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Distribution & Local Hobby Store Retail
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TOPIC: Distribution & Local Hobby Store Retail
#18660
Distribution & Local Hobby Store Retail 8 Years ago  
There are so few folks that are actually serious about opening and running a game shoppe.
I posted this information about running a game shoppe over a year ago in my past incarnation here so it is now written by Guest at this thread:
www.dwarvenforge.com/dwarvenforums/viewtopic.php?id=512
It is posting #14.
What I have there was is part of an MBA-level assignment I did years ago that I, of course, focused on gaming.
Hope it helps any folks here these days.
RabidFox*
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Cavern: Cavern, Cavernous Passages, many individual pieces, Cavernous River & Wall and Cavernous Lake someday soon;
Fantasy: Room & Passages, Room, Octagonal Room, Wicked Additions I&II, Adv. Builder, Diagonal Walls Set, Dungeon Accessories, Medieval Furniture, many individual pieces.
 
#18661
Distribution & Local Hobby Store Retail 8 Years ago  
Rabid Fox,
I see your guys point but if certain retailers were willing to sell at or just below cost or MSRP then I don't see a problem. The only problem though arises when you have to decide where to draw the line. If distributors are trying to shake down companies like DF then this industry is in trouble for up and coming companies.
They need to support these companies until they get a toehold and then start dealing. If I had a hobby store and I knew that I could sell a sure fire product like that at my cost, it will bring in more potential sales in other areas of my store such as figures and other settings or anything. These hobby stores have to help preserve this industry that has been so up and down over these past years.
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#18662
Distribution & Local Hobby Store Retail 8 Years ago  
The problem is, selling DF (or any other product) at a reduced profit margin actually represents a loss, since another product could have been stocked and sold at a larger profit. And DF products in particular take up considerable shelf space.

If we figure that a single DF boxed set occupies the same amount of space as a dozen RPG rules/source books, AND we assume that a retail store keeps 10% of the sale price of any item on the shelves, then the store must choose between keeping $12 from the sale of a $120 DF set, or keeping $48 dollars from the sale of a dozen $40 books. If the retailer generously cuts his take in half (to $6 per unit), his opportunity cost is even higher. It's bad business, and can only result in the store failing and shutting its doors.

And since most customers have limited disposable income, you can't count on the purchase of one gaming accessory to actually cause customers to buy other gaming accessories. Customers tend to spend a particular amount decided on ahead of time, and choose between the products available on which to spend that (maximum) amount.

This is (I believe) why retailers started reducing their orders, and caused DF to go to direct online sales.

I am NOT trying to slam DF or retailers in any way. Economics is a natural force with certain rules that apply universally. Those rules may not be "fair" or even pleasant, but they are what they are -- you might as well try to stop the wind from blowing or the rain from falling. (This is also not to say that we must always "obey" those rules. You can make an economically sound argument to support some pretty nasty ideas, but most economists acknowledge that the most efficient outcome is not always the most desirable outcome.)

I've said it before, and I'll say it now -- DF makes a terrific product. Part of what makes their product terrific is its size and weight, but those two things make it expensive to store and ship. DF has taken very creative steps to eliminate as much of those costs as possible, and to eliminate other costs incurred by dealing with distributors and retailers. The natural consequence of those measures, however, is that the customer has to take on some of the workload previously shouldered by the distributor and retailer -- we have to find the product, place the order, and wait for the product to arrive at our door.

We can volunteer to take on that "burden", because it costs us very little (if I don't feel like going online to find hobby supplies, I won't lose my job, be evicted from my home, or go hungry) and keeps the price of DF products at a very reasonable level. But we cannot expect anyone else to shoulder that burden for us, when their risks are so much greater.
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#18663
Distribution & Local Hobby Store Retail 8 Years ago  
Rabid Fox,
I see your guys point but if certain retailers were willing to sell at or just below cost or MSRP then I don't see a problem. The only problem though arises when you have to decide where to draw the line. If distributors are trying to shake down companies like DF then this industry is in trouble for up and coming companies.
They need to support these companies until they get a toehold and then start dealing. If I had a hobby store and I knew that I could sell a sure fire product like that at my cost, it will bring in more potential sales in other areas of my store such as figures and other settings or anything. These hobby stores have to help preserve this industry that has been so up and down over these past years.

I sorely wish it was as easy as you describe tmcmenamin.
Its not, and mostly for all of the reasons that jackattack gave.
Also though, for the simple reason that the distributors are businesses too.
Everyone involved wants to make a boatload of money and everyone cannot.
Some of the distributora have been around a long time -namely Alliance (aka The Armory combined with Chessex) and have seen companies come and companies go and they do not realized or care if they are part of the reason many of the companies have gone.
All the distributors want is their share of the pie as they see it; they do not care if companies disappear because there are always new ones coming along.

tmcmenamin, it is as dog-eat-dog in the gaming industry as it is in almost every other industry - VICIOUS!!
The distributors are the main reason why.
This is not to say that GW and Hasbro do not contribute greatly to this problem in the gaming industry, but the distributors are the BIG bad guys involved here.
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SF: Starter(3), Passage(2), Alpha(7), Beta(2) someday soon;
Cavern: Cavern, Cavernous Passages, many individual pieces, Cavernous River & Wall and Cavernous Lake someday soon;
Fantasy: Room & Passages, Room, Octagonal Room, Wicked Additions I&II, Adv. Builder, Diagonal Walls Set, Dungeon Accessories, Medieval Furniture, many individual pieces.
 
#18664
Distribution & Local Hobby Store Retail 8 Years ago  
RF*, jackattack, and tmcmenamin;

My thoughts are:

RF*, as usual your analysis shows the M-60 tread-tracks up your back from having been run over by the vagaries of the gaming business. I would not venture to argue with you as to your experience in that area. And I agree at least 95% with your summation of GW and Hasbro - although (surprise, surprise!) GW is actually IMPROVING - at least in the White Marsh store!

tmcmenamin (is it okay if I just say TM for now? it's faster to type), while I don't know you and therefore can't pick on you as I do with the Fox and with jackattack, I will venture to say that you're a little bit right, and a little bit wrong. Game stores and game distributors have a responsibility to their owners, their owners families, their employees, and their customers; the first three is to survive, thrive, and feed all of them, the last one is that what the customer wants, the customer gets (within reason, of course!) or the store goes under. Period. No appeal, no last minute commutation of sentence. If YOU won't sell me what I want, I will go to the guy who WILL. This is NOT called viciousness, it is called commerce. NO, I don't LIKE it, but I recognize the validity of the facts.

jack, what can I say? You and I have debated this subject before, almost as loudly as the Foxman and I have yelled at each other. We both understand the others' viewpoint and, so far, have respected it - eventually. And you are 100% right - DF fills a HUGE amount of shelf space - which is why what my FLGS has left is sitting on the floor! But seriously, profit-and-loss statements are what determine a successful game STORE, as opposed to a game CLUB. You nailed it exactly on the head on that score!

The other thing we have to consider is that, with production costs being what they are, DF HAS to manufacture in China, and HAS to cover shipping costs from there - unless anyone here WANTS to pay $300-$400 per Sci-Fi Beta set or MBS Set! Not me, buddy. Just the price of urethane resin has risen (little pun there) over the past few years; add the cost of molds, transportation, labor (even in China - where poverty-level-wages for the US are a fortune), and all the other sundry costs of making a product of DF quality, and we are VERY lucky indeed to NOT be faced with those $300-plus prices. THAT is why Jeff convinced Stefan to go direct-marketing, via Internet. DF COULD NOT SURVIVE at the quality they deliver, in the small size company they are, if they had to continue as a FLGS-supported manufacturer. Because if they had to retail DF, then WE would be paying those huge prices, just so DF, the distributor, and the retailer could keep dinner on the table for all their responsibilities.

This is not called greed; it is called economics in a free market society.

I don't have to like it, and neither do any of you; we just have to recognize it and deal with it.

Class dismissed; those of you who have term papers to submit, please stop by my desk and drop them in the In basket. The rest of you, our next Economics 101 class will assemble here in accordance with your class curriculum schedule.


Pain in the @$$, aren't I?

See ya!

Jim
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#18665
Distribution & Local Hobby Store Retail 8 Years ago  
Since when does the GTA have to turn in much of anything Prof? :D

I love the tank tracks analogy Jim; it has felt so too many times! :)
This is especially TOT concerning the unbridled, inexperienced and selfish enthusiasm from certain of the "youngsters", who I have had to deal with, who have not had any time in the "cage".
Your analogy is even more apropo concerning the constant agitation, pugnaciousness and belligerence from a certain "rabid" GW-defender who I will not name right here on the boards. :mad:
He even said, clear back in May last year, that he would not be coming back when his anti-RabidFox tyrades were not well received by a fair number here. :mad:
Well, 16 months later, he still present and has been agitating in the same manner, mayhap less blatantly, the whole time for no other reason than his personal "fun". :mad:
His histrionic comment concerning his departure from these hallowed halls, which I would have liked to quote, was decent drama, but truly lousy theatre. :mad:
Quoting it would have served none but himself so I did not, but your analogy Jim brought him :mad: directly to mind immediately.

tmcmenamin,
I truly wish that your idea as far as going back to FLGS sales was workable right now.
Do you know why?
That would mean that Dwarven Forge had really come into it own as far as a corporation and now had the size, resources and clout to have actual business FLGSs keep a decent level of DF product in stock so as to make Master Maze available to a wider variety of gamers.
I will for now, at least, lean back and dream of such a day. :cool:
RabidFox*
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SF: Starter(3), Passage(2), Alpha(7), Beta(2) someday soon;
Cavern: Cavern, Cavernous Passages, many individual pieces, Cavernous River & Wall and Cavernous Lake someday soon;
Fantasy: Room & Passages, Room, Octagonal Room, Wicked Additions I&II, Adv. Builder, Diagonal Walls Set, Dungeon Accessories, Medieval Furniture, many individual pieces.
 
#18666
Distribution & Local Hobby Store Retail 8 Years ago  
RabidFox,
I know that the FLGS idea is sort of a piep dream but if we get enough noteriety on it then it may come to fruition. Also, I like jackattack's idea about having a catalogue in the FLGS where you could go to order merch. from DF if you have no other means. Anything to get traffic inside the stores seems like a sound idea. As gamers and gamer consumers we need to charge the paddles on this industry.
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#18667
Distribution & Local Hobby Store Retail 8 Years ago  
Actually, David Wasilewski started the thread about catalogs (in the Fantasy Master Maze Products forum).
jackattack
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