GW Price Hike

[PegaZus]

I originally put up the profit numbers just to show that GW was doing better if you looked at the bottom line. Quick glance was that they were doing well. I couldn\'t find any real good information past what I could pull from their website. And if they were making 10 times that much ten years ago, then yeah, looks like they\'re on the wrong track.

I recall a book I read that talked about innovation and company deaths that happened to those who ignored the lower end markets. I\'ve searched repeatedly for it a couple of times, but haven\'t never come across it again. (Anybody got the name off hand? Bueller? Bueller?) It had numerous examples of a hard drive company that would abandon the lower end of the market (where it was less profitable) to these new upstart hard drive makers.

Which was where the innovations happened, which ate into the market share of the companies above them, which slowly but surely killed off the older company. Since gaming isn\'t nearly the fast paced world of computer products, what we may be seeing here is that same thing in slow motion. GW starts cutting the older, less profitable areas and focuses upon the higher end items. This is leaving room for someone to come in and start taking away market share (Hordes maybe?).

They may also be killing themselves trying for \"planned obsolescence\" with revisions to codices and such that kill off older products (an interesting article is here). The key point to me from that article was that a $90 text book that lasts longer but is resold for $60 is a better economic path than trying to sell 3 $30 books that can\'t be resold. They\'ve got one set of production costs so making one book costs less than making three books.

So, to bring it back on topic, if these new models will be useful for several subsequent owners, they\'ll be worth the increase in price. Maybe even just surviving new rule releases would make the case for the increased price. But, if the new codex comes out in a few years that makes these models worthless (assuming that they\'ve been glued and painted and thus cannot be reworked), then they\'ll a bad deal.

Overall, hell if I know. Time for a drink. :beer:

EDIT: Wouldn\'t you know it? Just as soon as I post, I find the damn book. Probably because it wasn\'t as old as I thought: The Innovator\'s Dilemma, by Clayton M. Christensen. I remember it being a good read, so figured I\'d edit and add it.

 

[Jericho]

Side note: I love almost everything about Apple. They make good quality products with extremely polished user interfaces, which is a big selling feature. But they still don\'t make a laptop under $1000 which is a MASSIVE portion of the market these days.

I really think GW is doing the same thing by phasing out blister packs. If you walk into a store with a $20 there isn\'t much you can buy except for paint or a WD magazine. Hell even their lousy brushes cost $9 in Canada now (I paid approximately $7 each for my W&N S7 brushes from Dick Blick btw). The death of the blister pack means there is virtually nothing a kid can buy anymore. Cheap stuff like that helped get me into the hobby, and it wasn\'t until later that I started to get my hands on rulebooks and other stuff.

 

[Shadzar]

Originally posted by ScottRadom
I\'d sure like to hear suggestions for a diffrenent course of action from GW from people who actually run businesses.

You mean run a business like GW, or any business?

From a busines standpoint when you raise prices you can strangle yourself but cutting off people that can no longer afford to buy from you for the higher profit margin.

In turn you start making less, and need to raise prices again.

This constant inflation soon leads to things such as Chrysler going bankrupt. While prices wasn\'t the only cause there, it is the same outcome and a business closes.

IF your product is actually selling, then the last thing you want to do is drive customers away.

Offer incentives for buying your products/stock. Sales rather than price hikes.

The higher prices form GW, the hgiher the retailers must raise their prices, and the stores risk going out of busines, which risks causing the market for that item to dwindle into nothingness and causing the manufacturer of said item from also going out of business.

Focus on more constant revenue rather than big blasts of revenue less often.

If you can bring a price point to that which someone not really looking for your item will buy it, say even 5 marines for $10, then you have a chance of getting those not into the game to pick it up and try. Either you may gain a new customer to grow your market, or at least get the impulse buy sale that you would not have done before.

Having higher prices means you are excluding potential sales for the impusle buyer, which may cause low or no growth for your product.

Selling more for less mark-up per item is better than selling only a few for a higher mark-up on each item.

Employees must still be paid even though your items are not moving, power and other bills must also be paid to let those employees work, etc.

Raising prices to overcome a slight downfall can lead to needing to lay people off, quicker than the amount of time it would take under normal circumstances.

I no longer work at that store or run it, but tried explaining this to the owner, and when he used it, it worked. When he went back to wanting that little more and more on things even raising the prices 25 cents per item, he started noticing sales dropping off, then had a hard time getting people to return when he tried lowering the prices again.

It basically boils down to how you make the custoemr feel about buying your product. If they get the feeling you are just using them to drain them off all they have, they will find other things to spend their money on rather than give it to you.

Any business exists for the customers. If it doesn\'t then it will find it has less and less customers and the ones that remain will spend less and less in the long run, which will ensure the downfall of the business.

If GW wants to pick up sales then, it needs to find a way to offer lower prices.

Takes D&D minis for example where you could get 8 minis for $13, now you get 5 for $16 or 3 for $10. This is the backwards way of doing it when the quality remains the same, but the quantity drops and the price increases.

If you want to lower the quantity, then lower the price.

Why sell 10 goblins 5 per sprue with 10 individual wolves for $30 when you could sell them in smaller chunks of 5 for $15, and make the purchase more accessible.

It is the same price, but just a little extra packaging, and people can still get as many as they may want, as they can afford them.

Do I want 10 more goblins, or the new movie on blu-ray?

Do I want the new movie on blu-ray this week or 5 more goblins some paint and a new brush, and get the other next week?

The move to include all parts to make any model in the line is a good step, but jacking the price doesn\'t quite meet it in many eyes.

Someone buying a Land Raider, may not want the crusade5r parts and feel they shouldn\'t have to pay for something they can\'t make use of. But someone wanting marines with melta, plasma, etc can get them from any box, and never runs out.

It is a give and take there, and the price may be a bit more, but you have to look at the entire economy at the same time.

So make the better packs for less SKUs to give more per pack and raise the price is fine.

Offering the same thing today for $3 more than it cost yesterday, my money will go elsewhere. Especially when it IS the same thing and was made prior to the price change, not that took anything extra to make it than the one i bought yesterday.

 

[Joek]

Actually, the thread on Warseer is terribly amusing - not a thread I\'d want to get involved in, but by christ folk like to wade in with their GW hate and loathing don\'t they?

Anyways, GW figures have always been pricey, and they still are. However, it doesn\'t particularly bug me, as I\'m no gamer - merely picking up figures that I like the look of. It just so happens that GW still produce some wonderful things. And quite honestly, I\'ve been busy selling some painted stuff for a little while and it tends to fund my...erm...habit quite nicely. Hell, Enigma, Reaper, ANdrea figures are all fairly expensive too, but if I like a figure, I\'ll be more than happy to pay for a bit of quality.

Now, from a gamers point of view, I completely understand that the price hikes are terribly annoying. God knows how someone has the money to field I.G or Demonhunter armies! That said, the easy answer is to simply stop buying the damn things if folk feel that strongly about it. Obviously, it\'ll either mean GW listen and drop prices or they go out of business - so one\'s a good thing, and one would clearly be a bit of a bugger.

However, this just doesn\'t happen. People just love to moan and winge about the prices of everything, but after the moaning, they\'ll still buy the damn things. Unless you do decide to stick up for what you believe in and do something vaguely positive to attempt some sort of change, then nothing major will happen. Clearly, GW can take all the wingeing and muck-throwing is folk still buy the figures. And they still do - maybe not quite in the same numbers as they did, but they still do.

As I said, I\'m a painter, not a gamer, so the above doesn\'t bother me at all. I\'m actually of the opinion that on a huge number of lines, there\'s value for money to be had - the £12 sets of Dark Elves and Demons are fab - I was actually suprised when the Dark Elf COld one riders cames out at that price! Yes, there are the expensive things as well, but no-ones forcing a gun at anyone\'s head.

Hey, if you not playing in a \'proper\' tournament, would anyone really mind folk using substitutes (I suggest Lego!)?

At the end of the day, the GW prices are what they are, and it\'s up to the buyer to decide if they want it or not. There\'s no gun to the head - it\'s a hobby - and there are ways and means of working around it!

 

[ScottRadom]

Shadzar made some excellent points.

It\'s just tough for me as I run a Meat shop, and our product is more expensive than anyone elses by a healthy margin. There is literally a Grocery Store where you can buy meat at 75-65% of the cost across the parking lot. Maybe 100ft away.

We frequently raise prices (but lower them as well) and we base our costs to the customer vs. our costs to get it to the customer and make some money. We don\'t do the \"loss leader\" mentality of some of our competitors. We stay strong and growing because we just make damn sure our prices are justifiable with our service and quality. And I may be alone in the world but I think vs. the competition GW DOES standout as a leader in quality gaming mini\'s and their service to the customer vs. the competition has been excellent from my standpoint. I know there\'s plenty of people out there who would disagree but I think GW get\'s is right way more often then they get it wrong. Price hikes I can live with so long as I think there still delivering on the otehr less tangible stuff.

But it\'s an excellent perspective Shadzar, well written and informed. Pretty hard to refute any of your points. Nice post!

 

[Temperance]

Originally posted by Shadzar
Why sell 10 goblins 5 per sprue with 10 individual wolves for $30 when you could sell them in smaller chunks of 5 for $15, and make the purchase more accessible.

It is the same price, but just a little extra packaging, and people can still get as many as they may want, as they can afford them.

There\'s also packing labor, shipping, the \"little extra packaging\" which isn\'t as little as you might think, storage space, etc. If they could profitably sell those 5 goblins for the half the price, they would.

 

[slah]

The problem as I see it isn´t so much that GW is raising prices. It´s the fact that they are raising prices in a time where the price on \"luxury\"-items should be falling - or at the very least should remain the same (in order to stimulate a growth in their clientbase), and the fact that these raises in price are bigger than can be explained by increased costs.

A company that raise their prices in good financial times (because their customers have cash to spare), BUT also raise their prices when the financial times are bad (because the company needs capital), are gonna price out their customers at some point - that can´t be avoided...

 

[Overdose]

Price rises are always a bitter pill to swallow, but obviously GW feel that they can justify it and that sales won\'t be greatly affected.

Time will tell, but my guess is most people will continue to buy, regardless and that\'s what GW obviously thinks too.

 

[Shadzar]

Originally posted by Temperance

Originally posted by Shadzar
Why sell 10 goblins 5 per sprue with 10 individual wolves for $30 when you could sell them in smaller chunks of 5 for $15, and make the purchase more accessible.

It is the same price, but just a little extra packaging, and people can still get as many as they may want, as they can afford them.

There\'s also packing labor, shipping, the \"little extra packaging\" which isn\'t as little as you might think, storage space, etc. If they could profitably sell those 5 goblins for the half the price, they would.

Mr Lee, Mr Lee....oooh Mr Lee Mr Lee... lol

Yeah form working at Iomega and having on a daily basis had $1 million MSRP product going through my hands stuffing the boxes I understand that packaging systems costs money, and that is why buying bulk costs less because of less packaging.

What is missing here is how much is paid to those people stuffing boxes where machines cannot.

I got paid $17.50 per hour to shove Zip drives into clamshells, the next lady got paid the same to shove in a power supply, and so on.

In the examples of the Goblin Wolf Riders, the amount of time required to slide the sprues loosely into the box will be the same per box. on pair of sprue halves for the goblins, and 5 complete wolf sprues for the wolves.

Same two people doing the same thing, but less per box. They still get paid the same.

Not if the box remained the same size you are going to have costs and overhead, for the excessive size of the package, and for the storage of said package until it ships out to deliver.

I recall after a few discusion the line I was on decided to cut down on the packaging and keep the same price point. This allowed us to runt he line quicker and get more product out and took less room to store a run (order for those not in the know).

It also did cost less to have the smaller packages.

Now having 2 boxes over the one will incur a greater production cost, because the surface area of the one box would not suffice for two boxes when the dimensions of the sprues (L*W) doesn\'t change, only the height does.

There it comes down to how to make the packaging. Can you use less colors? Does the box need to be as sturdy since it is shrink-wrapped anyway? Do you really need the heavy-duty glue on the box since it is shrink-wrapped?

You can cut some costs be re-evaluating the packaging all together.

Something a little more close to home, but not anything to fault you fo and being used more as an example.

The clamshell blisters now used for DDM cost more than a printed box, do they now?

The cost of seeing the minis in the \"window\" is passed on to the customers. So maybe the 5 goblin pack wouldn\'t cost just $15 to half the price for quantity, since packaging costs money to. So maybe say $18 for 5 goblin wolf riders.

That is an astonishing $3 just for redesigning the box.

Now you could say, that that creates a new problem or two.

1- You have more SKU\'s and have two different products!

Don\'t just use the one package of the smaller quantity for a smaller price.

Hamburger that is $2.99 per lb will be that price whether it is a 1 lb pack or a 10 lb family pack. ???

So sell just the 5 goblin pack and discontinue the 10 man pack.

2- But the goblins are a minimum of 10 per unit.

Does everyone buy the GW GWRs (goblin wolf riders) to use for WFB?

Does everyone paint all their minis at the same time?

I am more than frugal with my money and would be called cheap. Want to go out to eat for breakfast? Biscuitville has sausage bisuits 2 for $1. Dinner? I have a coupon for KFC.

Even I would be more willing to buy something at a little over half ($18 for 5) to try, than dumping the full $30 (for 10) all at once.

If I don\'t like the GWRs and bought 10 I am out $30. Nothing left. If I bought the $18 and didn\'t like them, I still had $12 (excluduing tax) I might be willing to spend on something else in the line. Maybe I want a Manfred Van Carstein(sp) to have a vampire on Horseback for D&D, or some other game. Hey that is why I have the one I own now! I cant use it or the goblins from the GWRs for my space wolves army!

So then people wanting 10 would have to spend $6 extra.

$18 MSRP does not mean that a retail can only price the item on the shelf at this price or more. That is the failing or the retail stores for doing this.

MSRP is only the adjusted price given by the manufacturer to figure into a specific mark-up for the store.

Not every store wants a 44% mark-up on books, or 35% mark-up on most other things.

So the store charging that full price is where that problem comes into play, and the stores offering better prices will be places more liekly to sell to those not wanting to pay $36 for the same 10 GWRs they use to get for $30.

You get a price hike in there with a better value buy and also may get other people to purchase since the price is more something may be willing to try and waste the money on even if they don\'t like it.

When GW (or WotC) goes for a direct price hike with no added value, then people starting looking more closely at their money and what do they REALLY need. Or Even do they really NEED another unit of GWRs to modify to have variant X or will the one unit they have already be enough and just not bother with some WYSIWYG compliance to the rules.

Raising the price on a half pack for packaging still gives a lower immediate cash out for people that they can sort of pay as they go building an army, or collecting other minis. Clearly buying in bulk would be cheaper, but that is where the customer would have to work with the retailer to see if they offer discounts for bulk purchases. So it isn\'t removed form the table for those that don\'t want to just buy a box of 5 GWRs to try out, or play around with, or use for another game (D&D, Middle Earth, insert any game using goblins here).

What it does is allow more access to people who wouldn\'t have bought the product before because or its high price tag. The only effect I have ever seen come from such a thing is increased sales overall for the product, and possibly growth of the products awareness/customer base.

But this is all just anecdotal.

So when looking at the cost of packaging, and the packaging itself, think where that cost could be reduced.

in the case of GW, then could go to machine packaging. get rid of the boxes for bags. Shrink-wrap with stiffer plastic. There reduces printing costs. Like those bags of Zombies for ZOMBIES!!!!

The smaller the packaging the more you can store and smaller the package to ship to retailers, which will reduce the cost to the consumer.

 

[plattokeefe]

dont know if anyones mentioned this yet as im to lasy to read all the posts, but if you look on ebay or any number of independant internet stockists of gw products youll find you can get the stuff at 25% discount.

also the quality of the sculpts there doing now are amazing the primaris psycker for instance is an amazing model a little steep at £8 yes but still very good mini.

appolagys for spelling and grammer im a bit dyslexic and very lazy lol!

 

[hestan101]

Originally posted by Overdose
Price rises are always a bitter pill to swallow, but obviously GW feel that they can justify it and that sales won\'t be greatly affected.

Time will tell, but my guess is most people will continue to buy, regardless and that\'s what GW obviously thinks too.

:beer:

 

[Aliengod3]

I believe that we are all suppose to take a drink thanks to this topic.

A price hike on GW products? That is unheard of!!! Ya right...

I just paid $15 for GW black primer plus $9 for the most recent white dwarf. I would have said \"screw WD!\" but the paint article featuring a chaos lord painted by brokenblade was worth it to me.

 

[Shadzar]

Originally posted by Aliengod3
I believe that we are all suppose to take a drink thanks to this topic.

A price hike on GW products? That is unheard of!!! Ya right...

I just paid $15 for GW black primer plus $9 for the most recent white dwarf. I would have said \"screw WD!\" but the paint article featuring a chaos lord painted by brokenblade was worth it to me.

Just go to your local hardware store or Wal*mart equivalent and get a can of the cheap flat black. You don\'t need that expensive crap primer. I could get 15 bottles of flat black for the same price as that one GW bottle.

When people stop letting them charge outrageous prices, then they will quit. the name/label GW isn\'t worth the extra $14 for some spray paint.