Recommend
5 
 Thumb up
 Hide
36 Posts
1 , 2  Next »   | 

BoardGameGeek» Forums » Gaming Related » General Gaming

Subject: What is the usual wholesale price for boardgames? rss

Your Tags: Add tags
Popular Tags: BuyingOnline-vs-FLGS [+] [View All]
gabe soto
msg tools
mb
Hi everyone!

Just had a quick question, especially for anyone running a FLGS. What is the usual wholesale price for boardgames. I suspect it is about 50% off retail. The reason I ask is because I was just in a new FLGS I found near my home and couldn't help but notice two things (which I have noticed at my other FLGS as well):

1. They had an excellent selection of the latest and most popular games in stock.

2. No one was buying any of them, or at least not any of the real games which retail for $40+

Now I understand the policy of supporting your FLGS and I do and did in this occasion try to spend at least a little money everytime I am in one. But, I cannot justify spending over $50 to $100 at full retail when I can go to an online retailer and get 35% off plus free shipping and usually no tax.

So, my real question is, does it make any sense for a FLGS to discount their games 20%, 30% or even 35%? I realize they have to cover overhead such as lighting, rent, salaries. I guess what I am wondering is since that overhead is constant no matter what is being sold wouldn't it make more sense to discount the product and at least make a small amount of money than just have the stuff sit there for weeks?

It seems most of the sales are from CCG and Minis and the big boardgames just sit there collecting dust. Now I have seen the occasional person buy big games at retail but it is somewhat rare. If the FLGS gave even a modest discoutnt (20%) I could see myself taking all of my business there instead of online. What do you guys think?

3 
 Thumb up
0.01
 tip
 Hide
  • [+] Dice rolls
Robert C Kalajian Jr
United States
Simsbury
Connecticut
flag msg tools
designer
publisher
badge
Avatar
mbmbmbmbmb
Overhead for a storefront is MUCH higher than those stores that run online. Sometimes deep discounting cuts too much into their profit. So much so, that running the store would become an issue.
4 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
gabe soto
msg tools
mb
As I mentioned, I realize how much overhead must be for these stores. I guess the question I am asking is:

Would a store be better off only making $5-$10 off of a $50 game rather than just having it sit around for 3 months. Since I would see myself and surely others changing their buying practices back to FLGS from online it seems the higher volume would eventually lead to greater profits. Just a thought.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Kent Reuber
United States
San Mateo
California
flag msg tools
badge
Avatar
mbmbmbmbmb
I used to work in a game store in college, but that was back in the early 80's. At that time, we bought games for about 40-50% off retail. You got better deals from some distributors if you could order certain amounts and pay your bills off within a certain time. My understanding was that distributors had really slim margins, maybe only 10%, so that they bought at 60% off retail.
 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
gabe soto
msg tools
mb
Thanks for the input guys.

I don't know about you but I could see myself spending a whole lot more money (definately more than twice what I do now) at my FLGS if they offered a bit more of a discount. It seems like they are stuck in the days before internet retailers. I really want to support them and would feel really good about spending a good chunck of change in there on a regular basis instead of at internet retailers. I am averaging a $150 online order every 2-3 months.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Barak Engel
United States
Oakland
CA
flag msg tools
And the Geek shall Inherit the Earth
badge
I am the unholy trinity: Agnostic, Atheist, and Skeptic.
Avatar
mbmbmb
gsoto72 wrote:
Thanks for the input guys.

I don't know about you but I could see myself spending a whole lot more money (definately more than twice what I do now) at my FLGS if they offered a bit more of a discount. It seems like they are stuck in the days before internet retailers. I really want to support them and would feel really good about spending a good chunck of change in there on a regular basis instead of at internet retailers. I am averaging a $150 online order every 2-3 months.


Which is why game stores should adopt well established marketing tactics like loyalty programs.

Unfortunately, the vast majority of FLGS owners do not recognize some of the basic retail economics (such as cost of customer acquisition), or have become so locked into a particular mindset after having read a particular manifesto which has become somewhat of a holy grail in the industry (about why you can never, EVER discount a game at an FLGS), that the idea is anathema to them.

The truth is that to effectively run an FLGS you need to be able to sell your games at different prices to different clients. Every single retail chain does this in different fashions; maybe they are on to something? Folks like you SHOULD be given loyalty discounts - based on purchase volume, on a membership program (like a Barnes & Noble card), points-based, coupons or what have you - while random and impulse buyers will keep paying full price (and wouldn't mind it anyway). The trick is understanding your customer base well enough to know HOW to maximize such price differentiation for your benefit.
16 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Jeff Michaud
United States
Longwood
Florida
flag msg tools
On-Line Want List Generator - Hopefully Making Math Trades a Little Bit Easier
badge
Captain Kirk, Captain Picard, Captain Sisko, Captain Janeway, Captain Archer
Avatar
mbmbmbmbmb
Sal M wrote:
Wholesale prices are generally between 55-60% of MSRP.

I think it's more like 50-60% of MSRP (ie. 40-50% discount from MSRP)... but it depends on your volume. The distributor gives bigger discounts to those ordering more product.

So those who move more product can not only make up for selling below MSRP by making more sales (volume volume volume), but because their wholesale price is less as well.

ps: this is based on looking into this a couple years ago with Alliance, other distributors may having different wholesale models
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Jeff Michaud
United States
Longwood
Florida
flag msg tools
On-Line Want List Generator - Hopefully Making Math Trades a Little Bit Easier
badge
Captain Kirk, Captain Picard, Captain Sisko, Captain Janeway, Captain Archer
Avatar
mbmbmbmbmb
By the way, it's really unforutnute the author of the base post decided to tangent into the buying online vs. at your FLGS, and should have kept it to the topic in the subject line.

This has been discussed over and over and over again to death. See the threads marked by the tag for just some of them...

http://www.boardgamegeek.com/tagutils.php?action=viewtag&tag...
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
United States
Boise
Idaho
flag msg tools
badge
Avatar
mbmbmb
Wholesale pricing to retailers is in the 40-50% range, dependent on the distributors used and the volume purchased.

Board games are rarely the primary source of revenue for most local merchants so deep discounting is a bad idea.

There are thousands of local stores around the globe, many of which are hugely successful whether or not they offer a discount, loyalty program or other incentives.

Quote:
Now I have seen the occasional person buy big games at retail but it is somewhat rare.


It may be rare that you have seen it happen, but it's a regular occurance. The fact is that there are more people who consider a board game purchase as a small expense than there are who consider it a major expense. It's often an impulse purchase, a matter of convenience or perhaps an insignificant dollar amount.

Deep discounting on the internet is a very select and very targeted business model for board games. BGG is, in my opinion, the primary source of customers for the most popular internet discounters whereas the thousands of local stores have access to a huge customer base that has other considerations about the particulars of buying gaming goodies.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
gabe soto
msg tools
mb
Well, I'm sure we won't be solving this issue today.

My overall impression is that the FLGS in the areas I frequent (SF Bay Area, Sacramento and San Diego) are not doing very well. A few have closed since I got back into the hobby about 3 years ago such as GameScape in Palo Alto. Game Towne in San Diego seems to be hurting pretty bad from the last few times I've been there. Obviously EndGame seems to be doing well.

Given that games are not a very big source of revenue its interesting how much square footage of the store they take up. I just wanted to see if others had a similar dilema when it came to making larger purchases of games. I just can't justify spending 35%-40% more at my FLGS when it comes time to make a good sized purchase.

I think most people would consider a $50 game a purchase to at least think about. Those impulse buyers will probably not be making a habit of buying $50 games very often.

Ultimately the question is:

Would you rather sell 25 games a day at $10-$15 profit or 5 games a day at $25-$30 profit.
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Scott Muldoon (silentdibs)
United States
Astoria
New York
flag msg tools
designer
badge
Avatar
mbmbmbmbmb
gsoto72 wrote:

Ultimately the question is:

Would you rather sell 25 games a day at $10-$15 profit or 5 games a day at $25-$30 profit.


The problem with this framing of the question is that you're just making numbers up. What if the "question" is selling 10-12 games a day at $10-$15 profit versus 5-7 games a day at $20-$25 profit? The fact that this issue can't be reduced to a simple calculation is why there is no simple answer.

My personal suspicion is that brick'n'mortar cannot compete with internet retail on a dollar-to-dollar basis. A successful FLGS must provide other non-monetary benefits, tangible or intangible; although mild discounting can support that strategy.
4 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
United States
Boise
Idaho
flag msg tools
badge
Avatar
mbmbmb
Quote:
A few have closed since I got back into the hobby about 3 years ago


Small businesses come and go, it's the nature of the beast.

Quote:
I just can't justify spending 35%-40% more at my FLGS when it comes time to make a good sized purchase.


You fit squarely into the target market for internet deep discounters.

Quote:
Those impulse buyers will probably not be making a habit of buying $50 games very often.


Thankfully, you couldn't be more wrong on that count. There's little difference in a gamer impulsively buying a $50 game, a box of MTG cards, a couple of new regiments for 40K or a new $30 D&D book. It happens thousands of times every day all over the planet.

Quote:
Would you rather sell 25 games a day at $10-$15 profit or 5 games a day at $25-$30 profit.


That actually isn't the ultimate question. The ultimate question for a local merchant is whether they have the smarts and business acumen to establish and successfully operate a niche store catering to gamers. Discounting board games does not automatically increase the sales of board games. Often, the effect is the opposite as it can easily devalue the genre in the eyes of the shopper.

Quote:
Well, I'm sure we won't be solving this issue today.


No issue to solve Gabe. The blessing is that there are local stores, internet discounters, big-box retailers and various other outlets to buy board games from.
5 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Marshall P.
United States
Wichita
Kansas
flag msg tools
"Nothing in Biology Makes Sense Except in the Light of Evolution" - Theodosius Dobzhansky
badge
There is grandeur in this view of life, whilst this planet has gone cycling on according to the fixed law of gravity, from so simple a beginning endless forms most beautiful and most wonderful have been, and are being, evolved.
Avatar
mbmbmbmbmb
My FLGS offers 10% discount. That plus free playing space is enough value to me so that I do all of my purchases there. The problem is I buy maybe 4 games a year and none of them from the selection they already have in stock. So their stock sits on the shelf with nobody buying it.

The rest of my game group doesn't buy that many games either. And some that do, buy them online. So, I can't see how it's worth the FLGS's effort to give us playing space. I guess it doesn't cost them much since the tables are already set up for role players and CCGers.
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
gabe soto
msg tools
mb
Believe it or not this discussion has actually been quite helpful to me. I can see now that the strategy for a FLGS is not to do high volume in bigger board games to a select few but rather modest volume to a larger group at higher prices. The higher volume stuff will be CCG, smaller games and probably miniatures. Makes sense. Since I and most BGG patrons are more of the big board game types we will take that part of our business online and get smaller and more niche stuff at the FLGS. Thanks for all your input guys, have a great Sunday!
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
J C Lawrence
United States
Campbell
California
flag msg tools
designer
badge
Avatar
gsoto72 wrote:
My overall impression is that the FLGS in the areas I frequent (SF Bay Area, Sacramento and San Diego) are not doing very well. A few have closed since I got back into the hobby about 3 years ago such as GameScape in Palo Alto. Game Towne in San Diego seems to be hurting pretty bad from the last few times I've been there. Obviously EndGame seems to be doing well.


The GameScape in Palo Alto was the most profitable and had the lowest inventory overhead of all the GameScape stores. It closed purely because their lease was raised enourmously. Meanwhile game Kastle opened a few miles away and in many ways provides a better game store than GameScape in palo Alto ever did.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
marc lecours
Canada
ottawa
ontario
flag msg tools
mbmbmbmb
Suppose a retailer buys games from a distributor at 25$ a game and he can sell them for 35$ a piece(10$ profit) or 50$ a piece(25$ profit)

Would a store prefer to sell 20 games a day at a profit of 10$ each or 10 games a day at a profit of 25$ a game. This is of course a rigged question since most stores would prefer 250$ of profit rather than 200$ of profit.

Would a store prefer to sell 20 games a day at a profit of 10$ a game or 5 games a day at a profit of 25$ a game. This is also a rigged question since most stores would rather make 200$ a day in profit rather than 125$ a day in profit.

So it all depends on how lowering of prices increases sales. In the first model above a price reduction from 50$ to 35$ leads to double the sales. In the second model the same price reduction leads to a quadrupling in sales.

If we assume that small game store operators are rational businessmen and businesswomen, that means that the first model is probably closer to the truth. Of course maybe small game store operators are not rational and have not really studied this too much. BUT I suspect a lot of them have since they are gamers at heart! Also if it was profitable to discount prices, some game store somewhere would have tried it and that business model would have been copied if it was profitable.

I have bought over 150 games in the past 2 years and I am rarely influenced by the price tag. A 5$ or 10$ discount would not influence me a whole lot.

On the other hand lower prices would increase sales to teens and to young adults. A store would have less profit but by increasing sales, the store might increase the number of gamers out there.
 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Boards & Bits
United States
Spokane Valley
Washington
flag msg tools
badge
Avatar
mbmbmbmbmb
The question might be:

"Would you rather make $200 profit each day by selling 10 games, or 40 games?"

The answer, of course, would be 10 games. It requires less investement, less time/man-power, and less space in the store.

What you're really asking is:

"How can I get the store to help me more than they help themselves?"

The answer, of course, is that you can't. The store owner is managing the store the way they feel is best. If they were really having trouble staying in business, they may want ideas from the customers. But most likely, unless the customer has run their own retail business, their advice would be of little help.

Stores rarely need business from customers that want to change the way they do business. There are probably enough customers that are happy with the store the way it is and don't need it to change

The last point would be this: a store will model it's business in relation to its competition.

In other words, if a neighborhood FLGS offered a 20% discount on boardgames, then any other FLGS's in the same neighborhood would probably have to do the same, or shut down (assuming that boardgames were it's main source of sales, which of course isn't true).

But if you look at most FLGS's, they don't have competition, which is likely the reason they started the business where they did. And FLGS's do *not* compete with FOGS's. Therefore, they have no need to offer a discount on boardgames similar to online stores.

Tom
5 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Phillip Heaton
United States
Springfield
Virginia
flag msg tools
mbmbmbmbmb
Lou Zocchi wrote a pamphlet called "How to Market Your Wargame Design". In it he said that the distributors would buy your game at 60% off of retail, then sell it to the stores at 40% off of retail. Sometimes the stores could get it at 60% off of retail too, but the had to buy at least six, if not nine, copies to get that discount.

Following this reasoning, the FLGS is paying $6 for that game they're charging you $10 for. They have to pay a lot of overhead with that $4 of "profit". I feel that they give a lot of added value for the extra $3.50 I pay for that game, but I can understand your point.

The high-volume on-line store get that same game for $4. They sell it to you for $6.50 (plus postage unless you buy a bunch of games). They don't have anywhere near the overhead, since they can operate out of a warehouse with some office space.

Believe it or not, they have almost the same profit margin. They both take in a little over $1.60 for every $1 they spend. (retail $1.66, on-line $1.63)
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Boards & Bits
United States
Spokane Valley
Washington
flag msg tools
badge
Avatar
mbmbmbmbmb
Philgamer wrote:
Lou Zocchi wrote a pamphlet called "How to Market Your Wargame Design". In it he said that the distributors would buy your game at 60% off of retail, then sell it to the stores at 40% off of retail. Sometimes the stores could get it at 60% off of retail too, but the had to buy at least six, if not nine, copies to get that discount.

Following this reasoning, the FLGS is paying $6 for that game they're charging you $10 for. They have to pay a lot of overhead with that $4 of "profit". I feel that they give a lot of added value for the extra $3.50 I pay for that game, but I can understand your point.

The high-volume on-line store get that same game for $4. They sell it to you for $6.50 (plus postage unless you buy a bunch of games). They don't have anywhere near the overhead, since they can operate out of a warehouse with some office space.

Believe it or not, they have almost the same profit margin. They both take in a little over $1.60 for every $1 they spend. (retail $1.66, on-line $1.63)

That sounds nice, but it's not exactly accurate. The example you gave is possibly for a small publisher. For a mainstream publisher, such as Rio Grande, retailers get pretty much the same discount (with 1-2%) whether they buy from distributors or direct from the publisher.

Tom
1 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
David C
United States
Aurora
Colorado
flag msg tools
badge
Avatar
mb
I'm bumping this, even though my question seems answered: is the usual wholesale price for games for an FLGS less than that of your online warehouse games? ...or is it more likely the case that my FLGS is buying games from the same place that I am?

I ask because I got to thinking back to my days working at a local-based videogame store. Often times, our wholesale prices that we would get games at, were more expensive than the toys r us down the way...which was quite a downer, and also why used games mean as much as they do.
 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Kyle Robertson
United States
Georgia
flag msg tools
I actually just talked to my local shop about this. He says online retailers mark-up is 10-20%, his mark-up is almost 48%. So a game like Pandemic is around $22.50 wholesale (for less than 5 copies). And will cost around $25-28 online and retail at a local shop for around $35.

In response to the owner who said, "[he] can't stay open if he only marks-up %15." You may be right but you also can't stay open if no one is buying your products, NO MATTER WHAT YOUR MARK-UP IS.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Darth Heisenberg
Spain
Death Star
A galaxy far, far away
flag msg tools
"Apology accepted, Captain Needa."
badge
"Say my name"
Avatar
mbmbmbmbmb
BoardsAndBits wrote:

FLGS's do *not* compete with FOGS's.

Tom


Wrong!!

I've spent quite some cash on board games lately, and almost ALL in online friendly game stores. All that cash would be in my LFGS if their prices were the same, so they LOST a LOT of money.

That's a FACT.

So FOGSs are indeed competition to FLGs.
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
C M
msg tools
mbmb
Registrau wrote:
BoardsAndBits wrote:

FLGS's do *not* compete with FOGS's.

Tom


Wrong!!

I've spent quite some cash on board games lately, and almost ALL in online friendly game stores. All that cash would be in my LFGS if their prices were the same, so they LOST a LOT of money.

That's a FACT.

So FOGSs are indeed competition to FLGs.


That post was from nearly 9 years ago...
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Trent Boardgamer
Australia
Perth
Western Australia
flag msg tools
mbmbmbmbmb
Just over a decade ago when managing a games store our average margin was 50%. So if the wholesale cost to us was $50, we would sell it for $75. (That margin would mean you are selling at R.R.P)

So no, it really doesn't make sense to sell a game at 30% off retail. That would only be $2.50 profit, which has no chance of paying rent, staff, insurance, power bills etc.

As far as I'm aware margins are about the same today, based off what I see games sold for, that would still be about right.

Also some of the margins on bigger franchised Items such as GamesWorkshop, D&D etc use to have smaller margins of about 33%.

Now keep in mind small turn over businesses (Which would be all your FLGS) work on a margin model. The higher the margin they can compete in the current marketplace the more profitable they are. Selling at low margins for increased turnover doesn't generally make sense due to the finite customer base (People will only travel so far for your product and there are only so many people in that area), doesn't generally make sense due to the fixed over heads cost, not to mention staff cost go up with added turnover.

Most online stores work on a volume profit model. $2,50 per game sold is fine because they will move 10,000 of them vs the the FLGS 15 copies. Online volume selling works, because you have a much larger customer base and much lower overheads (In a comparative sense)
2 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
Trent Boardgamer
Australia
Perth
Western Australia
flag msg tools
mbmbmbmbmb
lightnng wrote:
gsoto72 wrote:
Thanks for the input guys.

I don't know about you but I could see myself spending a whole lot more money (definately more than twice what I do now) at my FLGS if they offered a bit more of a discount. It seems like they are stuck in the days before internet retailers. I really want to support them and would feel really good about spending a good chunck of change in there on a regular basis instead of at internet retailers. I am averaging a $150 online order every 2-3 months.


Which is why game stores should adopt well established marketing tactics like loyalty programs.

Unfortunately, the vast majority of FLGS owners do not recognize some of the basic retail economics (such as cost of customer acquisition), or have become so locked into a particular mindset after having read a particular manifesto which has become somewhat of a holy grail in the industry (about why you can never, EVER discount a game at an FLGS), that the idea is anathema to them.

The truth is that to effectively run an FLGS you need to be able to sell your games at different prices to different clients. Every single retail chain does this in different fashions; maybe they are on to something? Folks like you SHOULD be given loyalty discounts - based on purchase volume, on a membership program (like a Barnes & Noble card), points-based, coupons or what have you - while random and impulse buyers will keep paying full price (and wouldn't mind it anyway). The trick is understanding your customer base well enough to know HOW to maximize such price differentiation for your benefit.


Definitely agree.

The biggest issue it's seems with a lot of the struggling FLGS people mention on BGG, is that there just isn't great business people running them.

The above is a standard requirement for any FLGS, I was certainly doing it even back in the 90's before online competition existed, as you still had volume mover competition in the way of the large chains on some of the product line.

As far as I'm concerned a FLGS shouldn't be suffering from online retailers anymore than any other business segment. Yes, online sales (EBAY) and retailers are added competition, but they have their negatives as well, to which FLGS should exploit.

(I managed a Games Store for 7 years extremely successfully and yes it is still doing well today, so I'm not just someone trying to make it sound easy).

3 
 Thumb up
 tip
 Hide
  • [+] Dice rolls
1 , 2  Next »   |