do so, or would do so, to cut out all middlemen.

That is the reality, period.

Such a "coup de grace delivered by Az......

[Edit] And Az came after me, not the other way around, as I've noted before with you HBMC, reading comprehension.

 Azreal13 wrote:
Branded =\= manufactured.

Games Workshop is vertically integrated, it owns the means of production, the distribution and the retail elements of it's business. Where the tension arises it also supplies its own competitors.

I don't think this is in any way controversial. GW makes minis and has its own retail outlets. No, it doesn't own transit companies but even the conglomerates of old didn't own the railroads and trucks that carried parts to their factories.

In GW's perfect world, everyone buys from them. Alas, this isn't practical as the GW Store model doesn't work for lots of places, so GW tolerates retailers in areas where it is not feasible to establish a store.

As is well-known, at one point GW tried to use their knowledge of sales to "bump off" long-time retailers by siting GW Stores in their area. It didn't work.

In any event, I find the discussion of "profit" above a bit weird because all items should be sold at a profit. If you break even (that is, the retailer makes nothing on the transaction), the shop goes out of business.

 TalonZahn wrote:
Oh look, HBMC is here to pile on.

You can cry all you want Az, but there are MANY MANY Manufacturers that would, and do, sell straight to their customers.

And gladly do so, or would do so, to cut out all middlemen.

That is the reality, period.

Such a "coup de grace delivered by Az......

But I've never disputed that?

My assertion has been that in the scope of the huge number of manufacturing companies in the world, manufacturers that sell direct to the consumer are a comparative minority. Those that do it, act as wholesale distributors and also own a significant retail presence are even rarer.

You just seem to think a few thousand, globally speaking, is significant when there's hundreds of thousands, probably millions, of manufacturers out there who aren't looking to sell direct to retail, wouldn't know how and don't make anything that anyone would want to buy in the state they output it.

[Edit] And Az came after me, not the other way around, as I've noted before with you HBMC, reading comprehension.

Correcting someone for making an inaccurate statement and then standing by one's argument when they dispute it isn't "coming after" anyone. Stop watching gangster films.