Peter Youleesh
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I am curious,... maybe somebody can explain to me... if a board game price is affect somehow a margin for distributors or sellers. For example game which cost 10€ will have bigger margin in %, like a game which cost 60€ ? Or it mostly not depends on initial price, and retailers have same margins in percent for cheaper and more expensive games?
Thank you.
 
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Depends on the retailer, perceived market value, game genre, supply, distributor and/or publisher pricing, any publisher pricing requirements (if any), initial game launch parameters, editions/variants marketed, etc..

Point being, profitability is not usually a simple a+b=c equation. There are usually a lot more variables involved and the equations have become more complex with the introduction of publishers directly competing for the same customer market as the retailers via the internet.

Quite often publishers devalue the value of their own product lines due to direct, or indirect, side effects of their own business and marketing decisions and sales tactics and how they work out their business relations with distributors and retailers.

Publishers that KNOW how to keep from burning bridges in either direction, customers and distributors/retailers, often retain better market values for their titles and opportunities for reasonable profit margins across the board. This fact of the gaming industry has been proven time and time again.

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Christopher Dean
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The Cult of the New Game Store
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saroyan wrote:
I am curious,... maybe somebody can explain to me... if a board game price is affect somehow a margin for distributors or sellers. For example game which cost 10€ will have bigger margin in %, like a game which cost 60€ ? Or it mostly not depends on initial price, and retailers have same margins in percent for cheaper and more expensive games?
Thank you.
I suppose it depends on the individual retailer or distributor. I buy products from 5-6 different distributors across Canada and USA. Each of them seems to have a different pricing model....even for the SAME game at times. And that is at the distributor level.

At the retailer level the pricing variances are even more extreme. I have almost 1000 titles... so I 'try' to apply at 70%-ish of retail across all titles, as applying random pricing on an individual basis would be too big of a time sink for me personally. I can only imagine what the larger retailers with 16000 titles in their catalogues would do.

That being said, I am aware of plenty of retailers that adjust their pricing based upon a supply and demand sliding scale. Thus as the supply dwindles, those retailers tend to increase the price of the remaining units. This tends to get harsh reports here on the Geek but it happens anyways... then it blows over. But as I said, adjusting price based on an individual title when you have hundreds or thousands of titles is well... time consuming.

So again back to your question... the Suggested Retail Price SRP of a game, be it $15.99 or $99.99.... has little impact on the 'profit' margin for my store and others like me that apply the same % based pricing model across our entire catalogue. As we acquire the same % of profit across all games regardless of the individual title.

I suppose the short answer is 'it depends upon how you want to treat your customer base'.

Do you want to exploit them for a quick fix or do you want to help build a community of folks that will 'want' to come back.

Michael
The Cult of the New
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Jeramy Poulin
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What Christopher said is all correct but the simple answer for retailers and generally distributors is that the margins are the same across the board. The gaming industry is in-line with the 'default' retail margin of a single keystone markup (meaning the msrp is double what they buy it for, a double keystone would be triple, etc...).

Whether it's Love Letter for $10 or Eclipse for $100 the retailer has the same % margin (they paid $5 and $50 respectively). Even most gaming accessories or bottles of paint are the same 'keystone' markup.

With the rise in price of the 'top end' games as compared decades ago and so the much larger discrepancy between game and the cheaper accessories, dice, sleeves, etc..IMO I think the industry should have 'pushed' the cheaper stuff to be higher than standard keystone. It would help the brick and mortar stores compete since it's easier for them to sell the 'cheap' stuff.
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I would note, the MSRP is *not* always double what a distributor/retailer pays for the item. Our purchase spreadsheets vary with a wide range of different retailer price points covering multiple publishers and distributors that are also modified based on shipping costs (if applied), purchase quantity requirements, etc..

Next, MSRPs are worthless sales tactics and mean nothing to the buyer who shops around. Perceived value is all that matters in the end - that is what the customer is WILLING to pay for the item. In the customer eyes if the item is not worth the asking prices, regardless of what it is, they won't pay it, end of story.

Supply and demand: (Warning: I think like a 30+ year veteran gamer first and retailer second, and always will.). As a *gamer supportive retailer* I think of my fellow gamer first so we are not out to fatten up our bank accounts by raping the desperate. Supply and demand is a cop-out market strategy used to hammer the desperate gamer. No, games are not a "necessity" but they are also not a "luxury" like gold and silver. Such marketing strategies are also called "product speculating" as is done by fat cat corporations and Wall Street.

I will always believe that a small piece of happiness in the life of many that are struggling to get by (veterans, retirees, kids with parents having trouble just paying the bills, college kids trying to work and get educated at the same time, etc..) in a world recession should not be treated like a stock market trading plan just to fatten up someones wallet.

Our pricing structure does not change, and has never changed, by leaps and bounds due to the "supply and demand" excuse and NEVER will. It is one thing if a title will never be in print again to ask for a reasonable and sensible market value but that is NOT the same thing as stock shortages of items that are due to be reprinted in the near future. I may not get rich fast thinking this way, but I will not sellout my personal convictions as a fellow gamer for the all mighty dollar.

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Christopher Dean
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Side note, I wrote a several-post article recently on another thread that plays somewhat into this topic if anyone is interested in reading further,

http://boardgamegeek.com/article/13515346#13515346

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Christopher Dean
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NWS Online Store wrote:
Supply and demand: (Warning: I think like a 30+ year veteran gamer first and retailer second, and always will.). As a *gamer supportive retailer* I think of my fellow gamer first so we are not out to fatten up our bank accounts by raping the desperate. Supply and demand is a cop-out market strategy used to hammer the desperate gamer.
Point of clarification, in case my post was misconstrued, I was 'not' implying NWS was price gouging, even as a retailer myself, I find your threads enlightening and community building.

I was simply being transparent.

There are those among us (heck just check the rants in the retailer forums) that watch the supply dwindle away from retailers that may have been shorted in their stock from the distributors and once the 'demand' is a fever pitch... they release the highly sought after product across mediums where the per unit price is known to be highly inflated. (far beyond the % to account for the normal fees to selling on those mediums)

My point was simply that your mileage may vary from retailer to retailer... from distributor to distributor. Some truly will base their pricing based upon what they perceive is the highest price they speculate that the 'market' (the gaming community) will allow.... while others such as myself simply apply the same basic (and transparent) calculation against the keystone markups that Jeremy eloquently posted about in a thread above.

I am not passing judgement on either business model, I'm merely acknowledging that whether we like it or not... both models exist.

Cheers.

Michael
The Cult of the New
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Quote:
Point of clarification, in case my post was misconstrued, I was 'not' implying NWS was price gouging, even as a retailer myself, I find your threads enlightening and community building.
First, I do not think your post was taken that way, secondly, thanks for the supportive comments. I also liked these statements,

Quote:
I suppose the short answer is 'it depends upon how you want to treat your customer base'. Do you want to exploit them for a quick fix or do you want to help build a community of folks that will 'want' to come back.
I agree completely. Customer loyalty is not something to mess with, nor should should it be treated like a commodity to be sucked in with low prices on one end and then spanked by market speculation on the other end.

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Christopher Dean
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