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View Full Version : GW business model - keep the good lose the bad?



Tom - Heretic
27-01-2006, 11:59
The way I see it, GW has pros and cons and I thought it would be interesting if some of you more business minded chaps could clue me in more. It could even be productive (roffles).

Anyway, pros:
* Brilliant infrastructure, you can basically get what you want, when you want.
* great support, miles above any other wargame I've encountered.
* It keeps moving forwards, with new models, armies and games.
* mail order is great, you actually hope to get the wrong stuff :D
* All this means there is a large community of gamers, which (should) mean better forums, tournies, clubs etc.
* The games aren't half bad, too.

Cons:
* price. It's very expensive.
* Over enthusiastic staff - no, I don't play marines...no, I don't want to buy wood elves, ogres or templars thankyou....
* I get the impression that the veterans aren't really cared for, and what we would like to see never makes it to the shelves :(.


So, is there any way that GW could keep the good elements and lose the bad? I have a horrible feeling that the price of the models is directly linked to the quality of infrastructure...but hey, maybe I'm wrong.

As I said, what's your take on this?

Frodo34x
27-01-2006, 12:22
I don't know how well the first on the list of cons could be solved, but the second and third seem like they could be solved, but at a cost towards the new players.

captain_bas
27-01-2006, 13:10
would you say that 'over-enthusiastic' staff is a con?

after all, if youre a new player or someone who doesnt know anything about the games, having enthusiastic staff is a pro. after all, provided youre not introverted or there for a specific thing, most people like to have the staff talk to them. When i was a newbie, getting a potted guide tio the range was bloody useful and without it i would probably have bought a load of crap i didn't need.

anyway, if i dont feel like talking to a staff member, i tell them im just browsing. if they try and hard-sell you something, theyre not doing their job propperly. tell the manager. mind you, i reckon youre overreacting, ive never had a staff member try and get me to buy sometihng i didnt want and in fact quite the opposite, theyre always really helpful.

as for your last point, as a veteran, i feel cared for. the web support is great and games workshop still provides quality miniatures on a regular basis. with the possible excepton of the vespid i can't think of a bad miniature theyve put out in ages.

besides, i dont feel theres anything else they could do for us on a company-wide scale... i mean, basically what you want is specialist games brought back on a large scale, right? well the problem is that specialist games are such a tiny fraction (1% or so) of total sales that it just isn't good financial sense to put them back on the shelves.

anyway, in summery... i don't feel the second point is something that GW will address... they value having enthusiastic staff. having staff who talk to everyone and get excited about the product is central to GW attracting new customers.

as for helping the veterans, why don't you have a word with a manager, and make a suggestion? i used to suggest ideas for campaigns and some of them got adapted into stuff the store used.

CB

Mikhaila
27-01-2006, 14:41
The over enthusiastic staff is a pro, not a con. Maybe not from everyone's point of veiw, but certainly from the viewpoint of anyone that owns a business. Staff attitude can effect sales drastically, and selling things is the main reason for having staff member on payroll.

rkunisch
27-01-2006, 15:12
The over enthusiastic staff is a pro, not a con. Maybe not from everyone's point of veiw, but certainly from the viewpoint of anyone that owns a business. Staff attitude can effect sales drastically, and selling things is the main reason for having staff member on payroll. The question is how desperate the staff is to sell you something they think you need. As a customer I value helpful staff. I do not like people who tell me unasked what to buy. That said, I did not encountered much of them. The GW staff I met were always friendly and helpful and never tried to sell me something unwanted. As a fact they are better than most of the staff of other businesses (not only games related) over here in Germany.

Have fun,

Rolf.

Tom - Heretic
27-01-2006, 16:31
Exactly, rkunisch. Yeah, if you're new then no doubt the staff are helpful, but if you already know what you're buying you don't need to be pounced on, asked what army you collect and told all about how great space marines are.
Maybe this is another symptom of who GW aims it's products at, now. IE, not me.

Grimshawl
27-01-2006, 17:28
How about adding lack of support for many of the Non Space Marine armies/dex's into the con section? because that has to be one of my biggest complaints with GW.

triafata
27-01-2006, 17:43
The staff thing is a tough one. Completely subjective. I personally hate being jumped on by an ADHD kit on an upped dosage of pure white sugar asking me to collect the latest army I have no interest in.

BUT, I have to admit, I find the staff pretty into their jobs and that's a plus both from a customer and employer perspective.

Anyone know if the redshirts (they're still red in Canada) are paid any commision?

Tom - Heretic
27-01-2006, 17:47
I don't think any GW staff are paid on commission.

Easy E
27-01-2006, 19:22
No commission, just sales quotas (if I recall correectly). As a former salesman, nothing was more annoying than having a quota, but no commission.

As for prices and Infrastructure. Yes, the cost of the excellent infrastructure must be passed onto the consumer in some way, shape or form. I feel that a great deal of the model prices pay for the elaborate Retail/Sales system they have. As a veteran, this is annoying, because I want to go into a local store that has a variety of choices to look at, instead of a GW store that only offers 1 company. However, as a company, I can see the value of the stores as a portal to new gamers, and providing them with limited choices.

Devari
28-01-2006, 09:15
* great support, miles above any other wargame I've encountered.

I have to disagree with you completely on this point. I've been playing 40K since third edition, and I'd say that their support for the third edition rules was adequate. Since fourth edition was released, however, there's been absolutely NO SUPPORT AT ALL for any of the new rules or codexes. They have yet to publish any fourth edition errata even though it's been more than a year since the rules were released. They also removed all the previous third edition FAQs from their website, yet failed to reprint the errata anywhere even though they are still needed by all the third edition codexes still in use. So they've actually taken two steps backward with regards to support by failing to support the current ruleset in any way and also by removing errata that is still needed by the third edition codexes.

Some examples of very obvious rules problems in the Space Marine codex that should have been solved a long time ago are:

1. The space marine librarian's familiar doesn't have a "T" next to it in the armoury, so you can't take a familiar for a librarian in termiantor armour. But there's absolutely no conceiveable reason why terminator armour whould affect taking a familiar in any way. Until we get errata, however, we need to play by the rules as written, even though they make no sense.

2. According to the rules, Terminators can not move and fire rapid fire weapons as if they are stationary and cannot assault after firing rapid fire weapons, because the rules only give them these abilities when firing heavy weapons. But it makes absolutely no sense for a Terminator to have trouble firing a combi-bolter if they can easily fire an assault cannon. However, untill we get an errata this causes a problem with the rules for Terminator sergeants that want to use combi-weapons.

There are many more examples and they can all affect the game in singificant ways. Since it would take GW maybe ten minutes to post errata on their webiste I have no idea why they haven't fixed problems like these that have been around for more than a year.


No commission, just sales quotas (if I recall correectly). As a former salesman, nothing was more annoying than having a quota, but no commission.

I think if they started giving GW staff comissions the GW stores would become 100% retarded. As it is right now, I find about half the GW staff to be helpful (i.e., they undestand the rules and can have an intelligent discussion about the game) and the other half to be really annoying (i.e., they don't understsand the rules and actually argue with children about how the game "really isn't that expensive"). With a game as expensive as 40K, the last thing a player needs is to have someone try to convince them they should buy something that doesn't fit their army, doesn't work the way they thought it did, or that they simply don't need.


So, is there any way that GW could keep the good elements and lose the bad? I have a horrible feeling that the price of the models is directly linked to the quality of infrastructure...but hey, maybe I'm wrong.

The current prices of GW models have nothing to do with their "infrastructre". Other gaming companies have similar "infrastructure" to support and yet they produce similar quality products for around half the price. The prices of GW prodcuts are simply an attempt to see how much they can get away with charging. I personally think they've gone far past the point where this generates more profit and have actually ended up hurting themselves by losing customers (who are very unlikely to come back into the game).


As I said, what's your take on this?

My main recommendations to GW would be:

1. Reduce all prices by 20%. I realize that's NEVER going to happen unless someone who actually understands GW's customers is suddenly put in charge of GW, but if they actually did lower prices it would probably get a large number of people back into the game who had left due to ridiculous prices.

2. Start posting errata for the fourth edition rules and codexes on the GW website, and put all the third edition errata back on the website. ANY gaming company that expects to be taken seriously regularly publishes errata for their products, whether it's CCGs, RPGs, or miniatures games. I'm actually amazed that GW thinks they can avoid publishing errata for their games without getting their customers very frustrated at the lack of support.

Overall, I still enjoy playing 40K and I think that the fourth edition rules and codexes are an improvement over third edition. My infiltrating marine army is a lot of fun to play and I think that the rules for LOS and close combat in fourth edition work well. But for GW to compete effectively with other gaming companies (i.e., games like Warmachine that have much lower prices and much better support) I think that they really need to address these problems.

worldshatterer
28-01-2006, 12:24
What other companies in the wargaming industry maintain a similar level of "infrastructure" and produce models that sell for "half the cost"? I can't name one, can you?

Don't get me wrong, i hate GW's overpricing, and like a lot of the competition, which is marginally cheaper productwise and often based around you using smaller forces so will require less of an initial investment . However i do think you may be overexagerating .

Devari
28-01-2006, 18:57
What other companies in the wargaming industry maintain a similar level of "infrastructure" and produce models that sell for "half the cost"? I can't name one, can you?

Don't get me wrong, i hate GW's overpricing, and like a lot of the competition, which is marginally cheaper productwise and often based around you using smaller forces so will require less of an initial investment . However i do think you may be overexagerating .

The company I was thinking of is Privateer Press who produces Warmachine. Most Warmachine miniatures are around half the price (typically 50%-60%) of similarly-sized GW miniatures. For example, some retail prices in U.S. dollars are:

Warmachine Warcaster = $7-$8, Space Marine HQ = $10-$15
Warmachine Warjack = $20, Space Marine Dreadnaught = $40

Warmachine also has extensive errata on their website, something that GW simply doesn't have. So pricing and support are both much better for Warmachine products than they are for GW products.

Agamemnon2
29-01-2006, 09:08
Incidentally, what's with PP tacking the word "War-" on top of random nouns? I'm half expecting them to release Warpigs and Warbicycles soon.

Mikhaila
29-01-2006, 12:46
PP doesn't have even 10% of the infrastructure GW has, probably not even 1%. Nice game, decent models, but a totally different animal from GW games.

carmachu
29-01-2006, 13:54
PP doesn't have even 10% of the infrastructure GW has, probably not even 1%. Nice game, decent models, but a totally different animal from GW games.

And yet customer service/treatement and keeping on top of problem in their game is SO much better. A lesson GW needs to learn.

Tom - Heretic
29-01-2006, 15:13
I agree, PP seems to be more open to their gamers than GW is, but then again - that is to be expected from a significantly smaller company.

Still, give 'em a few years and they may well be nipping at GW's heels. That would be good for the gamers since prices will inevitably come down due to competition.

philbrad2
29-01-2006, 15:21
The way I see it, GW has pros and cons and I thought it would be interesting if some of you more business minded chaps could clue me in more. It could even be productive (roffles).

Anyway, pros:
* Brilliant infrastructure, you can basically get what you want, when you want.


Agreed



* great support, miles above any other wargame I've encountered.


Agreed again. Good background but when that comes to 'upping the ante' with ideas such as advanced rules for the core games. I still think GW is appealling to the masses with relatively simple rules sets in its core games.



* It keeps moving forwards, with new models, armies and games.

True also.


* mail order is great, you actually hope to get the wrong stuff :D

But GW MO is horrendously expensive. How can a box of Termi's (with packaging of course) cost 10 LESS than purchasing the sprues separately. I acknowledge GW must make a mark up on MO but 50% of the cost of the boxed set?


* All this means there is a large community of gamers, which (should) mean better forums, tournies, clubs etc.

Agreed but treatment of gamers by GW is two tier. New players with their firstarmies or those they buy the 'must have' army of the moment are lapped up. veteran gamers who have their preferred armies and playing styles are seen by GW staffers with a bit less enthusiasm IMHO. GW seem to be pushing the GW games club thing here in the UK quite strongly these days and kudos to them its a good idea. But there is still large areas even in urban areas with several stores in a 20+ mile radius that dont have a GW back club.


* The games aren't half bad, too.

On the advice of council I refuse to answer that statement :D




Cons:
* price. It's very expensive.

Yup and its a niche/luxury market and up to a point people will pay through the nose for luxury/niche products be they toy soldiers of expensive cars.


* Over enthusiastic staff - no, I don't play marines...no, I don't want to buy wood elves, ogres or templars thankyou....

Oh yes apart from the 'red shirts' I know in numerous stores the new guys who come and talk to you trying to push the 'army of the moment' seem to shy away a bit once the find out you've been playing X years and have Y number of armies. But to their credit its better to have enthusiatic people who actually play and know about their games than staff who are simply there to sell product. They may pay basic wages but the perks for GW staff who buy and play the games mean they are often happy(ish) bunnies. Numerous staffer within GW have asked me several times what it would take me to work for GW and the reply is 'mo' money' everytime. For GW's shop staff target group - males, late teens/early twenties with a passion for GW gaming then as a bassic way to get some cash and feed their gaming 'habit' GW is a good start. Like everywhere else the bottom rung of the GW ladder is the lowest paid. If you want to get on the bigger bucks (note I didn't say big bucks) are further up the GW ladder.


* I get the impression that the veterans aren't really cared for, and what we would like to see never makes it to the shelves :(.

Sort of ... gaming facilities I mentiioned above and if you read the other threads in this forum there is a reported policy change in GW against Vet gamers gaming in stores. As for not having what we want on the shelf (IG vets for example) I'd expect vet gamer/modellers to be sufficient ability to make their own.


So, is there any way that GW could keep the good elements and lose the bad? I have a horrible feeling that the price of the models is directly linked to the quality of infrastructure...but hey, maybe I'm wrong.

I had a big falling out with my local GW store a few years back when they wouldn't let me and my sons use a table in the store we'd arranged with the store the previous day and had got to the door before it opened to play. To be told 'Oh well we've no staff to referee' - WTF??? I've been playing 4oK for about 15+ years I'm perfectly capable of doing it myself. After several excuses I simply left the shop and have not been back to purchase items or frequent their gaming facilities since. I even complained to GW Lenton and got a full apology from the store manager and cell manager, the member of 'staff' who stopped me has since left after several more complaints. As a result I rarely frequent GW stores and don't at all for gaming. I do regularly play at Lenton and use WW and am lucky enough to have space at home to set up an 8x4 or 6x4 table when needed.

As a company I think their product is very high calibre, they have a motivated workforce in shops, although GW have some questionalbe business practises of late and the company has changed drastically changed in the last 5 years, better in the quality of the product that goes out of the door but worse in the catering for long term gamers. GW seem concerned with the 'quick buck' and milking a certain demographic (early teens with parents who'll pay the prices) the longer term gamer GW's support has shrunk in recent years. a shrinkage for me that ties in with the demise of the Citadel Journal a few years back. GW needs to look at its entire customer base not just those new gamers who may only play for a year or two before moving on. Until this is addressed, GW will start to loose long term gamers to other systems.

:chrome:

Devari
29-01-2006, 20:20
PP doesn't have even 10% of the infrastructure GW has, probably not even 1%. Nice game, decent models, but a totally different animal from GW games.

I was referring to the type of company infrastructure, not the size of the company. GW and Privateer Press are both tabletop gaiming companies and therefore carry out similar activities, i.e., rules design, model design, playtesting, printing and manufacturing, advertising, and so on. Privateer Press sells products of the same quality for considerably less than GW, so GW prices can't be blamed on the "infrastructure" needs of a gaming company. If anything, the fact that GW is considerably larger than Privateer Press should mean that they can offer similar products at a lower price. You see large businesses charging lower prices and pushing smaller businesses out of the market all the time. The larger buisnesses are actually considerably more efficient because of their size, i.e., their infrastructure costs are lower per item they produce. The argument that "GW is a bigger company, so they have to charge higher prices" is completely bacwards. GW should actually be able to charge considerably LOWER prices than Privateer Press.

captain_bas
29-01-2006, 20:53
maybe youre forgetting that GW has 300+ stores throughout the world, and probably about 100 times the staff that privateer press does.

since GW caters to a much larger amount of people, their infrastructure needs to be very different... whereas pp is geared towards producing rules and distributing their product to a small number of middle men or retailers, GW has 2 massive factorys, and is actually a miniature games producing and sales operation. thats why its so much easier to get hold of gw stuff than pp stuff.

your analogy is like comparing a one man computer building and selling operation to Dell computers (or apple, for that matter). since GW has a massive supply and support network, its infrastructure costs are much higher than pps costs.

CB.

Crazy Harborc
29-01-2006, 22:33
maybe youre forgetting that GW has 300+ stores throughout the world, and probably about 100 times the staff that privateer press does.

since GW caters to a much larger amount of people, their infrastructure needs to be very different... whereas pp is geared towards producing rules and distributing their product to a small number of middle men or retailers, GW has 2 massive factorys, and is actually a miniature games producing and sales operation. thats why its so much easier to get hold of gw stuff than pp stuff.

your analogy is like comparing a one man computer building and selling operation to Dell computers (or apple, for that matter). since GW has a massive supply and support network, its infrastructure costs are much higher than pps costs.

CB.

GW started small, GW was smaller/as small as PP is now. IMHO, all PP has to do is NOT follow GW's lead on pricing management and attitudes towards customers to catch up.

On the other hand, IMHO, it's far more likely that PP, Mongoose, Old Glory, Confrontation, and who knows how many others will keep taking in gamers from GW's market share.

Everytime GW manages to alienate/drive away a current customer, GW needs to suck in two replacements.

Devari
30-01-2006, 02:43
maybe youre forgetting that GW has 300+ stores throughout the world, and probably about 100 times the staff that privateer press does.

since GW caters to a much larger amount of people, their infrastructure needs to be very different... whereas pp is geared towards producing rules and distributing their product to a small number of middle men or retailers, GW has 2 massive factorys, and is actually a miniature games producing and sales operation. thats why its so much easier to get hold of gw stuff than pp stuff.

your analogy is like comparing a one man computer building and selling operation to Dell computers (or apple, for that matter). since GW has a massive supply and support network, its infrastructure costs are much higher than pps costs.

CB.

What you don't seem to understand is that infrastructure costs are lower PER UNIT PRODUCT PRODUCED for a larger company than for a smaller company. Saying "GW has 100 times more infrastructure" doesn't explain their higher prices because they can produce more than 100 times the product with that infrastructure. If larger companies couldn't produce products more efficiently than smaller companies, then why would any company want to expand? There would be no point in scaling up if their infrastructure didn't become more efficient. Since we know that larger companies out compete smaller companies all the time their production costs per unit produced must be considerably lower. So whenever you look at a company's infrastructre costs you also need to consider how much product they produce. GW's larger infrastructure allows them to produce products at a LOWER cost and should make their prices LOWER. The price increases we see can't possibly be blamed on GW's "infrastructure" because that simply doesn't make any sense.

Mikhaila
30-01-2006, 14:31
The price increases we see can't possibly be blamed on GW's "infrastructure" because that simply doesn't make any sense.

I wasn't trying to blame the price increase on anything. I just disagreed with your comment that they have similar infrastructure.

One thing that is affecting me as a store owner right now, is based on a difference in the infrastructure of PP vs GW.

If I order GW product, I get it two days later, with a fill rate of 99.5%. If I order PP product, it's a total crapshoot as to what any distributor has in stock, because PP isn't keeping up with sales. They are getting better, but I still can't keep in more than about 75% of their line at any one time.

The second problem is quality control. Because PP has put on extra people to catch up with demand, there packers are doing a crap job right now. A large percentage of models are missing parts. If a customer walks in with a bad GW model, I hand him a new box off the shelf, and get a replacement from GW in about 2 days. If a customer complains about a PP model missing parts, I have two choices:

1) If I have the model in stock, replace it, then email PP, wait for 2 to 3 weeks for them to ship the parts, and repackage the model.

2) If I don't have the model because its out of stock at PP/Distributor, I have to tell the customer I can't help him, he has to email PP himself.

Not a big deal in the end, just annoying. But it does point out the difference in infrastructure between the companies.

Devari
30-01-2006, 19:47
Considering the size differences between the companies, the availability of Warmachine products is obviously going to be less than for Games Workshop products. This is primarily a result of the SIZE of each company rather than due to differences in the types of infrastructure. If GW was the same size as Privateer Press you'd be having the same problems getting GW products simply because the total model production would be much lower.

My point was that some people are trying to claim that because GW is a larger company than Privateer Press they somehow need to charge higher prices, which makes no sense. GW's production should be more efficient than Privateer Press and should result in lower prices.

captain_bas
30-01-2006, 20:48
if GW just sold their stuff in the same way as PP... i.e. they sold everything through independent retailers, then yes, youre right, they would have a more efficient infrastructure and so their stuff would be cheaper.

however, there is one major difference in the infrastructure - GW has hundreds of stores which cost a large amount to run and therefore has to be taken into account when working out the efficiency of GWs business operations. im told that a third of GWs costs is in staff, and a further 20% in leases and suchlike, so that means GWs infrastructure and operations are vastly different from PPs.

so, the reason GWs business operations are not more efficient is the fact that they have invested heavily in a massive chain of retail outlets, and while essential to promoting their business, these are a massive drain on finances and have to be paid for from somewhere. this may go some distance to seeing why GW see price rises as inevitable.

CB.

Grimshawl
30-01-2006, 21:39
something most people fail to mention or think about when they mention GW run stores as why GW must demand more money for their products then smaller companies that just sell to indies and dont operate their own retail chain is that GW also gets to cut out the middleman when they sell their product in this way, that is where the money to run the GW shop should come from, not constant price increases. after all, Indies derive their operating cash and profits from the difference between what they buy GW goods for and what they retail GW goods for, if they can manage it as individuals an entire Company such as GW should be able to do it as well if not better.

Some guy (UK)
30-01-2006, 21:45
It was said before that enthusiastic staff are good- and i definatley agree with this- but what some failed to notice is that a lot of the red shirts are over enthusiastic. They go far to over the top at times. Especially when i go to a store ive never been to before, and they start hounding me with the latest codex. Well not all stores, but most;)

Later, Some Guy (UK)

Devari
30-01-2006, 21:49
if GW just sold their stuff in the same way as PP... i.e. they sold everything through independent retailers, then yes, youre right, they would have a more efficient infrastructure and so their stuff would be cheaper.

however, there is one major difference in the infrastructure - GW has hundreds of stores which cost a large amount to run and therefore has to be taken into account when working out the efficiency of GWs business operations. im told that a third of GWs costs is in staff, and a further 20% in leases and suchlike, so that means GWs infrastructure and operations are vastly different from PPs.

so, the reason GWs business operations are not more efficient is the fact that they have invested heavily in a massive chain of retail outlets, and while essential to promoting their business, these are a massive drain on finances and have to be paid for from somewhere. this may go some distance to seeing why GW see price rises as inevitable.

CB.

The fact that GW uses their own stores doesn't explain their higher prices because those stores should be a very efficient way to sell GW merchandise. The amount of sales that the stores generate should more than make up for the cost of operating the stores. If the stores weren't more profitable than using independent retailers, then why would they open them in the first place? It would be compeletly retarded for GW to open their own stores if they couldn't generate more profits by doing so.

And even if some of the GW stores don't provide an efficient way to sell their products for some reason (for example, if they chose a poor location for a store), then that's GW's own fault. Why should I pay more for GW products simply because they insist on selling them from their own stores instead of using independent retailers?

Corporal Punishment
30-01-2006, 23:47
The fact that GW uses their own stores doesn't explain their higher prices because those stores should be a very efficient way to sell GW merchandise. The amount of sales that the stores generate should more than make up for the cost of operating the stores. If the stores weren't more profitable than using independent retailers, then why would they open them in the first place? It would be compeletly retarded for GW to open their own stores if they couldn't generate more profits by doing so.

And even if some of the GW stores don't provide an efficient way to sell their products for some reason (for example, if they chose a poor location for a store), then that's GW's own fault. Why should I pay more for GW products simply because they insist on selling them from their own stores instead of using independent retailers?

If you think about it, it really does explain it though. GW has a lot of stores open here in the states in some of the highest priced retail space you can find. Once they sign the leases on those spaces they are a fixed cost from there on out for the most part. So if sales go down (they have) the only thing they THINK they can do is raise prices to try and make up for the loss of sales volume. One store can generate TONS of sales. I have heard some managers quote $2 million in gross sales. But you have to realize that the lease for the space is going to run them an easy $50,000 a year, then you have the staff costs to support just to run the place. The marketing of the product is what eats up all this money for them. The product itself is worth practically nothing at all in materials. 3% of retail price is average from what I understand, so that $40 dreadnought has $1.20 worth of material in it. There are other production costs of course, but I have no idea what they are.

Anyway, what the clowns in the boardroom need to realize is that VOLUME will make up for their crappy numbers. Not price increases. People have had enough of $40 Dreadnoughts and $55 Land Raiders. Lower prices and people may actually buy.

Go take a poll of everyone you know, ask them what they would buy if GW lowered prices by 25% tomorrow. I'd actually buy something at their store instead of on e-bay!

Devari
31-01-2006, 00:06
If you think about it, it really does explain it though. GW has a lot of stores open here in the states in some of the highest priced retail space you can find. Once they sign the leases on those spaces they are a fixed cost from there on out for the most part. So if sales go down (they have) the only thing they THINK they can do is raise prices to try and make up for the loss of sales volume. One store can generate TONS of sales. I have heard some managers quote $2 million in gross sales. But you have to realize that the lease for the space is going to run them an easy $50,000 a year, then you have the staff costs to support just to run the place. The marketing of the product is what eats up all this money for them. The product itself is worth practically nothing at all in materials. 3% of retail price is average from what I understand, so that $40 dreadnought has $1.20 worth of material in it. There are other production costs of course, but I have no idea what they are.

The problem with that idea is that GW is selling their products to the customer at RETAIL PRICES from their stores. They aren't selling them to an independent retailer at roughly 50% of retail. So instead of GW making, say $10 by selling a dreadnought to an independent retailer for $20, they make $30 by selling a dreadnought directly to the customer for $40 from their GW store. The costs of operating the GW store are EASILY covered by the large increase in profits.


Anyway, what the clowns in the boardroom need to realize is that VOLUME will make up for their crappy numbers. Not price increases. People have had enough of $40 Dreadnoughts and $55 Land Raiders. Lower prices and people may actually buy.

Go take a poll of everyone you know, ask them what they would buy if GW lowered prices by 25% tomorrow. I'd actually buy something at their store instead of on e-bay!

I agree completely about lowering their prices. I think that lowering prices would improve their sales regardless of whether they use their own stores or independent retailers. I don't buy GW products at retail prices anymore because I can get them online or on ebay for considerably less. The only reason I go to the GW store anymore is to place bits orders.

Corporal Punishment
31-01-2006, 00:23
The problem with that idea is that GW is selling their products to the customer at RETAIL PRICES from their stores. They aren't selling them to an independent retailer at roughly 50% of retail. So instead of GW making, say $10 by selling a dreadnaught to an independent retailer for $20, they make $30 by selling a dreadnaught directly to the customer for $40 from their GW store. The costs of operating the GW store are EASILY covered by the large increase in profits.

I agree completely about lowering their prices. I think that lowering prices would improve their sales regardless of whether they use their own stores or inepdendent retailers. I don't buy GW products at retail prices anymore because I can get them online or on ebay much cheaper. The only reason I go to the GW store anymore is to place bits orders.

I'm with you on the e-bay stuff. I buy from e-bay exclusively. There are some VERY GOOD deals on there.

I'm not so sure in regards to the store sales. Their profit margins after they have all their costs in the products are not that great IMO. They can't be. I've heard independents quote that they make 30% on items they order from distributors and 40% if they order direct. So GW's direct margin would probably be 50% or 60%. The question though, is whether that is an "all in" cost or just the cost of goods sold. They have a massive marketing engine in place to sell this stuff. For example, a full color magazine of high quality with a couple hundred pages that sells for $6 a copy and has no advertisers. I'd bet they take a sizeable loss on that. Things like that are what offset the profits from stores....along with the other marketing efforts they do, the physical costs of the store and staff, etc. At the end of the day those things have to be quite substantial, otherwise their share price would not be getting beaten silly.

And none of this addresses the issue of market penetration here in the states. With just their stores, the penetration is pathetic. They aren't even close to selling what they could if they didn't try to manhandle their independent sellers who built this hobby in the states from DAY ONE with zero GW retail outlets at the time. Such is the nature of the "publicly traded" beast though, when all eyes turn to share price and the product itself becomes secondary.

Wickerman71
31-01-2006, 03:39
Though in the end GW feels the store fronts do the job that they where intended for & that is show the hobby off to people not currently in it. Slapping some blister packs on a wall doesn't do a whole hell of allot. Where as showing fully painted armies on fully modeled terrain tables does quit a bit. In a pleasant mall store front manner it is a rather good sales tool IMHO. Not saying that some of the independents don't do this as well (though thru my experience most of them do not).

Being located in a busy mall sees allot more traffic than any side street shop is going to. All this has a cost & none of GW's competitors do this. The competition reaps the benefits of GW's fruits in this regard. After all I doubt there are very many Confrontation players that did not start out in the hobby on a GW product. If GW was to go out of business, I could not see their competition being happy for to long.

I'm not backing GW & saying they have a right to rape their customers far from it. Though comparing what other companies do to what GW does & stating they do about the same is complete non-sense. The Internet is a very valuable sale tool but it really can only do so much.

Corporal Punishment
31-01-2006, 04:35
Though in the end GW feels the store fronts do the job that they where intended for & that is show the hobby off to people not currently in it. Slapping some blister packs on a wall doesn't do a whole hell of allot. Where as showing fully painted armies on fully modeled terrain tables does quit a bit. In a pleasant mall store front manner it is a rather good sales tool IMHO. Not saying that some of the independents don't do this as well (though thru my experience most of them do not).

Being located in a busy mall sees allot more traffic than any side street shop is going to. All this has a cost & none of GW's competitors do this. The competition reaps the benefits of GW's fruits in this regard. After all I doubt there are very many Confrontation players that did not start out in the hobby on a GW product. If GW was to go out of business, I could not see their competition being happy for to long.

I'm not backing GW & saying they have a right to rape their customers far from it. Though comparing what other companies do to what GW does & stating they do about the same is complete non-sense. The Internet is a very valuable sale tool but it really can only do so much.

I'll agree that it is good for the hobby. The question is "how good?" Based on earnings I'd say not good enough.

My point was do they need to be in the highest priced retail space in the city? Maybe they feel like they do because their prices are so high that they need high end shoppers with lots of disposable income. That could be the philosophy at work. I'll tell you though, you will get a lot more sales and move a lot more product if you cater to the mainstream middle class of our society. These are plastic army men and while they are an item that is purchased with disposable income they are not a luxury item nor a status symbol so I'm not sure how the marketing of product in high end settings fits into all of this. After all the products are not so pricey that the average person couldn't afford them.

Not only that but if you read the quarterly reports, Mr. Kirby has repeatedly explained that the company doesn't need to advertise and only needs to rely on word of mouth. That idea also does not jive with having such a high end, expensive location. Niche products of that nature are things that customers SEEK on a regular basis. The customer finds you when you sell that item, you don't have to lure that customer in. And that is what happened in the US up until the late 1990s. There simply weren't many GW stores and the gamers sought out GW product. Of course that customer is the veteran gamer which GW seems to shun at every possible turn. I suppose a point could be made that the "walking by" customer who buys things on a whim at the high end mall could be exactly who GW wants to attract. A very valid point IMO but if that is the case then why not just go all out and advertise like any other business would?

In the end we may never know what is going on in these people's heads. I'd love to sit in on some meetings of the senior marketing staff though. That's be a real hoot.

Wickerman71
31-01-2006, 14:17
I'll agree that it is good for the hobby. The question is "how good?" Based on earnings I'd say not good enough.

We all have different experiences when it comes to getting into this hobby. My self it was a GW store that got me playing. Not a local store mind you but the Birmingham store in England when I was on vacation their in the mid eighties. After that I mainly had to use mail order to get the stuff until the GasTown store opened up.

As for the high price they pay for area that see allot of traffic certainly has a cost attatched to it and as I said it really is aimed at first timers. After all 90% of business is location being centered around allot of foot traffic is not a bad thing. Some one that has been in this hobby along time may feel it's a waste of money because it does nothing for them but in the end I feel it is a very narrow view.

Though if you where to argue that maybe they had too many of these types of stores I might be inclinded to agree. Seeing as there is all ready 3 stores within 20 miles of me & a forth coming soon. As for bad sales as you call them I don't see how the store fronts could be at blame for this other than the argument that they drive up cost.

Mikhaila
31-01-2006, 16:10
I've heard independents quote that they make 30% on items they order from distributors and 40% if they order direct. .

For the last few years, an independent store, in the US, gets 45% discount, and free shipping at 500 dollars. Ordering from Alliance, ACD, or several other distributors is on a discount of 40%, but you can order one of a blister, vs a sleeve of 2, and you can piggyback your GW order with your regualar game order, to hit the free shipping amount of 300 dollars. These numbers probably vary a lot by country, and I suspect the US might be at the upper end of the discount range.

Crazy Harborc
31-01-2006, 20:27
Times do change, a 45% discount off of list:eek: On that point GW IS a good company.

Okay....back to sleep now.

Corporal Punishment
01-02-2006, 02:48
We all have different experiences when it comes to getting into this hobby. My self it was a GW store that got me playing. Not a local store mind you but the Birmingham store in England when I was on vacation their in the mid eighties. After that I mainly had to use mail order to get the stuff until the GasTown store opened up.

As for the high price they pay for area that see allot of traffic certainly has a cost attatched to it and as I said it really is aimed at first timers. After all 90% of business is location being centered around allot of foot traffic is not a bad thing. Some one that has been in this hobby along time may feel it's a waste of money because it does nothing for them but in the end I feel it is a very narrow view.

Though if you where to argue that maybe they had too many of these types of stores I might be inclinded to agree. Seeing as there is all ready 3 stores within 20 miles of me & a forth coming soon. As for bad sales as you call them I don't see how the store fronts could be at blame for this other than the argument that they drive up cost.

That was exaclty where I was headed with my previous post, the fact that such high end retail space is not cheap at all. But also the infrastructure to distribute to these stores.

I was introduced to the hobby 14 years ago and the store I played in was in the middle of Oklahoma. The only store in the US at the time if I remember correctly was in Maryland. The only other option was mail order. But we had a sizeable club devoted to GW games despite the lack of support. It's that environment that built this hobby in the early days.

Of course, earnings growth is not achieved with that kind of arrangement. You have to be able to distribute product to customers in order to grow sales and earnings per share. IMO, it would seem that in an effort to attract that "buy on a whim" customer in the high traffic, high disposable income setting that maybe the infrastructure is a big cumbersome. Just a guess but I also suspect that sales across the board are down and LOTR has masked the problem for a while. With the increase in prices as an attempt to soften the blow. Now that the LOTR fever is tapering off we may get a better view of what is going on in the coming years.

Crazy Harborc
01-02-2006, 21:40
CP..........do you do your gaming in Tulsa by chance? I visit the the one real gaming store a couple of times a year. Let's see that would be Top Deck(?). I met the new owner, about a month ago.

IMHO, the GW, USA history of dealing with indies has made it less likely to persuade "thinking about it" store owners to do the work/time/money needed to build a market for GW products in a new area. Maybe the boys at GW, HQ, USA will not repeat their past practices towards indies, in areas GW opens company stores in.....Here's hoping (I really do mean that too).

Corporal Punishment
01-02-2006, 23:04
CP..........do you do your gaming in Tulsa by chance? I visit the the one real gaming store a couple of times a year. Let's see that would be Top Deck(?). I met the new owner, about a month ago.

IMHO, the GW, USA history of dealing with indies has made it less likely to persuade "thinking about it" store owners to do the work/time/money needed to build a market for GW products in a new area. Maybe the boys at GW, HQ, USA will not repeat their past practices towards indies, in areas GW opens company stores in.....Here's hoping (I really do mean that too).

I am in Dallas currently and the store I learned to play in was in Norman, Oklahoma. It is long gone now, of course.

I agree with you in regards to the indie store owners. The problem now is that GW has competitors. Right here in Lewisville, TX is Reaper miniatures and they are churning out some decent models. Every store around here is picking up their fantasy game.

Crazy Harborc
02-02-2006, 21:30
IMHO, it's not going to be one company competing with GW for it's market share that will overtake GW. I can see more quality minies and games available every year. Then there's the PC and or gamebox games...ready to play right out of the box.

But, oh well.........the suits at GW's HQ in the UK "know" the supply of potential newbies is endless:rolleyes:

KnightoNi1894
03-02-2006, 11:05
Times do change, a 45% discount off of list:eek: On that point GW IS a good company.

Okay....back to sleep now.

45% off good? Are you retarded? Most games run from distributors at 50-55% off retail, not 45%, which is direct from GW. Understand that the game industry, as well as most products that game stores deal in, generally have approx. 100% markup on all items, thereby netting them 1/2 of the retail price in actual "profit" on any actual sale. This "profit" is then cut down by overhead like electricity, employees, rent, etc. This is a very low profit margin compaired to most retail/food outlets.

Clothing sales generally net 1000% "profit" just like resturants (especially sit down ones compaired to fast food). How much do you think that hamburger $8-10 from T.G.I. Fridays really costs the restruant? $1, maybe $2...

45% is definately NOT a good discount, especially dealing with direct sales from the company...

Knight

BlazeXI
03-02-2006, 11:35
The way I see it, GW has pros and cons and I thought it would be interesting if some of you more business minded chaps could clue me in more. It could even be productive (roffles).

Anyway, pros:

Cons:


Well, if you want to evaluate how company is doing the easiest way would be to do a SWOT analysis. Instead of dividing values on Pros nad Cons it should be grouped in 4 Categories:

*Strenghs
*Weaknesses
*Oportunities
*Threats

So Tom-Heretic, your Pros= Strenths, cons=weaknesses
as to

Oportunities:
*LotR was one few years ago,
*now Down of War and other computer games are,
*as I think the summer Campaigns are

Threats:
*computer/video games
*cometitors gaining market share

Crazy Harborc
07-02-2006, 00:36
45% off good? Are you retarded? Most games run from distributors at 50-55% off retail, not 45%, which is direct from GW. Understand that the game industry, as well as most products that game stores deal in, generally have approx. 100% markup on all items, thereby netting them 1/2 of the retail price in actual "profit" on any actual sale. This "profit" is then cut down by overhead like electricity, employees, rent, etc. This is a very low profit margin compaired to most retail/food outlets.

Clothing sales generally net 1000% "profit" just like resturants (especially sit down ones compaired to fast food). How much do you think that hamburger $8-10 from T.G.I. Fridays really costs the restruant? $1, maybe $2...

45% is definately NOT a good discount, especially dealing with direct sales from the company...

Knight

Well, welcome to the club.......I'll step down and let you become the new leader of the "R" club:D

So what country are you in?? It's hard to tell with no "location".

I been in the restaurant business (have several good friends who own their own places). I really don't know (or care) about markups at chain owned restaurants like TGI Fridays.

I owned (part owner) a hobby/gaming shop (Again, several friends own their own) Yes, GW does do 45% off list NOT 50-55% or 100% to indies. That is better than most wholesalers and or manufacturers give.

As far as 45% isn't a good discount..........and indie gaming stores marking up 100%?? If the ones in your area/country do that, try finding some decent NON- greedy ones to deal with.

Mikhaila
07-02-2006, 01:08
Some numbers from my game store in Americal, obviously will vary in other countries.

Note: Mark up and discount are different ways to judge profit margin. Discount is how much less than retail a distributor charges a retailers. If a 10.00 blister costs a store 5.50, thats a 45% discount.

Markup is the percentage a store marks up a product based on its cost. If a store buys a blister for 5.00 and charges 10.0, its a 100% markup. The term 'keystoning', means charging twice as much for a product as you pay for it.

Discounts on some products to american game stores.

GW- 45% if you're direct, 40% through distributors.
Magic- As high as 48% direct, low as 40% through distributors.
FOW-40% most ac****s, 45% for large accounts.


Very few products are ever offered at more than a 50% discount, (100% markup). Several years ago my average discount was 50%, now it's closer to 45%. All discounts on games have gotten worse over the last 17 years I've been in business.

GW's discount is less than some, better than others.

Hlokk
09-02-2006, 18:06
Well, if you want to evaluate how company is doing the easiest way would be to do a SWOT analysis.

Well, not really mate. SWOT is a summary tool, not an analytical tool in itself. If we truly want to evaluate GW, we need to look at things like Ansoff's matrix, Porters 5 forces, Mintzberg's taxonomy of organisational forms, LoNGPEST etc...

Wintermute
09-02-2006, 18:28
Are you retarded?


This sort of language is not welcome on Warseer. Please keep your posts civil and do not question the intelligence of fellow posters again.

Wintermute
Forums Moderator

Devari
09-02-2006, 18:31
Very few products are ever offered at more than a 50% discount, (100% markup). Several years ago my average discount was 50%, now it's closer to 45%. All discounts on games have gotten worse over the last 17 years I've been in business.

GW's discount is less than some, better than others.

And yet GW's retail prices are higher than those of other miniature companies. This means GW is charging distributors more for their products and the distributors (or the GW stores) are charging proportionally higher retail prices. Which means that:

1. GW's is very inefficient, wasteful, etc. when producing product, resulting in higher costs that are passed on to the distributors and then to the customers.

Or:

2. GW can produce miniatures at the same or lower costs as other companies, and is simply very greedy, resulting in higher prices.

Considering the massive price increases (50% over five years, which is MUCH higher than inflation) and the size of GW, I can't possibly see how option #1 could be the cause of their higher prices. This leaves option #2: pure greed.

Brushmonkey
09-02-2006, 19:54
Yes, because all of those new factories, sculpting technonlgies and spanking new figures pay for themselves...:wtf:

Devari
09-02-2006, 20:29
Yes, because all of those new factories, sculpting technonlgies and spanking new figures pay for themselves...:wtf:

New factories and technologies SHOULD pay for themselves after a few years by allowing GW to produce and sell more product and by making the company more efficient. There's simply NO WAY that GW should be less efficient than their competetors. If anything, their larger size means they can streamline and centralize model design, production facilities, distribution, etc., which means that they should be able to produce models for a LOWER cost than other companies.

pyramid_head
09-02-2006, 20:33
the vets are considered expendable. Got this point hammered home last night at a vets night. One table was open, the other two having demos set up on them, when I asked to clear one I got the response "what are we supposed to run after your asses all night?". I responded with "uh well its veterans night isn't it?" to which the weasley little **** goes "I DONT SEE MANY VETERANS AROUND HERE". Pretty much all the regulars were in.

In conclusion: **** GW local I'll buy cheaper off online vendors and go to clubs

Crazy Harborc
09-02-2006, 20:40
"ALL those new factories"?? There is one GW factory in the UK and one in the USA. The one in the USA is going on it's second year I do believe. Is GW opening another somewhere else??

Exterminatus
10-02-2006, 14:49
This sort of language is not welcome on Warseer. Please keep your posts civil and do not question the intelligence of fellow posters again.

Wintermute
Forums Moderator


Are you retarded?

hehe just kidding wintermute, I would like to receive one strike please.

BlazeXI
11-02-2006, 14:39
Well, not really mate. SWOT is a summary tool, not an analytical tool in itself. If we truly want to evaluate GW, we need to look at things like Ansoff's matrix, Porters 5 forces, Mintzberg's taxonomy of organisational forms, LoNGPEST etc...
easies, Hlokk, easiest.

Hlokk
13-02-2006, 23:52
easies, Hlokk, easiest.
Depends. Johnson and scholes (1997) argue that it isnt really the easiest tool to use if you dont have the info from other sources in front of you. You just end up making unfounded generalities.

(Sorry, I had the book in front of me)
:p

Mikhaila
14-02-2006, 00:13
Depends. Johnson and scholes (1997) argue that it isnt really the easiest tool to use if you dont have the info from other sources in front of you. You just end up making unfounded generalities.

:p

Bring it on! If there is one thing that these forums are good at, its Unfounded Generalities.

Inquisitor Samos
14-02-2006, 14:56
Indeed! "Unfounded Generalities to the Fore!" should be one of our mottoes! Huzzah!


Another should be "All of 'Wargaming-land' Is Consistent with My Own Personal Experience!"




(Oh, btw: :p ;) , just so no one misunderstands and thinks I'm being malicious!)

Grimshawl
14-02-2006, 15:35
I know its so unrealistic to base your opinions on real life experiences, what were we thinking and since this is a web based medium it must all be a lie anyway, right. here have some more generalities, the sky is up, and is the color blue, mountains are high, water is wet and the sea is salty, but since all those things arent true all the time and I'm proclaiming them from my own personal experiences as well as in an online forum we can pretty much garentee that I'm wrong.;)
just like most of the posters here.

Taliesynkp
14-02-2006, 16:08
We keep coming around to the same point. GW has the legal right to charge whatever they want for their products. We have the legal right to decide what we want to buy.
I'm finally going to gain control of my trust fund (after waiting 25 years past when I should have gotten it). Money to purchase anything is not going to be a problem for the rest of my life. Yet, I still have no intention of paying GW prices. I used to love the game; Now I feel like sucker everytime I play.
Based on GWs fiscals for the past two years they are in a death spiral and doing exactly the wrong things (like most companies) to get out of it. When they go under in '09 or '10 maybe whoever gets the IP will be less annoying.

Inquisitor Samos
14-02-2006, 16:36
I know its so unrealistic to base your opinions on real life experiences, what were we thinking.....
"'Reality' is what we take to be true. What we take to be true is what we believe. What we believe is based upon our perceptions. What we perceive depends on what we look for. What we look for depends on what we think. What we think depends on what we perceive. What we perceive determines what we believe. What we believe determines what we take to be true. What we take to be true is our reality." - Gary Zukav, The Danicng Wu Li Masters


Or, in alternate terms: Each person's position on any issue is relative to their own experiences only, and will not necessarily be the same as the positions of any other persons.

Such indeed is the case with opinions/positions on Games Workshop.

Grimshawl
14-02-2006, 17:38
to which I reply Blah, Blah, Blah.
Look you and I breath simular air on the same planet but using such theorims as you've just spouted it would be hard to prove it even if we were standing shoulder to shoulder.
thats the same type of thinking that says... If a tree falls in a forest and no one is around to hear it, does it make a sound?... (no)
....of course it does.
anyway each to their own.

Inquisitor Samos
14-02-2006, 19:25
Avoiding going off further on an epistemological or metaphysical tangent, my point was actually that we all have our separate reasons to like/dislike the way GW is currently operating.

I myself am in the "love their products, but their prices and their general way of doing business suck" camp. It seems to me that you are in a somewhat more negative-polarity viewpoint than I am. Mikhaila, on the other hand, has a more positive viewpoint, as he's not having any problems to speak of with GW, and GW's products sell well in his area. Others don't see why they should be upset at GW's prices or business model at all, and therefore can't see why other people complain so much about them.

None of that makes any of us automatically "GW Bashers" or "GW Apologists." (Although the self-admitted "GW-haters" do tend to be more honest in expressing exactly what they are about than the "GW-lovers" do, at least in my opinion.)

And none of that makes any of us automatically, categorically completely correct, either.

This last point is the main thing that I feel people tend to allow to get lost in discussions such as this one. None of us should fall into the trap of thinking that our own personal bad/good experiences/feelings/opinions about the way Games Workshop has been doing things are the only point of view, nor should we believe that everyone else really should agree with us on the matter.

Grimshawl
14-02-2006, 20:15
good points, I can actually agree with you on almost all your last post, anyway, I generally am fed up with GW as a company but your right in that they do make and have made some really great games that I still want to play, which is why I am still paying atention to what they're up to.

Inquisitor Samos
14-02-2006, 20:37
I suspect that your main point of contention with them is the same as mine: the Specialist Games and the near-total-lack of support thereof........ ;)