The Economics of Mini\'s
- Thread starter Kaine
- Start date
Just a few quick points before I go off to bed.
1) GW market research puts their market share at greater than 95% of the industry. I think it was 97% of tabletop miniatures sales worldwide.
2) Lord of the Rings, despite being (IMHO) a terrible application of pretty cool background material and a decent skirmish ruleset, is actually profitable for them. Apparently their costs on LOTR are a fraction of the cost of WFB/40k kits since they are usually 1-2 piece models and only one frame per box. I\'m guessing they use less studio staff as well, since they don\'t have to come up with 4+ army books per year to accompany new releases.
Despite selling more models for less money, they maintain a good profit margin on the boxes due to much lower production costs.
Who knew?
1) GW market research puts their market share at greater than 95% of the industry. I think it was 97% of tabletop miniatures sales worldwide.
2) Lord of the Rings, despite being (IMHO) a terrible application of pretty cool background material and a decent skirmish ruleset, is actually profitable for them. Apparently their costs on LOTR are a fraction of the cost of WFB/40k kits since they are usually 1-2 piece models and only one frame per box. I\'m guessing they use less studio staff as well, since they don\'t have to come up with 4+ army books per year to accompany new releases.
Despite selling more models for less money, they maintain a good profit margin on the boxes due to much lower production costs.
Who knew?
But think of Microsoft as well. They are the largest player in operating systems, yet they are hardly the best. Microsoft have thrown lots of money into development of newer programs however most people are still prefering to use the more tried and tested programs. Most companies are still prefering to run with XP and it has hardly been the revolution Microsoft proclaimed it to be. I heard that Microsoft are planning to release another \"new\" Windows next year called Windows 7. Back to my point, you can be the market leader and release \"newer\" versions of products, but if it isn\'t well received by the public, they will not support it out of tradition or a sense of nostalgia.
Kaine made the comment that the Baneblade developement cost was close to 250,000. It was in GW\'s words (or close enough to them) pushing the boundaries of injection moulded plastics. Ok, i can accept that but if it going to make a massive dent in your already suffering bottom line, is it the best time to do it now? Just because you CAN make something doesn\'t always mean that you SHOULD.
Another point i would like to make is that their pricing doesn\'t seem to make any sense when you start to look at Forge World products. A complete Damocles Command Rhino (including the Rhino) costs £30 while the conversion kit on it\'s own costs £20. So i can buy a Rhino for £10? No a Rhino costs £18. So where has the extra money gone to? ???
I love some of the forge world stuff and i can\'t understand why they stuff around people so much with the ordering and delivery. That and the extra cost are the two things that have stopped me from ever buying from there. If they made it more accessible, i think they could greatly increase their sales and therefore their revenue.
Final thought for this post was when i was thinking about how Dell do their business. They have very few in store products that people can look at, but by keeping their costs low, having excellent service and a successful marketing campaign, they have managed to become market leaders when it comes to personal and business computers. Very few people i know of complain about the 2 week delay as they are saving about $300 over a similar scoped product.
Kaine made the comment that the Baneblade developement cost was close to 250,000. It was in GW\'s words (or close enough to them) pushing the boundaries of injection moulded plastics. Ok, i can accept that but if it going to make a massive dent in your already suffering bottom line, is it the best time to do it now? Just because you CAN make something doesn\'t always mean that you SHOULD.
Another point i would like to make is that their pricing doesn\'t seem to make any sense when you start to look at Forge World products. A complete Damocles Command Rhino (including the Rhino) costs £30 while the conversion kit on it\'s own costs £20. So i can buy a Rhino for £10? No a Rhino costs £18. So where has the extra money gone to? ???
I love some of the forge world stuff and i can\'t understand why they stuff around people so much with the ordering and delivery. That and the extra cost are the two things that have stopped me from ever buying from there. If they made it more accessible, i think they could greatly increase their sales and therefore their revenue.
Final thought for this post was when i was thinking about how Dell do their business. They have very few in store products that people can look at, but by keeping their costs low, having excellent service and a successful marketing campaign, they have managed to become market leaders when it comes to personal and business computers. Very few people i know of complain about the 2 week delay as they are saving about $300 over a similar scoped product.
freakinacage
Well-known member
sod fantasy and sci fi stuff. look at the price of historical plastics. the tanks are waaaaaaaay better. moulding quality is awesome, detailing is head and shoulders above gw. and the prices are cheaper (maybe not majorly but still noticable)
Infidel Castro
New member
I will only say this:
Two Vostroyans in a blister: £7
3 Dwarf Hammerers in a blister: £7.
Tub of sand: £5.
I purchased the first two without checking what a \'D\' is these days in GW\'s pricing range, and when it came to paying I nearly laughed in the spotty employee\'s face. However, I held my reserve and asked how much the sand was in a tub no bigger than that of your standard houmous pot from a supermarket. The reply of \'£5\' almost saw me clamber across the counter and give him one on the nose, representing GW as he was (and he really was, as he followed me round the store in the usual annoying fashion).
I don\'t care about other companies\' pricing strategies as I rarely buy anywhere else (I rarely buy anything at any time) but I must say I left that store seething. If we must talk about other firms though, no doubt they\'re just using GW pricing as a basis for their own scams. i.e., if that\'s how much GW over-charge, we can do the same. That\'s how it all looks to me.
I\'m still gobsmacked now by the prices...:no:
Two Vostroyans in a blister: £7
3 Dwarf Hammerers in a blister: £7.
Tub of sand: £5.
I purchased the first two without checking what a \'D\' is these days in GW\'s pricing range, and when it came to paying I nearly laughed in the spotty employee\'s face. However, I held my reserve and asked how much the sand was in a tub no bigger than that of your standard houmous pot from a supermarket. The reply of \'£5\' almost saw me clamber across the counter and give him one on the nose, representing GW as he was (and he really was, as he followed me round the store in the usual annoying fashion).
I don\'t care about other companies\' pricing strategies as I rarely buy anywhere else (I rarely buy anything at any time) but I must say I left that store seething. If we must talk about other firms though, no doubt they\'re just using GW pricing as a basis for their own scams. i.e., if that\'s how much GW over-charge, we can do the same. That\'s how it all looks to me.
I\'m still gobsmacked now by the prices...:no:
Gilvan Blight
New member
I had a similar experience buying Flock. I had some at home but couldn\'t find it and wanted to finish off a mini for a game. Was at the mall and figured I would just stop in and pick up some Flock. As usually I also picked up a couple paints as well. When I got the bill it blew me away. I remember asking if the price of paint went up and being told no, so I checked and figured out I just paid something like $12 Canadian for for a tub of flock. For $12 at a hobby store I can get a 50cu inch container of Woodland Scenics flock. What looks to be at least 5 times as much as the GW tub if not more.
Yes, it is expensive but if they really spend £250,000 on it they are not very efficient. Do you see those made in China plastic models that can be had for like $5 a kit? I also check the cost of those mouldings as I once was interested in producing something. This was last year and the cost of a mould for my single 8\"x10\" frame would have been $5,000. But the cost of actual plastic production would have be $2 per frame.
I do think that GW struggle with supporting all there stores in so many areas, but is not just a means to sell models to enthusiasts. GW is more about community and bringing gamers together in there stores. I go to my local store every week and see gamers coming down with there cases wanting to battle someone. How would you achieve this online or in an independent store? Not to mention that GW pull in a lot of young gamers starting them of with the hobby. And I bet that a lot of the smaller model producers have had growth from a young GW hobbyist finding they products on the internet and other stores and expanding there hobby.
There are gaming club and the alike but a lot are do not cater for the younger gamer like my local club is over 18’s only and there is a fee. When I was in a store and one of the local kids heard some older gamers talking about going to the club and asked about going he was flat refused. GW encourage the younger gamers and help them into the hobby not to mention the revenue help GW produce the models and keep the whole cycle going.
In short I think that if GW shut down lots of stores or went under the whole market would suffer the injection of new hobbyists would fall and other companies couldn\'t fill the gap.
Price raises are apart of the current economic climate and if it is what GW have to do to cement there future then so be it. I will carry on supporting them no matter the cost.
There are gaming club and the alike but a lot are do not cater for the younger gamer like my local club is over 18’s only and there is a fee. When I was in a store and one of the local kids heard some older gamers talking about going to the club and asked about going he was flat refused. GW encourage the younger gamers and help them into the hobby not to mention the revenue help GW produce the models and keep the whole cycle going.
In short I think that if GW shut down lots of stores or went under the whole market would suffer the injection of new hobbyists would fall and other companies couldn\'t fill the gap.
Price raises are apart of the current economic climate and if it is what GW have to do to cement there future then so be it. I will carry on supporting them no matter the cost.
This is very localised imo. At my local GW back in England, they were very eager to either
1) sell you something
2) if they realised you weren\'t buying, ignore you.
I would never game at my local store nor paint since they seem to tire of the \'non buyer gamer\' after a while. Not that I didn\'t buy anything mind!
generulpoleaxe
New member
@nunu, games workshop wasn\'t the first stores to do this, they took the idea and turned it into a mass marketing idea (they are bloody good at that and as a business man i\'ll take my hat off to them for it)
but some companies rely on brand loyalty over product quality and cost.
produce quality products at a reasonable price as others have (and still do) as well as treating existing customers with the respect they deserve and you get repeat custom for years to come. (something gw forgot or stopped caring about)
but some companies rely on brand loyalty over product quality and cost.
produce quality products at a reasonable price as others have (and still do) as well as treating existing customers with the respect they deserve and you get repeat custom for years to come. (something gw forgot or stopped caring about)
@ Arma. I cant coment on your store but in my store (Croydon) the staff\'s first question is usally \"What army do you collect?\" opening conversation about the hobby. And I am no fool i know the goal is to sell you something but if i wanted to talk about playing, painting, modeling they usally listen to me waffle for hours. I think that is the sign of a good GW from a bad, a Games workshop has to be more than a shop to buy tin soldiers. It should be a comunity of hobbists and a place to have fun.
@Generulpoleaxe. I dont think the quality has dropped (it has problery got vastly better since i started 15 years ago) and the main debate over prices can be linked to increase in production costs and expensive distubtion though GW stores. If GW made massive profits year on year with share holders getting massive payouts I would be pissed. But we all know that there has been no dividends in the last 2 years and loss made last year.
@Generulpoleaxe. I dont think the quality has dropped (it has problery got vastly better since i started 15 years ago) and the main debate over prices can be linked to increase in production costs and expensive distubtion though GW stores. If GW made massive profits year on year with share holders getting massive payouts I would be pissed. But we all know that there has been no dividends in the last 2 years and loss made last year.
generulpoleaxe
New member
investment in equipment wipes out a lot of profit as well
any company that wants longevity has to constantly examine their expenses and look at how they can stop wastage whilst maintaining productivity.
keeping as many stores open as gw does simply doesn\'t make good business sense.
they need to keep the key stores open that both bring in the most money, as well as keeping their presence within that area.
a lot of their stores are just taking money from each other within the uk, that is a huge mistake that is costing them dearly.
passing this cost onto their customers is proving to also be bad as their profits aren\'t improving and they are losing customers to other companies, which in turn also helps their competitors.
a lot of stores need to be closed and the company needs to get itself off the stock market.
they can then invest and grow at a controlled rate whilst serving the needs and wants off their customers, instead of their shareholders.
and as for staff asking you about what army you collect as soon as you walk in the door, they should great every customer in a curtios manner and then leave them be unless the customer looks as if they need help (i.e. they are searching through the racks in a particular section or they aproach a member of staff,) then the what army do you collect question can come in.
people don\'t want to feel like they are just their to be sold something, that aproach actualy loses a lot of potential customers.
being polite, as helpfull as needed by the customer and remembering customers and what they collect is far better for retaining customers.
(i have learned this through working in most areas within retail, from management through to the warehouse side of things)
edit, price increases due to oil and tin increase is understandable, but only to a certain point.
when a company doesn\'t look at restructuring to keep it profitable (and by that i don\'t mean just firing people and running a company on skeleton staff as that just does more long term damage) and readressing how it operates, then it is relying on brand loyalty to see it through.
and that will only last for so long, take a look at companies such as marks and spencers, they made the same mistakes gw are doing and eventualy they had to take drastic measures before they went under.
gw aren\'t in danger of going under, but they aren\'t improving their situation.
I think your right about the nonprofitable stores. For me i would travel to goto a big flag ship GW with big hobby areas however i am always sad to see a store shut.
GW could easly ship all production to china and save a fortune, but it means something special to me that everything is still made in the UK. We dont make anything any more.
I do think the manager makes the shop. They can make you feel welcome and encorage you. My manager is always saying come down and paint, take a day off and come down and paint all day! A bad manager can make it a whole other expereince.
GW could easly ship all production to china and save a fortune, but it means something special to me that everything is still made in the UK. We dont make anything any more.
I do think the manager makes the shop. They can make you feel welcome and encorage you. My manager is always saying come down and paint, take a day off and come down and paint all day! A bad manager can make it a whole other expereince.
Agreed. It\'s a pain actually that I\'ve been going to the same GW store for several years, and every time they hire someone new I get that song and dance. I can see them eyeballing me as I start browsing and then they get up and start the blurb. I\'m not unfriendly about it but I prefer to just browse in peace and chat more casually.
