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Rumor's true. GW to screw Internet businesses

 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Tue Apr 22, 2003 6:50 am 
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Very well said. ?And it appears we both must have seen the same daily news footage ... Does Jervis wear a beret ? ? :laugh:

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Tue Apr 22, 2003 7:17 am 
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Yeah, their response wigged me out. I am completely confused now. I have sent an e-mail to GWUS. We will see if I get an answer.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Wed Apr 30, 2003 10:20 pm 
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Okay, I will not defend GW by any means.  However, from their history, I would say the decision is based on "branding" issues.

For years, GW has been very adamant that retailers should rarely, if ever, discount their goods.  Discounted goods lead to a reduced perception of value.

You needn't look any farther than the average comic shop to see this happen.  The industry standard is a 20% discount off cover price, and "files" for regular customers where the stores keep the books until they feel like picking them up.  The result is that shops can't raise their prices or the good customers go elsewhere, but the advantages of reducing their "dead stock" are limited by the people who let their books sit for extended periods only to eventually skip out.

So, GW seems to be attempting to use its distribution controls to prevent the almost universal 20-30% internet discount from eroding their brand value.

I'm sure they expect to only pick up a portion of the internet business.  The real question is whether the smaller volume of retail sales will generate as much profit as the greater volume of wholesale sales.

On the copyright issues, I think they would do better to remember that they are a toy soldier company, not a rule and art company.  Copyrights can be protected as easily as they can ask people to shut down a website or remove material.  Basically, all they need is a notification that the person is being allowed to use copyrighted material for non-commercial uses, and an acknowledgement from the person.

I think it's mildly amusing that they used Tolkien's term "Eldar" and somehow avoided copyright entanglements, but they are beginning to lean towards the Disney uber-aggressive protection of their own copyrights.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Thu May 01, 2003 3:33 am 
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Hi!

This particular topic is of great interest to me due to my past experience as a retailer (thank god I no longer retail in this kind of enviornment!).

1. The IP issue is just a smoke screen, this is about business and increasing profits and eliminating competition. I'd have more repect for them if they just stated their intentions as such instead of disguising it and trying to pass of as victims.

2. As Neal mentioned, it has been GW's mantra, for nigh 7-8 years, that discounting is bad business. IN a sense this is true. A standard brick and mortar store can ill afford discounts dur to overhead costs. The most I have seen on a regular basis is 10%, perhaps more on limited clearances, but they can't due this regularly. Of course only the naive would believe that GW does this to benefit B&M stores. It is well known that GW will put up stores near competing independent dealer that sell a lot of GW stuff and then screw up their orders and a hole host of other underhanded things until that business croaks. The idea behind eliminating discounts is to eliminate alternate sources of cheap GW figures so that the only choice is either to buy from an independent dealer or a GW store at FULL reatil price. OF course they REAL reason is to so limit choices so that those who dont have a game store close (which in the US is a common thing), will buy online with the only one being able to do so...GW mail order. :(

3. The venture is not without risk. GW runs a real danger of losing market share to other competing products on the online market. Online stores that can push other non-GW lines successfully, it may be difficult, but not impossible. IF companies like Excelsior (warzone) or I-kore (Void) are smart and capitalize on GW limited online presence (via their online site), they could increase their exposure and thus sales riding the anti-GW wave that is evident on most forums. The other flaw in GW's strategy is that they are assuming that most if not allonline buyers will happily (or not) buy online from them at full price. A pretty big assumption. I predict many "black market" trades and sales will occur at many a site where GW has no control.

While GW has done many "questionable" things in the past, it will be interesting to see if this will work. They have tried in the past to "tame" the US market using the UK model and it has failed, we'll see if this is any better.

Primarch

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Thu May 01, 2003 6:24 am 
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Hell, I am not going to buy from them at their prices. As for the B&M stores, I have to say that they are a heavier screw than GW. Example: BFG at GW online is 50.00. BFG at my local B&M is 59.99. Screw that. The only business that any of my local B&Ms get from me is either emergency or impulse buys.
So, I would have to make an assumption that by eliminating online sellers. (Which you can obtain BFG for around 39.00, by the way) They would bring all buyers to them because old B&M shops can't compete with anyones prices. That is pretty low. Is this a correct or am I reading too many conspirocy books?  :p

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Thu May 01, 2003 2:39 pm 
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I have a hard time believing that GW distribution would intentionally screw up orders to high-volume stores just to supposedly help their own stores, for several reasons.  3 anecdotal, and 3 based on marketing principals:

1) My friend who owned 3 game shops in middle-TN told me that the GW stores were primarily to promote the hobby.  This was confirmed to me by another shop owner.  Given the location of the local GW store (among the highest overhead locations in Nashville), I tend to believe them.  It seems the stores are about promotion, marketing, and advertising rather than retail profits.

2) The local GW store is incredibly helpful.  Again, my buddy said they promoted the hobby and were less interested in direct competition.  The GW shop is actually running a promotion that culminates in a tournament at an independent store.  

3) Directly questioning the owners of two other local stores resulted in both of them telling me they weren't worried before/haven't suffered any discernible loss of business since the GW store opened over a year ago.

4) GW knows that local shops have loyal customers who prefer to do business with them.  Tanking those stores would not result in full capture of their business, and would make a lot of people mad.  They only locate corporate stores in high-volume areas, which means that there are probably multiple outlets.  If they mess with all of them, the chances that everyone would be out of the same stuff at the same time is slim, and would be blamed on GW.

5) In the past few years, the amount of communication between stores has skyrocketed, and they have been fighting heavy-handed marketing and distribution.  For example, GW started requiring large minimum orders for new releases and stores ended up with dead stock.  After many online discussions, many of the stores decided to skip the new releases and order smaller lots after the figs went to the regular rotation.  Not only did GW get a drop in new release orders, the figs did worse overall because by the time the stores had them, the excitement had worn off.

6) Related to #4, it's a good way to lose overall hobby market share.  Miniature games don't just compete against each other, and neither do the retail outlets.  RPGs, CCGs, and computer games compete for much of the same pool of hobby money.  Screwing around your customers is going to result not just in customers going to competing miniature games, but other hobbies as well.

In short, it would just be a bad idea, profit-wise, and my personal observations are that GW, however business-oriented they are, is not a stupid institution.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Thu May 01, 2003 4:03 pm 
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I just got a response from a college friend who now runs a game shop in another town.

According to the GW reps, it is an effort to drive business back to the retail outlets - GW or not.  The idea being that B&M stores run games, do demos and bring new customers into the hobby, while internet sales do not.

My friend seems to think it's the best thing since sliced bread, for obvious reasons.

I'm certainly not a marketing expert, so maybe they are right in thinking that their retailers will build their customer base more than the lack of internet sources will inhibit it and pissed off people will leave.

Time will tell.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Thu May 01, 2003 6:22 pm 
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This f*cking pisses me off more than I have ever seen GW do before. ?I have heard a lot of store owners complain about GW's business practices, but it never really affected me till now. ?It is not just that I am irritated that I won't be able to shop for deals online, but as webmaster myself, I know the hard work people put into an online business and GW has just kicked them in the ass. ?Shouldn't GW be a little thankful that online shops buy and sell their products?

There are two large hobby stores in my area, and both hold games, BUT ONE SELLS GW items at a discount. ?Guess where I shop? Also, guess which store has the greater following? GW still get their money whether the store charges full price or the business is offering a 50% close out sale. ?I guess I'll still be able to get items for cheaper anyway, but to restrict where I shop to hobby stores where most are dumps anyway blows my mind.

Plus it is hard to justify paying $30 for 16 Dark Eldar Warriors when you play them in units of 10. ?Brilliant, so do I buy two boxes? Maybe use the leftovers in my HQ Retinue? Maybe fill the gaps with metal minis? Why not just sell them in groups you play them in? I know this was deliberate.

The only thing that keeps me going are the discounts. ?There is no freakin way I would pay full price to get into a new army today. ?It just isn't worth it. ?I got out of the hobby for several years until some co-workers expressed interest in 40k, and found myself really excited to get back in it, but I see myself getting out of it again. I put in a $100 order from GW the other day, and that is the last one I make. ?From now on I'll just buy second hand.

Too bad too with EpicA coming out, but there is no way GW USA is getting anything from me anymore. ?I live in Florida, there's too many things for me to do here anyway.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Thu May 01, 2003 6:31 pm 
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It won't. Not every one has access to a gaming store. Or, in my case, a good one. All of the stores around here are way over priced and have little to no games going at all. If there is a game it is usually some fantasy one. I can't see how it wil build a decent market base. I have never seen one of these stores full of people. I am glad Neal has a helpfull GW store locally, the nearest one to me was staffed with... How can I put this? Very, undertrained and unhelpful people.

I have to admint that I am no marketing expert either. I get most of my marketting knowlege from my wife. She has been in the marketting game for over 10 years now. She sees it as a bad move. A really bad move in fact. It could also just be that she works for cisco. So, she may just have an affinity for the internet.  :p

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Fri May 02, 2003 2:02 am 
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Hi!

There is no doubt that dealing with GW is a mixed bag. As Neal points out, some retailers indeed do have a good relationship with GW and some honestly believe this move is in their interest. However, it is also that GW HAS engaged in short changing competing independent dealers, this not only on anecdotal tales from online forums, but from my own direct observations and conversations with store owners. Mind you, not all such events end in the store closing its doors, some of those stores were savy enough to stock and push non-GW lines and thus were able to survive, but it did hurt the bottom line for awhile. It is also true that others were not so lucky, then again, perhaps that is in no small measure their own fault for not being diverse enough to survive such an event. While I may not like GW's policies, I make no excuses for businesses who did not plan ahead for this happenstance. The business maxim of "diversify or die" holds very true in the business of hobby stores.

Neal also brings another good point, non-miniature alternatives for entertainment abound and are relatively inexpensive when compared to the hundreds of dollars a warhammer army may cost. Computer games come to mind as perhaps one of the biggest challenges mini-games may face. While some may scoff at this, a game that cost 40-50 bucks and can potentially provide hundreds if not thousands of hours of entertainment certainly has huge advantages over mini games for the casual buyer. This perhaps more than other mini-game competitors could hurt GW since it diverts all those impulse buys. Imagine a couple of "pokemon-craze" games coming out around now, GW would definitely be at a disadvatage as it has shown to be in the past versus such competition.

I agree that GW, as a corporation, has many people thinking very hard on how to make their business successfull. But that is no guarantee that all their desicions are correct or beneficial. We must remember GW is a big fish in a VERY small pond. Compared to the likes of Hasbro and other companies, GW is small fry, so it takes only ONE major blunder to bring them down.

It will be interesting to see what the rest of the year will bring regarding this desicion.

Primarch

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Fri May 02, 2003 4:19 am 
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"Neal also brings another good point, non-miniature alternatives for entertainment abound and are relatively inexpensive when compared to the hundreds of dollars a warhammer army may cost. Computer games come to mind as perhaps one of the biggest challenges mini-games may face. While some may scoff at this, a game that cost 40-50 bucks and can potentially provide hundreds if not thousands of hours of entertainment certainly has huge advantages over mini games for the casual buyer. "

I completely agree with you.  I wouldn't be surprised to hear that the interent, including fansites, are the reason for GW's explosion in success in recent years.  Remmeber, we will still be able to buy from online shops around the world, including Canada, since this only affects US online shops.  It is such a joke.  It is almost like the record industry trying to shut down Kaza when US copyright laws can't be enforced off the coast of New Zealand.  It is just principle really.  This isn't going to help them at all.  In the short term local gaming stores may see a spike in business, but eventually everyone will find alternate avenues to get stuff cheaper.  GW doesn't seem to understand the internet. . .

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Fri May 02, 2003 12:29 pm 
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Quote (nealhunt @ 01 2003 May,16:03)
According to the GW reps, it is an effort to drive business back to the retail outlets - GW or not. ?The idea being that B&M stores run games, do demos and bring new customers into the hobby, while internet sales do not.

My friend seems to think it's the best thing since sliced bread, for obvious reasons.

I have been following this quite carefully, and with interest. I must admit, that I can see good arguments for boths sides of this debat, but in general I am very anti this move.

It is true that it will drive people into the B&M stores a little more, and so help the hobby in this way. However, what about all of those people who simply dont have a choice? If I was faced with only being able to buy from GW, and not having the choice of internet outlets, I would reconsider my hobby. I am sure that this move will actually result in a lot of people leaving GW, and probably the hobby in general, because of this.

This has nothing to do with GW's IP. And anyone who believes that GW is doing this for the good of the hobby has not really been following the plot. This is about GW being able to fix their prices. It may help some people as a side effect. If this goes ahead, and I were in the US, I would be forced to go either to a GW or indi retailer which sells GW, if I happened to live close to one, or a mail order company which sells GW (and I dont know about the US, but I cant think of many phone mail order companies which stock GW), or GW alone - with their prices.

At the end of the day, GW has examined their mark up and profits, and decided that they are losing something. Where other companies would address this by becoming more competitive and following the rules of an open market, GW's reaction is close down the market.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Fri May 02, 2003 2:48 pm 
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Let me first say that I have serious doubts as to the effectiveness of the decision for increasing company profits.

However, there are some statements that reflect common misconceptions.

GW doesn't "get their money whether the store charges full price or the business is offering a 50% close out" at all [Gandalf's quote, but not directed at him specifically].  Technically, they got the cash, but there is marketing value that is lost.  That's real value.  In fact, it may even be *better* than money, because GW has limited options wen it comes to marketing and advertising.

What GW is doing is refusing to sell to stores who don't pay as much - cash price vs. cash price plus free marketing.

This is a question of elasticity of demand - can the company make more money by charging more and getting more profit/unit, or can they make more money by charging less and moving a greater number of units at lower margins.  It's is no different than the decision a manufacturer makes as to whether they sell a product to high-end boutique shops (high margins, low volume), or discount to Wal-Mart (low margins, high volume).  Where does (units sold * profit) hit the highest number?

It's a complex business decision.  Not only do they have to take into account the price vs. sales issue, they also have to take into account the "pissing off current customers vs. bringing in new customers" issue.  It's obvious what they have chosen.

It's not an evil, anti-competitive plot.  There is no more reason to be mad about this than there is to get mad when the corner gas station raises prices.  It's simply market forces, and GWs gamble on how they will respond.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Fri May 02, 2003 5:18 pm 
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GW doesn't "get their money whether the store charges full price or the business is offering a 50% close out" at all [Gandalf's quote, but not directed at him specifically].  Technically, they got the cash, but there is marketing value that is lost.  That's real value.  In fact, it may even be *better* than money, because GW has limited options wen it comes to marketing and advertising.


I doubt that.  If they were really concerned about their marketing value, I wouldn't have been hearing so many people complain about them over the last ten years.  Forcing retailers to purchase more than they can afford exemplifies that.  I wouldn't be surprised to that GW's formula for success hasn't driven smaller hobby stores down to the point that it was no longer profitable to continue (yeah, both the hobby store and GW can be blamed, but I am focusing on GW here).

Let me use Citadel's paint cans for example.  I have seen three different versions of the can over the last 10 years, and while I do think the latest is probably the best one, each time they built a new display for them, one in which the previous version didn't fit.  The owner of the hobby store I knew at the time was pissed because he felt he was forced to buy the new display, and with each can only costing $2, wasn't sure if the profit was worth it until way in the long run. He eventually closed down, and who profited from that experience? GW sold all their stuff for no loss to him, but in the end, he couldn't sell off all of his.  He tried hard too, and the most he could discount was 5%.  I felt bad for him, but walked away from it feeling like running a gaming store was a dumb idea.  So few remain profitable, and if something happens, they are out of business like that (snap). After my friend's business went under, guess what? Another opened a few months later and the whole process stated all over again.  GW was still selling to the San Antonio area and the new business struggled to profit.

I really like the boys at GW US mail order (who have seemed to dislike there jobs lately, as one mentioned that they have received a lot of calls about this), I generally are very impressed with the games and figs I buy.  But what drives me to buy more and what I need probably is a result on how I feel about the hobby, and in this case I think I'll just be happy with what I have, and won't be buying anything new anymore.

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 Post subject: Rumor's true. GW to screw Internet businesses
PostPosted: Fri May 02, 2003 7:33 pm 
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>> If they were really concerned about their marketing value, I wouldn't have been hearing so many people complain...

The company has experienced solid expansion for the last 10 years, which shows they are highly successful in their marketing, despite some complaints.  That doesn't happen if they don't care about their marketing.

It's not their business to keep small stores open.  If their formula for success puts some stores out of business, that's just competition in the marketplace.  If GW nets out greater profits it's a successful plan, and they are doing their job.

Don't get me wrong.  I'm rather disppointed that I will not be able to order figs at 20-30% off and get to skip sales tax.  It will definitely affect what I buy and from whom.  GW has lost some of my potential business, and I will probably give most of the newer figs a pass.

However, in the words of Michael Corleone, "It's not personal.  It's just business."

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