J.L.Robert wrote:
The grossly underestimated their margins, and the volume needed to be profitable at the prices they were offering.
Tanga doesn't sell games exclusively. There's already little money in the hobby. Pozy were just shooting themselves in the foot by marking games down so much. Kudos to those who were able to take advantage of their offerings.
I am not sure that is the case. The guy that originally started it up, from what I understand, was into games and knew quite a bit about them. He moved on and took a new position with a different company. There was a hiccup during the transition before it got back to running almost to normal. It never seemed quite the same though - it really felt like someone had taken over someone else's pet project.
Maybe they underestimated the profit it could generate, but I am not sure they underestimated their margins. They had a fixed cost, a fixed sell price, and a specifc quantity to sell. With the exception of a couple of games (Redneck Life, or whatever it was called, Zombies, and the Mr. Jack extension), they seemed to sell out rather quickly and with no need to reduce the asking price. So they knew ahead of time how much profit each offering was going to generate.
Pozy wasn't exclusive to just games and they had the toy side of the business to keep them going as well. they also had the advantage of being able to add a lot of other things to your deal of the day order as well - something Tanga can't do.