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Pledges for Limited Runs
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TOPIC: Pledges for Limited Runs
#15787
Pledges for Limited Runs 8 Years, 4 Months ago  
In Fantasy Master Maze Products, "Alternative Cavern Ideas", jkratzer wrote:

"Narrow Passages has gone from an occasional sale thing to a "gotta have it!" item.You might want to start it back up again as an 'occasional' item, limited runs based on PRE-ORDERS only."


Pre-orders is an interesting idea to get a limited run, although there are logistical problems. But it might not be impossible.

IF the masters (and molds?) are safely tucked away someplace, then (re)development is already done. Overseas travel (to train the manufacturers on casting and painting) could coincide with a regular trip; those costs are absorbed as well. So the limited run only has to overcome manufacture and shipping costs, AND turn a decent profit (or else why do it at all?).

I don't see a company taking pre-orders for something they aren't sure they can do, though. They could end up holding onto thousands of dollars of customers' money, then having to refund it after months of waiting to see if they would get enough to place the order. Not good.

But maybe they could create a "pledge list" of customers who promise to pre-order. If DF says that they WILL do the limited run, those customers WILL pre-order (send money). They should factor in a "back-out" rate (some people who pledge might change their minds, or might not have enough money when DF places the order), so the number of pledges needed will be higher than the number of pre-orders needed. They would also want to set a time limit on the pledges -- if they don't get enough pledges in three or four months, then they announce that the order will not be placed due to lack of customer interest. I would place a similar deadline on pre-orders -- once the e-mail goes out to the pledge list, customers have one month to send money, or DF would have to announce that the order will not be placed due to lack of response (money cheerfully refunded).

(What's the emote for "hat in hand"?) RF*, can you (or anyone) speak to this in general terms? If the premise is correct (an item is not being produced, but the means to produce it are easily available), can a limited run be produced at a profit? Could a pledge-before-preorder plan work, or is it just too complicated? Does collecting the money before ordering the run actually eliminate/minimize financial risks, or is there a hidden pitfall I'm missing? Does the website get enough traffic to make a pledge system viable? If the plan fails -- not enough pledges, or enough pledges but not enough preorders -- will it be seen as an interesting experiment that didn't work, or as a serious business failure? Is there another way to do this?

I am in no way suggesting that we "force" DF to make a "command performance". I am extremely mindful of the necessity for a company (especially a small company) to operate at a profit and avoid unnecessary risks. But we MIGHT find a way to turn a product that is not produced regularly into something that turns a profit on an irregular (or even semi-regular) basis by tweaking the way we approach pre-orders and expressing interest when a limited run is brought up as a possibility.
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#15788
Pledges for Limited Runs 8 Years, 4 Months ago  
There is a win/win for speculative pre-orders but it would involve a few ironclad rules for both sides.

One is that the customer would have to pony the money up front and refunds would not be allowed barring the minimum required order is not met.

On the supplier side they would have to:

1) Set a date by which the minimum orders needed to make running the product viable must be reached (typically 2 - 3 months).
2) ANy monies that come in for those orders are placed in an interest bearing account.
3) If the minimum order run is not reached by X date then customers get a full refund within 2 weeks of the end date.

If done correctly the generated interest off the money could cover the suppliers cost to refund the cash or provide a small positive cash flow if the product does go off.

Note that above seems simple but can get complicated from the supplier end.
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#15789
Pledges for Limited Runs 8 Years, 4 Months ago  
The pledge idea has its merits especially when applied by a company small like Dwarven Forge jackattack.

The pledge run could go a pre-determined time period.
If after the time has run out and/or the pledges are of an adequate number, then Dwarven Forge could then take pre-orders.
Once a pre-determined percentage of the pledges have become pre-orders by a pre-determined time deadline, then production could be initiated.
This could take from start-to-finish as long as 24-30 months or as little as about 12 months, all determined by buyer response.
The whole process could be shut down at any point.

The main catch jackattack with this process is that there are some people on these forums who may not want or simply feel they cannot wait the period of time necessary for this to be successful.
Patience has been shown to be in short supply with a few here and this whole idea is determined to be a success or a failure hinged completely on patience.

In addition, the pre-orders need to be labeled as non-refundable.
If the pre-orders never achieve the desired percentage, in other words if lots of folks welch on their pledges, the pre-order monies should then be transferred to the buyer's Dwarven Forge account and be used on other product on-hand.

If someone welches on three pledges, that would make them ineligible for pledging on any special pre-order for a pre-determined amount of time.

How is that for a process just from off the top of my head?
Was that what you were looking for jackattack?
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#15790
Pledges for Limited Runs 8 Years, 4 Months ago  
Yes. I like the idea of converting pre-orders to "store credit", instead of playing around with refunds. I hadn't considered that, and it would mean that even if pre-orders didn't come through, we would still get some good DF loot.

And your point about patience is also well taken. It would need to be clear up front that this endeavor may end up not happening at all, and even if it does it may take a long time to get done. On the other hand, if enough people are serious about taking the opportunity to get a set that will ONLY be available as a limited run they should be willing to wait the for it to be arranged, produced, and shipped. (Maybe there could be a sticky update thread for progress reports.)
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#15791
Pledges for Limited Runs 8 Years, 4 Months ago  
This idea definately has it merits and I have seen it used to sucess by other companies. A small percentage of welching probably doesn't matter as the extra's would likely not be too many and would likely sell fairly quickly to those who don't like the idea of pre-ordering. Though would need some penalty to stop peopel ordering extra to get a product over the line then cancelling out.

One good example of a company doing this is Logos who have two versions of pre-ordering www.logos.com/prepub and www.logos.com/communitypricing . They sell a very different type of product (electronic books) so scheme for dwarven forge would need to be quite different but they are very interesting schemes.

Prepub offerers products for a very significant discount but only go ahead when enough orders are reached (a progress bar shows how close this is) Once enough orders a placed production begins. Credit cards are required but only charged when the product is ready.

Community pricing is very interesting, though probably is not possible for Dwarven Forge. Even Logos seem to use it for public domain books therefore items with a development cost but no real ongoing production costs (royalties). Customers actually bid the maximum they would pay for the product. Once bids at a certain price reach a viable level everyone who bids that price or higher gets the book at the cheapest viable price.

Fo r those you wonder why I am editing, I have just discovered not to put a full stop directly at the end of a link if you want the link to work.
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#15792
Pledges for Limited Runs 8 Years, 4 Months ago  
Guys, I THINK you might be on to something here. Fortunately, we are dealing with a company whose owners/managers never caught the 'Not Invented Here' syndrome.
So we might be able to put this one over.

Jeff, Stefan; listen up. We've actually got a GOOD IDEA here!

Check it OUT!!!

See ya!

Jim
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#15793
Pledges for Limited Runs 8 Years, 4 Months ago  
Well, we have an idea, at any rate. I'll leave it to Jeff and Stefan to decide whether it is a good one.

Remember, all of this is predicated on a HUGE assumption -- that the molds are either available, or can be easily produced from existing masters. If they can't, then all of this is pretty much moot. There might also be considerations involved that we don't realize on the customer end.

Of course if it does work out, I expect a TON of online keister-kissing... :lol:
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#15794
Pledges for Limited Runs 8 Years, 4 Months ago  
Pledges will never work because half (or more) of the pledgers will back out. It happened to another small company with forums that I used to frequent. There was a ton of enthusiasm over this product that they basically talked the company into producing. The company caved in and no one bought the product.
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#15795
Pledges for Limited Runs 8 Years, 4 Months ago  
Philip -

While a 'pledge-only' concept would certainly be susceptible to the damage you talk about in your post, the version that jackattack came up with, as modified by some of the other psots, would have a much safer chance of success.
Pledges tell DF that there is interest in REVIVING an older pattern or design, such as Narrow Passages. NO NEW product will EVER be developed or prototyped solely on the basis of pledges. IF sufficient pledges are made to suggest to DF that the revival COULD work, THEN DF would start taking PRE-ORDERS. Once sufficient pre-orders are paid, UP-FRONT, THEN and ONLY THEN, China gets the order to start pouring resin.
Anyone who renegs on a pre-order receives NOT a CASH refund, but a 'store credit' for future DF store purchases.

ALL OF THIS IS TO BE MADE CLEAR BEFORE ANY PRE-ORDERS ARE ACCEPTED, and it will NOT be done in "Small Print"; it's clearly stated, in BOLD print, in the body of the pledge/pre-order Page.
And, it MUST be followed by a signed agreement of some kind; I know there is some new tech available for Web sales that allows the buyer and seller to electronically 'sign' a document that then becomes a legally-binding sales contract.

With this kind of pledge/pre-order sales operation, BOTH DF and the Buyer would be fully protected.

I DON'T know if Jeff and Stefan will go for this kind of setup or not; I also don't know if the DF-buying community, of which you and I, and anyone ELSE who is reading this with more than a passing curiosity, are all members, will buy into it. I KNOW I will; I suspect folks like jackattack, waza, RabidFox*, and BlackHawk1 will also.
With absolutely NO rancor, I really don't care whether you do or not; it is a personal decision on YOUR part, and I have no business dipping MY big nose into it. IF you DO, welcome aboard; if not, no big deal. We're still DF fans, we still exchange ideas here on the forum, and to whateveer extent we are friendly acquaintance NOW, we still will be after you read this magnum opus. Or at least, on my part, we are.

And that's about all I have to say on this subject.

Ain't the beer cold? Who's on first?

See ya!

Jim
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#15796
Pledges for Limited Runs 8 Years, 4 Months ago  
yep- no matter what happens a straight pledge means nothing. Its easy for someone to say "OMFG!!! If you make that I'll buy 20 sets!!!". Then when pay-up time comes its "gee- sorry... I'd like to get even a single set but money is tight..."

No matter what happens people have to put money down to show they are serious. As they say talk is cheap.
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#15797
Pledges for Limited Runs 8 Years, 4 Months ago  
I agree. This is a great idea, but it definitely needs to be clear that it is more than just "Man, I'd LOVE one of those!"

My biggest anxiety about the SF line, and the people who have claimed they are waiting to begin buying it until DF does X, is that those same people can then, once X has been done, claim that they STILL won't buy until DF does Y.

In the end, what none of us want to see is DF investing a lot of resources (time, money, energy) into a product based on a misconception of how many people will actually BUY.

L
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#15798
Pledges for Limited Runs 8 Years, 4 Months ago  
Still, the point is well taken, and was mentioned in the original post.

A pledge is a verbal agreement made in good faith, but many factors contribute to the possibility that people will (have to) back out of the agreement. Some customers will change their minds once the initial excitement wears off, some will find other hobby products they can purchase without having to wait a few months for delivery, and some will be forced out of the market by inflation or new expenses that come up between pledge and pre-order (rising gas prices are killing my magazine subscriptions, and I have to scrape together enough money to buy new tires before they are completely bald).

Somebody at DF will have to do some math before they get anywhere near making this kind of offer. What is the minimum number of sets they need to sell to cover production costs AND turn a reasonable profit? Once they have that number, they can decide how many pledges they want before they will move on to the pre-order stage -- whether it is the minimum number plus five, or three times their minimum number. And since they have the option to back out before AND after pre-orders are taken, they run virtually no financial risk.

The primary risk they DO run, however, is customer perception. I'd like to think that most of us on the boards would take it well if DF tried this and it didn't work -- we know them well enough from communicating on the boards and through doing business with them in the past that we can say, "Oh well, it was a good idea, but sometimes good ideas just don't work." But some customers (those without a history with DF, or those who ONLY want an out-of-production set to round out their collections) might feel that DF has reneged on THEIR end, or that the offer was only made to collect pre-orders without any intention of actually producing anything (particularly if pre-orders are converted to store credit). WE all KNOW that Jeff and Stefan would NEVER do such a thing, but a "new" customer doesn't -- and a disgruntled customer can be a very dangerous thing to a small business. (A single blogger caused one hundred MILLION dollars of damage to a company's stocks before the company could get a legal injunction against him.)

I still think it's a viable idea, and I hope that Jeff and Stefan (and their accountant and their lawyer) will give it some serious thought. But I will understand completely if we never hear them so much as comment on it because they don't think it is worth pursuing.
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