Oh, where to even begin?
These things happen because:
1) Hasbro don’t like to give full margin on products. Or any margin if they can help it.
We get reduced margin on Magic, on Monopoly, on pretty much everything except D&D – and well, they sell it to Amazon at a price so far below ours it is frequently cheaper to buy from Amazon than to restock from a distributor.
This obviously sucks.
But hey – the reason it sucks is because Hasbro has seen so many stores selling at 10, 20, 30% off. So obviously big mass publisher feels that big mass retailers can make money by selling a big mass of games at a slim margin. Because Hasbro.
2) Zavvi had exclusivity, so naturally they sold at a premium. But they were essentially fulfilling all of it and they have a larger operation than any one UK store.
Again, the myth that you can make up in volume what you lose on individual margin, so long as boxes come in and go out with minimal staff involvement.
3) In a race to get the good news out, Asmodee fucked up their pricing. I imagine that the extra £8 per copy is what Asmodee’s margin is.
That it was a simple copy paste error in a spreadsheet.
Now Asmodee would say, you don’t expect us to work for free do you? We have all the costs of getting the product to market, and we only made something like £9 million profit on the UK arm last year.
Games don’t grow on trees and neither does investment capital.
And they are right.
(See point 2 above: exclusivity)
As the Spice Girls sang, if you wanna be my lover, you gotta get with my friends.
4) Concentrate – here comes the retail bit.
You see, everyone is racing to get the best deal out there to ‘steal’ the preorders. Like, there is going to be a lot of this coming in, but not enough – hopefully. Now, in a sensible world everyone sells the limited edition thing at MSRP.
But we don’t live in that world.
You see, the tank fills up from the bottom. And if you run a discount operation you need to buy and flip and buy and flip and buy and flip. It even has an industry term: pump and dump.
So yeah…See, shipping isn’t free. It has a cost. That’s what margin is for – paying the operating costs and the shipping costs and everything else. Go back twenty years and the top six game stores in the UK were very different. Until Maelstrom came along, game stores didn’t race to the bottom on price.
But after Maelstrom, everyone did. It was their sole USP.
Now, lets say you have a product like Dominion – the GW game, not the deckbuilder. You need to be the store that pumps and dumps your copies first – because you can’t afford stockholding. It’s all preorders, cheap as chips, get ’em out the door.
Oh dear.
Now, if you factored in a margin, you still have some margin. Just £8 less of one. That means with the margin shave – the haircut as we say – you are now only making 20%. Which kind of sucks if you are used to discounting 30%.
5) the consumer. When it was a Zavvi exclusive, you had no alternative but to pay the price. And hundreds of thousands of people did. Just that. Descent is £175. Heroquest will be nearly that once you’ve added in the bonus exclusive figure. GAME aren’t discounting it – remember how console games used to be part of a price war and now they are all the same price? Because publishers simply reduce the margin if they think folks are going to discount it to get one over on their competition.
Consumers don’t win long term.
In fact, they lose bigger. Because only the big operations survive – or the ones that flipped their Dominion’s first.
So yeah.
This is the reason i don’t take preorders. And yeah, all us FLGS stores do a tiny fraction of the business these big guys do. But I only need to sell one copy to their seven.
Now, you can blame any and every party in this chain. But its the culture of discounting, pumping and dumping that’s to blame.
The Quantum Retailer 